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Data Science for Social Impact 35

2929

non-electoral

2015

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 20169/2014 Reportable In the matter between: SIPHO PATRICK MAGWAZA APPELLANT and THE STATE RESPONDENT Neutral citation: Sipho Patrick Magwaza v The State (20169/14) [2015] ZASCA 36 (25 March 2015) Bench: Ponnan, Maya, Mhlantla and Zondi JJA and Meyer AJA Heard: 16 March 2015 Delivered: 25 March 2015 Summary: Evidence – proscriptive evidence – s 35(5) of the Constitution – evidence excluded because its admission detrimental to the administration of justice. ____________________________________________________________________ ORDER ____________________________________________________________________ On appeal from: KwaZulu Natal High Court, Pietermaritzburg (PC Combrinck J (Kondile and Theron JJ concurring) sitting as a court of appeal. The appeal is upheld and the conviction and sentences imposed pursuant thereto are set aside. ____________________________________________________________________ JUDGMENT ____________________________________________________________________ Ponnan JA (Maya, Mhlantla and Zondi JJA and Meyer AJA concurring): [1] The appellant, Sipho Patrick Magwaza, was originally indicted as accused number 4 together with three others on five charges. However, at the commencement of the trial before Galgut DJP (sitting with assessors) in the High Court (Durban and Coast Local Division) all of the charges were withdrawn against two of the accused and the first charge was withdrawn against the two that remained. In the result, the appellant and his co-accused (accused 1 in the trial court) stood trial on one count each of murder and robbery with aggravating circumstances. The latter also faced two additional charges pertaining to the unlawful possession of a firearm and eleven rounds of ammunition. [2] On 13 April 2000, a gang of armed men attacked a pension payment point at Klaarwater Community Centre in Marianhill, KwaZulu Natal and made off with approximately R460 000. During the course of the robbery one of the security guards was fatally wounded and dispossessed of his firearm and its ammunition. The appellant and his co-accused were convicted as charged and sentenced to imprisonment for life. With the leave of the trial court, both accused appealed against their convictions to the full court of the Natal Provincial Division. PC Combrinck J (Kondile and Theron JJ concurring) dismissed the appeal. The further appeal by the appellant is with the special leave of this court. [3] It was not in dispute before Galgut DJP that the offences in question had indeed been perpetrated. In any event as the learned judge recorded, the „accused . . . formally admitted that the crimes were committed‟. He added: „That the crimes on counts 2 and 3 were committed in the furtherance of a common purpose furthermore is on the evidence equally plain. One or more of the robbers had obviously been armed and, in the absence of anything further, it is plain that every member of the gang was aware that one or more of the members was armed, that one or more firearms might be used during the robbery and that someone might be shot and killed. Each member of the gang therefore shared a common purpose with the others in regard to the use of a firearm. Each was therefore responsible for the shooting even though there may be no proof of who it was who fired the shot that killed the deceased. Even though there may have been no direct intention to kill there was what is in law called dolus eventualis which simply means that anyone in the gang who knew that the firearm might be used, who knew that someone might be killed and who nevertheless recklessly remained in the gang and took part in the robbery is in law held to have had the necessary intention to kill. Accused Nos 1 and 4 deny that they had been part of the gang that day, and that is therefore the sole issue before us. Despite the fact that scores of pensioners and others were present and witnessed the incident, and that it occurred in broad daylight, not one of them was apparently able either to see or later to identify any of the culprits.‟ [4] The State case against the appellant consisted, in sum, of a pointing out by him to Captain Neville Eva shortly after his arrest, together with certain utterances during the course of that pointing out, which according to Galgut DJP amounted to a confession. After an admissibility trial that evidence was ruled admissible and the appellant was convicted on the strength of it. In the course of his judgment the learned judge observed: „We are loath to convict any accused person on the single and uncorroborated evidence of a confession, as is now the case with accused No 4. We adopt this approach for reasons I do not propose to go into, save to say that we are aware of the inherent dangers of doing so. In the instant case, however, accused No 4 has been such a bad witness and the evidence of Eva and Ximba has been so impressive that we have no doubt of accused No 4‟s guilt. We are strengthened in this in particular by accused No 4‟s evidence about informing Eva of a spot where he had allegedly lost his firearm.‟ The full court affirmed that conclusion and in the result dismissed the appellant‟s appeal. [5] The appellant was arrested some two months after the offences had been committed at approximately 8.30 am on 8 June 2000 at the Umlazi Magistrates‟ Court. His arrest, allegedly on the strength of information furnished by a police informer, was effected by a team of detectives including Inspector Govender and the investigating officer, Inspector Mbatha of the Westmead Murder and Robbery Unit, Pinetown. According to Govender, he warned the appellant at the time of his arrest of the allegation and his rights in terms of section 35 of the Constitution. He added under cross-examination: „Inspector, you advised the Court that you informed the accused of his rights. Did you read out his rights? --- Not from any document, but from my memory.‟ On that score Mbatha had this to say: „And Inspector Govender told the Court, and you confirmed, that at the time of accused No 4‟s arrest his constitutional rights were explained to him. --- That is correct. Were these rights read to him? --- As I explained in my evidence-in-chief that the rights were read. GALGUT DJP They were read to him? --- Yes. From which document? --- From the form, the section 35 notice. Did you have that with you at the time of the arrest? --- I did not have the forms on me. Well, I think the attorney is talking about the time of his arrest. --- No, at the time of accused No 4‟s arrest the forms were not there with us. Well, let‟s ask the question again. Was he nevertheless advised of his rights, yes or no? --- Yes, he was. MS HARIRAM . . . And you interpreted these rights? --- Yes. What exactly did you interpret? --- Well, I cannot be precise on the words used when we were at Umlazi but he was advised that he has a right to remain silent. He was also informed of his right to contact his legal representative. These are the rights I can recall that were explained to him when we were at Umlazi.‟ [6] The interaction at the Westmead Murder and Robbery Unit between Inspectors Govender and Mbatha on the one hand, and the appellant on the other, was crucial to the admissibility enquiry and in turn to the conviction of the appellant. According to Govender: „. . . at the Murder and Robbery Office, M‟Lord, it was the accused that was in the office with Mr Mbatha, Thabethe and myself. This, just for the record, happened on the 8th June? --- On the 8th June. Probably it was about 9 o‟clock or thereafter on that morning. In respect of this accused, M‟Lord, again, I informed him that we were going to interview him about the allegation. Mr Mbatha was going to act as the interpreter. Prior to the interview with the accused, I warned him in respect of his rights in terms of the Constitution, and as the exhibit that I handed in, the document, it was the very same information that I had explained to the accused. This was interpreted by Mbatha, and the accused was prepared to continue with the interview. Again, M‟Lord, he did not request the services of an attorney or, if he could not afforded one, if I had to arrange one free of any cost to him. Just before you proceed, Inspector, just before you took the witness stand you helped me and assisted me in looking for a similar docket . . . [intervention] --- Document. . . . as Exhibit G for accused No 4 and we couldn‟t find it. --- That is correct. GALGUT DJP Docket? MR DE KLERK Document. Was there a similar document like that signed by accused No 4? - -- Specifically, I cannot recall. Mr Mbatha filed the docket. But what I can recall. M‟Lord, is that I did warn the accused of his rights.‟ Inspector Mbatha added: „GALGUT DJP On what you have told us, at your offices accused No 4 was not told of his rights. --- He was warned of his rights. I omitted that. Well, tell us about it. --- Before we could proceed with the interview of accused No 4 he was told about his rights. He also signed a form containing his rights. Where is that form? --- I filed it in the docket. You filed it or you found it? --- I filed it. Well, where is it? --- When we looked for it, we could not find it. Now tell me, in regard to that document, both with regard to accused No 1 and accused No 4, how exactly were the rights explained? --- They were explained as they appear in the form. What do you mean by that? --- As they appear in the form, that he has a right to remain silent. He has a right not to incriminate himself. No, no, I don‟t want to know what your recollection is of what the form says. I‟m concerned to know how Govender went about informing him of his rights. Let‟s take accused No 1 first. --- I don‟t quite follow the question. You say Govender explained his rights to him? --- Yes. And that he made use of the form? --- Yes. Well, how did he go about it? --- As the rights appear in the form. So he didn‟t read them to him? --- The rights were read as they are written in the form. Well, why don‟t you say so? --- Perhaps the way I explained it was not quite clear. Well, it wasn‟t clear and it‟s not clear to me. Did he read those rights or did he simply summarise them in his own words? --- He wrote the rights as they appear in the form. He read them? --- Yes, he read them and I read and interpreted them. Did that happen with accused No 4 as well? --- That is correct.‟ [7] Having commenced his interview with the appellant at approximately 9 am that morning, by 10.30 am Govender had made telephonic contact with Captain Eva (so testified the latter) with the request that he assist with a pointing out. In endeavouring to explain how it came to pass that the appellant had elected to participate in a pointing out, Govender testified: „I then questioned the accused by questioning him with certain question orally. Mbatha also did question him, and that at a stage that the replies that came back from the accused I then cautioned him that he should stop and that at this stage that what he had been telling me, there were certain forums that that could be addressed to. I personally could not take it any further. I informed the accused that he could say the same things said to a Magistrate or mention that to an independent policeman. M‟Lord, the accused adopted to want to do a pointing out. At that time I left the accused in the company of Inspector Mbatha and then left to contact an officer. I then got hold of Captain Eva. M‟Lord, when Captain Eva then got to the office, if I can recall correctly, is that I handed the accused to Captain Eva. . . . GALGUT DJP Tell me something, you say in regard to accused No 1 that you told him he could do a pointing out to an independent policeman of sufficient rank? --- That is correct, sir. So was it your idea that he should do a pointing out? --- No, it was not. What I said – could I explain, M‟Lord? Well, I wanted to ask you because the way you put it I got the impression that you suggested to him that he should do a pointing out. --- No, no, M‟Lord. What I . . . [intervention] How did it happen? --- What I said to him is that he could make a statement to what he said to a Magistrate or he could say that, what he was saying, to a police officer of sufficient rank or point out certain places to that officer. Well then, as I understand it, it was you that put the idea into his head to do a pointing out? --- If that‟s what the Court is saying, M‟Lord, yes, I said that to him from the replies he had given me. Well, let‟s make no secret of it. What were those replies then? --- From the accused? What is bothering me, you‟ve not suggested that he said to you that he wanted to point something out to you. --- If I can explain to the Court, M‟Lord. Yes. --- From the replies of the accused, regarded the places where this offence happened. From that reply I then canvassed the issue regarding a pointing out. The pointing out to an officer is about pointing certain places out. That‟s what was said. On that explanation then, it was not a case of him saying to you that he wanted to point something out to you? --- Not to me, no. What . . . [intervention] The question of a pointing out arose because you said to him that, if he wanted to, he could point out whatever to a policeman, an independent policeman? --- That is correct. That is correct. Does the same apply to accused No 4? --- The same, M‟Lord. So in his case too, it is not a case of him saying to you, “I want to point something out to you”, and you saying to him, “No, wait a minute, you mustn‟t point it out to me, you must point it out to an independent policeman”? --- That is correct, M‟Lord. That is correct. What is correct? --- That he can point that out not to me, to an independent policeman. I‟m going to start again, because you don‟t understand. It was not a case of him saying to you, “I want to point out a place to you, to you, Govender”. --- Yes, M‟Lord. It didn‟t happen that way. --- If I could explain, M‟Lord, it happened that what the accused said from his reply is that he could point out the place where this incident happened. I told him that I am not in a position from my rank and status to take the accused to that place so that he can point it out to me but he could point that place out to an independent police officer of sufficient rank. Well, that doesn‟t answer my question, unfortunately. He did not say to you, “I want to point something out to you”? --- Yes, he did. From his replies he said that – from the replies, my question and answers, from his replies he said he was prepared to point out certain places. Now, in context from the answers given by the accused, I said to him, “I cannot take you to those places”, but he could point that place out to a policeman to the rank of Captain and above. That‟s what I said, M‟Lord. Inspector, perhaps because my question isn‟t clear, you don‟t understand what it is I‟m trying to get from you. Did he say to you, “I want to point something out”, or did you say to him, “Are you prepared to point something out”? --- He wanted to – he said to me that, “I want to point something out”. It was from the accused. And this was said before there was talk about an independent officer? --- This was said, yes, before there was talk about an independent officer. Why would they want to point anything out to you? What was the reason? How was that going to help anybody? --- Well, it‟s going to – from the questions that was put to him, it‟s going to assist is that they knew the place where the commission of the offence had taken place and whatever transpired there. I don‟t understand, quite frankly. You knew already where the incident had taken place. --- That is correct, M‟Lord, but I did not know what part the assailants or the suspects or the accused had played. I did not know that. Well, quite obviously, what each accused said to you amounted to a confession? --- That is correct, M‟Lord. Is that right? --- That is correct. Why then would the accused want to point anything out to show what their precise participation was? --- Because they volunteered the information to me. It was from their own doing that they did this. I ask this question because I would have thought that the thing would have proceeded like this, that the accused would have said to you, “Yes, I took part and I did A, B and C”, and that you would have said, “Well, are you prepared to point these things out to me?”. You say it didn‟t happen that way? --- I understand what you‟re saying, M‟Lord. No, what happened is that, from their answers that the accused would have said to me that, “Listen,”, after telling me what happened is that, “I am prepared to point out what happened on that day and the position of the places”. That‟s what happened. So they didn‟t say that because you had first asked whether they‟d be prepared to do so? --- No, M‟Lord, I did not ask them first. No? --- No, it came voluntarily from them. Well, then I come back to my other question. Why would they want to do this pointing out? I ask because quite obviously . . . [intervention] --- Yes, I understand. Quite obviously, I would have thought it would have been of more interest to you for them to do a pointing out than for them to offer to do so. --- M‟Lord, I cannot pre-empt what is in the accused‟s mind at that stage but it‟s their voluntariness to co-operate in the investigation. Many accused persons from different examples will say, “Listen, I can even point out the place to you”. It‟s a fact of life.‟ [8] Inspector Mbatha, who it will be recalled was not just the investigating officer, but also acted as Govender‟s interpreter, had this recollection: „We arrived at our offices at Westmead and we sat with accused No 4 in an office. In that office it was Inspector Govender and myself. We started asking him questions. The questions that we asked accused No 4 were more or less the same as the questions we had asked accused No 1. During the questioning it came to a stage where Inspector Govender had to warn accused No 4 with regards to what accused No 4 was saying. Accused No 4 also ended up wanting to make a pointing out. It was Inspector Govender who made the necessary arrangements for that pointing out. Accused No 4 did the pointing out on that same day.‟ When asked: „What happened after the volunteering of this information?‟ He replied: „Well, it was at that stage that Inspector Govender stopped him and explained to him that there were other ways in which this could be dealt with because for him to give us that information was not sufficient.‟ His evidence continued: „And what ways did Inspector Govender suggest? --- He explained to him that he could go and make a statement to a Magistrate and that he could also go and point out the scene where the offence was committed.‟ As confusing as Govender‟s account was, that confusion was compounded by Mbatha‟s evidence. It is plain that Mbatha‟s conceptual understanding of what had transpired during the interview appears to have differed markedly from that of Govender. According to Mbatha‟s understanding the election by the appellant to point out the scene was because of his having furnished information to them that was not sufficient – whatever that may mean. What exactly he intended to convey by „that information was not sufficient‟ or in what respects it was insufficient was regrettably not explored any further during his evidence. Significantly, Mbatha added: „Accused No 4 said if we want to he could go and show us the scene where the robbery was committed, and that was before Inspector Govender warned him. That was the information that came out from accused No 4 himself.‟ [9] As recorded in the pointing out form completed by Captain Eva, he met with the appellant in his private office at the Westmead Murder and Robbery Unit at 11.15 that morning. The first part of that form records the details of the: (a) suspect; (b) commissioned officer; (c) interpreter; and, (d) the venue where the interview was being conducted. That is followed by what is described as Part A headed „HEREAFTER I ASK THE SAID PERSON:‟. The first question put to the appellant by Captain Eva under Part A was „Do you know why you were brought to me, and if so, why?‟ The answer that that question elicited was „Yes we pulled and armed robbery at Klaarwater‟. Part B of the form headed „I NOW CONVEY THE FOLLOWING INFORMATION TO THE SAID PERSON:‟ reads: „5. I am an Officer in the South African Police Service and as such I am also a Justice of the Peace. A Justice of the Peace is a Police Officer who, by the virtue of his appointment, has the same rights and powers as those of a Magistrate with regards to the recording of statements. A Police Officer such as myself, can accordingly testify in a subsequent trial about what a person has said and pointed out, whereas a Non-commissioned Officer can only testify in regards to what was pointed out. Do you understand this? . . . Yes. 6. I have nothing to do with the investigation of this case and you have nothing to fear from me. Further, if you have been assaulted or forced in any way to make a statement or do a pointing out, I am able to assist you. If necessary I can also arrange protection for you against any irregularities. Do you understand this information? . . . Yes. 7. You are not obliged to point out any scene(s) and/or point(s) on the scene(s) or to say anything about such point(s) or scene(s). You are further warned that whatever you may point out or may say will be noted down and photographs of the scene(s) and/or point(s) pointed out will be taken and may later be used as evidence against you in a subsequent trial. Do you understand this warning? . . . Yes. 8. You have the right to remain silent. (I also explain to the said person the consequences if he/she elects to say something). 9. You are not obliged to make any confession, admission or statement that might be used against you in a subsequent trial. Do you understand this? . . . Yes. 10. You also have the right to consult with a legal representative of your choice, and if you cannot afford the services of such legal representative, a legal representative can be appointed for you who is not in the employment of the State and whose services will be provided at no cost to yourself. 10.1 Do you understand these rights? . . . Yes. 10.2 Do you wish to exercise either of them? . . . No. 10.3 If so, how do you wish to do that? . . . N/A.‟ [10] Save for certain notable exceptions, the general approach adopted in South Africa prior to 1994 was that relevant evidence was admissible regardless of whether it was illegally or improperly obtained. A court of appeal, it was said, does not enquire whether the trial was fair in accordance with 'notions of basic fairness and justice' or with the 'ideas underlying the concept of justice which are the basis of all civilised systems of criminal administration‟ (S v Rudman & another; S v Mthwana 1992 (1) SA 343 (A) at 377). That was an authoritative statement of the law before 27 April 1994. It no longer is. Our Constitution now requires criminal trials to be conducted in accordance with just those notions of basic fairness and justice. In S v Zuma & other 1995 (2) SA 642 (CC) para 16 it was said by Kentridge AJ that the right to a fair trial 'embraces a concept of substantive fairness' and that it is for the criminal courts hearing criminal trials or appeals 'to give content' to the notions of basic fairness and justice which underpin a fair trial. [11] In the United States of America, subject only to the so-called 'reasonable mistake' exception, evidence obtained in violation of the Constitution is excluded. The drafters of our Constitution appear to have adopted a via media between the approach adopted in the USA on the one hand and that formerly adopted in South Africa on the other. In doing so, they have largely followed the example of Ireland, Australia, New Zealand and particularly Canada (S v Pillay & others 2004 (2) SACR 419 (SCA) at 444d-i). Thus in terms of s 35(5) of the Constitution: „Evidence obtained in a manner that violates any right in the Bill of Rights must be excluded if the admission of that evidence would render the trial unfair or otherwise detrimental to the administration of justice.' Of s 35(5), this court (S v Tandwa & others 2008 (1) SACR 613 (SCA) paras 116-117) stated: „The notable feature of the Constitution's specific exclusionary provision is that it does not provide for automatic exclusion of unconstitutionally obtained evidence. Evidence must be excluded only if it (a) renders the trial unfair; or (b) is otherwise detrimental to the administration of justice. This entails that admitting impugned evidence could damage the administration of justice in ways that would leave the fairness of the trial intact: but where admitting the evidence renders the trial itself unfair, the administration of justice is always damaged. Differently put, evidence must be excluded in all cases where its admission is detrimental to the administration of justice, including the subset of cases where it renders the trial unfair. The provision plainly envisages cases where evidence should be excluded for broad public policy reasons beyond fairness to the individual accused. In determining whether the trial is rendered unfair, courts must take into account competing social interests. The court's discretion must be exercised “by weighing the competing concerns of society on the one hand to ensure that the guilty are brought to book against the protection of entrenched human rights accorded to accused persons” . . .‟ [12] Section 24(2) of the Canadian Charter of Rights and Freedom, Part I of Constitution Act, 1982 requires evidence obtained in a manner that infringed guaranteed rights to be excluded if its admission 'would bring the administration of justice into disrepute'. It has been construed as meaning that the administration of justice would be brought into disrepute if the admission of the evidence in question would render the trial unfair (R v Jacoy (1989) 38 CRR 290 at 298). In R v Collins [1987] 1 SCR 265, a police officer violated the accused's rights by grabbing him by the throat. The accused had a bag of heroin in his hand, which the State sought to admit. The Supreme Court of Canada held that a trial is rendered unfair if the evidence is self-incriminating, such as a confession. The use of such evidence would render the trial unfair, for it did not exist prior to the violation and it strikes at one of the fundamental tenets of a fair trial – the right against self-incrimination. But Collins drew a distinction between real and testimonial evidence. While it viewed testimonial evidence (such as a confession) as undermining trial fairness, it expressed doubt that real evidence, discovered derivatively as a result of unconstitutional conscription, could render a trial unfair because the real evidence existed irrespective of the violation of the Charter and its use does not render the trial unfair. [13] In the later case of Thomson Newspapers Ltd et al v Director of Investigation and Research et al (1990) 67 DLR (4th) 161, La Forest J stated: 'A breach of the Charter that forces the eventual accused to create evidence necessarily has the effect of providing the Crown with evidence it would not otherwise have had. It follows that the strength of its case against the accused is necessarily enhanced as a result of the breach. This is the very kind of prejudice that the right against self-incrimination, as well as rights such as that to counsel, are intended to prevent. In contrast, where the effect of a breach of the Charter is merely to locate or identify already existing evidence, the case of the ultimate strength of the Crown's case is not necessarily strengthened in this way‟. Canadian jurisprudence has since rejected a strict distinction between real and testimonial evidence holding that the Collins distinction was unfounded (see R v Burlingham (1995) 28 CRR (2d) 244). For example R v Ross (1989) 37 CRR 369 at 379 emphasized that the admissibility of evidence under s 24(2) depended ultimately not on its nature as real or testimonial, but on whether or not it would only have been found with the compelled assistance of the accused. [14] In Pillay (at 432e-h), Mpati DP and Motata AJA summed up the Canadian position as follows: „What emerges from this is that evidence derived (real or derivative evidence) from conscriptive evidence, ie self-incriminating evidence obtained through a violation of a Charter right, will be excluded on grounds of unfairness if it is found that, but for the conscriptive evidence, the derivative evidence would not have been discovered. And Scott JA, who wrote separately, expressed himself thus at 445c-e: „As noted by Martland J in R v Wray (1970) 11 DLR (3d) 673 at 691, there is a clear distinction between unfairness in the method of obtaining evidence and unfairness in the actual trial. The former does not necessarily result in the latter. Where the infringement results in the creation of evidence which would not otherwise exist, for example a self-incriminatory statement or, as it is sometimes called, conscriptive evidence, it is generally accepted that the admission of such evidence will affect the fairness of the trial. The reason, of course, is that without the infringement the evidence would not have come into existence. But where, as in the present case, the infringement results in the discovery of a fact, ie the presence of the money in the roof, which would have existed whether there was an infringement or not, the impact on the fairness of the trial, if any, is less obvious.‟ Both judgments appear to be at one in respect of the kind of evidence with which we are here concerned, namely „self-incriminatory‟ or „conscriptive‟ evidence. Whether they, likewise, are at one in respect of the other category alluded to, namely „derivative‟ evidence, need not detain us. [15] Although s 35(5) of the Constitution does not direct a court, as does s 24(2) of the Charter, to consider 'all the circumstances' in determining whether the admission of evidence will bring the administration of justice into disrepute, it appears to be logical that all relevant circumstances should be considered (Pillay at 433h). Collins lists a number of factors to be considered in the determination of whether the admission of evidence will bring the administration of justice into disrepute, such as, for example: the kind of evidence that was obtained; what constitutional right was infringed; was such infringement serious or merely of a technical nature and would the evidence have been obtained in any event. In Collins (at 282), Lamer J reasoned that the concept of disrepute necessarily involves some element of community views and „thus requires the Judge to refer to what he conceives to be the views of the community at large'. Pillay (at 433d-e) accepted that whether the admission of evidence will bring the administration of justice into disrepute requires a value judgment, which inevitably involves considerations of the interests of the public. [16] To the extent here relevant s 35(1) and (2) of the Constitution provides: „(1) Everyone who is arrested for allegedly committing an offence has the right – (a) to remain silent; (b) to be informed promptly – (i) of the right to remain silent; and (ii) of the consequences of not remaining silent; (2) Everyone who is detained, including every sentenced prisoner, has the right – (b) to choose, and to consult with, a legal practitioner, and to be informed of this right promptly; (c) to have a legal practitioner assigned to the detained person by the state and at state expense, if substantial injustice would otherwise result, and to be informed of this right promptly;‟ Of those rights, Froneman J (S v Melani & others 1996 (1) SACR 335 (E) at 347e-h) observed: „The right to consult with a legal practitioner during the pre-trial procedure and especially the right to be informed of this right, is closely connected to the presumption of innocence, the right of silence and the proscription of compelled confessions (and admissions for that matter) which “have for 150 years or more been recognised as basic principles of our law, although all of them have to a greater or lesser degree been eroded by statute and in some cases by judicial decision” (in the words of Kentridge AJ in Zuma's case). In a very real sense these are necessary procedural provisions to give effect and protection to the right to remain silent and the right to be protected against self-incrimination. The failure to recognise the importance of informing an accused of his right to consult with a legal adviser during the pre-trial stage has the effect of depriving persons, especially the uneducated, the unsophisticated and the poor, of the protection of their right to remain silent and not to incriminate themselves. This offends not only the concept of substantive fairness which now informs the right to a fair trial in this country but also the right to equality before the law. Lack of education, ignorance and poverty will probably result in the underprivileged sections of the community having to bear the brunt of not recognising the right to be informed of the right to consultation with a lawyer. (Cf S v Makwanyane (supra at [paras 49, 50 and 51]).)‟ [17] It is clear that the rights in question exist from the inception of the criminal process, that is from arrest, until its culmination (up to and during the trial itself). In the case of the appellant‟s co-accused, accused 1, the State produced what was described as a standard constitutional rights warning form, to which was appended his signature as proof that he had indeed been warned. Not so in respect of the appellant. Neither Mbatha, nor Govender were models of clarity as to exactly what was conveyed to the appellant. But, even were it to be accepted that the cumulative effect of their evidence is that there was a warning of sorts, it appears to have been woefully inadequate. For, whilst there is some reference in the evidence of Govender and Mbatha to the rights to silence and legal representation, there is no indication that the appellant was warned of the consequence of not remaining silent (the logical corollary of the right to silence) or of his entitlement to the services of a legal representative at State expense. There was some suggestion in argument from the bar in this court that such deficiencies as there were came to be cured by the rather detailed warning by Captain Eva. But what is readily apparent from the document introduced into evidence, is that by the time the appellant had been warned by Captain Eva he had already confessed to the robbery. It is important to appreciate that a constitutional right is not to be regarded as satisfied simply by some incantation which a detainee may not understand. The purpose of making a suspect aware of his rights is so that he may make a decision whether to exercise them and plainly he cannot do that if he does not understand what those rights are (R v Cullen (1993) 1 LRC 610 (NZCA) at 613G-I). It must therefore follow that the failure to properly inform a detainee of his constitutional rights renders them illusory. What must govern is the substance of what the suspect can reasonably be supposed to have understood, rather than the formalism of the precise words used (R v Evans (1991) 4 CR (4th) paras 144, 160 and 162). [18] If it is accepted, as I think it must be, that the appellant was not properly warned of his constitutional rights, then it must follow that there was a high degree of prejudice to him because of the close causal connection between the violation and the conscriptive evidence. For, plainly, the rights infringement resulted in the creation of evidence which otherwise would not have existed. And as it was put in R v Ross (1989) 37 CRR 369 at 379 „ . . . the use of any evidence that could not have been obtained but for the participation of the accused in the construction of the evidence for the purposes of the trial would tend to render the trial process unfair.‟ [19] The police did not employ any other investigative techniques to link the appellant to the crime. Their investigation, which had been ongoing for some two months, did not lead them to the appellant. Instead, it was the accusing finger of an informer that pointed them in the appellant‟s direction. There was thus, at the time of his arrest, no other evidence that linked him to the offences. A few hours after his arrest he had furnished to the police the self-incriminating evidence, upon which, without more, he was ultimately convicted. The evidence adduced by Govender and Mbatha of what transpired from the time of the appellant‟s arrest until he arrived at a confessing state of mind, so to speak, is unclear and far from satisfactory. [20] In R v Ndoyana & another 1958 (2) SA 562 (E) at 563 De Villiers JP made the point that: „The circumstances which led up to an accused person's appearance before a magistrate or justice of the peace to make a confession are not less important than the circumstances surrounding the actual making of the confession. From the time an accused person is arrested until he is allowed on bail or brought to trial he is in the custody, power and control of the police. If before his trial he expresses the desire to make a confession the police will know the exact circumstances under which he came to express this wish and everything that went before and led, or could have led, up to it. Evidence of these circumstances should be given.' And in S v Majozi 1964 (1) SA 68 (N) at 71E-G, Harcourt J put it thus: „As long ago as R v Gumede 1942 AD 398 it was stressed that the interposition of the magistrate or justice of the peace should not be permitted to give an aura of respectability and admissibility to a statement which might be suspect in regard to it being motivated by previous events. One must not permit the proceedings before the magistrate or justice to draw a veil between the preceding events and the completed confession. The preceding events should be investigated to convince the Court beyond reasonable doubt of all the requirements in the section set out.‟ [21] Both the trial court and the full court focused solely on the voluntariness of the appellant‟s conduct. Neither touched, even tangentially, on the Constitution‟s exclusionary provision – s 35(5), or appeared to appreciate as Van der Merwe in PJ Schwikkard et al Principles of Evidence 3ed (2009) para 12.9.7 points out: „If an accused was not prior to custodial police questioning informed by the police of his constitutional right to silence, the court might in the exercise of its discretion conclude that even though the accused had responded voluntarily, all admissions made by the accused to the police should be excluded in order to secure a fair trial.‟ The exercise of the relevant discretion leads to the conclusion, in my view, that those factors which justify exclusion materially outweigh those which call for admission. [22] Having given the matter anxious consideration, and not without some hesitation, I arrive at the conclusion that the evidence should have been excluded. I accept that particularly in the current state of endemic violent crime, the public reaction to the exclusion of such evidence is likely to be one of outrage. But we need to remind ourselves that s 35(5) is designed to protect „even those suspected of conduct which would put them beyond the pale‟ (Key v Attorney-General, Cape Provincial Division 1996 (4) SA 187 CC para 13). To borrow once again from Tandwa (para 121): „But in this country's struggle to maintain law and order against the ferocious onslaught of violent crime and corruption, what differentiates those committed to the administration of justice from those who would subvert it is the commitment of the former to moral ends and moral means. We can win the struggle for a just order only through means that have moral authority. We forfeit that authority if we condone coercion and violence and other corrupt means in sustaining order.‟ [23] It follows that the appeal must succeed and in the result it is upheld and the conviction and sentences imposed pursuant thereto are set aside. ______________ V M Ponnan Judge of Appeal APPEARANCES: For Appellant: S B Mngadi Instructed by: PMB Justice Centre, Pietermaritzburg Bloemfontein Justice Centre, Bloemfontein For Respondent: N Dube Instructed by: Director of Public Prosecutions, Pietermaritzburg Director of Public Prosecutions, 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 March 2015 STATUS Immediate Sipho Patrick Magwaza v The State (20169/14) [2015] ZASCA 36 (25 March 2015) 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 Media Statement Today the SCA upheld an appeal by Mr Sipho Magwaza against his conviction on one count each of murder and robbery. On 13 April 2000, a gang of armed men attacked a pension payment point at Klaarwater Community Centre in Marianhill, Kwazulu-Natal and made off with approximately R460 000.00. During the course of the robbery one of the security guards was fatally wounded and dispossessed of his firearm and its ammunition. Mr Magwaza was arrested in consequence of information furnished by a police informer some two months after the incident. A few hours after his arrest he had participated in a pointing out to a Captain in the SAPS and had made certain statements to him that amounted to a confession. That was the only evidence implicating him in the offences and he was eventually convicted on the strength of it by the Durban High Court. His appeal to the Full Court in Pietermaritzburg failed. The SCA held that both of the courts below concentrated on the voluntariness of Mr Magwaza’s conduct. Our Constitution, stated the SCA, now requires criminal trials to be conducted in accordance with notions of basic fairness and justice. In terms of s 35(5) of the Constitution: ‘evidence obtained in a manner that violates any right in the Bill of Rights must be excluded if the admission of that evidence would render the trial unfair or otherwise detrimental to the administration of justice.' The SCA found that Mr Magwaza was not properly warned of his constitutional rights, including his right to silence and legal representation and that there was a high degree of prejudice to him because of the close causal connection between the violation and the self-incriminating evidence and the rights infringement resulted in the creation of evidence which otherwise would not have existed. After a survey of the relevant cases including international jurisprudence, the SCA concluded that the evidence should have been excluded. It followed that Mr Magwaza’s conviction had to be set aside. --- ends ---

3304

non-electoral

2006

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA CASE NO: 043/2005 Reportable In the matter between DR RENE TRUTER First Appellant DR JAN A VENTER Second Appellant and MARTHINUS ALBERTUS DEYSEL Respondent Coram: Harms, Zulman, Navsa, Mthiyane et Van Heerden JJA Heard: 24 February 2006 Delivered: 17 March 2006 Summary: Prescription Act 68 of 1969 - s 12(3) - commencement of running of prescription in respect of claim for damages for medical negligence – meaning of ‘knowledge of …the facts from which the debt arises’ for purposes of s 12(3) in the context of such a claim Neutral citation: This judgment may be referred to as Truter v Deysel [2006] SCA 17 (RSA) JUDGMENT VAN HEERDEN JA: [1] In April 2000, the respondent, Mr Marthinus Albertus Deysel instituted action in the Cape High Court against the appellants, Dr Rene Truter and Dr Jan Venter for damages arising from a personal injury allegedly sustained by him as a result of a series of medical and surgical procedures performed on him by Drs Truter and Venter in the period July 1993 to September 1993. Drs Truter and Venter raised a special plea of prescription which was, in terms of Uniform rule 33(4), set down for separate adjudication. The High Court (Mlonzi AJ) dismissed the special plea with costs on 2 November 2004. The present appeal against this order is with the leave the High Court. [2] The sole issue before the trial court, and indeed also before this court, concerns the time at which prescription started to run in respect of Deysel’s claim for damages against Drs Truter and Venter. In terms of s 11(d) of the Prescription Act 68 of 1969 (‘the Act’), this claim is subject to a three-year extinctive prescription period. According to the special plea, Deysel’s summons was served on Drs Truter and Venter on 17 April 2000. Thus, if the date on which the three-year prescription period commenced running was before 17 April 1997, then any claim which Deysel may have had would have become prescribed and the special plea should have been upheld. [3] For purposes of the adjudication of the special plea, the facts averred in Deysel’s particulars of claim, as amplified by his trial particulars, were taken to be admitted. The six operations which gave rise to Deysel’s claim were the following: DATE OPERATION PERFORMED BY 5 July 1993 Extra-capsular cataract extraction and posterior lens implantation Dr Truter 15 July 1993 Emergency irridectomy to correct iris prolapse Dr Truter 5 August 1993 Irrigation of residual lens material Dr Truter 25 August 1993 Posterior laser capsulotomy Dr Truter 7 September 1993 Anterior vitrectomy and Removal of lens material Dr Venter ± 21 September 1993 Insertion of new intra- ocular lens Dr Venter [4] It was also alleged and, for the purposes of the special plea only, was common cause, that the foreseeable and actual consequence of these procedures performed by Drs Truter and Venter were decompensation of the cornea of Deysel’s right eye, necessitating a corneal graft operation which was performed by a Dr Burger on 12 December 1996. This, in turn, developed complications involving the onset of infection of a corneal stitch and ultimately led to an evisceration of Deysel’s right eye on 23 April 1997. As Deysel had, at the time of the operations in 1993, already lost his left eye, he was thus rendered totally blind. [5] It should be noted that, in his trial particulars, Deysel made the following allegations (which were admitted for the purposes of the special plea): ‘Throughout all the surgical procedures, the Defendants [Drs Truter and Venter] could and should have known that repeated surgery irreparably damages the endolethial cells lining the cornea, and that it was reasonably foreseeable that it could and probably would lead to bullous kerotopathy. It was further reasonably foreseeable that this would in turn require a corneal graft and, if not uncomplicated, eventual loss of the eye if an infection were to set in.’ [6] As early as 27 July 1994, Deysel wrote to the Medical and Dental Council (‘the Council’), lodging a complaint against Dr Truter. In this letter, he recounted the operations performed upon him by Drs Truter and Venter, complained of the conduct of Dr Truter and asked the Council to investigate the matter ‘as I feel there was no need for five operations plus all the pain and suffering and unnecessary sums of money for one cataract’. He also mentioned that, according to a Dr Mouton, who had given him an opinion of the condition of his eye at the request of a Dr Claassen, under whose care he had been placed, there was ‘permanent damage to the eye’. [7] After asking for and receiving from Dr Truter her account of how she had treated Deysel, the Council responded to Deysel in writing on 20 July 1995, attaching a copy of Dr Truter’s explanation, and stating that – ‘After careful consideration the Committee is of the opinion that there has not been conduct which can be said to have been improper or disgraceful, and resolved that no further action be taken’. [8] In 1995, Deysel appointed attorneys Malcolm Lyons Munro and Sohn to investigate and prosecute a malpractice claim against Drs Truter and Venter arising from their treatment of him in 1993. These attorneys obtained professional reports from two experts in the field of ophthalmology, namely Professor Murray, the Head of the Department of Ophthalmology of the University of Cape Town, and Dr Sacks, an ophthalmic surgeon. Both these experts were provided with all the relevant medical records and other documents, including Deysel’s letter of complaint to the Council; Dr Truter’s report to the Council; the Council’s response to Deysel; Dr Truter’s and Dr Venter’s clinical notes and a medical report dated 9 November 1994 by a Dr Kruger, another ophthalmic surgeon whom Deysel had consulted for a second opinion. In addition, Dr Sacks was provided with a letter dated 16 October 1995 by the abovementioned Dr Claassen, also an ophthalmologist, who had treated Deysel’s right eye on various occasions from late 1993 to July 1995, setting out the detail of his findings in respect of Deysel’s right eye. None of these medical experts concluded that an inference of negligence on the part of Drs Truter and Venter was justified. Apart from Drs Kruger and Claassen, Deysel was referred to yet another eye specialist, a Dr Mouton, in June 1994. This doctor ascribed the reduction in Deysel’s visual acuity to ‘previous chronic macular oedema’. A fourth expert consulted by Deysel in February 1996, a Dr Woods, concluded that ‘he had reduced vision probably due to changes in the cornea’ and that ‘it appeared from my initial assessments that nothing could be done to improve his vision’. [9] After Deysel’s right eye had been removed by Dr Burger in April 1997, he made further complaints about Drs Truter and Venter to, inter alia, the Council and the MEC for Health in the Western Cape. New attorneys appointed by him in 1998, D Butlion and Associates, obtained a further medico-legal report, this time from a Professor Stulting, the Head of the Department of Ophthalmology of the University of the Orange Free State, who was provided with the same documentation previously submitted to the other experts. Professor Stulting’s very detailed report, dated 7 June 1999, concluded as follows: ‘it is my humble and honest opinion that Mr Deysel will not be able to prove that the conduct of any of the abovementioned doctors, namely, Dr Truter, Prof Venter or Dr Burger, fell short of the standard of care expected from a medical expert, such as an ophthalmologist, and that such negligent conduct caused the loss of Mr Deysel’s right eye.’ [10] According to evidence given by a Ms Pienaar, who was at the relevant time employed by firm of attorneys who ultimately took over Deysel’s matter, Deysel told her in late 1999 about a certain Dr Lecuana, an ophthalmologist at the University of Cape Town, whom he had heard (and to whom he had spoken about his problems) on a radio talk show. In early 2000, Ms Pienaar consulted with Dr Lecuana, who in turn referred her to a Dr Steven. Ms Pienaar’s evidence makes it clear that the same set of facts and documents which had been presented to the experts previously consulted were presented to Drs Lecuana and Steven. However, Dr Steven had expressed the view that the operations performed by Dr Truter and Venter had been done too quickly one after the other, without giving the cornea time to clear and heal, and that this constituted negligence on the part of the said doctors. As Ms Pienaar put it, ‘that was the first positive expert report that I could obtain’, and it was on the basis of this report that summons was issued on behalf of Deysel in April 2000. [11] The relevant section of the Act (s 12) reads as follows: ‘When prescription begins to run (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.’ (Emphasis added.) [12] There is no suggestion that Drs Truter and Venter prevented Deysel ‘from coming to know of the existence of the debt’ (s 12(2)) and Deysel certainly knew ‘the identity of the debtor(s)’ from the outset. The crisp question before the court a quo was thus whether Deysel had actual or deemed knowledge of ‘the facts from which the debt arises’, as required by s 12(3), prior to 17 April 1997. [13] In the High Court (and on appeal before us), counsel for Deysel contended that, in the context of a medical negligence claim, the meaning of the phrase ‘knowledge…of the facts from which the debt arises’ includes knowledge of facts showing that the defendant, in treating the plaintiff, failed to adhere to the standards of skill and diligence expected of a practitioner in the former’s position. Thus, it was submitted, until the plaintiff has sufficient detail – frequently, if not invariably, in the form of an expert medical opinion – showing that the defendant failed to exhibit the necessary degree of diligence, skill and care and in what respects he or she failed to do so, the plaintiff does not, in terms of s 12(3), have ‘knowledge of the facts from which the debt arises’. [14] Applied to the facts of this case, Deysel’s counsel argued that the first time that Deysel or his legal representatives were made aware that the known facts (the conduct of Drs Truter and Venter) constituted negligence was when Dr Steven gave advice to that effect to Ms Pienaar shortly before the issue of summons. There was no evidence to suggest that Deysel had been dilatory in not consulting with Dr Steven at an earlier stage or that he had acted unreasonably in endeavouring to obtain assistance from the various other sources set out above. Thus, the argument continued, prescription did not start to run in respect of Deysel’s alleged claim until such time as Dr Steven’s opinion was obtained and the special plea had no merit. [15] The High Court upheld this contention, stating: ‘It is not legally conceivable how a malpractice case will see its day in a South African court of law without the litigant obtaining knowledge of [a] medical expert that indeed the symptoms complained about or the resultant consequence is indicative of some degree of incompetence or negligence constituting the wrongful act.’ Mlonzi AJ thus held that, because Deysel had only received a favourable expert medical opinion in 2000, prescription only commenced running at that stage. [16] I am of the view that the High Court erred in this finding. For the purposes of the Act, the term ‘debt due’ means a debt, including a delictual debt, which is owing and payable. A debt is due in this sense when the creditor acquires a complete cause of action for the recovery of the debt, that is, when the entire set of facts which the creditor must prove in order to succeed with his or her claim against the debtor is in place or, in other words, when everything has happened which would entitle the creditor to institute action and to pursue his or her claim.1 [17] In a delictual claim, the requirements of fault and unlawfulness do not constitute factual ingredients of the cause of action, but are legal conclusions to be drawn from the facts: ‘A cause of action means the combination of facts that are material for the plaintiff to prove in order to succeed with his action. Such facts must enable a court to arrive at certain legal conclusions regarding unlawfulness and fault, the constituent elements of a 1 See, for example, Evins v Shields Insurance Co Ltd 1980 (2) SA 814 (A) at 838D-H and Deloitte Haskins & Sells Consultants (Pty) Ltd v Bowthorpe Hellerman Deutsch (Pty) Ltd 1991 (1) SA 525 (A) at 532H-I. See further MM Loubser Extinctive Prescription (1996) para 4.6.2 at pp 80-81 and the other authorities there cited. delictual cause of action being a combination of factual and legal conclusions, namely a causative act, harm, unlawfulness and culpability or fault.’2 (Emphasis added.) [18] In the words of this court in Van Staden v Fourie:3 ‘Artikel 12(3) van die Verjaringswet stel egter nie die aanvang van verjaring uit totdat die skuldeiser die volle omvang van sy regte uitgevind het nie. Die toegewing wat die Verjaringswet in hierdie verband maak, is beperk tot kennis van “die feite waaruit die skuld ontstaan”.’ [19] ‘Cause of action’ for the purposes of prescription thus means – ‘…every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the 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.’4 [20] As contended by counsel for Drs Truter and Venter, an expert opinion that a conclusion of negligence can be drawn from a particular set of facts is not itself a fact, but rather evidence. As indicated above, the 2 Loubser op cit para 4.6.1 at p 80 and the authorities there cited, in particular Evins v Shield Insurance Co Ltd at 838H-839A. 3 1989 (3) SA 200 (A) at 216D-E (per EM Grosskopf JA), cited with approval by Harms JA (with whom Scott JA concurred), in the context of a special plea of prescription raised against a claim for damages for professional negligence, in Drennan Maud & Partners v Pennington Town Board 1998 (3) SA 200 (SCA) at 213C. 4 Per Maasdorp JA in McKenzie v Farmers’ Co-operative Meat Industries Ltd 1922 AD 16 at 23, cited with approval by Corbett JA in the Evins case at 838D-F. presence or absence of negligence is not a fact; it is a conclusion of law to be drawn by the court in all the circumstances of the specific case.5 Section 12(3) of the Act requires knowledge only of the material facts from which the debt arises for the prescriptive period to begin running – it does not require knowledge of the relevant legal conclusions (ie that the known facts constitute negligence) or of the existence of an expert opinion which supports such conclusions. [21] Mlonzi AJ appears to have relied on the judgment of this court in the recent case of Van Zijl v Hoogenhout 6 for her conclusion that knowledge of fault is a requirement for the commencement of the running of prescription. In my view, she erred in so doing. The Van Zijl case is entirely distinguishable from the present case. In the Van Zijl case, Heher JA held that, where the prescription statute speaks of prescription beginning to run when a creditor has knowledge, ‘it presupposes a creditor who is capable of appreciating that a wrong has been done to him or her by another’.7 The plaintiff in the Van Zijl case was found on the facts to have lacked capacity for many years to appreciate that a wrong had been done to her and that this had therefore delayed the commencement of the running 5 See, for example, Mkhatswa v Minister of Defence 2000 (1) SA 1104 (SCA) para 23 at 1112H. 6 [2004] 4 All SA 427 (SCA). 7 Para 19. of prescription.8 By contrast, in the present case, it is abundantly clear that Deysel believed and appreciated from as early as 1994 that a wrong had been done to him by Drs Truter and Venter.9 [22] In accordance with the so-called ‘once and for all’ rule, a plaintiff must claim in one action all damages, both already sustained and prospective, flowing from one cause of action. Therefore, a plaintiff’s cause of action is complete as soon as some damage is suffered, not only in respect of the loss already sustained by him or her, but also in respect of all loss sustained later.10 [23] Applied to the facts of this case, Deysel’s cause of action was complete and the debt of Drs Truter and Venter became due as soon as the first known harm was sustained by Deysel, notwithstanding the fact that the loss of his right eye occurred later. [24] According to Deysel’s own evidence, from at least the time of his initial complaint to the Council in July 1994, he knew the details of the operations performed on him by Drs Truter and Venter and that he had 8 Para 44. 9 It is perhaps also necessary to point out that the High Court apparently misconstrued the relevant passage from the majority judgment in the Drennan Maud case as providing authority for the proposition that ‘knowledge of fault was considered as the required knowledge in a professional negligence case’. As submitted by counsel for Drs Truter and Venter, the phrase ‘design fault’ used by Olivier JA (at 205E-F) was plainly a reference to a defect in the design, not to fault in the sense of culpability. 10 See Evins v Shield Insurance at 836A-B and Drennan Maud & Partners v Pennington Town Board at 211F-G. See also Loubser op cit para 4.6.2 at 81ff. suffered harm. He also knew that the two doctors were required to exercise reasonable care and skill in treating him; indeed his unremitting and oft- repeated complaint was that they had failed to do so, as a result of which he had undergone a multiplicity of medical and surgical procedures and had suffered permanent damage to his remaining eye. He knew that he had a potential claim against Drs Truter and Venter, hence his instructions to the first set of attorneys in 1995 to investigate such a claim. [25] As is clear from the sequence of events described above, all the facts and information in respect of the operations performed on Deysel by Drs Truter and Venter in 1993 were known, or readily accessible, to him and his legal representatives as early as 1994 or 1995. Neither Deysel nor Ms Pienaar was able to point to any new fact which was given to either Dr Lecuana or Dr Steven which had not been presented to the previous medical experts for their opinions and which had not been known or readily accessible to Deysel and his representatives before 17 April 1997 (ie more than 3 years before the date on which he instituted action). Indeed, the ‘negative indicators’ which apparently eventually led Dr Steven to conclude that there had been negligence on the part of Drs Truter and Venter were dealt with in the reports of medical experts previously consulted. [26] Thus, neither Dr Lecuana nor Dr Steven revealed or furnished any new facts to Deysel: they merely advanced an opinion, in the form of a conclusion that there had been negligence, which opinion was based on the same facts which had been available prior to 17 April 1997 and which had been furnished to the other experts. [27] Lastly, insofar as the court a quo relied on English medical- negligence case law as an aid to the interpretation of the knowledge requirement in s 12(3) of the Act, I am of the view that it was incorrect in doing so. Not only do the English cases concern the interpretation and application of the English Limitation Act of 1980, which differs materially from the South African Act in both content and origin, but such cases are also, as illustrated convincingly by counsel for Drs Truter and Venter, eminently distinguishable on their facts from the present case and are, in addition, not necessarily consistent. Counsel for Deysel tried to persuade us otherwise, but to no avail. [28] It follows that the appeal must succeed. [29] The following order is made: (a) The appeal is upheld with costs. (b) The order of the Cape High Court is set aside and replaced with the following order: ‘The special plea of prescription is upheld and the plaintiff’s action is dismissed with costs’. B J VAN HEERDEN JUDGE OF APPEAL CONCUR: Harms JA Zulman JA Navsa JA Mthiyane JA

In the Supreme Court of Appeal of South Africa MEDIA SUMMARY – JUDGMENT DELIVERED IN SUPREME COURT OF APPEAL From: The Registrar, Supreme Court of Appeal Date: 17 March 2006 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 DR R TRUTER and DR J VENTER v M A DEYSEL The Supreme Court of Appeal today upheld the appeal of Drs R Truter and J Venter against a judgment of the Cape High Court which had dismissed a special plea of prescription raised by the two doctors in an action instituted against them by Mr M A Deysel for damages arising from a personal injury allegedly sustained by him as a result of a series of medical and surgical procedures performed on him by them during 1993. The sole issue before the Cape High Court and before the SCA concerned the time at which prescription started to run in respect of Deysel’s claim against Drs Truter and Venter. In terms of s 11(d) of the Prescription Act of 1969 (the Act), his claim would prescribe after three years. Deysel’s summons was served on Drs Truter and Venter on 17 April 2000. Thus, if the date on which the three-year period started running was before 17 April 1997, then any claim which Deysel may have had would have been extinguished by prescription and the special plea should have been upheld. During the period July to August 1993, Dr Truter had performed four different ophthalmologic procedures on Deysel’s right eye, starting with a cataract operation. Thereafter, during September 1993, Dr Venter had performed two further ophthalmologic procedures on the same eye. For the purposes of deciding the special plea only, the parties agreed that the foreseeable and actual consequence of these six procedures were decompensation of the cornea, necessitating a corneal graft operation which was performed by a Dr Burger in December 1996. This, turn, developed complications and ultimately led to the removal of Deysel’s right eye by Dr Burger in April 1997. As Deysel had, at the time of the procedures in 1993, already lost his left eye, he was thus rendered totally blind. As early as July 1994, Deysel wrote to the Medical and Dental Council, lodging a detailed complaint against Dr Truter and asking the Council to investigate the matter. He mentioned in the letter that, according to a Dr Mouton, who had given him an opinion of the condition of his eye, there was ‘permanent damage to the eye’. After asking for and receiving from Dr Truter her account of how she had treated Deysel, the Council informed Deysel in writing that it was of the opinion that Dr Truter was not guilty of any improper or disgraceful conduct. During the period from 1995 to late 1999, Deysel appointed three different firms of attorneys, one after the other, to investigate and prosecute a medical malpractice claim against Dr Truter and Venter. These firms of attorneys obtained professional reports from three experts in the field of ophthalmology. In addition, Deysel also consulted four other eye specialists about the condition of his eye. All these experts were provided with all the relevant medical records and other documents, including Deysel’s letter of complaint to the Council and the Council’s response. None of the medical experts concluded that an inference of negligence on the part of Drs Truter and Venter was justified. Eventually, in early 2000, Deysel’s ‘new’ firm of attorneys consulted with a Dr Steven, who expressed the view that the operations performed by Drs Truter and Venter had been done one after the other, without giving the cornea time to clear and heal, and that this constituted negligence on the part of the said doctors. This was the first ‘positive’ expert report that had been obtained and it was on the basis of this report that Deysel’s summons was issued in April 2000. Deysel’s claim against the two doctors would have prescribed if he had have actual or deemed knowledge of ‘the facts from which the debt arises’, in terms of s 12(3) of the Act, prior to 17 April 1997. The High Court concluded that the first time that Deysel or his legal representatives were made aware that the known facts (the conduct of Drs Truter and Venter) constituted negligence was when Dr Steven expressed this view shortly before the issue of summons. Thus, the court held, prescription did not start to run until such time as Dr Steven’s favourable medical opinion was obtained and the special plea had no merit. The SCA disagreed. It pointed out that, for the purposes of the Act, a debt is due when the creditor acquires a complete cause of action for the recovery of the debt, ie the entire set of facts which the creditor must prove in order to succeed with his or claim against the debtor. In a delictual claim, the presence or absence of negligence is not a fact; it is a conclusion of law to be drawn by the court in all the circumstances of the specific case. An expert opinion that a conclusion of negligence can be drawn from a particular set of facts is not itself a fact, but rather evidence. Furthermore, a plaintiff has to claim in one action all damages, both already suffered and prospective, flowing from one cause of action. In this case, Deysel’s cause of action was complete and the debt of Drs Truter and Venter became due as soon as the first known harm was suffered by Deysel, even though the loss of his eye occurred later. The SCA concluded that all the facts and information in respect of the operations performed on Deysel by Drs Truter and Venter were known, or readily accessible, to him and his legal representatives as early as 1994 or 1995. There was no new fact which was given to Dr Steven in 2000 which had not been presented to the previous medical experts for their opinions. Therefore, prescription of Deysel’s claim had started to run before 17 April 1997 (ie more than three years before the date on which Deysel instituted action). It followed that Deysel’s claim against Drs Truter and Venter had been extinguished by prescription. The Cape High Court should have upheld the doctors’ special plea and dismissed Deysel’s action.

3956

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case No: 484/2021 In the matter between: HELEN SUZMAN FOUNDATION APPLICANT and THE SPEAKER OF THE NATIONAL ASSEMBLY FIRST RESPONDENT THE PRESIDENT OF THE REPUBLIC OF SOUTH AFRICA SECOND RESPONDENT THE CABINET OF THE REPUBLIC OF SOUTH AFRICA THIRD RESPONDENT CHAIRPERSON OF THE NATIONAL COUNCIL OF PROVINCES FOURTH RESPONDENT THE MINISTER OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS FIFTH RESPONDENT Neutral citation: Helen Suzman Foundation v The Speaker of the National Assembly and Others (484/2021) [2023] ZASCA 6 (03 February 2023) Coram: DAMBUZA, PLASKET and MABINDLA-BOQWANA JJA, and BASSON and CHETTY AJJA Heard: This appeal was, by consent between the parties, disposed of without an oral hearing in terms of s 19(a) of the Superior Courts Act 10 of 2013. Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives via e-mail, publication on the Supreme Court of Appeal website and released to SAFLII. The date and time for hand-down are deemed to be 11h00 on 03 February 2023. Summary: Reconsideration application brought in terms of s 17(2)(f) of the Superior Courts Act 10 of 2013 – the inquiry is whether grave injustice would result if the order sought to be reconsidered were to stand – in this case the basis of the reconsideration application was that costs in an application for leave to appeal should not have been granted against the applicant based on the Biowatch principle – no evidence that the relevant principles were ignored or that discretion was exercised improperly in making the costs award. ORDER On application for reconsideration: referred by Maya P in terms of s 17(2)(f) of the Superior Courts Act 10 of 2013: The application is dismissed with costs. JUDGMENT Dambuza JA (Plasket and Mabindla-Boqwana JJA and Basson and Chetty AJJA concurring) Introduction [1] This is an application, brought by the Helen Suzman Foundation (HSF) in terms of s 17(2)(f) of the Superior Courts Act 10 of 2013, for the reconsideration of an adverse costs order made pursuant to this court’s dismissal of the HSF’s petition for leave to appeal against an order of a full court of the Gauteng Division of the High Court, Pretoria (the full court). The President of this court referred the reconsideration of the costs order for argument in open court and the parties agreed that it should be determined without oral argument, in terms of s 19(a) of the Superior Courts Act. [2] The background to this application is the following. The HSF brought an urgent application for declaratory relief against the Government of the Republic of South Africa, represented by the Speaker of Parliament, the President, the Cabinet, the Chairperson of the National Council of Provinces and the Minister of Co-operative Governance and Traditional Affairs (the Minister). The order sought was essentially to the effect that Parliament had failed to fulfil its obligations, in terms of ss 42(3), 44(1), 55(1), and 68 of the Constitution, to provide a legislative response specific to the Covid-19 pandemic. [3] In order to manage the Covid-19 pandemic, a national state of disaster had been declared by the Minister, in terms of s 27(1) of the Disaster Management Act 57 of 2002 (DMA). Regulations and directions had been issued in terms of the DMA concerning a broad range of issues, including the lockdown of the entire population and the control of economic activity. The HSF’s application challenged the continued reliance of the government on the DMA as the source of authority for managing the pandemic. It contended that the Minister, the Cabinet, and the President were deliberately evading the open, accountable and participatory Parliamentary lawmaking processes envisaged by the Constitution, by failing to enact specific legislation to manage the pandemic, rather than governing by decree in terms of the DMA. It sought a declarator that Parliament had failed to initiate, prepare and pass legislation to regulate the state’s response to the harm caused by the Covid-19 pandemic and that the Cabinet had failed to initiate that legislation as it was obliged to do under s 5(2)(d), and to further fulfil its obligations under s 7(2) of the Constitution, to ‘respect, protect and fulfil the rights in the Bill of Rights regarding their legislative responses to the impact of Covid -19’. The government parties opposed the application on the basis that they were not under an obligation to pass specific legislation and that the DMA provided a proper, comprehensive legislative framework for management of disasters, including the Covid-19 pandemic. [4] The full court rejected the contention by the HSF that the DMA was intended to be a stop-gap measure in times of disasters. It found that the question whether a positive obligation exists on Parliament and the Executive to legislate is a fact specific enquiry, and that nothing in the language of s 7(2) of the Constitution created an obligation on the Cabinet and Parliament to initiate and pass specific Covid-19 legislation. It therefore dismissed the application. [5] The full court ordered each party to pay its own costs. That costs order was premised on a finding that the HSF had sought to assert a ‘constitutionally discernible right’, in the public interest, and the matter raised important constitutional issues regarding the responsibilities of the government to legislate. The full court found that it was appropriate that the HSF be afforded the protection provided by the Biowatch principle (to which I shall refer more fully below) against an adverse costs order. It also made no order as to costs when refusing leave to appeal. [6] The HSF then petitioned this court for leave to appeal. Its application was refused but this time, a costs order was made against it. In this application the HSF contends that it should have been given the benefit of the Biowatch principle once more, for the same reasons given by the high court. It argued that no argument on costs was made or considered in that application; that even those of the respondents who had requested that costs be awarded in their favour had advanced no reason as to why the Biowatch principle should not be applied; and that their argument rested only on the premise that there were no reasonable prospects of success on appeal. [7] Section 17(2)(f) provides: ‘The decision of the majority of the judges considering an application [for leave to appeal] referred to in paragraph (b), or the decision of the court, as the case may be, to grant or refuse the application shall be final: Provided that the President of the Supreme Court of Appeal may, in exceptional circumstances, whether of his or her own accord or on application filed within a month of the decision, refer the decision to the court for reconsideration and, if necessary, variation.’ Simply put, this subsection creates an opportunity for reconsideration of a decision made by this court on an application to it for leave to appeal. Importantly, the President of this Court permits such reconsideration only in exceptional circumstances. In S v Liesching and Others1 the Constitutional Court held that the primary object of the section is to enable the President of this Court to deal with situations where grave injustice might otherwise result, and that it is not intended to afford disappointed litigants a further chance to obtain an order that had already been refused. In this case such injustice might result if an award of costs was made injudiciously, contrary to the established guiding principles on the awarding of costs by courts. [8] There is no suggestion that the Biowatch principle has abolished the discretion vested in courts with regard to costs orders. Courts must, however, commence a consideration of a costs award from the premise that in constitutional litigation an unsuccessful private litigant in proceedings against the State ordinarily ought not to be ordered to pay costs. The principle, however, must be considered holistically. In Biowatch Trust v Registrar, Genetic Resources and Others2 the principle was articulated thus: ‘If there should be a genuine, non-frivolous challenge to the constitutionality of a law or of State conduct, it is appropriate that the State should bear the costs if the challenge is good, but if it is not, then the losing non-State litigant should be shielded from the costs consequences of failure. In this way the responsibility for ensuring that the law and State conduct are constitutional is placed at the correct door’. This principle is qualified. If a matter which otherwise falls within the principle ‘is frivolous or vexatious, or in any other way manifestly inappropriate, the 1 S v Liesching and Others [2018] ZACC 25; 2019 (4) SA 219 (CC); 2018 (11) BCLR 1349 (CC); 2019 (1) SACR 178 (CC) paras 138-139. 2 Biowatch Trust v Registrar, Genetic Resources and Others [2009] ZACC 14; 2009 (6) SA 232 (CC); 2009 (10) BCLR 1014 (CC) para 23. See too Affordable Medicines Trust and Others v Minister of Health and Another [2005] ZACC 3; 2006 (3) SA 247 (CC); 2005 (6) BCLR 529 (CC) para 138. applicant should not expect that the worthiness of its cause will immunize it against an adverse costs award’.3 [9] It was submitted by the HSF that the bar to justify departure from the Biowatch principle is set high. I agree. As already stated, the courts have set the bar at litigation that is frivolous, manifestly inappropriate and vexatious, and where the conduct of an unsuccessful private litigant deserves censure.4 In Motala v Master, North Gauteng High Court, Pretoria5 this court made the point that the Biowatch principle is not a licence to litigate with impunity against the State. It referred to the following remarks of the Constitutional Court in Lawyers for Human Rights v Minister in the Presidency and Others:6 ‘[The Biowatch rule], of course, does not mean risk-free constitutional litigation. The court, in its discretion, might order costs, Biowatch said, if the constitutional grounds of attack are frivolous or vexatious - or if the litigant has acted from improper motives or there are other circumstances that make it in the interests of justice to order costs. The High Court controls its process. It does so with a measure of flexibility. So a court must consider the “character of the litigation and [the litigant's] conduct in pursuit of it”, even where the litigant seeks to assert constitutional rights.’ [10] In this Court the respondents did not suggest that the full court application was frivolous or vexatious litigation. Their argument was that the costs order against the HSF was properly made, based on events that unfolded after the full court had refused leave to appeal, but prior to the lodging in this Court of the HSF application for leave to appeal. 3 Para 24. 4 Affordable Medicines Trust (note 2) para 138. 5 Motala v Master, North Gauteng High Court [2019] ZASCA 60; 2019 (6) SA 68 (SCA) para 98. 6 Lawyers for Human Rights v Minister in the Presidency and Others [2016] ZACC 45; 2017 (1) SA 645 (CC); 2017 (4) BCLR 445 (CC) para 18. [11] During that period this Court handed down judgment in President, RSA and Another v Women’s Legal Centre Trust and Others7. The issue in that case was the State’s failure to recognize and regulate Muslim marriages. The Women’s Legal Centre Trust had sought a declarator couched in terms similar to those sought by the HSF in this case – that the state had a duty to prepare, initiate, introduce and bring into operation legislation recognising Muslim marriages. A further declaratory order sought was that the President and the Cabinet had failed to fulfil that obligation. In the alternative it sought a declarator that the Marriage Act 25 of 1961 and the Divorce Act 70 of 1979 be declared unconstitutional to the extent that there was no provision therein for recognition of Muslim marriages. Both pieces of legislation were found exclusionary and discriminatory for failure to regulate Muslim marriages. However, the court was concerned about separation of powers. For that reason, it refused to grant the declarator sought in the main prayer. It referred to the judgments of the Constitutional Court in Glenister v President of the Republic of South Africa and Others8 and Carmichele v Minister of Safety and Security and Another (Centre for applied Legal Studies intervening)9 in which that court held that courts cannot direct the State to locate a response in one piece of legislation rather than another. The Court remarked on the absence of precedent of courts directing the enactment of legislation under s 7(2) of the Constitution. It held that 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.10 [12] The respondents’ argument was that this decision was already in the public domain when HSF launched the application for leave to appeal. HSF would 7 President, RSA and Another v Women’s Legal Centre Trust and Others [2020] ZASCA 177; 2021 (2) SA 381 (SCA). 8 Glenister v President of the Republic of South Africa and Others [2011] ZACC 6; 2011 (3) SA 347 (CC); 2011 (7) BCLR 651 (CC) at paras 65 to 68. 9 Carmichele v Minister of Safety and Security and Another (Centre for Applied Legal Studies intervening) [2001] ZACC 22; 2001(4) SA 938 (CC); 2001 (10) BCLR 995 (CC) para 44. 10 Women’s Legal Centre Trust (note 7) para 43. therefore have been aware of the judgment. It should not have proceeded with the application. Doing so was unreasonable and placed the HSF outside the realm of the Biowatch protection, so it was submitted. [13] The judicial discretion of a court on costs has not been abolished by the Biowatch principle. In public interest cases, however, the exercise of that discretion is guided first and foremost by Biowatch together with the traditional guiding principles, including the conduct of the parties in the litigation and success on merits. [14] I cannot find any valid basis for the HSF’s contention that this court did not ‘apply’ the Biowatch principle when considering the application for leave to appeal. To reach that conclusion one would have to assume that the court simply ignored the principle which, apart from being the primary guideline, had been pertinently brought to its attention through the judgment of the full court. The court was aware, from the judgment of the full court, that the Biowatch principle had been applied by the full court – and that it had done so not once, but twice. It would also have been aware of the respondents’ reliance on the judgment in Women’s Legal Centre Trust in the application for leave to appeal, particularly the contentions that the issues raised therein had been determined ‘convincingly and conclusively’, and that the HSF had acted unreasonably in seeking leave to appeal.11 The costs award was made in this context. [15] Given the submissions made to the court in the application for leave to appeal, together with the fact that Biowatch is not unqualified,12 I am unable to 11 The respondents referred to the judgment in the answering papers in the application for leave to appeal and HSF responded in its replying papers. 12 See s16. find that grave injustice would result if the decision sought to be reconsidered would stand. Consequently, the following order shall issue: The application is dismissed with costs. ___________________ N DAMBUZA ACTING DEPUTY PRESIDENT Mabindla-Boqwana JA (concurring): [16] I am in agreement with the ultimate conclusion and order proposed by my colleague in the first judgment. There is, however, one issue regarding the application that concerns me, which I consider important to express an opinion on. This has to do with whether s 17(2)(f) of the Superior Courts Act envisages the kind of application brought by the applicant for reconsideration. The issue is a bit nuanced. At first glance, it seems trifling. Yet, I believe that it warrants further thinking. I say so for the reasons that follow. [17] Section 17(2)(f) provides that: ‘The decision of the majority of the judges considering an application [for leave to appeal] referred to in paragraph (b), or the decision of the court, as the case may be, to grant or refuse the application shall be final: Provided that the President of the Supreme Court of Appeal may in exceptional circumstances, whether of his or her own accord or on application filed within one month of the decision, refer the decision to the court for reconsideration and, if necessary, variation.’ (My emphasis.) [18] This section confers a discretion on the President of this Court ‘to refer a refusal of an application for leave to appeal to the Supreme Court of Appeal for reconsideration, and, if necessary, variation, in circumstances where an applicant has been denied leave to appeal by the Supreme Court of Appeal on petition pursuant to the provisions of section 17(2)(b)’.13 (My emphasis.) [19] As stated in Liesching, the court reconsidering is not considering an appeal on the merits; rather, it is reconsidering the decision refusing leave to appeal. Essentially, the court is required to decide whether the court below and the two judges of the Supreme Court of Appeal should have found that reasonable prospects of success existed to grant leave to appeal’.14 (My emphasis.) [20] The two judges of the Supreme Court of Appeal in the present matter refused leave to appeal the decision of the full court, with costs. The applicant is not aggrieved by the decision to dismiss the application for leave to appeal and is, therefore, content not to persist with a reconsideration of whether there were reasonable prospects of success on appeal. Rather, its discontent is limited to the costs order granted against it by the two judges. Put differently, this Court is not asked to consider whether the full court and the two judges should have found that there are reasonable prospects of success on appeal; which is the purpose of s 17(2)(f), in my view. [21] My reading of s 17(2)(f) is that this Court, in reconsidering the decision of the Court that considered the petition, essentially steps into the shoes of the two judges by re-looking at the decision of the court below refusing leave to appeal and, if necessary, varying the decision of the two judges in respect of what was brought on petition. 13Liesching; para 118; see footnote 1. 14 Ibid para 36; see also Notshokovu v S [2016] ZASCA 112; 2016 JDR 1647 (SCA) para 2. [22] In the present matter, the question of costs was not one of the issues which the two judges were called upon to consider when determining the petition. This is because, as regards costs, the full court had applied the Biowatch principle and had made no order as to costs. The applicant took no issue with that order. [23] The application brought to the President of this Court and referred to us is not the decision of the full court and that of the two judges refusing leave to appeal. The costs order complained about was granted in the first instance by the two judges determining the petition. They did not change the decision of the full court in respect of costs on the merits (or otherwise) of the case, but instead only ordered costs in respect of the application for leave to appeal. [24] Accordingly, the issue that the applicants have brought for reconsideration is a matter that ought to have been taken on appeal to the Constitutional Court, in my view. This Court is, therefore, not at liberty to change the costs order granted by the two judges. Only the Constitutional Court may vary that decision. [25] What I am proposing is unrelated to the question of whether a costs order on its own can be appealed against. Instead, the issue that I am raising is whether a court reconsidering the result of a petition can consider any matter other than that which involves the question of whether the court below and the two judges considering the petition should have found that there indeed were reasonable prospects of success on appeal, which in essence is the purpose of s 17(2)(f). [26] It may, conceivably, be argued that the costs order is part of the refusal decision. The difficulty with that argument is that, absent a reconsideration of the refusal for leave to appeal part of the order, the decision loses the character of the sort contemplated for referral in terms of s 17(2)(f). This is because the order of the court below as to whether leave to appeal should have been granted, is no longer open for reconsideration. The substance for reconsideration is the refusal of the leave to appeal. Mindful of the fact that this has not been raised by the parties, I make no finding on this aspect. ____________________________ NP MABINDLA - BOQWANA JA JUDGE OF APPEAL Appearances: For appellant: M du Plessis SC with A Coutsoudis Instructed by: Webber Wentzel, Sandton Symington De Kok Attorneys, Bloemfontein For first respondent: IV Maleka SC with M Salukazana Instructed by: State Attorney, Cape Town 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: 03 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 Helen Suzman Foundation v The Speaker of the National Assembly and Others (484/2021) [2023] ZASCA 6 (03 February 2023) Today the Supreme Court of Appeal (SCA) dismissed, with costs, an application for reconsideration of a decision made on an application for leave to appeal. The reconsideration application was referred by the President of the SCA for oral argument in terms of s 17(2)(f) of the Superior Courts Act 10 of 2013. This application was brought by the Helen Suzman Foundation (HSF) in terms of s 17(2)(f) of the Superior Courts Act 10 of 2013, for the reconsideration of an adverse costs order made pursuant to SCA’s dismissal of the HSF’s petition for leave to appeal against an order of a full court of the Gauteng Division of the High Court, Pretoria. The HSF application for leave to appeal was refused and a costs order was made against it. In the reconsideration application the HSF argued that costs should not have been awarded against it in terms of the Biowatch principle as the full court had done. The SCA held that the Biowatch principle is not unqualified and it was unable to find that the judges that considered the application for leave to appeal ignored the applicable principles when considering the costs ordered. The court was also unable to find that grave injustice would result if the decision award of costs was allowed to stand. In a separate concurring judgment Mabindla-Boqwana JA expressed doubt as to whether s 17(2)(f) of the Superior Courts Act envisages the kind of application brought by the applicant for reconsideration. ~~~~ends~~~~

428

non-electoral

2016

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case No: 453/15 In the matter between: RONSON PILLAY APPELLANT and THE STATE RESPONDENT Neutral Citation: Pillay v The State (453/2015) [2016] ZASCA 26 (18 March 2016) Coram: Tshiqi, Petse and Zondi JJA Heard: 24 February 2016 Delivered: 18 March 2016 Summary: Criminal law and procedure - Assessment of evidence – trial court’s failure to evaluate evidence of a child witness who is also a single witness by overlooking various contradictions in the evidence and their effect on its credibility constituted misdirection. ____________________________________________________________________ ORDER _____________________________________________________________________ On appeal from: KwaZulu-Natal Division of the High Court, Pietermaritzburg (Pillay and Mbatha JJ sitting as court of appeal): The appeal succeeds and the conviction and sentence are set aside. JUDGMENT Zondi JA (Tshiqi and Petse JJA concurring): [1] The appellant was convicted in the regional court, Verulam on a charge of indecent assault read with s 94 of the Criminal Procedure Act 51 of 1977 (the Act). He was found to have indecently assaulted the complainant, a 13 year old girl, over the period June 2006 to May 2007 by making her touch his penis and by showing her a picture of a penis on his cellular phone. On 26 November 2009 he was sentenced to four years’ imprisonment in terms of s 276 (1)(i) of the Act. He appealed to the KwaZulu-Natal Division of the High Court, Pietermaritzburg. On appeal the conviction was confirmed, but the appeal against sentence was allowed to the extent that the sentence imposed by the trial court was set aside and replaced with one of two years’ imprisonment in terms of s 276(1)(i) of the Act. The appeal against conviction and sentence is before this court with the leave of the court a quo. (This was prior to the enactment of the Superior Courts Act 10 of 2013 which came into effect on 23 August 2013). [2] It is common cause that the appellant, a 30 year old metro police officer, was a tenant at the complainant’s residence from 2004 to June 2007. He stayed in the main house with the complainant and her family from 2004 to October 2006 and later in the outbuilding from November 2006 to June 2007. The events giving rise to the charge are alleged to have occurred during the appellant’s stay at the complainant’s residence. [3] The relationship between the appellant and the complainant’s father was not only that of a landlord and tenant but they were also friends and colleagues. As he was experiencing financial problems the complainant’s father assisted him financially and secured a loan on his behalf to help him get on his feet. In due course the appellant’s financial situation worsened and in consequence he fell into arrears with his rent and failed to repay the loan secured by the complainant’s father on his behalf. This was the beginning of the end of their friendship. [4] Although the charge sheet refers to a single incident, the complainant, who was 15 years when she testified, referred to the following four incidents: She alleged that the first incident occurred on a Sunday shortly before midnight around June 2006. When the appellant arrived from work she was watching television in the lounge. As he walked into the house she switched off the television and went to the bathroom before going to bed because, as she put it, she did not want to give the appellant the wrong impression. On her way back to her room she stopped for a chat with him in his room. They sat on his bed and started chatting. During the course of the conversation the appellant asked her to ‘play’ with his penis. She refused. The appellant closed the door and after undoing his pants grabbed hold of her hand and asked her to ‘play’ with his penis, which act she performed reluctantly. According to her, she did not see the appellant’s penis despite the fact that the appellant had exposed it to her. Thereafter the appellant asked her if she had ever seen a boy’s penis. When she answered in the negative the appellant offered to show her how it looked like. He then asked her to leave his room for a moment and wait outside at the door and she complied. Shortly thereafter the appellant called her in and showed her a picture on his Nokia cellular phone depicting an object which he said was his penis. [5] The second incident is alleged to have occurred when she was in the appellant’s bedroom to collect her clothes. The appellant asked her to ‘play’ with his penis but on this occasion she refused and walked away from him. She alleged that the third incident occurred when she collected her face towel from the appellant’s bedroom. On this occasion he found him sitting on his bed onto which he pulled her and fondled her. He also forced her to perform oral sex on him. She alleged that during the fourth incident the appellant made her ‘play’ with his penis. [6] She alleged that she did not report these acts of sexual assault perpetrated on her to her parents after they occurred. They were only brought to her mother’s attention on 1 June 2007 through her friend, Moodley, in whom she allegedly confided. There is a dispute between Moodley and the complainant’s mother as to whether the complainant was also present in the room when the report was made to her mother, but what is clear is that her mother had a discussion with her in connection with the allegations. Her mother in turn informed her father of the allegations and he suggested that the complainant write everything down which she did. When the appellant returned from work the complainant’s mother confronted him with these allegations but he denied them. The following day the complainant accompanied by her father went to the police station and laid a charge of indecent assault against the appellant. Consequent upon these allegations against the appellant, the complainant’s father terminated his tenancy and evicted him from the property. [7] The appellant testified in his defence. He denied all of the allegations against him contending that the charges were orchestrated by the complainant’s father in an attempt to force him to pay the debt and arrear rental. A further possible reason suggested by the appellant for the complainant’s father to use her to instigate malicious charges against him was that he suspected that the appellant was spying on him for his wife. The trial court rejected the appellant’s version as false and accepted that of the complainant as truthful. On appeal the court a quo confirmed the conviction, but reduced the sentence. [8] As the appellant’s conviction was based on the evidence of a child witness who was also a single witness, it is useful to set out the legal principles applicable in relation to such evidence. It has long been accepted that the evidence of a child is potentially unreliable because of the child’s inexperience, imaginations and susceptibility to influence and for that reason it should be approached with caution. 1 The trial court must fully appreciate the dangers inherent in the acceptance of such evidence and where it is 1 Viveiros v S (75/98) [2000] ZASCA 95; [2000] 2 All SA 86 (A) para 2. apparent that such appreciation was absent a court of appeal may hold that the conviction should not be sustained. [9] In my view, the trial court misdirected itself in two respects. First, it failed to properly apply the cautionary rule in analysing the complainant’s evidence. Her evidence on the first incident was improbable. It seems improbable that after the appellant had allowed the complainant to ‘play’ with his penis, he would send her out of the room when he wanted to take a photograph of it. It is incomprehensible why she would agree to wait outside while the appellant took a photograph of his penis after he had made her to perform what she described as a disgusting act. According to her the act occurred in a room inside the house where her parents were present and her own room was also in the same house. It is thus not clear why she elected to remain outside, wait for the appellant and then return to his room and again look at the picture on his cellular phone after she had been exposed to the disgusting act. The State conceded that her behaviour in that regard is inexplicable and that the court should reject her evidence concerning that incident. [10] There were also discrepancies between the complainant’s evidence-in-chief and the statement she made to the police on 2 June 2007. In that statement the complainant only referred to the first incident and that incident only referred to the touching of his private part. No mention is made of the appellant showing the complainant a photograph of his penis. There is also no mention of the other later incidents. In her handwritten statement she stated that, during the third incident, the appellant called her into his bedroom, but when she was cross-examined on it, she testified that he called her, but she did not go. Regarding the fourth incident the complainant testified that the appellant made her ‘play’ with his penis. But when she was cross-examined on it, her reaction was that she could not remember it very clearly. The State could offer no explanation for these inconsistencies and agreed that there is lack of clarity on which of the incidents the appellant was convicted. [11] The complainant also contradicted herself materially regarding when the appellant stopped perpetrating the acts of sexual assault on her. In her evidence-in-chief, she testified that they ended when he moved into the outbuilding. But under cross-examination 2 R v Manda 1951 (3) SA 158 (A) at 163C-F. she testified that the fourth incident occurred in the outbuilding. Her mother on the other hand suggested that the relationship between the appellant and the complainant soured after he moved into the outbuilding, thereby suggesting that whatever happened probably occurred during that time period. Moreover, the complainant and Moodley, the person to whom she allegedly reported the indecent assault, contradicted each other as to how it came about that the report was made and on the content of that report. [12] The trial court did not deal with these apparent contradictions and improbabilities in the complainant’s evidence. It unreservedly accepted her evidence. From the reasoning of the trial court, it does not appear that it fully appreciated the dangers inherent in the acceptance of the complainant’s evidence and the need to subject her evidence to proper scrutiny to avoid the risk of a wrong conviction. [13] The trial court’s failure to carefully scrutinise the complainant’s evidence is demonstrated by the following passage in its judgment: ‘Be that as it may, the Court is focused on the interests of justice. Looking at the evidence in its totality, looking at the demeanour of the complainant, looking at the nature of her evidence, looking at her evidence-in-chief, tested by cross-examination, looking at the basic content of the statement that she made to the police and the basic content of the handwritten statement she made for her parents to read, the Court can only find that in material substance they are the same.’ The analysis of the complainant’s evidence makes it clear that the trial court’s finding that the evidence that was before it was ‘in material substance . . . the same’ cannot be correct. The evidence was not substantially the same. The inherent contradictions undermined the reliability of the complainant’s evidence and her trustworthiness as a witness. [14] The trial court also misdirected itself by applying the wrong standard of proof in determining the guilt of the appellant. The trial court rejected as far-fetched and fanciful the appellant’s suggestion that the charge against him was orchestrated to get him evicted from the complainant’s home. It reasoned that it was ‘highly improbable [and] against the totality of the evidence that [the complainant’s] parents would put [her] through this difficult experience of testifying in court . . . .’ This approach is incorrect and was deprecated by this Court in S v Shackell 3 in which the following was stated at para 30 regarding the standard of proof: ‘It is a trite principle that in criminal proceedings the prosecution must prove its case beyond reasonable doubt and that a mere preponderance of probabilities is not enough. Equally trite is the observation that, in view of this standard of proof in a criminal case, a court does not have to be convinced that every detail of an accused’s version is true. If the accused’s version is reasonably possibly true in substance, the court must decide the matter on the acceptance of that version. Of course it is permissible to test the accused’s version against the inherent probabilities. But it cannot be rejected merely because it is improbable; it can only be rejected on the basis of inherent probabilities if it can be said to be so improbable that it cannot reasonably possibly be true.’ [15] If regard is had to the shortcomings in the State’s case, mainly the unreliability of the complainant’s evidence and the misdirections displayed in the judgment of the trial court, it cannot be said that the guilt of the appellant was proved beyond reasonable doubt. The State conceded, correctly so, in my view, that these contradictions in the complainant’s evidence were serious and that in consequence it could not support the conviction. [16] In the result the following order is made: The appeal succeeds and the conviction and sentence are set aside. _________________ D H Zondi Judge of Appeal 3 S v Shackell 380/99 [2001] ZASCA 72; 2001 (4) SA 1 (SCA). Appearances For the Appellant: J H Du Plessis Instructed by: Maniklall Ravindra & Co, Verulam Hill, McHardy & Herbst Inc, Bloemfontein For the Respondent: A A Watt Instructed by: The Director of Public Prosecutions, Pietermaritzburg The 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: 18 March 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. Pillay v The State (453/15) [2016] ZASCA 26 (18 March 2016) Today the Supreme Court of Appeal (SCA) upheld an appeal from the Kwa-Zulu Natal Division of the High Court, Pietermaritzburg and set aside the conviction and the sentence of two years’ imprisonment imposed in terms of s 276(1)(i) of the Criminal Procedure Act 51 of 1977. The issue before the SCA was whether the evidence on which the appellant was convicted was sufficient. The appellant was convicted on a charge of indecent assault. He was found to have indecently assaulted the complainant, a 13 year old girl, over the period June 2006 to May 2007 by making her touch his penis and by showing her a picture of a penis on his cellular phone. There were contradictions and improbabilities in her evidence, but this notwithstanding the trial court unreservedly accepted her evidence and convicted the appellant. It failed to properly analyse the complainant’s evidence given the contradictions and improbabilities and the extent to which these shortcomings in her evidence affected the reliability of the evidence and the complainant’s truthfulness as a witness. Secondly, the trial court applied a wrong standard in determining the guilt of the appellant and by so doing, misdirected itself. The SCA held that the evidence adduced was insufficient to sustain conviction and concluded that the guilt of the appellant had not been proved beyond reasonable doubt and for that reason upheld the appeal.

59

non-electoral

2017

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 57/2017 In the matter between: LESHAY KLASSEN APPELLANT and THE STATE RESPONDENT Neutral citation: Klassen v The State (57/2017) [2017] ZASCA 58 (24 May 2017) Coram: Leach, Saldulker, Zondi and Mathopo JJA and Coppin AJA Heard: 4 May 2017 Delivered: 24 May 2017 Summary: Criminal Procedure: sentence: effect of convicted accused not testifying when considering whether substantial and compelling circumstances exist justifying a sentence less than a prescribed minimum: failure to hold an inquiry before imposing non-parole period under s 276B of the Criminal Procedure Act 51 of 1977: effect thereof. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Hartzenberg J and Vilakazi AJ sitting as court of appeal): It is ordered: The order of the trial court imposing a non-parole period under s 276B of the Criminal Procedure Act 51 of 1977 is set aside. The appeal is otherwise dismissed, and the appellant’s sentence confirmed. ________________________________________________________________ JUDGMENT ________________________________________________________________ Leach JA (Saldulker, Zondi and Mathopo JJA and Coppin AJA concurring) [1] The appellant was together with three others arraigned on a charge of murder in the Benoni Regional Court. The case arose out of an incident that occurred in the early hours of 17 June 2006 which led to the death of a young man, Joseph Mbane (the deceased). The appellant and his co-accused were convicted on the charge which carried a prescribed minimum sentence of 15 years’ imprisonment under the provisions of s 51(2)(a)(i) of the Criminal Law Amendment Act 105 of 1997. The trial court concluded that there were no substantial and compelling circumstances justifying a lesser sentence than the prescribed minimum, and proceeded to impose a sentence of 15 years’ imprisonment on the appellant and each of his co-accused. Thereafter, without further ado and without making any inquiry relevant to the issue, the trial court issued an order under s 276B of the Criminal Procedure Act 51 of 1977 (the CPA) that the appellant and his co-accused should not be placed on parole before they had served two thirds of their sentence. The effect of this was, of course, that a period of ten years’ imprisonment was to be served before the appellant and his co-accused could be paroled. [2] The appellant proceeded to appeal against both his conviction and sentence to the Gauteng Division of the High Court, Pretoria. His appeal was dismissed on 5 June 2009. With special leave of this Court, he now appeals against both the length of the period of imprisonment imposed as well as the imposition of the non-parole period. [3] The evidence on record discloses that early on the morning in question, the deceased was seen running towards a convenience shop at a filling station, pursued by the appellant and his co-accused who had arrived on the scene in a motor vehicle. They caught up with the deceased and began to assault him all over the body, kicking him with booted feet and punching him. The appellant was armed with a snooker cue which he used to strike the deceased over the head. The deceased fell to the ground but was able to regain his feet and break away from his attackers. He ran across the road but lost his footing and fell, whereupon they caught up with him and once more severely assaulted him. The attack upon the deceased continued despite the intervention of a bystander, Mr Bezuidenhout, who attempted to come to the aid of the deceased and to persuade his attackers to desist. His effort was in vain and in response to his entreaties they threatened to assault him. [4] The attack upon the deceased was prolonged and vicious. According to another eye witness, Mr Morrison, the attackers kept on kicking and hitting the deceased despite his terrible screams. Mr Bezuidenhout described the appellant and his co-accused as having acted ‘like a pack of wild dogs’. [5] Eventually the attack stopped and the deceased’s attackers climbed back into their vehicle and drove away, leaving him lying inert on the ground. Mr Bezuidenhout immediately went to see if he could help the deceased, but on examining him discovered that he had no pulse. The death of the deceased was confirmed by the paramedics and police who arrived on the scene some time later. During a post mortem examination, the deceased was found to have bruises on the head and shoulders, several lacerations on the head, swelling of the brain and blood in his mouth and trachea. There were pin-point bleedings in his lungs and heart, indicating a lack of oxygen. Essentially, he had been beaten to death. [6] Despite their plea of not guilty, the appellant and his co-accused were correctly convicted of the deceased’s murder. As I have said, an appeal to the high court failed and the only issues before this Court are the length of the period of imprisonment imposed and the non-parole period. [7] In regard to the prescribed minimum of 15 years’ imprisonment that was imposed, counsel for the appellant placed emphasis upon his client’s age (he was about 18 years of age at the time of the offence). This, it was contended, taken together with the appellant having been a first offender who was, so it was argued, heavily under the influence of alcohol at the time, justified a finding that there were substantial and compelling circumstances not to impose the prescribed minimum sentence. [8] I accept that the appellant was a youth of 18 years and that he was a first offender, but one cannot find that alcohol played any part in the proceedings. The only evidence in that regard is that, after the incident when the vehicle which had been used by the appellant and his co-accused was traced, it smelled of alcohol as did the breath of one of his co-accused. But the appellant himself did not testify at the trial. In S v Roslee 2006 (1) SACR 537 (SCA) para 33 this court stated that although there is no onus on an accused to prove the presence of substantial and compelling circumstances justifying a sentence less than the prescribed minimum, ‘it must be so that an accused who intends to persuade a court to impose a sentence less than that prescribed should pertinently raise such circumstances for consideration’. This the appellant failed to do. As he failed to give any evidence in regard to the consumption of intoxicating liquor, and no such evidence appears from the record, it would be impermissible speculation to find that his actions had in any meaningful way been influenced by his intoxication. [9] Bearing in mind that for the present offence a minimum of 15 years’ imprisonment is prescribed in respect of an 18 year old first offender – and that the question of sentence is to be approached conscious of the fact that the legislature has ordained that as the sentence which should ordinarily be imposed – I am of the view that the appeal against the length of the period of imprisonment imposed by the trial court must fail. [10] That then brings me to the question of the non-parole period imposed under s 276B of the CPA. As already mentioned, after imposing the sentence of 15 years’ imprisonment, the trial court immediately proceeded to order that the appellant not be released on parole until he had served at least ten years of that sentence. This was done without any inquiry as to whether such an order was appropriate and without hearing representations in regard to the issue. [11] The grant of parole is something best left to the executive and those officials charged with the duty of considering and deciding upon parole – see S v Stander [2011] ZASCA 211; 2012 (1) SACR 537 (SCA) para 20 and S v Botha 2006 (2) SACR 110 (SCA) para 27. Consequently, the power of a trial court to act under s 276B should be sparingly exercised, and then only after holding an inquiry as to the desirability of such an order and hearing argument on the issue. This is now well established by the jurisprudence not only of this court but of the Constitutional Court – see S v Jimmale & another [2016] ZACC 27; 2016 (2) SACR 691 (CC) paras 19-25; 2016 (11 BCLR 1389) and Strydom v S (20215/2014) [2015] ZASCA 29 (23 March 2015) para 16. Indeed the necessity of adopting such a procedure is so trite that it is surprising, to say the least, that this issue has recently had to be dealt with by this court on several occasions – see eg Ndlovu v S (925/2016) [2017] ZASCA 26 (27 March 2017), Mvubu v S (518/2016) [2016] ZASCA 184 (29 November 2016) and Mhlongo v S [2016] ZASCA 152; 2016 (2) SACR 611 (SCA) – all of which reaffirmed that it is a fatal misdirection to impose a non-parole period without an inquiry as to whether it ought to be imposed. [12] For some reason, no mention was made of this issue when the matter went on appeal from the trial court to the court a quo. Be that as it may, Ms Leonard SC, who appeared in this court on behalf of the state, whilst supporting the 15 years’ imprisonment imposed upon the appellant, conceded immediately and without demur that the further order relating to non-parole had to be set aside. [13] The judgment of the court a quo was delivered on 5 June 2009. It took more than six years until the appellant applied to this Court for special leave to appeal and, once such leave was granted, there appears to have been a problem in timeously obtaining a record. Consequently, more than nine years has passed since sentence was imposed on the appellant in the trial court on 28 March 2008. In these circumstances, Ms Leonard SC conceded on behalf of the state that, in the light of this lapse of time, no purpose would be served in asking for the matter to be remitted to the trial court to hold the necessary inquiry and to reconsider possibly imposing a non-parole period under s 276B. Not only is she clearly correct, but there is nothing in the record itself which indicates that this was an appropriate case for a non-parole period to be imposed, especially upon a young man who has hopefully been rehabilitated by the period of imprisonment he has already served. [14] A further issue of concern is that the appellant’s three co-accused, who received the same sentence as he did, still labour under a non-parole period improperly imposed upon them. That this is unjust, cannot be gainsaid: but none of the co-accused are before this Court which, in the circumstances, has no jurisdiction to ameliorate their plight. We raised this with the legal representatives of the parties who appeared before us and who gave us the undertaking to immediately take the matter up to see if an equitable solution could be found as a matter of urgency. We are grateful to them for doing so. [15] In the light of the above, the appeal must succeed only in regard to the non-parole period. It is therefore ordered: The order of the trial court imposing a non-parole period under s 276B of the Criminal Procedure Act 51 of 1977 is set aside. The appeal is otherwise dismissed, and the appellant’s sentence confirmed. _______________ L E Leach Judge of Appeal Appearances: For the Appellant: J M Mojuto Instructed by: Pretoria Justice Centre, Pretoria Bloemfontein Justice Centre, Bloemfontein For the Respondent: E Leonard SC 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: 24 May 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. LESHAY KLASSEN and THE STATE Arising out of an incident that occurred on 17 June 2006, the appellant was convicted in the Benoni Regional Court on a charge of murder. The charge arose out of an incident which had occurred when the appellant and three co- accused assaulted one Joseph Mbane and beat him to death. At the stage of sentencing, the trial court concluded that there were no substantial and compelling circumstances which justified the imposition of a sentence less than the prescribed minimum of 15 years’ imprisonment. That sentence was then imposed upon the appellant. Without further inquiry relevant to the issue, the trial court then issued an order under s 276B of the Criminal Procedure Act 51 of 1977 that the appellant should not be placed on parole before he had served two thirds of his sentence. The appellant appealed against both his conviction and sentence to the Gauteng Division of the High Court, Pretoria. On 5 June 2009 his appeal was dismissed. More than six years later the appellant applied to the Supreme Court of Appeal for special leave to appeal. This was granted to him. There was then a problem in timeously obtaining the record and, as a result, more than nine years had passed since sentence was imposed on the appellant in the trial court before the matter came before the Supreme Court of Appeal. The appeal against the sentence of 15 years’ imprisonment was dismissed. In doing so the Supreme Court of Appeal rejected an argument that the appellant had been heavily under the influence of alcohol as there was no evidence in that regard. Appellant himself had not testified at the trial and, although there was evidence that one of his co-accused had liquor on his breath, the court held it would be impermissible speculation to find that the appellant’s actions had in any meaningful way being influenced by intoxication. In regard to the non-parole period, the Supreme Court of Appeal referred to numerous cases in which both it and the Constitutional Court has stressed that it is necessary for a court to hear the parties and conducting an inquiry before an order of non-parole is imposed under s 276B, a procedure which was not followed in the present case. It therefore set aside the non-parole period. Moreover, in the light of the period of time that had elapsed, the SCA felt that there was no reason for the issue to be remitted to the trial court to hold the necessary inquiry. There was in any event nothing on the record which indicated that it was an appropriate case for a non-parole period to be imposed. In the result the order of the trial court imposing a non-parole period under s 276B of the Criminal Procedure Act was set aside. The appeal was otherwise dismissed and the appellant’s sentence confirmed.

1829

non-electoral

2011

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 758/10 In the matter between: JACOBUS HENDRIKUS JANSE VAN RENSBURG N.O. 1ST APPELLANT PHILIP FOURIE N.O. 2ND APPELLANT JACOB LUCIEN LUBISI N.O. 3RD APPELLANT LILY MAMPINA MALATSI-TEFFO N.O. 4TH APPELLANT ENVER MOHAMMED MOTALA N.O. 5TH APPELLANT RABOJANE MOSES KGOSANA N.O. 6TH APPELLANT and CHRISTIAAN JOHANNES BOTHA RESPONDENT Neutral citation: Janse van Rensburg v Botha (758/10) [2011] ZASCA 72 (25 May 2011) Coram: NAVSA, HEHER, SNYDERS, SHONGWE JJA and MEER AJA Heard: 3 May 2011 Delivered: 25 May 2011 Updated: Summary: Company – liquidation – corporate entities consolidated into one estate for purposes of liquidation of pyramid scheme – voidable preferences – s 29 of Insolvency Act 24 of 1936 – debtor – who is – effect of illegality of contract giving rise to ‘debt’. ___________________________________________________________________________________ _ ORDER On appeal from: North Gauteng High Court (Pretoria) (Fabricius 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 by the following: ‘1. The payments amounting to R192 710.00 made to the defendant are set aside in terms of s 29 of the Insolvency Act 24 of 1936. 2. The defendant is ordered in terms of s 32(3) of the Act to pay the amount of R192 710.00 to the plaintiffs together with interest thereon at the prescribed rate from date of judgment to date of payment. 3. The defendant is ordered to pay the costs of suit.’ _______________________________________________________________________ JUDGMENT _____________________________________________________________________ HEHER JA (NAVSA, SNYDERS, SHONGWE JJA AND MEER AJA concurring): [1] This is an appeal against a judgment of Fabricius AJ in the North Gauteng High Court, Pretoria with leave of the learned judge. [2] The appellants, the joint liquidators of MP Finance Group CC, who are engaged in winding-up the consolidated estate commonly referred to as the Krion pyramid scheme, instituted action under s 29 of the Insolvency Act 24 of 1936 against the respondent, Mr Botha, as an alleged investor in the scheme. They claimed that within six months of the liquidation of the scheme on 5 April 2002 it had paid amounts totalling R192 710.00 to the respondent at a time when its liabilities exceeded its assets and that the effect of those payments was to prefer him above the general body of the scheme’s creditors. They sought orders setting aside the disposition and for payment of the amounts thus disposed of. [3] The action was defended. The respondent set up various defences. In so far as they remain relevant they were the following: 1. He was not a party to the orders made by Hartzenberg J concerning the consolidation of the various entities involved in the perpetration of the scheme and which purported to confer authority on the liquidators to administer the estates of those as one close corporation, and, consequently was not bound by the terms of those orders. 2. He denied that the Krion scheme carried on any business at all or received any payments from or made dispositions to him. 3. He placed in dispute that MP Finance Consultants CC, one of the entities being administered by the liquidators as part of the consolidated estate, had been involved in the Krion scheme. 4. He pleaded that Ms Marietjie Prinsloo had utilised the corporate entities (other than MP Finance Consultants CC) being administered by the liquidators as well as various unincorporated entities or trading names as a smokescreen for her personal involvement in and control of the pyramid scheme, and that, to the extent that he had invested in the scheme, he was investing with Ms Prinsloo in her personal capacity. 5. He denied that the payments made to him had the effect of preferring him above other creditors in the estate. 6. Because the scheme was unlawful and all obligations incurred or undertaken were void, the scheme could not be a debtor for the purposes of s 29 and he, as an investor, could not be its creditor. [4] The action proceeded to trial. The liquidators relied upon the expert evidence of Mr Harcourt-Cooke, an auditor who had examined, reconstructed and analysed the affairs of the corporate entities in so far as they could be done in the absence of books of account or bank statements. The first appellant also gave evidence. He had been the deponent in support of the application proceedings before Hartzenberg J in 2003 and his affidavit in that matter was made available to the trial judge. The defendant testified in his own defence and called two former employees of Ms Prinsloo viz Ms Elaine Denysschen and Ms Jessie Denysschen to speak to the relationship between Ms Prinsloo and her businesses. In addition Mr George Ewan, the agent who introduced Mr Botha as an investor and received his payments testified about the role of Ms Prinsloo in operating the investment business. [5] Fabricius AJ held that: 1. a court is not competent to ‘create’ either a company or a close corporation or any other statutory entity unless this is done strictly in accordance with the applicable statute, finding, in effect, that Hartzenberg J had acted beyond his powers in consolidating the various entities of the scheme into one for the purposes of liquidation and ordering that the consolidated estate be wound up as a (non-existent) close corporation; 2. the so-called ‘consolidation order’ could not and did not bind the defendant; 3. the liquidators had not proved the jurisdictional elements required by s 29 of the Act, by which it appears that the learned judge meant that they had not established the debtor and creditor relationship inherent in the right to claim under the section. [6] The learned judge accordingly held that he had no choice but to dismiss the liquidators’ claim. [7] In the Steyn judgment delivered simultaneously with this judgment I have explained the terms, background, and meaning of the orders made by Hartzenberg J. If a defendant in proceedings brought by the liquidators in the course of winding-up the Krion scheme is proved to be an investor in the scheme, the orders made by Hartzenberg J will be regarded as res judicata between him or her and the liquidators, save to the extent that the investor brings himself or herself within the exception described by Conradie AJA in Fourie’s case. The rule assumes that a final binding judgment is a correct judgment whether that be so or not. That applies with equal force to Mr Botha. [8] In the Steyn appeal I have also held that, in accordance with the orders in their context the scheme was a debtor as contemplated in s 29 in respect of any dispositions that it made to investors by repayment of capital or interest arising from the operation of the scheme. That position holds with regard to the action instituted by the liquidators in this matter. [9] Counsel’s argument based on the illegality of the scheme, while superficially attractive, does not withstand closer analysis. In Commissioner for Inland Revenue v Insolvent Estate Botha t/a ‘Trio Kulture’ 1990 (2) SA 548 (A) this very problem arose in the context of an appeal against a tax assessment issued by the Commissioner on income from ‘occasional sales’. The respondent contended that the insolvent had been conducting an illegal lottery, the effect of which was to nullify the effect of all ‘sales’ which were undertaken in the course of the lottery. Hoexter JA assumed that the Trio scheme constituted such a lottery and went on (at 556A-557B) to explain why the sales were nevertheless not deprived of statutory efficacy: ‘Since a contract which is forbidden by statute is illegal and void, a Court is bound to take cognisance of such illegality; and it cannot be asked to enforce or to uphold or to ratify such a contract: Cape Dairy and General Livestock Auctioneers v Sim 1924 AD 167 at 170. It is sometimes said that any juristic act performed in defiance of a statutory prohibition is not only ineffective, but further that it should notionally be thought away. Thus in Schierhout v Minister of Justice 1926 AD 99, Innes CJ, having cited the Code 1.14.5, remarked at 109: “So that what is done contrary to the prohibition of the law is not only of no effect, but must be regarded as never having been done - and that whether the lawgiver has expressly so decreed or not; the mere prohibition operates to nullify the act.” Such general propositions are useful to stress the concept that inter partes an illegal jural act is devoid of legal consequence. But from such convenient generalisations it is not to be inferred that because an agreement is illegal a Court will in all circumstances and for all purposes turn a blind eye to its conclusion; or deny its very existence. As pointed out by Van den Heever J in Van der Westhuizen v Engelbrecht and Spouse; Engelbrecht v Engelbrecht 1942 OPD 191 at 199: “When we say a juristic act is void or voidable, we pass judgment upon it from various points of view, basing our judgment upon the degree or direction of its effectiveness....” And at 200: “... (J)uristic acts may be impugned from varying directions and to different degrees.” That the above approach is jurisprudentially sound is demonstrated by many everyday practical situations. Obvious examples which spring to mind are sales conducted on a Sunday in violation of provincial ordinances, and agreements pertaining to unlawful dealing in rough or uncut diamonds or unwrought precious metals. To the conclusion of such illegal agreements the law accords recognition for particular purposes. That they are void inter partes does not rob them of all legal result. For example, in dealing with a contravention of s 142 of Transvaal Law 15 of 1898, Innes CJ in R v Goldflam 1904 TS 794 remarked at 796: “The detectives proved, and Mr Stallard does not controvert the point, that there was an agreement to buy; and that if the transaction had not been forbidden by s 141 it would have been an agreement upon which an action could have been brought. If that be so, it appears to me that H there was a purchase within the meaning of the section.” Cases in point are not confined to the criminal law. In Van der Westerhuizen v Engelbrecht ( supra ) Van den Heever J elucidated the logical distinction with which he was there concerned by reference to the facts of Wilken v Kohler 1913 AD 135, in which case this Court held that in terms of s 49 of Ord 12 of 1906 of the Orange River Colony an oral contract for the sale of land in the Free State was void. Having mentioned (at 201) that a party to such an agreement was ( qua contracting party) remediless, Van den Heever J proceeded to say: “In other directions the contract did have legal effect. It would have been futile for either party to claim, as against the tax collector, that no sale had taken place or against creditors (supposing that had been the object of the transaction) that no disposition in fraud of creditors had been committed.” Assuming that the 'kweekkontrakte' are hit by the prohibition in the Gambling Act, the fact of the matter is that in the instant case the Court is not being asked to 'enforce' or to 'uphold' or to 'ratify' a contract which the law expressly forbids. The Court merely looks at the provisions of the Act in order to see whether the agreement contained in the 'kweekkontrak' comes within the literal language of the Act.’ [10] Thus the fact that the scheme was illegal through and through as a pyramid scheme and a contravention of various statutes, does not necessarily deprive the liquidators of the insolvent scheme of the debtor status contemplated by s 29. The plain wording of that section does not compel such a conclusion. That section is designed to facilitate the administration of an insolvent estate, and, particularly, the recovery of assets disposed of by the insolvent under the circumstances provided for in the section, for the benefit of creditors of the estate. The section, being remedial, should be interpreted to assist the process, not to hinder it. If an insolvent stands in relation to the person to whom he disposes of property as one who owes a debt, why should the illegality of the insolvent’s business be permitted to influence the power and duty of a liquidator to rely on s 29 to recover the money or asset disposed of? To allow it to do so would defeat the purpose of the provision, and, as this liquidation process demonstrates, work great inequity on the general body of creditors while favouring individuals who have no claim to favour. It seems to me, in the circumstances of this case, to be essential to a proper winding-up that the underlying illegality of the nature in question should be disregarded when interpreting s 29. To do so will not conduce to the upholding of an illegal contract. [11] Before I turn to a consideration of the defence evidence certain observations arising from the evidence of Mr Janse van Rensburg are pertinent. In the first instance, Ms Prinsloo created and operated a pyramid scheme which procured investments from gullible or greedy members of the public. There was only one scheme. Its business commenced with the diversion of funds from the micro-lending business of MP Finance Consultants CC. Thereafter, in an effort to confer legitimacy on the business Ms Prinsloo successfully made use of registered corporate entities (the entities in the consolidated estate). As the consolidation orders emphasised, the pyramid scheme was one ongoing enterprise from beginning to end. Assets and liabilities were moved from one to the next without formality or any trappings of ownership. Cash collected from investors under one name was used to pay investments to other investors in another name (albeit not the name of the entity with which he or she had contracted or ‘invested’). [12] The application was brought to deal with the whole scheme. The liquidators had no interest in winding up parts of it. They readily conceded that they could not distinguish between the input and output of the various entities. Neither did they have knowledge of why Ms Prinsloo had used the names of unincorporated entities (save for M & B Co- operative Partnership which seems to have anticipated the registration of a co-operative). [13] The liquidators applied to liquidate the registered corporate entities – nobody suggests that any such entity that participated in the scheme was omitted. They recognised that Ms Prinsloo had used trading names to further the scheme. Such names were in themselves of little significance since they did not acquire or dispose of investors’ money for themselves; they were either the alter ego of Ms Prinsloo or the names under which it suited her to operate the corporate entities. Some were mentioned by the liquidators in the application for condonation; others (Finsure and MP Finance Sacco, for instance) were not. Even Ms Prinsloo had admitted at the s 417 enquiry that she could not disentangle the roles of the various participants. In this context the orders made by Hartzenberg J were directed to a single main object: by consolidating all the apparent operating arms of the scheme into one coherent close corporation the liquidators were to be relieved of the necessity of attribution, especially in relation to the recovery of assets. That is what the order achieved. Before the making of the order the learned judge may or may not have considered whether the role of Ms Prinsloo warranted the inclusion of her (or her estate, since she may by then have been sequestrated) in the consolidation. That did not happen and the effect of the order was to define the scheme according to the scope of the business conducted under the umbrella of the corporate entities. [14] This last conclusion does not mean that a defendant in Mr Botha’s position cannot, by satisfactory evidence, persuade a court that he contracted with a party or entity outside the ambit of the scheme. In such a case the liquidators will have failed to discharge the onus on them. As I have noted his counsel contended that Mr Botha invested with Ms Prinsloo personally. In order to evaluate this submission it is necessary to analyse the evidence in some depth. [15] Neither Mr Harcourt-Cooke nor the first appellant possessed personal knowledge of the relationships established between individual investors and the scheme or Ms Prinsloo. Both expressed opinions based upon in-depth study of the affairs of the pyramid scheme as reflected in the investor files, property and bond searches, the creditors claims and the evidence of Ms Prinsloo and others in other proceedings. Nevertheless the evidence of Van Rensburg that all her trading activities were definitely part of the same scheme should not be disregarded. No-one regarded the difference in names as important. They were all an attempt by Prinsloo to legitimise her activities. However it is also clear from all the evidence that ‘everybody regarded the investments as made with Ms Prinsloo’. [16] That the corporate entities (other than Krion Financial Services Ltd towards the end of the life of the scheme) were empty shells in the sense of the absence of proof of assets or liabilities, bank accounts, financial records and minute books is also clear. However those facts do not go very far to establishing the identity of the operator or owner of the investment scheme because of its entirely cash-based business strategy and the total lack of concern showed by Ms Prinsloo and her associates towards distinguishing between the corporate entities. It must also be noted that although there was evidence of a regular division of investors cash received between agents (10%) and Ms Prinsloo and her family members, this is consistent with her general disregard for legal distinctions. She apparently neither contracted in her own name nor used documents which suggested that she intended such an impression to be created in the minds of investors. [17] Mr Ewan, as a witness, was ambivalent. He does not seem to have been much aware of legal distinctions. Early in his evidence he said, ‘Die dokumentasie het kort-kort verander, maar niks het verander nie . . . daar was nie ‘n maatskappy nie, ons het vir Marietjie gewerk . . . jy het jou geld by Marietjie belê. . . [Sy] was die lewe en vlees en bloed van die maatskappye.’ (My emphasis.) Later he admitted that, as instructed, he had represented to investors that they were dealing with a ‘kapitaal-kragtige’ company. [18] Mr Botha was first approached by Ewan to invest in the cash loan business (of MP Financial Consultant CC). It was represented to him that it was a company for investment and a registered business, and that convinced him to invest in it. The only knowledge he had of Ms Prinsloo’s businesses and organisation was derived from what Ewan told him. [19] Ms Jessie Denysschen who was an employee involved in the administration testified: ‘MP Finance het begin met hierdie beleggings en ons het by die cash loans begin te werk, en toe het sy [Ms Prinsloo] oorgegaan na ander maatskappye, na die beleggings afdeling.’ (My emphasis) [20] Perhaps more valuable than the recollections of naïve and unskilled witnesses uttered many years after the event are the inferences provided by contemporaneous documents. The investor file of Mr Botha was produced at the trial. As the testimony establish such files were ‘meticulously’ maintained by the persons administering the scheme. In the file were the following relevant documents: 1. On 8 August 2001 Mr Botha signed what purported to be a subscription for shares in Martburg Finansiële Dienste Bpk at R5000 per unit (paying R20 000); 2. On 15 August 2001 Botha and Ewan signed an ‘ontvangserkenning’ (receipt) recording that Ewan, as agent for Martburg Finansiële Dienste Bpk had received R70 000 from Botha ‘for shares purchased’ in that company; 3. (a) On 16 August 2001 Botha, as ‘shareholder’, signed a ‘membership certificate’ in ‘MP Finance Sacco’ for a payment of R70 000 for 12 months at a return of 10 per cent per month. This document was apparently countersigned by Ms Prinsloo (Pelser) under circumstances not explained in evidence. (b) On the same day Botha, as ‘shareholder’, signed a ‘share agreement’ with MP Finance Sacco represented by Prinsloo (who countersigned) in which receipt of R70 000 was acknowledged and which provided for payment of returns at a rate of R7000 per month. 4. On 17 August 2001 Botha and Ewan signed a receipt recording that Ewan had received R170 000 for shares purchased in the same company. 5. On 6 September 2001 Botha purported to subscribe for shares in Martburt Finansiële Dienste Bpk to an amount of R20 000. 6. (a) On 14 October 2001 Botha was ostensibly issued with a ‘membership certificate’ in M & B Korporasie Bpk for an investment of R62 768,57 for 12 months at a return of 10 per cent per month. The certificate was signed by Botha and H H Prinsloo (the husband of Ms Prinsloo). (b) On the same day Botha was issued with a ‘membership certificate’ in M & B Korporasie Bpk for an investment of R20 000 for 12 months at a return of 10 per cent per month. This too bears the signatures of Botha and H H Prinsloo. 7. On 22 October 2001 Botha was issued with a ‘membership certificate’ in M & B Ko- öperasie Bpk (sic) in return for an investment of R20 000 paying ‘dividends’ of R2000 per month and bearing his own signature and that of H H Prinsloo. 8. (a) On 18 January 2002 Botha was issued with a ‘membership certificate’ signed by H H Prinsloo on behalf of M & B Ko-öperasie Bpk in relation to an investment of R170 000 for four months at a return of 10 per cent per month. 9. On 25 January 2002 Botha was once again the recipient of a ‘membership certificate’ in M & B Ko-öperasie Bpk for an investment of R170 000 bearing a return of R17 000 per month. This document appears to have been signed by Botha, Ewan and H H Prinsloo. (b) On the same day Botha was issued with a ‘certificate of membership’ in the same entity reflecting an amount of R20 000 invested for three months at a 10 per cent return each month. 10. On a date not identified Botha purported to apply for membership in M & B Ko- öperasie Bpk, stating that he had had insight into the objectives and operations of that entity ‘as set out in the information document and its statutes’. The truth of this acknowledgment was not investigated in evidence bearing in mind that Ms Prinsloo apparently intended to register the co-operative but her application to do so was apparently refused. [21] Certain of these documents probably represented reinvestments of earlier matured investments. [22] A consistent element in the administration of the scheme was an accounting to investors on documentation headed ‘MP Financial Services’ but which contained no reference to the entity in which the investment had been made or the identity of the payer of interest or ‘dividends’. It may be assumed as a probable inference that MP Financial Services was merely a vehicle for administration purposes. The use of the name favours the case of neither party. [23] With the exception of MP Finance Sacco, the recipients of Mr Botha’s investments were entities expressly consolidated into MP Finance Group CC and administered by the appellants as such in terms of the orders of Hartzenberg J. [24] Counsel for Mr Botha submitted that MP Finance Sacco was, on the probabilities, a vehicle used by Ms Prinsloo to pursue her own personal business agenda. I think the submission is far-fetched. As I have pointed out the orders of Hartzenberg J by which Mr Botha is bound were premised on the acceptance that Ms Prinsloo carried on one seamless scheme under the auspices of the corporate entities. Given the terms, nature, timing and circumstances of Mr Botha’s involvement in MP Finance Sacco it is inconceivable that it was operated outside of the overall scheme. [25] The probabilities disclosed by the evidence are that Ms Prinsloo intended to operate the whole swindle under the umbrella of the companies albeit subject to her direction and control. The cash brought into the scheme (sometimes apparently as much as R20 million in a day) belonged to the principal represented by the agent who dealt with the investors on each occasion and which was one of the entities included in the consolidated estate, albeit that because such transactions were void and unlawful each investor obtained an immediate right to reclaim his investment. (In fact no-one appears to have exercised that right, being more interested in the returns.) [26] The payment made to Mr Botha was made by one of the entities in the consolidated estate of the scheme and were dispositions from that estate. That the liquidators were unable to prove which entity paid the money is of no relevance in the light of the orders, since the scheme was a debtor contemplated in s 29. Mr Botha and the scheme occupied a relationship of creditor and debtor for the purposes of that section. [27] When the payments were made the liabilities of the consolidated estate exceeded the value of its assets. That was established by the order and repeated in evidence by Mr Harcourt-Cooke. [28] Mr Botha was an investor in the scheme, which was the subject of the rule nisi published according to the instructions of the High court. However he adduced no evidence which might have had the effect of releasing him from the binding effect of the orders made when the rules were confirmed. [29] It follows that the appeal must succeed. 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 by the following: ‘1. The payments amounting to R192 710.00 made to the defendant are set aside in terms of s 29 of the Insolvency Act 24 of 1936. 2. The defendant is ordered in terms of s 32(3) of the Act to pay the amount of R192 710.00 to the plaintiffs together with interest thereon at the prescribed rate from date of judgment to date of payment. 3. The defendant is ordered to pay the costs of suit.’ ____________________ J A Heher Judge of Appeal APPEARANCES APPELLANTS: F du Toit SC Strydom & Bredenkamp Inc, Pretoria Symington & de Kok, Bloemfontein RESPONDENT: T Strydom Mills & Groenewald Attorneys, c/o Van Zyl Le Roux & Hurter Inc, Pretoria Naudes Attorneys, Bloemfontein

Supreme Court of Appeal of South Africa MEDIA STATEMENT From: The Registrar, Supreme Court of Appeal Date: 25 May 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. On 25 May 2011 the Supreme Court of Appeal delivered judgment in three appeals that had their origin in the liquidation of the fraudulent Krion pyramid scheme, viz Van Rensburg & Others NNO v Steyn, Appeal No 66/2010, Van Rensburg & Others v Botha, Appeal No 758/2010 and Zwarts v Van Rensburg & Others, Appeal No 590/2010. The appeals arose out of conflicting judgments in the High Courts. The issues in the appeals were, broadly: 1) the validity of the appointment of the liquidators to administer the consolidated insolvent estate of the scheme; 2) the validity of the order (made by the High Court in 2003) that consolidated the various entities under which the scheme was operated into one insolvent estate; 3) whether the order was binding on Messrs Steyn, Botha and Zwarts in actions brought by the liquidators under s 29 of the Insolvency Act to recover voidable dispositions; 4) whether the liquidators in the actions had alleged and proved that the defendants were debtors of the consolidated estate. The SCA decided all the issues in favour of the liquidators. Because the defendants, as investors in the scheme, had been given proper notice of the relief claimed in the 2003 proceedings, the orders made were binding upon them; the insolvent estate of the consolidated entities in the scheme was a creditor entitled to claim under s 29 and the investor defendants were its debtors; each of the investors had invested with with an entity afterwards consolidated into the scheme and not with Ms Prinsloo, its guiding mind, personally. --ends--

2998

non-electoral

2015

SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case No: 20198/2014 In the matter between: DR F KLUEVER First Appellant DR R H BHAWANI Second Appellant MINISTER OF DEFENCE Third Appellant and MICHIEL JACOBUS DE GOEDE Respondent Neutral citation: Dr F Kluever v De Goede (20198/2014) [2015] ZASCA 105 (19 August 2015). Coram: Navsa ADP, Mhlantla, Leach, Mbha and Zondi JJA Heard: 08 May 2015 Delivered: 19 August 2015 Summary: Delict – medical practitioner – professional negligence – surgical procedure resulting in high riding patella – primary surgery improperly performed – medical practitioner negligent – defence of contributory negligence dismissed – third appellant vicariously liable to compensate respondent. ___ ORDER ___ On appeal from: Gauteng Division of the High Court, Pretoria (Van Niekerk AJ sitting as court of first instance): The following order is made: The appeal is dismissed with costs including the costs attendant upon the employment of two counsel. ___ JUDGMENT ___ Mhlantla JA (Navsa ADP, Leach, Mbha and Zondi JJA concurring): [1] Michiel de Goede (Michiel) was a young and exceptional rugby player who had been offered and accepted a five year contract to play for the junior team of the Sharks Rugby franchise from 2008. On 5 April 2007 he sustained what is best described as a freak injury. It was sustained in the dying minutes of a rugby game after Michiel had been brought on as a substitute. It occurred without contact with any other player. Michiel was bending to receive a ball that had been passed to him and probably because of his weight, which was considerable for his age, his leg gave way. It is uncontested that he sustained a rupture of the patella tendon.1 As a result he had to receive medical treatment at 1 1In Chapman and Madison: Operative Orthopaedics, 2nd edition, Volume 4, a patella tendon is described as a ligament connecting two bones- the tibia and the patella. A rupture of the patella tendon usually occurs at the inferior pole of the patella. It results in an inability to actively obtain and maintain full knee extension. If the tendon does not heal properly and at the correct length and tension, knee range of motion can be altered significantly and can prevent a return to pre-injury status. Immediate surgical repair is recommended for optimal return of knee function and power. See also Campbell’s Operative Orthopaedics, 10th edition, Volume 3. Military Hospital, Pretoria, which is under the control of the South African National Defence Force (SANDF) and the third appellant, the Minister of Defence (the Minister). Dr Khwitshana (Khwitshana) diagnosed a sprained knee. The error was discovered five days later after Michiel had consulted Dr Boetie Thiart, (Thiart) an orthopaedic surgeon at Unitas Hospital who diagnosed a patella tendon rupture. [2] On 13 April 2007, the first appellant, Dr Felicia Kluever (Kluever), an orthopaedic surgeon employed at the hospital, performed surgery to repair the ruptured patella tendon. After the operation Michiel’s leg was placed in a brace which was removed after six weeks on 25 May 2007. Kluever thereafter referred Michiel to Mr Phillip du Plessis, (du Plessis) a physiotherapist employed at the hospital, to commence with a rehabilitation programme. [3] Du Plessis struggled to restore full flexion of the knee. This led him during September 2007, to refer and accompany Michiel for advice to Mr Cornelius Liebel (Liebel), a biokineticist who had been assisting Michiel with his sport conditioning prior to his injury. Liebel noticed that the right patella was slightly higher than the left and accordingly informed the two of them. Out of concern, du Plessis further took Michiel to the High Performance Centre in Pretoria. The physiotherapists there suggested that the circulage wire that had been inserted by Kluever during the surgical procedure referred to above, be removed. At that stage, it was thought that the wire might be hindering the flexing of the knee. Du Plessis reported this to Kluever who then scheduled a second surgical procedure to remove the circulage wire. This operation was performed on 1 October 2007 by the second respondent, Dr R H Bhawani (Bhawani). [4] From October 2007 until December 2007, Liebel worked with du Plessis to rehabilitate Michiel’s knee. No significant progress was made as they still could not achieve a complete range of movement of the knee. Early in 2008 Michiel joined the Sharks Academy in terms of the contract referred to above. Mr Jimmy Wright (Wright), a biokineticist employed at the Academy, attended to his rehabilitation. Despite Wright’s efforts after rehabilitation, Michiel could not regain the full knee function he had prior to the injury. Wright therefore referred him to Dr de Vlieg (de Vlieg), an orthopaedic surgeon, who identified a ‘high riding patella’2. On 16 September 2008, he performed a remedial operation known as the ‘VY quadriceps plasty’3 and brought down the patella. The damage found in the knee was irreversible and it became clear that Michiel’s knee would never be fully functional for him to play rugby. Sadly, his career as a rugby player for the Sharks Rugby franchise came to an end. [5] Consequently, Michiel instituted action against the appellants in which he claimed damages arising from injuries sustained during the surgical procedure performed on 13 April 2007. In his particulars of claim, he alleged that Kluever and Bhawani had been negligent when they performed the two surgical procedures referred to above. The Minister was sought to be held vicariously liable for the doctors’ actions as they were in the employ of the SANDF and were executing their duties as such when performing these operations. This latter aspect is uncontentious. 2 According to Dr de Vlieg, a patella runs in a groove on the femur and functions when the knee is fully extended. The patella will sit above the groove and as the knee bends, the patella will move downwards and be captured by the groove. A high riding patella or patella alta occurs when the patella is situated or sitting well above the groove and its point of engagement is delayed during the bending of the knee. 3 Dr de Vlieg testified that a VY quadriceps plasty operation is a technique of lengthening the muscle. The term “VY’ refers to the shape as the surgeon will cut a V during surgery and when he or she pulls it down and suture it back up, it becomes a Y shape because it has been elongated. [6] In their plea, the appellants denied negligence and pleaded that the medical services they provided to Michiel were performed with care and skill reasonably expected of medical personnel in their position. In the alternative, the appellants pleaded contributory negligence and averred that Michiel had failed to attend scheduled appointments with the medical practitioners and, contrary to the advice of Kluever, had undergone an extensive exercise programme that had impaired the healing process. [7] The matter came to trial in the Gauteng Division of the High Court, Pretoria before Van Niekerk AJ. At the commencement of the trial, the learned judge, at the request of the parties, issued an order in terms of Uniform rule 33(4) separating the merits from quantum. The judge was therefore essentially called upon to determine the question of negligence. Both parties adduced evidence and called various witnesses including expert witnesses. At the conclusion of the trial, Van Niekerk AJ was unpersuaded by the appellants’ defences. He concluded that Kluever had been negligent in that she had failed to place the patella in its correct position on 13 April 2007; further that she and Bhawani had failed to identify the issue after the primary surgery; and that this was the cause of the high riding patella and the condition of Michiel’s knee as discovered by de Vlieg in September 2008. Moreover, the learned judge rejected the Minister’s contention in relation to contributory negligence. He therefore declared the Minister liable to compensate Michiel for any damages suffered by him, arising out of injuries sustained by him, during the operation of 13 April 2007. The appellants appeal against these conclusions with special leave of this court. [8] This appeal turns on whether the findings referred to at the end of the preceding paragraph are correct. Simply put, the question is: was there negligence on the part of the medical practitioners at 1 Military Hospital which led to Michiel’s present admitted disability? [9] In order to arrive at a determination in relation to negligence, it is necessary to deal with the background facts in some detail. Michiel testified and relied on six other witnesses in support of his case, namely du Plessis, Liebel, Wright, Mr David Jacobus du Plessis, who is the deputy headmaster and head rugby coach of Eldoraigne High School, de Vlieg and Dr Anthony Birrel (Birrel), an orthopaedic surgeon. Kluever and Professor Kulule Lukhele (Lukhele), a chief orthopaedic specialist at Charlotte Maxeke Hospital, Johannesburg testified on behalf of the appellants. At the outset, it is necessary to record that there had been a misdiagnosis by Khwitshana which delayed the ruptured patella tendon from being attended to timeously. It was also agreed by all experts who testified that in order to obtain optimal rehabilitation of the knee, it was best that a diagnosis of a ruptured patella tendon be done timeously and preferably within a few days of the injury and the repair thereof immediately. The background facts are set out hereafter. [10] After Michiel’s injury, he was immediately taken to the hospital. An x-ray image of the injured leg was taken and as already stated Khwitshana told him his knee was sprained. He was given medication for pain and swelling and was instructed to return after two weeks for a check–up. The pain in his knee did not subside. [11] On 10 April 2007, Liebel assessed Michiel. He suspected a serious injury and referred him to Thiart. The latter examined Michiel and diagnosed a patella tendon rupture. He sent Michiel for ultra sound imaging (the scan). The results of the scan confirmed his diagnosis. Michiel had to be treated at 1 Military Hospital because his father is employed by the SANDF. Thiart therefore called Dr Van der Spuy, an orthopaedic surgeon employed at the hospital, who advised him of Michiel’s condition and his diagnosis. He referred Michiel to Dr Van der Spuy and provided the hospital with the results of the scan. Armed with these results, Michiel and his father returned to the hospital and presented the scan to Dr Van der Spuy. Michiel was informed that an operation on his knee would be performed on 13 April 2007. It is common cause that Thiart’s diagnosis was never explored nor was Michiel’s knee examined by Kluever before she performed the primary surgery nor had she seen the scan taken at Unitas Hospital. Kluever relied on a hearsay diagnosis by another doctor. [12] On 13 April 2007, the primary surgery was performed by Kleuver. She qualified as an orthopaedic surgeon the year before she performed the operation. She met Michiel at the theatre. He related to her how he had sustained the injury and pleaded with her to repair his knee as he wanted to carry on playing rugby. It is common cause that the exchange with Michiel took place immediately before surgery and lasted no more than a few minutes. Kluever proceeded to perform the operation in order to repair the ruptured patella tendon. She followed what she termed ‘the standard procedure’ during surgery which was: She determined the height of the patella by feeling the left knee with her hand. She used an anterial incision over the knee joint. She identified the infra patella tendon which was severely frayed and used circulage wire to approximate the ends of the tendon. She repaired the tendon in layers with a non-absorbable suture material known as Ethibond 2 and also repaired the paratendon, which is the top layer that surrounds the tendon. Upon completion, she applied a bandage and a brace which she fixed in full extension. She instructed Michiel to wear the brace for six weeks. [13] After the operation, Michiel was monitored by Dr Alberts, who was also in attendance at 1 Military. He was discharged on 15 April 2007. Thereafter Kluever saw Michiel again as an out-patient on 24 April 2007 and removed the suture clips. She recorded in the hospital file that the brace would be removed after six weeks. On 25 May 2007, she removed the brace and referred Michiel to du Plessis for rehabilitation. On his next visit, on 20 July 2007, Kluever recorded that Michiel did not have any complaints and was attending physiotherapy. His range of movement was at a level of 70 degrees. She told Michiel that he should continue with physiotherapy sessions and that she would allow him to attend biokinetics once his range of movement had reached 90 degrees. It does not appear that she had any concerns during these visits about the height of the patella. It also does not appear that she scrutinised the height of the patella. [14] Du Plessis struggled to get full flexion of the knee and decided to seek advice. During September 2007, he took Michiel to Liebel who noticed that the right patella was slightly higher than the left one. Du Plessis took him to the High Performance Centre for assessment. The therapists at the centre suspected that the circulage wire in the knee prevented Michiel from flexing the knee beyond 90 degrees. They suggested that the wire be removed. Du Plessis reported this to Kluever who scheduled an operation for the removal of circulage wire. On 1 October 2007, Dr Bhawani removed this wire. [15] Liebel corroborated du Plessis’s testimony regarding the visit during September 2007 as well as his observation and advice. He noticed that Michiel’s knee and quadriceps were quite wasted. His sessions with Michiel commenced during October 2007 after the circulage wire had been removed. They focused on light exercises. No significant progress was made. He submitted a report to Wright shortly before Michiel moved to Durban. [16] At the beginning of 2008, Michiel joined the Sharks Academy. Wright continued with his rehabilitation programme. However, Michiel could not regain the full knee function he had prior to the injury. As there was no improvement, he referred Michiel to de Vlieg who identified the high riding patella. [17] On 16 September 2008, almost 18 months after Kluever had performed the primary surgery, de Vlieg performed remedial surgery on Michiel’s right knee. He found a high riding patella and fibrous scar tissue below the patella. He found the repair mechanism performed by Kluever to be still intact. She had used suturing material known as Ethibond 2 to suture the tendon. He regarded this as being suturing material of the wrong strength and was adamant that she should have used Ethibond 5.0. He regarded her technique as inappropriate considering Michiel’s specific physical attributes. In his view, Kluever did not give adequate consideration to the fact that Michiel was physically large and was a rugby player. He concluded that the reason why the patella was found to be situated too high was due to the fact that the tendons were proximated by Kluever without taking into account the correct height of the patella, the elongated nature of the torn tendon and without performing augmentation4. In his view, the core problem was that 4 According to Dr De Vlieg augmentation is a technique that is used to improve the grip of the suture material within the tendon. This is done to reinforce the repair. at the time that Kluever performed primary surgery to repair the ruptured patella tendon, she did not take care to ensure that the patella was placed properly. This was due not only to the fact that she did not place it back in the groove precisely but also because she had not resorted to augmentation, which would have facilitated the proper placing of the patella within the groove. De Vlieg said he would have physically measured the patella height using a ruler as well as compared it to the right knee to ensure that it was similarly placed. He stated that the damage he found in the knee was caused by the wrong height of the patella and that it had started an osteoporotic process within the knee. He further stated that it was irreversible and that it would not have happened had the primary procedure by Kluever been performed using the appropriate technique and that this was foreseeable. [18] Dr Birrel’s views were that the procedure performed by Kluever was inappropriate. According to him, she inter alia, failed to take a proper history of Michiel’s injury and failed to properly prepare for the surgery. She did not perform augmentation. She should have confirmed the correct height of the patella either during the operation or thereafter by requesting x-rays to be taken and that had she done so, she would have been able to rectify the situation by repairing the high riding patella. [19] Prof Lukhele was called by the appellants to negate causality. In his testimony, he made very important concessions, namely: he would have debrided the torn edges of the ruptured patella then approximated the edges and augmented the suture had he performed the surgery. If Michiel’s knee was left with a high riding patella since the primary surgery, then the damage would ensue and such damage would be irreversible and it would be foreseeable. He confirmed that if the tendon was left elongated during the primary surgery, the patella would resultantly be too high. He accepted that a ruptured tendon would lead to that tendon to be already attenuated. He reserved what he termed the ‘guestimate’ of the patella height to experienced surgeons who have at least five years’ experience and that have acquired that particular skill. [20] The expert witnesses de Vlieg, Birrel and Lukhele prepared a joint minute. They agreed on two points, namely: (a) that a successful patella tendon repair required a treating surgeon to perform the procedure in the appropriate manner; (b) the removal of the circulage wire could not have had any effect on the patella and could not have caused the high riding patella, especially since that wire was removed six months after the repair when the tendon was expected to have healed. Lukhele further stated that the only possibility for the patella to have become high riding would be if the suturing and/or repair of the tendon had failed. [21] They disagreed on the other issues. In this regard, de Vlieg and Birrel were of the view that the standard procedure followed by Kluever was inappropriate. Furthermore they stated that Michiel would have had a better prognosis had the surgery been performed in the manner they considered correct and lastly, that had the primary surgery been properly performed, strenuous exercise by Michiel would not have caused the patella to move upwards. [22] On the other hand, Lukhele felt that the procedure performed by Kluever was proper. He considered her method to be the standard method. However, during his testimony, he did concede that it was necessary to individualise the patient and apply the applicable methods depending on the patient. He contended that a better prognosis after surgery depended on biological factors. He did not contest the view that strenuous exercise would not have caused the patella to move upwards. [23] Therefore, the first issue to be determined is whether Kluever and Bhawani were negligent. The applicable legal test for determining medical negligence was set out a century ago by Innes ACJ in Mitchell v Dixon,5 as follows: ‘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 is bound to employ reasonable skill and care; and he is liable for the consequences if he does not.’ [24] Innes CJ restated this principle in Van Wyk v Lewis,6 and went on to say: ‘And in deciding what is reasonable the court will have regard to the general level of skill and diligence possessed and exercised at the time by the members of the branch of the profession to which the practitioner belongs.’ [25] In Whitehouse v Jordan and another,7 the House of Lords concluded that the statement that ‘a mere error of judgment’ on the part of a medical practitioner does not constitute negligence was an inaccurate statement of the law. Lord Fraser said: ‘….[T]he statement as it stands is not an accurate statement of the law. Merely to describe something as an error of judgment tells us nothing about whether it is negligent or not. The true position is that an error of judgment may, or may not, be negligent; it depends on the nature of the error. If it is one that would not have been made by a reasonably competent professional man professing to have the standard and type of skill that the defendant held himself out as having, and acting with ordinary care, then it is negligent. If, on the other hand, it is an error that a man acting with 5 Mitchell v Dixon 1914 AD 519 at 525. 6 Van Wyk v Lewis 1924 AD 438 at 444. 7 Whitehouse v Jordan and another [1981] 1 All ER 267 (HL) at 281. ordinary care, might have made, then it is not negligence.’ [26] Regarding the manner in which the evidence of an expert should be evaluated, Mthiyane JA in Louwrens v Oldwage,8 held: ‘What was required of the trial Judge was to determine to what extent the opinions advanced by the experts were founded on logical reasoning and how the competing sets of evidence stood in relation to one another, viewed in the light of the probabilities.’ [27] In Medi-Clinic v Vermeulen,9 Zondi JA, when considering the manner in which the expert evidence should be evaluated, referred to the decision of Michael & another v Linksfield Park Clinic (Pty) Ltd & another 2001 (3) SA 1188 (SCA) paras 36 to 39 and said: ‘. . . what is required in the evaluation of the experts’ evidence is to determine whether and to what extent their opinions are founded on logical reasoning. It is only on that basis that a court is able to determine whether one of two conflicting opinions should be preferred. An opinion expressed without logical foundation can be rejected. But it must be borne in mind that in the medical field it may not be possible to be definitive. Experts may legitimately hold diametrically opposed views and be able to support them by logical reasoning. In that event it is not open to a court to simply express a preference for the one rather than the other and on that basis to hold the medical practitioner to have been negligent. Provided a medical practitioner acts in accordance with a reasonable and respectable body of medical opinion, his conduct cannot be condemned as negligent merely because another equally reasonable and respectable body of medical opinion would have acted differently.’ [28] Before us, counsel for the appellants, submitted that Kluever and Bhawani exercised care and skill when they performed the operations on Michiel and that the methods and/or procedure adopted by Kleuver during the first operation were within the standard required of the medical 8 Louwrens v Oldwage 2006 (2) SA 161 (SCA) para 27. 9 Medi-Clinic v Vermeulen (504/13) [2004] ZASCA 150 (26 September 2014) at para 5; 2015 (1) SA 241 (SCA). profession. He further contended that the patella was brought down to the correct height during the primary surgery. [29] This submission is against the weight of the evidence. There is an incremental accumulation of mishaps. First, on 5 April 2007 the medical staff misdiagnosed the injury as a sprained knee and told Michiel to return after two weeks. Secondly, the conduct of Kluever before the operation leaves much to be desired. She testified that she had qualified as an orthopaedic surgeon in 2006 and conceded that she was not a knee specialist, yet she did not adopt any measures to combat her relative inexperience. On her own testimony, she confirmed that she saw Michiel for the first time in theatre shortly before the surgery. She was aware that Michiel was a rugby player. This factor was not given adequate consideration. He was physically large and greater attention should have been paid to the force that would be exerted on his knee. The strength of the sutures ought to have been considered. She did not regard it necessary to take x-ray images of the injured knee prior to or after the surgery. She failed to take a proper history of Michiel’s injury nor did she examine him. The consultation with him was superficial. She never considered the x-ray image that had been taken on 5 April nor did she see the scan sent by Thiart. She relied on the hearsay diagnosis of the injury by Thiart. She obtained this information from a colleague of hers who had been briefed by Thiart. She never consulted a senior colleague or Thiart to discuss his diagnosis or precautionary steps. Eight days had elapsed before the surgery was performed. This too had a negative impact on Michiel’s treatment. The need to perform surgery to repair this type of injury immediately is highlighted in the literature provided by the parties. In this case the misdiagnosis and the delay had a negative impact on a better prognosis. [30] During the operation phase, Kluever determined the height of the patella by feeling the left knee with her hand and thereby determined what the correct height of the patella of the injured knee should be. All the orthopaedic surgeons were ad idem that her method in that regard was incorrect. Lukhele called it a ‘guestimate’ but reserved it for surgeons with at least five years’ experience who must have acquired that particular skill. Birrel and de Vlieg were adamant that she should have used either a measuring device, such as a ruler or employed x-rays. She performed surgery on a man that weighed 125 kilograms and who was a rugby player, yet she used suturing material of an inferior strength when she should have used Ethibond 5 and performed augmentation. She did not take into account the correct height of the patella after the operation. [31] When she was asked to comment about an allegation that she failed to place the patella back in its proper place after the surgery, her response was: ‘Well, I don’t think I left the patella high. Because of the principles that I used when I performed the surgery which is not always documented if its normal principles that you are using. So my normal principles when suturing the intra patella tendon is to be able to feel the quadrilateral side which in this case was the left knee, so once you’ve pulled it down with your stitches you feel the patella on the one side and then compare it to the left’. [32] In my view, this was a serious allegation that should have been met with an unequivocal and confident response refuting the allegations. Instead, she left one in the dark. [33] Lukhele when confronted with the undisputed fact that when de Vlieg opened the knee, the repair of Kluever was still intact, but the patella was sitting high, responded that there could only be two reasons for the high riding patella: Either the initial placement of the patella was incorrect and was left too high when the operation was done by Kluever; or there was attenuation in the period between the operation and the time that de Vlieg operated in the patient. In my view, since the original repair was still intact when the corrective surgery was done, the most probable cause is that the patella was not left in the correct position during the operation performed by Kluever. Thereafter, Liebel identified the high riding patella during September 2007. Wright noticed it early in 2008 and it was eventually restored by de Vlieg in September 2008. [34] Lastly, Kluever had an opportunity to identify the high riding patella when she received a report from du Plessis after his visits to Liebel and the High Performance Centre. However, she failed to do so. She, again, did not examine Michiel’s knee but merely scheduled an operation which was conducted by Bhawani on 1 October 2007. Bhawani, too did not bother to examine the knee and determine why it could not flex beyond 90 degrees. All he did was remove the circulage wire. [35] Cumulatively, and having regard to the effect of the misdiagnosis, the improper procedure, the failure thereafter to detect and identify the high riding patella, and the evidence of all the orthopaedic surgeons including Prof Lukhele, it is quite clear that Michiel’s present disability was due to Kluever’s negligence referred to above. The failure by Kluever to place the patella properly during the primary surgery and the subsequent failure by her and Bhawani to recognise and/or identify and/or repair the high riding patella subsequent to that operation caused Michiel to continue to suffer pain in his knee. Furthermore, this is the cause of the irreversible damage to his knee as found by de Vlieg. The repair of Michiel’s patella tendon could have been successful had the operation been performed with the necessary skill and care and/or the high riding patella had been timeously identified especially since du Plessis continuously reported to and raised his concerns with Kluever. [36] Regarding the plea of contributory negligence, counsel for the appellants submitted that the patella had migrated upwards because the original repair of the patella tendon failed to heal properly due to strenuous exercise. Furthermore, he submitted that Michiel’s patella tendon became attenuated during the period between the operation by the Kleuver and the one performed by de Vlieg. [37] I disagree. Michiel was, upon his discharge, immobile for six weeks. Therefore, there can be no basis to suggest that he caused the high riding patella at that stage. Once the brace was removed, he was in the care of du Plessis. Similarly, any argument that the patella was damaged during this stage will not assist the appellants because the physiotherapist was in the employ of the Minister. Be that as it may, the evidence of the physiotherapist and the biokineticists, that they did not perform strenuous exercises but concentrated on the upper body, remained unchallenged. By September 2007, five months after the operation, the high riding patella was identified. [38] Kluever speculated as to why the patella was high riding five months after the operation and stated that the circulage wire might have stretched under strenuous exercise albeit there was no evidence of a compromised wire. She further surmised that it could have been due to strenuous exercise. Her evidence in this regard is unsupported by any evidence. Furthermore, de Vlieg found her repair still intact 18 months after the operation. In my view, the repair would not have been in that condition if Michiel, the physiotherapists and biokineticists had done strenuous exercises as alleged by Kluever. In any event, this was mere speculation on her part. [39] Therefore, I am satisfied that any exercises performed during the sessions could not have caused the patella to become elongated. This is dispositive of the plea of contributory negligence. [40] In the result, the court a quo correctly upheld Michiel’s claim. The appeal therefore fails. [41] Consequently I make the following order: The appeal is dismissed with costs including the costs attendant upon the employment of two counsel. __________________ NZ MHLANTLA JUDGE OF APPEAL APPEARANCES: For Appellant: A T Ncongwane SC (with him I P Ngobese) Instructed by: The State Attorney Pretoria c/o The State Attorney Bloemfontein For Respondent: J du Plessis SC (with him H A Percival) Instructed by: Elmarié De Vos Incorporated Pretoria Webber Wentzel Attorneys c/o 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 August 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. Dr F Kluever v De Goede (20198/2014) [2015] ZASCA 105 (19 August 2015). The Supreme Court of Appeal (SCA) today dismissed an appeal against a finding of the court below that two medical practitioners were negligent when they performed surgical procedures on the respondent. On 5 April 2007, the respondent, whilst playing rugby during a school tournament, sustained a rapture of the patella tendon of his right knee. At that stage, he had been offered a five year contract to play for the Sharks Rugby Franchise from 2008. As a result, the respondent received medical treatment at 1 Military Hospital, Pretoria, where he was initially diagnosed with a sprained knee, but five days later was re-diagnosed to have sustained a rupture of the patella tendon. On 13 April 2007, Dr F Kluever, an orthopaedic surgeon employed by the Minister of Defence at the aforementioned hospital, performed the surgery to repair the respondent’s raptured patella tendon. After the surgical operation, his leg was placed in a brace, which was removed after six weeks on 25 May 2007. Dr Kluever thereafter referred the respondent to a physiotherapist to restore full flexion of the knee. The physiotherapist struggled to achieve this and this led him during September 2007 to refer the respondent to a biokineticist. The latter noticed that the right patella was slightly higher than the left. The respondent was also taken to the High Performance Centre in Pretoria where it was suggested that the circulage wire inserted by Dr Kluever during the primary surgery be removed as it might be hindering the flexing of the knee. The physiotherapist reported this to Dr Kluever, who scheduled a second surgery. On 1 October 2007 Dr R Bhawani performed the second procedure and removed the circulage wire. The physiotherapist and the biokineticist continued with the rehabilitation programme of the respondent’s knee but could not achieve a complete range of movement. During 2008, the respondent joined the Sharks Academy and a biokineticist employed at the Academy attended to his rehabilitation. No significant progress was made. As a result, he referred the respondent to Dr de Vlieg, an orthopaedic surgeon who identified a ‘high riding patella’. On 16 September 2008, Dr de Vlieg performed a remedial surgery known as the ‘VY quadriceps plasty’ to correct the high riding patella. He found that the damage to respondent’s knee was irreversible and that his knee would never be fully functional to enable him to play rugby again. Consequently, the respondent instituted action against Dr Kluever, Dr Bhawani and the Minister of Defence and claimed damages arising from injuries sustained during the surgical procedures. He alleged that the medical practitioners had been negligent when they performed the two surgical procedures. In their plea, the appellants denied negligence and stated that the doctors had performed the surgeries with due care and skill reasonably expected of medical personnel in their position. In the alternative, they pleaded that the respondent had failed to attend scheduled appointments with medical practitioners and that he had undergone an extensive exercise programme contrary to Dr Kluever’s advice. The Gauteng Division of the High Court, Pretoria, found that Dr Kluever had been negligent in that she had failed to place the respondent’s patella in its correct position on 13 April 2007; and that Dr Bhawani had failed to identify the problem after the primary surgery and that this was the cause of the high riding patella and the condition of the respondent’s knee as discovered by Dr de Vlieg in September 2008. In this court the issue on appeal was whether there had been negligence on the part of the medical practitioners which led to the respondent’s present admitted disability. The SCA restated the applicable legal test for determining medical negligence that a medical practitioner is not expected to exercise the highest possible degree of professional skill, but is bound to employ reasonable skill and care and the medical practitioner would be liable for the consequences if he or she did not take reasonable skill and care. What is reasonable, the court will have regard to the general level of skill and diligence possessed and exercised at the time by the members of the branch of the profession to which the practitioner belongs. The SCA having regard to the evidence, held that there was an incremental accumulation of mishaps: the misdiagnosis of the respondent’s injury; the improper conduct of Dr Kluever before and during the primary procedure; the failure thereafter to detect and identify the high riding patella and that it was clear that the respondent’s present disability was due to Dr Kluever’s negligence. The SCA found that the failure by Dr Kluever to place the patella properly during the primary surgery and the subsequent failure by her and Dr Bhawani to recognise and to identify and thereafter to repair the high riding patella, caused the respondent to continue to suffer pain in his knee. The SCA furthermore, concluded that this was the cause of the irreversible damage to his knee as found by Dr de Vlieg. The SCA further concluded that the repair of respondent’s patella tendon could have been successful had the operation been performed with the necessary skill and care and had the high riding patella been timeously identified. Accordingly, the SCA dismissed the appeal with costs and stated that the court a quo had correctly upheld the respondent’s claim against the appellants. --- ends ---

538

non-electoral

2016

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 974/2015 In the matter between: PETER GEES APPELLANT and THE PROVINCIAL MINISTER OF CULTURAL AFFAIRS AND SPORT, WESTERN CAPE FIRST RESPONDENT THE CHAIRPERSON, INDEPENDENT APPEAL TRIBUNAL SECOND RESPONDENT HERITAGE WESTERN CAPE THIRD RESPONDENT THE CITY OF CAPE TOWN FOURTH RESPONDENT CITY BOWL RATEPAYERS’ AND RESIDENTS’ ASSOCIATION FIFTH RESPONDENT Neutral citation: Gees v The Provincial Minister of Cultural Affairs and Sport (974/2015) [2015] ZASCA 136 (29 September 2016) Coram: Maya DP, Bosielo and Seriti JJA and Fourie and Dlodlo AJJA Heard: 15 September 2016 Delivered: 29 September 2016 Summary: Provincial heritage resources authority granting a permit in terms of s 34 of the National Heritage Resources Act 25 of 1999 for the demolition of a structure older than 60 years situated on a property with no formal heritage status: in so doing conditions were imposed controlling future development on the property: held that such conditions were lawfully imposed. _______________________________________________________________ ORDER ________________________________________________________________ On appeal from: Western Cape Division of the High Court, Cape Town (Weinkove AJ sitting as court of first instance): The appeal is dismissed with costs, including the costs of two counsel. ________________________________________________________________ JUDGMENT ________________________________________________________________ Fourie AJA (Maya DP, Bosielo and Seriti JJA and Dlodlo AJA concurring) [1] The issue in this appeal is whether the National Heritage Resources Act 25 of 1999 (the Act) authorises a provincial heritage resources authority, when granting a permit for the demolition of an entire structure which is older than 60 years, situated on a property with no formal heritage status, may lawfully impose conditions controlling future development on the property. [2] The appellant is the registered owner of all the sections in a sectional title scheme comprising the land and a small block of flats (the structure) on Erf 1444, Vredehoek, Cape Town (Erf 1444), situated at 24 Davenport Road, Vredehoek. The appellant intends to redevelop Erf 1444 and this requires the demolition of the structure. As the structure is more than 60 years old, s 34(1) of the Act prohibits its demolition without a permit issued by the third respondent, Heritage Western Cape (HWC). [3] The appellant’s application for a demolition permit was considered by HWC’s Built Environmental and Landscape Permit Committee at a meeting on 24 July 2013, and was refused. The appellant appealed to HWC’s appeals committee, which refused the appeal on 18 September 2013. [4] The appellant then lodged an appeal with the first respondent, the Provincial Minister of Cultural Affairs and Sport, Western Cape (the MEC). On 21 January 2015, the appeal tribunal appointed by the MEC in terms of s 49(2) of the Act, upheld the appeal and granted the demolition permit, subject to the following conditions: ‘(a) that the new development on the site shall not exceed the town-planning envelope of the existing building; (b) that the materials used for the façade of the new building are in keeping with the existing building; (c) that building plans for the new structure are submitted to Heritage Western Cape for its approval prior to any work commencing on site.’ [5] Aggrieved by the imposition of these conditions by the appeal tribunal, the appellant launched an application in terms of the provisions of the Promotion of Administrative Justice Act 3 of 2000, in the Western Cape Division of the High Court, Cape Town for the review of the appeal tribunal’s decision and the setting aside of the conditions attaching thereto, alternatively for an order directing the MEC to reconsider the appellant’s appeal. The application was opposed by the MEC while the City of Cape Town abided the decision of the court, but filed an affidavit providing the parties and the court with relevant information, particularly with regard to the proposed designation of a heritage protection overlay zone for the area including Vredehoek. [6] In the event, the matter was heard by Weinkove AJ who dismissed the application with costs, but granted the appellant leave to appeal to this court. The MEC opposes the appeal. The remainder of the parties abide the decision of the court. [7] The essence of the appellant’s case is that the imposition of the conditions in the demolition permit by the appeal tribunal was not authorised by s 48(2) of the Act and thus ultra vires HWC’s powers (via the tribunal’s ruling). It is common cause that an entity such as HWC exercising public power is confined to exercising only such powers as are lawfully conferred upon it ─ this is the principle of legality. See Fedsure Life Assurance Ltd & others v Greater Johannesburg Transitional Metropolitan Council & others 1999 (1) SA 374 (CC); 1998 (12) BCLR 1458 (CC) para 56; Pharmaceutical Manufacturers Association of SA & another: In re Ex Parte President of the Republic of South Africa & others 2000 (2) SA 674 (CC); 2000 (3) BCLR 241 (CC) para 50; Qualidental Laboratories (Pty) Ltd v Heritage Western Cape & another 2008 (3) SA 160 (SCA) para 9 and Vorster & another v Department of Economic Development, Environment and Tourism, Limpopo Province & others 2006 (5) SA 291 (T) paras 17 and 18. [8] It is accordingly necessary to consider the imposition of the conditions in the demolition permit by the appeal tribunal against the background of the Act. As explained in Qualidental Laboratories, para 10, an overview of the Act shows that its overarching objective is the identification, protection, preservation and management of heritage resources for posterity. This objective also finds resonance in s 24(b) of the Constitution. A heritage resource is defined in s 1 of the Act as ‘any place or object of cultural significance’. Cultural significance is defined as meaning ‘aesthetic, architectural, historical, scientific, social, spiritual, linguistic or technological value or significance’. A place is defined as including a site, area or region; a building or group of buildings and other structures or groups of structures; and open space, including a public square, street or park. In relation to the management of a place, a place is defined as including its immediate surroundings. [9] In terms of s 6 of the Act, the South African Heritage Resources Agency (SAHRA) and the provincial heritage resources authorities are empowered to prescribe principles for the management of heritage resources and to publish for general information policy relating to heritage resources management. Section 7 provides for heritage assessment criteria and grading. A three-tier system for heritage resources management is prescribed. National level functions are the responsibility of SAHRA, while provincial level functions are the responsibility of provincial heritage authorities. Local level functions are the responsibility of local authorities. In s 25 of the Act the general powers and duties of heritage authorities are set out. These are wide-ranging powers and duties enabling and obliging heritage authorities to comply with their conservation mandate in terms of the Act. [10] The formal protection provisions of the Act are to be found in part 1 of chapter II (ss 27-33). Section 27 deals with national and provincial heritage sites, while s 28 deals with protected areas. Section 29 provides for the provisional protection of protected areas and heritage resources by SAHRA and provincial heritage authorities, for a maximum period of two years, while local authorities are authorised to provisionally protect, for a maximum period of three months, any place which it considers to be conservation-worthy. [11] Section 30 of the Act requires a provincial heritage authority to compile and maintain a heritage register listing the heritage resources in the province which it considers to be conservation-worthy. In terms of s 30(11)(a), the special consent of the local authority is required for any alteration to or development affecting a place listed in the heritage register. Section 31 allows for the designation by planning authorities (including municipalities) and in certain circumstances provincial heritage authorities, of heritage areas to protect any place of environmental or cultural interest. [12] Part 2 of chapter II of the Act (ss 33-38) deals with general protection provisions, of which s 34(1) is of importance in the adjudication of this matter. It reads as follows: ‘No person may alter or demolish any structure or part of a structure which is older than 60 years without a permit issued by the relevant provincial heritage resources authority.’ In terms of s 34(2), within three months of the refusal of the provincial heritage resources authority to issue a permit, consideration must be given to the protection of the place concerned in terms of the formal designations provided for in part 1 of chapter II. [13] Finally, for purposes of this matter, reference must be made to s 48 of the Act, which falls within chapter III of the Act, headed ‘General Provisions’. Subsection (2) provides as follows: ‘On application by any person in the manner prescribed under subsection (1), a heritage resources authority may in its discretion issue to such a person a permit to perform such actions at such time and subject to such terms, conditions and restrictions or directions as may be specified in the permit, including a condition ─ (a) that the applicant give security in such form and such amount determined by the heritage resources authority concerned, having regard to the nature and extent of the work referred to in the permit, to ensure the satisfactory completion of such work or the curation of objects and material recovered during the course of the work; or (b) providing for the recycling or deposit in a materials bank of historical building materials; or (c) stipulating that design proposals be revised; or (d) regarding the qualifications and expertise required to perform the actions for which the permit is issued.’ [14] As the structure on Erf 1444 is more than 60 years old, its demolition is not permitted unless a permit has been issued by HWC in terms of s 48(2) of the Act. This is the demolition permit which forms the subject matter of the appeal. [15] It is common cause that: neither the structure nor Erf 1444 is a declared national or provincial heritage site as contemplated in s 27 of the Act; neither of them enjoy provisional protection in terms of s 29; nor is either of them listed in a heritage register in terms of s 30 or declared as a heritage object in terms of s 32. Furthermore, Erf 1444 does not fall within a protected area as contemplated in s 28 of the Act, nor within a heritage area as contemplated in s 31. While certain areas in Vredehoek fall within a heritage protection overlay zone (HPOZ) in terms of the City’s zoning scheme regulations, Erf 1444 does not. However, as pointed out in the affidavit filed by the City of Cape Town, it is currently in the process of conducting a heritage survey of Vredehoek with the purpose of rendering the area in which Erf 1444 is situated subject to the HPOZ. [16] The City has also graded Erf 1444 a proposed IIIC, as it is regarded as being of significance within its context of a well-preserved, coherent art deco streetscape spanning both sides of Davenport Road. In fact, the City has expressed the view that the large concentration of art deco buildings in the area is probably unique in the South African context and that Davenport Road is the core of the art deco area of Vredehoek. I should add that the main concern of most parties who made submissions to the heritage authorities opposing the demolition of the structure, was that the character of Vredehoek and this particular street should be preserved. [17] In considering the appellant’s submission that the conditions imposed in the demolition permit are ultra vires the provisions of s 48(2) of the Act, it is immediately apparent that the submission flies in the face of the wide scope of application of s 48(2). As recorded earlier, the subsection confers a discretion upon a heritage authority to issue a permit ‘subject to such terms, conditions and restrictions or directions as may be specified in the permit’, including the conditions in paras (a) to (d) thereof. The word ‘including’ in the context used in s 48(2), is a word of enlargement, not of limitation. The conditions which may be imposed are thus not confined to those set out in paras (a) to (d) of s 48(2), but may include any appropriate condition. See Dibowitz v Commissioner for Inland Revenue 1952 (1) SA 55 (A) at 61B-D. Needless to say, any condition so imposed has to be a lawful condition, ie imposed by the relevant heritage resources authority exercising a power lawfully conferred upon it. [18] What the appellant contends for is a construction of s 48(2) that limits its wide scope of application in the event of the granting of a permit for the demolition of a structure which enjoys no formal heritage protection. One may ask why, if this was the legislature’s intention, it had not been conveyed by curtailing the wide ambit of s 48(2) in such circumstances. This could easily have been done and the failure of the legislature to do so necessarily points to a contrary intention. Therefore, on the plain wording of s 48(2) the appeal tribunal had a wide discretion to impose terms, conditions, restrictions or directions in the permit. What remains, is to determine whether the appeal tribunal could lawfully have imposed the disputed conditions in the demolition permit. Put differently, were the conditions imposed by the appeal tribunal ultra vires the Act? [19] As recorded earlier, it is common cause that, although the structure on Erf 1444 is not worthy of protection, the surrounding area is. The City of Cape Town regards the area as conservation-worthy and is in the process of formally protecting it by incorporation in the City’s proposed HPOZ for the area of Vredehoek. The significance of Erf 1444 in the context of its surrounding area, was described as follows by the appeal tribunal: ‘Despite the building not falling within a Heritage Protection Overlay Zone, the art deco area of Vredehoek is accepted by the heritage fraternity as significant and worthy of being declared a conservation area. In broad terms and without referring to the boundaries of the art deco area, the significance of the area is sufficient to warrant protective measures.’ [20] It is important to note that the significance of Erf 1444 within its surrounding area was also acknowledged by Mr C Snelling, the heritage consultant who prepared the ‘Statement of Significance’ which accompanied the appellant’s application for the demolition permit. Mr Snelling referred to ‘. . . the richer art deco/modernist blocks of flats which are common in both the street on which the property is located and wider area . . . .’, and emphasised that: ‘. . . the structure does sit comfortably within its environment which is itself typical of the wider Vredehoek area which is noted for the art deco qualities of the various blocks of flats . . . and the eclectic mix of residential buildings which although invariably are of a simple box and hipped roof nature display variously art deco, Cape Dutch revival and arts and crafts qualities.’ [21] The significance of the IIIC grading of Erf 1444 was recognised by Mr A C Lillie, the heritage consultant who deposed to the appellant’s founding affidavit, as follows: ‘. . . grade IIIC heritage resources do not have intrinsic merit ─ their significance derives from their contribution to the character of significance of their surrounding areas.’ [22] It bears emphasising that a ‘place’ is defined in s 1 of the Act as including a street as well as the immediate surroundings of a place. Furthermore, in terms of s 3(1) of the Act those heritage resources of South Africa which are of cultural significance or other special value for the present community and future generations, must be considered part of the national estate and fall within the sphere of operations of heritage resources authorities. In terms of s 3(2) the national estate may include places, buildings, structures and equipment of cultural significance, as well as places which are associated with living heritage. Section 3(3) of the Act emphasises that a place is to be considered part of the national estate if it has cultural significance or other special value because of its importance in exhibiting particular aesthetic characteristics valued by a community or a cultural group. [23] In terms of s 5(1) of the Act, all heritage resources authorities performing functions and exercising powers in terms of the Act for the management of heritage resources, must recognise, inter alia, that heritage resources have lasting value in their own right, and that they are valuable, finite, non-renewable and irreplaceable, and must be carefully managed to ensure their survival. In the present context, the relevant heritage resources are not confined to the structure or Erf 1444 itself, but extend, on the clear wording of the Act, to the surrounding area, including other buildings or structures in the immediate vicinity of Erf 1444. This would encompass the large concentration of art deco buildings spanning both sides of Davenport Road and its surrounding area, which, on all the available evidence, forms part of the national estate and is worthy of protection. In fact, as recorded above, the City of Cape Town has recognised this and is in the process of rendering Erf 1444 and its surrounds a protected heritage area. [24] Although the proposed designation of the area as a heritage area requires further refinement, as well as engagement between the owner and the public, the evidence shows that it is an ongoing process that would, in the foreseeable future, result in the formal protection of the area in which Erf 1444 is situated. In view thereof, I agree with the submission on behalf of the MEC, that it would not make sense to allow for the demolition, in the interim, of the very resources that are intended to form the subject of the HPOZ, without the necessary counter-balancing measures to preserve the fabric of the HPOZ, such as the conditions imposed in the demolition permit. [25] The appellant’s construction of s 48(2), limiting the imposition of conditions to formally declared conservation areas only, would effectively reduce heritage resources management to a small area of concern and exclude major instances of possible abuse from the power of protection by heritage resources authorities. The current is a prime example. Where a heritage resource, such as this art deco area of Vredehoek, is potentially affected by an application brought in terms of the Act, the relevant heritage authorities should be entitled to impose such conditions as the Act would permit for the conservation of the affected area. In fact, their failure to do so would constitute the shirking of their conservation mandate to protect heritage resources for posterity. [26] Counsel for the appellant reiterated that the Act does not authorise heritage authorities to impose conditions controlling future development on a property when they grant a permit authorising demolition of the structure on a property with no formal heritage status. Therefore, the submission continued, it is impermissible to attach conditions to a demolition permit for the purpose of preserving neighbourhood characteristics unless those neighbourhood characteristics have been recognised as worthy of preserving by the designation of the area as a protected heritage area. [27] In Qualidental this court also dealt with an appeal regarding the imposition of a condition as to future development in a demolition permit in respect of a structure in an unprotected heritage area. The same submission was made on behalf of the appellant, namely that, in those circumstances, the Act does not clothe the HWC with the power to impose the relevant conditions. In paragraph 20 this court made short shrift of this submission in the following terms: ‘I may add that the purpose and effect of the condition are designed to enable the first respondent [HWC] to exercise a power vested in it in terms of the Act and which, as pointed out, is consonant with the overall objective of the Act ie the conservation of a heritage resource. Therefore the condition, rather than being one aimed at controlling development, as contended by the appellant, was in actual fact a condition with a conservation objective.’ [28] While the facts in the present appeal differ somewhat from those in Qualidental, this does not detract from the principle enunciated therein, that, even in an unprotected heritage area, the relevant heritage conservation authority may, in appropriate circumstances, when approving a demolition, impose conditions controlling future development to protect a heritage resource and its surrounds. [29] In my view, the purpose and effect of the conditions imposed in the present matter were clearly designed to enable HWC to fulfil its duty in terms of the Act, ie to conserve a heritage resource. Therefore the conditions, contrary to the appellant’s submission, were not aimed at controlling development as such, but constituted conditions with a conservation objective. It follows that the conditions were lawfully imposed in terms of s 48(2) of the Act. [30] Counsel for the appellant also had a second string to his bow. He submitted that an interpretation of the Act which authorises a heritage authority, when it grants a permit authorising demolition of the structure on a property not otherwise protected under the Act, to impose conditions controlling future building or development on the property, permits the arbitrary deprivation of property contrary to the provisions of s 25(1) of the Constitution. This line of attack was first raised in the appellant’s heads of argument on appeal. It was not alluded to in the papers in the court below or in the judgment of Weinkove AJ. In the result the MEC did not have the opportunity to meet a case on this basis and to present evidence which might be relevant to it. However, there is no need to belabour this point, as I believe that there is, in any event, no merit in the appellant’s underlying submission. [31] Section 25(1) of the Constitution provides as follows: ‘No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property.’ In terms of s 25(1), all deprivations of property must meet the requirements of the section, ie they must be authorised by a generally applicable law and may not permit arbitrary deprivation. If these requirements are not met, the infringement will be unconstitutional and invalid, unless it is justifiable under s 36(1) of the Constitution. See in general P J Badenhorst et al, Silberberg and Schoeman’s The Law of Property 5ed (2006) at 545; First National Bank of SA Limited t/a Wesbank v Commissioner, South African Revenue Service & another; First National Bank of SA Ltd t/a Wesbank v Minister of Finance 2002 (4) SA 768 (CC) paras 57-60. [32] It is true that the conditions imposed in the demolition permit amount to a curtailment of the appellant’s entitlement to deal with his property as he sees fit, and may therefore to a certain extent be regarded as a deprivation of property. However, it is widely recognised that in our present constitutional democracy an increased emphasis has been placed upon the characteristic of ownership which requires that entitlements must be exercised in accordance with the social function of law in the interest of the community. A J van der Walt and G J Pienaar Introduction to the Law of Property 7ed (2016) at 50 put it as follows: ‘. . . the inherent responsibility of the owner towards the community in the exercise of his entitlements is emphasised. The balance between the protection of ownership and the exercise of entitlements of the owner regarding third parties, on the one hand, and the obligations of the owner to the community, on the other hand, must be maintained throughout. This might, in certain circumstances, even mean that an owner’s entitlements could be limited or infringed upon in the interest of the community. In such cases the infringement must always be reasonable and equitable [not arbitrary].’ See also the comments of Davis J in Qualidental Laboratories (Pty) Ltd v Heritage Western Cape & another 2007 (4) SA 26 (C) at 37C-E; Corium (Pty) Ltd & others v Myburgh Park Langebaan (Pty) Ltd & others 1993 (1) SA 853 (C) at 858E-F; Diepsloot Residents’ and Landowners’ Association & another v Administrator, Transvaal 1994 (3) SA 336 (A) at 349C-J and Port Elizabeth Municipality v Various Occupiers 2005 (1) SA 217 (CC) para 23. [33] In the instant matter the partial deprivation of the appellant’s property rights by means of the imposition of the conditions in the demolition permit, is authorised by the Act, in that it stems from the very purpose of the Act viz the conservation of a heritage resource. The imposition of the conditions also accords with the conservation mandate of HWC in terms of the Act and is directly in line with the principles of heritage resources management set out in the Act. [34] In these circumstances I find that there has been no arbitrary deprivation of the appellant’s rights of ownership by HWC. On the contrary, the imposition of the conditions, in my view, was reasonable and equitable, having regard to the inherent responsibility of the appellant towards the community in the exercise of his entitlements as the owner of Erf 1444. [35] I therefore conclude that the court below was correct in dismissing the application for review and accordingly the appeal has to fail. [36] The following order is made: The appeal is dismissed with costs, including the costs of two counsel. ____________________ PB Fourie Acting Judge of Appeal Appearances: For the Appellant: S P Rosenberg SC (with him K Reynolds) Instructed by: Smith Tabata Buchanan Boyes, Cape Town Webbers, Bloemfontein For the Respondent: I Jamie SC (with him P S van Zyl) Instructed by: The State Attorney, Cape Town The State Attorney, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY From: The Registrar, Supreme Court of Appeal Date: 29 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 Neutral citation: Gees v The Provincial Minister of Cultural Affairs and Sport (974/2015) [2015] ZASCA 136 (29 September 2016) The SCA has today dismissed the appeal of the appellant against a judgment of the Western Cape High Court. In so doing the SCA held that the large concentration of art deco buildings spanning Davenport Road, Vredehoek, Cape Town, forms part of the national estate and is worthy of protection as a heritage resource. Therefore, the SCA held, that Heritage Western Cape, in granting a permit for the demolition of the appellant’s 60 year old block of flats, was justified in imposing conditions controlling future development on the property. ---ends---

2787

non-electoral

2012

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 881/2011 Reportable In the matter between: MARK MINNIES First Appellant IEKERAAM HINI Second Appellant MARK ADAMS Third Appellant LINFORD PILOT Fourth Appellant and THE STATE Respondent Neutral citation: Minnies v State (881/2011) [2012] ZASCA 102 (1 June 2012) Coram: Mthiyane DP, Leach and Tshiqi JJA and Petse and Ndita AJJA Heard: 10 May 2012 Delivered: 1 June 2012 Summary: Criminal law – contravention of s 34(1)(b) of the South African Reserve Bank Act 90 of 1989 – offering counterfeit money for sale (not as legal tender) to a buyer who knew it to be counterfeit, not constituting tendering in contravention of s 34(1)(b). ___________________________________________________________________ O R D E R ___________________________________________________________________ On appeal from: Western Cape High Court, Cape Town (J H Erasmus J and Matojane AJ sitting as court of appeal): The appeal is upheld. The order of the court below is set aside and in its place is substituted the following order: ‘(a) The appeal is allowed. (b) The convictions and the sentences of the appellants are set aside.’ ___________________________________________________________________ J U D G M E N T __________________________________________________________________ LEACH JA and PETSE AJA (MTHIYANE DP,TSHIQI JA AND NDITA AJA concurring) [1] Arising out of events which occurred on 19 July 2006, the appellants were tried in the Specialised Commercial Crime Court, Bellville on a charge of unlawfully tendering counterfeit money in contravention of s 34(1)(b) of the South African Reserve Bank Act 90 of 1989 (‘the Act’). They were convicted as charged and sentenced to various terms of imprisonment. The appellants appealed against both their convictions and sentences to the Western Cape High Court, Cape Town. The appeal was dismissed but, with leave of the high court, the appellants appeal now to this court against their convictions only. [2] The State’s case on the relevant facts, accepted by the trial court, is the stuff of a low grade Hollywood thriller. It may be summarised as follows. The principal state witness, Alfred Robert Laidlaw, was an acquaintance of the first appellant whom he had not seen for many years; the first appellant contacted Laidlaw and told him that he was looking for a buyer for counterfeit money; this led to a meeting between Laidlaw and the first, third and fourth appellants on 12 July 2006 during which Laidlaw was shown a counterfeit bank note; an offer was made to sell a large quantity of similar counterfeit bank notes at 50% of their face value; Laidlaw thereafter contacted the police who decided to set a trap; pursuant thereto to at midday on 19 July 2006 Laidlaw proceeded to the parking lot of the Good Hope Centre in Cape Town accompanied by a police agent who was posing as a potential purchaser; they met the four appellants who showed them a sports bag containing a considerable number of R100 counterfeit notes; at the time a number of other policemen were lurking nearby ready to pounce as soon as the transaction was concluded; however at the moment critique the appellants saw a nearby Metro police motor vehicle, panicked and took flight, speeding away from the scene in one of the two motor vehicles they had used to come to the scene; the police pursued them; a high speed car chase took place through the streets of the city until they eventually forced the appellants to stop and arrested them [3] It is apparent from this that the counterfeit banknotes which the appellants were wishing to sell were not handed over to Laidlaw and his companion but had merely been offered to them. The State however contended that this was sufficient to constitute an offence under s 34(1)(b) of the Act which provides that any person who ‘utters, tenders or accepts any . . . note . . . which has been forged, altered or unlawfully issued, knowing it to be forged, altered or unlawfully issued’ commits an offence. Consequently the State alleged the following in the charge sheet: ‘That the accused are guilty of the crime of contravening the provisions of section 34(1)(b) read with section 1 of the South African Reserve Bank Act 90 of 1989 and further read with section 2 of the Prevention of Counterfeiting of Currency Act 16 of 1965─ TENDERING OF COUNTERFEIT MONEY In that on or about 19/07/2006 and at or near Cape Town in the regional division of the Cape, the accused did unlawfully tender, accept or utter any notes or coins to Alfred Robert Laidlaw which had been forged, altered or unlawfully issued, knowing it to have been forged, altered or unlawfully issued, to wit 3 648 x R100 RSA notes.’ [4] This charge was poorly drawn. As the State’s case related solely to counterfeit banknotes, the reference in the charge to coins was of no relevance. By the same token, reference to s 2 of the Prevention of Counterfeiting of Currency Act 16 of 965 was also misplaced. As appears from s 1 thereof, that Act does not apply to banknotes allegedly issued under the South African Reserve Bank Act 90 of 1989. Moreover, the allegations that the accused unlawfully accepted or uttered notes to Laidlaw are irrelevant as the State has never contended that the appellants were guilty of uttering or accepting. [5] Be that as it may, the parties were agreed that the charge should be construed as merely alleging that the appellants had unlawfully tendered counterfeit banknotes in contravention of s 34(1)(b) despite the evidence clearly establishing that when the offer to sell the counterfeit money in question was made and the money shown to Laidlaw and his companion, all concerned knew that the banknotes were counterfeit and not genuine. [6] The following issues were argued before us during the hearing of the appeal: (a) whether in the legal and factual context of this case the word ‘tender’ should be construed as synonymous with the word ‘utter’; (b) whether the court below erred in holding that a conviction of ‘tendering’ counterfeit notes was permissible despite the absence of evidence of an intention on the part of the appellants to offer or pass off the same as genuine notes; (c) whether in any event the court below erred in relying on the evidence of Laidlaw who was not only a single incriminating witness but also whose evidence was fraught with contradictions and inconsistencies which detracted from its truthfulness and reliability; (d) whether the court below should have drawn an adverse inference against the State consequent upon its failure to call the witness David to corroborate Laidlaw’s testimony. From what appears below, it is unnecessary to decide all these issues. [7] The cardinal legal issue to determine is whether offering to sell the counterfeit banknotes in these circumstances amounted to an unlawful ‘tendering’ as envisaged by the section. The reason why the trial court concluded that an unlawful tender of the counterfeit notes had taken place is not clear. However, in dismissing the appellants’ appeal, the high court accepted the correctness of the decision in S v Modisakeng 1998 (1) SACR 278 (T). In that matter the appellant had handed a counterfeit banknote to a police trap who had expressed interest in purchasing forged currency. He did so in order to allow the trap to sample the forgeries he had for sale. The court held that because the trap had known that the note was forged, the appellant had not committed the offence of uttering. It went on to conclude that the intention of the legislature was to cast the net as widely as possible in s 34(1)(b) and that, as ‘tendering’ as envisaged by the section must be taken as something different from ‘uttering’, the word ‘tender’ should be construed as embracing the appellant’s actions in handing over the note despite both he and the trap knowing that it was false. [8] In dismissing the appellants’ appeal, the high court accepted the correctness of the Modisakeng decision. On a similar process of reasoning it concluded that the appellants’ offer to sell counterfeit money to Laidlaw and his companion amounted to a tender as envisaged by the section, despite the relevant parties being aware that the money that was being offered for sale was counterfeit. The correctness of this decision was at the core of the debate in this court. [9] In attempting to support the reasoning of the judgment in Modisakeng, counsel for the State argued that it was necessary to read the words ‘utters’, ‘tenders or accepts’ in 34(1)(b) disjunctively and to thereby ascribe a different meaning to each. Accordingly, while accepting that a crime of uttering in the context of counterfeit banknotes connotes intentionally passing off the false notes by representing them as genuine to the actual potential prejudice of another1 - and that for this reason the appellants’ actions fell short of establishing an uttering 2 - it was contended that this was not necessarily the case with tendering. 1 Compare Snyman Criminal Law 5th Edition 543. 2 Cf R v Toni 1949 (1) SA 109 (A) at 113 and Kolia v Rex 1937 NPD 105. [10] There is a close relationship between uttering and tendering. Indeed in many instances the act of uttering will involve the tender of money. Thus the learned authors of South African Criminal Law and Procedure Vol 33 in referring to uttering or otherwise dealing in counterfeit forgeries, state:4 ‘. . . that an uttering involves a parting with (money) or an offering of it. In this sense an uttering would include a tendering. Nevertheless the words ‘uttering’ and ‘tendering’ should be read disjunctively, mainly it seems, to obviate difficulties where the accused does not specifically tender counterfeit money in payment of goods but rather passes a counterfeit coin in return for good coin tendered to him.’ As support for this latter contention, the learned authers refer to R v Franks5 where the accused tendered a genuine coin and on receiving a genuine coin as change, by sleight of hand substituted a counterfeit coin which he then returned, claiming that it was counterfeit, and demanding a genuine coin. On being given a further genuine coin he again substituted a counterfeit coin which he again returned. He was found to have uttered counterfeit coins. [11] Bearing in mind the close relationship between uttering on the one hand and tendering on the other, there seems to be no reason for the legislature to have intended to draw any material distinction between the two in respect of the criminal intent required to commit the offence. This is especially so as, similar to uttering, in the context of currency the ordinary use of the word ‘tender’ is to offer money in payment. Indeed, and significantly, the legislature in the Act referred to banknotes as ‘legal tender’ – see eg s 34(2)(c). But more importantly, s 17(1) of the Act provides that a tender of a banknote ‘shall be a legal tender of payment of an amount equal to the amount specified on the note’. There is no reason to draw any distinction between a tender as envisaged in this section and a tender envisaged in s 34(1)(b). Accordingly tender in the latter section must be construed as an action whereby counterfeit money is offered as genuine currency. That is the clear meaning of the section. 3 Milton & Cowling South African Criminal Law and Procedure Vol 3. 4 Para A2-16. 5 R v Franks (1794) 2 Leach 644. [12] In the light of this conclusion, the fact that all relevant parties in the present case were aware that the appellants were attempting to sell counterfeit money is fatal to the charge levied against them. There was no use or passing off of the banknotes as if they were genuine and therefore no ‘tendering’ of the counterfeit notes – and on that issue, the judgment in Modisakeng was wrongly decided. As there was no unlawful tender as envisaged by s 34(1)(b), the appellants ought not to have been convicted on the charge on which they were arraigned and their appeal must succeed. [13] In closing, we wish to add that the appellants appear clearly to have been involved in counterfeiting activities. It is a matter of both surprise and concern that they were not, at the very least in the alternative, charged with the commission of some other statutory offence. Whether the prosecution was remiss or not is, however, not the question that has to be answered in this case. [14] The following order is made: 1 The appeal is upheld. 2 The order of the court below is set aside and in its place is substituted the following order: ‘(a) The appeal is allowed. (b) The convictions and the sentences of the appellants are set aside.’ ______________________ L E Leach Judge of Appeal ____________________ X M Petse Acting Judge of Appeal APPEARANCES: For Appellant: J van der Berg Instructed by: A K Kajee & Associates, Cravenby Webbers Attorneys, Bloemfontein For Respondent: E van Zyl (with her S Liedeman) Instructed by: The Director of Public Prosecutions, Cape Town The Director of Public Prosecutions, 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 01 June 2012 STATUS: Immediate Minnies & Others v The State 881/2011 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 from the Western Cape High Court, Cape Town setting aside the convictions and sentences of the four appellants. The Appellants were convicted under s 34 (1) (b) of the South African Reserve Bank Act 90 of 1989. The appellants had offered counterfeit banknotes to a police informer who was aware the money was counterfeit during a police operation. The counterfeit money had been offered to the police informer and a third party in return for genuine money which was to be 50 per cent of the face value of the counterfeit money. The Specialised Commercial Crime Court convicted the appellants and the Western Cape High Court dismissed their appeal. The issue on appeal related to the meaning to be ascribed to the word ‘tender’ in s 34 (1) (b) of the South African Reserve Bank Act. The appellants argued that their conduct did not constitute ‘tender’ as envisaged in s 34(1(b) because all concerned knew that the banknotes were counterfeit and not genuine. The SCA held that the word ‘tender’ as used in s 34(1)(b) meant that the banknotes offered by the appellants must have been used as ‘legal tender’ by offering them as genuine currency which was not the case in this appeal. The SCA found the decision in the case of S v Modikaseng 1998 (1) SACR 278 (T) which held that ‘tender’ was used in s 34 (1) (b) to cast the net as wide as possible was wrongly decided. The appeal was consequently upheld. -- ends --

4028

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 344/2022 In the matter between: OUTDOOR INVESTMENT HOLDINGS (PTY) LTD FIRST APPELLANT INYATHI SPORTING SUPPLIES (PTY) LTD SECOND APPELLANT and THE MINISTER OF POLICE FIRST RESPONDENT THE NATIONAL COMMISSIONER FOR THE SOUTH AFRICAN POLICE SERVICE SECOND RESPONDENT Neutral citation: Outdoor Investment Holdings (Pty) Ltd & Another v The Minister of Police & Another (Case No 344/2022) [2023] ZASCA 72 (24 May 2023) Coram: SALDULKER and CARELSE JJA and NHLANGULELA, KATHREE- SETILOANE and UNTERHALTER AJJA Heard: 3 March 2023 Delivered: 24 May 2023 Summary: Firearms Control Act 60 of 2000 (the FCA) – whether regulation 67 of the Firearm Control Regulations entitles one firearms’ dealer to store firearms at its licensed premises on behalf of another firearms’ dealer – properly construed neither regulation 67 nor the FCA permits one dealer to provide storage for firearms to another dealer. ____________________________________________________________ ORDER ____________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Noncembu AJ, sitting as court of first instance): The appeal is dismissed with costs including those of two counsel. ____________________________________________________________ JUDGMENT ____________________________________________________________ Kathree-Setiloane AJA (Saldulker and Carelse JJA and Nhlangulela and Unterhalter AJJA) concurring: [1] This appeal concerns the question of whether one firearms’ dealer licensed to trade in firearms and ammunition under the Firearms Control Act (FCA)1 read with the Firearm Control Regulations (the regulations)2 may store firearms on behalf of another licensed firearms’ dealer. Background [2] The first appellant is Outdoor Investment Holdings (Pty) Ltd t/a Safari Outdoor (Safari Outdoor), and the second appellant is Inyathi Sporting Supplies (Pty) Ltd (Inyathi).3 Each of them has been issued with dealer’s licences in terms of the FCA to trade in firearms and ammunition.4 Safari Outdoor conducts the business of a retailer in firearms and ammunition. It has five branches situated in Johannesburg (Rivonia), Pretoria (Lynnwood), Stellenbosch (Koelenhof), the East Rand (Boksburg) and the West Rand (Krugersdorp). 1 Firearms Control Act 60 of 2000. 2 As published in GG 26156 GNR 345 of 26 March 2004. 3 Safari Outdoor and Inyathi are referred to collectively as ‘the appellants’ in the judgment. 4 Although Safari Outdoor owns the total issued share capital of Inyathi, they operate their respective businesses separately and independently of each other. [3] Inyathi is a wholesaler in firearms and ammunition. A significant portion of the business of Inyathi is to provide storage facilities for firearms it sells to other retailers who are unable to take immediate delivery. [4] When Safari Outdoor sells a firearm to a purchaser, the purchaser is required to apply for a licence to possess the firearm in terms of the FCA.5 The purchaser cannot take delivery of the firearm until he or she has been issued with a licence to possess the firearm. Safari Outdoor is, therefore, required to store the firearm until this happens. In terms of the sale agreement which Safari Outdoor and the purchaser typically enter into, if the purchaser does not apply for a licence to possess the firearm as required under the FCA, he or she will be liable to pay a standard storage fee per month until the application is made. However, once the purchaser has applied for a licence to possess the firearm, Safari Outdoor will store the firearm free of charge for a period of 12 months. [5] Safari proffered 3 reasons, in its founding affidavit, for storing firearms it sold at Inyathi’s storage facilities. These were that: (a) due to a backlog in the office of the National Commissioner of Police (National Commissioner),6 at the time, it took anything between six to eighteen months to finalise a licence to possess a firearm; (b) as a result of the volume of firearms it sold to members of the public, it became ‘practically impossible’ to store all of them at its premises; and (c) storing these firearms at its premises (retail space) was significantly more expensive than storing them in Inyathi’s bulk storage facilities. [6] When Safari Outdoor receives its stock of firearms, each firearm is duly recorded in its firearm stock register in terms of s 39(3) of the FCA read with regulation 37 of the regulations. I reference these provisions later in the judgment. 5 Before a person can apply for a licence to possess a firearm, that person must be in possession of a competency certificate as contemplated in s 10 of the FCA. 6 The National Commissioner is the Registrar of Firearms in terms of s 123 of the FCA. [7] A designated firearm officer (DFO), who is a representative of the Registrar of Firearms, regularly visits the respective business premises of Safari Outdoor and Inyathi. During one such visit at its Lynnwood Bridge branch, Safari Outdoor was, in essence, informed that it is impermissible for Inyathi to store firearms on behalf of Safari Outdoor. In the high court [8] The appellants, consequently, brought an application in the Gauteng Division of the High Court, Pretoria (the high court) seeking a declaratory order in the following terms: ‘It is declared that [Safari Outdoor] is entitled to store firearms legally in its possession, in terms of Regulation 67 of the [Regulations, at the premises of [Inyathi]], provided that the removal of the firearms from the premises of [Safari Outdoor] were recorded in [Safari Outdoor’s] Firearm Stock Register and that the firearms stored at the premises of [Inyathi] be recorded in the Firearm Safe Custody Register of [Inyathi].’ [9] The Police Commissioner (Registrar of Firearms) opposed the application on the basis that Inyathi is not legally entitled to provide storage for firearms on behalf of Safari Outdoor. The high court dismissed the application on the basis that the appellants had failed to make out a case for the declaratory relief sought. The appeal is before us with the leave of the high court. The appeal [10] The question for determination is whether Inyathi may provide storage for firearms on behalf of Safari Outdoor. The appellant’s case is that, based on the ordinary grammatical meaning of the words in regulation 67(3) of the regulations, a dealer may provide storage for firearms to another dealer, in the safe or strong room specified in the former’s licence. Regulation 67 provides: ‘(1) Where a person provides storage facilities for firearms or ammunition to another person, such storage facilities must conform to the applicable requirements for a safe or strong room as set out in SABS Standard 953-1 or 953-2. (2) Storage may only be provided to a person who may lawfully possess the firearm or ammunition. (3) a holder of a dealer or gunsmith’s license may provide storage for firearms and ammunition in the safe or strong room specified on the dealer’s or gunsmith’s licence. (4) during the storage of a firearm, it must be – (a) uploaded; (b) not readily accessible to unauthorised use; (c) securely attached with a secure locking device to a non- portable structure in such a manner that it cannot readily be removed.’ [11] Regulation 67 must be interpreted in the context of the FCA and the regulations. The rules of interpretation, as pronounced by this Court in Natal Joint Municipal Pension Fund v Endumeni Municipality7 for legislation and other documents, apply to the interpretation of the provisions of the FCA and the regulations. [12] Part 1, chapter 7 of the FCA provides the framework for licences issued to, inter alia, dealers to trade in firearms and ammunition. Section 31 provides that no person may trade in any firearm, muzzle loading firearm or ammunition without a dealer’s licence. Section 32(1) provides that a dealer’s licence must be issued to a person who is a fit and proper person to trade in firearms and ammunition. Section 32(2) provides that any natural person who engages in trading on behalf of a dealer must hold a competency certificate to trade in firearms and ammunition. [13] Section 33 of the FCA authorises the Minister of Safety and Security to prescribe: (a) conditions in respect of the issue of a dealer’s licence which the Registrar of Firearms may impose on a dealer;8 and (b) specifications in respect of the business premises of a dealer.9 Section 34 of the FCA, in turn, provides that the dealer’s licence must: (a) specify the premises in respect of which the licence is issued; (b) specify the conditions contemplated in s 33; and (c) contain such other information as may be prescribed.10 7 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593 (SCA) at para 12. 8 Section 33(a) of the FCA. 9 Section 33(b) of the FCA. 10 Sections 34(a), (b) and (c) of the FCA. [14] Section 39 stipulates the duties of a dealer. It provides: ‘(1) A dealer may trade in firearms or ammunition only on premises specified in the dealer’s licence; (2) A dealer may not permit any person to trade in firearms or ammunition on his or her behalf unless the person is in possession of the appropriate competency certificate. (3) A dealer must keep such registers as may be prescribed and containing such information as may be prescribed at the premises specified in the dealer’s licence. (4) A dealer must keep his or her dealer’s licence on the premises specified in the licence. (5) A dealer must, at the request of any police official, produce for inspection- (a) any firearms or ammunition that the dealer may have in stock; (b) his or her dealer’s licence; and (c) any register or electronic data kept by the dealer in terms of Part 1 of this Chapter. . . . (9) A dealer must comply with any condition imposed under section 33 and specifications prescribed under that section.’ [15] Chapter 9 of the FCA provides for the storage, transport and carrying of firearms and ammunition. Section 83, which is found in that chapter, provides that firearms and ammunition must be stored and transported in the prescribed manner. Section 145(1)(a) of the FCA provides that the Minister of Safety and Security, may by notice in the Gazette, make regulations regarding, inter alia, anything that may or must be prescribed in terms of the FCA. [16] I now deal with the interpretation to be ascribed to regulation 67. The word ‘person’ in regulation 67 is neither defined in the regulations nor in the FCA. The word ‘person’ in regulation 67(1) is, however, a reference to a holder of a dealer’s or gunsmith’s licence, who provides storage facilities for firearms and ammunition. This much is clear from regulation 67(3), which provides that a ‘holder of a dealer’s or gunsmith’s licence may provide storage for firearms and ammunition in the safe or strong room specified in the dealer’s or gunsmith’s licence’. In terms of regulation 67(3) ‘such storage facilities must conform to the applicable requirements for a safe or strong room as set out in the SAB Standard 953-1 or 953-2’. [17] The term ‘another person’ as used in regulation 67(1) is a reference to ‘a person who may lawfully possess the firearm or ammunition’ as contemplated in regulation 67(2) of the regulations. This sub-regulation provides that ‘[s]torage may only be provided to a person who may lawfully possess the firearm and ammunition’. The appellants argue that because a dealer’s licence authorises a dealer to possess firearms for the purposes of trading in them, the phrase ‘a person who may lawfully possess a firearm and ammunition’ in regulation 67(2) must be construed as including a holder of a dealer’s or gunsmith’s licence. They contend that on this construction, regulation 67 permits a holder of a dealer’s licence to provide storage facilities to another holder of a dealer’s licence. [18] Regulation 86 deals with the safe custody of firearms and ammunition by, on the one hand, dealers and gunsmiths and, on the other, an individual holder of a firearm licence, authorisation or permit to possess a firearm. Regulations 86(1) and (2) provide: ‘(1) When a firearm or muzzle loading firearm is not under the direct personal and physical control of a holder of a licence, authorisation or permit to possess the firearm or muzzle loading firearm, the firearm or muzzle loading firearm and its ammunition must be stored in a safe place or storeroom that conforms to the prescripts of SABS Standard 953-1 and 953-2, unless otherwise specifically provided in these regulations. (2) Subject to regulation 36(2) a dealer or gunsmith must store firearms or muzzle loading firearms and ammunition in a safe or strong room that conforms to the prescriptions of SABS Standard 953-1 and 953-2, at the place of business specified on the applicable licence, authorisation and permit, as the case may be.’ [19] To interpret the words ‘a person who may lawfully possess the firearms and ammunition’ in regulation 67(2) so as to include dealers, would be to contradict regulation 86(2), which expressly provides that a dealer or gunsmith must store, inter alia, firearms in a safe or strong room that conforms to the prescriptions of SABS Standard 953-1 and 953-2 at the place of business specified in the licence. This duty is peremptory and applies across the board to all dealers. [20] In terms of regulation 86(2), there is a nexus between storage of the firearms and ammunition and the place of business specified on the dealer’s licence. This connection to the place of business specified in the dealer’s licence, is consistent with the provisions of s 39(1) of the FCA, which provides that ‘[a] dealer may trade in firearms or ammunition only on premises specified in the dealer’s licence’. It is arguable that on the ordinary grammatical meaning of the word ‘trade’, it is limited to the activity of buying and selling firearms and ammunition. However, on a contextual interpretation that has regard to the provisions of the FCA, the business premises specified in the dealer’s licence is intrinsically connected to both the trade in, and storage of, firearms and ammunition by a dealer. Textual indicators in the FCA that confirm this connection are found in: (a) section 33(b), which provides that the Minister may prescribe ‘specifications in respect of the business premises of a dealer’; (b) section 34, which provides that the dealer must specify the premises in respect of which the licence is issued; (c) section 39(4), which provides that a dealer must keep such registers as prescribed and containing such information as prescribed at the premises specified in the licence; (d) section 39(5), which provides that the dealer must keep his or her dealer’s licence at the premises specified in the licence; (e) section 39(9), which makes it mandatory for a dealer to comply with any, condition (in the licence) imposed under s 33 and, specification prescribed under the section. [21] In relation to the storage of firearms and ammunitions, s 83 of the FCA provides that they must be stored and transported as prescribed. Prescribed means prescribed by regulations in terms of s 145 of FCA. Regulation 86(2) then connects the storage of firearms and ammunition to the place of business specified in the dealer’s licence. As indicated, this sub-regulation obliges a dealer to store firearms and ammunition in a prescribed safe or strong room at the place of business specified in the licence. Thus, having regard to the peremptory nature of regulation 86(2), the phrase ‘may only be provided to a person who may lawfully possess the firearm or ammunition’ in regulation 67(2) must be construed as a reference to an individual holder of a licence, authorisation or permit to possess a firearm or ammunition. [22] Regulations 86(1), 86(4)(a)-(f)11 and 86(11)(b)12 of the regulations deal with the safe custody of, and access to, firearms in relation to an individual holder of a licence, authorisation or permit to possess a firearm or ammunition. These sub-regulations use the term ‘person who may lawfully possess a forearm, muzzle loading firearm or ammunition’ interchangeably with ‘holder of a licence, authorisation or permit to possess’ 11 Regulations 86(4)(a)-(f) provide: (a) A person who holds a licence to possess a firearm or is a holder of a competency certificate in respect of a muzzle loading firearm, may store a firearm or muzzle loading firearm in respect of which he or she does not hold a licence or competency certificate, if - (i) he or she is in possession of a written authorisation given by the person who holds a licence, permit or authorisation to possess that firearm or competency certificate in respect of a muzzle loading firearm and which authorisation is endorsed by a relevant Designated Firearms Officer; and (ii) the firearm or muzzle loading firearm is stored in a prescribed safe at the place mentioned in the authorisation contemplated in sub-paragraph (i). (b) Only the person who holds a licence, permit, or authorisation to possess the firearm or a competency certificate in respect of a muzzle loading firearm or permission contemplated in subparagraph (a)(i) may transport that firearm or muzzle loading firearm to and from the place where that firearm or muzzle loading firearm is to be stored in terms of paragraph (a) as authorised by the Registrar or Designated Firearms Officer. 12 Regulation 86(11)(b) of the Regulations provides: (b) Any person who may lawfully possess a firearm, muzzle loading firearm or ammunition shall store these in a prescribed safe or strong room, to which he or she shall have at all time exclusive access or his or her presence and cooperation shall be a necessary prerequisite for access to the relevant firearm, muzzle loading firearm and ammunition unless- (i) the storage is undertaken by the holder of a dealer’s of gunsmith’s licence in which case the dealer or the dealer’s personnel with valid competency certificates, or the gunsmith may have access to the safe or strong-room; or (ii) the firearm or muzzle loading firearm is temporarily stored in a safe or strong room that conforms to the prescripts of SABS Standard 953-1 and 953-2 or a lock-away safe, device, apparatus or instrument for the safe custody of a firearm that conforms to the prescripts of sub-regulation (12), that is under the control of a holder of a licence, authorisation, permit or competency certificate for a muzzle loading firearm issued in terms of this Act, the person storing the firearm or muzzle loading firearm must in writing notify the Designated Firearms Officer in whose area the firearm or muzzle loading firearm is temporarily stored.’ or ‘person who holds a licence to possess a firearm’. However, properly construed, each of these terms refer to an individual holder of a licence to possess firearms or ammunition, as opposed to a holder of a dealer’s licence, which authorises it to trade in firearms and ammunition. [23] Notably, the FCA references a firearm’s dealer specifically as ‘a dealer’ or a ‘holder of a dealer’s licence’. As do the regulations. This is a further textual indicator that the phrase ‘may only be provided to a person who may lawfully possess the firearm or ammunition’ in regulation 67 of the regulations, is a reference to an individual holder of a licence, authorisation or permit to possess a firearm or ammunition, and not another dealer. [24] By the same token, the words ‘on behalf of the holder of a licence, authorisation or permit’ in regulation 37 of the regulations must also be construed as a reference to an individual holder of a licence, authorisation or permit to possess a firearm or ammunition. Regulation 37 obliges a dealer to keep a Firearms Safe Custody Register of the firearms that the dealer receives on behalf of a holder of a licence, authorisation or permit for the purposes of the safe custody or transfer of the firearms. In terms of regulation 67, a dealer may provide storage to this category of licence holder as prescribed in the regulations. [25] The regulations are subordinate legislation. They are the consequence of a statutory power conferred, by virtue of s 145 of the FCA, on the Minister of Safety and Security to make regulations on matters relating to, inter alia, anything that may or must be prescribed in terms of the FCA. Although the regulations are binding with the force of law, they cannot impose requirements that are additional to, or inconsistent with, the FCA. They also cannot circumscribe the ambit of the FCA or override its provisions. They remain subordinate to the FCA. [26] Consequently, to interpret regulation 67 as permitting a dealer (as agent) to store firearms for another dealer, at its place of business specified in that dealer’s licence, will be inconsistent with the injunction in s 39(1) of the FCA that a dealer may trade in firearms and ammunition only on premises specified in the dealer’s licence. Significantly, counsel for the appellant accepted at the hearing of the appeal that storage of firearms form part of the trade in firearms as contemplated in s 39(1) of the FCA. [27] In sum, neither the FCA nor the regulations permits a dealer to provide storage for firearms to another dealer. This interpretation of the FCA and the regulations is consistent with the overall purpose of the FCA, which is to establish a comprehensive and effective system of firearm control and management.13 Accordingly, it is impermissible for Inyathi to provide storage for firearms on behalf of Safari Outdoor as its agent. [28] In the result, the following order is made: The appeal is dismissed with costs including those of two counsel. __________________________ F KATHREE-SETILOANE ACTING JUDGE OF APPEAL 13 Section 4 of the FCA provides: ‘The purpose of this Act is to – (a) enhance the constitutional rights to life and bodily integrity; (b) prevent the proliferation of illegally possessed firearms and, by providing for the removal of those firearms from society and by improving control over legally possessed firearms, to prevent crime involving the use of firearms; (c) enable the State to remove illegally possessed firearms from society, to control the supply, possession, safe storage, transfer, and use of firearms and to detect and punish the negligent or criminal use of firearms; (d) establish a comprehensive and effective system of firearm control and management; and (e) ensure the efficiency, monitoring and enforcement of legislation pertaining to the control of firearms.’ Appearances For appellants: N G D Maritz SC and A P J Els Instructed by: J W Botes Incorporated, Pretoria Salley’s Attorneys, Bloemfontein For first and second respondents: M V Magagane 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: 24 MAY 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 Outdoor Investment Holdings (Pty) Ltd & Another v The Minister of Police & Another (Case No 344/2022) [2023] ZASCA 72 (24 May 2023) Today, the Supreme Court of Appeal (SCA) handed down judgment dismissing an appeal against a decision of the Gauteng Division of the High Court, Pretoria (the high court). The issue before the SCA was whether regulation 67 of the Firearm Control Regulations (the regulations) entitles one firearms’ dealer to store firearms at its licensed premises on behalf of another firearms’ dealer. The first appellant was Safari Outdoor, and the second appellant was Inyathi. Each of them had been issued with dealer’s licences in terms of the Fire Control Act 60 of 2000 (the FCA) to trade in firearms and ammunition. Safari Outdoor conducts the business of a retailer in firearms and ammunition. Inyathi is a wholesaler in firearms and ammunition. A significant portion of the business of Inyathi is to provide storage facilities for firearms it sells to other retailers who are unable to take immediate delivery. When Safari Outdoor sells a firearm to a purchaser, the purchaser is required to apply for a licence to possess the firearm in terms of the FCA. The purchaser cannot take delivery of the firearm until he or she has been issued with a licence to possess the firearm. Safari Outdoor is, therefore, required to store the firearm until this happens. Safari stores these firearms at Inyathi’s storage facilities. The appellant’s case was that based on the ordinary grammatical meaning of the words in regulation 67(3) of the regulations, a dealer may provide storage for firearms to another dealer, in the safe or strong room specified in the former’s licence. The SCA held that to interpret regulation 67 as permitting a dealer (as agent) to store firearms for another dealer, at its place of business specified in that dealer’s licence, will be inconsistent with the injunction in s 39(1) of the FCA, which states that a dealer may trade in firearms and ammunition only on premises specified in the dealer’s licence. It held that neither the FCA nor the regulations permits a dealer to provide storage for firearms to another dealer. This interpretation of the FCA and the regulations is consistent with the overall purpose of the FCA, which is to establish a comprehensive and effective system of firearm control and management. Accordingly, it was impermissible for Inyathi to provide storage for firearms on behalf of Safari Outdoor as its agent. ~~~~ends~~~~

4133

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 727/2022 In the matter between: ADVOCATE C BISSCHOFF N O ON BEHALF OF DENZIL JOHN REYNERS APPELLANT and PASSENGER RAIL AGENCY OF SOUTH AFRICA RESPONDENT Neutral citation: Bisschoff N O obo Reyners v Passenger Rail Agency Of South Africa (Case no 727/2022) [2023] ZASCA 160 (28 November 2023) Coram: MBATHA, MABINDLA-BOQWANA and MATOJANE JJA and NHLANGULELA and KATHREE-SETILOANE AJJA Heard: 28 August 2023 Delivered: 28 November 2023 Summary: Prescription – interruption of running of extinctive prescription – claimant of unsound mind – prescription only begins to run from the date of appointment of curator ad litem. Knowledge of the identity of the debtor and of the facts from which the debt arises: ORDER On appeal from: Western Cape Division of the High Court, Cape Town (Mantame and Nuku JJ concurring and Le Grange J dissenting, sitting as a court of appeal): The appeal is upheld with costs. The order of the full court is set aside and replaced with the following: ‘The appeal is dismissed with costs.’ JUDGMENT Matojane JA (Mbatha and Mabindla-Boqwana JJA and Nhlangulela and Kathree-Setiloane AJJA concurring) Introduction [1] This is an appeal against the decision of the majority of the full court of the Western Cape Division of the High Court, Cape Town (the full court). The central issue, in this case, involves a question of whether the appellant's claim against the respondent became time-barred three years after an incident of a fall from a moving train or if the prescription period was extended until one year after the relevant impediment that prevented the claim from proceeding, had ceased to exist. [2] The appellant, Advocate C Bischoff, acting as curator ad litem (the Curator) on behalf of Mr Denzil John Reyners, sued the respondent, Passenger Rail Agency of South Africa (PRASA) for damages as a consequence of an incident where Mr Reyners fell from a moving train's open doorway on 20 February 2001, resulting in head injuries. [3] The trial proceeded before Goliath DJP (the trial court). At the trial, PRASA argued a special plea of prescription raised in the pleadings that Mr Reyner's claim had prescribed, as prescription had commenced from the date of the incident in accordance with s 12(1) of the Prescription Act 68 of 1968 (the Act). [4] In response, the Curator contended that Mr Reyners’ mental defect prevented him from having knowledge of the debtor’s identity and the facts from which the debt arose, as required by s 12(3) of the Act. Therefore, prescription would only have started running against Mr Reyners on 7 February 2013, when he was placed under curatorship. [5] The Curator also contended that prescription did not commence to run from 20 February 2001 due to injuries suffered by Mr Reyners that rendered him a person of unsound mind, incapable of managing his own affairs and without the capacity to litigate. Alternatively, the Curator argued that Mr Reyners was rendered ‘insane’ as contemplated in s 13(1)(a) of the Act, and consequently, the running of prescription was delayed until a year after the relevant impediment had ceased to exist. [6] In June 2020, the trial court issued a judgment, concluding that, in view of Mr Reyners' circumstances, he could not be deemed to have acquired the necessary knowledge about the debtor's identity and debt-related facts or to engage in litigation effectively. It accordingly held that the prescription period did not start to run while Mr Reyners was under a disability or impairment. As a result, the trial court dismissed the special plea of prescription and ordered PRASA to pay the Curator damages in the approximate amount of R3 million PRASA had conceded the merits. The Curator brought an application for leave to appeal the trial court order, which it refused. On 14 January 2021, this Court granted the Curator leave to appeal the trial court's order to the full court. [7] Le Grange, Mantame, and Nuku JJ heard the appeal. Mantame and Nuku JJ upheld the appeal, set aside the order of the trial court dismissing the special plea of prescription, substituted it with an order that the special plea of prescription succeeds, and dismissed the Curator's claim. Le Grange J dissented and found that he would have made an order upholding the trial court's ruling and dismissing PRASA's special plea of prescription with costs. The appeal is before us with special leave of this court. Common cause facts [8] The common cause facts are that on 20 February 2001, Mr Reyners fell from a moving train operated by PRASA. He sustained head injuries and was taken to Somerset Hospital. He was later transferred to Groote Schuur Hospital for treatment, including surgery on his head. By March 2001, he was discharged, and his medical records indicated a full recovery. The traumatic brain damage suffered by Mr Reyners resulted in, amongst other things, temporal lobe epilepsy, memory loss, aggression, a change of personality, and permanent loss of cognitive abilities and executive functioning. [9] After the accident, Mr Reyners continued to live with his parents and resumed his unskilled job at The Argus newspaper. He discussed the incident and its consequences with friends and family. He continued working at The Argus for an additional six months and then worked on an ad hoc basis until his services were no longer required. Following that, he worked intermittently as an unqualified carpenter for about a year and later as a painter for six months. Throughout this period, he continued to live with his parents and became a father to two children. [10] In June 2010, more than three years after the train incident, Mr Reyners instructed his current attorneys to file a claim against PRASA. On 7 February 2013, the Curator was appointed as curator ad litem to help Mr Reyners with his legal affairs. On 23 August 2013, more than three years after instructing his attorneys, the Curator issued a summons against PRASA, seeking damages arising from the injuries sustained by Mr Reyners in the train incident. The evidence [11] The Curator led the evidence of two lay witnesses, Mr Llewellyn Grove, a friend who was with Mr Reyners on the train at the time of the incident and Ms Natasha Cupido, Mr Reyners' sister. The Curator also called five expert witnesses, including Dr Lawrence Tucker, a specialist neurologist; Ms Mignon Coetzee, a clinical psychologist; and Dr Keir Le Fèvre, a practising psychiatrist. Notably, PRASA did not present any evidence to counter that which was led on behalf of the Curator. [12] Mr Grove testified that Mr Reyners became aware of the incident after he and his family communicated the details to him. Under cross-examination, Mr Grove maintained that Mr Reyners could instruct an attorney about his fall from a moving train and explore the possibility of filing a claim. Additionally, Mr Grove stated in cross-examination that if Mr Reyners was aware of the potential claim, he had the capacity to pursue it. [13] Ms Cupido testified that Mr Reyners' head injury had a significant impact on his memory. She testified that she was told by Mr Reyners that a neighbour, Mr Chadwick, had informed him about the possibility of making a claim and referred him to an attorney. Ms Cupido mentioned that Mr Reyners knew that he fell from a train and suffered head injuries, but his family was unaware that they could file a claim after the accident. She believed that if Mr Reyners had been informed about the possibility of filing a claim six months after the incident, he would likely have taken immediate action rather than waiting for nearly a decade. [14] Dr Tucker testified that Mr Reyners suffered a severe head injury during the fall, which resulted in a depressed compound skull fracture, a subdural hematoma, and a midline shift in his brain. This injury caused both a specific focal injury and more general diffuse damage. Dr Tucker also pointed out that Mr Reyners displayed emotional instability, emotional incontinence, and susceptibility to seizures or epilepsy as a direct result of the incident. Additionally, Dr Tucker confirmed the presence of temporal lobe epilepsy through an EEG test. PRASA did not present evidence of a neurologist to challenge Dr Tucker's evidence. [15] Ms Coetzee prepared a report and testified about Mr Reyners' level of cognitive functioning. She emphasised several key points: (a) Cognitive decline: Mr Reyners had experienced a significant diminution in his cognitive abilities. He has difficulty processing and encoding information, and he struggles to retain it even when information is repeated. (b) Brain damage: Mr Reyners suffered brain damage as a result of his fall. This brain damage has had a notable impact on his cognitive functioning and memory. (c) Executive dysfunction: There were clear signs of executive dysfunction exhibited by Mr Reyners. He struggles with tasks that involve planning, decision- making, and organisation. (d) Memory impairment: Mr Reyners’s memory impairment is pronounced, affecting his ability to recall and retain information effectively. (e) Impact on day-to-day functioning: Mr Reyners' physical symptoms, including headaches and epileptic brain activity resulting from the injury, have a significant effect on his daily life. These symptoms affect his ability to function normally and; (f) Psychological well-being: The psychological toll of his condition is also evident. Mr Reyners experiences embarrassment due to his seizures, has lost his career prospects and is dealing with a decline in social connections within his family, especially in comparison to his more successful siblings. [16] Ms Coetzee testified that Mr Reyners' medical condition originated from the fall on 20 February 2001. She also mentioned that as of that date, Mr Reyners was incapable of handling his affairs and needed the assistance of both a curator ad litem and a curator bonis to assist him. Her evidence remained unchallenged. [17] Dr Le Fèvre testified on the impact of the traumatic brain injury on Mr Reyners. He stated that the injury, which occurred when Mr Reyners fell from a train, led to a permanent loss of cognitive abilities and executive functioning. As a result, Mr Reyners could not instruct his attorney or manage his affairs. Dr Le Fèvre recommended the appointment of curators ad litem and bonis to help with Mr Reyners' legal and financial matters. Again, there was no challenge to Dr Le Fèvre's evidence. [18] PRASA submitted a report prepared by Dr Hemp, a neuropsychologist, to counter Dr Le Fèvre's findings in respect of Mr Reyners. In her report, Dr Hemp stated that Mr Reyners had no personal memories of the train incident and learned about it while in the hospital. She stated that Mr Reyners could communicate this information, having already shared it with a friend who provided a lawyer's contact. Dr Hemp assessed Mr Reyners' general abilities as upper borderline with some in the low average range and concluded that he was not cognitively impaired, given his reported full recovery upon hospital discharge. Along with other experts, she had recommended that Mr Reyner be assisted by a curator bonis, but later explained that the recommendation was based on Mr Reyners’ illiteracy, limited education, history of dagga usage, and poor social judgment rather than his inability to communicate about the incident. [19] Dr Hemp’s report was included in the trial bundle, but she was not called to testify in the trial. As a result, her report is of limited evidentiary value because both parties agreed to include the reports in the bundle for what they purported to be without admitting that their conclusions were correct. The law [20] Sections 12(3) and 13(1)(a) of the Prescription Act are relevant to the determination of this appeal. Section 12(3), under the heading ‘When prescription begins to run’, states that a debt is not considered due until the creditor knows the identity of the debtor and the relevant facts underlying the debt. This section also specifies that a creditor is considered to have this knowledge if they could have reasonably obtained it through proper diligence. [21] Section 13(1)(a) provides that completion of prescription will be delayed in certain circumstances, including when the creditor is a minor or is insane or is a person under curatorship or is prevented by superior force, including any law or any order of the court from interrupting the running of prescription [22] In Truter and Another v Deysel,1 this Court held that the term ‘debt due’ encompasses any type of debt, including delictual debts, that is both owing and payable. A debt is considered due when the creditor has a complete cause of action to recover the debt. This means that all the facts and conditions required for the creditor to successfully pursue their claim against the debtor are in place. In other words, the debt becomes due when all the circumstances are in order, allowing the creditor to take legal action to collect the debt. [23] In Mtokonya v Minister of Police,2 the Constitutional Court held that interpreting the phrase ‘the knowledge of . . . the facts from which the debt arises’ to include knowledge that the debtor's conduct is wrongful and actionable in law would make the law of prescription ineffective. The court stated that this would result in an unacceptably high percentage of people in the South African population against whom prescription would not run when they have claims to pursue in the courts. The court emphasised that s 12(3) does not require a creditor to have a suspicion that the debtor's conduct is wrongful and actionable but rather requires knowledge that such conduct is wrongful and actionable in law.3 [24] In Van Zijl v Hoogenhout,4 this Court stated that knowledge required for a creditor to take legal action includes the ability to identify the responsible party and the awareness that harm had been done to them. The concept of prescription focuses on punishing prolonged inaction rather than the inability to act. Therefore, when a statute mentions that prescription starts when wrongdoing is first known to the creditor, it assumes that the creditor can recognise that they have suffered harm caused by someone else. 1 Truter and Another v Deysel [2006] ZASCA 16; 2006 (4) SA 168 (SCA) para 15. 2 Mtokonya v Minister of Police [2017] ZACC 33; 2017 (11) BCLR 1443 (CC); 2018 (2) SA 22 (CC). 3 Ibid paragraph 63. 4 Van Zijl v Hoogenhout [2004] ZASCA 84; [2004] 4 All SA 427 (SCA); 2005 (2) SA 93 (SCA) para 19. [25] In Mr Reyners' case, the crucial question is whether, at the time he was discharged from the hospital after falling from the moving train, he had knowledge of the debtor's identity and the facts which related to the claim or if he could have reasonably acquired that knowledge. Importantly, it is not necessary for Mr Reyners to be aware of the legal consequences of these facts. Even if he does not have actual knowledge of the facts but could have obtained such knowledge through reasonable care, it is considered equivalent to having actual knowledge.5 The approach of the majority on appeal [26] Mantame J and Nuku J wrote separate concurring judgments. Mantame J found Dr Le Fèvre's testimony unconvincing in her judgment because he did not explain how Mr Reyners could manage multiple jobs, some lasting a year, while supposedly needing a curator. [27] Mantame J held that Mr Reyners was aware of his circumstances after he sustained a head injury from the fall, as he took immediate action by wrapping his shirt around his head and walking towards the N1 Highway to seek help. She noted that despite sustaining a head injury, Mr Reyners continued to lead an everyday life for a decade and even became a father, which indicated that he was functioning well. [28] Mantame J concluded that the conversation between Mr Reyners and his neighbour Mr Chadwick was sufficient proof that Mr Reyners had the relevant mental capacity to institute a claim long before their conversation, as his condition was ‘stable’, and he knew that he got injured. Mantame J furthermore found that Mr Reyners provided coherent answers and shared information with 5 PriceWaterhouseCoopers Inc & others v National Potato Co-operative Ltd & Another [2015] ZASCA 2; [2015] 2 All SA 403 (SCA) para 14. his parents without distortion. This, according to Mantame J, contradicted the experts’ findings of cognitive and executive function loss. Nuku J, in turn, found that if Mr Reyners had acted in the same manner as he did after meeting Mr Chadwick, he would have been able to pursue his claim against PRASA in the same way that he did, albeit many years later. The majority erred by basing its findings on Mr Reyner’s conversation with Mr Chadwick. This was inadmissible hearsay evidence as both Mr Reyners and Mr Chadwick were not called to testify at the trial. [29] PRASA failed to present any evidence to counter the claims of the Curator’s expert witnesses regarding Mr Reyners’s disability and his need to be assisted by a curator ad litem from the time of the incident. In this regard, the joint minutes of neuropsychologists Dr Hemp and Ms Coetzee confirmed that Mr Reyners required the assistance of both a curator ad litem and a curator bonis. The joint minutes of the occupational therapists, Ms Else Burns-Hoffman and Ms Herculene van Staden, also indicated unanimous agreement on this need. When experts are tasked with providing facts based on their investigations, and they reach an agreement with the opposing party’s experts regarding these facts, the agreed-upon facts hold the same legal weight as facts that are explicitly agreed upon in the pleadings in a pre-trial conference, or through an exchange of admissions.6 [30] The majority assumed, in the face of uncontested expert evidence to the contrary, that Mr Reyners had the same cognitive abilities as a person without brain damage or disability. In doing so, the majority failed to acknowledge that while Mr Reyners had some residual capacity to engage with society, his complex attention and memory deficits, as noted by Ms Coetzee, made it difficult for him 6 Thomas v BD Sarens (Pty) Ltd para 11 to utilise his intellectual ability effectively. This was supported by Ms Cupido’s evidence regarding Mr Reyners' memory lapses. Despite having some functional abilities, Mr Reyners’ post-incident lifestyle did not negate his disability. [31] I, therefore, agree with the conclusion of Le Grange J, in the minority judgment, that Mr Reyners’ capability to continue with some form of life after the fall could not possibly mean that he must have obtained knowledge of all the material facts from which the debt arose or which he needed in order to institute an action. Given his physical and mental condition, pain, memory function, and social environment, his failure to acquire such knowledge can hardly be regarded as unreasonable. [32] On the conspectus of the evidence as a whole, it is clear that Mr Reyners has been under a disability or impediment since the incident, which prevented the interruption of the running of prescription as contemplated in the Act. Even though a curator was appointed approximately 12 years later, it was clear that Mr Reyners needed a curator after the incident. Prescription began to run from the date of the appointment of the curator ad litem. For all of these reasons, the appeal must succeed. [33] In the result, the following order is made: 1 The appeal is upheld with costs. 2 The order of the full court is set aside and replaced with the following: ‘The appeal is dismissed with costs.’ _______________________ K E MATOJANE JUDGE OF APPEAL Appearances For appellant: C Webster SC Instructed by: Jonathan Cohen & Associates Attorneys, Cape Town Matsepes Inc, Bloemfontein For respondent: T D Potgieter SC Instructed by: Bossr Inc, Durbanville 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: 28 November 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 Bisschoff N O obo Denzil John Reyners v Passenger Rail Agency of South Africa [2023] ZASCA 160 (28 November 2023) Today, the Supreme Court of Appeal (SCA) upheld an appeal from the Western Cape Division of the High Court, Cape Town (high court). The order of the high court was set aside and replaced with one dismissing the appeal. The appeal revolved around the question whether the appellant’s claim against the respondent became time-barred three years after an incident when the appellant’s client sustained severe injuries after falling from a moving train, or whether the prescription period had extended until one year after the impediment that prevented the claim from proceeding had ceased to exist. The appellant acted as curator ad litem on behalf of his client who sued the Passenger Rail Agency of South Africa (PRASA) for damages resulting from the injuries sustained from the fall. During proceedings in the high court, the respondent raised a special plea of prescription, claiming that the matter had prescribed in terms of s 12 of the Prescription Act 68 of 1968 (the Act). The appellant, however, indicated that s 12 was not applicable as the mental defects sustained by his client prevented him from having knowledge of the debtor’s identity and that the injuries sustained rendered him of unsound mind. Prescription could, therefore, only have started once he was placed under curatorship. Section 13 of the Act provided that prescription would be delayed in certain circumstances, inter alia when a person is placed under curatorship. In casu, this Court determined that the crucial question was whether, at the time of him being discharged from the hospital after the injury, the appellant’s client had knowledge of the debtor’s identity, or could have reasonably obtained knowledge of such the debtor’s identity. The SCA determined that the high court erred when it assumed that the appellant’s client had the same cognitive capabilities as a person without brain damage or a disability. It failed to acknowledge that, while he had some residual capacity to engage with society, his complex attention and memory deficits made it difficult for him to have utilised his intellectual abilities effectively, regardless of his post- incident lifestyle. The SCA determined that, on a conspectus of the evidence, it was clear that the appellant’s client had been under an impediment since the injury and required the appointment of a curator to act on his behalf. In the result, the appeal was upheld and the order of the high court replaced with one dismissing the appeal. ~~~~ends~~~~

3447

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 899/2019 In the matter between: KINGSLEY JACK WHITEAWAY SEALE FIRST APPELLANT ONTSPAN BELEGGINGS (PTY) LTD SECOND APPELLANT HI FRANK COMPONENTS (PTY) LTD THIRD APPELLANT SCHOEMANSVILLE OEWERKLUB FOURTH APPELLANT and MINISTER OF PUBLIC WORKS FIRST RESPONDENT MINISTER OF WATER AND SANITATION SECOND RESPONDENT PREMIER OF THE NORTH-WEST PROVINCE THIRD RESPONDENT TRANSVAAL YACHT CLUB FOURTH RESPONDENT REGISTRAR OF DEEDS, PRETORIA FIFTH RESPONDENT Neutral citation: Seale and Others v Minister of Public Works and Others (899/2019) [2020] ZASCA 130 (15 October 2020) Coram: PONNAN, ZONDI, DAMBUZA and VAN DER MERWE JJA and WEINER AJA Heard: 7 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 10h00 on 15 October 2020. Summary: Contract – agreement to agree – unenforceable in absence of deadlock- breaking mechanism. Acquisitive prescription – of servitude under Prescription Act 18 of 1943 – proof required of actual use of servitude as if of right continuously for 30 years. _____________________________________________________________________ ORDER On appeal from: Gauteng Division of the High Court, Pretoria (Davis J sitting as court of first instance): The appeal is dismissed with costs, including the costs of two counsel. The costs order of the court a quo is substituted with the following: ‘(a) The first, third and fourth applicants are jointly and severally ordered to pay the costs of the second respondent, including the costs of two counsel; (b) The second respondent is ordered to pay the costs of the second applicant, including the costs of two counsel; (c) The applicants are jointly and severally ordered to pay the costs of the fourth respondent, including the costs of two counsel.’ JUDGMENT Van der Merwe JA (Ponnan, Zondi, Dambuza JJA and Weiner AJA concurring) [1] The Hartbeespoort area is a popular destination for spending holidays and leisurely weekends. Its central attraction is the Hartbeespoort Dam (the Dam). The Dam was built by the government of the Union of South Africa (the Union Government) during the early part of the previous century. Its legal successor, the national government of the Republic of South Africa (the State), owns a narrow strip of land on the eastern bank of the Dam between the waterline and the boundaries of the adjacent properties. These properties include erven in the Schoemansville and Meerhof townships. This strip of State land has at least since 1925 been referred to as the foreshore. The appeal concerns servitudal rights of access over the foreshore for purpose of boating and fishing on the Dam. [2] The first appellant is Mr Kingsley Jack Whiteaway Seale. He is a director of both the second appellant, Ontspan Beleggings (Pty) Ltd and the third appellant, HI Frank Components (Pty) Ltd. Each of the appellants own properties that are situated adjacent, or in close proximity, to the foreshore. The fourth appellant is the Schoemansville Oewerklub, a voluntary association that acts in the interest of its members. The majority of its members are registered owners of erven in Schoemansville. [3] The appellants launched an application in the Gauteng Division of the High Court, Pretoria for orders declaring and enforcing servitudal rights over the foreshore. The second respondent, the Minister of Water and Sanitation, opposed the application on behalf of the State. The fourth respondent, the Transvaal Yacht Club, a voluntary association that owns property adjacent to the foreshore, also opposed the application. The court a quo (Davis J) dismissed the application, but granted leave to the appellants to appeal to this court. Background [4] The history of the matter spans more than a century. The following exposition suffices for a proper understanding of this judgment. At the time when the Union Government determined to construct the Dam (then referred to as the Hartebeestpoort Reservoir), the Schoeman family owned portions of the freehold farm Hartebeestpoort nr 498 in the district of Pretoria. The Crocodile River, which would be the main source of water for the Dam, traversed the original farm. Mr Johan Hendrik Schoeman and members of his family were the co-owners of the land known as the northern portion of the farm Hartebeestpoort. Mr Schoeman was the owner of an adjacent farm referred to as a certain portion of the south-eastern portion of the farm Hartebeestpoort. Parts of these two portions of land would be submerged by the Dam. [5] In the light hereof, on 25 January 1918, the Union Government, represented by the Minister of Lands, and the owners of the aforesaid portions of the farm Hartebeestpoort, represented by Mr Schoeman, entered into an agreement of sale (the 1918 agreement). In terms thereof the Union Government purchased the portions of the aforesaid tracts of land from the Schoeman family that would be submerged by the Dam. The eastern boundary of the land purchased was determined to be a line running three feet above the projected high flood level of the Dam. [6] The land in question was subdivided accordingly and the portions thereof that became the property of the Union Government presently consists of three titles. These adjoining properties are presently described as the following portions of the farm Hartbeestpoort: the remaining portion of portion 28, measuring 474,6058 hectares (portion 28); the remaining extent of portion 29, measuring 231,4418 hectares (portion 29); and portion 59 (a portion of portion 29), measuring 2,0296 hectares (portion 59). They vest in the State as the legal successor of the Union Government. [7] After the subdivision, Mr Schoeman retained ownership of the remainder of the portion of the south-eastern portion and shortly afterwards also acquired ownership of the remainder of the northern portion. The boundary between Mr Schoeman’s land and the State land therefore ran above the actual (fluctuating) waterline of the Dam. As I have said, this strip of land is referred to as the foreshore and has to be traversed to gain access to the Dam from the east. [8] Clause 3(k) (clause K) of the 1918 agreement provided for the retention of rights of access to the Dam in the following terms: ‘The said Johan Hendrik Schoeman in his individual capacity or his assigns shall retain the right of access to the said Hartebeestpoort Reservoir on certain three places to be mutually agreed upon by the parties to these presents – the said places being situated approximately as follows: (a) near the south eastern entrance to Hartebeestpoort on the eastern bank of the River, (b) near the site of the old dam on the Crocodile River built by the now late General Schoeman, and (c) at a suitable site in the Zwartspruit Valley – for the purpose of boating on the said reservoir and fishing therein, provided that the said Schoeman or his assigns shall at all times be subject to all general regulations and restrictions that may be framed and at any time come into force in connection with the said reservoir and the use thereof by the public, provided that such regulations shall be of general application and that the said Schoeman or his assigns shall not be prevented from reasonably using the said reservoir for the said purposes unless and until the water of the said reservoir may at any time be required for domestic purposes and the public are excluded from access to the Reservoir when the rights hereby granted to the said Schoeman shall cease and determine until such time as such restrictions are withdrawn. It is further understood and agreed that if in regards to the operations to be undertaken in connection with the said reservoir the actual sites marked on the last mentioned diagrams or any of them should be required for the purposes aforesaid that then and in that case a suitable site as near as possible to the original site shall for the purposes aforesaid be granted to the said Schoeman in his individual capacity who shall have the right of selecting such site or sites – which shall not interfere with the working and works of the Reservoir.’ [9] For reasons lost in time, the parties never agreed upon the precise locations of the ‘three places’. Mr Schoeman nevertheless desired the registration of these rights. After correspondence had been exchanged, the Union Government during 1922 entered into a notarial contract with Mr Schoeman (the notarial contract). It recorded the 1918 agreement, reproduced clause K and proceeded as follows: ‘WHEREAS it is desired to have the right so reserved in Clause K registered in the Deeds Office, but as the Government will hold that area which will form the submerged area of the said Hartebeestpoort Reservoir under a great many titles, some portions of which have not yet been acquired by the Government. NOW THEREFORE, the parties hereto agreed to register this Contract in the Deeds Office in the Register known as the Register for Diverse Acts, whereby the rights granted to the Party of the other part, the said JOHAN HENDRIK SCHOEMAN, in his individual capacity, or his Assigns, and more fully detailed in Clause K above set out in full, may be recorded and registered in favour of the said JOHAN HENDRIK SCHOEMAN, in his individual capacity or his Assigns, against the said submerged area of the Hartebeestpoort Reservoir, subject to the conditions that when and soon as the Government has acquired the whole of the area which will form the submerged area of the Hartebeestpoort Reservoir, and has taken out a Certificate of Consolidated Title of such area; the parties hereto, their Successors in Title or Assigns, bind themselves to enter into a Contract whereby the rights as detailed in said Clause K of the said Deed of Sale, may be properly registered as a servitude against the Titles of the servient and dominant tenements respectively.’ [10] It is apparent that the notarial contract envisaged two registrations. The first was the registration of the notarial contract itself in the Register of Diverse Acts. The second was the registration of a servitude. The first registration took place on 3 October 1922. The second did not take place. Although the Union Government and its successors for many years afterwards expressed the intention to acquire the titles of the area submerged by the Dam, the State at some stage decided not to do so. It therefore did not take out the certificate of consolidated title envisaged in the notarial contract. [11] It appears that Mr Schoeman was an entrepreneur of note. During 1923 he established the Schoemansville Township. It was established on the remainder of the northern portion adjacent to portion 28. The title deeds of all the erven in Schoemansville contain the following clause: ‘All registered erf-holders shall be entitled in common with JOHAN HENDRIK SCHOEMAN, his Successors in Township Title or Assigns, to the right of access to the dam near the South- eastern entrance to Hartebeestpoort on the Eastern-Bank of the Crocodile River, for the purpose of boating on the said reservoir and fishing therein, subject to the conditions of Notarial Agreement No. 99/1922M, dated the 27th day of September, 1922, filed in the Deeds Office. . . .’ [12] During 1935 Mr Schoeman also established the township of Meerhof. Meerhof is situated adjacent to portions 29 and 59. The title deeds of the erven in Meerhof contain a similar provision in respect of access to the Dam: ‘All registered erfholders in the Township shall be entitled in common with the Applicant, his successors in Township Title or Assigns to the right of access to the Lake at the southern end thereof near the late H.J. Schoeman’s old dam known as Sophia’s Dam (now adjoining Schoemansville Station ) on the Eastern Bank of the Crocodile River for the purpose of boating in the said lake and fishing therein subject to the conditions of the Notarial Agreement No. 99/1922M, dated the 27th September 1922, and filed in the Deeds Office. The owners of business erven Nos. 89, 90, 164 and 165 however, shall be entitled to ply boats for hire on the Lake, as from the abovementioned access.’ [13] In the meantime, Mr Schoeman persuaded the Union Government to retransfer a portion of the land that had been transferred pursuant to the 1918 agreement, to him. The decision of the Union Government was taken on 10 October 1925 and was recorded in Cabinet Minute 3125 (the Cabinet Minute). In terms thereof, the following was approved: ‘1. The grant to JOHAN HENDRIK SCHOEMAN of certain piece of land being Portion No. 1 of Portion L of the Northern portion of the farm Hartebeestpoort No. 498, District Pretoria, measuring 476 square roods, together with the right to use the foreshore immediately in front of the said land and between it and the Hartebeestpoort Lake, subject to rights of access to the said foreshore in favour of the Government of the Union of South Africa and its servants. 2. The grant of a right of user in favour of the TRANSVAAL YACHT CLUB in respect of the foreshore immediately in front of Stands Nos. 117 and 118 of Schoemansville Township and between the said Stands and the Hartebeestpoort Lake. Subject, however, to rights of access in favour of the Government of the Union of South Africa and its servants. 3. The reservation of the foreshore adjoining the Hartebeestpoort Lake extending from Stand No. 121 to the corner of Tolstoi Street and Lakeside Avenue of Schoemansville Township as a landing place for the general public and persons plying for hire with boats on the Hartebeestpoort Lake, other than standholders in the Schoemansville Township, the owner for the time being of the piece of land referred to in paragraph (1) above and the Transvaal Yacht Club referred to in paragraph (2) above, subject to rights of access in favour of the Government of the Union of South Africa and its servants. 4. The reservation of the foreshore adjoining the Hartebeestpoort Lake extending from the corner of Tolstoi Street and Lakeside Avenue to Riekert Street of Schoemansville Township, as a landing place for the owners of Stands in Schoemansville Township other than the owner for the time being of the piece of land referred to in paragraph (1) above and the Transvaal Yacht Club referred to in paragraph (2) above, subject to rights of access in favour of the Government of the Union of South Africa and its servants.’ [14] Paragraph 1 of the Cabinet Minute was given effect to by Crown Grant 67 of 1926 (the Crown Grant). It was registered in the Deeds Office on 1 April 1926. In terms thereof Mr Schoeman received transfer of a piece of land, measuring some 48 hectares, presently known as portion 43 of the farm Hartebeestpoort (portion 43). It does not form part of the Schoemansville Township. The Crown Grant also provided for access to the Dam, as follows: ‘The owner of the land hereby granted shall be entitled to the free use of the foreshore immediately in front of it, and between it, and the Hartebeestpoort Lake as indicated on the Diagram S.G. No. A.1936/25. . . .’ This servitude was duly endorsed on the title deed of the servient tenement, presently portion 28. [15] The fourth respondent was established on 23 February 1923. It was a condition of the grant of portion 43 to Mr Schoeman that he would donate erven 117 and 118, Schoemansville to the fourth respondent. These erven were duly transferred to it. It subsequently also obtained ownership of the adjacent erf 119. These three erven have since been consolidated and are presently known as erf 1113 Schoemansville. The rights that had been approved in terms of para 2 of the Cabinet Minute were registered as a servitude against the title deed of the servient tenement, in favour of the fourth respondent’s land. [16] Lakeside Avenue in Schoemansville is presently known as Waterfront Street. During the early 1980’s a bird sanctuary was established on parts of the foreshore referred to in paragraphs 3 and 4 of the Cabinet Minute. The relative locations of the adjacent properties that I have referred to can be pictured as follows. Moving roughly from west to east, one would traverse the foreshore in this order: in front of portion 43; in front of erf 463, Schoemansville (erf 463); in front of erf 1113, Schoemansville; from in front of erf 121, Schoemansville to the western boundary of the bird sanctuary; the bird sanctuary itself; and from the eastern boundary of the bird sanctuary to in front of the corner of Riekert Street and Waterfront Street in Schoemansville. [17] The first appellant established the Hartbeespoort Snake and Animal Park on portion 43 during 1962. In 1964 he extended his operation to the adjacent erf 463, with the permission of the owner thereof, Mr Schoeman. During 1965 Mr Schoeman donated erf 463 to the Peri-Urban Health Board. The first appellant leased erf 463 from it. During 1973 the first appellant obtained the shareholding in the second appellant and the second appellant obtained transfer of portion 43. And in 1982 the Peri- Urban Health Board transferred erf 463 to the first appellant. [18] As I have said, erf 1113 adjoins erf 463. In terms of various successive lease agreements, the fourth respondent has since 1969 leased not only the foreshore in front of its property but also approximately two thirds of the foreshore in front of erf 463. The fourth respondent effected significant improvements to the foreshore, to facilitate access to the Dam for yachting. The fourth respondent’s use of the foreshore in front of erf 463 was and remains a major bone of contention. One of the principal purposes of the appellants’ application was to limit the fourth respondent to the use of the foreshore in front of the fourth respondent’s property. [19] The first appellant also owns a residential property in Schoemansville (erf 297), as well as erven 89, 90, 164 and 165 in Meerhof. Erf 90 adjoins portion 59 and the other erven are situated adjacent to portion 29. The third appellant is the owner of erf 1132 in Schoemansville. It is situated opposite erf 463, which lies between it and the foreshore. [20] In the court a quo the first, third and fourth appellants essentially claimed an order directing the State to take all steps necessary to register praedial servitudes of access to the Dam for purposes of boating and fishing, as follows: (a) over portion 28 in favour of the land on which the township of Schoemansville had been established (that is all the erven in Schoemansville), in accordance with the aforesaid provision in the title deeds of these erven; (b) over the foreshore in front of erf 463, in favour of erf 463; (c) over portion 29 in favour of the land on which the township of Meerhof had been established (that is all the erven in Meerhof), in accordance with the aforesaid provision in the title deeds of these erven; and (d) over portion 59, in favour of erf 90, Meerhof. Thus, the place of access envisaged in para (c) of clause K is not directly relevant to the matter. The second appellant, in essence, sought a declarator that it is entitled to free use of the foreshore in front of portion 43, subject to the rights of the State. Analysis [21] It is apparent that the case of the second appellant was very different to that of the other appellants. Unless indicated otherwise, I henceforth refer to the first, third and fourth appellants collectively as the appellants and to the second appellant as Ontspan Beleggings. I commence with a consideration of the appeal of the appellants. They contended that they were entitled to the enforcement of contractual rights to registration of the servitudes, alternatively that they had acquired the servitudes by acquisitive prescription. [22] It is trite that a servitude is a right to use the property of another in a particular manner. The right may be attached to a particular (dominant) tenement (praedial servitude) or to a particular person (personal servitude). Both are real rights that come into existence upon their registration in the Deeds Office. A personal right to claim the registration of a servitude (praedial or personal) may, of course, arise from an agreement. Whether or not an agreement provides for the right to the registration of a servitude, and whether such servitude would be praedial or personal, depends on an interpretation of the particular agreement in accordance with the ordinary well-known rules of construction. See Willoughby’s Consolidated Co Ltd v Copthall Stores Ltd 1918 AD 1 at 16. [23] The appellants contended that the rights to obtain the registration of the servitudes emanated from clause K on its own, or clause K together with the notarial contract. A personal servitude held by a natural person inevitably terminates when that person dies. See AJ van der Walt The Law of Servitudes (2016) at 565-566. Mr Schoeman passed away in 1967. It follows that the contractual case was entirely dependent thereon that Mr Schoeman had obtained the right to the registration of a praedial servitude. It is trite that a praedial servitude is characterised by the fact that it attaches to a dominant tenement, regardless of the identity of the owner thereof from time to time. Therefore an agreement cannot give rise to the right to a praedial servitude without the express or implicit identification of a dominant tenement. [24] Clause K did not grant rights in favour of a dominant tenement. It provided quite the contrary. The rights were granted to Mr Schoeman ‘in his individual capacity or his assigns’. Clause K did not require him to be the owner of any property. In context the ‘assigns’ meant persons to whom Mr Schoeman in his individual capacity might have ceded his rights. I agree with the fourth respondent that the use of the word ‘or’ instead of ‘and’ was significant and indicated that ‘assigns’ did not refer to successors in title. It would make no sense to grant rights of access to a person or his successors. Insofar as there might be an ambiguity, it should be resolved by the application of the well- established rule of construction that because a servitude is a limitation on ownership, it must be accorded an interpretation which least encumbers the servient tenement, that is, in this case, a personal servitude. See Kruger v Joles Eiendomme (Pty) Ltd and Another [2008] ZASCA 138; 2009 (3) SA 5 (SCA) para 8. In my opinion clause K did not provide the right to a praedial servitude. [25] The mere registration of the notarial contract could not alter this position. The notarial contract, in any event, specified that the purpose of the registration of the notarial contract was that the rights granted in terms of clause K might ‘be recorded and registered in favour of the said Johan Hendrik Schoeman, in his individual capacity or his Assigns, against the submerged area of the Hartebeestpoort Reservoir’. [26] There are indications that the second part of the notarial contract might have envisaged the registration of a praedial servitude. These are, first, that, other than in clause K and in respect of the registration of the notarial contract itself, the second part referred to ‘the parties hereto, their Successors in Title or Assigns’. Second, it expressly referred to the registration of a servitude against the titles of the servient and dominant tenements respectively. The registration of a servitude was, however, subject to a finding that the ‘conditions’ had been fictionally fulfilled, as the appellants contended. Their reliance on fictional fulfilment appears to be tenuous. Even if it is accepted for argument’s sake that the notarial contract placed a tacit contractual duty on the Union Government to take steps to acquire all the land that had been submerged by the Dam and that it or its successor in law took a decision not to acquire the land, the appellants had to prove that the decision had been taken with the intention to avoid the registration of the servitude. See Lekup Prop Co No 4 (Pty) Ltd v Wright [2012] ZASCA 67; 2012 (5) SA 246 (SCA) paras 7 and 10-11. There was no evidence as to when and why such a decision had been taken. But, as I shall demonstrate, none of the aspects mentioned in this paragraph matters if clause K was an unenforceable agreement to agree. This is the issue that I now turn to. Agreement to agree [27] In terms of clause K access to the Dam would be obtained at three places. Only the general location or vicinity of the three places was stated. Clause K did not identify the locations of the three places. They had to be mutually agreed by the parties. Material elements of the right of access would therefore only be determined by further agreement. Thus, there was an agreement to agree. I accept that there was an implicit obligation on the parties to negotiate in good faith, but subject thereto, the further agreement was entirely dependent on the will of the parties. Clause K did not contain any provision that would regulate the position in the event of failure of the negotiations in respect of the proper identification of the three places. [28] Our law in respect of the enforceability of an agreement to agree developed in the following manner. In Premier of the Free State Provincial Government and Others v Firechem Free State (Pty) Ltd. 2000 (4) SA 413 (SCA); [2000] 3 All SA 247 (A) at 431G-H Schutz JA said, with reference to earlier authority, that ‘an agreement that the parties will negotiate to conclude another agreement is not enforceable, because of the absolute discretion vested in the parties to agree or disagree’. In Southernport Developments (Pty) Ltd v Transnet Ltd 2005 (2) SA 202 (SCA); [2005] 2 All SA 16 (SCA) at 208C-D Ponnan AJA, writing for the court, held that the dictum in Firechem is not applicable to a contract that contains what he referred to as a deadlock-breaking mechanism. By that he meant provisions that prescribe further steps to be followed in the event of the failure of the negotiations. [29] Letaba Sawmills (Edms) Bpk. v Majovi (Edms) Bpk. 1993 (1) SA 768 (AD); [1993] 1 All SA 359 (A) provided an example of such a deadlock-breaking mechanism. There an option to renew a lease on the basis that in the event of the parties failing to agree on the rental, a market-related rental would be determined by arbitrators, was held to be enforceable. Southernport similarly dealt with an option to lease specified properties (or agreed portions thereof) ‘on the terms and conditions . . . negotiated between the parties in good faith’. The court held at 211F-G that the enforceability of the option had been saved by a provision that should the parties be unable to agree on any of the terms and conditions, the dispute would be referred to an arbitrator whose decision would be final and binding. [30] Ponnan AJA referred to the judgment of Kirby P in the Australian case of Coal Cliff Collieries (Pty) Ltd v Sijehama (Pty) Ltd (1991) 24 NSWLR 1 and proceeded to say: ‘[16] Kirby P then adverted to three situations. He stated of the first: “In many contracts it will be plain that the promise to negotiate is intended to be a binding legal obligation to which the parties should be held. The clearest illustration of this class will be cases where an identified third party has been given the power to settle ambiguities and uncertainties… But even in such cases, the court may regard the failure to reach agreement on a particular term as such that the agreement should be classed as illusory or unacceptably uncertain: In that event the court will not enforce the agreement.”; of the second: “In a small number of cases, by reference to a readily ascertainable external standard, the court may be able to add flesh to a provision which is otherwise unacceptably vague or uncertain or apparently illusory…”; and, of the third: “Finally, in many cases, the promise to negotiate in good faith will occur in the context of an “arrangement” (to use a neutral term) which by its nature, purpose, context, other provisions or otherwise makes it clear that the promise is too illusory or too vague and uncertain to be enforceable:…”. The principles enunciated in Coal Cliff Collieries accord with our law. The first and third situations alluded to by Kirby P are covered, respectively, by Letaba Sawmills and Firechem.’ [31] In his majority judgment in Makate v Vodacom (Pty) Ltd [2016] ZACC 13; 2016 (4) SA 121 (CC) Jafta J said that our common law, as reaffirmed in Southernport, was that an agreement to negotiate in good faith is enforceable if it provides for a deadlock- breaking mechanism in the event of the negotiating parties not reaching consensus. He, however, also said: ‘[100] Whether an agreement to negotiate in good faith is enforceable where there is no deadlock-breaking mechanism remains a grey area of our law. This is because Firechem Free State suggests that it is not enforceable while Everfresh suggests otherwise. In Everfresh, Moseneke DCJ said: “Were a court to entertain Everfresh’s argument, the underlying notion of good faith in contract law, the maxim of contractual doctrine that agreements seriously entered into should be enforced, and the value of ubuntu, which inspires much of our constitutional compact, may tilt the argument in its favour. Contracting parties certainly need to relate to each other in good faith. Where there is a contractual obligation to negotiate, it would be hardly imaginable that our constitutional values would not require that the negotiation must be done reasonably, with a view to reaching an agreement and in good faith.”’ [32] The combined rationes decidendi of the decisions of this court in Firechem and Sourthernport are therefore that an agreement to agree without a deadlock-breaking mechanism is not enforceable because it is dependent on the absolute discretion of the parties and/or because it is too vague and uncertain to be enforceable. We are bound by these decisions, of course, unless we determine that they were clearly wrong. The appellants did not advance such an argument. I am, in any event, by no means convinced that these decisions were wrong. With respect, I fail to see how a mere agreement to agree (in good faith) can be enforced without violation of the fundamental principle that a court may not make a contract for the parties. [33] As I have said, the appellants did not question these principles. Instead, they attempted to avoid their application by arguing, on the strength of Nach Investments (Pty) Ltd v Yaldai Investments (Pty) Ltd and Another [1987] ZASCA 25; [1987] 2 All SA 154 (A); 1987 (2) SA 820 (A), that clause K had contemplated a general servitude. Hefer JA said in Nach at 831D-E that it has long been accepted that a servitude may be constituted either along a specifically agreed route (a definite or defined servitude) or generally (simpliciter). He added that in the latter case the entire servient tenement is subject to the servitude and the grantee may select a route provided only that it does so civiliter modo. As clause K had created the right to a servitude simpliciter, so the argument went, the identification of the places of access was immaterial. [34] Both the language and the context of clause K, however, point to an intention to agree on a definite servitude. The right of access was expressly created at three specific places to be selected and identified by mutual agreement from each of the general areas mentioned. It is also apparent from clause K that the locations of the places mattered to the Union Government. The fourth respondent pointed out that clause K provided that should any of the actual sites marked on diagrams (that is, agreed sites) subsequently be required for the operations to be undertaken in connection with the Dam, ‘a suitable site as near as possible to the original site shall for the purposes aforesaid be granted to the said Schoeman in his individual capacity who shall have the right of selecting such site or sites – which shall not interfere with the working and works of the Reservoir’. Thus, the parties to clause K did not agree to a general servitude and merely made reference to a future agreement because they contemplated that defined places of access would eventually be agreed upon. Clause K rather complied with the description in Nach at 831F-G: ‘If the intention is to constitute a specific right of way, i.e. one which may only be exercised along a specifically defined route, the agreement is inchoate at least as to a material term and for that reason it is unenforceable until the route is agreed upon’. [35] It follows that clause K was unenforceable. That impacted on the enforceability of the notarial contract and the title deed provisions. The notarial contract provided that the parties ‘bind themselves to enter into a Contract whereby the rights as detailed in said Clause K of the said Deed of Sale may be properly registered as a servitude. . .’. In the absence of further agreement, therefore, the notarial contract could not have an independent existence. And in respect of the places of access the provisions in the title deeds of the erven in Schoemansville and Meerhof echoed the wording of para (a) and para (b) of clause K respectively. Thus, the unenforceability of clause K was destructive of the enforceability of the notarial contract and the title deed provisions. [36] The first appellant placed some reliance thereon that, on 6 November 1962, Mr Schoeman had entered into a notarial agreement in terms of which he ceded the rights under clause K and the notarial contract to his sons and that they had subsequently (on 30 August 1992) ceded these rights to him. The short answer hereto is nemo plus iuris ad alium transferre potest quam ipse habet; no one can transfer to another a greater right than he has himself. As I have said, the rights that had purportedly been ceded, were not enforceable. And even on the basis that Mr Schoeman had a personal servitude, neither he nor his sons could cede rights that extended beyond Mr Schoeman’s lifetime. It follows that the contractual case had to fail. Acquisitive prescription [37] This brings me to the question of acquisitive prescription. The effect of s 3 of the State Land Disposal Act 48 of 1961 was that the relevant period of prescription had to be completed prior to 28 June 1971. The Prescription Act 18 of 1943 (the 1943 Act) was repealed by the Prescription Act 68 of 1969 with effect from 1 December 1970. The appellants accepted that the matter was governed by s 2 of the 1943 Act. It provided: ‘(1) Acquisitive prescription is the acquisition of ownership by the possession of another person’s movable or immovable property or the use of a servitude in respect of immovable property, continuously for thirty years nec vi, nec clam, nec precario. (2) As soon as the period of thirty years has elapsed such possessor or user shall ipso jure become the owner of the property or the servitude as the case may be.’ [38] The onus rested on the appellants to prove all these requirements. See Stoffberg NO and Others v City of Cape Town [2019] ZASCA 70. It is not necessary to consider them in detail. I confine myself to the element of ‘use of a servitude in respect of immovable property’. This postulates de facto exercise of a servitude as if of right, by a person and his or her successors in title for a continuous period of 30 years. See Bisschop v Stafford 1974 (3) SA 1 (AD) at 9C. [39] As I have said, the appellants claimed the registration of praedial servitudes in favour of the following properties: all the erven in Schoemansville; erf 463; all the erven in Meerhof; and erf 90, Meerhof. In view of what I have said, this issue must, of course, be determined on the basis that no contractual rights to such servitudes existed. [40] It did not appear from the papers when boating and fishing on the Dam had become viable. The notarial contract was entered into on 27 September 1922. It recorded that the land that had been purchased in terms of the 1918 agreement, ‘will form the submerged area of the HARTEBEESTPOORT Reservoir which is at present in course of constructions’. An advertisement of a public auction of the proposed Schoemansville erven, to be held on 14 December 1922 in the town hall in Pretoria, contained images of the Dam ‘as it should appear when completed’. As I have said, the Schoemansville township was formally established in 1923. In the circumstances it seems probable that little or no boating and fishing on the Dam could have taken place prior to the establishment of Schoemansville. [41] Assuming, nevertheless, that Mr Schoeman in his capacity as the owner of the remainder of the northern portion, was the predecessor in title of the owners of the erven in Schoemansville, the appellants had to prove that Mr Schoeman and the successive owners of all the erven in Schoemansville actually used the foreshore on portion 28 to obtain access to the Dam as if of right for a continuous period of 30 years prior to 1971. This was an onerous burden that the evidence simply did not satisfy. And the evidence told us nothing about the use of the foreshore on portion 29 by Mr Schoeman and the successive owners of the erven in Meerhof. There was also no evidence as to the use of the foreshore on portion 59 by the successive owners of erf 90, Meerhof. [42] The appellants attempted to show that Mr Schoeman had erected a landing stage on the foreshore in front of erf 463 for use in respect of his passenger boat enterprise. The deponent for the fourth respondent said that the foreshore in front of erf 463 was too steep for this purpose and that even when the water level of the Dam was as low as 16 percent of its capacity, there was no sign of such a landing stage or any remains thereof. The first appellant disputed this, but the dispute cannot on the papers be resolved in his favour. The only admissible piece of evidence in this regard was contained in a contemporaneous letter by the Surveyor General (Mr Murray) to the Secretary of Lands dated 10 April 1926. It made quite clear that Mr Schoeman had erected landing stages on the adjacent portion 43. As I have said, the first appellant commenced the use of erf 463 during 1964. There was no evidence of the actual use of the foreshore in front of it prior hereto. In the result, the appellants did not show the acquisition of the servitudes by prescription. Second appellant [43] It remains to deal with the declarator claimed by Ontspan Beleggings. The court a quo erred in saying that no reliance was placed on rights that had emanated from the Crown Grant. It therefore failed to consider Ontspan Beleggings’ case before it. As I have demonstrated, the owner of portion 43 is clothed with a registered praedial servitude of access to the Dam over the foreshore in front of it. In this court the second respondent submitted that there had been no dispute as to the existence and use of this servitude. Ontspan Beleggings countered the submission by correctly pointing out that in the answering affidavit in the court a quo, the second respondent had denied that the Crown Grant gave rise to a praedial servitude. The true position was repeated in the replying affidavit. The second respondent did not dispute that in argument in the court a quo it had adopted the stance reflected in the answering affidavit. [44] In the light of the second respondent’s denial of Ontspan Beleggings’ rights, the court a quo should have issued the declarator that it sought. However, in written and oral argument in this court, the second respondent unreservedly recognised the servitude attached to portion 43. Thus, there was no further need for the declarator that Ontspan Beleggings had sought. It is trite that this court does not decide abstract or academic issues and there is no reason why we should, in these circumstances, nevertheless exercise a discretion to issue a declarator. The second respondent acknowledged the rights of Ontspan Beleggings almost at the outset of the appeal. There should, however, be an order that the second respondent is liable for the costs of Ontspan Beleggings in the court a quo, and not the other way around, as the court a quo ordered. Conclusion [45] There is a final matter that I should mention. It will be recalled that the Cabinet Minute had approved the reservation of portions of the foreshore for landing places for the general public and the owners of erven in Schoemansville respectively. As I have said, parts of both these portions of the foreshore have been taken up by the establishment of a bird sanctuary. I make no pronouncement on the enforceability of these reservations, for two reasons. First, none of the appellants purported to represent the general public in these proceedings and there was a lack of evidence in respect of the current position in this regard. Second, in answer to the evidence of the appellants that the remaining portion of the foreshore reserved for the Schoemansville title holders was being used as envisaged in the Cabinet Minute, the second respondent said that it was irrelevant to the issues in the case. In my view, this stance was correct, as no relief was claimed solely on the basis of para 4 of the Cabinet Minute. [46] In the result the appeal must be dismissed with costs, including the costs of two counsel. The fourth respondent rightly did not press for punitive costs of the appeal. As I have said, however, the order of the court a quo should be adjusted to provide that the second respondent pay the costs of Ontspan Beleggings in the court a quo. [47] The following order is issued: The appeal is dismissed with costs, including the costs of two counsel. The costs order of the court a quo is substituted with the following: ‘(a) The first, third and fourth applicants are jointly and severally ordered to pay the costs of the second respondent, including the costs of two counsel; (b) The second respondent is ordered to pay the costs of the second applicant, including the costs of two counsel; (c) The applicants are jointly and severally ordered to pay the costs of the fourth respondent, including the costs of two counsel.’ _______________________ C H G VAN DER MERWE JUDGE OF APPEAL APPEARANCES For appellants: J L Gildenhuys SC, with her W C Meyer (Heads also prepared by E C Labuschagne SC) Instructed by: Couzyn Hertzog & Horak Attorneys, Pretoria Symington de Kok Attorneys, Bloemfontein For 2nd respondent: M C Erasmus SC, with him H A Mpshe Instructed by: State Attorney, Pretoria State Attorney, Bloemfontein For 4th respondent: W Trengove SC, with him K Hofmeyr and C Shongwe Instructed by: Bowman Gilfillan Inc., Sandton McIntyre van der Post Inc., Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY - JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL Seale and Others v Minister of Public Works and Others (899/2019) [2020] ZASCA 130 (15 October 2020) From: The Registrar, Supreme Court of Appeal Date: 15 October 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) dismissed the appeal by the appellants with costs including costs of two counsel and adjusted the order of the court a quo to provide that the second respondent pay the costs of Ontspan Beleggings in the court a quo. The first appellant in this case is Mr Kingsley Jack Whiteaway Seale. He a director of both the second appellant, Ontspan Beleggings (Pty) Ltd and the third appellant, HI Frank Components (Pty) Ltd. The fourth appellant is the Schoemansville Oewerklub, a voluntary association that acts in the interest of its members. The appellants launched an application in the Gauteng Division of the High Court, Pretoria for orders declaring and enforcing servitudal rights. The second respondent, the Minister of Water and Sanitation, opposed the application on behalf of the State. The fourth respondent, the Transvaal Yacht Club, a voluntary association that owns property adjacent to the foreshore, also opposed the application. The application was dismissed but the appellants were granted leave to appeal. The appeal concerns servitudal rights of access over a narrow strip of State land between the edge of the water and the boundaries of adjoining properties (the foreshore), for purpose of boating and fishing on the Hartbeespoort Dam (the Dam). The history of the matter spans more than a century. At the time when the Union Government determined to construct the Dam, the Schoeman family owned portions of the freehold farm Hartebeestpoort. The Crocodile River, which would be the main source of water for the Dam, traversed the original farm. Mr Johan Hendrik Schoeman and members of his family owned portions of the farm Hartebeestpoort that would be submerged by the Dam. On 25 January 1918 the Union Government and the owners of the portions of the farm Hartebeestpoort, represented by Mr Schoeman, entered into an agreement of sale (the 1918 agreement). The Union Government purchased the portions of land that would be submerged by the Dam from the Schoeman family. The boundary between this land and the State land ran above the actual (fluctuating) waterline of the Dam. Clause 3(k) (clause K) of the 1918 agreement provided for the retention of rights of access to the Dam to Johan Hendrik Schoeman in his individual capacity or his assigns, on certain three places which were to be mutually agreed upon by the parties. The agreement never took place. Mr Schoeman nevertheless desired the registration of these rights. Later, the Union Government during 1922 entered into a notarial contract with Mr Schoeman (the notarial contract) which envisaged the registration of a servitude. Mr Schoeman later persuaded the Union Government to retransfer a portion of the land that had been transferred pursuant to the 1918 agreement, to him and the decision was recorded in Cabinet Minute 3125 (the Cabinet Minute). Part of the Cabinet Minute was given effect to by Crown Grant 67 of 1926 (the Crown Grant). It was registered in the Deeds Office. In terms thereof portion 43 of the farm Hartebeestpoort (portion 43) was transferred to Mr Schoeman and the rights of access to the foreshore in front of portion 43 that had been approved therein were registered as a servitude against the title deed of the servient tenement. The first, third and fourth appellants (appellants) essentially claimed an order for the registration of praedial servitudes of access to the Dam for purposes of boating and fishing. The second appellant (Ontspan Beleggings), in essence, sought a declarator that it is entitled to free use of the foreshore in front of portion 43. The SCA emphasised that it is trite that a servitude is a right to use the property of another in a particular manner. The right may be attached to a particular (dominant) tenement (praedial servitude) or to a particular person (personal servitude). A personal right to claim the registration of a servitude (praedial or personal) may, of course, arise from an agreement. The appellants contended that the rights to obtain the registration of the servitudes emanated from clause K on its own, or together with the notarial contract. The SCA noted that a personal servitude held by a natural person inevitably terminates when that person dies. Mr Schoeman passed away in 1967. It is trite that a praedial servitude is characterised by the fact that it attaches to a dominant tenement, regardless of the identity of the owner thereof from time to time. Therefore an agreement cannot give rise to the right to a praedial servitude without the express or implicit identification of a dominant tenement. The rights were granted to Mr Schoeman ‘in his individual capacity or his assigns’. In context the ‘assigns’ meant persons to whom Mr Schoeman in his individual capacity might have ceded his rights. The SCA agreed with the fourth respondent that the use of the word ‘or’ instead of ‘and’ was significant and indicated that ‘assigns’ did not refer to successors in title. The SCA therefore held that clause K did not give rise to a right to praedial servitude. The SCA held that an agreement to agree without a deadlock-breaking mechanism was not enforceable. It therefore held that because the right of access could only be determined by a further agreement, clause K was unenforceable. The unenforceability of clause K was destructive of the enforceability of the notarial contract and similar title deed provisions that had been relied upon. The therefore had to fail. About the acquisitive prescription, the onus rested on the appellants to prove the requirements. The appellants did not show the acquisition of the servitudes by prescription. In dealing with the declarator claimed by Ontspan Beleggings, the second respondent unreservedly recognised Ontspan Beleggings’ servitude, meaning there was no need for the declarator that Ontspan Beleggings had sought. In the result the appeal was dismissed with costs, including the costs of two counsel. The order of the court a quo was adjusted to provide that the second respondent pay the costs of Ontspan Beleggings in the court a quo. ________________________

4120

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 1016/22 In the matter between: KING PRICE INSURANCE COMPANY LIMITED APPELLANT and SIZWE ANTONIO MHLONGO RESPONDENT Neutral citation: King Price Insurance Company Limited v Mhlongo (Case no 1016/2022) [2023] ZASCA 152 (15 November 2023) Coram: GORVEN, MABINDLA-BOQWANA and WEINER JJA and BINNS- WARD and KEIGHTLEY AJJA Heard: 6 November 2023 Delivered: 15 November 2023 Summary: Civil procedure – claim under insurance policy arising from motor vehicle collision – market value pleaded – evidence led on shortfall of amount owed to the financier – no evidence led on market value – incongruity between pleadings and evidence – claim not proved. __________________________________________________________________ ORDER ______________________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Phooko AJ with Khumalo J concurring, sitting as court of appeal): The appeal is upheld with costs. The order of the Gauteng Division of the High Court, Pretoria is set aside and is substituted by the following order: ‘1 The appeal is upheld with costs. The order of the Regional Court for the Regional Division of Gauteng, Pretoria is set aside and is substituted by an order granting absolution from the instance with costs.’ __________________________________________________________________ JUDGMENT __________________________________________________________________ Keightley AJA (Gorven, Mabindla-Boqwana and Weiner JJA and Binns-Ward AJA concurring) [1] The respondent in this appeal, Mr Mhlongo, was a policy holder with the appellant, King Price Insurance Company Ltd (King Price). The policy was for comprehensive cover for his Mercedes Benz E200 motor vehicle. In 2018, Mr Mhlongo’s vehicle was involved in a collision, and as a result, it was written off. He duly lodged a claim under his policy with King Price. However, King Price rejected the claim and cancelled the policy. [2] Mr Mhlongo then issued summons out of the regional court, Pretoria (the trial court), averring a breach of the agreement by King Price. He claimed contractual damages in the amount of R374 960.50 being ‘the fair, alternatively reasonable, alternatively market related value of the motor vehicle’ (the market-related value). In response, King Price pleaded that Mr Mhlongo had failed to comply with his obligations under the agreement. He was thus not entitled to indemnity, and King Price was entitled to avoid the agreement of insurance. [3] The parties did not seek to separate issues in the matter, proceeding on both merits and quantum. Much of the trial focused on whether King Price was entitled to avoid the agreement. The only evidence adduced by Mr Mhlongo to establish the quantum of the damages he claimed to have suffered was a written settlement quotation, supposedly from Standard Bank which had financed the purchase of the vehicle, stating that the settlement amount due to the bank under the vehicle finance agreement was R374 960.50. [4] The trial court found in Mr Mhlongo’s favour. It awarded damages in the amount pleaded. The matter went on appeal to a full bench of the Gauteng Division of the High Court, Pretoria (the full bench), which upheld the trial court’s judgment and order. On petition to this Court, leave to appeal was granted, although it was limited to ‘[w]hether the respondent (Plaintiff) proved the quantum of the claim’. [5] The nub of King Price’s case on appeal is that the evidence adduced by Mr Mhlongo did not support his pleaded case on quantum. As noted above, he claimed as damages the market-related value of his vehicle. He confirmed that this was the basis of his claim in cross-examination. Yet he presented no evidence at all on the market value of the vehicle. King Price pointed out that Mr Mhlongo conceded under cross-examination that he had no knowledge of its market value. According to King Price, Mr Mhlongo’s reliance on the settlement amount due to Standard Bank was misplaced, as it bore no relation to the case as pleaded. In the absence of evidence which established the pleaded quantum of his claim, King Price contended that the claim ought to have been dismissed by the trial court, and the full bench ought to have upheld its appeal. [6] The full bench dismissed King Price’s appeal on two bases. First, it found that, correctly interpreted, the agreement between the parties obliged King Price to pay the settlement amount, and hence Mr Mhlongo was entitled to claim that amount by way of contractual damages. Second, it found that the onus lay on King Price to plead and prove an alternative basis for the calculation of damages, and it had failed to do so. [7] The full bench erred in respect of the first basis for dismissing the appeal. What was fundamentally at issue was not the correct interpretation of the agreement, but rather the case as pleaded by Mr Mhlongo. He pleaded his damages based on the market-related value of the vehicle. He did not plead damages based on the settlement amount (nor, incidentally, did he even prove that amount adequately). It was thus irrelevant to Mr Mhlongo’s case whether, on a particular interpretation of the agreement, King Price was obliged to pay the settlement amount: this was simply not the case that Mr Mhlongo pleaded, or King Price was asked to meet. Consequently, the full bench ought not to have dismissed the appeal on this basis. [8] As to the second basis for dismissing King Price’s appeal, here too, the full bench erred. It is trite that it is for a plaintiff to prove its damages. Having appropriately elected to frame his damages as the market-related value of the vehicle, Mr Mhlongo bore the onus of proving the damages so pleaded. King Price elected to defend the action on the basis that Mr Mhlongo had not discharged his onus. King Price was entitled to defend the action in this manner. As such, there was no duty on King Price to plead or present evidence to prove an alternative quantum of damages, as the full bench suggested. When Mr Mhlongo failed to prove his pleaded damages, that should have been the end of the matter. [9] Unfortunately for Mr Mhlongo, there was a fatal incongruity between the case he pleaded and the case he presented to the trial court. In the absence of evidence to establish the market-related value of his vehicle, it could not properly be found that he had proved his claim. The claim ought to have failed for this reason. It follows that the appeal must succeed. [10] In the result the following order issues: The appeal is upheld with costs. The order of the Gauteng Division of the High Court, Pretoria is set aside and is substituted by the following order: ‘1 The appeal is upheld with costs. The order of the Regional Court for the Regional Division of Gauteng, Pretoria is set aside and is substituted by an order granting absolution from the instance with costs.’ ____________________ R M KEIGHTLEY ACTING JUDGE OF APPEAL Appearances For appellant: C Richard Instructed by: Weavind & Weavind Inc, Pretoria Matsepes Inc, Bloemfontein For respondent: S Mahabeer SC Instructed by: Mahomed Salek Inc, Durban 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: 15 November 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 King Price Insurance Company Limited v Mhlongo (Case no: 1016/2022) [2023] ZASCA 152 (15 November 2023) Today the Supreme Court of Appeal (SCA) handed down judgment upholding an appeal against a judgment of the full bench in the Gauteng Division of the High Court, Pretoria (the full bench). The matter originated in the Regional Court of the Regional Division of Gauteng (the trial court). The respondent in the appeal, Mr Mhlongo, was a policy holder with the appellant, King Price Insurance Company Limited (King Price), for comprehensive cover for his motor vehicle. After it was written off in a collision, King Price rejected his insurance claim. Mr Mhlongo instituted an action in the trial court for breach of the agreement and claimed damages for the fair, alternatively reasonable, alternatively market-related value of the motor vehicle. The quantum of damages claimed was R374 960.50. Both the trial court and the full bench ruled in his favour and he was awarded the damages pleaded. The appeal to the SCA was limited to the question of whether Mr Mhlongo had proved the quantum of his claim. The SCA upheld the appeal on the basis that although Mr Mhlongo had pleaded damages based on the market value of the vehicle, he had adduced no evidence to support that claim. The only evidence Mr Mhlongo had relied on was a document that he said was provided by the Standard Bank, which had financed the purchase of the vehicle. The document indicated that the settlement amount due to the bank under the finance agreement was R374 960.50. This bore no relation to the market value of the vehicle. In the absence of evidence to establish the market-value of his vehicle, the SCA held that it could not properly be found that Mr Mhlongo had proved the quantum of his claim. The appeal by King Price was accordingly upheld, and Mr Mhlongo’s claim was dismissed. ~~~~ends~~~~

2967

non-electoral

2015

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 20059/2014 Reportable In the matter between: MEDOX LIMITED APPELLANT and THE COMMISSIONER FOR THE SOUTH AFRICAN RESPONDENT REVENUE SERVICE Neutral citation: Medox Limited v The Commissioner for SARS (20059/2014) [2015] ZASCA 74 (27 May 2015) Coram: Brand, Cachalia, Bosielo and Willis JJA and Fourie AJA Heard: 15 May 2015 Delivered: 27 May 2015 Summary: Taxpayer failing to object to income tax assessments issued by the Commissioner ─ Absent any objection, the assessments became final and conclusive by virtue of the provisions of s 81(5) of the Income Tax Act 58 of 1962 ─ Taxpayer not entitled to relief by means of a declaratory order to have the assessments set aside ─ Appeal dismissed. ORDER On appeal from: Gauteng Division, Pretoria (Teffo J sitting as court of first instance): The appeal is dismissed and no order as to costs is made. ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Fourie AJA (Brand, Cachalia, Bosielo and Willis JJA concurring): [1] The appellant, Medox Limited (Medox), approached the Gauteng Division, Pretoria, on application for an order declaring that all income tax assessments issued to it by the respondent, the Commissioner for the South African Revenue Service (the Commissioner), in respect of the years of assessment following its 1997 year of assessment, are null and void. [2] The Commissioner opposed the application which was heard by Teffo J. The judge concluded that the high court did not have jurisdiction to entertain the dispute and accordingly dismissed the application with costs. Medox applied for and was granted leave to appeal to this court. [3] In essence, the court below held that the dispute should have been pursued by way of an objection to the assessments, lodged with the Commissioner and, if necessary, followed by an appeal to the tax court created in terms of the Income Tax Act 58 of 1962 (the Act), as the appropriate forum to deal with matters of this kind. Background [4] Medox commenced trading in South Africa under the name and style of Drake Personnel during 1976, but in 1995 was provisionally wound-up in terms of an order of the high court. Whilst under provisional liquidation, Medox continued trading and on 7June 1996, the winding-up order was set aside by the high court when it sanctioned a scheme of arrangement between Medox and its creditors in terms of s 311 of the Companies Act 61 of 1973. [5] Medox submitted a return to the Commissioner in respect of the income accrued to it during the 1996 tax year. The Commissioner’s assessment for this tax year reflected an assessed loss of R46 622 063. Medox did not submit a return to the Commissioner for the 1997 tax year, but thereafter submitted its income tax returns for the tax years 1998 up to and including 2010 (excluding 2003). In respect of each of the returns submitted in the tax years subsequent to 1997, Medox did not seek to carry forward the assessed loss incurred in the 1996 tax year and to set it off against profits earned during the subsequent tax years. The Commissioner duly issued income tax assessments to Medox in respect of these subsequent tax years without reflecting the assessed loss. [6] Medox made no objection against the assessments issued by the Commissioner in respect of the 1998 and subsequent tax years, but alleges that during 2009 it realised that it had not submitted a return in respect of the 1997 tax year and that the income tax assessments issued by the Commissioner in respect of the 1998 and subsequent tax years, had failed to set off the assessed loss of R46 622 063 incurred by Medox in the 1996 tax year. [7] Medox then took the view that the 1998 and subsequent income tax assessments were void as the Commissioner had acted ultra vires by issuing same in disregard of the mandatory provisions of s 20(1)(a) of the Act, requiring him to set off assessed losses of a taxpayer against income derived by the taxpayer in subsequent years. The Commissioner denied the allegation, whereupon Medox approached the court below for declaratory relief. Applicable statutory provisions [8] At the relevant time, the Act was the statute that regulated the relationship between the Commissioner, who performed the functions and exercised the powers assigned to him in terms of the Act, and Medox as the taxpayer. I should add that the Act was subsequently repealed and substituted by the Tax Administration Act 28 of 2011 with commencement date 1 October 2012, but it has no bearing on the present appeal. [9] The following sections of the Act are pertinent to the adjudication of the appeal: (i) Section 20, which provides that for the purpose of determining the taxable income derived by any person from carrying on any trade, there shall be set off against the income so derived by such person any balance of assessed loss incurred by the taxpayer in any previous year which has been carried forward from the preceding year of assessment. (ii) Section 81, the relevant part of which reads as follows: ‘(1) Objections to any assessment made under this Act shall be made in the manner and under the terms and within the period prescribed by this Act and the rules promulgated in terms of section 107A by any taxpayer who is aggrieved by any assessment in which that taxpayer has an interest. (2) The period prescribed in the rules within which objections must be made may be extended by the Commissioner where the Commissioner is satisfied that reasonable grounds exist for the delay in lodging the objection: Provided that the period for objection may not be so extended─ (a) . . . (b) where more than three years have lapsed from the date of the assessment; or (c) . . . (3) Any decision by the Commissioner in the exercise of his or her discretion under subsection (2) shall be subject to objection and appeal. (4) . . . (5) Where no objections are made to any assessment or where objections have been allowed in full or withdrawn, such assessment or altered assessment, as the case may be, shall be final and conclusive.’ (iii) Section 83, which provides that any person entitled to object to an assessment, may appeal against such assessment to the tax court established in terms of the provisions of s 83. The tax court may in the case of an assessment appealed against, confirm the assessment or order that it be altered or referred back to the Commissioner for further investigation and assessment. Discussion [10] It is trite that an appeal is directed at the order of the court of first instance and not the reasons for the order. In Tecmed Africa (Pty) Ltd v Minister of Health & another [2012] 4 All SA 149 (SCA) Ponnan JA put it thus at para 17: ‘. . . appeals, do not lie against the reasons for judgment but against the substantive order of a lower court. Thus, whether or not a court of appeal agrees with a lower court’s reasoning would be of no consequence if the result would remain the same.’ [11] For the reasons that follow, I am of the view that there is no merit in the application for a declaratory order. In view of this conclusion, there is no need to enter into the debate as to whether or not the learned judge a quo correctly held that the high court did not have the necessary jurisdiction to entertain the application. I will assume (without deciding) that the court a quo did have the jurisdiction to adjudicate upon the application. [12] In order to obtain declaratory relief in the court below, Medox had to show that it has an existing, future or contingent right to have the assessments for the 1998 and subsequent tax years declared null and void. See s 19(1)(a)(iii) of the Supreme Court Act 59 of 1959 (now s 21(1)(c) of the Superior Courts Act 10 of 2013). As it is common cause that Medox did not object in terms of s 81 of the Act to any of the assessments issued in respect of the 1998 and subsequent tax years, it will immediately be apparent that Medox’s contention that it has a right to have these assessments declared null and void, flies in the face of the provisions of s 81(5) of the Act. The latter subsection expressly provides that, where no objection is made to an assessment, such assessment shall be final and conclusive. In addition, it should be borne in mind that more than three years have lapsed from the date of each of these assessments, with the result that, by virtue of the provisions of s 81(2)(b) of the Act, the Commissioner is precluded from reopening the assessments. [13] This court has over the years dealt with provisions worded similarly to s 81(5) of the Act and confirmed that, where no objection is made to an assessment issued by the relevant tax authority, the assessment is final and conclusive as between the tax authority and the taxpayer. These decisions have been collected in Commissioner for Inland Revenue v Bowman NO 1990 (3) SA 311 (A) at 316B-C. Further at 316E, Goldstone AJA writing for the court, reiterated that an assessment to which no objection has been made, ‘becomes binding upon the taxpayer as a statutory obligation’. [14] When confronted with the significant obstacle in the form of s 81(5) of the Act, counsel for Medox was driven to argue that the section only applies to ‘valid’ assessments and not to ‘invalid’ assessments. I must confess that I have considerable difficulty in following this submission. As I understood counsel, a valid assessment is one issued in accordance with the provisions of the Act, while an invalid assessment is not. To me this appears to be a distinction without any difference. [15] On this argument virtually any assessment in which the Commissioner erroneously refuses to allow a deduction, rebate or exemption provided for in the Act, could be regarded as invalid and therefore not subject to the provisions of ss 81 to 83 of the Act. This would render the mechanisms provided in ss 81 to 83 for objections to and appeals against assessments nugatory and grant aggrieved taxpayers carte blanche to approach the high court in virtually every instance where they disagree with an assessment made by the Commissioner. For the sake of completeness, I should mention that it has not been suggested by Medox that any other good cause, eg iustus error or fraud, exists for the setting aside of the relevant assessments. It has accordingly not laid any basis for an attack upon the assessments by virtue of any other avenue of relief. [16] What counsel for Medox is effectively asking this court to do, is to read words into the Act by implication. As emphasised by Corbett JA in Rennie NO v Gordon & another NNO 1988 (1) SA 1 (A) at 22E-F, this cannot be done unless the implication is a necessary one in the sense that without it effect cannot be given to the statute as it stands. The submission on behalf of Medox requires the word ‘assessment’ in s 81 of the Act, and in particular in subsecs 81(2)(b) and 81(5), to be read as being a reference to a ‘valid’ assessment. In my view there is no basis upon which it can be said that the reading in of the word ‘valid’ in s 81 is necessary to give effect to the section as it stands. On the contrary, I believe that this construction would be in conflict with the intention of the legislature as appears from the clear language of the subsections. [17] Finally, and in any event, I believe that the premise from which Medox departs in its quest to have these assessments set aside, is fatally flawed. What Medox contends, is that it was the duty of the Commissioner to take the necessary steps to have the assessed loss of 1996 set off against profits earned by Medox during the subsequent tax years. As I understand the provisions of the Act, it is the taxpayer who has to render a return in which any loss occurred in any previous year is carried forward to be set off against income derived by the taxpayer from carrying on any trade. That this is the taxpayer’s duty, is made clear in s 20(2A)(b) of the Act which states that the taxpayer shall not be prevented from carrying forward a balance of an assessed loss merely by reason of the fact that he or she has not derived any income during any year of assessment. Further, s 82(b) of the Act places the burden of proof ─ that any amount is subject to set-off in terms of the Act ─ upon the person claiming such set-off, ie the taxpayer. [18] It follows, in my view, that the application for declaratory relief was correctly dismissed by the court a quo and that the appeal accordingly falls to be dismissed. [19] This brings me to the issue of costs. When the record of the appeal was presented to the members of this court, it transpired that the Commissioner’s attorney (the State attorney, Pretoria) had not complied with SCA rules 10(1)(b) and 10A. The first requires heads of argument in an appeal to be lodged by the respondent within one month from the receipt of the appellant’s heads of argument. The latter requires the heads of argument to be accompanied by a practice note dealing with prescribed procedural aspects to assist the members of the court in adjudicating the matter. [20] This failure by the State attorney created the impression that the appeal may not be opposed, yet no notice to abide had been filed on behalf of the Commissioner. This uncertain state of affairs led the court to request the registrar to address the State attorney in writing, to establish whether or not the appeal was opposed. [21] The registrar’s letter caused a flurry of activity on the part of the State attorney. The registrar was advised that the Commissioner’s heads of argument and practice note had, due to an administrative oversight, not been filed. It was further indicated that an application for condonation would in due course follow, together with the required heads of argument and practice note. In the event, an application for condonation accompanied by the Commissioner’s heads of argument was filed on Friday, 8 May 2015 (four court days before the hearing of the appeal), while the practice note was only filed with the registrar on Monday, 11 May 2015. [22] In the condonation application, the State attorney attempted to explain the cause of the delay in filing these documents, but woefully failed to present a plausible or acceptable explanation. There is no need to traverse the explanation in any great detail. The following aspects, may, however, be highlighted: (i) the appellant’s heads of argument were served on the State attorney and filed with the registrar of this court on 27 August 2014. In terms of SCA rule 10(1)(b) heads of argument on behalf of the Commissioner had to be filed on or before 29 September 2014. (ii) Junior counsel acting on behalf of the Commissioner was instructed to and did settle heads of argument, which were received by the State attorney on 29 September 2014. A copy thereof was served on the appellant’s attorneys on 6 October 2014 (there is no explanation as to why it was not served on the appellant’s attorneys timeously on 29 September 2014). However, the heads of argument were not lodged with the registrar of this court nor was the prescribed practice note prepared for filing. (iii) Subsequent to 6 October 2014, and due to a litany of administrative deficiencies, no steps were taken to forward the heads of argument to this court nor was any practice note prepared for filing. The administrative deficiencies leading to this sorry state of affairs can only be described as grossly negligent, demonstrating a flagrant disregard for the rules of this court. It is clear that, had this court not brought the failure to file the heads of argument and practice note to the attention of the State attorney, nothing would have been done and the appeal would have been heard without the Commissioner being represented. (iv) It also appears that on 15 March 2015 a notice of set down of the appeal for hearing on 15 May 2015, was forwarded to the State attorney by its Bloemfontein correspondent. Notwithstanding this, no steps were taken to attend to the filing of any heads of argument or a practice note. [23] Whilst the appellant’s legal representatives may not have been prejudiced as they had received the Commissioner’s heads of argument on 6 October 2014, this court has been seriously inconvenienced by the supine attitude adopted by the State attorney. This was readily conceded by counsel for the Commissioner. The members of this court had to prepare for the appeal without the benefit of the Commissioner’s heads of argument or practice note, which were only filed at the very last minute. It has often been emphasised that a disregard of the rules of this court will not be tolerated and that the court may mark its disapproval by means of a punitive costs order. See Africa Solar (Pty) Ltd v Divwatt (Pty) Ltd 2002 (4) SA 681 (SCA) para 45. [24] The Commissioner’s application for condonation was granted, mainly in view of the good prospects of success in the appeal, while the question of costs was reserved. In my view, the circumstances set out above justify a departure from the general rule that a successful litigant should normally be entitled to its costs. I believe that an appropriate sanction for the flagrant disregard of the rules of this court by the State attorney, would be to disallow the Commissioner’s costs of appeal. [25] In the result the following order is made: The appeal is dismissed and no order as to costs is made. ________________________ P B FOURIE ACTING JUDGE OF APPEAL APPEARANCES: For the Appellant: J Truter Instructed by: Couzyn Hertzog & Horak, Pretoria c/o Spangenberg Zietsman & Bloem, Bloemfontein For the Respondent: L G Nkosi-Thomas SC L Sigogo Instructed by: State Attorney, Pretoria

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 27 May 2015 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Medox Limited v The Commissioner for SARS (20059/2014) [2015] ZASCA 74 (27 May 2015) MEDIA STATEMENT The SCA today dismissed the appeal of a taxpayer who sought to have the income tax assessments issued by the Commissioner of SARS, declared null and void. It held that, in view of the taxpayer’s failure to object to the assessmnts, the high court was correct in finding that the taxpayer was not entitled to a declaratory order to have the assessments set aside.

2571

non-electoral

2014

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 657/2013 In the matter between: THE MINISTER OF POLICE Appellant and VONGANI SHARON MBOWENI First Respondent RUDZANI LOLLA MAKATU Second Respondent Neutral citation: Minister of Police v Mboweni (657/2013) [2014] ZASCA 107 (5 September 2014) Coram: MPATI P, BOSIELO, WALLIS and MBHA JJA and SCHOEMAN AJA Heard: 25 August 2014 Delivered: 5 September 2014 Summary: Special case – requirements for – facts must be agreed and fully set out – section 28(1)(b) of the Constitution – deprivation of parental support – constitutional damages. ORDER On appeal from: North Gauteng High Court, on circuit in Polokwane (Mothle J sitting as court of first instance): The appeal is upheld and the action is referred back to the high court for trial in accordance with the provisions of this judgment. All parties will bear their own costs of the appeal. JUDGMENT Wallis JA (Mpati P, Bosielo and Mbha JJA and Schoeman AJA concurring) [1] On 15 March 2009 the police arrested Mr Wisani Mahlati and detained him at the Ritavi police station. During his detention two other prisoners in his cell assaulted him. The noise of the assault was apparently disguised by other inmates of the cell singing loudly. The police did not detect the assault or do anything to prevent it or protect Mr Mahlati. The following morning, satisfied that they had no grounds for Mr Mahlati‟s arrest and detention, the police released him. He was at that time visibly in pain, sweating excessively and had vomited. He was taken to a doctor and, later that day, hospitalised. His condition deteriorated and he died five days later. [2] The first respondent was married to Mr Mahlati and is the mother of his daughter born on 13 January 2009, a few months prior to his death. The second respondent is the mother of another daughter born some years earlier on 27 November 2000. On behalf of their daughters the respondents pursued claims against the Minister of Police (the Minister) for substantial damages based on an allegation that their daughters‟ „right to parental care as provided for in Section 28(1)(b) [of the Constitution] was impaired upon‟ when their father died as a result of „the unconstitutional conduct‟ of the members of the force for whom the Minister was in law liable. It was specifically pleaded that the damages were „general in nature‟ and that it was „neither possible nor practical to particularise the amount in any further detail‟. Notwithstanding that allegation it appears that the parties were able to agree the amounts payable in respect of loss of support of Mr Mahlati‟s two daughters and on 16 April 2013, at the trial before Mothle J, sitting in the North Gauteng High Court on circuit in Polokwane, judgment was given for the agreed amounts, now described as delictual damages. [3] The order granted by Mothle J provided that „the claim for constitutional damages‟ be separated from that in respect of delictual damages, in disregard of the fact that they had never been separate claims. The parties then prepared a document headed „Statement of Facts in terms of Rule 33(1) and (2)‟ and according to the judgment proceeded to argue „whether a child whose parent/s has died as a result of the unlawful conduct of a third party has a right to sue for constitutional damages arising from an infringement of the constitutional right to parental care as provided in section 28(1)(b) of the Constitution‟. Mothle J answered this question in the affirmative and granted an order in the following terms: „[1] The Plaintiffs‟ right to claim for constitutional damages lodged on behalf of the minor children of the deceased, succeeds; [2] The Defendant is liable to compensate the minor children of the deceased for proven constitutional damages arising out of the unlawful deprivation of their father‟s parental care …‟ He then referred the quantum of those damages to trial.1 The present appeal is with his leave. [4] The issues raised in this case are of considerable difficulty and importance with far-reaching ramifications if the judgment of the court below is sustained. Although the Constitutional Court in Fose2 accepted that there may be circumstances in which in terms of s 172(1)(b) of the Constitution damages are a just and equitable remedy for the breach of a constitutional right, the only subsequent cases in which damages have been awarded as a remedy for the breach of a constitutional right are the Modderfontein Squatters case3 and Kate,4 both of which differed entirely from the present matter. To uphold the judgment of the court below would accordingly break new ground. That requires careful consideration of the legal basis for the claim and the reasons for holding that constitutional damages are the appropriate remedy to be afforded to the claimants. But first it is necessary to examine the procedural circumstances in which the court below was asked to address these important issues. [5] The parties and the court below approached the matter as if there was a clear-cut issue of law capable of resolution with the barest minimum of factual matter being placed before the court. That was an error. In Modderfontein Squatters and Kate the court was concerned with 1 The judgment is reported as M and Another v Minister of Police 2013 (5) SA 622 (GNP). 2 Fose v Minister of Safety and Security 1997 (3) SA 786 (CC). 3 Modderfontein Squatters, Greater Benoni City Council v Modderklip Boerdery (Pty) Ltd (Agri SA & Legal Resources Centre, Amici Curiae); President of the RSA v Modderklip Boerdery (Pty) Ltd 2004 (6) SA 40 (SCA). 4 MEC, Department of Welfare, Eastern Cape v Kate 2006 (4) SA 478 (SCA). whether damages were on the facts of those cases an appropriate remedy for breaches of the claimants‟ constitutional rights. The facts and those rights had been determined and all that remained was for the court to determine an appropriate remedy. While Fose was decided on exception, the background to the claim was a series of assaults allegedly perpetrated on the claimant, details of which were fully pleaded. It was accordingly possible for the court, against the pleaded factual backdrop, to determine whether the consequence of the breaches of his constitutional rights warranted an award of constitutional damages that included a punitive element, in addition to the damages to which he was in any event entitled in consequence of the assaults. It held that they did not. In all three cases the court was apprised of the facts on which the claim was based. Here there were no facts dealing with the question of the loss of parental care. [6] Those three cases demonstrate that the question of remedy can only arise after the relevant right has been properly identified and the pleaded or admitted facts show that the right has been infringed. To start with the appropriateness of the remedy is to invert the enquiry. But that is what occurred in the present case. This came about because of a flawed understanding of the provisions of rules 33(1) and (2) dealing with special cases. To understand why this is so it is necessary to look at the rules themselves, which read as follows: „(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 …‟ The statement of facts prepared by the parties did not comply with the requirements of rule 33(2)(a) in that it did not set out the facts upon which the proposed legal argument was to rest, nor did it define the question of law that the court was being asked to determine or set out the parties‟ contentions in relation to that question. Had that been done the litigation would probably have taken a different course. As it is, it is apparent that the exercise upon which the litigants embarked was fatally flawed. [7] This court, whilst still the Appellate Division, dealt with the requirements of a special case.5 That occurred in a matter where what purported to be a special case was stated for the consideration of this court in terms of the Labour Relations Act 28 of 1956. The aim was to secure the ruling of this court on a number of questions arising from the unfair labour practice jurisdiction of the then industrial court. Giving the judgment of the Court, which held that the document presented to it did not constitute a special case, Nicholas AJA said: „Provision is made in Rules of Court and in a number of statutes for the submission to a Court of questions of law “in the form of a special case”… In none of them is “special case” defined, presumably because the expression has an accepted meaning. Mozley and Whiteley's Law Dictionary 7th ed says sv “special case” that it is: “1. A statement of facts agreed to on behalf of two or more litigant parties, and submitted for the opinion of a court of justice as to the law bearing upon the facts so stated.” Stroud's Judicial Dictionary 4th ed states that: “A special case is a written statement of the facts in a litigation, agreed to by the parties, so that the court may decide these questions according to law... It is also known as a case stated.” 5 National Union of Mineworkers and Others v Hartebeestfontein Gold Mining Co Ltd 1986 (3) SA 53 (A) at 56G-57E. This meaning is reflected in Rule 33 of the Uniform Rules of Court. It provides in subrule (1) that 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, and in subrule (2)(a) that “such statement shall set forth the facts agreed upon, the question of law in dispute between the parties and their contentions thereon”. It is, therefore, implicit in the expression “in the form of a special case” that there should be a statement of the facts agreed by the parties … The industrial court has power to reserve for the decision of the Appellate Division a question of law which arises in proceedings before it. It is only such a question which can properly be reserved - this Court does not answer whatever questions the industrial court may choose to put to it. The question must not be an abstract or academic question. Courts of law exist for “the settlement of concrete controversies, ... not to pronounce upon abstract questions, or to advise upon differing contentions, however important.” (Per INNES CJ in Geldenhuys and Neethling v Beuthin 1918 AD 426 at 441.) Consequently, in order to enable this Court to determine whether the questions of law reserved do or do not arise in the proceedings, the industrial court should set out in the special case something which shows what has arisen, and how it has arisen.‟ [8] 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,6 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 6 Bane v D’Ambrosi 2010 (2) SA 539 (SCA) para 7. and this court could then rectify the consequences of the error in deciding the special case. [9] The statement of facts in this case described in some detail the circumstances of Mr Mahlati‟s detention and death. In regard to the children‟s claims, however, it provided virtually no detail. They were identified and it was said that their father had been under a legal duty to support them and had supported them. Then followed a bald statement that the deceased provided parental care to his two daughters. On that basis it was said that they were entitled to constitutional damages because they had been deprived of their biological father and guardian and thus deprived of their constitutional right in terms of s 28(1)(b) of the Constitution. Nothing more was placed before the judge in respect of this claim. [10] It appears that the parties thought that the statement that Mr Mahlati provided parental care to his daughters was a statement of fact that sufficiently raised the point of legal principle of whether a claim for constitutional damages was legally tenable. In that they erred. The statement was a conclusion that a constitutionally protected right had been infringed, which is a mixed matter of fact and law. A brief look at s 28(1)(b) of the Constitution reveals why that is so. The section reads as follows: „Every child has the right … to family care or parental care or to appropriate alternative care when removed from the family environment.‟ The right is couched in the alternative, not as three separate and distinct rights. Children have the right to family care or parental care or appropriate alternative care. The third of these, which presupposes the absence of the first two, demonstrates that there are alternative ways of ensuring the fulfilment of the right generally embodied in the section. The right is thus a right that the child will be cared for, that can be fulfilled in different ways. That at least raises the possibility that the right is satisfied if any one of those alternatives exists as a matter of fact. The language of the section suggests a progression from an ideal of being raised and cared for in a family, bearing in mind that concepts of family differ among different communities in this country and that the notion of what constitutes a family is subject to evolution over time, to parental care by one or both of a child‟s parents,7 to appropriate alternative care, which may mean foster care or care in an appropriate home or institution.8 The latter is probably seen as the least desirable situation, but may be necessary in the best interests of the child, which are paramount in terms of s 28(2) of the Constitution. [11] The fact that section 28(1)(b) expresses the right that it embodies in three alternatives, demanded that in the first instance there be a proper analysis of the different elements of the right and, in particular, the relationship between the right to family care and the right to parental care. In Grootboom,9 Yacoob J said that ss 28(1)(b) and (c) must be read together and that the former defines those responsible for giving care, while the latter lists various aspects of the care entitlement. His approach to the three alternatives was that: „They ensure that children are properly cared for by their parents or families, and that they receive appropriate alternative care in the absence of parental or family care.‟ 7 The word „parent‟ may encompass a biological, adoptive or foster parent or a parent who has become such by virtue of a surrogacy agreement. 8 These were described as three contingencies in Jooste v Botha 2000 (2) SA 199 (T) at 208D-F. The conclusion that parental care necessarily means care by a custodian parent may be unduly restrictive. 9 Government of the Republic of South Africa and Others v Grootboom and Others 2001 (1) SA 46 (CC) para 76. See also Minister of Health and Others v Treatment Action Campaign and Others (No 2) 2002 (5) SA 721 (CC) paras 74-76 (hereafter TAC (No 2)). At least superficially that appears to support an interpretation that the rights guaranteed by the section are fulfilled if the child is cared for by any one of those responsible for giving that care, or at least that one of those responsible for that care provides it. The primary obligation clearly rests on family and parents, but, as the second TAC case shows, where they are for reasons of poverty or otherwise unable to provide necessary care the State may be obliged to step in.10 [12] The court below simply elided the concepts of family care and parental care11 by reference to the definition of „care‟ in the Children‟s Act 38 of 2005. Appropriate though reference to that definition might be in certain circumstances, it was not directed at the problem facing the court below of a claim for damages arising from an alleged breach of the constitutional right embodied in s 28(1)(b) of the Constitution. An important question in that analysis, where a family unit is disrupted by the death of one parent, is whether the fact that the child is thereafter cared for by the surviving parent means that there was no infringement of the right, because it is being fulfilled in a different way. An alternative approach would be that the right is in part infringed because there is an element of deprivation in the change from a situation where both parents participate in the child‟s life to that where one parent shoulders the entire burden of care. If the parents were separated and the one parent provided the child‟s day to day care, another question would be whether the death of the other parent deprived the child of parental care in terms of s 28(1)(b). The separation of father and mother might already have done so. 10 TAC (No 2) para 77. 11 As do the authors of the section on „Children‟s Rights‟ in Constitutional Law of South Africa, 2nd ed (loose-leaf) section 47.3 (Revision service 07-09). [13] These two questions could easily have arisen in this case, the first in relation to Mr Mahlati‟s wife and his newly born child and the second in relation to the older child from whose mother he appeared to be separated. As they illustrate, it was essential for the court to be told or to determine the facts in order to have a full picture of what Mr Mahlati did in relation to his daughters that was said to constitute parental care, the loss of which would warrant an award of constitutional damages. In every case whether the parent who has died provided parental care in terms of the Constitution would depend on the relationship between the parent who has died and the children in respect of whom the claim is being made. [14] The central issue in this case was whether, and if so in what way, the two girls had been deprived of parental care in the sense in which that expression is used in the Constitution. Their mothers represented them in this litigation. Presumably they were and are receiving parental care from their mothers. In the case of the younger of the two girls she was but a babe in arms when her father died. She will never really have known him even though he was at the time married to her mother and I assume, although like much else this does not appear from the record, had established a family home with her. If he was, then one would have thought her claim would be one for loss of family care rather than loss of parental care, which she clearly still enjoys. In the case of the older girl she was living with her mother at a different address from her half-sister. Although both homes are in the same town we do not know if they were sufficiently close for Mr Mahlati to visit both on a daily basis or whether he tried to do so. We do not even know whether, like so many South Africans, commercial necessity forced him to live away from home most of the time. All we know from the pleadings is that he was detained at a police station over 100 kilometres away from the town where his children were living. Without knowing what role Mr Mahlati played in the lives of his children it was impossible for the court below to determine that a loss had been suffered, much less the nature of that loss. [15] The court below recognised the relevance of these facts, because in para 51 of the judgment the following was said: „In the case of loss of parental nurturing the most important factors to be alleged and proved will be the ages of the children at the time of death of the parent, [the] nature of the relationship between the child and the parent, the role which the parent played in the child‟s development, time spent together and the general financial contribution by the deceased in the upbringing of the child. Some cases also distinguish between the instances where one parent survives the other, in which case the award would be substantially less than in the instance where both parents perish. Further arguments have also been raised in some cases, concerning the prospects of re-marriage, with a view to bring in a partner who would otherwise replace the lost parental services.‟ It is unclear why, in the light of this, the learned judge proceeded to make an order holding the Minister liable to the respondents for proven constitutional damages arising out of the unlawful deprivation of Mr Mahlati‟s parental care. None of the facts he identified as important to the determination of whether there had been a loss of parental care had been alleged or admitted. As a result he was not in a position to assess whether there had in fact been any loss of parental care. [16] The judge‟s approach was to leave these questions to a later stage of the trial where the issue of quantum would be considered. That was not appropriate, because the first issue he had to determine was whether there had been any deprivation of parental care at all. Until he had determined the nature of parental care for the purposes of s 28(1)(b) and, on the basis of evidence or admissions of fact, decided that there had been a deprivation of parental care, no question of quantum could arise. An enquiry into damages cannot take place in the air. It must be an enquiry into the damages arising from an identified wrong. [17] The difficulties to which this gave rise emerge from the judgment itself. In para 54 the judge held that the plaintiffs have a right to claim constitutional damages on behalf of their children for unlawful deprivation of their father‟s care. Immediately thereafter in para 55 he said that this finding was for the purpose of determining whether the plaintiffs had the „right to sue‟ on behalf of their children and recorded that liability was not conceded. It appears that he was of the view that liability was still in issue because of the absence of evidence on the issues he had identified. In other words the issue was determined as if on exception. But that was incompatible with the declaration of liability that he proceeded to make against the Minister. [18] A second area of concern with the approach adopted in the court below is that, even if the facts showed that the children had been deprived of parental care within the meaning of s 28(1)(b), that did not necessarily establish their right to claim damages. A further issue was whether the actions, or more accurately inaction, of the police in failing to safeguard and care for Mr Mahlati while in police custody, constituted a wrongful act in relation to the children. It was clearly wrongful in relation to Mr Mahlati himself, but whether it constituted a wrongful breach of the children‟s constitutional right is a different matter. The court needed first to decide whether the right operates horizontally in terms of s 8(2) of the Constitution so as to extend to the policemen in the present situation or whether, if it does not, the position of state employees is different, by virtue of s 8(1) of the Constitution. It also required the court to decide whether the police owed a legal duty to the children to avoid or prevent them from suffering a loss of parental care. Not every breach of constitutional duty is equivalent to unlawfulness in the delictual sense and therefore not every breach of a constitutional obligation constitutes unlawful conduct in relation to everyone affected by it.12 [19] Insofar as Mr Mahlati was concerned the police were in breach of his constitutional rights to human dignity, life and freedom and security of the person in terms of ss 10, 11 and 12 of the Constitution. But their obligation to protect Mr Mahlati while in their custody does not necessarily mean that they were at the same time under a legal duty to his children to secure their rights in terms of s 28(1)(b). That raised and demanded an assessment of policy considerations similar to those that operate in relation to the existence of a legal duty in delictual claims. In Steenkamp13 Moseneke DCJ summarised the position as being that „whether or not a legal duty to prevent loss occurring exists calls for a value judgment embracing all the relevant facts and involving what is reasonable and, in the view of the court, consistent with the common convictions of society‟. The court below did not undertake this enquiry and it is apparent from the heads of argument in this court that counsel had not appreciated its relevance. [20] Even if those issues could be and had been determined in favour of the respondents there remained the further issue of whether constitutional damages were the appropriate constitutional remedy for that breach. The heads of argument in this court framed the debate as being one between constitutional damages as a remedy and a development of the common 12 Steenkamp NO v Provincial Tender Board, Eastern Cape 2007 (3) SA 121 (CC) para 37. 13 Para 39 and the further discussion in paras 40-42. law relating to the assessment of damages to permit recovery of an amount in respect of general damages under the head of deprivation of parental support, but that was not the primary issue. The first issue was whether the existing remedy by way of damages for loss of support was inadequate to compensate the children for any breach of their right to parental care from their father. In that regard, a curious feature of the court below‟s judgment is that the judge said that: „The claim for loss of parental care goes further than that of the loss of support. However, in my view, the child cannot claim for both loss of support and deprivation of parental care separately as the former is part of the latter. Such claim would amount to duplication and undue enrichment.‟ If that was indeed his view then it is entirely unclear why he even addressed the issue of a claim for constitutional damages for breach of the children‟s s 28(1)(b) rights, because he had already granted judgment in their favour for damages for loss of support. [21] The proper starting point for the enquiry was to consider whether the existing remedy by way of damages for loss of support was an appropriate remedy for any breach of the children‟s constitutional rights. As Moseneke DCJ pointed out in Law Society of South Africa and Others v Minister of Transport and Another:14 „It seems clear that in an appropriate case a private-law delictual remedy may serve to protect and enforce a constitutionally entrenched fundamental right. Thus a claimant seeking “appropriate relief” to which it is entitled, may properly resort to a common- law remedy in order to vindicate a constitutional right.‟ In another case15 Moseneke DCJ said: „There appears to be no sound reason why common law remedies, which vindicate constitutionally entrenched rights, should not pass for appropriate relief within the 14 Law Society of South Africa and Others v Minister for Transport and Another 2011 (1) SA 400 (CC) para 74. 15 Dikoko v Mokhatla 2006 (6) SA 235 (CC) para 91. reach of s 38. If anything, the Constitution is explicit that, subject to its supremacy, it does not deny the existence of any other rights that are recognised and conferred by the common law.‟ [22] The court below did not consider whether a remedy by way of a claim for damages for loss of support was an appropriate remedy for any breach of the children‟s rights in this case. Its approach was that the Constitutional Court in Fose16 had recognised the possibility of a claim for constitutional damages as an appropriate remedy for a breach of a constitutional right and the only issue was whether such damages should be awarded for a breach of the right in s 28(1)(b) of the Constitution. That approach was incorrect. The court should first have considered the adequacy of the existing remedy. If it was inadequate then it should have considered whether the deficiency could be remedied by a development of the common law to accommodate a claim more extensive than one for pecuniary loss. Ackermann J pointed out in Fose17 that the common law of delict is flexible and falls to be developed with due regard to the spirit, purport and objects of the Bill of Rights. Another consideration is that the infringement of constitutional rights may often be appropriately vindicated by resort to public law remedies.18 [23] I am also concerned that there may be a misunderstanding of the ambit of the dictum in Fose on which the claim for constitutional damages was advanced and a lack of appreciation of what that case decided. It is as well therefore to remind ourselves of what Ackermann J said in para 60 of his judgment. The passage reads as follows: 16 Fose para 60. 17 Fose para 58(b). 18 Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail and Others 2005 (2) SA 359 (CC) para 81. „it seems to me that there is no reason in principle why “appropriate relief” should not include an award of damages, where such an award is necessary to protect and enforce chap 3 rights. Such awards are made to compensate persons who have suffered loss as a result of the breach of a statutory right if, on a proper construction of the statute in question, it was the Legislature's intention that such damages should be payable, and it would be strange if damages could not be claimed for, at least, loss occasioned by the breach of a right vested in the claimant by the supreme law. When it would be appropriate to do so, and what the measure of damages should be will depend on the circumstances of each case and the particular right which has been infringed.‟ [24] In the first place Ackermann J said that where a delictual claim arising from a breach of statutory duty is made, the award is made to compensate the injured party for loss that they have suffered. In other words the claim is for pecuniary loss of the type ordinarily recoverable by way of the Aquilian action. It is not a claim for a solatium or for general damages. The latter are recognised in claims arising from personal injuries, but that is an exception to the general rule that the Aquilian action is an action to recovery pecuniary loss. It was in the context of the fact that damages to compensate for pecuniary loss are recoverable in an Aquilian action, where the legal duty that has been breached arose from a statutory provision, that Ackermann J remarked that it would be strange if a similar claim could not be brought arising out of a breach of a constitutional right. It is so that he added the rider „at least‟ before his reference to „loss‟ but that does not mean that he endorsed a general proposition that constitutional damages will encompass a solatium or general damages. Whether our law should develop in that direction in some instances remains an open question. The awards in both Modderfontein Squatters and Kate were based on quantifiable financial harm and the rejection in Fose of claims for punitive damages points in the opposite direction. It would be a curious result indeed were the legal position to be that Mr Mahlati could not have obtained an award of constitutional damages for the assaults perpetrated on him, because of the rejection of such awards in Fose, but, because he died, his daughters can obtain an award of constitutional damages beyond their claim for damages for loss of support on the basis of the same decision. [25] The final point that should have been born in mind in the consideration of these claims was the broader implications of a judgment in favour of the respondents. The most obvious instance in South Africa of a child losing a parent as a result of the unlawful actions of a third party would be where the parent was killed in a motor accident and the target of the claim was the Road Accident Fund. The members of this court are well aware that the Fund is under considerable financial pressure dealing with the claims that it faces at present. Recognising claims of the type now suggested would add to its existing burden. That necessitates our approaching the matter aware that any decision will have an effect going beyond the facts of the present case. In those circumstances, before the court below arrived at a decision with potentially far-reaching consequences it should have ensured that any parties, and especially those organs of state that discharge their responsibilities from public funds, had the opportunity to appear and make submissions that would enable the court to arrive at a just conclusion. As Jafta J pointed out in Mvumvu:19 „… in determining a suitable remedy, the courts are obliged to take into account not only the interests of parties whose rights are violated, but also the interests of good government. These competing interests need to be carefully weighed.‟ 19 Mvumvu and Others v Minister of Transport and Another 2011 (2) SA 473 (CC) para 49. The competing interest in that case was that a retrospective declaration of invalidity would increase the Road Accident Fund‟s liabilities by R3 billion. In the present case the Road Accident Fund and the Ministers of Transport and Finance would appear to have had a significant interest in the decision that the court below was called upon to make and would have been able to make a contribution to its determination. In those circumstances they should have been afforded the opportunity to intervene in order to make that contribution. [26] In the result the court below failed to address issues of a factual and a legal character that were central to the decision that it was called upon to make. For those reasons the judgment of the court below cannot stand. It was but faintly suggested on behalf of the Minister that the claim should be dismissed, but as the Minister was a party to the inappropriate procedure adopted in the court below that would not be justified. As to costs the parties are jointly responsible for the situation that has arisen. As this was an endeavour on the part of the respondents to vindicate constitutional rights it is appropriate that the parties bear their own costs of the appeal. [27] The following order is accordingly made: The appeal is upheld and the action is referred back to the high court for trial in accordance with the provisions of this judgment. All parties will bear their own costs of the appeal. M J D WALLIS JUDGE OF APPEAL Appearances For appellant: P J J de Jager SC (with him A Granova) Instructed by: State Attorney Pretoria and Bloemfontein For respondent: G J Diamond Instructed by: Diamond Hamman & Associates, Polokwane; Van Pletzen Lambrechts 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: 5 September 2014 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 Police v Mboweni Mr Mahlati died as a result of an assault perpetrated on him by other prisoners while he was in police custody. The Minister of Police accepted liability for failing to protect Mr Mahlati from harm while in police custody. The claims of his wife and two daughters, one from a previous relationship, for damages for loss of support wre settled and judgment was given for payment of the agreed amounts. The mothers of the two children wished to pursue a further claim for damages on behalf of their daughters based on a breach of the children’s right to parental care in terms of section 28(1)(b) of the Constitution. The Minister of Police did not accept that such a claim is recognised in law. The parties therefore formulated an agreed statement of facts on which they asked the high court to determine whether such a claim was a valid claim in law. The high court upheld the claim although it held that liability was not admitted and issued a declaratory order that the minister of police was liable for such damages as might be proven at a further hearing. The SCA today set aside that judgment and referred the case back to the high court for determination after a trial. It did so on the basis that the procedure adopted by the high court was incorrect. The parties had failed to place the relevant facts concerning the nature of the relationship between Mr Mahlati and his daughters before the judge and it was accordingly not possible to say whether and to what extent there had been a loss of parental care in the sense given to that expression by the Constitution. The SCA also pointed out that the proper interpretation of the constitutional right in section 28(1)(b) of the Constitution is a matter of some difficulty as the right embodied in the section is expressed as being a right to family care or parental care or appropriate alternative care outside the family environment. This alternative formulation raises issues concerning the persons responsible for ensuring the right is fulfilled that the high court had not addressed. It also raised issues concerning the existence and scope of the legal duties on the police and the appropriateness of a remedy of constitutional damages in addition to the damages recoverable in respect of the loss of support arising from the death of the family breadwinner. Lastly the existence of such a remedy could have a substantial impact on public funds, such as those of the Road Accident Fund, who were not represented before the high court. Accordingly an opportunity ought to have been given for bodies such as that to participate in the proceedings. The judgment of the high court was accordingly set aside and the matter referred back for trial in which the issues could be fully and properly canvassed.

3856

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 876/2020 In the matter between: ENGEN PETROLEUM LIMITED APPLICANT and FLOTANK TRANSPORT (PTY) LTD RESPONDENT Neutral citation: Engen Petroleum Ltd v Flotank Transport (Pty) Ltd (876/20) [2022] ZASCA 98 (21 June 2022) Coram: MAYA P, ZONDI, MAKGOKA JJA, MEYER AND SAVAGE AJJA Heard: 23 May 2022 Delivered: 21 June 2022 Summary: Interpretation of cession – whether a pledge or out-and-out cession incorporating a pactum fiduciae – effect of out-and-out cession on ceded debts upon liquidation of cedent – appeal upheld with costs. ORDER ________________________________________________________________ Application for leave to appeal from: Northern Cape Division of the High Court, Kimberley (Makoti AJ sitting as court of first instance): Leave to appeal is granted. The appeal is upheld with costs. The order of the high court is set aside and replaced as follows: ‘1. The respondent is to pay to the applicant the following amounts: 1.1 R342 389.38 with interest thereon at the legal rate from 12 December 2014 to date of payment, both days inclusive; 1.2 R344 239.14 with interest thereon at the legal rate from 19 December 2014 to date of payment, both days inclusive; 1.3 R152 817.80 with interest thereon at the legal rate from 22 December 2014 to date of payment, both days inclusive; 1.4 R313 137.14 with interest thereon at the legal rate from 24 December 2014 to date of payment, both days inclusive; 1.5 R339 052.39 with interest thereon at the legal rate from 2 January 2015 to date of payment, both days inclusive; 1.6 R198 613.68 with interest thereon at the legal rate from 9 January 2015 to date of payment, both days inclusive; 1.7 R230 571.36 with interest thereon at the legal rate from 16 January 2015 to date of payment, both days inclusive; 1.8 R276 046.04 with interest thereon at the legal rate from 23 January 2015 to date of payment, both days inclusive; 1.9 R34 794.85 with interest thereon at the legal rate from 30 January 2015 to date of payment, both days inclusive. 2. The respondent is to pay the applicant’s costs.’ JUDGMENT Savage AJA (Maya P, Zondi, Makgoka JJA and Meyer AJA concurring) Introduction [1] The applicant, Engen Petroleum Limited (Engen), seeks leave to appeal to this Court against the judgment and order of the Northern Cape Division of the High Court, Kimberley (the high court), dated 29 March 2020. This was after the high court dismissed with costs Engen’s application to enforce against the respondent, Flotank Transport (Pty) Ltd (Flotank), the terms of a cession agreement concluded between Engen and Windsharp Trading (Pty) Limited (Windsharp). Engen applied for leave to appeal. This was refused. [2] Following the refusal by the high court of Engen’s application for leave to appeal, Engen petitioned this Court for leave to appeal. The application was referred for oral argument in terms of s 17(2)(d) of the Superior Courts Act 10 of 2013. The parties were advised to be prepared, if called upon to do so, to address this Court on the merits. Having regard to the prospects of success, apparent from the reasons which follow, leave to appeal to this Court is granted. Relevant factual background [3] In January 2009 Engen and Windsharp entered into an Engen Diesel Club (EDC) agreement. Under the terms of the EDC agreement, Windsharp became indebted to Engen in an amount which, by June 2014, exceeded R5.5 million. As security for the debt, Engen and Windsharp concluded two deeds of cession, in April 2012 and June 2014. Clause 1 of the first cession, entered into on 3 April 2012 (the 2012 cession), recorded that: ‘1. CESSION AND PLEDGE The Cedent hereby cedes, transfers and makes over to the Cessionary all the Cedent’s right, title and interest in and to the Debts (as defined in clause 2) as a continuing general covering security for the due performance and discharge of every obligation and indebtedness from whatsoever cause and howsoever arising which the Cedent may now or at any time hereafter have toward the Cessionary; and without limiting the generality of the foregoing, whether such indebtedness be a direct, indirect or contingent liability; whether it be matured or not; whether it may be or may have been incurred by the Cedent individually or jointly with others or by any firm in which the Cedent has or holds or may hereafter have or hold any interest; and whether it arises through any acts of suretyship, guarantee, warranty, indemnity or other undertaking signed by the Cedent solely or jointly with others or otherwise.’ [4] Clause 1 of the second cession entered into on 30 June 2014 (the 2014 cession), which replaced the first cession, was similar to clause 1 of the first cession, but with the insertion in italics at the end of that clause of the following: ‘…The Cession hereby granted by the Cedent to the Cessionary includes any and all reversionary rights the Cedent might otherwise have had in and to the claim hereby ceded.’ [5] Clause 14.2 of the 2014 cession provided that: ‘14.2 Execution of this memorandum has discharged – (a) every prior agreement between the parties to the extent within the scope of the subject matter of this agreement, whether or not inconsistent with the provisions of this memorandum; . . .’ [6] On 5 November 2014, at Engen’s instance, a provisional order of liquidation was obtained against Windsharp. That order was made final in January 2015. On 9 December 2014, Engen notified Flotank in writing of the existence of the June 2014 cession and of Engen’s intention to claim the debt ceded to it by Windsharp. Engen called upon Flotank, pursuant to the terms of the 2014 cession, to make payments directly to it. Flotank was cautioned that should it fail to do so it would not be absolved of liability towards Engen for any amounts paid to Windsharp. [7] In response to Engen’s notice, on 12 December 2014 Flotank sought that, by 13h00 the same day, Engen provide it with a copy of the relevant cession. Engen failed to do so. Thereafter, Flotank, in disregard of Engen’s notice, made nine payments to Windsharp, from 12 December 2014 to 30 January 2015, in respect of debts due by it to Windsharp. In May 2017, on the basis that Windsharp had ‘ceded its book debts in securitatem debiti’ to it, Engen applied to the high court for an order that Flotank pay Engen the nine amounts it had paid to Windsharp. [8] Flotank opposed the application inter alia on the basis that, on liquidation, Windsharp’s ceded book debts resorted with its liquidators, with Engen becoming a secured creditor of Windsharp from the date of liquidation; and that Engen held a claim against Windsharp’s liquidators. In addition, Flotank contended that since Engen had failed to provide it with the cession relied upon, no proper perfection of the cession had occurred. [9] The high court found that the concursus creditorum was created by operation of law on 5 November 2014 when Windsharp was placed into provisional liquidation. The court rejected Flotank’s contention that Engen had failed to ‘perfect’ the cession by not having provided a copy of the cession to Flotank and that notice to Flotank by Engen of the cession had been sufficient. The court found, however, that it was Windsharp’s liquidators and not Engen that were entitled to claim that which had been ceded in securitatem debiti to Engen. This, reasoned the court, was so in that the cession entered into had amounted to a pledge, which was the basis on which the case had been conducted before the court. [10] For the first time in its application for leave to appeal to this Court, Engen argued that, properly construed and as a matter of law, the 2014 cession was not a pledge and that the high court had erred in treating it as such. Since the reversionary rights of the cedent were vested in Engen as the cessionary, it was contended that an out-and-out cession to Engen existed and that it was entitled to the relief sought against Flotank. [11] The matter was opposed by Flotank on the basis that the cession relied upon by Engen was not an outright cession and should be construed as a pledge. This, it was submitted, was so even where there is a clear expression of the intention of the parties otherwise. Discussion [12] The issue turns on the interpretation of the terms of the second cession agreement. The true character of a cession in securitatem debiti depends on the intention of the parties,1 with the wording of the cession being the appropriate point of departure to determine such intention.2 In Grobler v Oosthuizen (Grobler)3 this Court, recognised the existence of opposing theories in our law regarding cessions in securitatem debiti, namely the ‘pledge theory’ and the ‘outright cession theory’. 1 Grobler v Oosthuizen [2009] ZASCA 51; 2009 (5) SA 500 (SCA) (Grobler) para 11; Thorogood v Hoare 1930 EDL 354; Fisher v Schlemmer 1962 4 SA 651 (T); Nahrungsmittel GmbH v Otto [1992] ZASCA 228; 1993 1 SA 639 (A); African Consolidated Agencies (Pty) Ltd v Siemens Nixdorf Information Systems (Pty) Ltd 1992 (2) SA 739 (C) at 744. 2 Grobler para 11. 3 Grobler paras 11-15. However, it found it unnecessary to resolve the debate between these theories one way or another.4 [13] On ‘the pledge theory’ the principal debt is ‘pledged’ to the cessionary on the basis that the cedent retains ‘bare dominium’ or a ‘reversionary interest’ in the claim against the principal debtor.5 On such construction, only the right to enforce the right upon non-payment is ceded.6 Since a cession ordinarily entails a transfer of a right, it is the retention by the cedent of the very substance of the right around which the doctrinal debate regarding the pledge theory has centred. This Court, in Grobler, recognised however that such debate had been resolved, primarily for pragmatic reasons, with the pledge theory accepted as the default position.7 On this basis a cession in securitatem debiti is now taken to resemble a pledge, unless the intention of the parties is different.8 [14] On the alternative theory – ‘. . . a cession in securitatem debiti is in effect an outright or out-and-out cession on which an undertaking or pactum fiduciae is superimposed that the cessionary will re-cede the principal debt to the cedent on satisfaction of the secured debt. In consequence, the ceded right in all its aspects is vested in the cessionary. After the cession in securitatem debiti the cedent has no direct interest in the principal debt and is left only with a personal right against the cessionary, by virtue of the pactum fiduciae, to claim re-cession after the secured debt has been discharged.’9 4 Grobler para 15. National Bank of South Africa Ltd v Cohen’s Trustee 1911 AD 235. 5 Grobler para 15 with reference to Picardi Hotels Ltd v Thekweni Properties (Pty) Ltd [2008] ZASCA 128; 2009 (1) SA 493 (SCA) para 3 and other authorities. 6 Ibid para 16 with reference to Land- en Landboubank van Suid-Afrika v Die Meester 1991 (2) SA 761 (A) 771C-G; Development Bank of Southern Africa Ltd v Van Rensburg 2002 (5) SA 425 (SCA) para 50. 7 Grobler para 17 with reference to Leyds N O v Noord-Westelike Koöperatiewe Landboumaatskappy Bpk 1985 (2) SA 769 (A) at 780E-G; Bank of Lisbon and South Africa Ltd v The Master and Others 1987 (1) SA 276 (A) at 291H-294H; Incledon (Welkom) (Pty) Ltd v Qwa Qwa Development Corporation Ltd [1990] ZASCA 85; 1990 (4) SA 798 (A) at 804F-J; Millman N O v Twiggs [1995] ZASCA 62; 1995 (3) SA 674 (A) at 676H; Development Bank of Southern Africa Ltd v Van Rensburg fn 6 para 50. 8 Grobler para 17. 9 Grobler para 17. [15] Although the pledge construction has been recognised as the default form of security cession, there is no support for a conclusion that it has subsumed the field of security cessions.10 This is so since our law favours a recognition of both constructions of security cession.11 It therefore remains open to the parties to structure a cession either as a pledge or as an out-and-out cession, upon which a pactum fiduciae is superimposed. This is to be determined by reference to the clear intention of the parties.12 [16] The 2014 cession expressly ceded to Engen the debt as defined, with any reversionary rights Windsharp may have to the debt ceded. From the wording used, it is clear that the parties’ express intent was to achieve an out-and-out cession on which the pactum fiduciae could, as a matter of law, be superimposed. Although Engen, as indicated earlier, did not assert an out-and-out cession with a pactum fiduciae in the high court, it is open for it to do so for the first time on appeal, since the correct interpretation of a cession is a question of law.13 [17] The result is that given that the 2014 cession was an out-and-out cession, the debt ceded by Windsharp was an asset in the estate of Engen.14 Windsharp held no right to receive payment from Flotank of the principal debt ceded to Engen but retained a claim by virtue of the pactum fiduciae to re-cede once that debt was discharged. It follows that Flotank was obliged, on receipt of notice of the cession, to make payments to Engen and not to Windsharp. In finding differently the high court erred. [18] It follows for these reasons that the appeal must succeed with costs. 10 3 Lawsa 3 ed para 180. 11 2 Lawsa 2 ed para 53; Van der Merwe Kontraktereg 4th ed (2012) at 427. 12 Grobler paras 11-14; Worman v Hughes and Others 1948 (3) SA 495 (A) at 505; Byron v Duke Inc [2002] ZASCA 58; 2002 (5) SA 483 (SCA). This was also applied by this Court in Freddy Hirsch Group (Pty) Ltd v Chickenland (Pty) Ltd [2011] ZASCA 22; 2011 (4) SA 276 (SCA) para 15. 13 Government of the Republic of South Africa v Von Abo [2011] ZASCA 65; 2011 (5) SA 262 (SCA) paras 18-19; CUSA v Tao Ying Industries [2008] ZACC 15; 2009 (2) SA 204 (CC) at para 68. 14 Van der Merwe, fn 12, at 429; MT Argun: Master & Crew of the MT Argun v MT Argun 2003 (3) SA 149 (C) at 158. Order [19] The following order is made: 1 Leave to appeal is granted. 2 The appeal is upheld with costs. 3 The order of the high court is set aside and replaced as follows: ‘1. The respondent is to pay to the applicant the following amounts: 1.1 R342 389.38 with interest thereon at the legal rate from 12 December 2014 to date of payment, both days inclusive; 1.2 R344 239.14 with interest thereon at the legal rate from 19 December 2014 to date of payment, both days inclusive; 1.3 R152 817.80 with interest thereon at the legal rate from 22 December 2014 to date of payment, both days inclusive; 1.4 R313 137.14 with interest thereon at the legal rate from 24 December 2014 to date of payment, both days inclusive; 1.5 R339 052.39 with interest thereon at the legal rate from 2 January 2015 to date of payment, both days inclusive; 1.6 R198 613.68 with interest thereon at the legal rate from 9 January 2015 to date of payment, both days inclusive; 1.7 R230 571.36 with interest thereon at the legal rate from 16 January 2015 to date of payment, both days inclusive; 1.8 R276 046.04 with interest thereon at the legal rate from 23 January 2015 to date of payment, both days inclusive; 1.9 R34 794.85 with interest thereon at the legal rate from 30 January 2015 to date of payment, both days inclusive. 2. The respondent is to pay the applicant’s costs.’ ________________________ K M SAVAGE ACTING JUDGE OF APPEAL Appearances For applicant: M Tsele Instructed by: MCH Attorneys Inc., La Lucia Ridge Webbers, Bloemfontein For respondent: P Zietsman SC Instructed by: Van der Wall Inc., Kimberley EG Cooper Majiedt 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: 21 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 Engen Petroleum Ltd v Flotank Transport (Pty) Ltd (876/20) [2022] ZASCA 98 (21 June 2022) Today the Supreme Court of Appeal (SCA) handed down judgment upholding, with costs, an appeal against the decision of the Northern Cape Division of the High Court, Kimberley (the high court). In January 2009 Engen and Windsharp entered into an Engen Diesel Club (EDC) agreement. Under the terms of the EDC agreement, Windsharp became indebted to Engen in an amount which, by June 2014, exceeded R5.5 million. As security for the debt, Engen and Windsharp concluded two deeds of cession, in April 2012 and June 2014. On 5 November 2014, at Engen’s instance, a provisional order of liquidation was obtained against Windsharp. On 9 December 2014, Engen notified Flotank in writing of the existence of the June 2014 cession and of Engen’s intention to claim the debt ceded to it by Windsharp. Engen called upon Flotank, pursuant to the terms of the 2014 cession, to make payments directly to it. Flotank was cautioned that should it fail to do so it would not be absolved of liability towards Engen for any amounts paid to Windsharp. After Engen failed to provide Flotank a copy of the cession relied upon, Flotank disregarded Engen’s notice and made nine payments to Windsharp, from 12 December 2014 to 30 January 2015, in respect of debts due by it to Windsharp. In May 2017, Engen applied to the high court for an order that Flotank pay Engen the nine amounts it had paid to Windsharp. Flotank opposed the application inter alia on the basis that, on liquidation, Windsharp’s ceded book debts resorted with its liquidators, with Engen becoming a secured creditor of Windsharp from the date of liquidation; and that Engen held a claim against Windsharp’s liquidators. In addition, Flotank contended that since Engen had failed to provide it with the cession relied upon, no proper perfection of the cession had occurred. The high court found that the concursus creditorum was created by operation of law on 5 November 2014 when Windsharp was placed into provisional liquidation. The high court rejected Flotank’s contention that Engen had failed to ‘perfect’ the cession by not having provided a copy of the cession to Flotank and found that notice to Flotank by Engen of the cession had been sufficient. The high court found, however, that it was Windsharp’s liquidators and not Engen that were entitled to claim that which had been ceded in securitatem debiti to Engen. It reasoned that this was so because the cession entered into had amounted to a pledge, this having been the basis on which the matter proceeded in the high court. In its reasoning, the SCA recognised the distinction between the ‘pledge theory’ and the ‘outright cession theory’. On ‘the pledge theory’ the principal debt is ‘pledged’ to the cessionary on the basis that the cedent retains ‘bare dominium’ or a ‘reversionary interest’ in the claim against the principal debtor. In essence, under such theory, only the right to enforce the right upon non-payment is ceded. The alternative theory is that of an out-and-out cession. In terms of this theory, an undertaking or pactum fiduciae is superimposed that the cessionary will re-cede the principal debt to the cedent on satisfaction of the secured debt, with all ceded right in all aspects vested in the cessionary. The SCA held that, although the pledge construction has been recognised as the default form of security cession, it had not subsumed the field of security cessions. Our law favoured a recognition of both constructions of security cession. It remains open to the parties to structure a cession either as a pledge or as an out-and-out cession upon which a pactum fiduciae was superimposed. The form adopted is to be determined by reference to the clear intention of the parties. The SCA held that, from the wording of the 2014 cession, the parties’ express intent was to achieve an out-and-out cession on which the pactum fiduciae could, as a matter of law, be superimposed. Although Engen did not rely on the cession as constituting an out-and-out cession with a pactum fiduciae in the high court, it was open for it to do so for the first time on appeal, since the correct interpretation of a cession was a question of law. As a result, the SCA held that the 2014 cession amounted to an out-and-out cession and that the debt ceded by Windsharp was an asset in the estate of Engen. Windsharp held no right to receive payment from Flotank of the principal debt ceded to Engen but retained a claim by virtue of the pactum fiduciae to have the debt re-ceded if such debt was discharged. It followed that Flotank was obliged, on receipt of notice of the cession, to make payments to Engen and not to Windsharp. The SCA found that the high court erred in its decision and for those reasons the appeal was upheld with costs. ~~~~ends~~~~

3735

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 4/2021 In the matter between: SIMON ROY ARCUS APPELLANT and JILL HENREE ARCUS RESPONDENT Neutral citation: Simon Roy Arcus v Jill Henree Arcus (4/2021) [2022] ZASCA 9 (21 January 2022) Coram: DAMBUZA, MOCUMIE and HUGHES JJA and KGOELE and SMITH AJJA Heard: 18 November 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 released to SAFLII. The date and time for hand-down is deemed to be 10:00 am on 21 January 2022. Summary: Interpretation of s 11(a)(ii) of the Prescription Act 68 of 1969 – whether a maintenance order is a judgment debt, subject to 30 years’ prescription period, or any other debt, subject to three years’ prescription period – held: maintenance orders are final, executable and appealable – a maintenance order is thus a judgment debt for the purposes of the Prescription Act, and subject to 30 years’ prescription period. __________________________________________________________________ ORDER __________________________________________________________________ On appeal from: Western Cape Division of the High Court, Cape Town (Francis AJ, sitting as court of first instance): The appeal is dismissed with costs. __________________________________________________________________ JUDGMENT __________________________________________________________________ Smith AJA (Dambuza and Hughes JJA concurring) [1] The circumscribed issue for determination in this appeal is whether an undertaking to pay maintenance in a divorce consent paper, which was made an order of court, gives rise to a ‘judgment debt’ as contemplated in section 11(a)(ii) of the Prescription Act 68 of 1969 (the Prescription Act or the Act), with a prescriptive period of 30 years, or any ‘other debt’, as contemplated in section 11(d) of the Act, with a prescriptive period of three years. [2] The facts are common cause, but not really germane for the resolution of the posed legal question. I therefore summarise them briefly and only to provide context. [3] When the appellant and the respondent divorced each other on 27 July 1993, they entered into a consent paper which, inter alia, provided that the appellant would pay maintenance for the respondent until her death or remarriage, and for their two minor daughters until they became self-supporting. The consent paper was made an order of court. [4] It is common cause that the appellant’s obligations to pay maintenance in respect of the minor children terminated during 2002 and 2005, respectively, when they became self-supporting. [5] Despite the fact that the appellant failed to pay the maintenance stipulated in the consent paper, the respondent did not take any steps to recover the arrear maintenance until December 2018, when she instructed her attorneys to send a letter of demand to the appellant. Notwithstanding demand, the appellant failed to pay the arrear maintenance, but commenced paying the monthly maintenance due to the respondent from January 2019. [6] On 27 August 2019, the appellant lodged an application in the maintenance court for the retrospective discharge of his maintenance obligations in terms of the consent paper (the discharge application). That application is still pending. [7] On 17 February 2020, the respondent caused a writ of execution to be issued in respect of the arrear maintenance of some R3.5 million. That writ was served on the appellant on 18 March 2020. [8] Subsequently, on 19 June 2020, the appellant brought proceedings in the Western Cape Division of the High Court, Cape Town (the court a quo) for an order, inter alia, staying the writ of execution pending the determination of the discharge application. He also applied for a declaration that all maintenance obligations under the consent paper which accrued before 1 March 2017 (being the due date for payment of maintenance three years prior to the date of service of the writ) have been extinguished by prescription. [9] In the court a quo, as is the case before us, only the abovementioned issue fell for decision. The court a quo (Francis AJ) held that the maintenance obligations in the consent paper arose from a ‘judgment debt’ as contemplated in section 11(a)(ii) of the Prescription Act and are consequently subject to a 30-year prescription period. The appellant appeals that judgment with the leave of the court a quo. [10] It is perhaps necessary to mention that although the learned acting judge was not convinced that there were reasonable prospects of success on appeal, he was of the view that ‘the issue relating to the prescriptive period applicable to debts created by maintenance orders is compelling enough to warrant the scrutiny of a higher court’ and granted leave for that reason. [11] Sections 11(a)(ii) and 11(d) of the Prescription Act read as follows: ‘The periods of prescription of debts shall be the following: (a) thirty years in respect of – . . . (ii) any judgment debt; . . . (d) save where an Act of Parliament provides otherwise, three years in respect of any other debt.’ [12] Although the appellant accepts that a maintenance order has characteristics of a civil judgment, namely that it is executable without further proof and appealable, he contends that: (a) Having regard to the objectives of the Act, a ‘judgment debt’ for the purposes of s 11(a)(ii), is one which is final in the sense of it being appealable, capable of execution and unalterable by the court which granted it. (b) Because maintenance orders are variable by the court which granted them and are susceptible to ongoing disputes which may require evidence, they lack the certainty to qualify as a judgment debt for purposes of the Prescription Act. (c) And since maintenance is intended for consumption and not accumulation, it is appropriate that the debts arising from maintenance orders should prescribe within three years, as they should be enforced promptly. [13] In order to provide proper context to the appellant’s contentions, it is necessary to state upfront that it matters not that the appellant’s obligations to pay maintenance arose from an agreement, which was made an order of court, as opposed to a maintenance order granted by a maintenance court in terms of the Maintenance Act 99 of 1998 (the Maintenance Act). This is so because the definition of ‘a maintenance order’ in the Maintenance Act includes a maintenance order made by a court in terms of the Divorce Act 70 of 1979 (the Divorce Act). [14] A resolution of this appeal will, to a great extent, depend on the determination of the question of whether maintenance orders possess the essential nature and characteristics of civil judgments. It would thus be instructive to survey authoritative pronouncements made by our courts in this regard. [15] A good starting point would be Zweni v Minister of Law and Order,1 where this Court held that ‘[a] “judgment or order” is a decision which, as a general 1 Zweni v Minister of Law and Order [1993] 1 All SA 365 (A); 1993 (1) SA 523 (A) at 532I-533A. 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’. And in Kilroe- Daley v Barclays National Bank Ltd,2 this Court held that a ‘judgment debt’ for the purposes of section 11(a)(ii) of the Prescription Act ‘refers, in the case of money, to the amount in respect of which execution can be levied by the judgment creditor; that in the case of any other debt steps can be taken by the judgment creditor to exact performance of the debt, ie delivery of the property, or performance of the obligation. A further feature of a judgment debt is that the judgment is appealable’. In Strime v Strime,3 it was held that ‘[a] claim for arrear maintenance under a Court’s order is exigible without any averment or proof that the plaintiff had, in order to maintain herself, incurred debts during the period in question and notwithstanding the fact that she earned, or could have earned, an income from employment’. And in Eke v Parsons,4 the Constitutional Court held that the effect of settlement agreements incorporated into court orders is that it changes ‘the status of the rights and obligations between the parties. Save for litigation that may be consequent upon the nature of the particular order, the order brings finality to the lis between the parties; the lis becomes res judicata (literally, “a matter judged”). It changes the terms of a settlement agreement to an enforceable court order’. Lastly, in Myathaza v Johannesburg Metropolitan Bus Services (SOC) Limited t/a Metrobus and Others,5 the Constitutional Court, in a pronouncement that, in my view, is emphatically dispositive of all the appellant’s arguments, held that: 2 Kilroe-Daley v Barclays National Bank Ltd [1984] ZASCA 90; [1984] 2 All SA 551 (A); 1984 (4) SA 609 (A) at 624D-F. 3 Strime v Strime [1983] 2 All SA 386 (C); 1983 (4) SA 850 (C) at 852C-E. 4 Eke v Parsons [2015] ZACC 30; 2015 (11) BCLR 1319 (CC); 2016 (3) SA 37 (CC) para 31. 5 Myathaza v Johannesburg Metropolitan Bus Services (SOC) Limited t/a Metrobus and Other [2016] ZACC 49; (2017) 38 ILJ 527 (CC); [2017] 3 BLLR 213 (CC); 2017 (4) BCLR 473 (CC); 2018 (1) SA 38 (CC) para 44. ‘The three-year period is meant for claims or disputes which are yet to be determined and in respect of which evidence and witnesses may be lost if there is a long delay.’ And that: ‘. . . a debt contemplated in the Prescription Act cannot be reviewed or appealed against, except if it is a judgment debt.’6 [16] A maintenance order possesses another important attribute of a final civil judgment, namely that it is appealable. In terms of s 25 of the Maintenance Act, ‘any person aggrieved by any order made by a maintenance court under this Act may, within such period and in such manner as may be prescribed, appeal against such order to the High Court having jurisdiction’. In addition, a person who is served with a demand to pay in terms of a maintenance order is compelled to comply with that order until he or she is able to demonstrate a change in circumstances justifying a variation of the order. [17] It is thus manifest that maintenance orders are: (a) dispositive of the relief claimed and definitive of the rights of the parties, to the extent that they decide a just amount of maintenance payable based on the facts in existence at that time; (b) final and enforceable until varied or cancelled; (c) capable of execution without any further proof; and (d) appealable. [18] The appellant contended that, despite these attributes, a maintenance order, nevertheless, cannot constitute a final judgment for the purposes of the Prescription Act, since it can be varied by the court which granted it, for sufficient reason or good cause. It is thus not unalterable by the court which made the original order, and in this sense resembles an interlocutory order or ruling which is open to 6 Myathaza v Johannesburg Metropolitan Bus Services (SOC) Limited t/a Metrobus and Others (supra fn 5) para 55. reconsideration, variation or rescission by the court which granted it, on good cause shown or altered circumstances. In addition, maintenance orders are susceptible to further disputes regarding the extent or existence of the liability. This means that the debt arising from a maintenance order is not certain and is contingent in nature, in as much as they can be varied or discharged with retrospective effect, so that arrears sought to be enforced by way of a writ of execution may be reduced or even extinguished through variation of the maintenance order. For these reasons debts which arise from maintenance orders cannot be regarded as ‘judgment debts’ for the purposes of the Prescription Act, or so the argument went. [19] In my view, this argument is not sustainable. As mentioned, a maintenance order fixes the obligations between the parties until such time as it is discharged on application by either party. This can only happen if new circumstances arise upon which the original order can be reconsidered. That the maintenance order is subject to variation in this sense, does not detract from the fact that the court granting the maintenance order has done so on a consideration of the facts placed before it at the time. Its decision, either by way of a reasoned judgment or by agreement between the parties, disposed of the lis which was in existence between the parties at that point in time. An application for variation of that order thus introduces a new lis, the party applying for such an order contending that circumstances have changed to such an extent that they justify a reconsideration of the original decision. Thus, the matter is res judicata on the facts which were before the court that made the original maintenance order. Obligations arising out of maintenance orders are therefore not ‘claims or disputes which are yet to be determined’,7 and are therefore not subject to a three-year prescription period. 7 Myathaza v Johannesburg Metropolitan Bus Services (SOC) Limited t/a Metrobus and Others (supra fn 5). [20] Section 8 of the Divorce Act 70 of 1979, which provides that a maintenance order ‘may at any time be rescinded or varied’, is thus an exception to the general rule that an order of court once pronounced is final and immutable.8 In the event, the court that made the maintenance order is not at liberty to reconsider its original decision on the same facts. It can only vary or discharge the order if new facts are presented, which justify a reconsideration of the order. An aggrieved party who wishes to challenge the soundness of the original decision without establishing changed circumstances can only do so by way of an appeal. [21] The appellant’s argument had another string to its bow. He asserted, in addition, that his submissions in this regard find support in the fact that the Maintenance Act (in particular subsections 24(1) and (2)) draw a distinction between maintenance orders and orders for a once off payment of a specified sum of money, with only the latter being described as a civil judgment. Section 24(1) provides that ‘any order or direction made by a maintenance court under this Act shall have the effect of an order or direction of the said court made in a civil action’. And in terms of subsection (2), ‘any order made under sections 16(1)(a)(ii), 20 or 21(4) [which are for payment of once off specified sums of money] shall have the effect of a civil judgment of the maintenance court concerned and shall be executed as provided in Chapter 5’ of the Maintenance Act. [22] According to the appellant the distinction between the two categories is important, since a civil judgment is a final judgment, whereas a maintenance order is not, because it is variable following an enquiry in terms of Chapter 3 of the Maintenance Act. He contended that it is significant that no provision is made for 8 Reid v Reid [1992] 3 All SA 354 (E); 1992 (1) SA 443 (E) at 447C. the variation of orders for payment of a specified sum of money in terms of ss 16, 20 and 21 of the Maintenance Act. And, furthermore, it is only upon conviction for an offence of failure to pay in accordance with a maintenance order under section 31, that the court can make an order for payment of the arrears in terms of section 40(1) that will have the effect of a civil judgment. On a proper construction of these sections, the Maintenance Act clearly distinguishes between a maintenance order and a civil judgment, which contemplates a final judgment for payment of a specified sum of money. The latter is not subject to variation following an inquiry in terms of section 16 of the Maintenance Act, or so the argument went. [23] To my mind, this argument is also flawed. First, the attempt to draw a distinction between an ‘order’ and a ‘judgment’ is contrived and does not find any support in decided cases. In Zweni, this Court held that ‘the distinction between “judgment” and “order” is formalistic and outdated; it performs no function and ought to be discarded’. The court emphasised that ‘the distinction now is between “judgments or orders” (which are appealable with leave) and decisions which are not “judgments or orders”.9 [24] Second, section 24(1) of the Maintenance Act provides that a maintenance order shall have the effect of an order or direction of the court made in a civil action. This means that a maintenance order has the same legal consequences which flow from an order made in a civil action. In my view, there can be no clearer declaration of the legislature’s intention to visit upon a maintenance order the legal characteristics of a civil judgment. Paradoxically then, and properly construed, the sections relied upon by the appellant are destructive of his arguments. 9 Zweni v Minister of Law and Order (supra fn 1) at 532E-G. [25] In the light of these findings, there is no room for the interpretation of s 11(a)(ii) to give effect to the policy considerations mentioned by the appellant. The appellant contended that the following policy considerations militate against a finding that maintenance orders are subject to a 30-year prescription period: (a) maintenance orders are intended to provide for immediate living expenses and sustenance and should therefore be promptly enforced; (b) permitting a maintenance creditor to wait up to 30 years to enforce a maintenance order could cause hardship to a maintenance debtor who, having been lulled into a false sense of security by the inaction of the maintenance creditor, has not provided for the liability, only to be surprised by a vast claim for arrear maintenance, plus accrued interest; (c) a 30-year prescriptive period allows the potential for abuse where a maintenance creditor seeks to exploit a subsequent windfall in the life of the maintenance debtor; and (d) it is difficult for maintenance debtors to defend against stale maintenance claims, and unreasonable to expect them to preserve documents for up to 30 years to deal with such claims. [26] Apart from the fact that these are considerations that the legislature may contemplate if it desires to enact amendments to the maintenance laws, I am not convinced that these factors support the case for a shorter period of prescription. As was pointed out by the respondent’s counsel, there can be little doubt that a longer period of prescription is in the best interests of those vulnerable individuals who are usually the beneficiaries of maintenance orders, namely divorced women and minor children. Moreover, in my view, the potential prejudice that a 30-year prescription period would have for the maintenance debtor, is also exaggerated. Apart from the fact that any such prejudice can be avoided by the debtor doing what all responsible citizens are supposed to do, namely to comply with court orders, it is inconceivable that any such prejudice can arise when, in appropriate circumstances, the debtor would be able to apply for either prospective or retrospective variation of the order. In the event, the Constitutional Court’s pronouncement in Myathaza, to the effect that the three-year prescription period is meant for claims which are still to be determined, is dispositive of this argument. As mentioned earlier, a maintenance order fixes the obligations of the judgment debtor until such time as it is discharged or varied upon the establishment of new facts. [27] I am also of the view that the appellant’s extensive references to maintenance dispensations in foreign jurisdictions are misplaced. The fact that other countries have elected to enact statutory provisions to provide for specific periods of prescription in respect of maintenance orders cannot assist in the interpretation of the Prescription Act as enacted and implemented in South Africa. [28] The court a quo accordingly made the correct order and the appeal must fail. The appeal is accordingly dismissed with costs. __________________________ J E SMITH ACTING JUDGE OF APPEAL Mocumie JA and Kgoele AJA [29] We have read the main judgment by our colleague Smith AJA, with whom our other colleagues agree. We agree with most of what is said in it, including the order it proposes. We write separately, as our approach differs from the main judgment. Our approach endorses the approach adopted by the court of first instance (Francis AJ) and emphasises that the construction and interpretation as contended for by the appellant would perpetuate the hardships suffered by the most vulnerable groups in our society: women and children. This is so because, at the core, the issues in this appeal involve the proper interpretation and application of the Maintenance Act, which was mainly enacted to provide for a fair recovery of maintenance money, and to avoid the systemic failures to enforce maintenance orders and habitual evasion and defiance with relative impunity.10 [30] The words of the Constitutional Court in Bannatyne v Bannatyne and Another (Bannatyne),11 almost two decades now, still ring hollow for many women, because of maintenance debtors who take advantage of the weaknesses of the maintenance system to escape their responsibility by using every loophole in the law. This appeal highlights the disadvantages which the rightful court ordered-maintenance beneficiaries continue to suffer at the hands of maintenance defaulters. The appeal stems from the judgment of the Western Cape Division of the High Court, wherein Francis AJ (the high court) made a declaratory order that the maintenance obligations contained in the consent paper, which was made an order of the court, is 10 Bannatyne v Bannatyne and Another 2003 (2) BCLR 111; 2003 (2) SA 363 (CC) para 27; see also S S v V V- S [2018] ZACC 5; 2018 (6) BCLR 671 (CC). 11 Bannatyne v Bannatyne and Another 2003 (2) BCLR 111; 2003 (2) SA 363 (CC) (Bannatyne). subject to a 30-year prescription period in terms of s 11(a)(ii) of the Prescription Act 68 of 1969 (the Prescription Act). The appeal is with leave of the high court. [31] Mr Simon Roy Arcus (the appellant) and Mrs Jill Henree Arcus (the respondent), who was cited as the first respondent in the proceedings before the high court, were married some 19 years and two children were born out of their marriage. Although the children did not take part in this appeal, they were cited as the second and third respondents before the high court. The marriage was dissolved in terms of a consent agreement entered into between the parties, which was incorporated into the divorce order granted by the former Cape of Good Hope Provincial Division on 27 July 1993. The appellant failed to pay the cash maintenance portion agreed upon, namely the R2 000 per month in respect of the respondent and R750 per month in respect of each child from the date of the divorce (27 July 1993) until January 2019. The respondent did not demand payment of the arrear maintenance until December 2018. For that reason, the respondent caused a writ of execution to be issued against the appellant, dating back to July 1993, as the law allows her to, in the amount of R 3 223 190.70 (as amended). The writ of execution was stayed pending the outcome of the proceedings before the high court, which led to this appeal. The appellant also applied for retrospective discharge of his maintenance obligations under the divorce order, which application is pending before the magistrate court in terms of the Maintenance Act of 99 of 1989 (the Maintenance Act). [32] The appellant's case before the high court is summarised aptly by Francis AJ in para 9 as follows: ‘The applicant contends that a court order for the payment of maintenance pursuant to a consent paper gives rise to an ordinary “debt”, which prescribes in 3 years, and not a “judgment debt”, which only prescribes after 30 years. The applicant advanced the following arguments in support of this contention: A judgment debt is final and conclusive in nature and cannot be altered by the court which pronounced it, i.e. one the effect whereof is res judicata. Because maintenance orders are capable of being varied, substituted, discharged on good cause, or even varied with retrospective effect, a maintenance order is not final and conclusive and lacks the attributes of a final judgment and is, therefore, not a judgment debt. Various provisions of the Maintenance Act draw a distinction between maintenance orders for the payment of maintenance and orders for the payment of a once-off specified amount of money, with only the latter order giving rise to a civil judgment; and The policy imperatives underlying the Prescription Act are not served by interpreting the words “any judgment debt” in section 11(a)(ii) as including a maintenance order, regardless of the fact that such an order may emanate from a judgment of the High Court: a creditor is responsible for enforcing his or her rights timeously and must suffer the consequences of failing in this regard and, conversely, a debtor must be protected against a stale claim which has existed for such a long time that it is difficult to defend against it.’ [33] For the respondent, it was contended that, whilst it is possible for a maintenance order to be varied as the circumstances change (in terms of s 8(1) of the Divorce Act 70 of 1979 (the Divorce Act)), this does not mean that when a consent paper is made an order of court, as in this case, the dispute between the parties is not definitively settled at that point in time. It was submitted on behalf of the appellant that although it is correct that once a court has made a consent order, it is functus officio, however, in relation to matrimonial disputes, that does not apply in all circumstances. The principle of res judicata only applies to those terms of the order which deal with the proprietary rights of the parties and the payment of maintenance to one of the spouses where there is a non-variation clause. In PL v YL,12 it was held that: ‘A further exception to the general rule that an order of court, once pronounced, is final and immutable, is created by section 8(1) of the Divorce Act. As stated, in the absence of non-variation clause in the settlement agreement, it permits the court to rescind, vary or suspend a maintenance order granted earlier. Further, there exists in principle no reason why the parties may not subsequently seek an amendment thereof by mutual consent, or in circumstances where the order through error or oversight does not correctly reflect their agreement. Not only is the mandate of the court to exercise its discretion in terms of section 7(1) of the Divorce Act derived from the settlement agreement, but the consent order itself is based on the terms of that agreement. The legal nature of a consent order was considered by the appeal court in Swadif (Pty) Ltd v Dyke NO. It was held that where the purpose of the granting of the consent judgment is to enable the parties to the agreement to enforce the terms thereof through the process of the court, should the need therefor arise, the effect of the order is to replace the right of action on the agreement by a right to execute on the judgment: “[i]t seems realistic, and in accordance with the views of the Roman- Dutch writers, to regard the judgment not as novating the obligation under the bond, but rather as strengthening or reinforcing it. The right of action, as Fannin J puts it, is replaced by the right to execute, but the enforceable right remains the same.” The consent order accordingly does not have the effect of eliminating the contractual basis thereof. Rather, through operation of the res judicata principle, the judgment constitutes a bar to any action or proceedings on the underlying settlement agreement. The provisions of the agreement are instead to be enforced by the remedies available to a judgment creditor on a judgment. It is of course always open to the parties to abandon the judgment in whole or in part and to enter into a new agreement. Save for the aforegoing, the effect of the consent order is otherwise that it renders the issues between the parties in relation to their proprietary rights and the payment of maintenance to a former spouse, where the agreement includes a non-variation clause, res judicata, and thus effectively achieves a “clean break” as envisaged by the scheme of the Divorce Act.’ 12 PL v YL [2013] 4 All SA 41 (ECG); 2013 (6) SA 28 (ECG) para 46; see also Swadiff (Pty) Ltd v Dyke N O 1978 (1) SA 928 (A) at 939E. [34] Having considered the submissions of both parties and the applicable legal principles, the high court concluded on the basis of ss 24, 26 and 40 of the Maintenance Act that because the maintenance order which the court granted upon the divorce of the parties was a civil judgment, the failure by the appellant to pay maintenance for all those years was a judgment debt which triggered the application of s 11(a)(ii) of the Prescription Act and therefore, the prescription period of 30 years. [35] The high court subsequently granted an order that the maintenance obligations contained in the consent paper that was made an order of court on 27 July 1993 under case number 7177/1993, is subject to a 30-year period as prescribed in s 11(a)(ii) of the Prescription Act. It is this order that the appellant challenges with leave of the high court. [36] The sole issue for determination before this Court, as was in the high court, is whether an undertaking to pay maintenance in a divorce consent paper which was made an order of court gave rise to a ‘judgment debt’ as contemplated in s 11(a)(ii) with a prescriptive period of 30 years, or ‘any other debt’ as contemplated in s 11(d) of the Prescription Act, with a prescription period of three years. [37] This Court, must therefore consider whether the high court interpreted the word ‘judgment debt’ as contemplated in s 11(a)(ii) of the Prescription Act, with a prescriptive period of 30 years, and ‘any other debt’ as contemplated in s 11(d) of the Act, with a prescription period of three years, correctly. For this purpose, the proper approach to adopt in the interpretation of the statutes implicated, namely, the Prescription Act read with the Maintenance Act as well as the Divorce Act, is as was recently restated in C:SARS v United Manganese of Kalahari (Pty) Ltd13 to take into consideration ‘. . . 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 inevitable point of departure [being] the language used in the provision under consideration’. [38] The section at the heart of this appeal, s 11 of the Prescription Act provides: ‘The periods of prescription of debts The periods of prescription of debts shall be the following: (a) thirty years in respect of– (i) any debt secured by a mortgage bond; (ii) any judgment debt; (iii) any debt owed to the State. . . in respect of the right to mine minerals or other substances; . . . (d) Save where an Act of Parliament provides otherwise, three years in respect of any other debt.’ [39] As a starting point the law on consent papers incorporated into agreements including divorce orders, commonly known as settlement agreements or deeds of settlement, has been settled by the Constitutional Court in Eke v Parsons (Eke)14 as follows: ‘The effect of a settlement agreement order is to change the status of the rights and obligations between the parties. Save for litigation that may be consequent upon the nature of the particular order, the order brings to finality to the lis between the parties; the lis becomes res judicata (literally “a matter judged”). It changes the terms of a settlement agreement to an enforceable 13 C: SARS v United Manganese of Kalahari (Pty) Ltd [2020] ZASCA 16; 2020 (4) SA 428 (SCA). 14 Eke v Parsons [2015] ZACC 30; 2015 (11) BCLR 1319 (CC); 2016 (3) SA 37 (CC) para 31 citing with approval the judgment of the full court in PL v YL 2013 [2013] 4 All SA 41 (ECG); 2013 (6) SA 28 (ECG). order. . . .’ [40] On the issue of the applicable period of prescription, in Myathaza v Johannesburg Metropolitan Bus Services (SOC) Limited t/a Metrobus and Others,15 the Constitutional Court held that the three year prescription is meant for claims and disputes ‘. . . which are yet to be determined and in respect of which evidence and witnesses may be lost if there is a long delay’. In Reid v Reid,16 the court stated, ‘. . . [w]hen the consent paper is then made an order of Court, res judicata is established on the just amount payable as maintenance . . .’. [41] Following the above precedents, it suffices to state the obvious, which was common cause between the parties, that the consent paper between the appellant and the respondent which was incorporated into their divorce order created a lis between them and the issue which was in dispute became res judicata. Such order became enforceable inter partes upon default or non-compliance by any of the parties. The parties only differed on whether it had all the attributes of a final order or not, and thus ‘a judgment debt’ or ‘any other [ordinary] debt’, which if breached became enforceable, and upon a warrant of execution to satisfy it being issued, it remained unsatisfied if it prescribed within three years or 30 years in terms of the Prescription Act. [42] The word ‘judgment debt’ is not defined in the Prescription Act and so too the word ‘any other judgment’. In its plain meaning ‘a judgment debt’ means an amount of money in a judgment awarded to the successful party which is owed to them by 15 Myathaza v Johannesburg Metropolitan Bus Services (SOC) Limited t/a Metrobus and Others [2016] ZACC 49; 2017 (4) BCLR 473 (CC); 2018 (1) SA 38 (CC) para 44. 16 Reid v Reid [1992] 3 All SA 354 (E); 1992 (1) SA 443 (E) at 447B. the unsuccessful one. Any other judgment in the context of maintenance means any order granted by a court, either the magistrates' court or the high court. The context in which the meaning of these words must be established is the maintenance dispute which was finally settled between the parties by a consent paper. To interpret the Prescription Act and whether three years or 30 years is applicable to the arrears which the appellant owed over 19 years, this Court must look at the Prescription Act in the context of the Maintenance Act with specific reference to three sections, namely, ss 24, 26 and 40. [43] Under the Maintenance Act, when a court orders a maintenance debtor to make payment of a sum of money in terms of s 24,17 that order has the effect of a civil judgment and it shall be executed as provided. On the language used, ‘a civil judgment’; this attracts a prescription period of 30 years. Section 2618 read in conjunction with ss 7(1)19 and 8(1)20 of the Divorce Act provides that the same 17 Section 24 provides: ‘Effect of orders of maintenance court (1) Save as is otherwise provided in this Act, any order or direction made by a maintenance court under this Act shall have the effect of an order or direction of the said court made in a civil action. (2) Any order made under section 16(1)(a)(ii), 20 or 21 (4) shall have the effect of a civil judgment of the maintenance court concerned and shall be executed as provided.’ 18 Section 26 provides: ‘Enforcement of maintenance or other orders (1) Whenever any person – (a) against whom any maintenance order has been made under this Act has failed to make any particular payment in accordance with that maintenance order; or (b) against whom any order for the payment of a specified sum of money has been made under section 16(1)(a)(ii), 20 or 21(4) has failed to make such a payment, such order shall be enforceable in respect of any amount which that person has so failed to pay, together with any interest thereon– (i) by execution against property as contemplated in section 27; (ii) by the attachment of emoluments as contemplated in section 28; or (iii) by the attachment of any debt as contemplated in section 30.’ 19 Section 7(1) provides that: ‘A court granting a decree 'of divorce may in accordance with a written agreement between the parties make an order with regard to the division of the assets of the parties or the payment of maintenance by the one party to the other.’ 20 Section 8(1) provides that: ‘A maintenance order or an order in regard to the custody or guardianship of, or access to, a child, made in terms of this Act, may at any time be rescinded or varied or, in the case of a maintenance order or an order with regard to access to a child, be suspended by a court if the court finds that there is sufficient reason therefor . . . .’ enforcement mechanisms may be applied for the recovery of any monies that may be owing pursuant to a maintenance order or an order for a specified sum of money made by a maintenance court upon an inquiry (at an initial stage) and thereafter, any time for a rescission, variation or suspension if the court finds that there are sufficient reason therefor and even be substituted or discharged on good cause shown by a maintenance court. This section makes reference to the recovery of monies pursuant to a maintenance order. This means that it is a civil judgment debt. [44] Over and above, s 4021 of the Maintenance Act provides that an order of a court that grants an order for the recovery of arrear maintenance shall have the effect of a civil judgment of the court. The section categorically states that that order is a civil judgment. As the high court correctly found, this section (s 40) buttresses the reasoning that a maintenance order has the effect of a civil judgment, because ‘if an order for arrear maintenance payments is to be regarded as a civil judgment, why should the principal amount payable in terms of the original maintenance order be considered to be something other than a civil judgment?’. [45] Furthermore, based on the acceptance of Eke that once a settlement agreement has been made an order of court, it is an order like any other order and changes the terms of the settlement agreement to an enforceable court order, a maintenance order is a civil judgment subject to s 11(a)(ii) of the Prescription Act. In our view and for the purposes of the conclusion we reach on the issue of the applicable period of 21 Section 40(1) provides that: ‘Recovery of arrear maintenance A court with civil jurisdiction convicting any person of an offence under section 31(1) may, on the application of the public prosecutor and in addition to or in lieu of any penalty which the court may impose in respect of that offence, grant an order for the recovery from the convicted person of any amount he or she has failed to pay in accordance with the maintenance order, together with any interest thereon, whereupon the order so granted shall have the effect of a civil judgment of the court and shall subject to subsection (2), be executed in the prescribed manner.’ prescription, whether the order is incorporated in a deed of settlement or not in this matter, makes no difference. This we say because, throughout all the relevant sections under Chapter 5, the Maintenance Act makes reference to ‘judgment’ and ‘order’. The terms cannot be interpreted other than with reference to a civil judgment and order. Some of the provisions, such as s 24(1) in particular, even make direct reference to ‘civil judgment’. The same applies to s 24(2). There is therefore, no justifiable distinction that can be drawn between ss 24(1) and (2) if one applies the trite approach on the interpretation of legislation, although differently couched.22 The distinction sought to be made by the appellant between an order and a judgment that the legislature intended for 3 years’ prescription to apply to an order and 30 years to a judgment is superficial and does not exist in law. [46] In conclusion, it is indisputable that the consent paper which contained the agreement concluded between the appellant and the respondent was incorporated into their divorce order and became a court order; that the maintenance question (dispute) was determined; and that from that moment (in 1993) it was beyond any doubt that the maintenance dispute between them was finally disposed of. Thus, it could hardly be revisited, except if it was to be varied on the basis of the original order and only when the circumstances which were applicable at the time of the original order have changed; which the appellant did not do. Besides, a claim of maintenance under a court order is exigible without any averment or proof that the respondent had, in order to maintain herself, incurred debts during the period in question.23 That the respondent did not claim the arrears over such a long period is irrelevant for the purposes of the issue in dispute; that of which period of prescription is applicable. The high court was thus correct to hold that ‘the maintenance 22 See footnote 15 above. 23 Strime v Strime [1983] 2 All SA 386 (C); 1983 (4) SA 850 (C) at 852D. obligations contained in the consent paper that was made an order of this court on 27 July 1993 under case number 7177/93, [was a civil judgment] and is subject to a 30-year period as prescribed in section 11(a)(ii) of the Prescription Act’. [47] For the sake of completeness, the appellant’s attempt to make a case based on public policy is simply unfounded. The submission was made that the policy imperatives underlying the Prescription Act are not served by interpreting the words ‘any judgment debt’ in s 11(1)(a)(ii) of the Prescription Act as including a maintenance order, regardless of which court granted the order. Furthermore, that because a maintenance order is intended to provide for immediate living expenses and substance, it should, therefore, be promptly enforced. To enforce it much later would result in great financial hardship for a maintenance debtor who has been lulled into a false sense of security by the inaction of the maintenance creditor and who has not provided for the liability. It would also be unreasonable and burdensome to expect a maintenance debtor to keep records for up to 30 years to deal with possible maintenance claims, so the submission was concluded. [48] What is extremely troubling is that the prejudice the appellant decries affects the maintenance creditors (who are predominantly, as this case demonstrates, women and children) far more than maintenance debtors (who are generally men). The submission was made by the appellant that to enforce the order and avoid prescription, a maintenance creditor had the option of approaching the court every three years. However, this will definitely cause hardship to the maintenance creditors, as they will be compelled to approach the courts every three years to enforce their claims to avoid prescription. In Bannatyne, the Constitutional Court recognised that the gendered nature of the maintenance system is undeniable. We can, therefore, not interpret the Prescription Act in a manner that will be at odds with the purpose of the Maintenance Act. To do so will be to the disadvantage of a maintenance creditor and will fly in the face of what the Maintenance Act was enacted to do, namely, to avoid the systemic failures to enforce maintenance orders and habitual evasion and defiance with relative impunity.24 It would also give protection to maintenance debtors more than was intended for. Consequently, the order of the high court ought to stand. Order [49] It is for these additional reasons that we support the order of the main judgment dismissing the appeal with costs. ______________________ B C MOCUMIE JUDGE OF APPEAL ______________________ A M KGOELE ACTING JUDGE OF APPEAL 24 Bannatyne para 27. APPEARANCES For appellant: D M Davis SC (with T Smit) Instructed by: Myburgh Attorneys Incorporated, Bellville Webbers Attorneys, Bloemfontein For respondent: A Kantor SC Instructed by: Salvatore Puglia Attorneys, Cape Town Du Toit Lambrechts 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: 21 January 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 Simon Roy Arcus v Jill Henree Arcus (4/2021) [2022] ZASCA 9 (21 January 2022) The Supreme Court of Appeal (SCA) today dismissed, with costs, an appeal brought by Simon Roy Arcus (the appellant). The appeal stemmed from the judgment of the Western Cape Division of the High Court, wherein Francis AJ (the court a quo) made a declaratory order to the effect that the maintenance obligations contained in the consent paper, pursuant to the divorce of the appellant and Jill Henree Arcus (the respondent), which was made an order of the court, was subject to a 30-year prescription period in terms of s 11(a)(ii) of the Prescription Act 68 of 1969 (the Prescription Act). The circumscribed issue for determination in this appeal was whether an undertaking to pay maintenance in a divorce consent paper, which was made an order of court, gave rise to a ‘judgment debt’ as contemplated in section 11(a)(ii) of the Prescription Act, with a prescriptive period of 30 years, or any ‘other debt’, as contemplated in section 11(d) of the Prescription Act, with a prescriptive period of three years. Smith AJA (Dambuza and Hughes JJA concurring) (the majority judgment) found that a resolution of this appeal, to a great extent, depended on the determination of the question of whether maintenance orders possessed the essential nature and characteristics of civil judgments. Pursuant to a survey of authoritative pronouncements made by our courts in this regard, the majority judgment found that it was manifest that maintenance orders were: (a) dispositive of the relief claimed and definitive of the rights of the parties, to the extent that they decided a just amount of maintenance payable based on the facts in existence at that time; (b) final and enforceable until varied or cancelled; (c) capable of execution without any further proof; and (d) appealable. The majority judgment found that a maintenance order had the same legal consequences which flowed from an order made in a civil action. A maintenance order fixed the obligations of the judgment debtor until such time as it was discharged or varied upon the establishment of new facts, and was therefore not subject to a three-year prescription period. Thus, the majority judgment held that the court a quo made the correct order and the appeal accordingly failed. Mocumie JA and Kgoele AJA wrote a separate concurring judgment, as, although largely in agreement with the main judgment, the approach taken was different. The concurring judgment’s approach endorsed the approach adopted by the court of first instance (Francis AJ) and emphasised that the construction and interpretation as contended for by the appellant would perpetuate the hardships suffered by the most vulnerable groups in our society: women and children. This was so because, at the core, the issues in this appeal involved the proper interpretation and application of the Maintenance Act, which was mainly enacted to provide for a fair recovery of maintenance money, and to avoid the systemic failures to enforce maintenance orders and habitual evasion and defiance with relative impunity. The concurring judgment found that the distinction sought to be made by the appellant between an order and a judgment that the legislature intended for 3 years’ prescription to apply to an order and 30 years to a judgment was superficial and did not exist in law. It found further that: it was indisputable that the consent paper which contained the agreement concluded between the appellant and the respondent was incorporated into their divorce order and became a court order; that the maintenance question (dispute) was determined; and that from that moment (in 1993) it was beyond any doubt that the maintenance dispute between them was finally disposed of. Thus, it could hardly be revisited, except if it was to be varied on the basis of the original order and only when the circumstances which were applicable at the time of the original order had changed, which the appellant did not do. Besides, a claim of maintenance under a court order was exigible without any averment or proof that the respondent had, in order to maintain herself, incurred debts during the period in question. That the respondent did not claim the arrears over such a long period was irrelevant for the purposes of the issue in dispute; that of which period of prescription is applicable. The high court was thus correct. Furthermore, Mocumie JA and Kgoele AJA found that one could not interpret the Prescription Act in a manner that would be at odds with the purpose of the Maintenance Act. To do so would be to the disadvantage of a maintenance creditor and would fly in the face of what the Maintenance Act was enacted to do, namely, to avoid the systemic failures to enforce maintenance orders and habitual evasion and defiance with relative impunity. It would also give protection to maintenance debtors more than was intended for. Consequently, the order of the high court ought to stand. ~~~~ends~~~~

3253

non-electoral

2007

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case number : 521/06 Reportable In the matter between : BODY CORPORATE OF GREENACRES APPELLANT and GREENACRES UNIT 17 CC FIRST RESPONDENT GREENACRES UNIT 18 CC SECOND RESPONDENT CORAM : HARMS ADP, CLOETE, LEWIS, PONNAN et COMBRINCK JJA HEARD : 13 NOVEMBER 2007 DELIVERED : 28 NOVEMBER 2007 Summary: Sectional Titles Act 95 of 1986: Arbitration: Management rule 71(1) interpreted. Neutral citation: This judgment may be referred to as Body Corporate of Greenacres v Greenacres Unit 17 CC [2007] SCA 152 (RSA). _________________________________________________________ CLOETE JA/ CLOETE JA: [1] The appellant is the Body Corporate of Greenacres, a body corporate as contemplated in s 36 of the Sectional Titles Act1 and to which it would be convenient to refer as ‘the body corporate’. The first respondent is Greenacres Unit 77 CC which, as its name implies, is the registered owner of unit 17 in the Greenacres sectional title scheme. It would be convenient to refer to the first respondent as ‘the owner’. The relief sought on appeal does not concern the second respondent (the registered owner of another unit in the Greenacres sectional title scheme) and it should not have been joined in these proceedings. [2] The body corporate claims that it is owed levies and electricity charges in respect of the unit by the owner. The owner’s defence to the claim is that it undertook, at its expense, work for the completion of parts of the common property, which the body corporate was obliged to undertake but which it had requested the owner to perform; and that the body corporate’s claim was extinguished by set-off. The parties’ rival contentions were set out in pleadings in an action instituted in the Randburg Magistrate’s Court. Those proceedings were withdrawn by the body corporate and arbitration proceedings instituted. The owner delivered a special plea alleging that the latter proceedings were not competent in that only a court of law could determine the body corporate’s claim. The arbitrator held that the dispute between the parties was indeed arbitrable. The court a quo (Snyders J), in a judgment which has been reported as Greenacres Unit 17 CC v Body Corporate of Greenacres,2 held the contrary at the suit of the owner who was the first applicant before that court. The body corporate (which was the first respondent) has appealed to this court with the leave of the court a quo. [3] The legislative framework relevant to the appeal is the following. Section 35(1) of the Act provides: 1 95 of 1986. 2 [2006] 4 All SA 78 (W). ‘A scheme shall as from the date of the establishment of the body corporate be controlled and managed, subject to the provisions of this Act, by means of rules.’ Section 35(2) provides: ‘The rules shall provide for the control, management, administration, use and enjoyment of the sections and the common property, and shall comprise ─ (a) management rules, prescribed by regulation . . . . (b) conduct rules, prescribed by regulation . . . ‘. Regulation 303 provides in subregulation (1) that4 the management rules as contemplated in s 35(2)(a) shall be the rules set out in Annexure 8, and in subregulation (5) that the conduct rules as contemplated in s 35(2)(b) shall be those rules set out in Annexure 9, to the regulations. Regulation 39 provides: ‘The provisions of the Arbitration Act, 1965 (Act 42 of 1965), shall, insofar as those provisions can be applied, apply mutatis mutandis with reference to arbitration proceedings under the Act.’ Management rule 71(1) was subsequently inserted5 into Annexure 8. It provides: ‘Any dispute between the body corporate and an owner or between owners arising out of or in connection with or related to the Act, these rules or the conduct rules, save where an interdict or any form of urgent or other relief may be required or obtained from a Court having jurisdiction, shall be determined in terms of these rules.’ The rule goes on to provide for the procedure for arbitration and to prescribe time limits within which steps are to be taken. [4] The issue in the present proceedings revolves primarily around the correct interpretation of the third saving provision in rule 71(1), namely: ‘Save where . . . any form of . . . other relief may be required or obtained from a Court having jurisdiction.’ This provision cannot be interpreted literally as covering any relief which a court may grant, for then it would be as wide as the rule itself and operate to negate it. That would plainly be absurd. [5] In my view the key to the interpretation of the provision at issue is the wide 3 Of the regulations made in terms of s 55 of the Act and contained in GN R664 published in Government Gazette 11245 of 8 April 1988. 4 Subject to subregulations (2) and (3), which are irrelevant for present purposes. 5 By GN R1422 contained in Government Gazette 18387 of 31 October 1997. wording of the operative part of the rule. The word ‘any’, which introduces the rule, is ‘a word of wide and unqualified generality’.6 Each of the phrases ‘arising out of’, ‘in connection with’, and ‘related to’ is also of wide import and the combination of all three evidences an intention on the part of the Legislature to cast the net as widely as possible. The inclusion of the Act and the conduct rules with the management rules is in itself an indication that the Legislature wished to regulate by arbitration almost every dispute which might arise between a body corporate and an owner, and between the owners themselves. The same intention appears from rule 71(8)7 which reads as follows: ‘Notwithstanding that the Arbitration Act, No. 42 of 1965, makes no provision for joinder of parties to an arbitration without their consent thereto, should a dispute arise between the body corporate and more than one owner or between a number of owners arising out of the same or substantially the same cause of action, or where substantially the same order would be sought against all the parties against whom the dispute has been declared, such party shall be automatically joined in the arbitration by notice thereof in the original notice of dispute given in terms of sub-rule (2).’ [6] Against this background the saving provision at issue should in my view be interpreted narrowly as excluding only such relief as an arbitrator is not competent to give, whether by virtue of the provisions of the Act or otherwise. The last part of the rule should accordingly be read as follows: save where an interdict or any form of urgent relief may be required, or other relief has to be obtained, from a court having jurisdiction. The purpose behind the inclusion of the provision was in my view to make it clear that although the operative part of the rule is to be interpreted widely for the purpose of ascertaining what disputes have to be subjected to arbitration, it is not to be interpreted as conferring jurisdiction on an arbitrator to grant all forms of relief which may be sought consequent upon such determination; and accordingly, if the relief sought cannot be granted by an arbitrator, arbitration on a dispute which would otherwise fall within the operative part of the rule, would nevertheless not be competent in terms of the rule. 6 Per Innes CJ in R v Hugo 1926 AD 268 at 271. 7 Inserted by GN R438 contained in Government Gazette 27561 published on 13 May 2005. [7] So far as the Act is concerned, two examples may be given where an arbitrator will not have jurisdiction: s 46 and s 48. Section 46 deals with the appointment of an administrator who, to the exclusion of the body corporate, has some or all of the powers of the body corporate. The discretion whether or not to appoint an administrator, to determine which powers of the body corporate shall be vested in the administrator, and to remove the administrator is vested in the court, ie, in terms of the definition in s 1, the provincial or local division of the High Court having jurisdiction. Section 48 deals with the destruction of, or damage to, building(s) comprising the scheme. It confers wide powers on a court. A court may make an order that the building(s) shall be deemed to have been destroyed8 and ‘impose such conditions and give such directions as it deems fit for the purpose of adjusting the effect of the order between the body corporate and the owners and mutually among the owners, the holders of registered sectional mortgage bonds and persons with registered real rights’9. A court may also10 authorise a scheme for the rebuilding and reinstatement in whole or in part of the building(s), and for the transfer of the interests of owners of sections which have been wholly or partially destroyed, to the other owners; and in this regard the court: ‘may make such order as it may deem necessary or expedient to give effect to the scheme.’ A dispute in relation to any of the matters in respect of which a discretion is vested in the court by the Act could not be determined by an arbitrator acting under rule 71 of the management rules, for such an interpretation of the rule would have the impermissible consequence that the rule would conflict with the Act. [8] More general examples of relief, which an arbitrator is not competent to give and which the saving provision must also be interpreted as covering, would be an order for the inspection or the preservation of property, pending the resolution of a dispute relating to such property. The power to make such orders is conferred on a court11 in terms of s 21(1)(e) of the Arbitration Act read with regulation 39 made 8 Section 48(1)(c). 9 Section 48(2). 10 Section 48(3). 11 Defined in s 1 of the Arbitration Act to mean any court of a provincial or local division having jurisdiction. under the Act quoted in para 3 above. An arbitrator acting under s 71(1) would not have this power. [9] It was submitted on behalf of the body corporate that because of the express wording of the saving provision at issue (‘may be obtained’) the meaning to be given to the saving provision should extend also to relief that may (not only must) be sought from a court. That was the approach of the court a quo, which reasoned:12 ‘[T]he saving provision has to be read to exclude interdictory relief, urgent relief and any other relief which may be required or obtained from a court having jurisdiction. Other relief obtains practical content if read with section 37(2) which empowers a body corporate to recover levies from an owner by way of action in a court of competent jurisdiction. The recovery of levies is therefore relief which may be required or obtained from a court having jurisdiction and would fall within the ambit of the saving provision of rule 71(1).’ Section 37(2) provides: ‘Any contributions levied under any provision of subsection (1)13, shall be due and payable on the passing of a resolution to that effect by the trustees of the body corporate, and may be recovered by the body corporate by action in any court (including any magistrate’s court) of competent jurisdiction from the persons who were owners of units at the time when such resolution was passed.’ The submission on behalf of the body corporate was that rule 71 (which makes arbitration compulsory) cannot contradict s 37(2) (which permits an action in a court) because a regulation which is inconsistent with the statute under which it was made, is invalid under the Constitution according to the doctrine of legality.14 But properly understood, the rule and the section deal with two different situations. In order for the 12 Above, n 2, at 80h-j. 13 Which obliges a body corporate to establish for administrative purposes a fund, and to require the owners, whenever necessary, to make contributions to the fund for the purposes of satisfying any claims against the body corporate. 14 Pharmaceutical Manufacturers Association of SA : In re ex parte President of the Republic of South Africa 2000 (2) SA 674 (CC) para 50. rule to operate, there must be a dispute.15 Absent a dispute ─ for example, where an owner ignores a demand for payment of levies or simply refuses, without more, to pay them ─ there can be no arbitration, as there is nothing for an arbitrator to determine;16 and the body corporate is entitled to institute a court action in terms of s 37(2) for recovery of the levies. It was submitted on behalf of the body corporate that this would give rise to an anomaly as an owner might raise a dispute in the court proceedings and then require arbitration.17 But such a situation frequently arises in the case of consensual arbitrations. What happens is that the court proceedings are stayed, the dispute goes to arbitration and, if determined in favour of the claimant, the consequent arbitral award can be made an order of court to enable the claimant to execute against the respondent. The whole purpose of rule 71 is to provide an expeditious and inexpensive method of determining disputes and the operative part of the rule is formulated in wide terms, as I have already pointed out. I see no reason why a dispute as to the liability of an owner to pay levies should be excluded from its operation and there is in my view no basis to do so. [10] For the sake of completeness I shall deal also with the argument advanced on behalf of the body corporate. It was that the saving provision should be read as being limited to an interdict, and other relief in connection with the interdict, granted 15 Rule 71(2) also provides for a ‘complaint’ to be referred to arbitration. The first reference to ‘complaint’ in the rule was inserted by GN R438 contained in Government Gazette 27561 published on 13 May 2005. That rule now provides: ‘If such a dispute or complaint arises, the aggrieved party shall notify the other interested party or parties in writing and copies of such notification shall be served on the trustees and the managing agents, if any and should the dispute or complaint not be resolved within 14 days of such notice, either of the parties may demand that the dispute or complaint be referred to arbitration . . .’. (Underlining supplied.) It may be that an arbitrator is called upon to investigate a complaint and act as a mediator; or it may be that the complaint has to have given rise to a dispute before the services of an arbitrator must be engaged (which is the view of Butler, The Arbitration of Disputes in Sectional Schemes under Management Rule 71 (1998) vol 9 Stellenbosch Law Review 256 at 260). It is not necessary for the purposes of the appeal to express any opinion in this regard. 16 Withinshaw Properties (Pty) Ltd v Dura Construction Co (SA) (Pty) Ltd 1989 (4) SA 1073 (A) at 1079B-G; Parekh v Shah Jehan Cinemas (Pty) Ltd 1980 (1) SA 301 (D) at 304E-G. 17 It is not necessary to consider the position where no demand for arbitration is made by the owner. It may be that the court action would continue, as in the case of a consensual arbitration; or it may be that a body corporate is obliged to proceed to arbitration under rule 71 because legislation requires such a dispute to be resolved by arbitration. If the latter is the position, a court could raise the point mero motu. as a matter of urgency. This submission was influenced by what Prof Butler has suggested in an article,18 namely: ‘The reference to “other relief” should clearly not be taken literally and should be restricted to urgent relief similar to an interdict which is directed at preventing serious prejudice to one party pending the arbitrator’s award or to ensuring that a party will still be in a position to comply with the award.’ Cleaver J (D Potgieter AJ concurring) in his unreported judgment in Balmoral Heights No 39 BK v The Trustees for the Time Being of the Balmoral Heights Body Coporate19 was inclined to Prof Butler’s view, but did not come to a definite conclusion. With respect, I see no reason to confine the saving provisions in rule 71 to urgent relief, or to relief granted in connection with or similar to an interdict. The phrase ‘or other relief’ is used in contradistinction both to an interdict and to urgent relief; ‘other’ does not mean ‘similar’; and the relief excluded may be neither urgent nor dependent on an interdict being granted.20 [11] I therefore conclude that the arbitration provisions prescribed by rule 71 are applicable to disputes described in sub-rule (1) between the parties there referred to, save where an interdict or any form of urgent relief is required, and save where an arbitrator is not competent to grant the relief sought. It follows that the arbitrator was correct in determining that the dispute between the Body Corporate and the owner was arbitrable and the court a quo was incorrect in finding the contrary. [12] The following order is made: (1) The appeal is allowed, with costs. (2) The order of the court a quo relating to the first respondent on appeal (the first 18 Above, n 15, at 264. 19 CPD case A698/2001; 4 October 2002; para 14. In that matter an owner claimed loss of rental income as damages from the body corporate which, the owner alleged, had failed to maintain the common property with the result that water penetrated the unit owned by it. The court correctly upheld a special plea that the dispute had to be arbitrated under rule 71 because it arose out of the body corporate’s alleged failure to comply with its duties under the Act. (The court no doubt had in mind the duty imposed by s 37(1)(j) viz ‘properly to maintain the common property (including elevators) and to keep it in a state of good and serviceable repair’). 20 For example, an order for the inspection of property ─ see para 8 above. applicant in the court a quo) is set aside and the following order is substituted: ‘The first applicant’s application is dismissed, with costs.’ ______________ T D CLOETE JUDGE OF APPEAL Concur: Harms ADP Lewis JA Ponnan JA Combrinck JA

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 November 2007 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 BODY CORPORATE OF GREENACRES v GREENACRES UNIT 17 CC 1. The Supreme Court of Appeal today decided that all disputes between a body corporate of a sectional title scheme and an owner, and between owners amongst themselves, which arise out of the Sectional Titles Act, the management rules and the conduct rules, must be submitted to arbitration ─ unless the arbitrator is not competent to grant the relief sought (such as an interdict). 2. The body corporate brought arbitration proceedings against an owner for payment of arrear levies. The owner’s defence was that he had paid for the completion of certain parts of the common property at request of the body corporate and that the amount owing to him in consequence exceeded the amount due to the body corporate. 3. The owner argued that the Act permitted the body corporate to recover unpaid levies in a court and that this is the procedure it should have followed. The SCA held that court procedure was apposite only where there was no dispute to be arbitrated upon, but where there was a dispute, an arbitrator had to be appointed to resolve it unless the relief sought could not be granted in arbitration proceedings. --ends--

448

non-electoral

2016

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not reportable Case No: 190/2015 In the matter between: MV ‘SHARK TEAM’ FIRST APPELLANT GRANT TUCKETT SECOND APPELLANT WHITE SHARK PROJECTS CC THIRD APPELLANT and SARAH TALLMAN RESPONDENT Neutral citation: MV ‘Shark Team’ v Tallman (190/2015) [2016] ZASCA 46 (31 March 2016) Coram: Cachalia, Willis and Zondi JJA and Plasket and Kathree- Setiloane AJJA Heard: 22 February 2016 Delivered: 31 March 2016 Summary: Admiralty Jurisdiction Regulation Act 105 of 1983 – maritime claim involving loss of life at sea – boat capsized when struck by unusually large wave – whether skipper of boat negligent – no negligence established – appeal allowed and claim for damages dismissed. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from Western Cape Division of the High Court, Cape Town (Freund AJ sitting as court of first instance): 1 The appeal is upheld with costs, including the costs of two counsel. 2 The order of the court below is set aside and replaced with the following order: „(a) The plaintiff‟s action is dismissed. (b) The plaintiff shall pay the defendants‟ costs, including the costs of two counsel and the qualifying expenses of: (i) Dr John Zietsman; (ii) Mr Michael Fiontann Hartnett; (iii) Professor Michel Tipton; (iv) Dr Cleeve Robinson; (v) Mr Robert Fine; (vi) Mr Wilfred Chivell; and (vii) Dr Linda Liebenberg.‟ ______________________________________________________________ JUDGMENT ______________________________________________________________ Plasket AJA (Cachalia, Willis and Zondi JJA and Kathree-Setiloane AJA concurring): [1] The great white shark (Carcharodon Carcharias) has been described as „one of the largest and most powerful predators on earth‟.1 Because of its size and strength, it was hunted by sports fishermen and, presumably because of the danger it was seen to pose to bathers and divers, by those 1 Rudi van der Elst A Guide to the Common Sea Fishes of Southern Africa 2 ed (1993) at 54. It is described as a „huge, spindle-shaped shark with small conspicuous black eyes, a blunt, conical snout and large triangular, saw-edged teeth‟ and grows to as much as 7.1 metres in length. (L J V Compagno, D A Ebert and M J Smale The Sharks and Rays of Southern Africa at 44). who had „taken it upon themselves to rid the oceans of these sharks‟.2 This, together with the slow growth rate of the great white shark, its low fecundity and its vulnerability to being caught in open-ocean gill-nets, rendered it a species vulnerable to over-exploitation. In 1991, it was declared a protected species in South Africa. As a result, the killing of great white sharks is unlawful.3 In the wake of this, a new industry developed: about 20 years ago, operators began to take paying clients to sea to view great white sharks from cages lowered into the water alongside ski-boats or similar craft. [2] This appeal concerns the only tragedy in South Africa that has befallen such a craft, the 10.7 metre long catamaran-hull ski-boat MV ‘Shark Team’. At about 10h00 on Sunday 13 April 2008, while anchored and engaged in viewing great white sharks in an area called the Geldsteen to the west of Dyer Island and some eight and a half kilometres south of Kleinbaai on the southern Cape coast, a swell broke in front of or on Shark Team and capsized her. Most of those on board – paying tourists, crew and research volunteers – were thrown into the sea, among the great white sharks that had been attracted to the boat by chum – fish-bait thrown into the sea to lure the sharks to the boat – and „teased‟ closer with a line to which a tuna head had been attached.4 Most of them managed to climb onto Shark Team’s up-turned hull and were taken off it and to the safety of Kleinbaai harbour by the crew of one of the vessels in the vicinity, White Shark. [3] Unfortunately, three tourists drowned. Two were trapped under the hull while the third man, who had been sitting on the bow, was probably thrown clear of the boat. Ms Sarah Tallman, the widow of one of the deceased, Mr Christopher Tallman, instituted a maritime claim in the Western Cape Division of the High Court, Cape Town, in which she sought damages for, inter alia, loss of support in rem from Shark Team, and in personam from the skipper, 2 Van der Elst (note 1) at 54. 3 Phil and Elaine Hiemstra Coastal Fishes of Southern Africa at 70. The authors point out that similar protection is afforded this shark in Tasmania and New South Wales in Australia, in California and Florida in the United States of America, and in Namibia (at 70-71). 4 Ms Sara Dix, the videographer aboard White Pointer, whose skipper was considering taking the spot that Shark Team was about to leave when the capsize occurred, testified that she saw five great white sharks in the vicinity of Shark Team’s up-turned hull. Mr Grant Tuckett, and the owner of Shark Team, White Shark Projects CC. I shall refer to Ms Tallman as the plaintiff and to Shark Team, the skipper and the owner as the defendants. [4] The issues of liability and quantum having been separated, Freund AJ, after a trial that lasted 52 days and generated a record of 8 638 pages, found in favour of the plaintiff and declared that the defendants were liable for whatever damages the plaintiff could, in due course, prove. He did so on the basis that Tuckett had been negligent in failing to keep a proper look out in respect of the sea conditions and that, had he done so, he would have been aware of the risk posed by the swell, would have foreseen the reasonable possibility that a wave could have broken on or over Shark Team, and would have guarded against that possibility by weighing anchor and departing from his anchorage. He held that the liability of White Shark Projects CC was not limited by s 261(1)(a) of the Merchant Shipping Act 57 of 19515 because it was unable to establish a lack of privity on its part in relation to the loss of life occasioned by the capsize of Shark Team. [5] The defendants appeal to this court against Freund AJ‟s order and do so with his leave. The applicable law and the legal principles concerned [6] Section 1 of the Admiralty Jurisdiction Regulation Act 105 of 1983 defines a maritime claim as „any claim for, arising out of or relating to‟, inter alia, „loss of life or personal injury caused by a ship or any defect in a ship or occurring in connection with the employment of a ship‟.6 Section 6(1) of the Act creates a mechanism for the determination of the choice of law to be applied to a maritime claim. It provides: 5 Section 261(1)(a) of the Merchant Shipping Act provides: „(1) The owner of a ship, whether registered in the Republic or not, shall not, if any loss of life or personal injury to any person, or any loss of or damage to any property or rights of any kind, whether movable or immovable, is caused without his actual fault or privity- (a) if no claim for damages in respect of loss of or damage to property or rights arises, be liable for damages in respect of loss of life or personal injury to an aggregate amount exceeding 206,67 special drawing rights for each ton of the ship's tonnage. . .‟ 6 Admiralty Jurisdiction Regulation Act, s 1, item (f) of the definition of „maritime claim‟. „(1) Notwithstanding anything to the contrary in any law or the common law contained a court in the exercise of its admiralty jurisdiction shall- (a) with regard to any matter in respect of which a court of admiralty of the Republic referred to in the Colonial Courts of Admiralty Act, 1890, of the United Kingdom, had jurisdiction immediately before the commencement of this Act, apply the law which the High Court of Justice of the United Kingdom in the exercise of its admiralty jurisdiction would have applied with regard to such a matter at such commencement, in so far as that law can be applied; (b) with regard to any other matter, apply the Roman-Dutch law applicable in the Republic.‟ [7] The effect of s 6(1) was considered by this court in MT Argun: Sheriff of Cape Town v MT Argun, her owners and all persons interested in her & others; Sheriff of Cape Town & another v MT Argun, her owners and all persons interested in her & another.7 Scott JA held that „with regard to “any matter” in respect of which the High Court in England exercising its admiralty jurisdiction in 1890 would have had jurisdiction, the law to be applied is that which the High Court of Justice of the United Kingdom would have applied in the exercise of its admiralty jurisdiction on 1 November 1983, being the date upon which the Act commenced‟ and that the „reference to what may for convenience simply be called the English admiralty law as at 1983 is to be construed as a reference to that law including the relevant principles of private international law‟.8 [8] In terms of English private international law (as at 1 November 1983), the law applicable to this matter is South African law.9 This means that the common law rules of Aquilian liability are of application. [9] The rules of evidence applicable to this matter differ from the usual. This being a maritime claim, s 6(3) of the Admiralty Jurisdiction Regulation Act 7 MT Argun: Sheriff of Cape Town v MT Argun, her owners and all persons interested in her & others; Sheriff of Cape Town & another v MT Argun, her owners and all persons interested in her & another [2001] ZASCA 81; 2001 (3) SA 1230 (SCA). 8 Para 14. 9 JJ Fawcett and JM Carruthers Cheshire, North & Fawcett: Private International Law 14 ed (2008) at 766-768; Sir Lawrence Collins (General Editor) Dicey, Morris and Collins: The Conflict of Laws 14 ed (Vol 2) (2006) at 1893-1900. permits a court in the exercise of its admiralty jurisdiction to „receive as evidence statements which would otherwise be inadmissible as being in the nature of hearsay evidence, subject to such directions and conditions as the court thinks fit‟ but, in terms of s 6(4), the weight to be attached to that evidence „shall be in the discretion of the court‟. [10] For Aquilian liability to arise, the harm caused by the defendant must have been both unjustified – wrongful, in other words – and culpable – either negligently or intentionally caused.10 The element of wrongfulness is not in issue in this matter: if the other elements of Aquilian liablity are established, wrongfulness will follow as a matter of inevitability. There is also no suggestion that Tuckett acted intentionally when the harm occurred. Whether negligence was present and causally connected to the harm are the only issues involved in the first aspect of this matter. [11] The starting point in a case such as this is, inevitably, this court‟s judgment in Kruger v Coetzee11 in which the test for negligence was articulated as follows by Holmes JA: „For the purposes of liability culpa arises if - (a) a diligens paterfamilias in the position of the defendant - (i) would foresee the reasonable possibility of his conduct injuring another in his person or property and causing him patrimonial loss; and (ii) would take reasonable steps to guard against such occurrence; and (b) the defendant failed to take such steps.‟ [12] The standard of diligence against which Tuckett will be judged will not, however, be the general standard of the diligens paterfamilias referred to by Holmes JA – the reasonable person.12 In a case such as this, where specialized skill is involved, the general standard of the reasonable person is adjusted to that of the reasonable person in the field of endeavour involved. In 10 Perlman v Zoutendyk 1934 CPD 151 at 155; Coronation Brick (Pty) Ltd v Strachan Construction Co (Pty) Ltd 1982 (4) SA 371 (D) at 377D-E. 11 Kruger v Coetzee 1966 (2) SA 428 (A) at 430E-F. 12 See Cape Town Municipality v Paine 1923 AD 207 at 216 in which Innes CJ equated the diligens paterfamilias of Roman Law with the reasonable man – what we now refer to as the reasonable person. other words, while a person possessed of, or professing to be possessed of, specialized skills is not required to display the „highest possible degree of professional skill‟, he or she will be held to „the general level of skill and diligence possessed and exercised at the time by the members of the branch of the profession to which the practitioner belongs‟.13 In other words, he or she will be held to a standard of reasonable skill and care within the area of his or her expertise or professed expertise.14 In this case, then, Tuckett will be judged against the standard of the reasonable shark boat skipper. [13] That said, however, one must guard against the „insidious subconscious influence of ex post facto knowledge‟, and bear in mind that „[n]egligence is not established by showing merely that the occurrence happened . . . or by showing after it happened how it could have been prevented‟: after all, the reasonable person does not have „prophetic foresight‟.15 [14] Generally speaking, Scott JA held in Sea Harvest Corporation (Pty) Ltd & another v Duncan Dock Cold Storage (Pty) Ltd & another,16 that in order to establish negligence on the part of a defendant, it is not necessary that the precise manner of the harm‟s occurrence must be foreseeable: it is sufficient that its general manner of occurrence is reasonably foreseeable. But this general rule must bow to the peculiar facts of a case, which may call for a more subtle approach: flexibility with reference to the facts of each case is required. [15] Sea Harvest illustrates the point particularly well. An unknown reveller had, shortly after midnight on 1 January 1993, fired a distress flare which landed on a fibre glass gutter of the respondent‟s cold store in Duncan Dock, Table Bay Harbour. It set the cold store ablaze. This was largely destroyed by 13Van Wyk v Lewis 1924 AD 438 at 444; Charter Hi & others v Minister of Transport [2011] ZASCA 89 para 32. See too P Q R Boberg The Law of Delict at 346-347; Jonathan Burchell Principles of Delict at 87-89. 14 Mitchell v Dixon 1914 AD 519 at 525. 15 S v Bochris Investments (Pty) Ltd & another 1988 (1) SA 861 (A) at 866J-867B. 16 Sea Harvest Corporation (Pty) Ltd & another v Duncan Dock Cold Storage (Pty) Ltd & another [1999] ZASCA 87; 2000 (1) SA 827 (SCA) para 22. the fire as were fish and fish products belonging to the appellants that had been stored in the cold store. The flare had landed on the only part of the building that it could have ignited, and the fibre glass gutter could only have been ignited by a heat source of sufficient intensity and longevity. The distress flare met both of these criteria. Scott JA found that there was no doubt that a general possibility of a fire in the cold store was reasonably foreseeable but what would have been foreseen was a fire starting inside the cold store: indeed, that was precisely why fire-fighting equipment had been installed inside the premises.17 He then proceeded to hold:18 „Having regard to the particular circumstances of the case, it seems to me therefore that the question of culpability must be determined not simply by asking the question whether fire, ie any fire, was foreseeable but whether a reasonable person in the position of Worthington-Smith or Visser would have foreseen the danger of fire emanating from an external source on the roof of the building with sufficient intensity to ignite the gutter.‟ [16] I turn now to the common cause facts followed by the issues that arise in this appeal. Thereafter I shall deal with the voluminous evidence adduced by the parties in relation to those issues. I shall then consider the court below‟s approach to the evidence and the issues. The common cause facts [17] According to Ms Christina Rutzen, Kleinbaai harbour‟s harbour master, on 13 April 2008 the wind was light and the swell was running at about two metres at the harbour. Conditions did not change until the afternoon. There were no signs to make her believe that putting to sea that day could be unsafe. [18] Shark Team was the first of the shark boats to leave Kleinbaai harbour on the morning of 13 April 2008. It did so at about 07h30. Shark Team was followed by Barracuda at about 08h00, by Swallow, skippered by Mr Steve Smuts, at about 08h20, by Shark Fever, skippered by Mr Albert Scholtz, at 17 Para 23. 18 Para 24. about 08h45, by Megalodon at about 08h55 and by White Shark, skippered by Mr Ronnie Lennox, at about 09h05. White Pointer, skippered by Mr Phillip Colyn, left Gansbaai harbour at about 09h00 and arrived where the other boats were at anchor shortly before the capsize.19 [19] All of these craft made for the Geldsteen, a favoured area for viewing great white sharks in the winter months and in the conditions prevailing that day. Shark Team, having launched first, arrived at the Geldsteen first, and after choosing a spot, Tuckett instructed the crew to commence chumming. He then anchored and lay some 200 metres from the point where he had anchored. Cage diving commenced. [20] As they arrived, Barracuda, Swallow, Megalodon and White Shark anchored in a line roughly astern of Shark Team. Shark Fever took up a position ahead of and off Shark Team’s starboard bow. The line of boats was spread over about 350 metres from Shark Fever to White Shark. [21] As a result of the bridle anchoring system used by the shark boats, their bows faced into the south-westerly swell. The wind, blowing from the south-east, blew into their port sides and the shark diving took place in the lee thus created on the starboard side of the boats. [22] From about 07h50, when Shark Team anchored at the Geldsteen, until its capsize at about 10h00, it, Barracuda, Swallow, Megalodon and Shark Fever had their cages lowered and all of them engaged in shark viewing. Although White Shark lay at anchor, no shark viewing took place on this vessel. White Pointer, on arrival, had motored along the line of boats and was in the vicinity of Shark Team when the capsize occurred. Tuckett had contacted Colyn, the skipper of White Pointer, to offer him Shark Team’s spot, he having decided to go back to Kleinbaai. As they were talking to each other, disaster struck. Barracuda had left for the shore shortly before the capsize but returned to assist in the rescue. 19 I have named the skippers who gave evidence in the trial. One of them, Lennox, was not available to testify but two statements made by him were placed before the court. [23] When the capsize occurred, Shark Team’s videographer was inside the cage. Tuckett and other crew assisted passengers to get onto the up-turned hull. He and Ms Megan Laird, the dive master that day, managed to free a woman trapped in the water next to the hull as a result of her leg being entangled in ropes. Tuckett and Mr Adrian Hewitt, a crew member, were able to extricate the videographer from the cage, thereby certainly saving his life. They also saved the life of a passenger who was floating off Shark Team’s bow in great distress, unable to save himself and about to drown. [24] White Shark was able to come alongside Shark Team and succeeded in taking all of the survivors aboard. In what was now a heavily over-loaded boat, its skipper, Lennox, headed for the safety of Kleinbaai harbour. It was then realised that people were missing. That information was conveyed to the other boats in the area. They commenced a search. [25] Barracuda towed the up-turned hull of Shark Team into deeper water. In the meantime, the vessel Stan, with Mr Michael Rutzen on board, had launched from Kleinbaai harbour. When it arrived at Shark Team, its crew saw the feet of a man protruding from the hull. The body was recovered. It was Christopher Tallman. Although cardiopulmonary resuscitation (CPR) was attempted, it was to no avail. Rutzen, a diver and great white shark expert of immense experience, later dived under the hull and found the body of Tallman‟s friend, Mr Casey Lajeunesse, entangled in ropes. Despite the attentions of great white sharks, he was able to recover Lajeunesse‟s body.20 A while later, a third body, that of Mr Kevin Rogne, was found floating near Shark Team. [26] Before proceeding further, it is necessary to say something about the shark diving industry that developed after the great white shark was protected. Mr Wilfred Chivell, the owner of Shark Fever, is one of the pioneers in the industry and, it would appear, in the whale-watching industry as well. He testified that the industry started on a small scale in about 1996. At that stage 20 Rutzen said that great white sharks „don‟t eat people‟ but react aggressively when angered. only four or five boats operated in the area. That number has since increased. In 2000, about 20 000 people were taken shark viewing. That figure has risen to about 70 000 people a year at present. Between 30 000 and 40 000 trips have been made over the years. The capsize of Shark Team is the first and only incident of its kind in the industry. The issues [27] In her particulars of claim, the plaintiff alleged 32 different grounds of negligence. During the course of the trial some were not pursued while others were refuted. What remained were two issues. A third arose during the course of argument in this appeal. The first was that Tuckett was negligent because he failed to notice a deterioration in sea conditions when he could and should have done so. The second was that he had been negligent in failing to motor into the swell before anchoring in order to check the depth in front of where Shark Team was to lie. The third concerned the size of the wave and its origins, and whether Tuckett ought to have recognised signs that were indicative of an extraordinarily large swell developing and breaking. This issue is in truth part of the broader „proper lookout‟ issue but will be considered separately. [28] The trial centred on the first issue and Freund AJ found that this ground of negligence had indeed been established by the plaintiff. He rejected the defendants‟ defence that a reasonable skipper in Tuckett‟s position on the day in question, at the same spot, with Shark Team’s bow pointing into the swell, and in the prevailing swell and wind conditions, would not have foreseen the reasonable possibility of the capsize (and resultant harm). Because of the conclusion reached in respect of the first ground, Freund AJ did not consider it necessary to deal definitively with the second ground: although he found that Tuckett had been negligent, he suggested that the element of causation may not have been established. The third issue does not appear to have received discrete treatment. [29] Evidence was led, on behalf of the plaintiff, to establish that while Shark Team was at the Geldsteen on the morning of 13 April 2008, the sea conditions deteriorated to the point that it had become dangerous to be there. [30] The witnesses called by the defendants, on the other hand, testified that Shark Team was lying in deep enough water, that the swell was manageable and that no swells broke in the vicinity of Shark Team or looked like breaking (by either „peaking‟ or „feathering‟).21 The conditions were safe and there were no danger signs. [31] As a result of a bathymetric survey conducted on the instructions of one of the defendants‟ expert witnesses, Dr John Zietsman, two pinnacles were found in the vicinity of the spot where Shark Team lay and on one of which the swell that caused the capsize appears to have begun to break. It was argued that had Tuckett motored into the swell and used his fish-finder to determine the depth further on from where he wanted to lie, he would have seen the danger and would have avoided it by lying elsewhere. The defence to this attack was that the chances of Tuckett finding the pinnacles in this way were slim. Zietsman provided a possible explanation for the size of the wave, which was described, in one way or another, by everyone who saw it, as an extraordinarily large wave. The defendants‟ defence was that the possibility of such a swell developing and then breaking, in that area in the conditions prevailing at the time, was not reasonably foreseeable. [32] This appeal turns largely on the facts. It is therefore necessary to traverse the voluminous evidence at some length before considering Freund AJ‟s factual findings and his conclusions. The evidence Proper lookout: the sea conditions in general [33] As stated above, Christina Rutzen, the harbour master at Kleinbaai considered the wind to be light and the sea conditions to be moderate on the 21 A swell peaks when its face steepens. A swell feathers when white water develops on its crest. Both are signs that a swell is likely to break. morning of 13 April 2008. She also testified that those conditions prevailed throughout the morning and only deteriorated during the afternoon. Her observations were supported by her brother-in-law, Michael Rutzen, who put to sea shortly after the capsize in order to help with the rescue effort. The conditions at the Geldsteen were, in his opinion, not dangerous on his arrival. He described conditions that day as not being too rough, stating that there was nothing unusual about the sea conditions. He experienced a light south- easterly wind and a swell of two and a half to three metres on his way to where Shark Team had been towed. He saw nothing to alarm him at the Geldsteen, the wind was dying and there was not a lot of swell. Mr Wilfred Chivell, the owner of Shark Fever, had not been concerned that day about the weather forecast and the maximum predicted swell height of 3,96 metres because the swell was long and could be worked in safely and comfortably. He thought that it would be a good day at sea. He saw no signs of deteriorating weather conditions by the afternoon. It must be borne in mind, however, that neither Christina Rutzen nor Chivell went to sea on the day in question and that Michael Rutzen only did so after the capsize. That said, however, they are people with a great deal of maritime experience and local knowledge. [34] Ms Marili Meyer, a passenger on Shark Team, testified that the wind was strong and the sea was rough. She was extremely nervous and anxious as this was the first time she had ever gone to sea. Coming from the inland city of Bloemfontein, she was not particularly familiar with the sea. Her husband, Mr Hendrik Meyer, had been to sea once before. He therefore also had little experience to draw on as far as the nature and characteristics of the sea conditions and the wind were concerned. Ms Meyer testified about a wave that broke while she was on Shark Team’s viewing deck. While she initially testified that it was 50 to 100 metres from Shark Team, she conceded that it could have been much further – in the region of 500 metres or more as Mr Tuckett later testified. Her evidence concerning this wave takes the matter no further, because the wave broke far away from Shark Team and posed no threat to it at all. [35] Smuts, the skipper of Swallow, described the wind on 13 April 2008 as being „very light‟. On the way to the Geldsteen nothing caused him any concern. When he arrived at the Geldsteen, however, he said he experienced a larger swell than he had anticipated. He took up a position about 30 to 50 metres astern of Barracuda, which was, in turn, about 100 metres astern of Shark Team. His crew lowered the cage and his clients proceeded to view sharks. [36] He regarded the conditions as „threatening‟ but not dangerous. The threat, he said, lay in the swell picking up because of the dropping tide. The swells began to peak and he estimated their size to have reached about 7 metres. His method of estimating the swell size, however, was based on what he believed to be the height from Barracuda’s waterline to the top of her aerial. He believed this to be eight metres but accepted that it was, according to Barracuda’s skipper, between three and a half and four metres. He also accepted that estimating swell height in the circumstances was, at best, a rough and ready exercise and unlikely to be accurate. [37] He maintained that conditions deteriorated rapidly – in the five to ten minutes prior to the capsize – and spoke to Lennox, the skipper of White Shark, on his cellphone to discuss the conditions. He told Lennox that all of his clients had had their chance to view sharks and he intended returning to Kleinbaai. Lennox said that he was aborting his trip, having lain at anchor for about 30 minutes already. At that stage, however, Smuts had not seen any swells breaking in the area. He had just ended his conversation with Lennox when the capsize occurred. [38] When Smuts was asked about the size of the wave that had capsized Shark Team, he said that one saw waves like that after and during north-west storms. On the day in question, a light south-easterly wind that normally flattens the sea was blowing but, he added, that „definitely was not the case that day‟. [39] He conceded that conditions could vary from one spot to another, even over a fairly short distance. As a result, he said that all he could speak about were the conditions prevailing where Swallow lay. [40] Mr Coenie Coetzee was the dive master aboard White Shark which had left Kleinbaai harbour at 09h05 on 13 April 2008. He described the trip to the Geldsteen as „a nice ride‟ but on arriving and anchoring there he found a bigger swell than he had anticipated. He estimated the south-westerly swell to have been about four metres in height and said that a „very, very slight‟ south- easterly wind blew. On arrival the crew began to chum and motored round for a while to see what the sea was doing. White Shark then anchored astern of Megalodon. A period of time after the vessel had anchored, however, four larger swells passed her. This alarmed Coetzee and Lennox. A decision was taken not to put the cage over the side and to abort the trip as well as the afternoon‟s trip. Shortly thereafter – „a couple of minutes‟ later, according to Coetzee – Shark Team was struck by the wave and capsized. [41] Despite the four swells coming through, White Shark remained at anchor until Shark Team’s capsize. Coetzee was explaining to his clients why the shark viewing had been cancelled when he saw the wave striking Shark Team some 300 metres away. Lennox was talking to Smuts, or had just finished doing so. It was put to Coetzee in cross-examination that the swell that was running at the Geldsteen had not caused concern for him „until that set of swells came through‟ to which he answered: „Correct.‟ Coetzee agreed that conditions could vary from boat to boat, depending on position, and that what was experienced on Shark Team could have been different to what was experienced on White Shark. [42] Lennox did not testified but was interviewed by Captain K J Coates, who investigated the capsize on behalf of the South African Maritime Safety Authority (SAMSA). Lennox also made a statement to the police, which is more or less consistent with the evidence of Coetzee. [43] Colyn, the skipper of White Pointer testified that, after he had arrived at the Geldsteen, Tuckett called him by cellphone to offer him Shark Team’s position. He stated that a swell of about four metres was running. He described this as „quite a big swell‟. His assessment of the conditions was that it was „pretty safe‟ for shark viewing if one was in deeper water. He accepted that if a boat was in a depth of ten to 12 metres, it would not be on a reef and would be safe. He described the position where Shark Team lay as being a prime spot for shark viewing and one that he had used. He testified that on 13 April 2008, the wind was a light south-easterly wind and it would have had no effect on the swell. [44] On his arrival at the Geldsteen that day, he first motored to the northern-most end of the line of shark boats before turning and coming down the line to the vicinity of Shark Team and Shark Fever. The area looked safe to him. He accepted that if there was an absence of breaking swells and a boat lay in sufficient depth of water it could be accepted that it was in a safe position. He did not see any warning signs that a massive wave may be imminent but said that he had not been in the area long enough. [45] As the skipper of Shark Team, Tuckett was the defendants‟ main witness. His version of events, and of the prevailing conditions, on the day in question was supported by various crew members of Shark Team and Shark Fever, as well as a passenger aboard Shark Fever. [46] It is apparent that Tuckett is a well-qualified and experienced para- medic, diver and skipper. He began to work for White Shark Projects in late 2003 and so, by the time of the capsize of Shark Team, he had close to four and a half years of experience in the shark diving industry. All of that experience was obtained in the area in which the capsize occurred. The shark boats tended to operate in an area called Joubert‟s Dam, which is inshore of the Geldsteen and north of Dyer Island, and around Dyer Island, including the Geldsteen. The Joubert‟s Dam area is favoured in the summer months and the area around Dyer Island, including the Geldsteen, is the preferred area in the winter months.22 [47] From Tuckett‟s experience, it can be accepted that he had local knowledge of the areas in which he operated, including the Geldsteen – and the spot where the capsize occurred. Smuts, for instance, testified that Tuckett had extensive knowledge of shark-diving in the Geldsteen area. Mr Michael Hartnett, an expert witness called by the defendants, testified that Tuckett had local knowledge as he had „thousands of hours working in the same area‟ and that, on this basis, he would have been in a position to „discern certain conditions and what effect they will have on his vessel‟. (He considered local knowledge to be perhaps the most important factor when a skipper has to decide on a safe place to lie at anchor.) Chivell, speaking more generally of all of the shark boat skippers, said that they had been going to sea in the Geldsteen area for „many, many, many years over hundreds and hundreds of days and thousands of hours‟. As a result of their experience, they „got to know where [are] the safe areas; where can you do what in certain weather conditions‟. For him too, the most important aspects of understanding the workings of the sea on the Geldsteen, and what is safe and what is not, are historic and local knowledge. [48] Tuckett testified that he tended to be a cautious skipper and White Shark Projects was known among the local shark diving community as being the first to cancel or postpone trips on account of weather and sea conditions. This was confirmed by a number of the witnesses called by both the plaintiff and the defendants. The witnesses on both sides regarded Tuckett as a good skipper. Their assessment of his abilities as a skipper ranged from him being described as a „fine skipper‟ by Smuts; a competent skipper according to a member of his crew, Ms Megan Laird; a responsible skipper, according to Christina Rutzen; and a competent and responsible skipper according to Colyn. The witnesses also agreed that Tuckett was a cautious skipper. 22 The Geldsteen area was described differently by various witnesses. Nothing turns on this. It is common cause that the spot where the capsize occurred is on the Geldsteen, howsoever it may have been defined. Indeed, Chivell regarded him as being „too careful‟ and a „very cautious skipper‟. This is confirmed by Zietsman who correlated swell heights and the instances of boats going to sea, both before and after the capsize: Shark Team only went to sea occasionally when the swell height was bigger than 3.75 metres, and less often than the other shark boats. [49] On the day in question, Tuckett followed a routine that appeared to be standard among the shark boat skippers. He checked the forecast on the program that White Shark Project used, Buoy Weather. That indicated, with a green flag, that conditions were suitable for most marine activities. When he arrived at the harbour, at about 06h00 or possibly earlier, he looked at the sea. There was nothing in the conditions that concerned him: a moderate south-east wind blew and it was overcast. The launch was uneventful, as was the trip to the Geldsteen. He saw no waves breaking over a rock called Black Sophie, which was an indicator of rough sea. He regarded it as „an average trip on the Geldsteen‟, and the „shark action was fantastic‟. Everyone on board „seemed to be quite happy with what they were seeing‟. Neither the wind nor the sea conditions at the Geldsteen gave him cause for concern. [50] When he arrived in the area that he had decided upon, he motored around for ten or 15 minutes and checked the swell direction, the current and the wind direction. He first went to a spot where Barracuda later lay. He decided that it was a bit rough there so he motored 100 to 150 metres to the south-west where conditions looked flatter. Both spots were entered as markers into his global positioning system (GPS) and had been since he started work in the industry. He had never seen the south-westerly swell break in that area and nothing in the sea state indicated to him that there may be shallower water to the west of Shark Team. [51] Once he had decided on where he wished to lie, he motored, with the aid of his GPS and with his fish-finder functioning, into the wind for 200 metres – the length of his anchor line – and gave an order for the anchor to be deployed. The anchor was in nine metres of water. He then went astern back in the direction in which the wind was blowing and lay in the spot he had chosen, on the bridle anchoring system which kept the bow into the swell. He lay in 11.1 metres of water. He felt that this was safe: the shark boat skippers have a rule of thumb that one should, in order to be safe, lie in over nine metres of water. [52] In dealing with where the boat lay, he denied the evidence given by Coetzee that Shark Team lay close to the kelp – and hence shallow water. Tuckett said that it lay over 200 metres from the kelp: the anchor, being in 9 metres of water, was probably 30 to 50 metres from the kelp and the boat was a further 200 metres from the anchor. He denied that Shark Team was on a reef and said that he was not aware of any reef nearby. The bow of Shark Team faced into the south-westerly swell at all times up to the capsize. [53] None of the passengers experienced any difficulties from the swell when moving around the boat. Indeed, he said that „often when we‟re out there and it‟s a little choppy, people who are not used to being at sea, do need to hold on to handrails – we have to constantly tell them to hold on, don‟t move around too much, and there was nothing noticeable on that particular day‟. None of the passengers indicated a concern with either the weather conditions or the state of the sea. Nobody experienced difficulties climbing into or out of the cage as a result of the swell. [54] When everyone had had a chance to view sharks from the cage, Tuckett decided that it was time to leave. The videographer wanted more footage and Tuckett gave him a few minutes to do so. If he had been in any way concerned about the conditions, he would not have acceded to this request. He issued instructions to the crew to prepare for the return trip to Kleinbaai. By that stage, Shark Team had been at that spot for about two and a half hours. Tuckett had seen White Pointer approaching and was speaking to her skipper Colyn, to offer him Shark Team’s spot, when the capsize occurred. [55] After the capsize, the surviving passengers and crew of Shark Team were rescued by White Shark which had slipped its anchor on seeing the wave strike and was on the scene very quickly. The sea conditions at this stage were, according to Tuckett, flat. This is borne out, by and large, by the photographs depicting the rescue. [56] Tuckett testified that conditions vary from place to place on the Geldsteen, even over fairly short distances. He described the spot where Shark Team lay as being sheltered. [57] When testifying about the conditions, he pointed to various features of the Shark Team video that had been handed in as an exhibit. It showed a fairly flat sea, with a small swell, people getting into and out of the cage with ease and the cage itself being stable rather than „swinging and slapping around‟ when in the water. It also depicted a crew member standing easily on an engine while he worked the bait line. This was possible in good sea conditions but if the sea is „very up and down or choppy then we actually have to stand down on the deck behind the cage‟. He described the swell as „a slow rolling swell‟. These conditions, he said, remained constant throughout the trip. [58] While he made it clear that it was difficult to estimate the swell size with accuracy, especially from photographs or videos, and his estimates came with no guarantee of accuracy, he guessed that the swell size was between two and two and a half metres. In some of the photographs that he was taken to, he estimated swells of three metres. [59] When a video taken from Barracuda came to light towards the end of Tuckett‟s examination in chief, he was taken through it. It showed, much like the Shark Team video, passengers who seemed to be comfortable in the conditions, and who stood with ease, and with no support, on the deck. The cage looked stable and divers were entering and leaving it easily. The sea, he said, looked calm where Barracuda was lying. He identified one swell that he described as „a moderate swell‟ that was not peaking which looked to him like an „average, moderate, slow, lazy swell‟. He estimated that other swells going past Barracuda were in the region of two and a half metres but said that he was making „educated guesses‟. One had some white water on it, created, he believed, by the wind. [60] Tuckett was subjected to a long, arduous cross-examination that traversed both the relevant and the irrelevant. It lasted five days. [61] In cross-examination, he stated that: his employer had not placed pressure on him to go to sea on 13 April 2008; he was satisfied that his crew was competent; he was alert, as he always was, when he was at sea that day; Shark Team was never in danger; there were no warning signs of possible breaking waves; there was no deterioration in the conditions; and there were no breaking waves anywhere near Shark Team. He said that there was nothing that he could have done to have prevented the capsize and that the wave was one he „could never have expected or never have avoided‟. He made it clear that, being the first to arrive on the Geldsteen, he was able to choose the calmest spot, that the swells were not very big where Shark Team lay and that he saw no peaking or feathering swells: all he saw were slow, lazy swells. He did notice, however, that the boats astern of him were „riding in higher swells than where I was‟. [62] Tuckett had testified in chief that he had been to the spot where the capsize occurred many times in the past. It was one of his waypoints in his GPS and a favourite spot of his. He was taken to task on this evidence on the basis that the logs for Shark Team’s trips from 7 March 2008 to the date of the capsize showed that he had been to spots all over the Geldsteen but not to that exact one. These spots varied from 40 to 770 metres away. [63] I turn now to the evidence of Scholtz, the skipper of Shark Fever, which had taken up a position about 40 metres ahead of Shark Team and about 20 metres across (off Shark Team’s starboard bow). His evidence is important because of Shark Fever’s proximity to Shark Team. [64] He testified that, on the morning of 13 April 2008, Shark Fever launched without incident and „had a very pleasant ride‟ to the Geldsteen. There was, he said, some swell but it was not uncomfortable or anything to worry about. On arrival, he saw that Shark Team was lying almost exactly on a way point of his – a spot he described as one of the „safe spots‟ – so he moved to another way point in front of Shark Team. He lay in 12 or 12.5 metres of water. He described the conditions as calmer than where Barracuda and Swallow lay at The Point. He said: „Where myself and Shark Team were lying, the water was calmer there than where Barracuda and Swallow was lying, because I could see their boats‟ noses go up and down and up and down, and we were almost stationary at times. And yes we also went a little up and down at times but give and take 80% of the time we were lying, we were almost lying still.‟ He estimated the swell size to be about two and a half metres on average. [65] He said that he knew the area where he lay and that it was a „safe area for me‟. He had been there in conditions similar to those prevailing on 13 April 2008, and worse. He had never seen feathering swells in that area: while swells break close to the island and on the kelp, they do not break in the area where he lay. Later, he said that over a period of five years prior to the capsize, he had not seen a swell break in that area, so he assumed it to be a safe area. [66] On the day in question, he never saw any swells „standing up‟ near his boat and nothing in the conditions caused him any concern. The swell posed no danger. He knew he was safe from experience and because Shark Team, being so close to him, had been there for longer than him. He could not recall conditions deteriorating in any way and he did not notice any increase in the swell height. He stated, however, that the swell was not consistent in that while the average was about two and a half metres, some swells as big as about four metres came through at times. He stressed that „[w]hile we were lying there I felt very safe and comfortable being there at the time, no matter if the swell was 1 metre or 4 or 5 metres‟. Conditions remained constant from before the capsize to afterwards. From an hour and a half before the capsize to a half hour after it, Shark Fever lay in that area and, „there was nothing for me to really feel worried about, to really move out of the area to get to the harbour, to land‟. [67] It was put to him that when he saw the swell that capsized Shark Team getting bigger, it must have reached a shallower area. He said that he had difficulty responding to this as „I was lying there the whole day‟ and „[n]othing out of the ordinary happened‟. It was also put to him that Shark Team should never have been where she was. His answer was that there was no doubt in his mind that the vessel was „not in danger at all‟ and that the swell that capsized Shark Team „was according to me an unexpected swell or as it was referred to as well, as a freak swell‟. [68] The evidence of both Tuckett and Scholtz concerning the wind and sea conditions as well as a lack of deterioration in them was supported by: Ms Megan Laird, who was on Shark Team as a volunteer and dive master; Mr Adrian Hewitt, who was a crew member aboard Shark Team; Ms Alison Towner, the dive master aboard Shark Fever; and Ms Sara Dix, the videographer aboard White Pointer. Laird, Hewitt and Towner were marine biologists engaged in research into great white sharks and all three had sea- going and diving qualifications and experience. Their research and their duties entailed recording data concerning their boat‟s position, water depth, swell size and wind direction. They also had to keep a lookout for these types of factors and conditions. While Dix may not have had the research involvement of the others, she too had extensive sea-going experience. A passenger aboard Shark Fever, Ms Bridget Willcox, who had some sea-going experience, gave evidence that was consistent with that of the crew of both vessels. [69] Their evidence, taken together, was to this effect: the wind was light to moderate; there were no concerns about the swell on the Geldsteen; it was estimated to be two metres, two to three metres; two and a half to three metres by Laird, Hewitt and Towner respectively and described as moderate by Dix and Willcox; the swells were long, lazy swells; all felt comfortable on their boats; none of them noticed any deterioration in the conditions or any increase in wind speed; nobody on the respective boats were seen to experience condition-related difficulties; no breaking, peaking or feathering swells were observed; and none of them recalled any larger swells coming past their boats. [70] Laird said that if the swell had deteriorated she would have noticed because she was working as the dive master and this would have had an impact on people who were trying to get in and out of the cage, and on those inside the cage. Hewitt recorded details of the conditions for his research. He was interested in correlating shark sightings and prevailing conditions. One of Towner‟s duties was to fill in data sheets that recorded conditions, including the depth of water, the nature of the swell and its direction, wind direction, current direction and underwater visibility. She said that after the capsize, the sea returned to the state it had been in before the event. Dix said that the sea returned to normal, and said of the wave that „[i]t really was just like something that came out of nowhere and then went again‟. [71] Michael Rutzen‟s evidence concerning conditions on 13 April 2008 has been alluded to above. He also gave evidence concerning the Geldsteen, based on more than 20 years of experience. In his experience, the swells break only on the kelp lines and the south-east wind tends to flatten the south- westerly swell. He had only experienced an extraordinarily large wave once on the Geldsteen and that was in 1998 when it broke and „washed white water‟ towards the moving boat he was in. Swells of between three and four metres are normal in the area where the capsize occurred. [72] Chivell is also a mariner with a great deal of experience of the Geldsteen. He said that he was familiar with the spots where Shark Team and Shark Fever lay and, in his opinion, they are safe spots. He had never seen breaking swells there or heard of a shark diving or whale watching boat experiencing problems with breaking swells in that area. [73] Concerning the deterioration of conditions, he made two points: first, that deteriorating conditions per se are not a problem but it is only when a „massive change in swell conditions‟ occurs that it becomes problematic; secondly, he saw no signs of deteriorating conditions by the afternoon of 13 April 2008, no deterioration of significance was forecast and only a slight increase of wind speed, which would have been irrelevant to boats lying in the lee of Dyer Island, was predicted. He also saw no evidence of dangerous conditions in the photographs taken immediately after the capsize. [74] He was of the opinion that three metre swells could not be said to be big and four metre and bigger swells could be said to be big but there was no reason why skippers could not go to the Geldsteen in four metre swells: it all depended on a range of factors whether it was safe or not. Large swells on their own are not a problem. They only become a problem when they break. [75] He found it strange that Smuts and Lennox could have thought that conditions were dangerous but yet had anchored. This, he said, would have led him to institute a disciplinary process if one of his skippers had done that. He made the point, however, that both Smuts and Lennox were new to the industry, that they had only a few months experience in the area and that White Shark was smaller than the other shark diving boats, as well as lower in the water, and thus susceptible to „feeling‟ the conditions more than the others. Swallow was also a smaller boat, according to Smuts. [76] Chivell was sceptical about the ability of lay people to gauge that conditions were deteriorating. First, he expected that experienced skippers and crew would become aware of deteriorating conditions before a lay person. Secondly, he said that if „you‟ve never been at sea . . . and you‟re sitting on the boat and you‟ve done your dive and you‟re starting to feel seasick, then everything becomes a problem‟. [77] When asked to comment on one of the swells in the Barracuda video, he conceded that „[f]rom the angle of the video it looks like a big swell‟ but he insisted that conditions could be different where other boats were lying and that if the swell „is not breaking, if it‟s not feathering, if it doesn‟t give you any indication of breaking, I wouldn‟t mind these swells‟. He added, however, that while the bigger swells that showed signs of feathering posed no threat to Barracuda, the boats astern of her should have been „very much alert‟. [78] Hartnett was an expert by virtue of his long and varied experience as a mariner. He was not at sea on the Geldsteen on the day of the capsize but was required to give his expert opinion on a number of aspects relating in one way or another to the reasonableness of Tuckett‟s conduct that day. [79] He believed that there were no indications in the weather forecast of possible danger. He considered that the size of the swell, on its own, is a meaningless measure of whether conditions are dangerous. What would indicate danger are such features as feathering swells or the shortening of swells, and of course, breaking waves. Big swells pose no threat on their own. As other witnesses had testified, he also pointed to the fact that conditions at sea may vary from spot to spot: while swells may be breaking in one spot, they may not be doing so elsewhere. [80] He regarded a boat lying in 11 metres of water to be safe. He was of the view that in choosing a spot, Tuckett ought to have been guided by his local knowledge. The fact that he had found his chosen spot to be safe in the past, and had never experienced breaking swells there before, were important indicators that he acted reasonably. [81] Hartnett made the point that inexperienced people, being in a foreign environment, are not well placed to judge whether conditions are deteriorating. Skippers and crew, being more attuned to the marine environment, are far better placed to do so. [82] He did not consider it inappropriate for a skipper to be checking on the cage diving. He considered this to be one of a skipper‟s duties. He also saw no problem in a skipper working a bait line. This did not create a conflict with his duty to keep a proper lookout: indeed, by virtue of the nature of the task, it could make the skipper more alert to „strange waves or big swells‟ because these would affect his balance while he throws, works and retrieves the bait line. Proper lookout: the pinnacles and motoring into the swell [83] After Zietsman, a civil and ocean engineer, had been engaged as an expert witness by the defendants, he commissioned a bathymetric survey of the area in which the capsize occurred. This brought to light the existence of slightly shallower water to the north-west of Shark Fever and to the west of Shark Team. More importantly, it brought to light the existence of two pinnacles, each about five square metres in area, and approximately 6,8 and 7,2 metres under the water. Neither Tuckett nor any of the other skippers who testified, including Chivell, knew of these pinnacles. They all had used this area for shark viewing over a number of years, and considered it a perfectly safe place to lie. The remainder of the shallower area was over eight metres deep. [84] Tuckett was asked whether he had ever seen, with the aid of his fish- finder, shallower areas in the vicinity of the capsize. He said he had not and the sea state to the west of Shark Team had not indicated the presence of shallower water either. He saw nothing, he said, that „gave me any indication that there [were] any shallow reefs there‟. This evidence was supported – perhaps indirectly – by Scholtz when it was put to him that the swell that caused the capsize must have reached a shallower area when he saw it getting bigger. As previously noted, he answered that he had difficulty responding because „I was lying there the whole day‟ and „[n]othing out of the ordinary happened‟. He had not seen a wave breaking in that area for the previous five years during which he had used that spot. [85] It was put to Chivell, in the context of the assertion that Tuckett should have spotted the shallower water off his starboard bow, that a skipper of a boat will see shallower water because the swell would „rise up‟ over a reef. Chivell, with reference to a recent trip he made to the Geldsteen (in conditions similar to those prevailing of 13 April 2008) to try to locate the pinnacles identified by the bathymetric survey, said that one would have expected this to be the case but he found on his trip that it was not necessarily so. He then stated, with obvious reference to Shark Team, that if a boat has been lying in a place for two or two and a half hours and no swells had looked like they were going to break, there would be no danger signs to induce a skipper to move away. When it was put to him that a swell is going to break sooner or later over a shallow reef, his answer was that he had not seen that happen in the Geldsteen area. [86] Hartnett was of the view that given the depth, size and spire-like shape of the pinnacles off Shark Team’s starboard bow, and on one of which the swell had begun to break, it was not to be expected that a person would be aware of their presence by reading the water: there would have been no discernible disturbances of the surface when swells passed over them in the conditions prevailing on 13 April 2008. It could well have been different in a very big sea, but nobody would be there to observe. [87] It was suggested to Tuckett that he had been remiss in failing to proceed from the spot he had chosen into the swell to ensure that no shallow water lay ahead. He stressed that he had not been aware at the time of any shallow areas in the vicinity of Shark Team „so I was one hundred percent confident with the area where I came to lay‟. The court then asked him whether he should have „scouted around, to use lay language‟ and whether, if he had done so, his knowledge would have been different. To this he said: „Yes, M‟Lord, but I had been riding around that area in years previously and I‟ve never picked up anything like that, so the thought never entered my mind that there was anything there that I needed to worry about. And because I‟d anchored previously on that marker in those conditions with that wind, with those swell conditions, I was quite happy to go straight to that point and I felt quite safe there, M‟Lord. And we did motor around. We motored around off The Point. We did motor coming over. We did go a little bit further out to start our chum line coming into that point. So we did look for a good 15 minutes before actually dropping our anchor in the 9 metres of water, M‟Lord.‟ [88] He made the point that „as soon as I came anywhere near to the Geldsteen and started . . . choosing my anchor point and checking the wind, then the depth-finder would go on‟. When asked by the court what his fish- finder had shown him on the day in question, he said that he had definitely not seen „any shallow pinnacles or anything‟. [89] He was asked whether, with the benefit of hindsight and the bathymetric survey, he thought it would have been prudent to proceed into the swell for a while. He said: „Yes, M‟Lord, but you‟ve got to also bear in mind, M‟Lord, that I was one hundred percent convinced in my mind that the only swell that was going to break anywhere near me that day would have been behind me and on my portside. And I never saw anything peaking or swirling or any indication of anything south or west of my position to give me any concern. And I would have been looking in that direction as I came in to pick my spot to lay anchor as well, M‟Lord.‟ [90] In re-examination, he was taken to this issue again. He made two points. First, he said, when he chose his spot, he motored around it for anything from five to 15 minutes focusing on the area in front of where the vessel was to lie. Secondly, he said that going into the swell to check depth would not have led to the discovery of the shallower area and the pinnacles because they lay to the west – in other words, off Shark Team’s starboard bow. [91] As far as spotting the pinnacles was concerned, Chivell was of the opinion that it would have taken sheer luck for anyone to have done so: one would have to sail directly over one of them with the fish-finder on and be watching it at the precise moment. This is so because the fish-finder uses a single beam trained directly downwards. That was why it was more important to read the sea. [92] According to Zietsman, one pinnacle was about 37 metres from Shark Fever and the other was about 48 metres from Shark Team. One does not know how accurate these figures are but they will suffice as a rough guide. He explained that while the fish-finders on the shark boats use a single beam, the bathymetric survey was done with a high resolution multi-beam system that gives a swathe of the sea bed. The wave and the capsize [93] In his judgment, Freund AJ expressed the view that the size of the wave that struck Shark Team was not relevant but he accepted that it was „both a very large wave, and that it was considerably larger than the largest swell observed in the preceding or succeeding few hours‟.23 [94] It is, in my view, necessary to canvass the evidence concerning the size of the wave and its effect on Shark Team. It is noteworthy that, as I shall show, every person who saw and testified about the wave described it as extraordinarily large. [95] Coetzee described the wave as unique and said that the unique thing about it was „the size, the height and the white water that was going continuously non-stop for a long period of time‟. Smuts said that he had seen waves of that size and bigger during north-westerly storms but on that day a light south-easterly wind, which usually flattens the sea, was blowing. Colyn said that the wave that capsized Shark Team was „massive‟. It had been put to him that in a consultation with the defendants‟ legal team, he had said that the wave was the biggest he had seen in the area. He conceded that he may have said so. [96] Dix, the videographer on board White Pointer, testified that she was in the wheelhouse with Colyn when the wave struck Shark Team and that Colyn described it as a „freak wave‟. This made sense to her because „there was nothing else after it really . . . it was just out of the blue‟. She described it as a „massive wave‟. When asked what drew her attention to the swell, she said: „Well, it was massive. It was massive. I‟d never seen anything so big.‟ 23 Judgment of the court below, para 65. [97] It was put to Coates, who investigated the capsize on behalf of SAMSA, that Tuckett had experienced nothing untoward at sea and then saw a „wall of water‟ coming towards Shark Team, and he was then asked how Shark Team could have escaped in these circumstances. He answered: „With a lot of luck, Sir.‟ [98] Tuckett said that he had never seen a wave of that size in his life, before or since the capsize of Shark Team. He continued shark viewing in that very area after the capsize and has never seen a breaking swell of that nature there. [99] Laird was on the bow of Shark Team when the wave struck. She estimated that it was about 10 metres high. (In an interview with „You‟ magazine, she had apparently said the wave was about eight metres high but, in my view, little turns on this. On the basis of this discrepancy, the court below called her credibility into question. In my view, the discrepancy was immaterial.) [100] Hewitt described the wave as „this huge wave heading straight towards us‟ and said that „you could hear it roaring‟. He described it as being „incredibly large‟. He estimated its height to be the height of the White Shark Projects lodge ─ which was about 10 metres high. He also estimated the height of the wave to be about the same as the length of Shark Team ─ about ten to 11 metres. He had never seen a wave like that at the Geldsteen and had only seen something similar once before ─ 20 nautical miles off Cape Point in „very, very rough conditions‟. [101] Scholtz referred to the wave as „the freak swell‟. He was on the viewing deck when he saw the swell which was „out of the ordinary compared to the other swells‟. It was catching up to a swell in front of it. Then, when the swell was 15 to 20 metres from Shark Fever it „just suddenly became very big, just like rose up‟. He told his passengers after the capsize that they had witnessed something that he as a skipper had never witnessed, either in that area or elsewhere. Finally, he described the swell as a „freak swell‟ and as being „out of the ordinary for me‟. [102] Towner was on the viewing deck of Shark Fever when she saw the swell that capsized Shark Team. She said that she saw „a very, very large what can only be described as “a wall of water” coming towards us‟. When asked about its size, she said she was on the viewing deck and „I had to look up and actually strained my neck to look up at this thing‟. In cross- examination, it was established that the viewing deck was about four metres above the waterline and she was 1,6 metres tall ─ and she still strained her neck looking up at „this thing‟. She described it as „significantly higher‟ than the viewing deck and as a „very, very large wave, abnormally large‟. She resisted estimating its height until she was pushed to do so by the court. She accepted that a swell of eight metres would be „extraordinarily large‟ and said that this swell was „larger than 8 metres‟: it was „certainly not something normal out there‟. [103] Wilcox was a passenger on Shark Fever. She described the swell as „massive‟ and huge in comparison to anything they had seen earlier. [104] Michael Rutzen did not see the wave. He was asked, however, if he had ever seen abnormally large waves in the Geldsteen area. He said that he had, on one occasion in 1998 when he „heard a big thunder‟, a wave broke and „washed white water towards us‟. He said that three to four metre swells are normal in the area where the capsize occurred but the wave that capsized Shark Team was not normal. [105] Chivell, the owner of Shark Fever, was not at sea when the capsize occurred. In his view, it would have taken a wave of a height more or less equal to the length of Shark Team to cause her to capsize. He had never seen a wave of that size at the Geldsteen. [106] Although Tuckett said that the wave had struck Shark Team head-on, other witnesses spoke of it striking the starboard bow. Tuckett appears to have been incorrect. Given that it is now known that the swell began to break on a pinnacle which was west of Shark Team and that it passed under Shark Fever which was off Shark Team’s starboard bow, it is probable that it struck Shark Team’s starboard bow – as Hewitt put it, „somewhere directly off the bow to slightly off the starboard bow‟. [107] Smuts described the wave as having pitch-poled Shark Team. By this he meant that it went over along its length. Coetzee said the same: that the wave flipped Shark Team over, bow over stern and that „the bow ended up in the stern‟s direction upside down‟. This is consistent with the evidence of Laird, who was on the bow of Shark Team when the wave struck. She said that it „hit Shark Team on the bow and flipped it over, capsized the vessel‟. [108] It is clear from the evidence given by those who saw the wave that capsized Shark Team that it was extraordinarily large and was the only wave of its kind to be seen that day. Indeed, most of the witnesses testified that they had either never seen a wave of that magnitude or had only seen one once. Clearly, it was not the product of the prevailing swell: not a single swell, even those that were bigger than the norm, broke that day in the vicinity of Shark Team. Only one, or perhaps two, showed signs of feathering, but those were some distance beyond Shark Team, and astern of Barracuda – and posed no threat to Shark Team. [109] Zietsman proffered an explanation for the large wave, what its probable size was and how it broke. His explanation is summarised in his report at the conclusion of an analysis of the swells and the wind conditions on 13 April 2008 and reads as follows: „The most important findings of these analyses is that the crossing of the South West swell and the South East wind sea, at right angles, would create a wedging effect. Observers on the boat would have felt the relatively short period wind generated waves from the SE at a period of about 8 seconds and a wave height of 1.5 m. The much longer wave swell from the SW at about 14 seconds and a significant wave height of 3.5 m would have been less evident to someone on the boat, at least until the two coincided and created a superposition of the components. The wedging effect would have resulted from the merging of the incoming swell from the South West with the wind sea from the South East. The combination of wind and wave swells is an infrequent occurrence and is only likely to occur at less than 2% of the time. The confluence of these effects, together with the reflection of other waves from the NE (i.e. from the Gansbaai/Danger Point Peninsula) as modelled by ZAA, would have increased the most probable maximum wave height to give a swell of Hs=3.5m (and most probable maximum height 7m) and when this is further combined with their localised superimposition at a point where the water depth is reduced, it would cause wave break. The result of the combination of all these factors at the same time and same point most probably resulted in the wave breaking over the reef, which as noted in Section 2.2.1 above is a rocky outcrop to the north west of Shark Fever and to the west of Shark Team, where the water depth is about 5.3m LAT or about 6.5m at the time of the incident. We believe that it is this outcrop that caused the combined wind and wave swells coming from directions at right angles to each other to break. Shark Fever was able to avoid a potentially similar scenario because the wave had not yet broken as it was positioned to seaward of Shark Team and in deeper water. In summary, if the wind sea had not been present from the South East and superimposed on the wave swell from the South West, with both occurring simultaneously and at a location where the water was shallow enough to cause wave break, then the possibility of the wave breaking when and where it did and the consequences for Shark Team would have been much reduced.‟ [110] When Zietsman testified, he said that what made the wedging occur, and explains why this was a relatively rare phenomenon, was the confluence of the south-westerly swell of a particular height – over about three and a half metres – and a south-easterly wind of a sufficient velocity – capable of generating a wind swell. In other words, it is not a phenomenon associated with every south-westerly swell and south-easterly wind. [111] Zietsman was not surprised to be told that neither Tuckett nor Laird aboard Shark Team were aware of any short period wind-generated swells, despite the fact that, he said, one could see in the video the effect of the wind swell in the rocking of the boats. People on the boats probably only noticed and experienced the larger swell and would not have been aware of the wind swell cutting across the sea swell. [112] During the course of his cross-examination, Zietsman was asked whether, with the full knowledge at his disposal and with the benefit of hindsight which, it was conceded, Tuckett „couldn‟t possibly have known‟, he would have thought it dangerous to lie where Shark Team had on the day of the capsize. His answer was that on the basis of what he knew „with hindsight, having done all this work, that under these conditions I wouldn‟t moor there‟. [113] The cross-examination proceeded thus: „Now, I understand that and I understand, of course, that even you if you‟d been out there as a skipper wouldn‟t have known all those things. --- Exactly. And far less would Mr Tuckett have known all of those things. I understand that. --- Yes, I understand, M‟Lord. Yes. But you do accept that if hypothetically – and it would be a very strange scenario – if hypothetically one had all of that knowledge. --- Yes. It would be apparent it‟s risky. --- Yes, you wouldn‟t moor in that location.‟ [114] He was asked about how easy it was to identify the interaction of the sea swell and the wind swell. He said that although it was correct that the hump effect, where the two meet, was „quite dramatic‟, nobody but he noticed it and nobody wanted to accept it. He said that „nobody could see it‟ and it was only when he pointed it out that people noticed it. The cross-examination proceeded as follows: „But what happens is, it is quite a dramatic effect if you‟re looking for it, as you said. -- - Well, if you know what you‟re looking for.‟ [115] That the phenomenon was not generally known about was clear from the evidence of Chivell. He testified that he had never experienced a cross sea on the Geldsteen but, if it occurred, that would be when the sea is very big as a result of a „massive cold front‟. [116] Zietsman explained that the swell began to break on the deeper of the two pinnacles, which was closest to Shark Fever. In order for it to start to break, the swell had to be at least 8,41 metres high. (He departed from the rule of thumb that the break height of a swell is determined by the depth of water divided by 1,3 because other factors were present, such as the slope of the sea bed, which increased the break height.) He calculated the break height where Shark Team lay to be 10,81 metres. What stood out for him, however, was that the break continued even as the swell moved into deeper water. This attested to the size of the swell because, if it had been smaller, it would have reformed into a swell and passed under Shark Team. The fact that it continued to break confirmed for him that it was bigger than ten metres. He believed that it would have taken a wave of that size to have capsized a boat of the size of Shark Team. [117] It is perhaps not surprising that, on being asked what conclusions he drew from his evidence about the size of the swell and how it broke, he answered that it suggested to him that „it was an unusual event‟. He also was of the view that given the size of the swell, it „would have broken whether or not that pinnacle of 7,2 existed‟. The court below’s judgment [118] In his judgment, Freund AJ‟s starting point was what he described as „a fundamental question‟ as to „what swell size would be large enough to serve as a warning to a reasonably prudent skipper of a shark-cage vessel at anchor that he should weigh anchor and depart‟.24 His key finding in this respect was that the reasonable skipper, with tourists on his boat and at anchor on the Geldsteen, „would regard passing waves of 4m or more as a clear warning that conditions were, or were becoming, unsafe and therefore a warning that he should depart‟.25 [119] On the basis of the evidence of the Meyers, the up-country passengers aboard Shark Team, as well as that of Smuts on Swallow, which lay astern 24 Judgment of the court below, para 45. 25 Judgment of the court below, para 51. and to the port of Barracuda, Coetzee on White Shark, the vessel at the northern end of the line of shark boats, and the hearsay evidence of Lennox, the skipper of White Shark, Freund AJ found that, on the probabilities, „swells in excess of 4m must have passed Shark Team in the period preceding the capsize reasonably frequently‟ and that „these swells were sufficiently threatening that a prudent skipper would, prior to the time of the capsize, have taken steps to depart from the scene‟.26 [120] He was „in little doubt‟ that Coetzee and Lennox on White Shark „regarded the conditions where they were in the period preceding the capsize of Shark Team as dangerous‟27 and that, on the basis of the evidence of Coetzee and Smuts, „conditions where they were deteriorated alarmingly in the few minutes immediately preceding the capsize‟.28 He was prepared to accept that conditions may have been different where Shark Team and Shark Fever lay but regarded it as „improbable that they were very different‟.29 [121] He found that, having regard to the probabilities, the „swell conditions prior to the capsize had become noticeably dangerous and that the evidence of Tuckett, and those who supported him to the effect that the conditions were benign, cannot be accepted‟.30 [122] On this basis, Freund AJ found that there was force in the contention advanced on behalf of the plaintiff that Tuckett and his crew were not keeping a proper lookout in respect of the swell conditions as a result of complacency; that the swell conditions were large and threatening enough to serve as a warning to a prudent skipper and, that being the case, Tuckett should have „foreseen that a wave breaking over Shark Team was a reasonable possibility‟.31 26 Judgment of the court below, para 186. 27 Judgment of the court below, para 152. 28 Judgment of the court below, para 160. 29 Judgment of the court below, para 162. 30 Judgment of the court below, para 151. 31 Judgment of the court below, paras 187-188. [123] The crux of Freund AJ judgment appears in the following passage: „189 If Tuckett had been keeping a proper lookout, he would have been aware of the risk posed by the swell conditions. He would have foreseen the reasonable possibility that, if Shark Team stayed where it was, a wave might break over his vessel. He should have taken reasonable steps to guard against this risk. The reasonable steps which should have been taken were to weigh anchor and to depart from Geldsteen as soon as possible.‟ It is common cause that Tuckett took no steps to depart. Though his passengers had completed their dives, he was content to allow the videographer to continue filming in the cage. A reasonable skipper would, by the time of the arrival of the capsizing wave, have departed. At the very least, a reasonable skipper would already have weighed anchor and been at the wheel, and therefore, on the probabilities, in a position to avoid or “punch through” an approaching wave. Tuckett was, therefore, negligent. His negligence was causally connected to the capsize which resulted in the plaintiff‟s husband‟s death.‟ [124] Freund AJ held that because the Geldsteen is described in charts as being foul ground, „care must be taken to establish the depth of the position where the vessel comes to rest and the depth in the direction from which the swell is proceeding‟.32 A prudent skipper would therefore, he said, have „taken care to establish the depth in the direction from which the swell is proceeding‟.33 As Tuckett had not looked at the depth south and west of his chosen spot, he could not have known whether there was shallow ground in those directions, and so was negligent.34 [125] The court then held that what was „considerably less clear‟ was whether that negligence was causally connected to the capsize35 and whether, with the equipment available to him, Tuckett would have found the pinnacles had he explored to the west of his spot.36 Freund AJ held that it was not necessary to make findings on these issues as he had already concluded 32 Judgment of the court below, para 193. 33 Judgment of the court below, para 194. 34 Judgment of the court below, para 195. 35 Judgment of the court below, para 196. 36 Judgment of the court below, para 197. that Tuckett had been negligent in another respect and that his negligence was causally linked to the harm. He suggested, however, that he inclined towards a finding of liability on this ground too.37 Analysis Factual findings [126] Freund AJ accepted as more probable the evidence of the plaintiff‟s witnesses and rejected as improbable the evidence of the defendants‟ witnesses as to the sea conditions and whether they deteriorated. In particular, he rejected the evidence of Tuckett in its entirety. He also appears to have rejected the evidence of every witness whose evidence supported Tuckett‟s version. He accepted, and relied heavily on, aspects of the evidence of Zietsman as to swell heights. [127] The factual findings of trial courts are presumed on appeal to be correct and will only be interfered with if they are the product of misdirection. In Santam Bpk v Biddulph38 Zulman JA held: „Whilst a Court of appeal is generally reluctant to disturb findings which depend on credibility it is trite that it will do so where such findings are plainly wrong (R v Dhlumayo and Another 1948 (2) SA 677 (A) at 706). This is especially so where the reasons given for the finding are seriously flawed. Overemphasis of the advantages which a trial Court enjoys is to be avoided, lest an appellant's right of appeal “becomes illusory” (Protea Assurance Co Ltd v Casey 1970 (2) SA 643 (A) at 648D-E and Munster Estates (Pty) Ltd v Killarney Hills (Pty) Ltd 1979 (1) SA 621 (A) at 623H- 624A). It is equally true that findings of credibility cannot be judged in isolation, but require to be considered in the light of proven facts and the probabilities of the matter under consideration.‟ [128] In my view, there are a number of criticisms that may be levelled against the judgment of the court below in respect of its assessment of the evidence and consequent factual findings. They amount to misdirections. 37 Judgment of the court below, para 198. 38 Santam Bpk v Biddulph [2004] ZASCA 11; 2004 (5) SA 586 (SCA), para 5. [129] The first is that the court below did not evaluate and assess the evidence of the witnesses properly. Freund AJ simply accepted the evidence of the plaintiff‟s witnesses and rejected the evidence of the defendants‟ witnesses without giving reasons of any substance as to why he preferred the one over the other: he referred to the probabilities as favouring one side and being against the other without justifying his conclusion. [130] For instance, he stated that, having regard to the probabilities, the „swell conditions prior to the capsize had become noticeably dangerous and . . . the evidence of Tuckett, and those who supported him to the effect that the conditions were benign, cannot be accepted‟.39 He did not say on what basis he had decided that the probabilities favoured this conclusion, especially when it was accepted by all of the witnesses with sea-going experience that conditions differ from spot to spot, that Smuts and Coetzee could only speak about conditions where their vessels lay and that Tuckett had testified that he had chosen his spot precisely because it was calmer. [131] In accepting the evidence of Smuts, Coetzee and Lennox that the sea condition was deteriorating Freund AJ overlooked the incorrect premise on which they based their opinion ─ the dropping tide. The evidence was that the capsize occurred shortly after high tide. The tide could not have dropped significantly by then and certainly was not dropping when they claim the deterioration of conditions caused them concern. This undermines Smuts‟ evidence that „with the tide dropping, the chances of swells breaking in that area were large‟40 and Lennox‟s hearsay evidence (to which, admittedly, little weight was attached) that „with the tide dropping, it was not going to be good to lie around any of the reefs‟ and that „[o]n low tide the swell would pick up‟.41 Low tide was still almost six hours away. [132] All of this is gainsaid by the fact that the evidence of those aboard Shark Team and Shark Fever, the closest boat to Shark Team, was that they 39 Judgment of the court below, para 151. 40 Judgment of the court below, para 76. 41 Judgment of the court below, para 88. experienced no breaking swells over the entire period that they were on the Geldsteen – over two hours in the case of Shark Team prior to the capsize, and more or less the same time, but both before and after the capsize, in the case of Shark Fever. They also saw no peaking or feathering swells where they lay. [133] The grounds upon which Freund AJ rejected Tuckett‟s evidence are flawed. They were that Tuckett had testified in chief that he had, on the request of his employer, filled in training logs after he had given crew members training and not contemporaneously, had not had the appropriate skipper‟s licence for a period while he skippered Shark Team and had been shown to be incorrect in his evidence that he had gone to the precise spot of the capsize numerous times before in the weeks preceding the incident. He had filled in the training logs some time after the capsize and the problem with his skipper‟s licence had occurred, and been rectified, about two years before the capsize. [134] These grounds accord no basis whatsoever for rejecting his evidence as a whole. Whether Tuckett filled in the training logs after the event, and not contemporaneously with the training being given, and whether he was properly certified as a skipper at some stage prior to the capsize had no material bearing on his credibility and were irrelevant to the issues before the court. In the second place, there was no suggestion that Tuckett was untruthful. Ironically, his forthrightness in disclosing these facts seems to have been held against him and was used as the basis for a finding that he was „not unwilling to mislead‟.42 [135] As for Tuckett‟s evidence about going previously to the precise spot of the capsize, it must be borne in mind that he was testifying about six years after the capsize occurred. When he was confronted with his boat‟s logs, they showed that in the five weeks or so preceding the capsize he had been to numerous spots all over the Geldsteen including spots close to his position on 42 Judgment of the court below, para 165. 13 April 2008. He had an explanation for that too. He said that one could not always go to a spot because it could already be taken by another boat or the wind or the swell prevented one from lying there. He also said that in the previous winter months he had used that spot many times. It was not suggested to him in cross-examination that he had tried to mislead the court deliberately, as opposed to making a sincere mistake. [136] Even if it were to be accepted that he had been untruthful about lying on the precise spot of the capsize during the preceding five weeks, that does not mean that everything else that he said must be rejected: evidence can be „good in parts‟.43 The ultimate question that must be answered „is not whether a witness is wholly truthful in all that he says, but whether the court can be satisfied . . . on a balance of probabilities in a civil matter, that the story which the witness tells is a true one in its essential features‟.44 [137] It is obviously so that Tuckett had an interest in the outcome of the case. That is not unusual at all. The matter concerns his personal liability and also affects his professional reputation. This does not mean that his evidence must be treated with suspicion, much less disregarded or discounted. It must still be dealt with on its merits, bearing in mind his interest.45 [138] He was also criticised for downplaying the size of the swell on the Geldsteen on the day in question. His evidence in this respect is, however, consistent with the evidence of everyone else who was aboard either Shark Team or Shark Fever and who testified. There is no suggestion – much less evidence of – a conspiracy between all of these witnesses. [139] Evidence of the swell size must also be viewed in its proper context. Throughout Tuckett‟s evidence he was at pains to say, when asked to estimate the size of a swell, that he found it difficult to do this, that he was taking an educated guess and that his estimates came with no guarantee of 43 H C Nicholas „Credibility of Witnesses‟ (1985) 102 SALJ 32 at 35. 44 Nicholas (note 43) at 35. 45 Nicholas (note 43) at 37-38. accuracy. All of the witnesses with sea-going experience confirmed that it is extremely difficult to estimate swell sizes, particularly from photographs and videos, and that the result may not be accurate. Not surprisingly, in the circumstances, the estimates of the size of the swell varied considerably from witness to witness: at one stage, Smuts, whose evidence was accepted and relied upon, spoke of an eight metre swell but his estimate was shown to be based on an erroneous assumption. [140] I have read the evidence of Tuckett – and re-read parts of it more than once – and I can see no proper basis for its rejection. To say, as Freund AJ did, that he has a propensity to mislead is, with respect, neither borne out by the evidence as a whole and nor is it fair. He may be subject to criticism in certain respects, but his evidence was supported in all material respects, and not only regarding swell size, by a number of witnesses who were aboard Shark Team and Shark Fever. I do not understand why that evidence apparently counted for naught and was rejected. [141] If a reason for the rejection of the evidence of those who supported Tuckett‟s version is discernible, it appears to have been their supposed interest in a favourable outcome for the defendants, or sympathy for or loyalty towards Tuckett. This is especially so in respect of Towner, Tuckett‟s partner. I could find nothing in the record that established any hint of these forms of bias on the part of Laird, Hewitt, Scholtz, Towner, Dix and Willcox. In addition, Laird and Dix had had nothing to do with Tuckett for a number of years and Willcox did not even know him. Even if criticism could be levelled against some of the witnesses in some respects, their evidence taken as a whole constitutes an impressive, consistent and weighty edifice. [142] Freund AJ accorded far too much weight to the evidence of the Meyers, and far too little weight to its deficiencies and their fairly made concessions. They spoke of windy conditions whereas every other witness spoke of a slight wind blowing. Their lack of sea-going experience made their evidence of deteriorating conditions worth little, even though I do not doubt their honesty. Their evidence of the conditions was vague. They conceded, fairly, that the crew would have had a better understanding of the conditions than them. Interestingly, Ms Meyer first thought that she had noticed conditions deteriorating when she was on the viewing deck where, because of its height above the deck she had been on, the movement of the boat is likely to have been exaggerated. Every other person aboard Shark Team did not experience any marked deterioration, and testified about a long, lazy swell, no breaking swells and no indications of peaking or feathering swells. [143] This evidence is largely consistent with the weather forecast for the area for 13 April 2008 and with the observations of Christina Rutzen and Chivell from the shore. Every witness who went from Kleinbaai to the Geldsteen that day spoke of it being a pleasant and easy trip. The evidence accords too with the conditions that Michael Rutzen encountered shortly after the capsize and that Dix spoke of at the precise spot of the capsize for about half an hour after the event. Zietsman‟s research reveals that if there was any deterioration in conditions it was marginal and would not have been discernible to the skippers at the time. The photographs taken after the capsize, particularly those depicting the rescue, show a calm sea. [144] What precisely was the evidence of Smuts and Coetzee? Smuts was at anchor for sufficient time to complete shark viewing. He was probably about 150 metres away from Shark Team. Swallow lay astern of and north-east of Barracuda which lay in a spot which Tuckett had felt was too rough. Smuts testified that the swell was bigger than he had anticipated but said that conditions were „threatening‟ but not dangerous. The threat was the dropping tide, which as I have discussed above was factually incorrect. He saw no swells breaking, although he spoke of some swells peaking. It would appear from his evidence that he believed there to have been a deterioration in the conditions in the five to ten minutes before the capsize. The threatening conditions could not have been a serious concern for him or else he would not have anchored and allowed shark viewing for nearly an hour and a half. Swallow was still at anchor when the capsize occurred. [145] Coetzee‟s evidence of deteriorating conditions is similarly sparse. Boiled down to its essentials, it is confined to four large swells that came past White Shark shortly before the capsize and persuaded him and Lennox to abort their trip. Before that the vessel lay at anchor for about half an hour and was still at anchor when the wave struck Shark Team. [146] It is not necessary, in my view, for the evidence of Smuts, Coetzee and Lennox to be rejected in order to accept the evidence of Tuckett and the witnesses who supported him. I say this because the evidence of Smuts, Coetzee and Lennox concerned conditions where Swallow and White Shark lay, some distance away from Shark Team and Shark Fever; and everyone accepted that conditions in the two locations could be different. By the same token, the evidence about the conditions they experienced cannot be taken to be evidence of the conditions that Tuckett, Scholtz and their crew and passengers experienced. In my view, Freund AJ erred when he held that despite the evidence, the probabilities pointed to conditions being much the same in the two different spots. [147] The only evidence adduced by the plaintiff of conditions where Shark Team and Shark Fever lay was that of Colyn who believed conditions to have been safe, even though he estimated the swell to have been about four metres in height. He never saw any breaking swells. He remained in the area of the capsize for about half an hour. He intended to put his cage down and to view sharks. The only reason why this did not happen, according to both Colyn and Dix, was that no one felt like viewing shark after the tragedy that befell Shark Team, not because it would have been dangerous to do so. [148] In my view, for the reasons that I have set out, the evidence of Tuckett and those who supported his version should not have been rejected by the court below. The rejection of this body of evidence constituted a misdirection. Once that evidence is accepted, as it should have been, it establishes that there were no signs, in the position where Shark Team lay, that would have alerted a reasonable skipper to the possibility of danger. Swell size and foul ground [149] In my view, Freund AJ‟s starting point was an incorrect formulation of the test to be applied as to the foreseeability of harm when he stated that „[t]he swell conditions were sufficiently large and threatening that Tuckett should have foreseen that a wave breaking over Shark Team was a reasonable possibility‟.46 Earlier in his judgment he had said that the question was not „whether the defendants could reasonably have foreseen a wave as large as the wave which actually capsized Shark Team‟ but whether „the conditions were such that the skipper could reasonably have been expected to foresee the risk of a wave breaking over Shark Team‟.47 [150] In the light of the facts of this case, and in line with the flexible approach advocated by this court in Sea Harvest,48 a more precise formulation of the harm that should have been foreseen by Tuckett is required. He should, in order to be held culpable, have foreseen the possibility of a wave breaking that was sufficiently large to capsize a boat of the size of Shark Team. That, according to Zietsman, could not have been achieved by a south-westerly swell on its own: in the prevailing conditions such a swell could not achieve the required size. [151] The incorrect formulation led Freund AJ to focus on the swell size as the determinant of foreseeable harm. All of the evidence of those with sea- going experience was that swell size on its own is not the problem: shark boats could work in big swells as long as they were long swells, as was the case on 13 April 2008. The danger lies in the swells breaking. The signs that this may happen ─ and that the potential for danger is present ─ are either swells starting to feather or to peak. [152] The focus on swell size led Freund AJ to take a swell size of four metres as some sort of safety cut-off. He then proceeded, on the basis of 46 Judgment of the court below, para 188. 47 Judgment of the court below, para 65. 48 Note 16, paras 22-24. Zietsman‟s conclusions as to the significant wave height49 to find that the four metre cut-off was exceeded, not on the basis of the significant wave height (which he had calculated to be in the region of three metres) but the assumed maximum wave height of twice the significant wave height. By doing this, he reduced what is really a matter of judgment by experienced skippers with local knowledge who take into account a range of factors, into a simplistic, formulaic process ─ when the swell is four metres, it is time to leave. What is worse, he calculated the cut-off according to the maximum wave height, rather than the significant wave height. In other words, on this approach, shark boats should return home if the significant wave height is two metres because the maximum wave height will be about double that. This is entirely unrealistic: if this were the standard that skippers had to adhere to, the shark boats would never put to sea. It is also unconnected to the foreseeability of any harm eventuating: some of the witnesses testified that one can have a dangerous sea with a small swell and a perfectly safe sea with a much larger swell. It will often depend on the period of the swell (and other factors like wind). [153] In fixing on the size of the swell as the determinant of imminent danger, he appeared to ignore the obvious safety measure of skippers making sure that their boats lie in sufficiently deep water. The rule of thumb of the shark boat skippers was that anything deeper than nine metres was good enough and considered safe. He also ignored the evidence that at the spot where the capsize occurred, no swells had broken that day or looked like breaking, and generally did not break, except in very big seas, when nobody would be at sea anyway. . [154] He attributed a great deal of importance to the Barracuda video in particular. It showed a limited number of big swells astern of Barracuda and a bit of feathering on one of them. This video has limited value because Barracuda was probably about 120 metres astern of Shark Team: the fact that 49 Significant wave height is a concept used to describe the sea state. It is the average of the one-third highest swells over a period. the vessels astern of her may have seen danger signs, does not mean that Tuckett should and could have, being some distance ahead of Barracuda. [155] On the other hand, Freund AJ made no mention of the fact that on both the Barracuda and Shark Team videos one sees passengers and crew moving around with ease and comfort, and a stable deck. Despite referring to the affidavit of the videographer who made the Barracuda video stating that the two big swells visible in the video appear more dramatic than they were,50 he simply discounted this evidence51 and relied on the video as a primary piece of evidence of deteriorating conditions. My colleagues and I have also viewed the video and do not share Freund AJ‟s observations. [156] Freund AJ made much of the assertion that the Geldsteen is inherently dangerous because it is foul ground. In this he read too much into the concept of foul ground. As a number of witnesses testified, it signifies an uneven sea floor that creates difficulties for anchoring but if a skipper places his or her boat in a sufficient depth of water and is careful to anchor properly, it poses no dangers. He also read too much into the evidence that breaking waves are experienced all over the Geldsteen in bad conditions. In the type of circumstances when the waves break all over the Geldsteen, no one puts to sea. Conclusion [157] The evidence establishes that at the spot where the capsize occurred, there were no danger signs that would have alerted a reasonable skipper to the need to depart in order to avoid the harm of a sufficiently large wave breaking, capsizing the boat and causing the death of a person. To this must be added the evidence of Zietsman that the south-westerly swell on its own could not have produced the type of wave that could have capsized Shark Team. Negligence on the part of Tuckett has thus not been established in this respect. 50 Judgment of the court below, para 144. 51 Judgment of the court below, para 159. [158] Even if the evidence of Smuts and Coetzee as to warning signs of danger is accepted, then another issue arises. According to both witnesses, the deterioration occurred over a short period – what Chivell and Zietsman would regard as impossibly short periods. Both Smuts and Lennox had decided, in the light of the warning signs they had just seen, to leave. They had not had time even to weigh anchor when the capsize occurred. If they are taken as the epitome of the reasonable skipper, then the warning signs came too late for Tuckett. Even if he had the same knowledge as them, the wave would have struck Shark Team before he could have weighed anchor. He could not have avoided the catastrophe. So, on these facts, which are favourable to the plaintiff, causation would not have been established. [159] The evidence establishes that no one knew of the pinnacles, that it would have taken sheer chance for anyone to find them with a single-beam fish finder, that all of the skippers believed from past experience that where Shark Team lay was safe and that no signs of danger were seen there at the time or before. On this basis, a reasonable skipper would have believed that he or she was lying in a safe spot: the depth where Shark Team lay was 11 metres and there were no indications of shallower water, and nor would there have been as a result of the depth, size and shape of the pinnacles. It would have made no difference if Tuckett had motored into the swell – in a south- westerly direction. The pinnacles lay to his west and as the swell was not coming from that direction, no danger could reasonably have been foreseen from that quarter. [160] The evidence establishes, thus, that a reasonable skipper in Tuckett‟s position would not have known of the pinnacles, would have had no way of knowing about them and would have believed himself or herself to be safe in the position where Shark Team lay. He or she would have done no more than Tuckett had done in motoring around his or her chosen spot with the fish- finder on, and would have had no reason to explore further to the west where the pinnacles were. Consequently, negligence on the part of Tuckett has not been established in this respect either. [161] Furthermore, the evidence of Zietsman was that the wave that capsized Shark Team was so big that it would have broken in the deeper water whether the pinnacle was there or not. That establishes an absence of causation, even if negligence had been established. [162] The wave was extraordinarily large. Its origin, it would appear, was not the south-westerly swell but the confluence of that swell, when it had attained a critical height, and the south-easterly wind, when it had attained a critical velocity, resulting in a wedging effect – a relatively rare occurrence and one that was unknown to even the most experienced of the skippers who testified. From the evidence of Zietsman, a civil and ocean engineer of immense experience, who identified the phenomenon with some difficulty, it may be concluded that a reasonable skipper in the position of Tuckett could not have been expected to know of this phenomenon, would not have known when the sea swell and wind had reached a critical height and velocity respectively, and would not have been able to recognise the signs of the phenomenon, let alone guard against the risk it posed. On that account, negligence on the part of Tuckett has not been established in relation to this issue either. [163] As a result of my conclusions on the negligence issue, it is not necessary to deal with the second issue, whether or not White Shark Projects‟ liability was limited in terms of s 261(1)(a) of the Merchant Shipping Act. [164] The appeal must, accordingly, succeed. The order [165] I make the following order: 1 The appeal is upheld with costs, including the costs of two counsel. 2 The order of the court below is set aside and replaced with the following order: „(a) The plaintiff‟s action is dismissed. (b) The plaintiff shall pay the defendants‟ costs, including the costs of two counsel and the qualifying expenses of: (i) Dr John Zietsman; (ii) Mr Michael Fiontann Hartnett; (iii) Professor Michael Tipton; (iv) Dr Cleeve Robinson; (v) Mr Robert Fine; (vi) Mr Wilfred Chivell; and (vii) Dr Linda Liebenberg.‟ __________________ C M Plasket Acting Judge of Appeal APPEARANCES: For Appellants: M Wragge SC (with him D Cooke) Instructed by: Edward Nathan Sonnenbergs, Cape Town Webbers, Bloemfontein For Respondent: D Melunsky Instructed by: Webber Wentzel, 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 31 March 2016 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. MV ‘Shark Team’ v Tallman (190/2015) [2016] ZASCA 46 (31 March 2016) MEDIA STATEMENT Today the Supreme Court of Appeal (SCA) upheld the appeal by MV ‘Shark Team’, Mr Grant Tuckett and White Shark Projects CC (the appellants) against a judgment of the Western Cape Division of the High Court, Cape Town, and accordingly dismissed the claim of Ms Sarah Tallman (the respondent), who had sought to hold them liable in delict for damages arising out of the death of her husband, Mr Christopher Tallman, who had drowned at sea while on a shark cage diving expedition operated by the appellants. In April 2008, the MV ‘Shark Team’, a ski-boat carrying tourists on a shark cage diving trip, capsized at sea after being hit by a large wave. As a result, three passengers drowned, including Mr Tallman. This is the first and only incident of its kind in the history of the industry in the area. Ms Tallman sought to hold the appellants liable for inter alia loss of support arising from the death of her husband, on the basis that his death had been caused by the negligence of the skipper of Shark Team, Mr Tuckett. The issue before the SCA was whether the death of Mr Tallman was caused by the negligence of Mr Tuckett, and whether the appellants should accordingly be held liable for the damages suffered by Ms Tallman. The factual points in dispute included the conditions at sea on the day in question, whether Mr Tuckett had acted with sufficient care in going shark cage diving given those conditions, whether he had taken adequate care to find a safe place to anchor while conducting the diving, whether the conditions deteriorated during the course of the trip, and whether he accordingly should have halted the trip earlier (ie before the capsize occurred). The trial in the court a quo had lasted 52 days, and both appellants and respondents had called numerous witnesses and led extensive expert evidence. After a comprehensive review of this evidence, the SCA concluded that on the day in question, Mr Tuckett had not acted negligently in choosing the anchoring spot he did, and there were no warning signs which would have alerted a reasonable skipper in his position to leave in time to avoid the wave in question. The capsize was caused by a wave that was abnormally large for the area, far larger than the average swell for the day, and which was the product of a rare cross-sea. This phenomenon occurred less than two per cent of the time, and was where a strong south-easterly wind produced swells which combined at irregular intervals with the ordinary south-westerly sea swells, with the result that certain waves were much larger than would otherwise be expected. As there was only one witness aware of this phenomenon, who was a highly qualified expert on oceanography, the SCA held that Mr Tuckett could not have been expected to know of it and taken it into account. On the facts then, the SCA held that the respondent had failed to prove that the death of Mr Tallman was caused by the negligence of Mr Tuckett, and accordingly upheld the appeal. --- ends ---

73

non-electoral

2017

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 633/2016 In the matter between: PRINCIPAL, MBILWI HIGH SCHOOL FIRST APPELLANT CHAIRPERSON OF SCHOOL GOVERNING SECOND APPELLANT BODY OF MBILWI HIGH SCHOOL SENIOR DISTRICT MANAGER, VHEMBE THIRD APPELLANT DISTRICT, DEPARTMENT OF BASIC EDUCATION MEC OF EDUCATION, FOURTH APPELLANT LIMPOPO PROVINCE and RM (OBO OM) RESPONDENT Neutral citation: Principal of Mbilwi High School v RM (633/2016) [2017] ZASCA 72 (1 June 2017) Coram: Ponnan, Theron, Majiedt, Wallis and Zondi JJA Heard: 16 May 2017 Delivered: 1 June 2017 Summary: Appeal: mootness: the court should exercise its discretion to hear an appeal where it relates to the proper construction and application of important provisions in the National Education Policy that will impact on the future conduct of education officials and learners. Interpretation: the high court misinterpreted the National Policy Pertaining to the Programme and Promotion Requirements of the National Curriculum Statement Grade R-12. __________________________________________________________________ ORDER __________________________________________________________________ On appeal from: Limpopo Local Division of the High Court, Thohoyandou (Makhafola J sitting as court of first instance): 1 The appeal is upheld. 2 The order of the high court is set aside and replaced with the following: „(i) The Rule Nisi granted on 30 January 2015 is discharged. (ii) The applicant is directed to pay the costs of this application.‟ _____________________________________________________________________________ JUDGMENT ______________________________________________________________________________ Theron JA (Ponnan, Majiedt, Wallis and Zondi JJA concurring): [1] The main issue in this appeal is the interpretation and application of the National Policy Pertaining to the Programme and Promotion Requirements of the National Curriculum Statement Grade R-12 (the National Policy) issued by the Department of Education. In particular it concerns the progression, promotion and retention of learners in the senior phase of the school program. [2] The facts giving rise to this matter are largely common cause. OM, a minor, was a learner at Mbilwi High School (the school) from 2011 until 2014. He was in grade 11 in 2014. The school routinely assessed learners throughout the academic year and usually held at least two meetings with parents where such assessments were discussed. OM was assessed during the 2014 academic year. At the end of the first term he obtained an aggregate mark of 63.1%, during the second term 43.7% and during the third term 46.7%. The final assessment for the 2014 academic year was conducted in November and he obtained an aggregate of 49.7% but he failed two subjects, namely, Mathematics and Physical Sciences, having achieved less than 30 per cent in both subjects. According to the school, because he had failed to satisfy the requirements for promotion to grade 12, it was obliged to retain him in grade 11. [3] During January 2015, the respondent, RM, the father and natural guardian of OM, lodged a complaint with the school about his son‟s retention in grade 11 and sought to have him progressed to grade 12. The school said that it was not entitled to do so and, after a re-mark of the mathematics and physical science papers did not result in an improvement in his marks, maintained that stance. On 6 January 2015, the respondent lodged an appeal with the third appellant, which appeal was dismissed. [4] On 30 January 2015, the respondent, in his capacity as parent and natural guardian of OM, brought an urgent application in the Limpopo Local Division of the High Court (the high court), against the appellants. The first appellant is the principal of the school. The second appellant is the chairperson of the Governing Body of the school. The third appellant is the Senior District Manager for the Vhembe District, Department of Education in Limpopo. The fourth respondent is the Member of the Executive Council, responsible for basic education in the province of Limpopo. [5] The respondent, inter alia, sought the following urgent relief in the high court: (i) That the decision of the school management team in refusing to promote OM from grade 11 to grade 12 was unlawful and be set aside. (ii) That the decision of the third appellant in dismissing the respondent‟s appeal was unlawful and be set aside. (iii) Directing that the school promote OM from grade 11 to grade 12 with immediate effect. (iv) Directing that the school‟s non-compliance with the Procedure Manual for Promotion and Submission of 2014/11 GET Grades 9, and NSC Grades 10 and 11 schedules and summaries, instruction 47 of 2014 (the Procedure Manual), was unlawful. (v) Directing that the school comply with the provisions of the Procedure Manual. [6] On that same day, 30 January 2015, and by agreement between the parties, an interim order was issued which essentially provided for the relief sought by the respondent. The interim order was confirmed on 31 March 2015. On 10 April 2015, the appellants applied for leave to appeal. On 14 April 2015, the respondent applied for and succeeded with an application in terms of Rule 49(11) for execution of the order pending the application for leave to appeal. OM thus progressed to grade 12 in 2015. [7] The reasons for the judgment were handed down on 18 October 2015. On 23 February 2016, the application for leave to appeal was refused by the high court. The first appellant appeals with the leave of this court. While there was an appearance for the respondent at the hearing of this matter, the matter was not opposed. [8] It was common cause that the outcome of this appeal would have no practical effect as between the parties. By the time the reasons for judgment were handed down on 18 October 2015, the learner had almost completed grade 12. The preliminary question in this matter is whether this court should, in any event, entertain this appeal. [9] Section 16(2)(a)(i) of the Superior Courts Act 10 of 2013 is relevant and reads: „When at the hearing of an appeal the issues are of such a nature that the decision sought will have no practical effect or result, the appeal may be dismissed on this ground alone.‟ The primary object of s 16(2)(a)(i) is to alleviate the heavy workload of courts of appeal.1 It is founded upon the principle that courts of law exist for the settlement of concrete controversies and not to pronounce upon abstract questions or to advise upon differing contentions.2 1 Absa Bank Ltd v Van Rensburg [2014] ZASCA 34;2014 (4) SA 626 (SCA) at 631E; Premier, Provinsie Mpumalanga & ‘n ander v Groblersdalse Stadsraad 1998 (2) SA 1136 (SCA) at 1137G-HD. 2 Tshwane City v Nambiti Technologies & others (Pty) Ltd [2015] ZASCA 167; 2016 (2) SA 494 (SCA) paras 5-7; Radio Pretoria v Chairman, Independent Communications Authority of South Africa, & another 2005 (1) SA 47 (SCA) at 48B-C; Land en Landbouontwikkelingsbank van Suid-Afrika v Conradie 2005 (4) SA 506 (SCA) at 510H- 511B; The Merak S; Sea Melody Enterprises SA v Bulktrans (Europe) Corporation 2002 (4) SA 273 (SCA) at 276G-I. The Constitutional Court has stated that: „A case is moot and therefore not justiciable if it no longer presents an existing or live controversy which should exist if the Court is to avoid giving advisory opinions on abstract proposition of law.‟3 [10] Section 16(2)(a)(i) confers a discretion on this court to hear an appeal notwithstanding mootness.4 Accordingly, the court on appeal may in appropriate cases, notwithstanding the mootness of the issue as between the parties to the litigation, hear an appeal where important questions of law are raised which are likely to arise in the future.5 [11] In my view, the proper interpretation and application of the provisions of the National Policy are important matters of law which will arise in future. The decision in this appeal extends beyond the parties. The precedential potential of this court‟s decision is similar to that in Motor Industry Staff Association v Macun NO & others,6 where Navsa JA, writing for the court, stated: „Had it not been for the precedential potential of the present case, it might well have been liable to be dismissed in terms of s 16(2)(a)(i) of the Superior Courts Act 10 of 2013 on the basis that it would, in the circumstances of the present case, have no practical effect.‟7 [12] Central to this matter is the question whether a learner may be progressed at all after having failed, for the first time, to meet the requirements for promotion. 3 National Coalition for Gay and Lesbian Equality & others v Minister of Home Affairs & others 2000 (2) SA 1 (CC) para 21 fn 18 and cases cited therein. 4 Centre for Child Law v Hoërskool Fochville & another [2015] ZASCA 155; 2016 (2) SA 121 (SCA) para 11; Absa Bank v Van Rensburg, supra, at 629F. 5 Absa Bank v Van Rensburg, supra, at 629F-630D (and cases referred to therein); Qoboshiyane NO & others v Avusa Publishing Eastern Cape (Pty) Ltd & others [2012] ZASCA 166; 2013 (3) SA 315 (SCA) at 319B-E. Centre for Child Law supra para 11; Sebola & another v Standard Bank of South Africa Ltd & another [2012] ZACC 11; 2012 (5) SA 142 (CC); Land en Landbouontwikkelingsbank van Suid-Afrika supra; The Merak S supra. 6 Motor Industry Staff Association v Macun NO & others [2015] ZASCA 190; 2016 (5) SA 76 (SCA) [2016] 3 BLLR 284 (SCA). 7 Ibid, para 25. The decision of the court a quo stands as a clear precedent that progression is to be considered by the National Department of Education (the department) in such cases. The issue in this matter on which the adjudication of this court is required involves the proper construction and application of provisions in the National Policy which will impact on the future conduct of the appellants as well as learners.8 In these circumstances, this court should exercise its discretion to entertain the appeal. [13] The applicable legislative framework is primarily to be found in the National Policy and the Procedure Manual. The Procedure Manual consists of three Annexures. Annexure „A‟ deals with promotion requirements. Annexure „B‟ is titled „Procedure for SMT and Subject Teacher‟s Meeting for Promotion, Retention and Progression of Grades 9, 10 and 11 Learners 2014‟. Annexure „C‟ sets out the procedure relating to the „Information Meeting with parents/guardians regarding progression and retention of Grades 9, 10 and 11 Learners 2014‟. [14] In the National Policy, promotion is defined as: „the movement of a learner from one grade to the next when that learner meets the minimum required level of achievement per subject in a particular grade‟. Progression is defined as: „the advancement of a learner from one grade to the next . . . in spite of the learner not having complied with all the promotion requirements.‟ [15] Section 29(1) of the National Policy provides that a learner in grades 10-12 will be promoted from grade to grade if such a learner has, inter alia, completed end-of-year examination requirements in no fewer than seven subjects, and has 8 Executive Officer, Financial Services Board v Dynamic Wealth Ltd & others [2011] ZASCA 193; 2012 (1) SA 453 (SCA) paras 43 and 44. achieved 40% in three subjects, one of which is an official language at Home Language level, and 30% in three subjects. The learner may fail, that is, obtain less than 30% in one subject provided they have completed the curriculum and written the examination. This was the stumbling block for OM. Section 29(1) is to be read with Annexures „A‟, „B‟ and „C‟ of the Procedure Manual. [16] Annexure „A‟, sets out the promotion, retention and progression requirements, in relevant part, as follows: „2.4 Promotion of a Learner 2.4.1 For Grades 04 to 08 learners who meet promotion requirements, “RP” for “Ready to Progress” is written in the appropriate column against the name of the learner in the Promotion Schedule. 2.4.2 For Grades 9, 10 and 11 learners who meet promotion requirements, “P” for “Promoted” is written in the appropriate column against the name of the learner in the Promotion Schedule. 2.5 Retention of a Learner 2.5.1 A learner who does not meet the promotion requirements for the first time in the Intermediate, Senior or FET [Further Education and Training] phase, must be retained, and 2.5.2 For Grades 04, to 08 learners who do not meet the promotion requirements, “NR” for “Not Ready to Progress” to is written in the appropriate column against the name of the learner in the Promotion Schedule. 2.5.3 For Grades 9, 10 and 11 learner, “R‟” for “Retained” is written in the appropriate column against the name of the learner in the Promotion Schedule. 2.6 Progression 2.6.1 Guiding Principle: a learner may only be retained once in phase in order to prevent the learner being retained in this phase for longer than four years 2.6.2 If the learner has already been retained in a phase, the learner ordinarily qualifies to be “Progressed”. 2.6.3 If on the basis of the evidence available the school deems it is in the best interest of the learner to move to the next grade, then the learner is “Progressed”. 2.6.4 The “QP” for “Progressed” is written in the appropriate column against the name of the learner in the Promotion Schedule. 2.7 Retention of Learners who ordinarily qualify for progression 2.7.1 If a learner ordinarily qualifies for progression, but the school has educational reasons or evidence that it is in the best interest of the learner to be retained, then the learner is “Retained”‟. [17] Clause 2.5.1 of Annexure „A‟ provides in peremptory terms that a learner who does not meet the promotion requirements for the first time in the intermediate, Senior or FET phase, must be retained. This is the only provision dealing with the failure of a learner to achieve promotion to the next grade for the first time. Clauses 2.6, 2.7.4 and 5 deal with learners who have failed, for the second time, to achieve promotion after having been retained in a grade, and do not detract from clause 2.5. [18] This view is fortified by clauses 3 and 4 of Annexure „B‟ which read: „3 Consider the learners who do not qualify for progression. These are learners who have not met the promotion requirements for [the] first time in a phase. Write “R” for “Retained” against the name of the name of the learner. Consider learners who ordinarily qualify for progression on the basis that they have already been retained once in the phase. 4.1 If evidence available is such that it serves the best interest of the learner to be progressed, then the learner is progressed . . . 4.2 If the evidence available or educational reasons are such that it is in the best interest of the learner to be retained, then the learner is retained . . .‟ [19] The guiding principle in respect of progression is that a learner may only be retained once in a four year phase. If a learner has already been retained in a phase, such learner ordinarily qualifies to be progressed, if the school deems it is in the best interest of a learner to do so. The system is clear: a first failure to meet promotion standards results in a compulsory retention. A second failure has to be dealt with on a discretionary basis weighing the objective to avoid the learner being retained in this phase for longer than four years (which means that the learner ordinarily qualifies to be „progressed‟) against the evidence available as to whether it would be in the best interest of the learner to be progressed. It is clear from this framework that progression is not to be afforded a learner who has failed to meet the promotion requirements for the first time. The school management only has a discretion whether or not to retain or progress the learner, following a second failure to achieve the requirements for promotion. [20] Clause 4.1 of Annexure „A‟ provides that the school management team must hold an information meeting with the parents of all learners who qualify for progression, irrespective of whether they are to be progressed or retained. If the parents of a learner who qualifies for progression agree with the decision of the school management team to either progress or retain the learner, a Partnership Contract must be entered into between the parties. In the event that the parents contest the decision of the school management team, they may appeal against such decision to the Senior District Manager. [21] Annexure „C‟ deals with the procedure for the information meeting with parents as envisaged in clause 4.1 of Annexure „A‟ and the conclusion of the Partnership Contract provided for in clause 4.2 thereof. This only applies to learners who ordinarily qualify for progression, namely those who, in terms of clause 4.1 have already been retained once in a phase. Annexure „C‟ sets out the applicable procedure to be adopted, relating to either the progression or retention of such a learner for the second time and how this should be dealt with between the school, the parents and the learner. Whether or not progression is to follow (as opposed to a second retention) is then to be dealt with by way of proper discourse through an information meeting with the parents per clause 4 of annexure „A‟ read with clauses 4 and 5 of annexure „B‟ and the Partnership Contract provisions of annexure „C‟. It follows that both the information meeting and the appeal provided for in clause 5 of annexure „A‟ will only come into play in respect of a learner who has failed to achieve the promotion requirements for the second time, and not the first time. [22] It was common cause that OM had failed more than one subject and did not meet the minimum required level of achievement for promotion to grade 12. It was also common cause that he had not previously been retained in that phase. In the circumstances, he did not qualify for progression to grade 12. The terms of the National Policy, read with the Procedure Manual, dictated that he had to be retained in grade 11. The provisions of clause 2 of Annexure „A‟, read together with Annexure „C‟, with regard to the holding of an information meeting with his parents, was not applicable to his situation. [23] On a proper construction and application of the National Policy and the Procedure Manual, a learner may only be progressed upon having failed to achieve the requirements for promotion for the second time. The first failure has to be dealt with by way of retention in the same grade. Should a second failure follow, the educational authorities have a discretion to decide whether a further retention, or progression, would be in the best interest of the learner. That decision is to be taken in consultation with the parents and a Partnership Agreement is to be entered into between the parties. It is only the latter decision, i.e. how a second failure is to be dealt with, that is subject to an appeal in the event that the educational authorities and the parents do not agree. [24] The flawed reasoning of the high court appears from the following paragraphs of the reasons for judgment: „[2] The dispute has turned uglier in that the learner has been tossed between Mbilwi High School and Nazarene School of Natural Sciences and this conduct of the 1st, 2nd and 3rd respondents has become an affront to the best interests of this child-learner impacting the core of the justness and fairness to him. [3] It is on this basis that this court had to intervene and redirect the confronting parties to a solution in favour of the child. The court has acted in terms of the letter and spirit of Section 4(a) of the [C]hildren‟s Act 38 of 2005 which provides: “In any matter concerning a child-(a) an approach which is conducive to conciliation and problem-solving should be followed and a confrontational approach should be avoided”. In the result, the confirmation of the Rule Nisi in favour of the applicant was found to serve the best interests of the child. … [18] The law concerning children is clear both in the [C]onstitution, and [C]hildren‟s Act and other legislation relating to treatment of children. Further, the Education Department‟s Regulations are lucid and have to be complied with to promote and protect the welfare of learners. . . . [19] The respondents did not act in terms of annexure “C” relating to procedure for information meeting with parents/guardians regarding progression and retention of grades 9, 10 and 11 learners 2014.‟ [25] The high court found that the school had „flouted‟ the national policy „by not following correct procedures‟. The basis for this finding is to be found in para 19 of the judgment where it is stated that the appellants failed to act in accordance with Annexure „C‟ relating to the procedure for the holding of an information meeting with parents. This finding of the high court is based on the premise that the provisions pertaining to progression were applicable. The high court was wrong in that it had simply interpreted the policy incorrectly. [26] It follows that an appeal did not lie to the third appellant against the decision by the school management team that the learner be retained in grade 11. This question did not arise in this matter. It was however dealt by the high court in the following manner: „Paragraph 11 of the founding affidavit is a scathing attack on non-compliance with regulation[s] relating to the composition of the appeal panel. Without being ashamed, the respondents do not admit the irregularity …. Instead the deponent, justifies the irregularity and challenges the applicant to prove prejudice to himself (the applicant).‟ Insofar as the high court made any findings in this regard, these are obiter and not binding. [27] For these reasons the following order is made: 1 The appeal is upheld. 2 The order of the high court is set aside and replaced with the following: „(i) The Rule Nisi granted on 30 January 2015 is discharged. (ii) The applicant is directed to pay the costs of this application.‟ _________________ LV Theron Judge of Appeal APPEARANCES: For the Appellants: R J Raath SC and T W G Bester SC Instructed by: Mathivha Attorneys, Thohoyandou Molefi, Thoabaka Attorneys, Bloemfontein For the Respondent: M S Sikhwari Instructed by: Mvundlela & Associates, Thohoyandou Webbers Attorneys, Bloemfontein

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL PRINCIPAL OF MBILWI HIGH SCHOOL & OTHERS V MAKHERA RATSHILUMELA JOHANNES (OBO OVHONALA MAKHERA) From: The Registrar, Supreme Court of Appeal Date: 30 May 2017 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 upheld an appeal against a judgment of the high court, Limpopo Local Division, Thohoyandou, concerning the interpretation and application of the National Policy Pertaining to the Programme and Promotion Requirements of the National Curriculum Statement Grade R -12 (National Policy) issued by the Department of Education. On 30 January 2015, the respondent brought an urgent application against the appellants in his capacity as parent and natural guardian of his minor son, Ovhonala Makhera (Ovhonala). The respondent required that the decision of the school management team refusing to promote Ovhonala from grade 11 to grade 12 be set aside and directed that Ovhonala be promoted from grade 11 to grade 12 with immediate effect. On that same day, and by agreement between the parties, an interim order was issued and on 10 April 2015 the appellants applied for leave to appeal. An execution order was granted on 14 April 2015 pending the application for leave to appeal and Ovhonala progressed to grade 12 in 2015. Reasons for the judgment of the court a quo were handed down on 18 October 2015. It was common cause that the outcome of this appeal would have no practical effect between the parties as Ovhonala had almost completed grade 12 in 2015. The SCA held that the proper interpretation and application of the provisions of the National Policy are important matters of law which will have an impact on the future conduct of the appellants’ as well as learners. The SCA found that a learner may only be progressed upon having failed to achieve the requirements for promotion for the second time. The first failure has to be dealt with by way of retention in the same grade and should second failure follow, the educational authorities have a discretion to decide whether a further retention, or progression, would be in the best interest of the learner. That decision is to be taken in consultation with the parents and a Partnership Agreement is to be entered into between the parties, it is only when a second failure is to be dealt with, that is subject to an appeal in the event that the educational authorities and the parents do not agree.

4092

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 681/2022 In the matter between: GIDEON JAKOBUS PETRUS STEMMET FIRST APPELLANT ELAINE STEMMET SECOND APPELLANT and TSELISO JAMES MOKHETHI FIRST RESPONDENT MMAKWELENG NAOMI MOKHETHI SECOND RESPONDENT Neutral citation: Stemmet and Another v Mokhethi and Another (681/2022) [2023] ZASCA 127(04 October 2023) Coram: MAKGOKA, MATOJANE, WEINER and MOLEFE JJA and MALI AJA Heard: 25 August 2023 Delivered: 04 October 2023 Summary: Civil procedure – Prescription Act 68 of 1969 – knowledge of minimum facts required for prescription to start running. ORDER On appeal from: Free State Division of the High Court, Bloemfontein (Matshaya AJ with Mbhele AJP concurring and Daffue J dissenting, sitting as a court of appeal): The appeal is upheld with costs. The order of the full court is set aside and replaced with the following: ‘1. The appeal is upheld with costs. 2. The order of the magistrate’s court is set aside and replaced with the following: “The defendants’ special plea of prescription is upheld and the plaintiffs’ claim is dismissed with costs”.’ JUDGMENT Weiner JA (Makgoka, Matojane and Molefe JJA and Mali AJA concurring): Introduction [1] This is an appeal against the judgment and order of the majority of the full court of the Free State Division of the High Court, Bloemfontein (the full court). The appeal is with the special leave of this Court. The matter concerned the prescription of a claim which Mr and Mrs Mokhethi (the respondents) had instituted against Mr and Mrs Stemmet (the appellants). The claim involved latent and undisclosed defects (the defects) which the respondents discovered some time after they had purchased the appellants’ property situated in Fichardt Park, Bloemfontein (the property). The respondents had viewed the property on two separate occasions. They were impressed with the condition of the property and an agreement of sale was concluded on 24 May 2013. The purchase price was R1 290 000. A mortgage bond over the property was registered in favour of Absa Bank (Absa) for the purchase price. [2] After payment of the purchase price by the respondents, the property was transferred to the respondents on 22 July 2013, on which day the respondents took occupation of the property. Several months after taking occupation, but prior to 24 June 2014, [3] the respondents noticed the following defects on the property: (a) structural cracks: (i) in the main, second and third bedrooms, (ii) along the rafters in the northern gable wall, (iii) in the bathroom and kitchen, (iv) in the ceiling in the passage, and (v) in the outside walls of the living room, garage and dining-room; and (b) windows and cornices detaching from the walls. [4] On 24 June 2014, the respondents lodged a claim with Absa, which, as part of its financing of the purchase price of the property, had insurance cover over the property. On 12 August 2014, Absa declined the claim on the basis that ‘the defects were old and gradual, had been previously patched and were caused by the expansion and retraction of the clay upon which the property was built’. [5] On 19 July 2017, the respondents issued summons against the appellants in the magistrate’s court for damages. They alleged, in their amended particulars of claim, that, at the time of the purchase: the appellants knew of the defects and failed to disclose them and/or concealed them; the appellants knew or ought to have known that the property was built upon clay, which expanded and retracted during wet and dry conditions; and that the foundation was not adequately underpinned and supported. These problems caused structural cracks to manifest. The appellants, alleged the respondents, had a duty to inform them of the latent defects and they failed to do so. The respondents relied on delict in the form of fraudulent non- disclosure of the defects and/or the fraudulent concealment of the defects, which induced them to purchase the property, which they would not have done had they been aware of the defects. [6] In anticipation of a possible special plea of prescription, the respondents averred that they obtained ‘knowledge of the cause of and the existence of the defects and/or latent defects’ on 12 August 2014, when they were informed by Absa that the said defects were ‘old and gradual, had been previously patched and were caused by . . . [active] clay’. The respondents claimed a sum of R128 423.26, being, inter alia, the cost of repairs to the property. The summons was served on the appellants on 27 July 2017. [7] Together with their amended plea, the appellants raised a special plea of prescription. They averred that the respondents were aware of the defects by June 2014, by which time, the running of prescription had already commenced. As summons was only served on 27 July 2017, the claim had prescribed. In their replication to the appellants’ special plea, the respondents did not join issue with the appellants’ special plea of prescription. [8] Section 12 of the Prescription Act 68 of 1969 (the Act) provides: ‘(1) Subject to the provisions of subsections (2), (3), and (4), 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.’ [9] In due course the matter came before the magistrate’s court for trial. The first respondent testified on behalf of the respondents. With regard to prescription, his evidence can be summed up as follows. Several cracks began appearing on the walls of the property some time before 24 June 2014, and he concluded that the property was ‘falling apart’ and not fit for habitation. This resulted in the respondents lodging a claim with Absa, their insurer on that date. On 12 August 2014, Absa repudiated the claim, as mentioned. [10] In explaining when he first noticed the defects, the first respondent made several statements in his testimony, which bear repeating: (a) He was a qualified engineer, although he hadn’t practised as such for many years. (b) He purchased the property because of the excellent condition it was in. (c) Prior to June 2014, when he submitted the claim to Absa, there were problems with doors jamming, after which cracks began appearing above these doors, which cracks grew bigger and bigger. (d) About a month or two before June 2014, he realised that the cracks were growing bigger and were structural. (e) He took photographs of the defects and made inscriptions on them, before he submitted the claim to Absa. The photographs were taken at different times. The inscriptions refer to large structural cracks, which were either horizontal, vertical or diagonal. The cracks were detected both inside and outside, with one in the main bedroom going ‘through the 200m wall from the inside to the outside of the property’. (f) The patchwork became visible – it was clear that cracks had been covered up. (g) He had knowledge, because of his profession, of what structural cracks were and that they were different to plaster cracks. He described a structural crack as, ‘. . . it goes through the wall, it goes through the structure. . . They will say it’s a structural crack, because the structure is cracking and not the plaster is cracking’. They were not hairline cracks. (h) On the diagram of the property, forming part of the bundle of photographs, he had indicated that the cracks were ‘literally everywhere’ and ‘developing every day’. As the cracks were growing bigger every day, he reported the matter to Absa. (i) He took the photographs ‘[b]asically to make a case . . . in terms of the structure falling apart’. (j) All of the instances above were known to him before he submitted the claim to Absa on 24 June 2014. He did not, however, according to him, know the cause of the cracks. [11] In its judgment, the magistrate’s court reasoned that the respondents could only have acquired the minimum facts to interrupt prescription on 12 August 2014. This was the date on which Absa declined their claim and provided the reason for its decision. It accordingly dismissed the special plea of prescription and went on to consider the merits of the respondents’ claim. It granted judgment against the appellants on the merits. [12] The appellants appealed to the high court. They did not appeal the finding on the merits of the claim. The parties thereafter settled the quantum at R128 423.26.1 The only issue before that court was whether the special plea of prescription had been correctly dismissed by the magistrate’s court. The appeal initially served before two Judges. They did not agree on the outcome of the appeal. As a result, a third Judge was called in. This is how the matter came to be heard by the full court. [13] The full court was not unanimous. The majority dismissed the appeal, while the minority would have upheld the appeal, having found that the respondents’ claim had prescribed. The majority relied upon several authorities dealing with prescription.2 It is trite that the debt becomes due (and prescription begins to run) when the creditor has the minimum facts necessary to institute action. In Minister of Finance v Gore, this Court held that ‘[t]he running of prescription is not postponed until a creditor becomes aware of the full extent of its legal rights, nor until the creditor has evidence that would enable it to prove a case “comfortably”’.3 However, the majority and minority differed on what constituted the minimum facts in the present case for prescription to have started running. 1 This amount included the fees of the respondents’ experts for the inspection of the property and the compilation of the reports. 2 Truter and Another v Deysel [2006] ZASCA 16; 2006 (4) SA 168 (SCA) (Truter); Anglorand Securities Ltd v Mudau and Another [2011] ZASCA 76 (SCA); Evins v Shield Insurance Co Ltd 1980 (2) SA 814 (A); Minister of Finance and Others v Gore NO [2006] ZASCA 98; [2007] 1 All SA 309 (SCA); 2007 (1) SA 111 (SCA); Macleod v Kweyiya [2013] ZASCA 28; 2013 (6) SA 1 (SCA); Links v MEC, Department of Health, Northern Cape [2016] ZACC 10; 2016 (5) BCLR 656 (CC); 2016 (4) SA 414 (CC) (Links). 3 Gore supra para 17. [14] The majority agreed with the magistrate’s court. They concluded that the respondents only acquired knowledge of the basis of their cause of action, for the purposes of prescription, when the respondents received the letter from Absa on 12 August 2014. It was only in such letter that they were informed that the cracks were due to ‘active clay and it was previously patched, the damage was deemed old and gradual’. Alternatively, they only acquired such knowledge when their experts informed them of their opinion on the cause of the damage to the property on 30 September 2014. [15] The majority found that, in June 2014, the respondents could not have known whether their debtor was the appellants, the insurer or a builder. Conversely, the minority found that there could not have been a doubt that the appellants were liable either in contract or delict. In addition, having noticed the structural cracks, and informing Absa that the property was ‘falling apart’, in June 2014, they were in possession of the minimum facts necessary to institute action. The existence of the clay conditions and unstable foundations, which the experts testified about, was a matter for evidence and the respondents were not required to have this knowledge to institute the action. [16] The question that arises is: when did the respondents become aware of the existence of the defects and the damages arising therefrom to satisfy section 12(2) of the Act and did they, at that stage, know the identity of the person responsible for their damage, to satisfy the requirement in section 12(3) of the Act? [17] It is convenient to first dispose of the second requirement of s 12(3), ie knowledge of the identity of the debtor. In this regard, the respondents could not have had any doubt that it was the appellants. It is from the appellants that they had purchased the property, in seemingly perfect condition, newly painted and neat. Within a few months, the doors began jamming, cracks began appearing and continued to emerge and worsen as time went on until it reached the point that the property was ‘falling apart’. Who else, it can be asked, under these circumstances, could the respondents look to for their damage, other than the appellants? At that stage, it would not matter to the respondents what the cause of the defects was. The cause of the defects as later determined in the opinions of experts, was not required at that stage to complete the cause of action. That was a matter for evidence. [18] I turn to the first requirement. The onus is on the appellants to show that the respondents were, three years prior to 27 July 2017, in possession of sufficient facts to cause them, on reasonable grounds, to believe that they had a claim against the appellants and that the appellants were aware of the defects, but failed to disclose them and/or that such defects were concealed by the appellants.4 Thus, it must be determined as to precisely when the respondents had acquired the minimum knowledge necessary to institute action against the appellants. This is a factual enquiry. It is to that aspect that I turn. [19] The respondents contended that they only became aware of the cause of the latent defects, which would form the basis of their cause of action, on receipt of Absa’s letter on 12 August 2014. Thus, by the time the summons was served upon the appellants on 27 July 2017, the claim had not prescribed. The respondents also relied upon expert reports which they received on 30 September 2014, to allege, in the alternative, that the claim only prescribed three years after 30 September 2014. 4 Links supra para 42. [20] It is common cause that the defects started to manifest some time before 24 June 2014, when the respondents lodged the claim with Absa. Thus, at that stage, the respondents were aware that there were structural problems with the property. What they did not know, was the cause thereof. The question is whether they needed to know the cause of the defects, to complete the minimum facts necessary for prescription to run. The majority answered that in the affirmative. It concluded that, until the respondents knew what the cause of the defects was, prescription could not begin to run. The issue on appeal is whether that conclusion was correct. [21] In Truter and Another v Deysel,5 this Court stated that in a delictual claim, the requirements of fault and unlawfulness do not constitute the factual ingredients of the cause of action, but are legal conclusions to be drawn from the facts. The facts in that case are significant and apposite in the present case. The plaintiff had a surgical procedure in 1993, but only received a medical report of negligence in 2000. The high court had held that it was only when the plaintiff received the medical report that prescription began to run. This Court upheld the appeal on the basis that the facts which the plaintiff requires are those which he can prove and which support his right to judgment. ‘It does not comprise every piece of evidence which is necessary to prove each fact’.6 (Emphasis added.) It was held further that: ‘In a delictual claim, the requirements of fault and unlawfulness do not constitute factual ingredients of the cause of action, but are legal conclusions to be drawn from the facts: “A cause of action means the combination of facts that are material for the plaintiff to prove in order to succeed with his action. Such facts must enable a court to arrive at certain legal conclusions regarding unlawfulness and fault, the constituent elements of a delictual cause of 5 Truter supra para 19 6 Truter supra para 19. action being a combination of factual and legal conclusions, namely a causative act, harm, unlawfulness and culpability or fault”.’7 (Original emphasis.) [22] This Court in Macleod v Kweyiya, in dealing with this issue stated: ‘In order to successfully invoke s 12(3) of the Prescription Act, either actual or constructive knowledge must be proved. Actual knowledge is established if it can be shown that the creditor actually knew the facts and the identity of the debtor. The appellant places no reliance on actual knowledge but on constructive knowledge. Constructive knowledge is established if the creditor could reasonably have acquired knowledge of the identity of the debtor and the facts on which the debt arises by exercising reasonable care. The test is what a reasonable person in his position would have done, meaning that there is an expectation to act reasonably and with the diligence of a reasonable person. A creditor cannot simply sit back and “by supine inaction arbitrarily and at will postpone the commencement of prescription”. What is required is merely the knowledge of the minimum facts that are necessary to institute action and not all the evidence that would ensure the ability of the creditor to prove its case comfortably.’8 (Emphasis added.) [23] The Constitutional Court’s conclusion in Mtokonya v Minister of Police9 sets out clearly the requisites relating to when a claim arises, and prescription begins to run: ‘Furthermore, to say that the meaning of the phrase “the knowledge of . . . the facts from which the debt arises” includes knowledge that the conduct of the debtor giving rise to the debt is wrongful and actionable in law would render our law of prescription so ineffective that it may as well be abolished. I say this because prescription would, for all intents and purposes, not run against people who have no legal training at all. That includes not only people who are not formally educated but also those who are professionals in non-legal professions. However, it would also not run against trained lawyers if the field concerned happens to be a branch of law with which they are not familiar. The percentage of people in the South African population against whom prescription 7 Truter supra para 17. 8 Macleod supra para 9. 9 Mtokonya v Minister of Police [2017] ZACC 33; 2017 (11) BCLR 1443 (CC); 2018 (2) SA 22 (CC). would not run when they have claims to pursue in the courts would be unacceptably high. In this regard, it needs to be emphasised that the meaning that we are urged to say is included in section 12(3) is not that a creditor must have a suspicion (even a reasonable suspicion at that) that the conduct of the debtor giving rise to the debt is wrongful and actionable but we are urged to say that a creditor must have knowledge that such conduct is wrongful and actionable in law. If we were asked to say a creditor needs to have a reasonable suspicion that the conduct is or may be wrongful and actionable in law, that would have required something less than knowledge that it is so and would not exclude too significant a percentage of society.’10 [24] From the common cause facts, it is clear that, as early as June 2014, the respondents were in possession of sufficient facts to cause them, on reasonable grounds, to believe that there had been attempts by the appellants to cover up latent defects in the property. In this regard, it is important to bear in mind that, according to the first respondent’s evidence, and from the photos submitted in evidence, the patchwork on the cracks was evident before the respondents lodged the claim with Absa on 24 June 2014. The attempt to patch up the cracks would have immediately led to a reasonable belief that the respondents had fraudulently misrepresented the facts to them. That apprehension was sufficient to complete their cause of action against the appellants. They thus had knowledge of sufficient facts which would have led them to believe that the defects existed when they purchased the property from the appellants, and that they were fraudulently concealed by the appellants.11 [25] It follows that the conclusion of the majority that the respondents only had the necessary knowledge of the minimum facts, on becoming aware of the cause of the defects, is at odds with established applicable legal principles referred to above. It 10 Ibid para 63. 11 Links supra para 42. also did not take account of the material facts, including the first respondent’s evidence, set out above. [26] The appeal must succeed. Costs should follow the result. [27] The following order is granted: The appeal is upheld with costs. The order of the full court is set aside and replaced with the following: ‘1. The appeal is upheld with costs. 2. The order of the magistrate’s court is set aside and replaced with the following: “The defendants’ special plea of prescription is upheld and the plaintiffs’ claim is dismissed with costs”.’ ____________________ S E WEINER JUDGE OF APPEAL Appearances For the appellants: J Ferreira Instructed by: Stander and Associates, Bloemfontein For the respondents: J J Buys Instructed by: Willie J Botha 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: 04 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 Stemmet and Another v Mokhethi and Another (681/2022) [2023] ZASCA 127 (04 October 2023) Today, the Supreme Court of Appeal (SCA) upheld an appeal with costs against the majority decision of the Free State Division of the High Court, Bloemfontein per Matshaya AJ with Mbhele AJP concurring and Daffue J dissenting (the full court), which had dismissed an appeal against the decision of the magistrate’s court. The matter concerned the prescription of a claim which Mr and Mrs Mokhethi (the respondents) had instituted against Mr and Mrs Stemmet (the appellants). The claim involved latent and undisclosed defects which the respondents discovered some time after they had purchased the appellants’ property situated in Fichardt Park, Bloemfontein (the property). The facts of the matter were briefly as follows. After payment of the purchase price by the respondents, the property was transferred to the respondents on 22 July 2013, on which day the respondents took occupation of the property. Several months after taking occupation, but prior to 24 June 2014, the respondents noticed some defects with the property, which defects included structural cracks in the walls. On 24 June 2014, the respondents lodged a claim with Absa bank (Absa), which were their insurers. On 12 August 2014, Absa declined the claim on the basis that ‘the defects were old and gradual, had been previously patched and were caused by the expansion and retraction of the clay upon which the property was built’. On 19 July 2017, the respondents issued summons against the appellants in the magistrate’s court for damages. The respondents relied on delict in the form of fraudulent non- disclosure of the defects and/or the fraudulent concealment of the defects, which induced them to purchase the property, which they would not have done had they been aware of the defects. The summons was served on the appellants on 27 July 2017. In reply, the appellants raised a special plea of prescription. They averred that the respondents were aware of the defects by June 2014, by which time, the running of prescription had already commenced. As summons was only served on 27 July 2017, the claim had prescribed. The question before the SCA was when did the respondents become aware of the existence of the existence of the defects and the damages arising therefrom to satisfy s 12(2) of the Prescription Act 68 of 1969 (the Act); and did they, at that stage, know the identity of the person responsible for their damage, to satisfy the requirement in s 12(3) of the Act? In regard to knowledge of the identity of the debtor, the SCA found that the respondents could not have had any doubt that it was the appellants. It was from the appellants that they had purchased the property, in seemingly perfect condition, newly painted and neat. Within a few months, the doors began jamming, cracks began appearing and continued to emerge and worsen as time went on until it reached the point that the property was ‘falling apart’. The SCA found further that at that stage, it would not matter to the respondents what the cause of the defects was. The cause of the defects as later determined in the opinions of experts, was not required at that stage to complete the cause of action. That was a matter for evidence. The SCA found further that from the common cause facts, it was clear that, as early as June 2014, the respondents were in possession of sufficient facts to cause them, on reasonable grounds, to believe that there had been attempts by the appellants to cover up latent defects in the property. The attempt to patch up the cracks would have immediately led to a reasonable belief that the respondents had fraudulently misrepresented the facts to them. That apprehension was sufficient to complete their cause of action against the appellants. They thus had knowledge of sufficient facts which would have led them to believe that the defects existed when they purchased the property from the appellants, and that they were fraudulently concealed by the appellants. It followed, the SCA held, that the conclusion of the majority in the full court that the respondents only had the necessary knowledge of the minimum facts, on becoming aware of the cause of the defects, was at odds with established applicable legal principles. It also did not take account of the material facts, including the first respondent’s evidence. Accordingly, the appeal succeeded. ~~~~ends~~~~

1385

non-electoral

2010

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT No precedential value Case No: 515/2009 In the matter between: ROSEMARY M MATHAVHA NO Appellant and ZIBA SIBEKO Respondent Neutral citation: Mathavha v Sibeko (515/09) [2010] ZASCA 100 (7 September 2010) Coram: Conradie, Maya, Shongwe, Tshiqi JJA and K Pillay AJA Heard: 24 August 2010 Delivered: 07 September 2010 Summary: Sale of land – first sale found to be valid – second purchaser bought and took transfer of property with knowledge of first sale -- ordered to transfer property to estate of first purchaser. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: North Gauteng High Court (Pretoria) (Preller J sitting as court of first instance): The appeal succeeds with costs. The order of the court a quo is set aside and replaced by an order reading as follows: ‘1. The sale agreement between the Municipality and the deceased dated 18 November 2000 and annexed to the particulars of claim is declared to be valid; 2. The respondent is directed to take all necessary steps to transfer erf 1577, Extension 9, Lebohang, Leandra to the estate late M M Ramarope. 3. In the event that the respondent fails to take such steps, the deputy sheriff is authorised to sign all necessary documents and take all other necessary steps to ensure the transfer of erf 1577 Lebohang to the estate late M M Ramarope. 4. The respondent is to pay the costs of the application.’ ___________________________________________________________________ JUDGMENT ___________________________________________________________________ CONRADIE JA (MAYA, SHONGWE, TSHIQI JJA and K PILLAY AJA concurring) [1] The appellant is the executor of the estate late M M Ramarope (the deceased) who on 18 November 2000 concluded with the predecessor of the Govan Mbeki Local Municipality a written contract in terms of which he bought from the Municipality a property described as Erf 1577, Extension 9, Lebohang, Township, Leandra for R135 000. The Municipality, cited as the second defendant, has abided the judgment of the court. [2] Six years later on 20 November 2006, the respondent, for R171 114, acquired from the Municipality the same property (which had, through no fault of the deceased, not yet been transferred to him) in terms of a written contract dated 20 November 2006 and took transfer of the property on 16 May 2007. [3] The trial was heard as a stated case by the North Gauteng High Court which granted leave to appeal against its judgment dismissing the appellant’s claim for transfer of the property from the respondent. [4] The stated case records the consensus of the parties on the following: ‘At all material times and in particular when the First Defendant purchased the property the First Defendant knew that a valid and binding sale agreement existed between the Plaintiff and the Second Defendant . . .’. [5] This agreement really disposes of the matter. Mr Muller for the respondent did not argue that once the respondent knew of the earlier (valid) sale, he would not be obliged to transfer the property to the appellant. The decision not to defend the conclusion of the court a quo that the respondent had been shown to be ‘dishonest (if not fraudulent)’ was a wise one. Associated South African Bakeries (Pty) Ltd v Oryx & Vereinigte Bäckereien (Pty) Ltd en Andere,1 ‘saw the demise’, as Prof Gerhard Lubbe puts it,2 ‘of the fraud construction’. [6] The stated case does the respondent no injustice. In 1988 the Municipality put the property out to tender. It would seem that the respondent tendered for the property in competition with the deceased. [7] According to the stated case the Municipality in 1998 ‘resolved to recommend’ that the property be awarded to the respondent. Of course, a resolution by a local authority to enter into a contract is no more than an instruction to its 1 1982 (3) SA 893 (A) at 910A–911B. 2 A doctrine in search of a theory: reflections on the so-called doctrine of notice in South African law, 1997 Acta Juridica 246. officials to act in the manner authorised by the resolution. Before the official has concluded the authorised contract, the local authority acquires no rights and incurs no obligations. In particular, the resolution could not (as was at one time thought) have created an option contract between the Municipality and the respondent. Quite apart from that, the offer comprising such an ’option’, to be valid, would have had to be in writing so that a written contract might be constituted by acceptance of the offer. [8] After the Municipality had resolved to enter into a sale agreement with the respondent, but before it had entered into any legal relationship with him, it would appear that it, the respondent and the deceased arranged for the deceased to buy the property. [9] The respondent maintains that he then orally ceded his right to purchase the property to the deceased but, as I said above, he had not acquired any right that might be capable of cession and, anyway, interest in land can only be ceded if the cession is evidenced in writing. When the deceased bought the property he could not have done so as the cessionary of any right acquired from the respondent. [10] The written cession concluded between the deceased and the respondent on 27 November 2000 is a sadly defective agreement. In the first place, it was concluded on a date after the sale between the Municipality and the deceased when, assuming that any right capable of cession had been created, there was none left to cede; in the second place, the consent of the municipality (which had not been obtained) was required for the validity of the cession. [11] Clause 10 of the cession contains a curious provision: ‘In the event of the cessionary passing away before transfer of the property in the name of the cessionary this agreement will lapse and any amount paid by the cessionary in terms hereof will be refunded to the executor of his estate.’ [12] Leaving aside the consideration that it is futile to attempt to extract a sensible meaning from the clause, it falls to the ground with the remainder of the cession. One would have thought that the appellant would under these circumstances on the basis of unjustified enrichment, have been entitled to repayment of the R30 000 paid in terms of the cession. However, there is no claim for this amount in the summons and Mr Smit for the appellant did not press it. [13] The stated case contains a tender to pay to the respondent the purchase price that he had paid to the Municipality and the costs of transferring the property to the plaintiff. We are obviously bound by the tender which seems to be a sensible solution to the dilemma in which the parties find themselves. [14] Since the municipality is not a party to the stated case acknowledging the validity of the agreement between it and the deceased, it would be best to declare that agreement to be valid. [15] The Registrar of Deeds Pretoria was cited as a party but the notice of appeal does not mention him as a party so that it is not clear whether he has had notice of these proceedings or not. In the circumstances the order cancelling the registration of transfer of erf 1577 cannot be granted but such an order would in any event be superfluous. [16] The appeal succeeds with costs. The order of the court a quo is set aside and replaced by an order reading as follows: ‘1. The sale agreement between the Municipality and the deceased dated 18 November 2000 and annexed to the particulars of claim is declared to be valid; 2. The respondent is directed to take all necessary steps to transfer erf 1577, Extension 9, Lebohang, Leandra to the estate late M M Ramarope. 3. In the event that the respondent fails to take such steps, the deputy sheriff is authorised to sign all necessary documents and take all other necessary steps to ensure the transfer of erf 1577 Lebohang to the estate late M M Ramarope. 4. The respondent is to pay the costs of the application.’ _____________________ J CONRADIE JUDGE OF APPEAL APPEARANCES APPELLANTS: M Smit Instructed by Stabin Gross & Shull, Johannesburg Claude Reid Inc, Bloemfontein RESPONDENTS: G C Muller SC (with him N A R Ngoepe) Instructed by TMN Kgomo & Associates, Pretoria Symington & De Kok, 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 From: The Registrar, Supreme Court of Appeal Date: 07 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 MATHAVHA v SIBEKO Two tenderers, the late Mr M M Ramarope and Mr Ziba Sibeko, competed for the purchase of an immovable property from the predecessor of the Govan Mbeki Municipality. By arrangement between them and the Municipality, the property was sold to one of them. After the death of the purchaser the other tenderer, contending that the sale was invalid, bought and took transfer of the same property from the Municipality. The Supreme Court of Appeal found the sale to the first purchaser to have been valid; the second purchaser was consequently ordered to give transfer of the property to the first purchaser’s estate. ---ends----

3487

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 1255/2019 In the matter between: THE SOUTH AFRICAN LEGAL PRACTICE COUNCIL APPELLANT and REEVA-JOY ALVES FIRST RESPONDENT MITCHELL DE BEER SECOND RESPONDENT ETIÈNNE MENTOOR THIRD RESPONDENT JANDRÈ ROBBERTZE FOURTH RESPONDENT ZELEK SING FIFTH RESPONDENT STACEY SUNDELSON SIXTH RESPONDENT MICHAEL MULLER VAN STADEN SEVENTH RESPONDENT DAVID WHITCOMB EIGHTH RESPONDENT ADRI THIART NINTH RESPONDENT Neutral citation: The South African Legal Practice Council v Alves and Others (Case no 1255/2019) [2020] ZASCA 170 (14 December 2020) Coram: MAYA P, SALDULKER and PLASKET JJA and EKSTEEN and UNTERHALTER AJJA Heard: 13 November 2020 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 14 December 2020. Summary: Legal Practice Act 28 of 2014 – legal practitioners to be admitted and enrolled either as advocate or attorney – s 115 preserves the right of any person who qualified for admission as an advocate, attorney, conveyancer or notary prior to the commencement of the Act to be so admitted thereafter – preservation of right extends ad infinitum – s 32 empowers Legal Practice Council to convert enrolment of a legal practitioner without recourse to the high court – s 32 does not detract from jurisdiction of the high court to order the Legal Practice Council to enrol a legal practitioner as an advocate where the practitioner qualifies for enrolment as such in terms of the Legal Practice Act. _______________________________________________________________________ ORDER _____________________________________________________________ On appeal from: Western Cape Division of the High Court, Cape Town (Hlophe JP and Baartman J, sitting as court of first instance): The appeal is dismissed. _____________________________________________________________ JUDGMENT _____________________________________________________________ Eksteen AJA (Maya P, Saldulker and Plasket JJA and Unterhalter AJA concurring) [1] The crisp issue in this appeal is whether the first to the ninth respondents (to whom I shall refer, for convenience, as applicants), who had all been admitted and enrolled as attorneys, were entitled to rely on the provisions of s 115 of the Legal Practice Act 28 of 2014 (the LPA) in order to be enrolled as advocates. The Western Cape Division of the High Court, Cape Town (the high court) ruled in their favour and ordered the South African Legal Practice Council (the LPC) to remove their names from the roll as attorneys and to enrol them as advocates. The appeal against this ruling is with leave of the high court. [2] Prior to the hearing of the appeal, the second to ninth applicants all completed their pupillage at the Cape Bar and the LPC approved the conversion of their enrolment as attorneys to advocates in terms of s 32 of the LPA. The appeal is accordingly moot in respect of these applicants. However, it remains live in respect of the first applicant. She has taken no part in the appeal and indicated that she would abide the decision of this Court. In addition the Cape Bar sought and obtained leave to be heard as amicus curiae. [3] At the time of the application each of the applicants were, as I have said, attorneys who wished to practice as advocates. Seven of them had been admitted as attorneys prior to 1 November 20181 in terms of the Attorneys Act 53 of 1979 (the Attorneys Act). The remaining two (the sixth and ninth applicants) were admitted and enrolled as attorneys in terms of the LPA after it came into operation. Only the first applicant had applied to the LPC, before the application to court, for her enrolment to be converted to that of an advocate in terms of s 32 of the LPA. Her application was refused as she did not meet the requirements laid down by the LPC in its rules. In particular, she had not completed a trial advocacy programme.2 Hence her application to court. [4] In her application she relied on the provisions of s 115 of the LPA, as did the remaining applicants. Section 115 is to be found under Chapter 10 of the LPA headed ‘NATIONAL FORUM AND TRANSITIONAL PROVISIONS’. The section provides: 1 The LPC came into full operation on 1 November 2018. Chapter 10 (Transitional provisions) had previously come into operation on 1 February 2015. 2 Section 32(3) of the LPA empowers the LPC to make rules setting out the circumstances under which a legal practitioner may apply for conversion of his or her enrolment under that section and to lay down any requirements which such practitioner must comply with. ‘Any person who, immediately before the date referred to in section 120(4), was entitled to be admitted and enrolled as an advocate, attorney, conveyancer or notary is, after that date, entitled to be admitted and enrolled as such in terms of this Act.’ The date referred to in the section is 1 November 2018, the date on which the LPA became fully operational. [5] The interpretation of this provision in the context of the LPA lies at the heart of the appeal. The principles applicable to the interpretation of documents, including statutes, are well settled. It is however useful to restate the essence of the principles as summarised in Natal Joint Municipal Pension Fund v Endumeni Municipality3 para 18, where 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. 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.’ [6] It is convenient first to consider the circumstances which gave rise to the promulgation of the LPA. For centuries, South Africa had been served by a divided legal profession. Prior to the LPA, the admission of advocates was governed by the Admission of Advocates Act 74 of 1964 (the Advocates Act). 3 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] All SA 262 (SCA); [2012] ZASCA 13; 2012 (4) SA 593. Section 3 of the Advocates Act required an applicant for admission to establish that they were more than 21 years of age, duly qualified, a fit and proper person and a South African citizen. Generally speaking, the qualification required was an LLB degree obtained from a South African university. No further training was required in order to practice. [7] For many years advocates were organised in various voluntary associations regulated by their respective Bar Councils and affiliated to the General Council of the Bar of South Africa (the GCB). The Bars were self- regulated and the GCB was a federal body established by the Bars. There was no statutory regulatory body. The Bars developed a comprehensive pupillage system to provide vocational training and education to aspirant members. However, advocates were not obliged to be members of a Bar affiliated to the GCB. Various other associations of advocates were established which were not affiliated to the GCB. Some offered vocational training of their own and others did not. Moreover, because the Advocates Act did not oblige advocates to belong to an association a number of admitted advocates practiced outside of any association, without any vocational training and free from any regulation. [8] By contrast attorneys were regulated by law societies, established by statute, and all attorneys were subject to regulation by these bodies. The Attorneys Act required candidate attorneys who had obtained an LLB degree or BProc degree from a South African university to undergo two years of articles and to pass an admission examination prior to their admission as attorneys. There was accordingly a marked disparity between the admission requirements for advocates and attorneys. [9] Once admitted as an advocate or as an attorney, a practitioner seeking to convert from one branch of the profession to the other was required first to obtain an order of court removing their name from the roll of one branch and re-enrolment on the other. When an advocate wanted to become an attorney they were required, irrespective of their experience, to first undergo a period of articles before they could be admitted as such. An attorney seeking to become an advocate was entitled (subject to what is set out later) to their immediate admission as such. However, if they wished to practice at a Bar affiliated to the GCB, they were often required by the Bar Council concerned to undergo a period of pupillage before they could obtain membership. These inequalities and perceived obstacles to entry into the profession and transfer between the branches thereof, together with other issues not material to the present debate, gave rise to the LPA.4 One of the principal purposes of the LPA was to create a single unified statutory body to regulate the affairs of all legal practitioners and all candidate legal practitioners in pursuit of the goal of an accountable, efficient and independent legal profession.5 It also sought to level the playing field by prescribing compulsory vocational training and a competency-based examination or assessment prior to admission and enrolment for both advocates and attorneys.6 [10] The LPA does not purport to merge the functions of advocates and attorneys. It maintains the distinction between advocates and attorneys and acknowledges the different training required for these functions. Thus, a ‘pupil’ is defined in the LPA as a person undergoing practical vocational 4 The purpose of the LPA is set out in s 3 thereof. 5 Section 3(c). 6 Section 26(1)(d). training with a view to being ‘admitted and enrolled’ as an advocate.7 An ‘advocate’ is likewise defined as a legal practitioner who has been ‘admitted and enrolled as such’ under the LPA.8 Advocates and attorneys collectively are referred to as ‘legal practitioners’. Thus, the latter term is defined in the LPA as meaning an advocate or attorney admitted and enrolled as such in terms of s 24 and 30 respectively.9 The distinction is material. [11] The admission of all legal practitioners, both advocates and attorneys, is governed by the provision of s 24. It stipulates that no one may practice as a legal practitioner (that is either as an advocate or as an attorney) if they are not admitted and enrolled to practice ‘as such’ in terms of the LPA. The LPA does not provide for practice as a legal practitioner. It provides for three forms of practice, as an attorney, as an advocate practicing on a referral basis only and as an advocate accepting work directly from the public.10 Section 24 accordingly requires a court to admit a legal practitioner either as an advocate or as an attorney and to authorise the LPC to enrol them as such. [12] The maintenance of a roll of legal practitioners is entrusted to the LPC. In doing so it was required at the commencement of the LPA to consolidate the rolls of admitted attorneys and advocates which existed prior to the LPA into one roll11 referred to in s 30(3). New entrants to the profession are required to apply to the LPC for enrolment against payment of a prescribed 7 A ‘candidate attorney’ is similarly defined as a person undergoing vocational training with a view to being ‘admitted and enrolled as an attorney’. 8 ‘Attorney’ bears a corresponding meaning. 9 ‘Candidate legal practitioner’ is similarly defined as being persons undergoing vocational training either as a candidate attorney or as a pupil. 10 Section 34. 11 Section 114. fee.12 Once a legal practitioner has been admitted and acquired the authority of the high court to be enrolled, they are entitled to be enrolled as such, subject to payment of the prescribed fee, and the LPC has no discretion to decline enrolment. The roll must reflect the form of practice pursued by the practitioner and the particulars of the order of court in terms of which they were admitted.13 [13] The LPA regulates the professional conduct and disciplinary proceedings in respect of legal practitioners.14 It is, however, only the high court that can strike their name from the roll of legal practitioners15 and it retains the jurisdiction to adjudicate upon and make orders in respect of matters concerning the conduct of legal practitioners.16 [14] All of these provisions reinforce the fact that legal practitioners, whether practicing as advocates or attorneys, are officers of the high court. They are admitted by the court which authorises their enrolment in the practice in which they are qualified and they owe a special ethical duty to the court. The high court retains the oversight over their conduct and the jurisdiction to pronounce on matters concerning their conduct. To this extent they practice under the auspices of the high court. [15] Against this background, the provisions of s 115 must be construed in the context of the LPA as a whole, with due regard to the history giving rise 12 Section 30(1)(b)(i). 13 Section 30(3)(a) and (b). 14 Chapter 4 s 36-44. 15 Section 40(3)(a)(iv). 16 Section 44. to its existence and the purpose to which it is directed. On behalf of the appellant three arguments were advanced as to why the applicants could not avail themselves of the provisions of s 115. Firstly, it was contended that on a proper construction of the LPA, s 115, being a transitional provision, applied only to applications for admission which were pending on 1 November 2018. As none of the applicants had lodged an application for admission prior to the commencement of the LPA, s 115 did not apply to them. Secondly, save for the sixth and ninth applicants, who were admitted as attorneys after the LPA came into effect, the remaining applicants did not qualify for admission as advocates under the Advocates Act immediately before 1 November 2018 because the Advocates Act required that an attorney had first to remove their name from the roll of attorneys before being able to qualify for admission as an advocate. They had not done so. Thirdly, it was argued that the LPA placed the process of enrolment in the hands of the LPC, including the conversion of an enrolment, and accordingly, where an applicant sought to convert their enrolment from that of an attorney to an advocate they were obliged to do so in terms of s 32 of the LPA. The result, it was contended, was that the high court did not have the jurisdiction to make the order which it did. [16] Section 115 is set out earlier. Ordinarily where the legislature intends that a transitional provision would apply only to proceedings commenced prior to the promulgation of the Act concerned it says so in terms. An example of such a provision is found in s 116(2) of the LPA which provides: ‘Any proceedings in respect of the suspension of any person from practice . . . which have been instituted in terms of any law repealed by this Act, and which have not been concluded at the date referred to in section 120(4), must be continued and concluded as if the law had not been repealed . . .’ [17] No similar intention appears from the provisions of s 115. On the contrary, s 115 applies to any person who immediately before the commencement of the LPA was entitled to be admitted and enrolled as an advocate, attorney, conveyancer or notary. It contains no limitation to this right. On a consideration of the language used in the light of the ordinary rules of grammar and syntax the section must be interpreted to mean that ‘whoever can show that they satisfied the criteria in s 3 of the [Advocates Act] and, had an application been made whilst the [Advocates Act] was still in force, were entitled to admission’.17 The purpose to which the section is directed is to preserve the rights of those who qualified for admission and enrolment prior to the LPA to be admitted and enrolled thereafter under the LPA. Mr Koen, on behalf of the LPC, was constrained to acknowledge that the interpretation contended for by the LPC would require a considerable reading-in to the section of words which do not appear therein. The reading-in would require, in relevant part, that s 115 is interpreted to mean: ‘Any person who, immediately before the date referred to in s 120(4), had made an application and was entitled to be admitted and enrolled’. He contended, that reading-in such additional words was the only manner in which to give meaning to the section as a transitional arrangement. The argument cannot be sustained. Section 115 finds application in respect of candidates who qualified for admission prior to commencement of the LPA. It preserves their right to be admitted under the LPA. The position was captured thus by Robeson J in Ex parte Bakkes and Similar Cases:18 ‘I am respectfully of the view that there is no ambiguity in s 115 of the LPA. It is clear from the section that persons who qualified for admission in terms of the AAA prior to 17 See Ex Parte Goosen and Others [2019] ZAGPJHC 68; 2019 (3) SA 489 (GJ) para 51. 18 Ex Parte Bakkes and Similar Cases [2019] ZAECGHC 3; 2019 (2) SA 486 (ECG) para 12. 1 November 2018 are entitled to be admitted and enrolled as advocates. The reference to admission and enrolment “in terms of this Act” means in my view nothing more than that the LPA may be used as a vehicle for the admission of such persons, given that the AAA has been repealed. To require such a person to satisfy the requirements of the AAA and the LPA in order to be admitted, would unfairly require such persons to be dually qualified, and would negate the provision in the section that they are entitled to be admitted and enrolled if they were so entitled prior to 1 November 2018. This could not have been the intention of the legislature.’ [18] The vast majority of candidates for admission may be expected to be young persons setting out upon a career in the practice of law, who have acquired their qualifications in the not too distant past. Section 115 may indeed be relied upon ad infinitum by any person who qualified prior to the commencement of the LPA, however, the legislature must be taken to have foreseen this when preserving their rights. The numbers of such people will be relatively small and would inevitably dwindle and eventually disappear. It is in this respect that the provision is transitional.19 [19] I turn to the second argument advanced on behalf of the LPC. Section 3 of the Advocates Act sets out the requirements which had to be met for admission as an advocate under that Act. It required an applicant who had previously been admitted to practice as an attorney to satisfy the court, inter alia, that their name had been removed from the roll of attorneys on their own application.20 It was a prerequisite for admission as an advocate. The requirement had a history of its own which developed from the divided profession which existed in South Africa prior to the LPA. When the 19 Ibid para 13. 20 Section 3(1)(d) of the Advocates Act. Advocates Act was first enacted s 3(1)(d) contained, after the words ‘. . . on his own application’, the following: ‘. . . and that for a continuous period of not less than six months immediately before the date of his application to be so admitted he has in no way been associated or connected with the practice of, or acted directly or indirectly as, an attorney, notary or conveyancer in the Republic or elsewhere . . .’21 [20] The rule originally arose from a judicial practice developed in the early 1900s of a ‘cooling off’ period.22 The requirement was however deleted from the Advocates Act by s 16 of the General Law Amendment Act 29 of 1974. Thereafter a practice developed for attorneys who wished to be admitted as advocates to seek in one application the simultaneous removal of their name from the roll of attorneys and their admission as an advocate. [21] I revert to the provisions of s 115. In Goosen the full court correctly considered the meaning of ‘entitled’ in the section. It held:23 ‘The word “entitled” is a common enough term. “Entitled to be admitted and enrolled” is the phrase to be given meaning. The concept of an entitlement is consistent only with the existing possession of a right. The Oxford English Dictionary . . . defines the term as the giving of a “rightful claim” to anything. The term “entitled” in the context of s 115, and indeed the context of the LPA has no convoluted inner, obscure meaning. It is simply shorthand for saying that the candidate fulfilled all the [Advocates Act] . . . criteria at a time when that candidate could have brought an application, ie before 1 November 2018. As the “right” to which a candidate is “entitled” is extinguished on 31 October 2018, the answer to the question whether one can apply after 31 October 2018, is answered purely 21 See In Re Rome 1991 (3) SA 291 (A) at 308C-D. 22 See Ex Parte Plowden-Wardlaw 1903 TS 35; Ex Parte Beyers 1904 TS 567. 23 Goosen fn 16 above para 26. by whether the substance of the rights in s 3 of the [Advocates Act] . . . can survive the repeal. It is the function of s 115 to preserve those “entitlements” or “rights”.’ [22] So, were the applicants entitled prior to the commencement of the LPA to their admission as advocates? It is common cause that each of the applicants met all of the requirements of s 3 of the Advocates Act, save that their names remained on the roll of attorneys. After the ‘cooling off’ period was removed from the provisions of s 3 any admitted attorney who met the requirements for admission as an advocate was entitled in one application to the removal of their name from the roll of attorneys and their admission as an advocate. That right the applicants acquired prior to the commencement of the LPA. To hold otherwise would be overly technical and would undermine the purpose of the section. For these reasons the second argument, too, cannot be sustained. [23] The third argument advanced relates to the provisions of s 32 of the LPA. Section 32 empowers the LPC to convert an enrolment from one form of practice to another without recourse to the high court. The section is designed to facilitate such movement and to eliminate the obstacles and inequalities which previously impeded it. To that end the council is empowered by subsec 32(3) to make rules setting out the circumstances under which a legal practitioner may apply to it for conversion of their enrolment and the requirements such legal practitioner must comply with. Thus the LPC may, by its rules, enable experienced practitioners to move from one form of practice to another, without undergoing all the vocational training prescribed under s 26 for admission to and enrolment in such practice. As a matter of logic, however, in my view, it cannot demand that an attorney seeking to convert their enrolment to an advocate must first attain a greater qualification than that set by the LPA for admission by the high court. To the extent that it did so in respect of the first applicant it exceeded its powers. [24] While s 32 does entrust the regulation of conversion to the LPC, its power is not exclusive because legal practitioners under the LPA retain the right to be enrolled as advocates under the preservation of rights in s 115. There is nothing in s 32, or in the structure of the LPA as a whole, which suggests that the high court is precluded from admitting, and authorising the enrolment of, a practitioner who previously practiced as an attorney, as an advocate, in circumstances where the legal practitioner qualifies for admission as an advocate in terms of the LPA. In these circumstances there is no basis for the exercise of powers by the LPC under s 32. The conversion is in effect done by the high court under the preservation provision. For the reasons set out earlier the applicants all qualified for admission as advocates in terms of s 115. [25] There remains the issue of costs. The appeal is a matter of considerable interest and importance to the legal profession in seeking clarity on the interpretation of the LPA. In these circumstances, fairly, neither the LPC nor the amicus curiae sought an order for costs. [26] In the result the appeal is dismissed. __________________________ J W EKSTEEN ACTING JUDGE OF APPEAL Appearances For appellants: S Koen Instructed by: Bisset Boehmke McBlain, Cape Town Webbers, Bloemfontein Amicus Curiae: D Borgström SC (with him T Sarkas) Instructed by: Riley Incorporated

SUPREME COURT OF APPEAL SOUTH AFRICA MEDIA SUMMARY – JUDGEMENT DELIVERED IN THE SUPREME COURT OF APPEAL FROM The Registrar, Supreme Court of Appeal DATE 14 December 2020 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgement of the Supreme Court of Appeal. THE SOUTH AFRICAN LEGAL PRACTICE COUNCIL v REEVA-JOY AND OTHERS (Case no 1255/19) [2020] ZASCA 170 ______________________________________________________________________________ Today the SCA dismissed an appeal by The South African Legal Practice Council (the LPC) against an order of the High Court, Cape Town, which directed it to remove the names of the nine respondents from the roll of attorneys and to enroll them as advocates. The respondents had all been admitted and enrolled as attorneys and wished to be advocates. They relied on s 115 of the Legal Practice Act 28 of 2014 (the LPA) to assert their right to be enrolled as advocates. Section 115 of the LPA preserves the right of any person who had qualified to be admitted as an advocate, under the Admission of Advocates Act 74 of 1964, prior to the commencement of the LPA on 1 November 2018, to be admitted as an advocate thereafter. The LPC contended, firstly, that on a proper interpretation of the LPA the section applied only to applications for admission which had been launched before the LPA came into effect; secondly, that the respondents did not qualify to be admitted as advocates before the LPA came into effect because their names had not been removed from the roll of attorneys, a prerequisite for admission as an advocate, at that time; and thirdly, that once the respondents had been admitted as attorneys the LPA entrusted the regulation of the conversion to the LPC to the exclusion of the high court. The SCA held that s 115 preserves the right of all persons who qualified before the LPA came into effect to be admitted and enrolled at any time thereafter. It held further, that before the LPA came into operation an attorney was entitled to move in a single application for the removal of their name from the roll of attorneys and their admission as an advocate. As this right accrued to the respondents before the LPA came into operation they were entitled in terms of s 115 to their admission. In respect of the LPC’s power of conversion, the SCA found that because the respondents’ right to admission as advocates had been preserved in terms of s 115 there was no basis for the LPC to exercise any power of conversion and the high court effectively performed the conversion in terms of s 115.

68

non-electoral

2017

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 503/2016 In the matter between: LAZARUS MBETHE APPELLANT and UNITED MANGANESE OF KALAHARI (PTY) LIMITED RESPONDENT Neutral citation: Lazarus Mbethe v United Manganese of Kalahari (503/2016) [2017] ZASCA 67 (30 May 2017) Coram: Navsa, Theron and Swain JJA and Gorven and Mbatha AJJA Heard: 10 May 2017 Delivered: 30 May 2017 Summary: Derivative action: Section 165(5)(b) of the Companies Act 71 of 2008: requirement of „good faith‟: proof by applicant on a balance of probabilities: test subjective with objective control: state of mind of applicant determined by drawing inferences from objective facts: absence of collateral purpose not a self-standing requirement of good faith: relevant to determine whether issue „of material consequence to the company‟: all of requirements of subsec to be satisfied: court retains controlling discretion whether to grant relief: alternative means to obtain the same relief: relevant to determine whether action in best interests of company. ORDER On appeal from: Gauteng Local Division of the High Court, Johannesburg (Wentzel AJ sitting as court of first instance): judgment reported sub nom Mbethe v United Manganese of Kalahari (Pty) Ltd [2016] ZAGPJHC 8 (11 February 2016); 2016 (5) SA 414 (GJ). The appeal is dismissed with costs, such costs to include the costs of two counsel. JUDGMENT Swain JA (Navsa and Theron JJA and Gorven and Mbatha AJJA concurring): [1] The appellant, Mr Lazarus Mbethe, was the chairperson and a director of the respondent, United Manganese of Kalahari (Pty) Ltd. The respondent is one of the largest producers of manganese ore in the world and conducts business as an open- cast miner of manganese ore, which it crushes and screens at a fixed crushing and screening plant, before export to purchasers internationally. [2] During 2012, the appellant introduced the board of the respondent to Zastrospace (Pty) Ltd (Zastrospace), a mobile crushing and screening contractor. The reason for this was that in order to satisfy the then relatively high global demand for manganese ore, the respondent identified a need for the services of mobile crushing and screening contractors to process manganese ore, to supplement the production capacity of the respondent. The appellant promoted the services of Zastrospace on the basis that it had been established to benefit the local community in the Northern Cape Province, where the respondent conducts its mining operations. The appellant contended that by appointing Zastrospace, the respondent would obtain the services it needed at a competitive cost and at the same time provide substantial financial benefits to the local community. As will be seen, the consequent contract that the respondent concluded with Zastrospace was a lucrative one. [3] However, by the end of the first quarter of 2014 the market for the respondent's product deteriorated rapidly, and the respondent had to reduce its projected production. The need for mobile crushing and screening services diminished and the respondent's board resolved on 19 November 2014, to terminate the contract with Zastrospace. [4] Aggrieved at the decision to terminate the contract with Zastrospace, as well as certain perceived deficiencies in the management of the respondent, the appellant, in his capacity as the chairperson and a director of the respondent, launched an application before the Gauteng Local Division (Johannesburg). The appellant sought an order granting leave to institute and prosecute to finality, legal proceedings in the name and on behalf of the respondent, in terms of s 165(5) of the Companies Act 71 of 2008 (the Act). The court a quo (Wentzel AJ) dismissed the application with costs, concluding that the appellant had failed to discharge the onus of establishing the requirements of the Act. The appeal is with the leave of the court a quo. [5] The demands served upon the respondent in terms of s 165(2) of the Act1, which formed the basis for the proposed derivative action were as follows: 1 „(2) A person may serve a demand upon a company to commence or continue legal proceedings, or take related steps, to protect the legal interests of the company if the person- (a) is a shareholder or a person entitled to be registered as a shareholder, of the company or of a related company; (b) is a director or prescribed officer of the company or of a related company; (a) The first demand alleged that the shareholders‟ agreement of the respondent was in conflict with the provisions of the Act and the Third Report on Corporate Governance in South Africa (King III2) in relation to the activities, authority and quorate decision-making process of the board committees of the respondent. It was alleged that these committees, acting in accordance with the shareholders‟ agreement, took decisions despite committee members not being board members. It was alleged that they acted autonomously and not in accordance with the delegated authority of the board. As a result, they effectively managed the business of the company with the board abdicating the business and affairs of the respondent to these committees. It was alleged that the shareholders‟ agreement was bad in law, rendering void or voidable all matters decided by these committees, to the extent that they were in conflict with the Act and King III. It was demanded that the necessary steps be taken by the respondent to have all board committee meetings of the respondent interdicted and suspended, pending the amendment of the shareholders‟ agreement to comply with the provisions of the Act and King III. A further demand was that steps be taken by the respondent to declare all decisions taken by any board committee of the respondent in conflict with the law, null and void and of no force or effect. (b) The second demand alleged that the appellant in his capacity as the chairperson and a director of the respondent, suspended the holding of all committee meetings of the respondent on 21 July 2014, in an attempt to prevent the continued abdication of the board's authority to the board committees. It was alleged that Mr J Kriek, the CEO of the respondent, and Mr R Ramaite, a member of certain board committees of the respondent, wilfully defied this instruction of the appellant and proceeded to hold board committee meetings, at which binding decisions were taken. It was demanded that steps be taken by the respondent to interdict and (c) is a registered trade union that represents employees of the company, or another representative of employees of the company; or (d) has been granted leave of the court to do so, which may be granted only if the court is satisfied that it is necessary or expedient to do so to protect a legal right of that other person.‟ 2 King Code on Governance for South Africa 2009. restrain them from convening, holding and taking any decisions at any committee meetings of the respondent. In addition, it was demanded that Mr Kriek be interdicted and restrained from acting as the CEO of the respondent with immediate effect, pending the outcome of disciplinary proceedings for his suspension or dismissal, on various grounds. (c) The third demand was that steps be taken by the respondent for Mr Ramaite to be interdicted and restrained from acting as a member of any committee. The grounds for the demand were that he was not a director of the respondent and disobeyed the instruction of the appellant not to convene committee meetings. It was also alleged that he decided to terminate the Zastrospace contract, knowing that it was unlawful and to the prejudice of the respondent and its shareholders to do so. (d) The fourth demand alleged that Mr I Letshalo had been duly appointed to replace Mr Ramaite as the deputy CEO of the respondent, who refused to relinquish this position. It was demanded that steps be taken by the respondent to interdict and restrain Mr Ramaite from purporting to act as the deputy CEO, and for an order declaring that Mr Letshalo was the duly appointed deputy CEO of the respondent. (e) The fifth demand alleged that the termination of the contract with Zastrospace was unlawful and in breach of the contract in a number of respects. It was demanded that steps be taken by the respondent to reinstate the contract with immediate effect, or to have the purported termination declared unlawful and of no force or effect. [6] Whether the appellant should be entitled to advance these demands by way of a derivative action, requires an interpretation of the provisions of s 165 of the Act. Differing interpretations by the parties of the provisions of subsec (5)(b), lie at the heart of the dispute. The section makes provision for a statutory derivative action to commence or continue legal proceedings in the name and on behalf of a company, on the part of defined individuals and representatives or employees of the company. The section abolishes any right at common law of a person other than a company, to bring or prosecute legal proceedings on behalf of that company and is in substitution for the right at common law to bring a derivative action. In addition, the provisions of s 266 of the Companies Act 61 of 1973 (the 1973 Act), which made limited provision for a statutory derivative action, were repealed by the Act. [7] It is not in dispute that the appellant has locus standi to seek leave to bring or continue proceedings in the name and on behalf of the respondent in terms of s 165(5) of the Act. The portions of the section which are relevant to a resolution of the present dispute, provide that a court may grant leave only if: „(b) the court is satisfied that – (i) the applicant is acting in good faith; (ii) the proposed or continuing proceedings involve the trial of a serious question of material consequence to the company; and (iii) it is in the best interests of the company that the applicant be granted leave to commence the proposed proceedings or continue the proceedings, as the case may be.‟ [8] Central to the dispute between the parties is a divergence of their views on the nature of the onus which an applicant for relief in terms of the section has to discharge, in order to satisfy the court that the applicant „is acting in good faith‟. The appellant initially submitted in heads of argument, that good faith by an applicant who has shown the existence of a triable cause of action with a reasonable prospect of success, is presumed. However, at the hearing of the appeal counsel for the appellant correctly withdrew this submission. Section 165(7) of the Act provides that „[a] rebuttable presumption that granting leave is not in the best interests of the company arises . . .‟ where the proposed proceedings by the company are against a third party, or by a third party against the company and certain requirements are satisfied. Consequently, if the legislature intended a presumption to operate within the context of s 165(5) it would have said so. It was accordingly common cause that the appellant bore the onus of proving each of the requirements of s 165(5)(b) of the Act, on a balance of probabilities. [9] However, the parties disagreed upon the correctness of the court a quo‟s conclusion as to what had to be proved to establish the requirement of good faith. The court a quo, relying upon the decision in the Australian case of Swansson v Pratt [2002] NSWSC 583 (3 July 2002), as approved in Mouritzen v Greystones Enterprises (Pty) Ltd & another 2012 (5) SA 74 (KZD) para 51, held that there were two interrelated questions in determining good faith: „First, the applicant must honestly believe that a good cause of action exists and that it has a reasonable prospect of success. As a converse of this, the applicant must also show that the application is not brought for a collateral purpose.‟ In addition the court a quo held that: „The legislature has quite clearly placed a substantive onus on an applicant seeking to bring a derivative action to show that he is acting in good faith, which requires his establishing both elements of the requirement of good faith set out in Swansson. This is a substantive self-standing requirement for relief.‟ (Mbethe v United Manganese of Kalahari (Pty) Ltd [2016] ZAGPJHC 8 (11 February 2016); 2016 (5) SA 414 (GJ) para 170). [10] The dispute concerned the elevation of the absence of a collateral purpose to the status of an element or criteria of the good faith requirement, to be proved by an applicant as part of the substantive onus relating to good faith. The appellant argued that this was incorrect. The respondent however, supported the interpretation of the court a quo, on the basis that the proper purpose component requires the appellant to establish his good faith by proving that he is motivated by a desire to protect the legal interest of the company and not the ulterior purpose of pursuing his own private interest. [11] The importation from Australian law of the requirement that an applicant in order to establish good faith must in addition prove the absence of a collateral purpose, is unjustified when the provisions of s 237(2) of the Australian Corporations Act 2001 are compared with the provisions of s 165(5) of the Act. Section 237(2) provides that a court must grant the application if it is satisfied, inter alia that „the applicant is acting in good faith‟ and „it is in the best interests of the company that the applicants be granted leave‟ and „if the applicant is applying for leave to bring proceedings – there is a serious question to be tried.‟ Notably absent from the Australian statute is the provision that the proceedings must involve the trial of a serious question „of material consequence to the company‟ as is required by s 165(5)(b)(ii) of the Act. The presence or absence of a collateral or ulterior purpose on the part of an applicant, is clearly comprehended by the requirement that the question to be resolved is of material consequence to the company. It is therefore unnecessary to import this requirement as a self-standing requirement of the good faith enquiry, when it more appropriately arises in determining whether the question in issue is of material consequence to the company. However, as will be seen, the determination of the presence or absence of a collateral or ulterior purpose on the part of an applicant, may in itself constitute cogent evidence of an absence of good faith. The court a quo accordingly erred in concluding that an applicant in terms of s 165(5) of the Act bore an onus of proving the absence of a collateral purpose, as a self-standing requirement of the good faith enquiry. [12] Counsel for the appellant, although conceding that the appellant had to prove his good faith on a balance of probabilities, submitted that the threshold to discharge this onus should be a low one. It was submitted that this was necessary in order „to give teeth‟ to s 165 of the Act and that to place a heavy and restrictive onus upon an applicant, would discourage prospective litigants to seek leave to institute the derivative action. To achieve this, an interpretation of the section was required which was consonant with the purpose of the legislation, outlined in s 7 of the Act. Compliance with the Bill of Rights, as well as encouraging transparency and high standards of corporate governance and the efficient and responsible management of companies, had to be considered when interpreting the section. [13] In order to place the nature of the onus to be discharged by an applicant in terms of s 165(5)(b) of the Act in context, it is necessary to briefly examine the requirements of the common law derivative action abolished by the Act, as well as the repealed provisions of the statutory derivative action contained in s 266 of the 1973 Act. [14] The common law derivative action owed its origin to the so-called exceptions, set out in Foss v Harbottle (1843) 67 ER 189, to the general principle that the company is the correct party to bring an action to redress a wrong done to it. One such exception arose where a fraud on minority shareholders was perpetrated and the claim was a wrongful failure on the part of the company to institute action, in breach of its duty to a minority shareholder. A member seeking to advance a common law derivative action against the company, bore the onus of proving not only the existence of the right of the company relied upon, but in addition the breach of the duty owed to the member by the company. The member‟s right to proceed with the action was not unqualified as the court possessed a discretion whether to grant the remedy, or not. [15] Section 266 of the 1973 Act introduced a statutory derivative action which enabled a member to bring an action to enforce the company's rights against wrongdoing directors and officers. An applicant bore the onus of satisfying a court of the existence of a prima facie case of wrongdoing to justify the appointment of a provisional curator ad litem to investigate whether the alleged wrong had been committed, and whether it was desirable to involve the company in such proceedings. On the return date the court would either discharge the provisional order, or confirm the appointment of the curator and issue further instructions as to the institution and conduct of the proceedings. [16] It is clear that an applicant seeking to advance a derivative action whether at common law or in terms of s 266 of the 1973 Act, bore an onus. At common law the contemplated action related to the existence of the right relied upon and the breach of the duty owed to the member, by the company. In the statutory action this related to the existence of a prima facie cause of action against the wrongdoer. In either case, the court exercised an overriding discretion whether or not to grant leave to institute the derivative action. The imposition of an onus on an applicant, together with the exercise of a discretion by the court, had as its objective not only the need to protect the rights of members of the company, but also the need to protect the administration of the business of the company, against frivolous or vexatious claims, or claims which were not in the interests of the company. [17] Although the statutory derivative action provided for in s 165 of the Act is wider in scope than the common law action, as well as that under the former statutory regime, a need to strike the appropriate balance between these same interests, remains of paramount importance in determining not only the nature and extent of the onus resting upon an applicant, but also the nature and extent of the discretion vested in the court. There is accordingly no basis for the submission by appellant's counsel that the provisions of s 165(5)(b) of the Act require an applicant to satisfy the requirements of the section on a lesser standard than proof on a balance of probabilities. [18] For the same reason there is no basis for the obiter conclusion reached by the court a quo that the discretion to be exercised by the court is limited by the provisions of s 165(5) of the Act. The relevant portion of the subsec provides that „. . . the court may grant leave only if – . . .‟ the requirements of subsecs (a) and (b) are satisfied. The court a quo held that: „The use of the word “may” in this context does not confer discretion but rather authority to the Court to only grant relief if the requirements of the subsection are satisfied. Where they are satisfied, there is no residual discretion conferred upon the court not to grant relief.‟ Whilst it is correct that relief may only be granted if the requirements of the subsec are satisfied, this does not mean that the court is compelled to grant relief, if they are. If this were not so, the exercise by the court of a discretion would be precluded. [19] Although the individual requirements of subsecs 165(5)(b)(i), (ii) and (iii) of the Act are conjunctive, this does not mean that they are to be considered in isolation. For example, in considering whether the „proceedings involve the trial of a serious question of material consequence to the company‟, a finding that the applicant possesses a collateral or ulterior purpose, will also be of relevance in deciding whether the applicant acts in good faith. Similarly, evidence which suggests that the proceedings are not „in the best interests of the company‟, may establish an absence of good faith on the part of the applicant. [20] I turn to examine the meaning of the requirement that an applicant must act „in good faith‟. In Swansson supra para 36, the first factor3 in determining whether the good faith requirement was satisfied was held to be: „. . . whether the applicant honestly believes that a good cause of action exists and has a reasonable prospect of success.‟ In addition it was also held that, whether: 3 As pointed out above, the second factor was whether the applicant was seeking to bring the derivative action for a collateral purpose. „. . . the applicant honestly holds such a belief would not simply be a matter of bald assertion: the applicant may be disbelieved if no reasonable person in the circumstances could hold that belief.‟ In our law it would not be a matter of mere assertion by an applicant that he possesses the requirement of good faith. Although the test for good faith is subjective, relating as it does to the state of mind of an applicant, it is nevertheless subject to an objective control. The state of mind of an applicant has to be determined by drawing inferences from the objective facts, as revealed by the evidence. [21] The appellant states that he has acted in good faith in order to protect the interests of the respondent. The respondent denies this and alleges that the appellant lacks an honest purpose in seeking leave to institute a derivative action in the name and on behalf of, the respondent. The dispute is whether the appellant has misrepresented his state of mind. In R v Myers 1948 (1) SA 375 (A) at 383 it was held that absence of reasonable grounds for belief in the truth of what is stated, may provide cogent evidence that there is in fact no such belief. In Hamman v Moolman 1968 (4) SA 340 (A) at 347A, the following was stated: „The fact that a belief is held to be not well-founded may, of course, point to the absence of an honest belief, but this fact must be weighed with all the relevant evidence in order to determine the existence or absence of an honest belief.‟ [22] The enquiry is whether the evidence reveals reasonable (and therefore objective) grounds for the appellant's statement that he acts in good faith. If it is found that none, or insufficient, reasonable grounds are present to support his statement, this may establish an absence of good faith on his part. In addition, if the evidence establishes the presence of a collateral or ulterior purpose on the part of the appellant, the pursuit of which does not involve the trial of a serious question of material consequence to the company, or which is not in the best interests of the company, this may also constitute cogent evidence of the absence of good faith on the part of the appellant. [23] Because the issue of whether the appellant discharged the onus of proving on a balance of probabilities that he acted in good faith was not referred for the hearing of oral evidence, any factual disputes must be resolved in accordance with the dicta in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 635C. Any dispute of fact has to be resolved based on the facts relied upon by the respondent, together with any facts relied upon by the appellant which are admitted by the respondent. As held in Fakie NO v CCII Systems (Pty) Ltd 2006 (4) SA 326 SCA para 56 the version of the respondent can be rejected: „. . . only if it is "fictitious" or so far-fetched and clearly untenable that it can confidently be said, on the papers alone, that it is demonstrably and clearly unworthy of credence.‟ [24] The termination of the Zastrospace contract, being an integral part of the statutory demand, is central to a determination of whether the appellant has discharged the onus of proving on a balance of probabilities that he acts in good faith. The court a quo concluded that an analysis of the demands against the factual matrix demonstrated that: „. . . although dressed up in the noble cause of promoting good corporate governance and the upliftment of the Kuruman community, it is essentially all about the retention of the Zastrospace contract. It was only after the purported termination of this contract by way of committee that such committees have become the subject of complaint by the applicant in the interests of good corporate governance.‟ [25] Before us, counsel for the appellant conceded that the fifth demand that the respondent take steps to reinstate the Zastrospace contract had been rendered moot by the passage of time, even at the stage when the matter was heard by the court a quo. The conduct of the appellant in advancing this demand however remains of significance in deciding whether the application is brought in good faith. [26] The importance to the appellant of the termination of the Zastrospace contract as a ground for launching the application, is evident from his replying affidavit in which he states: „The Zastrospace issue forms an integral part of the statutory demand. . . .‟ It is therefore necessary to examine the evidence to determine whether reasonable grounds exist to support the appellant‟s statement that he has acted in good faith. [27] The appellant maintained in his founding affidavit that: (a) A reinstatement of the Zastrospace contract was necessary to protect the mining right of the respondent. This was because Zastrospace represented 27 local communities and its appointment was in compliance with the terms and conditions of the respondent‟s mining right, which permitted the continued exploration of the mineral resource. (b) Notices served by the Department of Mineral Resources on the respondent, were of relevance to the respondent in retaining its mining right. The department notified the respondent on 12 November 2014 that it required an audit and compliance inspection in respect of the mining right to take place on 2 December 2014. The inspection had as its stated purpose procurement and mine community development requirements. This was preceded by a compliance notice dated 28 October 2014 to obtain, inter alia, details of contracts relating to selling arrangements in relation to minerals, as well as details of outsourced mining activities. (c) A reinstatement of the contract was also necessary to ensure employment for members of the local community. He also brought the application in his capacity as a duly authorised representative of the Kuruman Community Trust (the Trust). According to the appellant, the Trust was formed by him with the specific purpose of representing the [BEE] requirement, which enabled the respondent to obtain its prospecting right and later its mining right. [28] In response to these allegations the respondent stated that: (a) As pointed out above, the need for the mobile crushing and screening service offered by Zastrospace was dictated by a high global demand for manganese ore, with associated high prices. In order to take advantage of the favourable market conditions, it was necessary to increase the respondent's production in excess of the capacity of its fixed crushing and screening plant. It was always clear that this service would only be required on an interim basis, for as long as the high global demand for manganese ore continued. (b) Although the rates charged by Zastrospace were broadly in line with similar charges by other contractors, the principal motivating factor for the conclusion of the Zastrospace contract, was the appellant‟s assurance and insistence that this would provide substantial financial benefits to the local community. (c) No formal or long-term agreement was concluded with Zastrospace because of the unpredictability of future market conditions and because it had no experience or track record in the business. (d) A financial rate per ton of manganese rock was agreed. Purchase orders were thereafter issued by the respondent for Zastrospace to process certain specified quantities of rock, which was the common practice in the industry. The quantities requested depended entirely on the respondent‟s own commercial requirements. (e) During the period from May 2013 to May 2014 the respondent paid R32.5 million to Zastrospace. During this period, and in order to confirm the empowerment and local benefits claims advanced by the appellant, the respondents made enquiries concerning the affairs of Zastrospace. It transpired that a company Cytopix (Pty) Ltd received 30 per cent of all payments made to Zastrospace as a „management fee‟. Mr P Roelofse, who was the CEO and controlled the financial affairs of Zastrospace, was also the sole director of Cytopix. Mr Lourens representing the respondent, requested details of the management services allegedly provided to Zastrospace by Cytopix as well as access to the Cytopix bank statements. This request was refused. During the period from August 2013 to June 2014, payments from Zastrospace to Cytopix totalled R5.6 million. It was estimated that by the time the contract was terminated, these payments should have exceeded R7 million. (f) According to Mr Lourens the payment by Zastrospace of 30 per cent of its total turnover to Cytopix as a „management fee‟ would mean that it would spend less than 70 per cent of its total turnover on operational expenses, which was highly unusual for this type of business. In his view it was highly unlikely that it would make any profit, or acquire any retained earnings with which to benefit the local community. When regard was had to proper provision being made for statutory payments such as PAYE and VAT it would probably have operated at a loss, after payment of the „management fee‟. (g) At the height of its operations Zastrospace employed approximately 12 to 13 persons based upon its payroll records. This number varied depending upon the level of services provided from time to time. The payroll records reflected the employees as coming from the Kuruman communities. According to the respondent, employment of 12 to 13 individuals on an ad hoc basis provided minimal, if any benefit to the local community. The respondent submits that the continued employment of Zastrospace would only be to the benefit of Cytopix and not the local community. (h) As regards the relationship between the appellant and Mr Roelofse, the respondent stated that the appellant had very close links to a range of companies bearing the „ukupha‟ name. These included Ukupha Properties, Ukupha Technologies and Ukupha Holdings. Mr Roelofse and his assistant Ms Erasmus, frequently made use of an email address linked to a domain name „ukupha‟ or „ukuphagroup‟. The Ukupha group was a private investment vehicle of the appellant, of which he was the main beneficiary and exercised management control. On those occasions when business opportunities with „Ukupha‟ were discussed, the appellant always spoke on its behalf. (i) As pointed out above, the Zastrospace contract was cancelled because the respondent‟s need for mobile crushing and screening services disappeared because the demand for manganese ore deteriorated rapidly. When the appellant learned that the management of the respondent believed that the relationship with Zastrospace should be terminated and referred to the Social Investment Committee for an independent decision, he threatened management and instructed KPMG, the respondent's company secretary, to cease all committee meetings. The appellant however, did not attend the meeting of this committee to argue for the retention of the Zastrospace contract, nor did he discuss this issue with the board of the respondent. (j) Although the appellant stated that he was a duly authorised representative of the Trust, it had failed to produce up-to-date financial statements. These would have indicated its spending or funding, in pursuance of its [BEE] objectives, to show how it had benefited the local community. (k) The notices from the Department of Mineral Resources simply referred to routine regulatory inspections. The respondent co-operated with the department in these inspections and no issue of importance or relevance, remained outstanding. The very good relationship between the respondent and its statutory regulator continued as before. [29] In response to these allegations the appellant in reply stated that: (a) Zastrospace was employed on the basis of a 12 month trial period whereafter a term contract was envisaged by the parties as it would provide employment to the local community. For this reason its services should have been retained, or appropriate measures taken to retain some, or all of its services. It was accordingly misleading to categorise the Zastrospace contract with the other mobile crushing and screening contractors. (b) He denied that he had any financial interest in Zastrospace and stated that he did not receive any economic benefit from it. (c) Cytopix was a company owned by Mr Roelofse which managed Zastrospace and employed 12 individuals. The 30 per cent management fee was required to pay for the management expenses of Cytopix. Zastrospace commenced crushing manganese ore in June 2013 and continued to do so until its services were terminated in September 2014. During this time its turnover was approximately R1.7 million per month, excluding VAT. Unskilled labourers of the Kuruman community were employed by it and there was nothing sinister or untoward in its financial affairs. The respondent had no right to investigate the affairs of Cytopix and Mr Roelofse was under no obligation to assist in any enquiry. (d) Ms Erasmus, the personal assistant to Mr Roelofse, made use of the Ukupha Group email address for an intermittent period prior to Zastrospace acquiring its own email address. He had known Mr Roelofse for many years and there was nothing untoward in their relationship. (e) It was not denied that the respondent's requirement for mobile crushing and screening services declined to virtually nothing. [30] Bearing in mind the dictum in Plascon-Evans, the following conclusions may be drawn from the evidence: (a) The respondent was legally entitled to terminate the contract with Zastrospace when it did. Indeed, it would have been financially irresponsible to continue with the contract, regard being had to the decline in demand for manganese ore at that time. (b) Regard being had to the undisputed reasons why the services of a mobile crushing and screening contractor were initially required, there can be no basis for the appellant's contention that after a 12 month trial period, it was envisaged that a term contract would be concluded with Zastrospace. This is particularly so when the unpredictability of the future demand for manganese ore is considered. (c) Regard being had to the fact that Zastrospace employed only 12 individuals from the local community, as well as the absence of any evidence to indicate how the local community benefited from the Zastrospace contract, it is clear that very little if any benefit accrued to them as a result of the contract. It appears that the main beneficiary of the Zastrospace contract was Mr Roelofse in his capacity as the CEO of Zastrospace, as well as the sole director of Cytopix, which was richly rewarded for the „management services‟ provided to Zastrospace. (d) Although there was no obligation on Mr Roelofse to furnish any information on the functions Cytopix performed to justify payment of 30 per cent of the total turnover of Zastrospace to it, as well as the manner in which the local community benefited from the contract, it should have been a simple matter for him to do so. That no affidavit was forthcoming from him, or indeed from members of the community, speaks volumes. (e) There is no basis for the appellant's contention that the notices from the Department of Mineral Resources had any relevance to the cancellation of the contract with Zastrospace, nor that they had serious implications for the retention by the respondent of its mining right. [31] Accordingly, the objective facts revealed by the evidence do not disclose any reasonable grounds to support the statement by the appellant, that he acted in good faith in seeking to have the contract with Zastrospace reinstated. The absence of reasonable grounds for belief in the truth of this statement, provides cogent evidence that he did not hold such a belief. The absence of any evidence to justify the reinstatement of this contract, particularly for the reasons and on the grounds advanced by the appellant, points inexorably to the presence of a collateral ulterior purpose on the part of the appellant, in order to explain his conduct. It is unnecessary to speculate as to what this purpose was, it being sufficient to conclude that as a result, the appellant failed to discharge the onus of proving on a balance of probabilities that the proposed proceedings involved the trial of a serious question of material consequence to the respondent. In addition, he failed to discharge the onus of showing that he held the honest belief that the respondent possessed a good cause of action with reasonable prospects of success, to have the Zastrospace contract reinstated. [32] As regards the remaining demands, it was only after the appellant became aware that the Zastrospace contract was likely to be terminated by a committee of the respondent, that the conduct of the committees of the respondent became the subject of complaint by the appellant, ostensibly in the interests of good corporate governance. The absence of good faith on the part of the appellant permeates all of these demands, which have as their origin his unjustified dissatisfaction with the termination of the Zastrospace contract. [33] In addition s 165(5)(b)(iii) of the Act requires that it be „. . . in the best interests of the company that the applicant be granted leave to commence the proposed proceedings . . .‟. If there are alternative means to obtain the same relief which do not involve the company being compelled to litigate against its wishes, this would be an important consideration in determining whether to grant leave to an applicant (Swansson supra para 60). The provisions of ss 20(4) and 163 of the Act provide an alternative avenue for the relief sought in demands 1 to 4. [34] Section 20(4) of the Act provides that: „One or more shareholders, directors or prescribed officers of a company, or a trade union representing employees of the company, may apply to the High Court for an appropriate order to restrain the company from doing anything inconsistent with this Act.‟ The first demand alleges that the shareholders‟ agreement of the respondent is in conflict with the provisions of the Act in relation to the activities, authority and quorate decision making process of the board committees. The demand is made that the respondent take all necessary steps to have the holding of all board committee meetings interdicted and suspended, pending the removal of the inconsistencies between the terms of reference of the board committees in the shareholders‟ agreement and the Act. The respondent denies these allegations and states that there is no inconsistency between s 72(2) of the Act and the shareholders‟ agreement, in particular schedule 13, being the approval framework. However, the appellant as a director would be entitled to apply to the high court for an order in terms of s 20(4), to restrain the company from doing anything inconsistent with the Act. In other words, the respondent could be interdicted from allowing board committee meetings to be held in terms of the shareholders agreement, contrary to the provisions of the Act. [35] Section 163(1) of the Act provides that: „(1) A shareholder or a director of a company may apply to a court for relief if – (a) any act or omission of the company, or a related person, has had a result that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, the applicant; (b) the business of the company, or a related person, is being or has been carried on or conducted in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, the applicant; or (c) the powers of a director or prescribed officer of the company, or a person related to the company, are being or have been exercised in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, the applicant.‟ In terms of s 163(2) of the Act, the court is entitled to make any interim or final order it considers fit, including an order restraining the conduct in question. [36] The relief sought in terms of the second demand is an interdict to prevent Mr Kriek and Mr Ramaite from convening and holding board committee meetings of the respondent, on the grounds that the appellant as a director and chairman of the respondent, suspended the holding of all such meetings. The respondent disputes that the appellant possesses an absolute executive authority to unilaterally suspend meetings and determine whether any actions of the respondent and/or its executives are authorised. When regard is had to the fact that the appellant is only one of four directors of the respondent, it is apparent that the relief sought by the appellant is comprehended by either subsec (1)(b) or (c) of s 163 of the Act. [37] The third demand is that the necessary legal steps be taken to interdict and restrain Mr Ramaite from acting as a member of all the committees on which he serves, as he is allegedly not a director of the company. It is alleged that in doing so he acted contrary to the express instructions of the appellant, colluded to reconvene meetings of the committees in breach of his duty of good faith and fiduciary duties to the respondent and in breach of clause 12.4 of the shareholders agreement. Again, the relief sought by the appellant is comprehended by either subsec (1)(b) or (c) of s 163 of the Act. [38] The fourth demand is that the requisite legal steps be taken to interdict Mr Ramaite from purporting to act as the deputy CEO of the respondent and that Mr Letshalo be declared to be the duly appointed deputy CEO of the respondent. The appellant alleges that Mr Ramaite refused to relinquish his position as deputy CEO and purported to act as such on behalf of the respondent, which conduct was unlawful, unauthorised and to the prejudice of the respondent. The respondent stated that neither of these individuals have ever expressed any concern or problem with the appointment of two separate deputy CEO‟s. Again, the relief sought by the appellant is comprehended by either subsec (1)(b) or (c) of s 163 of the Act. [39] The appellant therefore failed to prove on a balance of probabilities in terms of s 165(5)(b)(iii) of the Act that it was in the best interests of the respondent that he be granted leave to commence the proposed proceedings on behalf of the respondent. [40] The following order is made: The appeal is dismissed with costs, such costs to include the costs of two counsel. K G B Swain Judge of Appeal Appearances: For the Appellant: J G Nel Instructed by: Natalie Lubbe & Associates Inc, Northriding EG Cooper Majiedt Inc, Bloemfontein For the Respondent: A E Bham SC (with J A Babamia) Instructed by: Mervyn Taback Inc, Parktown 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 30 May 2017 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Lazarus Mbethe v United Manganese of Kalahari (503/2016) [2017] ZASCA 67 (30 May 2017) Media Statement The High Court dismissed an application brought by the appellant for leave to institute a statutory derivative action in the name and on behalf of the respondent company, in terms of s 165(5) of the Companies Act 71 of 2008. The SCA dismissed the appeal holding that the appellant had failed to discharge the onus of proving good faith. The test to determine this was subjective with objective control. The appellant's state of mind was to be determined by drawing inferences from the objective facts. The absence of a collateral purpose on the part of the appellant was not a self- standing requirement of good faith, but was relevant to determine whether the issue was ‘of material consequence to the company’. All of the requirements of s 165(5)(b) had to be satisfied before relief could be granted but the court retained a controlling discretion whether to grant relief, or not. Whether alternative means were available to obtain the same relief, was of relevance in determining whether the proposed action was in ‘the best interests of the company’. --- Ends ---

3839

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 1129/2019 In the matter between: LEBOGANG PETER MASHILO APPLICANT and THE STATE RESPONDENT Neutral citation: Lebogang Peter Mashilo v The State (1129/2019) [2022] ZASCA 81 (2 June 2022) Coram: PONNAN, MAKGOKA and CARELSE JJA and MAKAULA and SAVAGE AJJA Heard: 03 May 2022 Delivered: 02 June 2022 Summary: Application in terms of s 17(2)(f) of the Superior Courts Act 10 of 2013 – referred by the President of the Supreme Court of Appeal to a full court for reconsideration and if necessary variation – application – dismissed. ORDER On appeal from: Gauteng High Court, Pretoria (Msimeki J with Baqwa J concurring, sitting as a court of appeal) The application is dismissed. JUDGMENT Carelse JA (Ponnan and Makgoka JJA and Makaula and Savage AJJA concurring): [1] On 9 October 2014, the applicant, Lebogang Peter Mashilo, and his co- accused, Mzwakhe Moagi (Moagi), were charged before a regional court with robbery with aggravating circumstances read with the provisions of s 51(2) of the Criminal Law Amendment, Act 105 of 1997 (the Minimum Sentence Act) in that on 14 January 2014 and in Kwa-Thema they robbed Hajoon Khan (Khan) of his motor vehicle and two cellphones. The aggravating circumstances were the use of a firearm and depriving Khan of his liberty. They were consequently also charged with the kidnapping of Khan and the unlawful possession of a firearm. [2] Section 51(2) of the Minimum Sentence Act, read with schedule 2 of the Act, provides that: ‘2) Notwithstanding any other law but subject to subsections (3) and (6), a regional court or a High Court shall sentence a person who has been convicted of an offence referred to in – (a) Part II of Schedule 2, in the case of – (i) a first offender, to imprisonment for a period not less than 15 years; (ii) a second offender of any such offence, to imprisonment for a period not less than 20 years; and (iii) a third or subsequent offender of any such offence, to imprisonment for a period not less than 25 years; (b) Part III of Schedule 2, in the case of – (i) a first offender, to imprisonment for a period not less than 10 years; (ii) a second offender of any such offence, to imprisonment for a period not less than 15 years; and (iii) a third or subsequent offender of any such offence, to imprisonment for a period not less than 20 years; (c) Part IV of Schedule 2, in the case of – (i) a first offender, to imprisonment for a period not less than 5 years; (ii) a second offender of any such offence, to imprisonment for a period not less than 7 years; and (iii) a third or subsequent offender of any such offence, to imprisonment for a period not less than 10 years; and (d) Part V of Schedule 2, in the case of – (i) a first offender, to imprisonment for a period not less than 3 years; (ii) a second offender of any such offence, to imprisonment for a period not less than 5 years; and (iii) a third or subsequent offender of any such offence, to imprisonment for a period not less than 7 years.’ [3] On 14 October 2014, Moagi was convicted of all three offences as charged. The applicant was convicted of robbery with aggravating circumstances and kidnapping. Both accused admitted a previous conviction for robbery with aggravating circumstances. On the robbery charge, no substantial and compelling circumstances having been found to be present, both accused were sentenced to the minimum sentence of 20 years. On the kidnapping charge both were sentenced to five years’ imprisonment. On the firearm charge, Moagi was given three years’ imprisonment. The sentences were not ordered to run concurrently. Effectively, Moagi was sentenced to 28 years’ imprisonment and the applicant to 25 years’ imprisonment. [4] Both accused sought leave to appeal. Their application was refused by the regional magistrate. Each separately, petitioned the high court for leave to appeal. In the case of Moagi, it was granted. In the case of the applicant, on 24 May 2014, Msimeki J and Baqwa J dismissed his petition. [5] In the meanwhile, following the high court’s refusal of his petition for leave to appeal, the applicant sought special leave to appeal from this Court. His petition was dismissed. [6] Dissatisfied with this decision, the applicant applied to the President of this Court in terms of s 17(2)(f) of the Superior Courts Act (the Act), which provides: ‘The decision of the majority of the judges considering an application referred to in paragraph (b), or the decision of the court, as the case may be, to grant or refuse the application shall be final: Provided that the President of the Supreme Court of Appeal may in exceptional circumstances, whether of his or her own accord or on application filed within one month of the decision, refer the decision to the court for reconsideration and, if necessary, variation.’ [7] The President referred the application to this Court for oral argument, in terms of s 17(2)(d) of the Act. [8] Section 17(2)(f) of the Act was considered by Mpati P in Avnit v First Rand Bank Ltd.1 As appears from para 7 of his judgment: ‘A useful guide is provided by the established jurisprudence of this court in regard to the grant of special leave to appeal. Prospects of success alone do not constitute exceptional circumstances. The case must truly raise a substantial point of law, or be of great public importance or demonstrate that without leave a grave injustice may result. Such cases will likely to be few and far between because judges who deal with the original application will readily identify cases of that ilk. But the power under s 17(2)(f) is one that can be exercised even when special leave has been refused, so ‘exceptional circumstances’ must involve more than satisfying the requirements for special leave to appeal. The power is likely to be exercised only when the President believes that some matter of importance has possibly been overlooked or grave injustice will otherwise result.’ (My emphasis.) [9] In his application to the President of this Court, the applicant drew attention to Moagi’s success on appeal resulting in the reduction of the latter’s sentence. [10] Moagi’s appeal was heard by a Full Bench of the Gauteng Division of the High Court, Pretoria (Molahlehi AJ, Senyatsi AJ concurring) (the full bench). The full bench found that: ‘The silence of the charge sheet concerning minimum sentence and the failure by the trial court to forewarn the appellant about reliance on the provisions of s 51 (2) of the CPA at the beginning of the trial constitutes substantial and compelling circumstances.’ 1 Avnit v First Rand Bank Ltd [2014] ZASCA 132 para 7. On the strength of that finding it concluded: ‘i. For count 1, relating to robbery with aggravating circumstances, the appellant is sentenced to 14 years imprisonment. ii. For count 2, relating to kidnapping of the complainant, the appellant is sentenced to 5 years imprisonment. iii. For count 3, relating to possession of a firearm, the appellant is sentenced to 3 years imprisonment. iv. The appellant will effectively serve 12 years imprisonment.’ [11] It proceeded to reduce Moagi’s sentence to 14 years on the robbery with aggravating circumstances. The sentences imposed on the other two charges remained unchanged. Whilst the correctness of the full bench’s judgment in the Moagi matter, is strictly speaking, not before us, certain observations need to be made. In the first place, the court did not specifically direct that the sentences imposed in respect of counts 2 and 3 were to run concurrently with the sentence on count 1, in which event the effective sentence would have been 22 years’ imprisonment, not 12 years as is reflected in the paragraph 2(iv) of the order. I pause to record that what is stated in the judgment appears to be at odds with the order that issued in the matter, which reads: ‘1. The appeal against the sentence imposed on the appellant by the court a quo is upheld; 2. The order of the trial court is set aside and the following order relating to the sentence of the appellant, Mr Mzwakhe Moagi, is made: I. For court 1, relating to robbery with aggravating circumstances, the appellant is sentenced to 14 years imprisonment; II. For count 2, relating to kidnapping of the complainant, the appellant is sentenced to 5 years imprisonment; III. For count 3, relating to possession of a firearm, the appellant is sentenced to 3 years imprisonment; IV. Counts 2 and 3 will run concurrently with count 1; V. The appellant will effectively serve 14 years imprisonment; 3. The sentence is antedated to 14 October 2014, the date on which the trial court imposed its sentence; 4. The appellant is in terms of S 103(1) of the Firearm Control Act 60 of 2000, declared to be unfit to possess a firearm.’ [12] In the second place, the finding that the accused were not forewarned about the applicability of the minimum sentencing regime is not supported by the record. [13] The charge sheet reads: ‘THAT the accused are guilty of the crime of Robbery with aggravating circumstances (read with the provisions of Section 51(2) of the Criminal Law Amendment, Act 105 of 1997 and Act 38 of 2007). IN THAT upon or about 14/01/2014 and that or near KWA-THEMA in the Regional Division of NORTH GAUTENG the accused did unlawfully and intentionally assault HAJOON KHAN and did then and with force take the following items from him, to wit 1 x MOTOR VEHICLE FORD FIESTA WITH REG NO CS96FBGP, 2 CELLPHONES his property or property in his lawful possession, aggravating circumstances being THAT THE ACCUSED MADE USE OF FIREARM(S).’ [14] It is thus clear that the charge sheet made specific reference to the minimum sentence legislation. Further, both accused pleaded not guilty. Each was represented. Each had been convicted previously for the same offence, namely robbery with aggravating circumstances and sentenced in terms of the minimum sentencing legislation to the prescribed minimum sentence. At the commencement of the sentencing phase of the trial, the regional magistrate made it clear that there was ‘a minimum sentence for a second offender as well’. Neither accused, nor their legal representatives were under any misapprehension that a minimum sentence applied. In fact, when the application for leave to appeal was being argued on behalf of the applicant before the regional court magistrate, the following was said: ‘With regards to sentence Your Worship, it is my submission that another Court could quite easily come to a different decision and decrease the sentence. It is my submission there is a reasonable prospect of success with regards sentence and it is my submission that another Court could find substantial and compelling circumstances in the circumstances.’ The regional magistrate dealt with that submission in these terms: ‘In the light of the recent previous conviction of accused 2, the court cannot see that another Court would find substantial and compelling circumstances and impose a sentence less or in terms of Section 280(2) make the sentences run concurrently.’ [15] Thus, the basis on which leave to appeal was initially sought was that another court could find that substantial and compelling circumstances existed, not that the applicant had not been forewarned about the minimum sentence. That was also the only point sought to be advanced in support of his petition to this Court for special leave to appeal. He stated in support of that application: ‘7.1 The effective sentence of 25 years is shocking inappropriate as it did not take into consideration the fact that the said counts were committed as part of the same event and should therefore have been ordered to run concurrently and the sentence should therefore have been at least 20 years. 7.1.1 The magistrate further misdirected in imprison [sic] a sentence of 20 years even when then compelling and exceptional circumstances to deviate from the minimum sentence.’ [16] It was only in the application to the President of this Court under s 17(2)(f) of the Act that the applicant for the first time stated that: ‘11. It is applicant’s submission that the honourable judges of the Gauteng Local Division, Pretoria viz. Mr Justice Msimeki and Mr. Justice Baqwa did not apply their minds judiciously and in proper and reasonable manner when they dismissed his petition case no:P369/2014 on the 5th February 2015 in the process subjected him to an unfair appeal process which is not in the interest of justice because his co-accused’s petition who is in the same legal condition like applicant was granted leave to appeal and the appeal succeeded before the honourable Mr Justice Molahleli and the honourable Mr Justice Senyatsi AJ on the 26th October 2016. 11.1 In dealing with applicant’s co-accused Mr Mzwakhe Moagi’s matter case no: A448/2015 the Appeal Court’s finding was that there was failure by the trial court to forewarn the applicant about the application of the minimum sentencing regime viz. section 51(2)(a)(ii) of the Criminal Procedure Act 51 of 1977 at the beginning of the hearing constituted an irregularity warranting an interference on appeal.’ [17] Until then it had never been his case that there had been a failure of justice of any kind. In any event, as I have shown the applicant had indeed been forewarned in the charge sheet of the applicable minimum sentence provisions and reference was also subsequently made to those provisions both by the court and his counsel. [18] It follows that the application is without merit. [19] The following order is made: The application is dismissed. ________________________ CARELSE JA JUDGE OF APPEAL APPEARANCES For appellant: H L Alberts Legal Aid South Africa, Pretoria Legal Aid South Africa, Bloemfontein For respondent: L A More Director of Public Prosecutions, Pretoria 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: 02 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 Lebogang Peter Mashilo v The State (1129/2019) [2022] ZASCA 81 (2 June 2022) Today the Supreme Court of Appeal (SCA) handed down judgment dismissing the applicant’s application for reconsideration for special leave to appeal against the decision of the Gauteng Division of the High Court, Pretoria (the high court). The issue before the SCA was whether this Court should grant the applicant’s application for special leave to appeal. On 9 October 2014, the applicant, Lebogang Peter Mashilo, and his co-accused, Mzwakhe Moagi (Moagi), were charged before a regional court with robbery with aggravating circumstances read with the provisions of s 51(2) of the Criminal Law Amendment, Act 105 of 1997 (the Minimum Sentence Act). They were consequently also charged with the kidnapping and the unlawful possession of a firearm. On 14 October 2014, Moagi was convicted of all three offences as charged. The applicant was convicted of robbery with aggravating circumstances and kidnapping. Both accused admitted a previous conviction for robbery with aggravating circumstances. On the robbery charge, no substantial and compelling circumstances having been found to be present, both accused were sentenced to the minimum sentence of 20 years. Effectively, Moagi was sentenced to 28 years’ imprisonment and the applicant to 25 years’ imprisonment. Both accused sought leave to appeal. Their application was refused by the regional magistrate. Each separately, petitioned the high court for leave to appeal. In the case of Moagi, it was granted. In the case of the applicant, on 24 May 2014, Msimeki and Baqwa JJ dismissed his petition. Moagi’s appeal was heard by a Full Bench of the Gauteng Division of the High Court, (the full bench), which reduced his sentence on robbery with aggravating circumstances to 14 years on the basis that the charge sheet and the trial court failed to forewarn Moagi about the reliance on the provisions of s 51(2) of the Minimum Sentences Act. In the meanwhile, following the high court’s refusal of his petition for leave to appeal, the applicant sought special leave to appeal from this Court. His petition was dismissed. Dissatisfied with this decision, the applicant lodged an application for reconsideration to the President of this Court, in terms of s 17(2)(f) of the Superior Courts Act 10 of 2013 (the Act). In his application to the President of this Court, the applicant drew attention to Moagi’s success on appeal resulting in the reduction of the latter’s sentence. The applicant stated that he was subjected to an unfair appeal process because his co- accused, who was in the same legal position as he was, was granted leave to appeal and was successful in the said appeal, while the applicant was not. The President referred the application to this Court for oral argument, in terms of s 17(2)(d) of the Act. The SCA held that the finding of the full bench that the accused were not forewarned about the applicability of the minimum sentencing regime was not supported by the record. The charge sheet made specific reference to the minimum sentence legislation. Furthermore, the SCA found that neither the accused, nor their legal representatives were under any misapprehension that a minimum sentence applied. ~~~~ends~~~~

3915

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 159/21 In the matter between: SAMANCOR CHROME LIMITED APPELLANT and BILA CIVIL CONTRACTORS (PTY) LTD FIRST RESPONDENT RICHARD FANI BILA SECOND RESPONDENT THOMAS TIME BILA THIRD RESPONDENT PHINDILE PRECIOUS KHUMALO FOURTH RESPONDENT ELISAMINA SIBIYA FIFTH RESPONDENT Neutral citation: Samancor Chrome Limited v Bila Civil Contractors (Pty) Ltd and Others (Case no 159/2021) [2022] ZASCA 154 (7 November 2022) Coram: PETSE DP and ZONDI, HUGHES and MABINDLA-BOQWANA JJA and DAFFUE AJA Heard: 29 August 2022 Delivered: 7 November 2022 Summary: Contempt of court order – joinder of directors and contempt relief sought in the same application – directors aware of the relief sought against them – contempt of court established beyond a reasonable doubt. ORDER On appeal from: Gauteng Division of the High Court, Pretoria (Van der Westhuizen J, sitting as court of first instance): The appeal succeeds with costs. Paragraph (b) of the high court order is set aside and replaced with the following: ‘(b) It is declared that the respondents are in contempt of the order granted by Neukircher J on 1 July 2019. (i) The first respondent is to pay a fine of R100 000, while the second to fifth respondents are to pay a fine of R50 000 each, to the Registrar of this Court, within 30 days of this order. (ii) The respondents shall notify the applicant in writing of their compliance with the order in subparagraph (i) above within 5 days of the payment of the amounts referred to in subparagraph (i) hereof after they have done so. (iii) The respondents are to pay the costs in respect of the declaratory order in paragraph (b) above jointly and severally, the one paying the other to be absolved, such costs to include the costs occasioned by the employment of two counsel where applicable.’ JUDGMENT Mabindla-Boqwana JA (Petse DP and Zondi and Hughes JJA and Daffue AJA concurring) Introduction [1] The appellant, Samancor Chrome Limited (Samancor), is the co-owner of the Remaining Extent of Portion 2 of the farm Elandskraal 469 JQ (RE Portion 2) and the owner of Portion 154 of the farm Elandskraal 469 JQ (Portion 154) (the properties) in the North West Province. [2] It has the sole and exclusive right to mine1 and recover chrome ore in the properties in terms of converted mining rights. In terms of these rights, it is obliged to take all such necessary steps to adequately safeguard and protect the environment and the mining area from any possible damage. It also has to safeguard any persons using or entitled to use the surface mining area, from injury associated with any activities on the mining area. Furthermore, it bears certain safety obligations imposed on it by the Mine Health and Safety Act 29 of 1996 (the MHSA). [3] The first respondent, Bila Civil Contractors (Pty) Ltd (Bila), holds a prospecting2 right over RE Portion 2. The prospecting right entitles Bila to 1 ‘mine’ when used as a verb is defined in the Mineral and Petroleum Resources Development Act 28 of 2002 (the MPRDA) as ‘any operation or activity incidental thereto, in, on or under the relevant mining area.’ 2 ‘prospecting’ – ‘means intentionally searching for any mineral by means of any method – (a) which disturbs the surface or subsurface of the earth, including any portion of the earth that is under the sea or under other water; or remove and dispose of chrome ore and other minerals found during the prospecting operations in terms of s 20 of the Mineral and Petroleum Resources Development Act 28 of 2002 (the MPRDA). Section 20 stipulates: ‘(1) Subject to subsection (2), the holder of a prospecting right may only remove and dispose for his or her own account any mineral found by such holder in the course of prospecting operations conducted pursuant to such prospecting right in such quantities as may be required to conduct tests on it or to identify or analyse it. (2) The holder of a prospecting right must obtain the Minister’s written permission to remove and dispose for such holder’s own account of diamonds and bulk samples of any minerals found by such holder in the course of prospecting operations.’ [4] The planned prospecting activities required, in terms of s 20 of the MPRDA, consisted of three phases. Phase 1 would last for a period of six months from June 2018 to December 2018. It entailed activities that did not disturb the land such as collation of data and aeromagnetic surveys. Phase 2 would take place over 12 months from January 2019 to December 2019. It involved some sampling, trenching and limited drilling. In terms of this phase, Bila could drill up to six holes, which would be approximately 30 metres deep. It was obligatory that the pits be closed before the excavator moved to the next one. [5] Phase 3 would be from January 2020 to 29 May 2023. This phase allowed for excavation, drilling, blasting and bulk sampling. It was anticipated that 50 000 m³ (100 000 ton) would be tested by making trenches at different (b) in or on any residue stockpile or residue deposit, in order to establish the existence of any mineral and to determine the extent and economic value thereof; or (c) in the sea or other water on land.’ locations over the whole prospecting area, where the possibility of ore was identified with test pits. The amount required to finance the three phases was said to be R1 248 122. [6] On 12 June 2019, Samancor lodged an urgent application before the Gauteng Division of the High Court, Pretoria (high court), seeking an order interdicting Bila, its employees and contractors, from conducting unlawful mining operations on RE Portion 2 and Portion 154. Samancor alleged that in May 2019, its mineral resources manager, Mr Kabelo Dube, had observed extensive open cast mining operations, substantial blasting and other activities conducted by Bila, which were an indication that mining operations were taking place. Bila denied that it was mining, emphasising that although it had invested heavily in its operations, these were only for prospecting purposes. To this end, it alleged that it had employed 85 people and had invested in excess of R100 million in such prospecting activities. [7] The application served before Neukircher J who on 1 July 2019, having found in Samancor’s favour, granted the following order: ‘1. In respect of the remaining extent of Portion 2 of the farm Elandskraal 469 JQ North West Province: 1.1 [Bila], its employees and contractors are interdicted and restrained from conducting, facilitating or being involved in any manner whatsoever in mining operations on this property; 1.2 [Bila], its employees and contractors are interdicted and restrained from the removal of any material containing chrome or chrome ore or other minerals from this property outside of that allowed by its prospecting right. 2. In respect of Portion 154 of the Farm Elandskraal 469 JQ North West Province: 2.1 [Bila], its employees and contractors are interdicted and restrained from conducting, facilitating or being involved in any manner whatsoever in mining operations, including blasting activities, or the removal of any material containing chrome or chrom[e] ore or other minerals from [Samancor’s] mining area on this property; 2.2 [Bila] is ordered to vacate this property together with its employees, contractors, equipment and machinery within 5 days of the date on which this order is served [o]n it; 2.3 [Bila] is interdicted and restrained from entering onto this property; 2.4 [Bila] is directed to return to [Samancor], within 10 days of service of this order on it, any mineral and/or material containing chrome or chrome ore which it has removed from this property; 2.5 the second respondent [the Sheriff] is authorised and directed to give effect to the order set out in paragraph 2 by: i removing [Bila], its employees and contractors and any trucks, vehicles, mining equipment or any other equipment reasonably suspected of being used or intended to be used for conducting, facilitating or being involved in any man[n]er whatsoever in mining or blasting activities or the unlawful removal of any chrome or chrom[e] ore on this property; ii preventing all trucks and other vehicles reasonably suspected of being used or intended to be used for conducting, facilitating or being involved in any manner whatsoever in the unlawful removal of any chrome or chrome ore from this property, from entering this property; iii preventing [Bila] from conducting any mining operations including blasting activities on, or the removal of any material containing chrome or chrome ore or any other minerals from [Samancor’s] mining areas situated on this property; iv preventing [Bila] from entering this property. 3. [Bila] is ordered to pay the costs of this application.’ [8] Subsequent to this order, on 8 September 2019, Samancor launched an urgent application before the high court against Bila and its directors, ie the second to fifth respondents, who were not parties before Neukircher J. It sought an order: (a) joining the second to fifth respondents as parties in the application; (b) declaring that the respondents were in contempt of the judgment and order granted by Neukircher J on 1 July 2019; (c) directing that each of the respondents pay a fine of R100 000, alternatively such other sum as the court considered appropriate and; (d) that in the event that any of the respondents failed to comply with the order sought or continued to act in breach of the order, that such respondent be committed to prison for a period of 90 days, alternatively such other period as the court deemed appropriate. [9] A further order, which is not relevant to this appeal was also sought in terms of s 18(1) of the Superior Courts Act 10 of 2013 (Superior Courts Act), for the immediate enforcement and operation of the relevant parts of Neukircher J’s order. [10] In response to this application, a counter-application was filed together with an answering affidavit for an order interdicting Samancor from conducting any mining operations on RE Portion 2 pending the outcome of an appeal process that Samancor had lodged with the Department of Mineral Resources (the DMR) regarding its decision to grant a prospecting right to Bila. [11] Both applications were argued before Van der Westhuizen J, who, on 30 September 2019, granted an order joining the second to fifth respondents as parties to the application but dismissed, with costs, the application for contempt. He further struck the counter-application from the roll for want of urgency. [12] In dismissing the contempt application, Van der Westhuizen J relied on the decision of R v Keyser3 endorsed in Matjhabeng Local Municipality v Eskom Holdings Limited and Others; Mkhonto and Others v Compensation Solutions (Pty) Ltd.4 He held that the principles propounded in those judgments were not followed by Samancor and reasoned as follows: ‘The applicant seeks that the contempt order be granted immediately following on the order for joinder: Non constat that such consent to be joined and such joinder being granted, implies that a contempt order can be summarily granted against them. Such approach by the applicant ignores the basic right that a party has, namely that it is entitled to be heard before an order is granted against him or her or it. In my view it constitutes a summarily find[ing] of contempt without the respondents having the opportunity of being heard. The issue of urgency impacts upon the unfairness of the procedure followed. . . .’ [13] The passage in Keyser upon which Van der Westhuizen J relied, states as follows: ‘But counsel for the Crown fairly and properly admitted that in every case of contempt ex facie curiae dealt with by our courts without a criminal trial, the proceedings were commenced by an order, served upon the offender, containing particulars of the conduct alleged to constitute the contempt of court complained of, and calling upon the offender to appear before the court and show cause why he should not be punished summarily for the alleged contempt of court.’5 3 R v Keyser 1951 (1) SA 512 (A) at 518E-F (Keyser). 4 Matjhabeng Municipality v Eskom Holdings Limited and Others; Mkhonto and Others v Compensation Solutions (Pty) Ltd [2017] ZACC 35; 2017 (11) BCLR 1408 (CC); 2018 (1) SA 1 (CC) para 79 (Matjhabeng). 5 Keyser fn 3 above at 518E-G. The issues [14] The appeal by Samancor is against those portions of Van der Westhuizen J’s order dismissing the contempt application and it is with the leave of this Court. [15] The first issue is whether the high court was correct in holding that the contempt order could not be granted simultaneously with the joinder of the directors. If it was correct, that is the end of the matter. If not, the second question is whether this Court should determine the merits of the contempt application or send the matter back to the high court as submitted by counsel appearing for Bila. If this Court adopts the former, then it will determine whether Samancor is entitled to the contempt relief it sought before Van der Westhuizen J. Joinder and summary process [16] Keyser and Matjhabeng are in my view both distinguishable from the facts of this case. In Keyser the appellant was admonished and sentenced to a fine without knowing that he was an accused. As a result, he had no knowledge of the exact charges against him. He was not given an opportunity to consult counsel, prepare his defence nor was he advised of his right not to make a statement at all.6 [17] Similarly, in Matjhabeng, a rule nisi was granted ex parte calling upon the municipal manager to appear before court. He had neither been cited nor joined in his personal capacity as a party to the proceedings. He was 6 Keyser fn 3 above at 518B-D. cross- examined by the judge and Eskom’s counsel with no evidence being led and was not given an opportunity to comment on the allegations before being cross-examined. He was not legally represented or forewarned that committal to prison could be imposed. Had he known all of this, he might have asked for a postponement in order to consult with counsel and consider his position.7 [18] In the present matter, the directors were cited as respondents in the joinder and contempt application. They received the notice of motion, which clearly set out the relief sought against them. They had time to seek legal counsel, to consider the application and their position in regard thereto. They clearly knew what the case was against them. Specifically, they were aware that not only was joinder sought, but equally aware that the court was also asked to find them in contempt of court and impose a penalty, should it find them guilty of contempt. There was no suggestion either in the papers or in argument that the directors were not aware of the allegations against them and that they needed time to consult with counsel and prepare their case. [19] The resolution authorising the second respondent to depose to an affidavit was signed by each of the directors, which is a clear indication that they knew about the application. They also each filed confirmatory affidavits to the answering affidavit deposed to by one of them. [20] Furthermore, in the answering affidavit it was expressly stated: 7 Matjhabeng fn 4 above para 80. ‘7. While I dispute the liability of [Bila’s] directors for contempt of court, for the reasons dealt with in the rest of this affidavit, I am advised that the joinder of the directors as respondents will not be opposed.’ [21] Indeed, none of the respondents opposed the joinder. To the extent that it is suggested that the answering affidavit did not represent an answer for all the directors, then they would have elected not to oppose the application seeking their joinder and to hold them in contempt of which they were aware. [22] Counsel for the respondents argued that a contempt order could not be summarily granted after the joinder because the directors could not provide answers to the founding affidavit as they were not yet parties to the application and therefore were not obliged to file a response. He submitted that the answering affidavit was only filed on behalf of Bila and deposed to by the second respondent as indicated in the answering affidavit. [23] The answering affidavit, which is attributed solely to Bila, did not raise any issue with the contempt order being sought simultaneously with the joinder of the directors. It went ahead to address the merits of the contempt case. In several paragraphs of the answering affidavit, allegations, which referred to the respondents in plural, are made. The answering affidavit also ventured allegations and responses on behalf of all the respondents. In this regard, reasons were offered as to why the respondents could not be found guilty of contempt. The respondents did not distance themselves from these allegations. And no purpose would have been served in bringing a separate contempt application from the joinder in these circumstances. [24] In challenging the question of urgency, it was alleged in the answering affidavit that the matter should have been brought by way of a rule nisi. Apart from stating that an order should have been sought on terms akin to rule nisi proceedings, it is not clear how that is related to the directors’ joinder and summary contempt process. The summary process defence, as already stated, was not pertinently raised as an issue in the papers. Van der Westhuizen J erred in dismissing the contempt of court application on this basis. He should instead have proceeded to consider the merits in this matter. Further conduct of the matter [25] Counsel for the respondents submitted that, should this Court find that the high court erred in dismissing the contempt relief, then it should remit the matter to the high court for the determination of the merits. [26] The difficulty is that while Van der Westhuizen J did not delve into the merits of the contempt matter, he nevertheless expressed himself thus: ‘In my view, the applicant [Samancor] has further shown that: (a) the first respondent’s conduct complained of constitutes mining operations, despite the first respondent’s protestations in that regard; (b) the first respondent holds the information to gainsay any allegation by the applicant in that regard, but has decidedly chosen not to inform the court in that instance; (c) accordingly, the only inference to be drawn in that respect is that the first respondent is in fact conducting mining operations over the said property as shown by the applicant’s uncontroverted evidence; (d) the evidence placed before the court by the applicant at least prima facie shows the first respondent’s conduct complained of requires an answer that is not met by the first respondent, its protestations to the contrary nevertheless. The respondents hold the required information as demonstrated by the applicant; (e) the applicant would suffer irreparable harm should the order of Neukircher J, not be made operational and enforceable pending any possible application for leave to appeal and any appeal following thereon.’ [27] Van der Westhuizen J went on to state that Bila was less than candid with the court by choosing to raise a technical point and deliberately deciding ‘to ignore the pertinent facts raised in the founding affidavit, where it [was] in a position to gainsay such allegations, [whilst in possession of] all the relevant detail of its conduct complained of.’ [28] Although these findings were made in the context of the determination of the application in terms of s 18(1) of the Superior Courts Act, which formed part of the relief sought, the facts relied upon by Samancor in respect of that relief were the same as those for the contempt application. It seems to me the horse has left the barn and the high court appears to be functus insofar as at least one aspect of the contempt enquiry is concerned. Accordingly, it is proper for this Court to decide whether the requirements to hold the respondents in contempt have been met. Contempt application [29] The requisites to be fulfilled to hold a party in contempt of a court order are: (a) the existence of the order; (b) service or notice of that order to the respondent; (c) non-compliance with the order by the respondent; and (d) wilfulness and mala fides. The onus is on the applicant to prove all these requirements beyond a reasonable doubt. However, once the applicant has established the existence of the order, service or notice and non-compliance, the respondent bears the evidential burden in relation to wilfulness and mala fides. If the respondent fails to provide evidence that will establish reasonable doubt as to whether non-compliance was wilful and mala fide, contempt of the court order will have been established beyond a reasonable doubt.8 Existence of the order and service or notice [30] In the answering affidavit it is conceded that Neukircher J’s order ‘exists and it was served upon the respondents subsequent to its issue on 23 August 2019 and hence the respondents are aware of the order. The first two legal requirements have accordingly been met’. The next step of the enquiry is whether the respondents breached that order. Non–compliance with Neukircher J’s order [31] The facts relied upon by Samancor are as follows. On 2 July 2019, Bila applied for leave to appeal Neukircher J’s order. That application was dismissed on 12 August 2019. This meant that the order was no longer suspended and had to be obeyed. On 19 August 2019, Bila’s attorneys informed Samancor’s attorneys that they had been instructed to petition this Court for leave to appeal. [32] On 23 August 2019, Samancor’s attorneys served a copy of the order by Neukircher J dismissing the application for leave to appeal, on Bila’s attorneys, even though Bila would have been aware of that order by then, since they were represented in court when it was issued. It is common cause that at the time of the hearing of the application, which is the subject of this appeal, 8 Fakie N O v CCII Systems (Pty) Ltd 2006 (4) SA 326 (SCA) para 42. this Court was yet to be petitioned. Accordingly, from 12 August 2019 Neukircher J’s order remained operational and unsuspended. [33] As to allegations of contempt, Samancor alleges that on 19 August 2019, an employee of its security company, Mr Dolf Labuschagne, observed continued mining operations taking place on RE Portion 2. He took aerial photographs of the pit being mined by Bila. A mine wall as depicted in the photographs was an indication that substantial blasting had taken place. There were, among others, vehicles loaded with material mined from Bila’s mining area, large crushing plants, numerous loading trucks and material, which had been crushed and stockpiled on Bila’s mining site. [34] Mr Dube, who is a qualified mine surveyor, studied the photographs and confirmed that they indicated full-scale mining operations being conducted by Bila as opposed to prospecting operations. Samancor’s survey specialist, Mr Vusumzi Vilakazi, and Mr Dube conducted an analysis of the pit where unlawful mining activities were allegedly being conducted, using the industry-standard digital terrain modelling and surveying software known as ‘model-maker’. [35] They calculated that by 22 August 2019, Bila had mined and removed an estimated 174 382.23 tons of chrome ore from MG4 reef and 75 441.37 tons from the MG4A reef from the pit on RE Portion 2. They also measured the dimensions of the pits that had been excavated and found them to be larger than what was anticipated by Bila in the prospecting work programme (PWP). Bila had also not closed or rehabilitated any of the mine excavations conducted in an old pit on RE Portion 2. [36] Bila was only permitted to remove 80 000 tons of ore over a period of 42 months for purposes of conducting tests and analysis in terms of the prospecting right and PWP. It had as at 21 August 2019 removed a total amount of 642 607.04 tons of chrome ore from the MG4 reef and 278 005.09 tons of chrome ore from the MG4A reef on RE Portion 2 and Portion 154. [37] On 4 September 2019, Mr Labuschagne observed that Bila was continuing its mining operations on RE Portion 2 and it had escalated its operations since he had last observed on 19 August 2019. He took video footage of these activities. Mr Dube reviewed the video and confirmed that full-scale mining operations were taking place. Also, on 4 September 2019, Samancor’s safety, health, environment and quality specialist for explosives, Mr Tshepo Mogoai received a telephone call from one Mr Kenny Whal from Bila, who informed him that Bila would be conducting blasting on 4 and 5 September 2019 consisting of 110 (explosive filled) holes – a ‘big blast’. [38] Prior to the hearing of the matter before Neukircher J, Bila had been issued with a notice in terms of s 54 of the MHSA (s 54 notice)9 by the DMR 9 Section 54(1) of the Mine Health and Safety Act provides as follows: ‘54. Inspector’s power to deal with dangerous conditions. — (1) If an inspector has reason to believe that any occurrence, practice or condition at a mine endangers or may endanger the health or safety of any person at the mine, the inspector may give any instruction necessary to protect the health or safety of persons at the mine, including but not limited to an instruction that— (a) operations at the mine or a part of the mine be halted; (b) the performance of any act or practice at the mine or a part of the mine be suspended or halted, and may place conditions on the performance of that act or practice; (c) the employer must take the steps set out in the instruction, within the specified period, to rectify the occurrence, practice or condition; or highlighting safety transgressions that had been found, including Bila ‘blasting at a place that is above another underground mine without any risk assessment and exemption in place’. In terms of this notice, Bila was, among others, required to provide a risk assessment prepared jointly with Samancor. The notice was, however, uplifted notwithstanding the safety concerns still outstanding. The mine surveyors of the two parties, nevertheless met and Bila’s mine surveyor agreed with Samancor’s mine surveyor, Mr Johnny Maleka, that the parties were mining in the same area. [39] In that meeting, Samancor advised Bila of the mine health and safety concerns, which included loss of ventilation in Samancor’s shafts, possible influx of material flooding and blasting that would affect the integrity of Samancor’s underground workings and causing the surface of the land to cave and the pillars underground to collapse. The joint risk assessment was completed. However, Bila did not take steps to mitigate the risks identified in this assessment. [40] Continued mining operations by Bila in RE Portion 2 would sterilise the MG2 reef, which would shorten the life of the mine causing financial harm to Samancor. It was also causing an unacceptable degradation to the environment, which exposed Samancor to liability in terms of the National Environmental Management Act 107 of 1998. In addition, removal of tons of chrome, which was done between the period of 24 May 2019 and 22 August 2019, would result in the depletion of chrome resources. In that period, Bila had removed 249 823.60 tons of chrome from RE Portion 2. If it continued (d) all affected persons, other than those who are required to assist in taking steps referred to in paragraph (c), be moved to safety.’ that would mean approximately 83 274.53 tons of chrome resource will be removed per month. [41] Bila denied that it was conducting mining operations. It claimed that it was merely conducting prospecting operations in terms of its prospecting licence, the purpose of which was to establish whether there were sufficient viable minerals over RE Portion 2 for Bila to undertake a full-scale mining operation. It did not dispute that there could be sterilisation of MG2 reef. [42] Bila, however, did not deal with the evidence of Mr Dube and Mr Vilakazi, which indicated that Bila’s operations were at the scale beyond what was allowed by the prospecting right and as indicated in its PWP. While it denied the calculations made by the former, dismissing them as being guesstimates, it did not disclose the actual quantities that it removed during the period in issue. [43] It may be so that the physical operation equipment required for prospecting and mining is identical, the volumes of chrome ore allowed by the prospecting right and the mining right are not the same. Mr Dube’s and Mr Vilakazi’s analysis brought this evidence into focus but Bila did not directly engage with it. [44] Bila simply noted allegations regarding a call from its Mr Whal, who had advised Mr Mogoai that Bila would be conducting a ‘big blast’ on 4 and 5 September 2019. It denied that its mine surveyor had admitted that the parties were mining in the same area but attached no confirmatory affidavit to that effect. According to Bila, the uplifting of the s 54 notice was an indication that it had remedied the issues identified by the DMR in the s 54 notice. [45] The uncontroverted evidence brought by Samancor showed that full scale blasting took place at the level beyond that which was allowed for phase 2. Bila did not suggest that it only drilled six holes as permitted in phase 2. It seemed to suggest that the level of operation it undertook (which it did not reveal) was necessary to fulfil its prospecting objectives. The allegation made by Samancor as to the scale at which the operation was conducted did not seem to be challenged by Bila but somewhat was justified. [46] Bila, did not produce evidence to challenge allegations regarding, inter alia, the size of the pits, how much blasting it had done, the calculations regarding the amount of chrome ore that was removed and where the material was taken and stockpiled. This information was necessary to bring the level of operations within the ambit of the prospecting licence. Importantly, there was no evidence as to how Bila had changed its operations after Neukircher J’s order in order to counter the allegations that nothing had changed; instead, mining operations allegedly escalated. [47] The submission that Bila could not produce the necessary evidence because of the urgency of the matter, does not come to its assistance. It could have produced information that it was expected to readily have in its possession in terms of its prospecting right. It could also have gathered and brought evidence from those who were involved in these operations. No attempt was made, at the very least, to present any information that it had or could be obtained within the limited time available before delivering its answering affidavit. The second respondent ventured into giving opinions on matters he had no expertise on, such as deducing why the expansive operation was observed by the Samancor personnel, without any substantiation. [48] In addition, clause 13.1 of its prospecting right obliged Bila to maintain all such books, plans and reports regarding prospecting operations in terms of clause 13.2. It was further obliged to furnish the Regional Manager10 with progress reports. Furthermore, in terms of clause 13.3, it was required to inform the Regional Manager of any new developments and of any future prospecting activities, and was required to keep records of prospecting operations, results, and expenditure connected therewith. [49] Bila did not seriously and explicitly engage with the extensive facts and evidence presented by Samancor in its founding affidavit. Information as to what it was allowed to do in terms of the prospecting right and what it did, was within its knowledge and ought to have been presented.11 As Wallis JA noted in Strydom v Engen Petroleum Ltd: ‘Where matters are within the exclusive knowledge of one party less evidence is required to be adduced by the other party to discharge the onus of proof on a point. And sometimes the silence of the witness on a vital point within that person’s knowledge is as telling as anything that may be said from the other side.’12 10 Section 1 of the MPRDA defines ‘Regional Manager’ as ‘the officer designated by the Director-General in terms of section 8 as regional manager for a specific region.’ 11 Wightman t/a JW Construction v Headfour (Pty) Ltd and Another [2008] ZASCA 6; [2008] 2 All SA 512 (SCA); 2008 (3) SA 371 (SCA) para 13. 12 Strydom v Engen Petroleum Ltd [2012] ZASCA 187; 2013 (2) SA 187 (SCA); [2013] 1 All SA 563 (SCA) para 19. [50] From these facts, Samancor, in my view, has established non- compliance with Neukircher J’s order. As a result, Bila bears the evidential burden of rebuttal to produce evidence that gives rise to a reasonable doubt that such non-compliance was wilful and mala fide. Wilfulness and mala fides [51] The defence given by the respondents for non-compliance with the order (in the event that disobedience was proven) is that the order was not even capable of being breached since it was automatically suspended, according to the legal advice which the second respondent received and the correctness of which he had no reason to doubt. [52] Further, that the respondents, relying on the legal advice they had obtained from their attorneys, which was confirmed by the current senior and junior counsel, acted bona fide. It was further alleged in the answering affidavit that the advice was obtained verbally but that it could ‘be gleaned from the version of the respondents, which ha[d] been consistently articulated in writing in all the papers pertaining to this matter. If necessary, it will be re- articulated by counsel during the hearing.’ [53] The respondents were obliged to state the full details of the alleged advice, because they had raised it as a defence. In the ordinary course, the facts to be detailed would include the nature of the advice, when and by whom it was given. In S v Abrahams, this Court said: ‘[I]f an accused wished the Court to have regard to this advice as a mitigating factor, then it could be expected of him to produce the advice if it was in writing. In addition the Court would require to be satisfied that the advice was given on a full and true statement of the facts. In the absence of such safeguards the fact of the advice having been given was held to be of no avail as a mitigating factor. These remarks are pertinent to the present enquiry, more particularly as the attorney on whose advice the appellant claimed to have relied was not called to testify in regard to all the circumstances relevant to the giving of such advice.’13 [54] I am willing to assume in the respondents’ favour that the advice they allegedly received was given by its current attorneys of record and counsel who had represented Bila in the urgent application before Neukircher J and who remained on record in the subsequent proceedings relating to this matter, even though no confirmatory affidavits have been filed. There is, however, lack of detail, even at the bare minimum, of the alleged advice so as to assess whether it was given on full and true statement of facts as postulated in Abrahams. Moreover, Samancor was entitled to know what the defence proffered as a rebuttal for non-compliance was, so as to properly deal with it in reply. [55] The respondents submitted that the advice should be gleaned from the correspondence substantiating their version, and yet they did not point to a particular document where the alleged advice was contained in their answering affidavit. [56] We were referred by counsel for the respondents to the paragraphs of the answering affidavit, which deal with the point in limine of prematurity, in which the following is stated: 13 S v Abrahams 1983 (1) SA 137 (A) 146F-H. ‘16. . . . It is either the applicant’s case that: . . . 16.2 the notification of the respondents’ intention to institute section 17(2)(b) proceedings for an application for leave to appeal to the Supreme Court of Appeal (by way of a so- called petition) is sufficient to overcome the jurisdictional challenge, and the first respondent must be deemed to have initiated leave to appeal proceedings, in which case the contempt of court proceedings must fail, because the order is thereby automatically suspended until otherwise determined by the court upon the granting of the relief sought in prayer 6 of the present application. 17. I am advised that it will be argued that the better view is the one articulated in paragraph 16.2 above.’ (My emphasis.) [57] Counsel further directed us to a letter dated 11 September 2019, sent by Bila’s attorneys of record to Samancor’s attorneys. This letter records that Samancor’s application for contempt of court was premature because the deadline to petition this Court for leave to appeal was 29 September 2019. This, the respondents asserted, was further exacerbated by Samancor’s failure to obtain an order in terms of s 18(1) of the Superior Courts Act. [58] The intimation in the letter is that Neukircher J’s order was suspended until 29 September 2019, which was the final date of the period within which an application for leave to appeal to this Court could still be made. However, this letter is not by any stretch of the imagination legal advice to the respondents as it was addressed to Samancor’s attorneys. [59] Even if I were to assume on behalf of the respondents (and not be seen to be pedantically putting form over substance) that the content of the letter amounts to legal advice, the nature of it does not assist the respondents. Section 18(5) of the Superior Courts Act is clear and categorical that: ‘[f]or 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 notice of appeal is lodged with the registrar in terms of the rules’. (My emphasis.) It is not clear whether the advice was based on the full statement of facts as suggested in Abrahams as the answering affidavit is bereft of details. [60] Be that as it may, for the respondents to labour under the impression that only the intention of a party, which is effectively the mental state of a party, without any action, could automatically suspend an order is not only untenable but is far-fetched. Taken to its logical conclusion, it is no different to a contention that an intention to institute summons without actually doing so interrupts prescription. [61] This statement, must be viewed against the backdrop that the respondents deliberately and intentionally caused Bila to continue acting against Neukircher J’s order, whilst contending that it was not mining but prospecting. In addition, the respondents’ failure to disclose what the true nature and scale of the operations undertaken were, impels me to find that the defence of legal advice is contrived and therefore does not give rise to a reasonable doubt so as to rebut the inference of wilfulness and mala fides. [62] As regards removal of material at Portion 154, the defence advanced by the respondents, is that it was impossible to comply with this part of the order because Bila ‘did not remove any materials from Portion 154 immediately prior to or subsequent to the granting of the court order. Such materials as have been previously removed have long been sold’. In the same breath, the second respondent denies, in the answering affidavit, that Bila removed any minerals and/or chrome materials. The question then is: what material was long sold? [63] Details once again are not provided as to when and why Bila sold any minerals from Portion 154, when it was not permitted to do so. It is not stated whether the material was sold under the mistaken belief that Bila was entitled to sell it or not. The timeline should have been provided. It is not sufficient to state the impossibility to comply with the order owing to the sale of the material without providing information including documentation in that regard. [64] In the context of the facts of this case, it is improbable that Neukircher J would make such an order with the knowledge that the material removed by Bila could not be returned because it had long been sold. In my view, the respondents have not advanced credible evidence in rebuttal to give rise to a reasonable doubt in this regard too. Therefore, non-compliance on this aspect must also be found to have been wilful and mala fide. [65] The second respondent submitted that the contempt order sought against all the directors is an intimidation tactic. He alleged that he was the responsible director who had been given authority to make decisions. He therefore did not consult other directors on every single operational matter, and it therefore could not be said that the other directors had also caused Bila to be in contempt of Neurkicher J’s order. [66] This claim cannot shield the third to fifth respondents from responsibility. Even if they had given the second respondent powers to make decisions in operational matters, a court order is a serious matter requiring the board’s attention. The third to fifth respondents had a duty to ensure that once they received the court order stating that Bila had acted unlawfully, that court order was obeyed. They could not simply wash their hands and walk away from accountability. Moreover, they have not explained what steps they had taken to ensure that the court order was complied with. Consequently, all the directors must be held responsible jointly with Bila. [67] In these circumstances, Samancor has, in my view, established that the respondents were in contempt of Neukircher J’s order beyond a reasonable doubt. It is accordingly entitled to the relief it sought before Van der Westhuizen J. [68] The next issue to determine is the penalty to be imposed against the respondents. Samancor sought an order directing each of the respondents to pay a fine of R100 000 or any other sum the Court would deem appropriate. Further, counsel for Samancor submitted that, in the event that any of the respondents failed to pay the fine or continued to breach Neukircher J’s order, they be committed to imprisonment. [69] However, when pressed, counsel conceded that an order for committal would be inappropriate at this stage. The imposition of a fine in respect of each of the respondents is, thus, the most appropriate penalty in the circumstances. I am further of the view that the directors should be ordered to each pay half of the fine that would be paid by Bila. Costs should follow the result. [70] In the circumstances, the following order is made: The appeal succeeds with costs. Paragraph (b) of the high court order is set aside and replaced with the following: ‘(b) It is declared that the respondents are in contempt of the order granted by Neukircher J on 1 July 2019. (i) The first respondent is to pay a fine of R100 000, while the second to fifth respondents are to pay a fine of R50 000 each, to the Registrar of this Court, within 30 days of this order. (ii) The respondents shall notify the applicant in writing of their compliance with the order in subparagraph (i) above within 5 days of the payment of the amounts referred to in subparagraph (i) hereof after they have done so. (iii) The respondents are to pay the costs in respect of the declaratory order in paragraph (b) above jointly and severally, the one paying the other to be absolved, such costs to include the costs occasioned by the employment of two counsel where applicable.’ __________________________ N P MABINDLA-BOQWANA JUDGE OF APPEAL Appearances For appellant: G D Wickins SC Instructed by: Malan Scholes Inc, Johannesburg Claude Reid Attorneys, Bloemfontein. For respondents: D C Mpofu SC (with T Modise) Instructed by: Mabuza Attorneys, Johannesburg Matsepes 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: 7 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 Samancor Chrome Limited v Bila Civil Contractors (Pty) Ltd and Others (Case no 159/2021) [2022] ZASCA 154 (7 November 2022) Today, the Supreme Court of Appeal (SCA) upheld, with costs, an appeal against a decision of the Gauteng Division of the High Court, Pretoria (the high court). The appeal concerned a question of whether a contempt order could be granted simultaneously with the joinder of directors as parties to the application and whether contempt of a court order was established beyond a reasonable doubt. The facts in this case were briefly as follows. Samancor Chrome Limited (Samancor) was the co-owner of the Remaining Extent of Portion 2 of the farm Elandskraal 469 JQ (RE Portion 2) and the owner of Portion 154 of the farm Elandskraal 469 JQ (Portion 154) (the properties) in the North West Province. It had the sole and exclusive right to mine and recover chrome ore in the properties in terms of converted mining rights. The first respondent, Bila Civil Contractors (Pty) Ltd (Bila), held a prospecting right over RE Portion 2. On 12 June 2019, Samancor lodged an urgent application in the high court, alleging that Bila, its employees and contractors, conducted unlawful mining operations on RE Portion 2 and Portion 154. Bila denied that it was mining, emphasising that although it had invested heavily in its operations, these were only for prospecting purposes. The matter served before Neukircher J who granted an order on 1 July 2019, restraining and interdicting Bila from conducting mining operations and removing chrome ore outside of that allowed by its prospecting right. Subsequent to this order, on 25 September 2019, Samancor launched an urgent application in the high court against Bila and its directors, ie the second to fifth respondents, who were not parties before Neukircher J. It sought an order: (a) joining the second to fifth respondents as parties in the application; (b) declaring that the respondents were in contempt of the judgment and order granted by Neukircher J on 1 July 2019; (c) directing that each of the respondents pay a fine of R100 000, alternatively such other sum as the court considered appropriate; and (d) that in the event that any of the respondents failed to comply with the order sought or continued to act in breach of the order, that such respondent be committed to prison for a period of 90 days, alternatively such other period as the court deemed appropriate. A counter-application was filed together with an answering affidavit for an order interdicting Samancor from conducting any mining operations on RE Portion 2 pending the outcome of an appeal process that Samancor had lodged with the Department of Mineral Resources regarding its decision to grant a prospecting right to Bila. Both applications were argued before Van der Westhuizen J, who granted an order joining Bila’s directors as parties to the application but dismissed, with costs, the application for contempt. He further struck the counter-application from the roll for want of urgency. In dismissing the contempt application, he found that a contempt order could not be sought immediately following an order for joinder. The SCA found that the high court erred, in that Bila’s directors received the notice of motion, which clearly set out the relief sought against them. They had time to seek legal counsel and consider the application and their position in regard thereto. Specifically, they were aware that not only their joinder was sought, but were equally aware that the court was also asked to find them in contempt of court and impose a penalty should it find them guilty of contempt. The SCA accordingly held that the high court should have proceeded to deal with the contempt application. Because the high court had made findings that impacted on the breach aspect of the contempt inquiry, it was proper for the SCA to decide whether the requirements to hold Bila and its directors in contempt were established. The existence and service of the order was admitted and therefore the first two requirements to hold Bila and its directors in contempt were met. As to the issue of non-compliance with Neurkircher J’s order, the SCA found that uncontroverted evidence presented by Samancor showed that Bila had conducted mining operations and removed chrome ore outside that which was allowed by its prospecting right. In order to rebut the inference of wilfulness and mala fides, the respondents submitted that they relied on legal advice that Neukircher J’s order was automatically suspended because Bila had intended to lodge an application for leave to appeal that order. The SCA found the answering affidavit to be bereft of detail as to the nature of this advice. It further held that, even if it were to be assumed on behalf of the respondents, that sufficient detail was given, s 18(5) of the Superior Courts Act 10 of 2013 was clear and categorical that ‘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 notice of appeal is lodged with the registrar in terms of the rules’. The impression that an intention of a party automatically suspended an order was not only untenable but far- fetched. Taken to its logical conclusion, it was no different to a contention that an intention to institute summons without actually doing so interrupts prescription. The SCA, accordingly, found that contempt of Neurkircher J’s order was established beyond a reasonable doubt. It held that the imposition of a fine in respect of each of the respondents was the most appropriate penalty in the circumstances. In the result, it upheld the appeal with costs. ~~~~ends~~~~

2266

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 231/08 No Precedential Significance GOPAUL SEWPERSADH First Appellant ROSHNI DEVI SEWPERSADH Second Appellant and SURIAPRAKASH DOOKIE Respondent Neutral citation: Sewpersadh v Dookie (231/08) [2009] ZASCA 78 (1 June 2009) Coram: STREICHER ADP, JAFTA and MAYA JJA, HURT and TSHIQI AJJA Heard: 20 MAY 2009 Delivered: 1 JUNE 2009 Summary: Sale of land – termination of agreement of sale – whether conduct of parties after valid cancellation thereof tantamount to a revival of the agreement. _____________________________________________________________ ORDER _____________________________________________________________ On appeal from: High Court, Durban (Swain J sitting as court of first instance). 1. The appeal succeeds with costs. 2. The order of the court below is set aside and replaced with the following order: ‘(a) The written contract of purchase and sale entered into by the applicants and the respondent on 7 October 2003 is hereby declared and duly cancelled. (b) The respondent is hereby ordered to vacate the business premises situated at 19 Inwabi Road, Isipingo Rail, KwaZulu-Natal forthwith. (c) Should the respondent fail to vacate the said premises upon service of this Order, the Sheriff is hereby authorised and directed to immediately evict him from the said premises. (d) The respondent is ordered to pay the costs of this application.’ _____________________________________________________________ JUDGMENT _____________________________________________________________ MAYA JA (STREICHER ADP, JAFTA and MAYA JJA, HURT and TSHIQI AJJA concurring): [1] The appellants, a married couple, are the registered owners of immovable property situated at 19 Inwabi Road, Isipingo Road, KwaZulu-Natal, also known as Lot 60 Parukville, (the property). On 7 October 2003, they concluded a written agreement with the respondent for the sale of the property in terms of which the respondent was given possession and occupation of the property upon his signature. Consequent to the respondent’s failure to pay the purchase price within the period stipulated in the agreement, the appellants sought an order in the Durban High Court (Swain J) declaring the agreement to be cancelled, evicting the respondent from the property and ancillary relief. [2] The court below refused the application on the basis that although the agreement had been validly cancelled, it was subsequently revived by the parties’ conduct and that such revived agreement did not have to meet the formalities contained in the Alienation of Land Act 68 of 1981 for its validity.1 With the leave of the court below, the appellants now appeal against its judgment that the agreement had been revived. [3] Briefly stated, the background facts of the matter are as follows. The appellants were in a precarious financial position and faced a looming threat by their local authority to sell the property in execution to discharge the substantial arrears in rates and taxes which they owed. The first appellant then sought assistance from the respondent, a long-time fellow businessman and neighbour. They struck an agreement under which the respondent would purchase the property and settle the appellants’ various debts with the purchase price. Such price, fixed at R500 000, was to be paid in a rather elaborate manner described in more detail later in the judgment, but essentially in monthly instalments of not less than R20 000 within 24 months from the date of the signature of the sale agreement. [4] As they are wont, things did not go according to plan and the purchase price had not been paid in full at the end of the contract period. There was some dispute as to whether this constituted a breach of the agreement as the respondent alleged that despite repeated requests, the 1 In terms of section 2 (1) of the Alienation of Land Act of 1981 ‘[n]o alienation of land … shall be of any force or effect unless it is contained in a deed of alienation signed by the parties thereto or by their agents acting on their written authority’. appellants had failed to supply him with statements indicating the outstanding amount. This, the appellants denied. There was disagreement also about the frequency of the payments and whether the payments reduced the capital or interest portions of the debts and how such interest arose. Be that as it may, on the respondent’s own version only an amount of R428 912 had been paid by 22 March 2007 when he prepared his answering affidavit, long after the expiry of the contract period. [5] The appellants gave the respondent written notice to rectify the breach in terms of the agreement. When payment was not made within the requisite period the appellants cancelled the contract on 5 April 2006. Thereafter, on 29 May 2006, they launched the application. [6] The respondent nevertheless continued making payments. Sums of R5 000, R50 000 and R20 000 were paid into the appellants’ account on 4 July, 12 August and 25 October 2006, respectively. But nothing turned on these payments as it does not appear from the papers when the appellants became aware of them. In the appellants replying affidavit the first appellant, who deposed to the affidavit said that he had recently received a statement from Standard Bank reflecting these payments. A controversial payment, as will appear later in the judgment, is one made in December 2006 when the first appellant requested a sum of R50 000 from the respondent apparently to purchase a house for his daughter and the respondent gave him R30 000. Regardless of this payment, however, the application remained pending and on 22 March 2007 the respondent filed his answering affidavit followed shortly by the appellants’ reply on 2 April 2007. [7] In the court below, the respondent denied that he was in breach of the agreement or that it had validly been cancelled. His main contentions were that the letter of demand placing him in mora was defective as it did not specify the breach complained of and that the appellants impliedly waived any right they may have had to cancel the agreement by continuing to accept payments after the purported cancellation. However, no allegation of a waiver had been made in the papers before the court. [8] The court below accepted that the appellants did not rely on the respondent’s breach to make full payment within 24 months in their letter of demand, but found that their reliance on the breach in their founding affidavit was sufficient. The court concluded that the appellants had established that the respondent was in breach of the agreement which entitled them to cancel the agreement as they did. In its view, the cancellation excluded the possibility of the waiver contended for by the respondent. The court however held that the appellants’ request for a sum of R50 000, the payment by the respondent of R30 000 ‘in respect of the purchase price’ in response thereto and the appellants’ failure to tender the return of the additional payments made by the respondents and the respondent’s lengthy delay of ten months in filing his answering affidavit, all amounted to a new agreement by the parties to revive the cancelled agreement. [9] In argument before us, the respondent’s counsel prudently did not persist with the denial of a breach of the agreement and challenged only the validity of the cancellation. The essence of the challenge was that the letter of demand did not comply with the provisions of the breach clause of the agreement, as it did not specify the breach which founded the cancellation ie a failure to pay the outstanding balance within 24 months, such that the right to cancel did not accrue to the appellants. [10] The procedure to be followed by the parties in the case of a breach is set out in clause 9 of the agreement which provides: ‘Should the Purchaser commit any breach of the provisions of this agreement (all of which shall be deemed to be material), and remain in breach for a period of 7 (seven) days from the date of written notice given to him by the Sellers calling upon him to remedy such breach, the Sellers shall be entitled … to claim specific performance of all the Purchaser’s obligations … or cancel this agreement by written notice to the Purchaser’. [11] The appellants issued the impugned notice through their attorneys on 20 March 2006. It is necessary to set it out in some detail, and it reads as follows: ‘… We refer to a Notice dated 12 October 2005 sent to you by … our client’s former Attorneys, pursuant to an Agreement of Purchase and Sale entered into between you and our clients for the purchase and sale of Erf 60 Parukville. Our instructions are that you are still in breach of the Agreement of Purchase and Sale in that :- 1. You have not made any payment to Business Partners and the amount due to them as at 26 February 2006 is R246 074,52. 2. You have only paid R40 000 towards the rates due on Erf 60 Parukville and R10 000 towards the rates due on Erf 1816 Isipingo. 3. You have not made any payment to The Standard Bank of SA Limited. The amount currently owing to The Standard Bank is R124 237,36. This is a final demand calling upon you to remedy the afore-said breaches within seven days of receipt hereof. Should you fail to remedy the breaches in full our Client intends inter alia to cancel the Agreement of Purchase and Sale and retake possession of the property.’ Apparently, this notice failed to elicit the desired response as it was followed by a letter dated 5 April 2006 in which the appellants notified the respondent that in view of his failure to remedy the breach within the stipulated period, the agreement was cancelled and requested him to vacate the property. [12] The various items referred to in the notice which the respondent allegedly neglected to pay are debts in the appellants’ banking and municipal accounts which the respondent had to discharge on the appellants’ behalf under the agreement in payment of the purchase price. This is what necessitated the intricate payment scheme alluded to earlier and it is convenient to set it out at this stage. [13] The scheme is contained in clause 12 of the agreement headed ‘PURCHASE PRICE’ which provides: ‘The purchase shall be in the sum of R500 000 … [and] shall be paid as follows: (i) the Purchaser undertakes upon signature hereof to pay the sum of R25 000 to Business Partners in respect of [bank] Account Number: 1314851003; (ii) the Purchaser undertakes to continue making monthly payments into the said account of Business Partners until the Sellers’ indebtedness and interest has been paid in full; (iii) the Purchaser undertakes to make monthly payments in respect of the Seller’s indebtedness to Standard Bank of South Africa bearing Account Number: 211326119 in respect of a mortgage bond, which is being held by the said bank over the Sellers’ property described as Lot 1816, Isipingo situated at 92 Platt Drive, Isipingo Hills, KwaZulu-Natal; (iv) the Purchaser undertakes to make payment to the eThekwini Municipality – South Operational Entity in respect of all arrear rates due by the Sellers in respect of Lot 60 Parukville [the property] and Lot 1816 Isipingo to date of signature hereof; (v) the Purchaser undertakes to make payment of not less than R20 000 per month in respect of the reduction of the purchase price which sum shall be distributed equally in respect of payment to Business Partners, Standard Bank and the eThekwini Municipality. (vi) the Purchaser shall be liable for interest and penalties and levies in respect of each of the above accounts; (vii) it is recorded that the Purchaser shall complete payment of the purchase price within a period of twenty four months from date of signature of this agreement; (viii) the Purchaser shall be liable for all future rates and taxes from date of occupation until date of registration of transfer; (ix) Registration of transfer shall take place upon the Purchaser fulfilling all conditions as above; (x) the Purchaser’s obligations in respect of the payment of the mortgage bond to Standard Bank shall cease when the outstanding balance in respect of the said account is R20 000.’ [14] The minutiae of the respondent’s contention that the notice is defective are that (a) the breaches to which it referred, ie failure to pay Business Partners and Standard Bank and payment of only R10 000 towards rates, were not proved, (b) it did not record the amount that the respondent was required to pay to the various accounts, (c) it demanded payment of more than was outstanding even though the amount was not specified and (d) it did not disclose what was required of the respondent to rectify the breach. [15] As the respondent correctly pointed out, it is indeed not so that only a sum of R10 000 was paid by the respondent in respect of rates for Erf 1816 as alleged in clause 2 of the letter of demand, that no payments had been made to Business Partners and that no payments had been made to Standard Bank. But what is clear from the demand is that the breach alleged is the breach by the respondent to pay the full purchase price. But submitted counsel for the respondent, the respondent did not know what the purchase price was because, although the agreement stated that the purchase price was R500 000 it also provided that the respondent would be liable for interest and penalties and levies in respect of each of the above accounts. Even if that is so the respondent knew that at least R500 000 had to be paid within 24 months and that he had not done so. To that extent it would have been clear to him what the breach was that the appellants required him to remedy. [16] The finding of the court below that the cancelled agreement was revived by agreement between the parties may be disposed of shortly. An agreement to revive requires ‘a fresh meeting and concurrence of the minds’ of the parties to restore the status quo ante.2 No basis for a finding that there was consensus between the parties that the agreement be revived is to be found in the affidavits filed by the parties. The respondent did not only not allege such an agreement but could not do so in the light of his denial that he had breached the agreement and that the agreement had validly been cancelled. Moreover, the second appellant was also a party to the agreement of sale and, as the respondent’s counsel conceded, there was no evidence whatsoever of her consent to the revival of the agreement. [17] Finally, as to the inference drawn by the court below from the late filing of the answering affidavit, I simply cannot fathom its basis. There is no hint at all of the reason of such delay in the papers. [18] For these reasons the court below erred in finding that the agreement of sale had been revived. This finding dispenses with the need to deal with the question whether the agreement found by the court below had to comply with the formalities prescribed in the Alienation of Land Act. [19] The following order is made: 1. The appeal succeeds with costs. 2 Desai v Mohamed 1976 (2) SA 709 (N) at 712H-, United Bioscope Cafes Ltd v Moseley Buildings Ltd 1924 AD 60 at 67- 68; Neethling v Klopper 1967 (4) SA 459 (A) at 466-467. 2. The order of the court below is set aside and replaced with the following order: ‘(a) The written contract of purchase and sale entered into by the applicants and the respondent on 7 October 2003 is hereby declared and duly cancelled. (b) The respondent is hereby ordered to vacate the business premises situated at 19 Inwabi Road, Isipingo Rail, KwaZulu-Natal forthwith. (c) Should the respondent fail to vacate the said premises upon service of this Order, the Sheriff is hereby authorised and directed to immediately evict him from the said premises. (d) The respondent is ordered to pay the costs of this application.’ _______________________ MML MAYA JUDGE OF APPEAL APPEARANCES: For appellant: M Pillemer SC Instructed by: Kissoonlal & Associates, Durban Matsepe Inc, Bloemfontein For respondent: N Singh SC Instructed by: Ash Kirpal Attorneys, Pretoria Fusi Macheka 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: 1 June 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 G SEWPERSADH & OTHER v S DOOKIE The Supreme Court of Appeal upheld an appeal against a judgment of the Durban High Court that an agreement of sale of land which had been validly cancelled by the appellants was subsequently revived by the conduct of the parties. The high court based its decision on the facts that after the application was instituted, the first appellant was given a sum of R30 000.00 at his request, for the purchase of a house for his daughter; the appellants did not tender the return of various other payments made by the respondent into their account as payment towards the purchase price after cancellation (which they however claimed they became aware of belatedly) and the respondents’ inordinately late filing of his answering affidavit. The SCA reaffirmed the high court’s finding that the agreement had been validly cancelled but rejected the conclusion that it had subsequently been revived. In the SCA’s view the parties had not conducted themselves in any manner that indicated a fresh meeting and concurrence of minds to restore the agreement. There was also no evidence that the second appellant had consented to such revival.

3854

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case No: 165/21 In the matter between: ALERT STEEL (PTY) LTD APPELLANT (in liquidation) and MERCANTILE BANK LIMITED RESPONDENT Neutral citation: Alert Steel (Pty) Ltd v Mercantile Bank Ltd (case no 165/21) [2022] ZASCA 96 (21 June 2022) Coram: VAN DER MERWE, MOLEMELA and SCHIPPERS JJA and MUSI and MATOJANE AJJA Heard: 20 May 2022 Delivered: 21 June 2022 Summary: Enrichment – condictio indebiti and condictio sine causa – company in liquidation – sale of assets – claim for repayment of amount received by secured creditor – on the basis that receipt ultra vires – enrichment of creditor and impoverishment of company not proved – appeal dismissed. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Gauteng Division of the High Court, Johannesburg (Dippenaar J sitting as court of first instance): The appeal is dismissed with costs, including the costs of two counsel. ________________________________________________________________ JUDGMENT ________________________________________________________________ Schippers JA (Van der Merwe and Molemela JJA and Musi and Matojane AJJA concurring) [1] The issue in this appeal, which is before us with the leave of the court below, is whether the appellant, Alert Steel (Pty) Ltd (in liquidation) (the company), is entitled to repayment of an amount of R105 226 381.17, together with interest and costs, based on the condictio indebiti, alternatively the condictio sine causa. The respondent, Mercantile Bank Limited (the bank), a creditor of the company, received the bulk of this amount (R100 million) pursuant to a sale of the company’s assets. [2] The facts are largely common ground. The company formerly traded as a wholesaler and retailer of steel and hardware products. In March 2014 the bank granted the company overdraft facilities in the sum of R104 million against certain securities, including a registered notarial bond over the company’s stock and movable assets, cession of its present and future book debts and cession of its insurance cover with Credit Guarantee Insurance Company Ltd (CGIC). [3] On 9 May 2014 the company was placed in voluntary business rescue in terms of a board resolution. On the same day, the bank cancelled the overdraft facilities, demanded repayment of R104 million plus interest, and informed the company that it would exercise its rights under the securities it held. [4] On 10 July 2014 a creditor of the company launched an urgent application in the Gauteng Division of the High Court, Johannesburg (the high court), to set aside the resolution placing it in business rescue. CGIC was cited as a respondent in that application. Subsequently, CGIC applied to the high court for the provisional winding-up of the company, which was enrolled for hearing on 15 July 2014. CGIC provided the bank with an unsigned copy of the winding-up application on 14 July 2014, whereupon the bank perfected its notarial bond. [5] On 17 July 2014 the high court granted an order that the company be provisionally wound-up as it was unable to pay its debts. A final winding-up order was made on 19 February 2015. [6] The provisional liquidators (the liquidators) were appointed on 22 July 2014. That day, West Lake Trade and Investments (Pty) Ltd (West Lake) made a written offer to purchase all the company’s assets for R100 million. The assets included stock in trade, fixtures and fittings, and receivable and recoverable debts of the company. All of these assets were subject to the bank’s security mentioned above. The next day the liquidators informed the bank of the offer and encouraged the bank to accept it. [7] On 31 July 2014 the bank informed the liquidators that it supported West Lake’s offer, subject to the condition that should the bank fund the West Lake transaction, there would be no flow of funds to the insolvent estate and the purchase price would be applied to reduce the company’s indebtedness to the bank. The bank also imposed a condition that it would retain the cash and funds it had collected from debtors and in the perfection of its notarial bond, to reduce its exposure to the company. The liquidators expressly accepted these conditions. [8] On 5 August 2014 the liquidators applied to the Master for an extension of their powers in order to accept the West Lake offer of R100 million. They informed the Master that the bank was the only secured creditor; that it had the right, prior to the second meeting of creditors, to dictate the manner in which its security should be dealt with; and that it was willing to accept the offer. The Master granted the application and extended the liquidators’ powers to effect the sale of the assets, and the West Lake offer was accepted. The written agreement that was thus concluded, inter alia, provided: ‘3.1 The Offeror [West Lake] will purchase the Items of Sale for the sum of R100 000 000.00 (ONE HUNDRED MILLION RAND) on acceptance of this Offer to Purchase by the Offeree [the liquidators]. 3.2 It is agreed between the Offeror and the Offeree that payment as contemplated in 3.1 above shall be effected directly to Mercantile by the Offeror or any of its assigns or affiliates, wherein after the Offeror shall procure that Mercantile forthwith reduces any claims that it may have against the insolvent estate of Alert by the amount contemplated in 3.1 above.’ [9] Subsequently, the bank financed the purchase by West Lake by lending the R100 million to its nominee. The company’s account was credited in the sum of R100 million. Consequently, the company’s debt to the bank was reduced from R106 138 295.35 (the initial loan of R104 million plus interest) to R6 138 295.35. The bank released the company’s assets from its perfected notarial bond, and the assets were transferred to West Lake. [10] The balance of R106 138 295.35 was further reduced by R5 226 381.17, comprising amounts of R3.1 million paid to the bank by the liquidators in respect of book debts collected by them, and R2 126 381.17, collected by the bank pursuant to the perfection of its notarial bond. The sum of R100 million therefore represented the proceeds of the sale of the company’s assets, and in effect and in law the company made payment thereof to the bank. In argument in the high court and before us, the parties dealt with the amounts of R3.1 million and R2 126 381.17 on the same basis as the R100 million, and I shall do the same. [11] The first meeting of creditors in the company’s insolvent estate took place on 1 and 9 December 2015. The second meeting of creditors took place over an extended period of time and closed on 21 February 2017. The bank did not prove a claim against the estate at any of these meetings. [12] In June 2017 the bank submitted a claim against the company’s insolvent estate, in terms of s 44(4) of the Insolvency Act 24 of 1936 (the Insolvency Act). The affidavit in support of the claim stated that the bank was a secured creditor of the company in the sum of R106 138 295.17 as at 15 July 2014. The bank’s attorney requested the liquidators to convene a special meeting, at its cost, for proof of its claim. [13] The special meeting of creditors was held on 14 February 2018 at the Master’s office in Pretoria. However, at this meeting the bank withdrew its claim. According to the answering affidavit, this was done to preserve the bank’s position that its claim against the company had been reduced by R100 million, following West Lake’s acquisition of the company’s assets, and therefore it was unnecessary to prove a claim in that amount. Had the bank proved a claim in the whole amount (R106 138 295.17), that would have been contrary to its stated position. [14] The company’s case in the founding affidavit was founded on the following allegations. The bank had directly and indirectly collected amounts totalling R105 226 381.17, in respect of the company’s estate (the collected amount). The bank did not prove a claim in the company’s estate. The second meeting of creditors closed on 21 February 2017 and three months had passed since the closing of that meeting. Despite demand, the bank failed to pay the company the collected amount or any portion of it. [15] The liquidators, with the bank’s knowledge, had taken decisions on the basis that the bank was a secured creditor and would prove a claim in the company’s estate. Had they known that the bank was not a secured creditor as required by law, they would not have allowed it to collect and retain the collected amount. The liquidators had to finalise the first liquidation and distribution account in the company’s estate, and were required to deal with the collected amount. There was no legal basis for the bank to retain the collected amount without having proved a claim in the estate. The liquidators thus initially took the position that the bank had not perfected its security prior to the commencement of the winding-up of the company on 15 July 2014. However, the high court’s clear factual finding to the contrary was rightly not challenged before us and the appeal must be determined on the basis that the bank had indeed perfected its security prior to the effective date of the winding-up. [16] The company raised two further grounds upon which it claimed to be entitled to payment of the collected amount. The first was based on an alleged breach of an agreement between the parties, namely that in the event of the bank not being a secured creditor, it would pay the collected amount to the company, together with interest. The second ground was delictual. It was alleged that at the date of the concursus creditorum, the bank had wilfully or negligently represented to the liquidators that it was a secured creditor and would prove its claim in the winding up of the company. This representation was false and induced the company to act to its prejudice by allowing the bank to collect and retain the collected amount. However, the company did not persist with these claims on appeal. [17] In the high court, and before us, the case was advanced on the basis that the liquidators had acted ultra vires and the bank was consequently enriched. More specifically, it was submitted on behalf of the company that monies paid by liquidators in error or outside their powers, may be recovered with the condictio indebiti or the condictio sine causa. It was contended that the acts of the liquidators were inconsistent with s 44 and s 83(10) of the Insolvency Act. [18] The high court (Dippenaar J) dismissed the application with costs, including the costs of two counsel. Its main findings may be summarised as follows. The sale of the assets was effected outside the estate of the company, with the sanction of the Master. The company was seeking to receive, and not recover, the purchase price of the assets (R100 million) paid to the bank. Neither the payment of that amount to the bank nor the conduct of the liquidators was unlawful. The principle in Bowman,1 that an ultra vires payment by a liquidator may be recovered with the condictio indebiti or the condictio sine causa was inapplicable, since in that case the Master had not authorised the sale of an insolvent’s assets in specific terms. The validity of the Master’s consent to the sale of the company’s assets could not be decided without an application to review and set aside that decision. The high court also held that the bank had, in any event, not been enriched. 1 Bowman, De Wet and Du Plessis NNO and Others v Fidelity Bank Ltd [1996] ZASCA 141; 1997 (2) SA 35 (A) at 42A. [19] The finding that the payment to the bank of the proceeds of the sale of the insolvent company’s assets, was ‘effected outside the estate’ with the sanction of the Master, has no basis in the evidence. The Master did no more than authorise the sale of the company’s assets. That much is clear from the facts which the liquidators placed before the Master in support of the application for permission to accept the West Lake offer, as well as the terms of the Master’s authorisation. [20] The liquidators informed the Master that the bank was a secured creditor which had perfected its notarial bond over the assets. The West Lake offer of R100 million was for all the stock and assets of the company at all its branches. The liquidators attached a desktop valuation of the assets showing a forced-sale value of R65 million, and said that acceptance of the offer would benefit all the creditors. The company had some 800 employees and West Lake had undertaken to attend to the labour relations issues. Acceptance of the offer would increase the dividend; avert any auctioneer’s commission, advertising costs and the liquidators’ administrative expenses; and release the insolvent estate from monthly expenses in respect of rent, insurance and security, which the liquidators would have had to pay until the estate was wound-up. For these reasons, the Master authorised the sale and extended the powers of the liquidators. On the facts, it cannot be suggested that the Master authorised payment of the proceeds of the sale of the company’s assets to the bank, outside the estate and the principles of insolvency law. [21] Counsel for the company, on the authority of Bowman,2 submitted that it was entitled to repayment of the collected amount. In Bowman this Court approved the judgment in Van Wijk’s Trustee,3 in which it was held that if an heir or executor in violation of his duty pays a creditor whose claim should have been 2 Ibid. 3 Van Wijk’s Trustee v African Bank Corporation 1912 TPD 44 at 52-53. postponed, it is not contrary to any principle of law that the estate through the executor or the trustee is entitled to recover what has been improperly paid, by way of the condictio indebiti. Harms JA said that an ultra vires payment ‘can be reclaimed with the condictio indebiti or, at the very least, the condictio sine causa’.4 [22] The submission is, however, unsound. There was no allegation in the founding affidavit that the bank had been enriched at the expense of the company. The condictio indebiti and the condictio sine causa, or the respects in which the company had met the requirements of these enrichment actions, were not pleaded at all. But even if they were, and on the assumption that the payment of the collected amount to the bank was ultra vires the provisions of s 44 of the Insolvency Act because the bank did not prove a claim in the company’s estate, an ultra vires payment is not recoverable without more. The company was still required to establish the general elements of an enrichment claim, namely that (i) the bank was enriched, ie it gained a financial benefit that would otherwise not have taken place; (ii) the company was impoverished; (iii) the bank’s enrichment was at the company’s expense;5 and (iv) the enrichment was unjustified, ie there was no legal basis to justify the retention of the collected amount.6 [23] The company simply did not meet these requirements. To begin with, the bank was not enriched. To found an enrichment action, the company had to show that the bank had received the collected amount indebite in the widest sense or sine causa:7 in other words, that there was an increase in the assets of the bank which would not have taken place, but for the receipt of the collected amount. 4 Bowman fn 1. 5 Fletcher & Fletcher v Bulawayo Waterworks Co Ltd, Bulawayo Waterworks Co Ltd v Fletcher & Fletcher 1915 AD 636 at 649. 6 17 Lawsa 3 ed para 209. 7 17 Lawsa 3 ed para 214. The liquidators acknowledged that the company was indebted to the bank in an amount in excess of R100 million. Indeed, the liquidators informed the bank that its claim against the company could be reduced (which they incorrectly referred to as ‘set-off’) by the proceeds of the sale of the assets to West Lake. What is more, on 22 August 2014 they paid an amount of R3.1 million to the bank as ‘provisional dividends’, which merely confirmed that the bank was entitled to the collected amount. [24] The company’s reliance on Bowman does not assist it. In that case a creditor, Fidelity Bank Ltd (Fidelity), had secured claims against a company in liquidation in the amount of R640 000. The liquidators of the company entered into an agreement with Fidelity to pay the amount of R640 000 from the proceeds of the sale of the secured assets to Fidelity, prior to the drawing and confirmation of the liquidation and distribution accounts of the insolvent estate. Payment in terms of this agreement was thus ultra vires the powers of the liquidators. However, the liquidators made an overpayment to Fidelity in the sum of R220 000 and sought to recover it by way of the condictio indebiti. The liquidators did not seek to recover the payment of the R640 000 made in respect of the valid underlying debt. This Court held that because the agreement provided for payment of the amount R640 000 in respect of Fidelity’s secured claim, nothing more or less, it was only the amount of R220 000 that was an indebitum, which could be recovered in terms of the condictio indebiti.8 [25] If the bank had not been enriched by the receipt of the collected amount, then the company was not impoverished, since the quantum of a plaintiff’s claim is the amount by which it has been impoverished or by which the defendant has been enriched, whichever is the lesser.9 In any event, no payment was made at 8 Bowman fn 1 at 43F-G. 9 Fletcher & Fletcher fn 5 at 649. the company’s expense: it owed the bank R104 million plus interest, and its debt to the bank was reduced by the collected amount. Only the bank could lay claim to the proceeds of the sale to West Lake. [26] It follows that the company did not satisfy the requirement of enrichment at its expense. Neither was there any unjustified enrichment. There was a legal basis for the bank’s receipt of the collected amount. The founding affidavit stated that the bank ‘was a secured creditor in an amount in excess of R104 000 000.00’. [27] In any event, it would be unjust to require the bank, many years later, to prove its claim in the company’s estate. The unchallenged evidence was that the bank could not be restored to its position as a secured creditor, since the assets were transferred to West Lake many years ago and used in the course of the latter’s business. If the bank were ordered to repay the collected amount, all that would happen is that it would have to go through the formality of proving its claim for the initial loan of R104 million plus interest, and then be repaid the amount paid to the estate, less the liquidators’ fees. The inevitable conclusion to be drawn from the facts is that the recovery of the liquidators’ fees was the sole reason for the claim. As stated in Mars,10 a trustee (here a liquidator) who pays a creditor before confirmation of a liquidation and distribution account, does so at his own risk. [28] In the result the appeal is dismissed with costs, including the costs of two counsel. ___________________ A SCHIPPERS JUDGE OF APPEAL 10 E Bertelsmann et al (eds) Mars: The Law of Insolvency 10 ed (2019) at 597 para 23.10.2. Appearances: For appellant: M v R Potgieter SC Instructed by: Smit Sewgoolam Inc, Johannesburg McIntyre Van der Post, Bloemfontein For respondent: P Stais SC (with him G D Wickins SC) Instructed by: Brooks & Braatvedt Inc, Johannesburg Honey Attorneys 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: 21 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 Alert Steel (Pty) Ltd (in liquidation) v Mercantile Bank Limited (case no 165/21) [2022] ZASCA 96 The Supreme Court of Appeal (SCA) today dismissed an appeal by the appellant, Alert Steel (Pty) Ltd (in liquidation) (the company), against an order by the Gauteng Division of the High Court, Johannesburg (the high court), which dismissed its claim against the respondent, Mercantile Bank Limited (the bank) for repayment of the sum of R105 226 381.17, together with interest and costs. The Company previously traded as a wholesaler and retailer of steel and hardware products. In 2014 the bank granted the company overdraft facilities in the sum of R104 million against certain securities, including a registered notarial bond over the company’s stock and movable assets, and cession of its present and future book debts, and an insurance cover. The company was provisionally wound-up in 22 July 2014. A final winding-up order was made in February 2015. On 22 July 2014 the provisional liquidators received a written offer from West Lake Trade and Investments (Pty) Ltd (West Lake) to purchase all the companies assets for R100 million. The bank accepted this offer and the liquidators obtained the Master’s consent to proceed with the sale. The assets were sold to West Lake and the company’s indebtedness to the bank was reduced by R100 million. The liquidators paid an amount of R3.1 million in respect of book debts which they collected to the bank. An amount of R2 126 381.17 was collected by the bank pursuant to the perfection of its notarial bond. Subsequently, the liquidators applied to the high court for an order directing the bank to repay the amount of R105 226 381.17 together with interest, on the basis that the bank was not entitled to retain this amount because it had not proved the claim in the company’s insolvent estate. The liquidators’ claim was based on enrichment, namely the condictio indebiti, alternatively the condictio sine causa. The SCA held that the requirements of enrichment had not been satisfied. The bank had not been enriched: the liquidators had acknowledged that the company was indebted to the bank in an amount in excess of R104 million, and that the bank was a secured creditor. The company, correspondingly, was not impoverished. No payment was made at the company’s expense. It owed the bank R104 million plus interest. The payment to the bank was not unjustified: there was a legal basis for payment to the bank of the proceeds of the sale of the company’s assets to West Lake. The inevitable conclusion to be drawn from the facts was that the recovery of the liquidators’ fees was the sole reason for their claim. The appeal was accordingly dismissed with costs, including the costs of two counsel.

3496

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 1128/19 In the matter between: THEMBA YENDE FIRST APPELLANT AMAYENDE ASOGENYANENI TRADITIONAL COUNCIL SECOND APPELLANT and FELANI YENDE FIRST RESPONDENT AMAYENDE ASOGENYANENI ROYAL FAMILY SECOND RESPONDENT Neutral citation: Themba Yende and Another v Felani Yende and Another (1128/19) [2020] ZASCA 179 (18 December 2020) Coram: PETSE DP and MBHA, ZONDI, MOCUMIE and MOLEMELA JJA Heard: 12 November 2020 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 10h00am on 18 December 2020. Summary: Customary Law – recognition and appointment of traditional leader –whether provisions of the Traditional Leadership and Governance Framework Act were complied with – whether the living amaYende customary law was proven to the Commission. _____________________________________________________________ ORDER _____________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Strijdom AJ, Sethosa- Molopa and Potterill JJ concurring, sitting as a court of appeal): judgment reported sub nom [2019] ZAGPPHC 237. The appeal is dismissed with costs. JUDGMENT Molemela JA (Petse DP and Mbha, Zondi and Mocumie JJA concurring) [1] This appeal concerns the application of customary norms and criteria of the traditional community known as the amaYende asoGenyaneni (amaYende) the rightful senior traditional leader1 of that community. [2] On 23 October 2012,2 the Premier of Mpumalanga (the Premier), in his official capacity as the person responsible for making the administrative decision challenged, approved the recognition of amaYende as a traditional community and recognised the fourth appellant, Mr Themba Yende (Themba) as the senior traditional leader of that community. The Premier’s notice stipulated that the recognition was pursuant to the recommendation of the third appellant, the Commission on Traditional Leadership Disputes and Claims: Mpumalanga, (the Commission) as contemplated in the provisions of the Traditional Leadership and Governance Framework Act 41 of 2003 (the Framework Act). [3] Having learnt about Themba’s recognition as the senior traditional leader of the amaYende, Mr Felani Yende (Felani) and his two siblings Ntombikayise and Sibongile, (together referred to as the respondents) brought an application for review to the 1 ‘In terms of the Traditional Leadership and Governance Framework Act 41 of 2003, ‘senior traditional leader’ means a traditional leader of a specific traditional community who exercises authority over a number of headmen or headwomen in accordance with customary law, or within whose area of jurisdiction a number of headmen or headwomen exercise authority’. 2 The recognition was published in Government Gazette number 2109 on 02 November 2012. Gauteng Division of the High Court, Pretoria, challenging the Premier’s decision to recognise Themba as the senior traditional leader. Asserting that the Premier’s decision to recognise Themba was not in compliance with customary laws and practices of amaZulu, the respondents sought an order reviewing and setting aside the decision on the basis that it was unlawful. The review was grounded on s 6 of the Promotion of Administrative Justice Act 3 of 2000. The matter came before Manamela AJ, who dismissed the application with costs. The basis for dismissing the matter was that the respondents had been aware of the process underway at the Commission whose sole purpose was to determine the rightful senior traditional leader of amaYende but had not lodged any claim nor made any representations in that regard. Instead, they had belatedly taken steps after the publication of the Government Gazette recognising Themba as the senior leader of amaYende. [4] Aggrieved by that decision, the respondents obtained leave of this court to appeal to the Full Court of the Gauteng Division of the High Court, Pretoria (full court) after Manamela AJ had refused leave. On appeal, the full court reversed the decision of Manamela AJ on the basis that the respondents had not been afforded an opportunity to make representations, thus tainting the procedures followed by the Commission. As regards substance, the full court held that the appellants had not adduced evidence showing the existence of any “living” customs that were different from the ordinary customs of amaZulu. The Full Court set aside the Premier’s decision recognising Themba as senior traditional leader and directed the Commission to constitute and hold a meeting of the Royal Family within 15 days. [5] For a better understanding of the context, it is prudent to preface the background facts of this matter with a brief outline of the salient statutory provisions that are applicable. Section 211(1) of the Constitution3 gives recognition to the institution, status and role of traditional leadership. Section 211(3) enjoins the courts to apply customary law when that law is applicable, subject to constitutional values.4 [6] Section 11(1) of the Framework Act provides for recognition of, among others, senior traditional leaders and reads as follows: 3 The Constitution of the Republic of South Africa Act 108 of 1996. 4 Shilubana and Others v Sidwell Nwamitwa and Others [2008] ZACC 9; 2009 (2) SA 66 para 42. ‘11. (1) Whenever the position of senior traditional leader, headman or headwoman is to be filled- (a) the royal family concerned must, within a reasonable time after the need arises for any of those positions to be filled, and with due regard to applicable customary law- (i) identify a person who qualifies in terms of customary law to assume the position in question, after taking into account whether any of the grounds referred to in section 12(1)(a), (b) and (d) apply to that person; and (ii) through the relevant customary structure, inform the Premier of the province concerned of the particulars of the person so identified to fill the position and of the reasons for the identification of that person; and (b) the Premier concerned must, subject to subsection (3), recognise the person so identified by the royal family in accordance with provincial legislation as senior traditional leader, headman or headwoman, as the case may be.’ [7] Section 22(1) of the Framework Act established the Commission on Traditional Leadership Disputes and Claims as a specially constituted body with authority to decide on any traditional leadership disputes and claims contemplated in s 25(2) of the Framework Act.5 Section 22(2) in turn enjoins the Commission to execute its functions in a manner that is fair, objective and impartial. Section 25(2)(a), inter alia, empowers the Commission to, upon request or of its own accord, decide any traditional dispute or claim in instances where the title or right of the incumbent to a traditional leadership position was contested. In terms of s 25(2)(b), a dispute or claim may be lodged by any person and must be accompanied by information setting out the nature of the dispute or claim and any other relevant information. [8] I turn now to the facts that serve as the backdrop to the adjudication of this appeal. It is common cause that Felani and Themba are half-brothers, having been fathered by the late chief Leonard Yende (the late chief Yende), who was the last living senior traditional leader of amaYende. Themba was born from a relationship between the late chief Yende and Themba’s mother, Ms Hadebe. It is common cause that the late chief Yende did not marry Themba Yende’s mother and that Themba was raised by his maternal family. Themba assumed his mother’s surname, Hadebe, and only assumed that of his father (Yende) after the latter’s death in 1997. After Themba’s 5 Bapedi Marota Mamone v Commission of Traditional Leadership Disputes and Claims and Others [2014] ZASCA 30; [2014] 3 ALL SA 1 (SCA) para 68. birth, the late chief Yende paid lobola for Ms Maria Mnisi (MaMnisi) and they entered into a customary law union.6 Felani and his two siblings were born from that customary marriage. It is common cause that before he died in 1997, the late chief Yende did not officially assume his rightful position as a senior traditional leader of the amaYende and instead worked as a farm labourer. The traditional affairs were handled by one Sidumo. The latter aspect need not detain us any further, as Sidumo did not feature in the litigation that led to this appeal. [9] It is common cause that Themba lodged the claims for the recognition of the amaYende as a traditional community and for his recognition as its senior traditional leader in or about 2007. It is also undisputed that on 31 August 2010, a relative by the name of Mr Mbulali Joseph Yende (Mbulali) lodged a competing claim alleging that he was the rightful heir to be recognised as that community’s senior traditional leader. Both claims were referred to the Commission for investigation and recommendation as contemplated in s 25(2) of the Framework Act. It is common cause that Themba was, on the recommendation of the Commission, ultimately recognised as the senior traditional leader of the amaYende. What was seriously contested in this matter is whether Felani also lodged a claim for recognition as the rightful traditional leader of that traditional community. [10] The crisp issues for determination before this court are: (i) whether the relevant Royal Family had been afforded the right to make representations to the Commission; (ii) whether the provisions of the Framework Act were complied with; and (iii) whether the living amaYende customary law was proven to the Commission. [11] In Mphephu v Mphephu-Ramabulana and Others,7 this Court held that it is the members of the Royal Family alone that must identify the senior traditional leader as contemplated in s 11 of the Framework Act. In Bapedi Marota Mamone v Commission of Traditional Leadership Disputes and Claims and Others (Mamone),8 the Constitutional Court, interpreting s 11 of the Framework Act, held that there are two 6 Themba’s disputation of the existence of the customary law marriage was not persisted with on appeal. 7 Mphephu v Mphephu-Ramabulana and Others [2019] ZASCA 58; [2019] 3 All SA 51 (SCA); 2019 (7) BCLR 862 (SCA) para 38. 8 See Bapedi Marota Mamone v Commission of Traditional Leadership Disputes and Claims and Others [2014] ZASCA 30; [2014] 3 ALL SA 1 (SCA) para 19. crucial elements that attach to a proper recognition process: first, the nomination or identification should be done by the Royal Family and, second, the said nomination and recognition must be made after applying and taking into consideration the relevant customary laws and customs of the said traditional community. Although deference is bestowed on the Commission as a specialist body constituted by experts who are knowledgeable regarding customs and the institution of traditional leadership,9 if the Commission or the relevant administrator fails on the legislative test enunciated in s 11 of the Framework Act, its decision must be set aside. [12] In their founding affidavit in support of the review application, the respondents averred that they had objected to the nomination of Themba as the senior traditional leader of the amaYende at a public meeting held at the Town Hall of Piet Retief in 2012 with the representatives of the Department of Co-operative Governance and Traditional Affairs or the Commission. They contended that they were informed that another meeting would be convened and that they would in due course be notified about the date thereof. Attached to the respondents’ founding affidavit is a letter addressed to the Premier following the publishing of a public notice recognising Themba as the senior Traditional Leader of the amaYende. In that letter, reference is made to the public meeting which the respondents had attended and to the respondents having categorically refused to agree to Themba’s nomination. Also attached to the respondents’ founding affidavits were affidavits signed by several people who asserted that in terms of the living customary practices and traditions of the amaYende pertaining to succession, Felani was the heir to the late Chief Yende’s throne by dint of being the first-born son from the Great Wife, MaMnisi. [13] The minutes of that public meeting do not form part of the record filed in the proceedings of the review application. Of significance is that the deponent who filed an answering affidavit on behalf of the Premier, the MEC and the Commission did not dispute the occurrence of this meeting nor the respondents’ recordal or their objection to Themba’s nomination as the senior traditional leader of amaYende. Against that background, there is no basis for not accepting the respondents’ version that they did 9 See s 23(1) of the Framework Act. Also see Nxumalo v President of the Republic of South Africa and Others [2014] ZACC 27 para 21. in fact object to Themba’s nomination. The report of the Commission does not show that the respondents’ protestations were taken into account. Neither did the Premier state that any views expressed by the respondents were taken into account when he approved Themba’s recognition as the senior traditional leader. [14] As mentioned earlier, s 22(2) of the Framework Act stipulates that the Commission must carry out its functions in a manner that is fair, objective and impartial. It is not disputed that the late Chief Yende’s biological children constituted the core members of the Royal Family. It appears from the record of the claim hearing that not only were the respondents absent from the amaYende Royal Family Leadership Dispute Claim Hearing (the claim hearing) but that their absence was a serious concern for the Commission. This unquestionably attests to the fact that the respondents were indeed considered to be important members of the Royal Family, who should have been afforded an opportunity to play a pivotal role in the identification, recognition and ultimate appointment of the senior traditional leader.10 [15] The transcript of the claim hearing reveals that two speakers (presumably the officials) were concerned about the absence of the respondents from the proceedings, pointing out that the possibility of the latter showing up later to dispute Themba’s claim had to be avoided. The first exchange was as follows: ‘Q: I hear you are saying there are two boys and two girls, is there any of your siblings in the house today; I would like to ask [a] few things? A: Sadly he is not here but working though at some meetings; he would likely to accompany us together with my sisters.’ The second exchange was as follows: ‘Q: I am worried about one thing and that your siblings are not here to support you in your aim [presumably claim], what evidence do we have that they support you, we don’t want that situation where tomorrow they come and dispute your claim and think that your brother should be chief because your claim is quite big and if they knew they would have excused themselves from work to come and support you. So you are saying their jobs are more important than all of this, I can’t understand…’ 10 Umndeni (Clan) of Amantungwa and Others v MEC for Housing and Traditional Affairs KwaZulu- Natal and Another [2019] ZASCA 142; [2011] 2 All SA 548 (SCA) para 23. A: Answering your first question, regarding Themba’s siblings, [they] were not informed by myself and that was “an error” on my side because Themba had asked to inform them, but I had thought since this was going to be [a] community hearing, I should not bother them, and thinking it might not be a great deal if they missed just this one meeting.’ [16] The afore-mentioned exchanges make it clear that the absence of the respondents was on account of not having been invited to the claim hearing. It, therefore, cannot be gainsaid that the respondents were not afforded an opportunity to make any further representations after they had registered their discontent with Themba’s nomination. They were thus excluded from participation in a matter that materially affected the Royal Family of the amaYende. These exchanges also cast serious doubt on Themba’s assertion that he was unanimously nominated as the representative of the Royal Family of amaYende. [17] To that extent, the purported nomination of Themba as the senior traditional leader in the absence of other members of the Royal Family was fatally defective and constituted an irregularity. It is trite that denying a party who has an interest in a matter the right of meaningful participation in a hearing renders the proceedings in question procedurally unfair. The respondents’ exclusion from meaningful participation in the processes of the Commission clearly violated the provisions of s 22(2) of the Framework Act. Thus, the full court correctly found that the audi alteram partem principle was not observed and that this rendered the claim hearing procedurally unfair. [18] It is well-established that customary law is, by its nature, a constantly evolving system.11 Equally trite is that customary law exists not only in the official version documented in legislation and by writers, but there is also ‘living’ customary law, which denotes law that is actually observed by African communities.12 The Constitutional Court, in Shilubana,13 had occasion to decide a dispute in terms of which the traditional 11 Shilubana fn 2 para 45 and 81. 12 Mabena v Letsoalo 1998(2) SA 1068 at 1074H-J. 13 Shilubana fn 2. leadership was contested based on customary law of succession. That court aptly stated as follows: ‘It follows that the practice of a particular community is relevant when determining the content of a customary law norm. As this court held in Richtersveld,14 the content of customary law must be determined with reference to both the history and the usage of the community concerned. “Living” customary law is not always easy to establish and it may sometimes not be possible to determine a new position with clarity. However, where there is a dispute over the law of a community, parties should strive to place evidence of the present practice of that community before the courts, and courts have a duty to examine the law in the context of a community and to acknowledge developments if they have occurred.’15 (Emphasis added.) [19] It is evident from the record that Themba and Mbulali gave parallel versions on the living customs of the amaYende. It is unclear why the Commission ultimately decided to accept the customary practices contended for by Themba when there was no other evidence supporting his version on this aspect. The failure to call for and consider evidence of the customary practices of the amaYende applicable at the time of the determination of the dispute violated the provision of s 25(3) of the Framework Act. [20] The statement in the Commission’s report, that amaYende are of Zulu origin and observe Zulu traditions and customs was not controverted. The customary law and practices of the Zulu nation as espoused in the Natal Code of Zulu Law16 and many other authorities is that in homesteads that are polygamous, multiple house units are created by each marriage of the family head. The Indlunkulu (Great House) is an indispensable centre of the Zulu household. The Great House is established by the first wife. It is from that house that other houses take their position. The Great House may be supported by affiliated houses on the right and on the left (iQadi and iKhohlo, respectively). From it, derives the heir to the throne, if the family head is a chief. It follows that MaMnisi, being the first wife of the late chief Yende, constituted the Great Wife, and her household the Great House. 14 Alexkor Ltd and Another v Richtersveld Community and Others [2003] ZASCA 18; 2004(5) SA (SCA) 460 paras 56-7, referring to Amodu Tijani v The Secretary, Southern Nigeria [1921] 2 AC 399 (PC) at 404. 15 Shilubana fn 2 para 46. 16 Published in Government Gazette No 10966 published on 9 October 1987. [21] A Royal Family, as defined in s 1 of the Framework Act is ‘the core customary institution or structure consisting of immediate relatives of the ruling family within a traditional community, who have been identified in terms of custom, and includes, where applicable, other family members who are close relatives of the ruling family’. By virtue of being the late Chief’s biological son, Themba unquestionably falls within the definition of the Royal Family. However, the respondents are, as the Full Court correctly found, the core members of the Royal Family and have a say in the identification of a senior traditional leader who should step into their father’s shoes. [22] The full court was correct when it found that on the facts, the respondents are the ‘relevant and proper components’ of the Royal Family. It did not, by so saying, find that they are the only relevant decision makers, nor did it deny Themba’s status as a member of the Royal Family, as the biological son of the late Chief Yende. To the extent that the appellants suggest that the remarks of the full court impliedly exclude Themba as a member of the Royal Family, that suggestion is without merit. The exclusion of the respondents from any meetings in which Themba was recommended for appointment as the senior traditional leader of the amaYende was in contravention of s 11(1)(a) of the Framework Act, thus rendering its resolutions unlawful. On this ground alone, the appeal ought to fail, as the Premier’s decision was made pursuant to these material procedural defects. [23] Section 25(3) of the Framework Act delineates the scope of the investigations undertaken by the Commission. It enjoins the Commission apply only customary law and customs of the relevant traditional community when considering a dispute or a claim.17 Accordingly, the living succession customs of the AmaZulu as practiced by amaYende come into sharp focus in this matter. [24] Before the Commission, Themba asserted that ‘in terms of the customary law, the eldest son of the chief is the heir of the chieftainship irrespective of whether his mother was married to the chief or not.’ This version was vehemently denied by Mbulali, who maintained that the generally accepted custom of AmaZulu, which 17 Mamone fn 7 para 19. stipulates that the heir of the chieftainship was the eldest male of the Great House, was still extant. In the face of these two mutually exclusive versions, it is unclear why the Commission preferred Themba’s version over, Mbulali’s, without the benefit of any further evidence on this aspect. [25] It has been held in a plethora of judgments that customary law is not static; it evolves. Courts must acknowledge developments if they have occurred.18 In this matter, it is undisputed that no evidence of the living practices of amaYende was placed before the Commission. Although the report of the Commission states that its focus area is on ‘the research and investigation conducted during the latter part of 2011, no such research was placed before Manamela AJ as evidence. The transcript of the claim hearing makes no allusion to any research that was done. [26] The appellants contended that the full court erred in failing to accept that amaYende had ‘moved on’, in other words, had adopted modified principles regarding the customary law of succession. That approach, so contend the appellants, recognises a custom of succession in terms of which the first-born male is the heir to the throne, irrespective of whether his mother is married or not. The difficulty for the appellants is that before the Commission, there was no evidence showing that amaYende had ‘moved on’ from the generally accepted Zulu traditional practice that the eldest male heir of the Great House is the first in line to the throne.19 Other than his say-so, Themba did not tender any evidence to support his assertions on the actual living customary law observed by amaYende as at the time when the claim for senior leadership was lodged with the Commission. [27] In Mamone, the majority of the Constitutional Court having noted the need for deference to the Commission, sounded a warning that when considering a claim, the Commission is required by s 25(3) of the Framework Act to consider and apply the living customary law and customs of the relevant traditional community. The court stated as follows: 18 Shilubana fn 3 para 46. 19 In terms of s 81(1)(a) of the Natal Code of Zulu Law, the eldest son of the Indlunkulu is the first in the line of succession to the status and position of the family head. ‘When considering a claim, the Commission is required by section 25(3)(a) of the Framework Act to “consider and apply customary law and the customs of the relevant traditional community as they were when the events occurred that gave rise to the dispute or claim.” Notably, this provision tasks the Commission not only with applying the relevant customary law to the case before it, but also with determining what that law was at the relevant time. This latter question depends primarily on historical and social facts, which the Commission must establish through evidence led before it and its own investigation.’20 (Emphasis added.) [28] The record of the proceedings held before the Commission does not reveal any historical or social facts relied upon by the Commission. It is clear that the Commission proceeded in the respondents’ absence and made a recommendation without having considered their version of their living customs. The full court correctly found that the customary rules of succession of traditional leadership which were accepted by the Commission and the Premier have not been shown to be the actual living customary law rules of succession of the broader AmaZulu or amaYende. This shortcoming fatally tainted the entire process and thus rendered Themba’s appointment unlawful. The full court correctly found that the decision to appoint Themba as the senior traditional leader of the amaYende fell to be reviewed. [29] The appellants, in their heads of argument, contended that the custom contended for by the respondents is unconstitutional as it discriminates against children born out of wedlock on the basis of their mother’s marital status. This contention was not persisted with in oral argument before this court, and rightly so, for the unconstitutionality of the Zulu custom was not frontally challenged in the papers. Consequently, it cannot be challenged at appellate stage. [30] I consider next the remedy granted by the full court. Having found that Themba’s nomination was not in compliance with the Framework Act on account of not having been sanctioned by the Royal Family, it ordered the Royal Family of the amaYende to constitute and hold a meeting within 15 days of its order. Counsel for the appellants urged us that, in the event that we were inclined to dismiss the appeal, we should modify the order of the full court, as there might be a dispute about who are 20 Mamone fn 7 para 80. the rightful members of the Royal Family. The definition of ‘royal family’ in the Framework Act clearly sets out the persons who fall within that category. It is self- evident that all the biological children of the late chief Yende are an integral part of that family. [31] It is clear from the order granted by the full court that instead of directing a substitution, it recognised the important role played by the Royal Family in the nomination of the senior traditional leader as envisaged in Mamone and referred the matter back to the Royal Family for that purpose. Although it is the prerogative of the Royal Family to identify the senior traditional leader, it is abundantly clear from the provisions of the Framework Act that where the title to a traditional leadership is contested, it is open to any person to refer a dispute to the Commission. The order granted by the full court is thus just and equitable as it accords with the provisions of the Framework Act. Consequently, there is no need to modify it. It follows that the appeal falls to be dismissed. [32] For the sake of completeness, it remains to state that the 15-day period within which the meeting of the Royal Family must be convened will now be reckoned from the date of this Court’s judgment. As to the costs of appeal, counsel for the appellants correctly conceded that there is no reason to depart from the general rule that costs must follow the result. For the sake of clarity, it bears pointing out that since the Premier and the Commission did not participate in the appeal and filed a notice to abide, they should not be burdened with the costs of the appeal beyond the date on which they filed their notice to abide the decision of this Court. [33] In the result, the following order is made: The appeal is dismissed with costs. ____________________ M B MOLEMELA JUDGE OF APPEAL Appearances For Appellants: M S Phaswane SC (with him L X Dzai) Instructed by: Mketsu and Associates, Pretoria Matsepes Inc, Bloemfontein For Respondent: M E Mathaphuna SC Instructed by : Ndobela Lamola Attorneys Inc, Pretoria Honey & Partners Inc, Bloemfontein

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY - JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL Themba Yende and Another v Felani Yende and Another (Case no 1128/19) [2020] ZASCA 179 (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) dismissed with costs an appeal against a judgment of the Full Court of the Gauteng Division of the High Court, Pretoria (the full court). This appeal concerned the application of customary norms and criteria of the traditional community known as the amaYende asoGenyaneni (amaYende), following the official recognition of amaYende as a traditional community by the Premier of Mpumalanga (the Premier) and further recognition of the fourth appellant, Mr Themba Yende (Themba) as the senior traditional leader of that community. Mr Felani Yende (Felani) and his two siblings (together referred to as the respondents) brought an application for review to the Gauteng Division of the High Court, Pretoria, challenging the Premier’s decision to recognise Themba as the senior traditional leader. Asserting that the Premier’s decision to recognise Themba was not in compliance with customary laws and practices of amaZulu, the respondents sought an order reviewing and setting aside the decision on the basis that it was unlawful. The review was grounded on s 6 of the Promotion of Administrative Justice Act 3 of 2000. The matter came before Manamela AJ, who dismissed the application with costs on the basis that respondents had been aware of the process underway at the Commission for determining the rightful senior traditional leader, but had not lodged any claim nor made any representations in that regard. Instead, they had belatedly taken steps after the publication of the Government Gazette recognising Themba as the senior leader of the amaYende. Aggrieved by that decision, the respondents obtained leave of this court to appeal to the Full Court of the Gauteng Division of the High Court, Pretoria (full court). On appeal, the court reversed the decision of Manamela AJ on the basis that the respondents had not been afforded an opportunity to make representations, thus tainting the procedures followed by the Commission. The crisp issues for determination before this court were: (i) whether the relevant Royal Family had been afforded the right to make representations to the Commission; (ii) whether the provisions of the Framework Act were complied with; and (iii) whether the living amaYende customary law was proven to the Commission. This court held that the respondents were important members of the Royal Family, who should have played a pivotal role in the identification, recognition and ultimate appointment of the senior traditional leader. It also held that the respondents were not given an opportunity to make any further representations after they had registered their discontent with Themba’s nomination, thus excluding them from participation in a matter that materially affected the Royal Family of the amaYende. To that extent, the purported nomination of Themba as the senior traditional leader in the absence of other members of the Royal Family excluded the respondents from meaningful participation in the processes of the commission, violated the provisions of s 22(2) of the Framework Act and thus constituted an irregularity. Furthermore, the court held that the failure to call for and consider evidence of the customary practices of the amaYende applicable at the time of the determination of the dispute violated the provision of s 25(3) of the Framework Act. This court accordingly held that the full court was correct in referring the matter back to the Royal Family for purposes of nominating the senior traditional leader of the Amayende. As a result, the appeal was dismissed with costs. - END -

119

non-electoral

2017

` THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 1241/2016 In the matter between: JAN KAREL ELS APPELLANT and THE STATE RESPONDENT Neutral citation: Els v The State (1241/2016) [2017] ZASCA 117 (22 September 2017) Coram Bosielo, Seriti and Saldulker JJA and Plasket and Tsoka AJJA Heard: 17 August 2017 Delivered: 22 September 2017 Summary: Appeal against sentence - environmental offences - unlawful purchasing, possession and conveying of rhinoceros horns without a permit - in contravention of the Limpopo Environmental Management Act 7 of 2003 - misdirection by the trial court - appeal court entitled to interfere - four years’ imprisonment appropriate. _____________________________________________________________ ORDER ______________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Fourie and Mabuse JJ sitting as court of appeal): 1. The appeal is upheld. 2. The sentence imposed by the trial court in respect of counts 5 and 6 is set aside and substituted with the following: ‘Counts 5 and 6 are taken together for the purposes of sentence and the accused is sentenced to four years’ imprisonment’. 3. The suspended sentence on count 7 remains unaltered. _____________________________________________________________ JUDGMENT ______________________________________________________________ Saldulker JA (Bosielo and Seriti JJA and Plasket and Tsoka AJJA concurring): [1] This appeal is against sentence only. The appellant, Mr Jan Karel Els (Els) a game consultant manager, was charged in the regional court of Musina (trial court), Limpopo with seven counts for the contravention of the Limpopo Environmental Management Act 7 of 2003 (LEMA). Counts 1 to 4 related to the contraventions of s 31(1)(a) of the LEMA,1 (read with s 1 and 117(1)(a)(i) of LEMA), which are the unlawful, wrongful and intentional hunting of a specially protected wild animal by darting or immobilising the said animals by any means or method for trophy purposes without a valid permit. Counts 5 to 7 related to the contraventions of s 41(1)(a) of LEMA2 (read with s 1 and s 1 31. Hunting of Wild and Alien animals - (1) No person may without a permit hunt— (a) specially protected wild animals; 2 41. Prohibited acts regarding wild and alien animals - (1) No person may without a permit— (a) acquire, possess, convey, keep, sell, purchase, donate or receive as a gift, any specially protected wild animal, protected wild animal, game, non-indigenous wild animal or animals referred to in Schedules 7 or 8; 117(1)(a)(i) of LEMA),3 which related to the unlawful purchasing, possessing and conveying of the horns of a specially protected wild animal without a valid permit. [2] On 2 March 2012, the State withdrew counts 1 to 4 against the appellant. The appellant pleaded guilty to counts 5 to 7 and made a statement in terms of s 112(2) of the Criminal Procedure Act 51 of 1977 (the CPA).4 The State accepted the plea, whereafter he was convicted on the said counts. Count 5 related to the purchasing, possession and conveying of 30 rhinoceros (rhino) horns without a valid permit; count 6 related to the receiving of four rhino horns without a valid permit; and count 7 related to the conveyance of eight rhino horns (being his property) without a valid permit. [3] On 13 March 2012, the trial court sentenced the appellant as follows: counts 5 and 6 were taken as one for sentencing purposes and he was sentenced to ten years’ imprisonment, of which two years was suspended for five years on condition that the appellant is not convicted of contravening s 41(1)(a) of Act 7 of 2003,5 during the period of suspension. In respect of count 7 he was sentenced to four years’ imprisonment suspended for five years on condition that he is not convicted of contravening s 41(1)(a) of Act 7 of 20036 during the period of suspension. In addition thereto, he was sentenced to a compensatory fine of R100 000 per month, payable to the National Wildlife Crime Reaction Unit over a period of ten months for purposes of investigation into rhino related matters. 3 Penalties - (1) Any person who is convicted of an offence in terms of this Act is liable— (a) in case of an offence referred to in— (i) sections 28(1), 31(1)(a), 35(1), and 40(1), 41(1), 41(2), 42(1),49, 541)(i) and (j), 57 (1)(a) and (b), 57(2), 58, 61(2), 64(1)(a), 64(2)(a), 69(1), 70, 76. 4 112(2) Plea of guilty: If an accused or his legal adviser hands a written statement by the accused into court, in which the accused sets out the facts which he admits and on which he has pleaded guilty, the court may, in lieu of questioning the accused under subsection (1)(b), convict the accused on the strength of such statement and sentence him as provided in the said subsection if the court is satisfied that the accused is guilty of the offence to which he has pleaded guilty: Provided that the court may in its discretion put any question to the accused in order to clarify any matter raised in the statement. 5 Refer to fn 2. 6 Refer to fn 2. [4] Dissatisfied with the sentence imposed, the appellant launched an appeal against the sentences. The trial court refused the application for leave to appeal. Aggrieved by this, the appellant petitioned the Gauteng Division, of the High Court, Pretoria for leave to appeal against the sentence, which was partially successful. On 5 August 2014, the appeal against sentence in respect of count 5 – 7 was heard by the court a quo (Fourie and Mabuse JJ concurring), who set aside the compensatory fine of R100 000. However the court a quo left the effective sentence of eight years’ imprisonment on counts 5, 6 and the suspended sentence on count 7 unaltered. The present appeal is with the leave of the court a quo. [5] Before I turn to consider the content of the statement made by the appellant in terms of s 112(2) of the CPA, it is necessary to consider the general import of the preamble to the charge - sheet, which reads as follows: ‘Maremani Nature Reserve (Pty) Ltd is a privately owned farm situated at Musina in the Regional Division of Limpopo. The said farm is fenced. The main purpose of Maremani Natural Reserve is nature conservation, although hunting occurs on occasions. Various wild animals are kept on the farm, including Rhinoceros White (Ceratotherium simum) and Rhinoceros black (Diceros bicornis). AND WHEREAS at all material times the late Mr Thomas Frederick Fourie, was appointed to manage the farm on behalf of the owners, a Danish Consortium. The late Mr Thomas Frederick Fourie was furthermore tasked with the responsibilities of managing the Maremani Nature Reserve and to protect the wildlife on the said Nature Reserve. AND WHEREAS during October 2009 the accused, with the assistance of a helicopter pilot immobilized and dehorned 2 white rhinoceros. Afterwards the horns, 4 in total, were bought without the necessary permits, from the late Mr Thomas Frederick Fourie. AND FURTHERMORE during October 2009 the accused once again immobilized and dehorned 6 white rhinoceros and 5 black rhinoceros with the assistance of a helicopter pilot and a veterinarian. Afterwards the accused bought the horns, 22 in total, from the late Mr Thomas Frederick Fourie. AND FURTHERMORE on 16 June 2010 the accused once again immobilized and dehorned two white rhinoceros with the assistance of a helicopter pilot and a veterinarian. Afterwards the accused bought the horns, four in total, from the late Mr Thomas Frederick Fourie. AND FURTHERMORE during July 2010 the accused once again immobilized and dehorned 5 white, his own rhinoceros, with the assistance of a helicopter pilot and a veterinarian. Afterwards the accused bought the rhinoceros (7) from the Limpopo Valley Conservancy or Mr Jeremiah Jesia Cronje, he conveyed horns (8) without the necessary permits to Thabazimbi. AND WHEREAS according to Schedule 2 of the Limpopo Environmental Management Act, Act 7 of 2003 both Rhinoceros white and Rhinoceros Blacks are Specially Protected Wild Animals. FURTHERMORE according to section 41(1) of the Limpopo Environmental Management Act, Act 7 of 2003, no person may without a permit: [a] acquire, possess, convey, keep, sell, purchase, donate or receive as a gift any special protected wild animals, protected wild animals, games, non-indigenous wild animal or animals referred to in Schedule 7 or 8. AND WHEREAS according to chapter 1 of the Limpopo Environmental Management Act, Act 7 of 2003, “hunt” means hunt with the intention to kill, and (a) To dart or immobilize a wild or alien animal by any means or method for trophy purposes: or . . . .’ [6] The events leading up to the commission of the offence appear largely from the appellant’s written statement in terms of s 112(2) of the CPA. Therein the appellant explained the circumstances relating to the illegal purchase, possession and conveying of the rhino horns as follows: ‘Ek, die ondergetekende, Jan Karel Pieter Els . . . . 3. Op 30 Oktober op die Maremani Natuurreservaat het wyle Thomas Frederick Fourie 30 (dertig) renosterhorings vir my te koop aangebied en my meegedeel dat sy werkgewer hom opdrag gegee het om dit te verkoop. 4. Ons het op ‘n koopprys vir al die renosterhorings in die bedrag van R760, 000 (SEWE HONDERD EN SESTIG DUISEND RAND) ooreengekom, welke bedrag betaalbaar was in drie paaiemente welke paaiemente ek betaal het. 5. Ek het op dieselfde dag besit geneem van 26 (SES EN TWINTIG)) renosterhorings en die renosterhorings vervoer na my woning te Thabazimbi. 6. Ek het op 16 Junie 2010 die balans van 4 (VIER) renosterhorings wat ek aangekoop het op die Maremani Natuurreservaat in besit geneem en dit vervoer na my woning te Thabazimbi. 7. Ek het agt renosterhorings van my eie in Julie 2010 onwettig vanaf Limpopo Valley Conservancy na my woning in Thabazimbi vervoer. 8. Al bovermelde horings het ek sonder die nodige permitte vervoer en in my besit gehou. 9. Derhalwe is ek skuldig aan die oortredings soos omskryf in Aanklagte 5,6, en 7 deurdat ek in elkeen van die gevalle Artikel 41(1)(a) van die Limpopo Omgewingsbestuurswet, Wet 7/2003 oortree het. 10. Eh het tydens pleging van die misdryf geweet dat ek wederregtelik optree.’ [7] The appellant was convicted by the trial court on the basis of the aforegoing statement in terms of s 112(2) of the CPA, and no evidence in respect of the merits was tendered. In mitigation, a statement in terms of s 112(3)7 of the CPA with specific reference to the appellant’s personal circumstances and the circumstances surrounding the offences was submitted on behalf of the appellant. I do not propose to deal with it in any great detail and the following suffices for present purposes. [8] The appellant stated that he was 39 years old (at the time of the offence), a game catcher and game management consultant. As a result of these offences his occupation in the game trade had come to an end. He had no intention of selling the rhino horns illegally. His intention was to collect the rhino horns hoping that when the trade in rhino horns was legalised, he would sell them for a profit. Mr Fourie, the manager of Maremani Nature Reserve, had arranged for the helicopters, pilots and veterinarians for the purposes of dehorning the rhinos, and none of the rhinos that were dehorned were injured and/or killed during the dehorning process. He stated that his conduct in regard to these offences, without the necessary permits, had to be distinguished from the illegal hunting of rhinos (poaching and killing). The rhino horns were stolen from him during September 2010, and as a result of the theft he did not derive any benefit from the horns. He was remorseful about his conduct and had co-operated with the police investigation. [9] In aggravation of sentence, the State called one Mr Scholtz from the South African National Parks Board. Mr Scholtz testified that he was previously employed by the South African Police Service and worked for the endangered species unit for about 11 years. Several aspects of his testimony did not relate to the offences that the appellant had been found guilty of but related to poaching. He testified about the statistics in respect of the illegal hunting of rhinos, and the value of the rhinos being killed, and their diminishing numbers. His testimony with regard to poaching was irrelevant and inadmissible. He also testified about the unfounded belief in some Far Eastern Countries that rhino horns are used as medicines to cure certain 7(3) Nothing in this section shall prevent the prosecutor from presenting evidence on any aspect of the charge, or the court from hearing evidence, including evidence or a statement by or on behalf of the accused, with regard to sentence, or from questioning the accused on any aspect of the case for the purposes of determining an appropriate sentence. illnesses, which evidence was unrelated to the charges the appellant was convicted of. [10] In sentencing the appellant, the trial court took into account wide ranging aspects linked to the current rhino poaching crisis, which in my view, constituted a clear misdirection The misdirections of the regional magistrate are inter alia as follows: (a) he misinterpreted many of the facts and admissions in terms of the s 112(2) statement of the appellant; (b) he considered factors most of which were irrelevant to the offences that the appellant had been convicted of; (c) he referred to the illegal hunting and/or the killing of rhinos and the unlawful smuggling of and trade in rhino horns, all of which in his opinion (without any factual basis) was astronomically out of control; (d) he referred further to the sale of the rhino horns to foreigners, namely Chinese, Vietnamese and Taiwanese, all of which were totally contrary to the facts presented before him; (e) he then further referred to unknown and unconfirmed media reports and a television programme in respect of poaching and illegal hunting, which did not relate to the appellant’s charges at all; (f) he relied on his ‘general knowledge’ of illegal hunting of rhinos in the Kruger National Park where prostitutes were being ‘rented’ to shoot rhinos without any evidence being tendered to prove this ‘general knowledge’. This was improper and untenable. (g) his reliance on the estimated figures referred to by Mr Scholtz in respect of rhinos illegally hunted during 2009, was without any foundation and irrelevant to the present charges. These figures were transposed to the offences committed by the appellant, as if the appellant was the poacher; (h) he overemphasised the seriousness of the present offences, which resulted in the effective eight years’ imprisonment being imposed on the appellant. [11] The regional magistrate furthermore misdirected himself by finding that the appellant had been a participant in relation to the charges on counts 1 to 4. These charges had been withdrawn against the appellant. It was improper for him to consider them for sentencing. He assumed that the rhinos had been hunted and killed, whilst they were only dehorned and that Mr Fourie did not have any permission to dehorn the rhinos. These findings are totally contrary to the facts and admissions made by the appellant in his statement, which was accepted by the State. [12] The court a quo held that it could not find that the trial court had misdirected itself and was not convinced that the sentence imposed, except for the compensatory fine, was shockingly inappropriate. It reasoned that there were aggravating circumstances which the regional magistrate had taken into account: firstly, that the appellant must have known that Mr Fourie would not have sold the rhino horns to him lawfully and secondly, that the appellant misled the authorities in an attempt that in future he would obtain a permit to enable him to possess and sell the rhino horns legally. There is no factual basis for these assumptions. Like the trial court, the court a quo relied on the testimony of Mr Scholtz that poaching of rhinos had increased since 2007, and as a result of the demand for the horns, a total of 1066 rhinos had been killed unlawfully between the period of 2008 and 2012. The trial court erred in treating the appellant as a poacher who killed rhinos when he was not. [13] Additionally, the court a quo took the view that the legislature deemed it fit that a maximum penalty of R250 000 or imprisonment for a period not exceeding 15 years or both such fine and imprisonment, was a clear indication that these offences were not to be dealt with in a lenient manner. Whilst the penalty may, in certain circumstances be laudable and deterrent, the facts in this case did not call for such a penalty. In the event, the court a quo held that the sentence imposed by the trial court was a salutary one, given that this was a serious offence where the public interest played an important role stating that: ‘What should also be taken into account in my view, is that people who are involved in this evil business, whether by killing these animals for their horns or by being illegally involved in the buying and selling thereof, or by merely being in illegal possession thereof, are participating in the destruction of the wild life heritage of this country’. [14] In my view, both the trial court and the court a quo made an assumption incorrectly and without any rational basis that the purchasing of the rhino horns by the appellant emanated from illegal hunting of rhinos. This impermissible approach by both courts lends itself to a misdirection, entitling this Court to interfere. Before us, counsel for the State conceded that there were several misdirections committed by the trial court and this concession, in my view, was correctly made. At the same time the State contended that a strong message had to be sent out that our environment had to be protected. [15] It is trite law that sentencing is a matter pre-eminently in the discretion of the trial court and a court of appeal will only interfere with the exercise of such discretion when such discretion was not properly exercised, or the sentence imposed is as a result of an irregularity or misdirection, or such sentence, having regards to the nature and circumstances of the offence, is disturbingly inappropriate or induces a sense of shock.8 [16] Mr Scholtz who was called by the State conceded that the appellant was not part of any smuggling network and that the appellant’s position was totally distinguishable from those cases related to poaching. By equating the appellant’s conduct to that of poachers, the trial court misdirected itself. [17] Having listened to both counsel, I am not persuaded that a non- custodial sentence is called for. Threat to the wildlife in South Africa has dramatically increased in recent years, and so has the illegal trade in rhino horns. As a result, this species is under a serious threat of being slaughtered or otherwise exploited, for economic gain. Sentences which reflect our censure will go a long way to safeguard the rhino from being economically exploited. Regrettably a non-custodial sentence would send out the wrong message. [18] Creating a safe haven for the fauna and flora of our land and our heritage should resonate universally.9 This Court expressed the following sentiments in S v Lemthongthai 10 8 S v de Jager & another 1965 (2) SA 616 (A) at 628H-629. 9 Tsoka J at para 20 in S v Lemtongthai [2013] ZAGPJHC 294; 2014 (1) SACR 495 (GJ). 10 Navsa JA at para 19 and 20 in S v Lemthongthai [2014] ZASCA 131; 2015 (1) SACR 353 ‘[19] The Constitution recognises that citizens have the right to have the environment protected for the benefit of present and future generations, through reasonable legislative and other measures that, inter alia, promote conservation. [20] The duty resting on us to protect and conserve our biodiversity is owed to present and future generations. In so doing, we will also be redressing past neglect. Constitutional values dictate a more caring attitude towards fellow humans, animals and the environment in general . . . A non-custodial sentence will send out the wrong message. Furthermore, illegal activities such as those engaged in by the appellant are fuel to the fire of the illicit international trade in rhino horn.’ [19] I align myself with the above sentiments. However the facts in this case differ from Lemtongthai. As a result the present appellant deserves a lighter sentence. As it was held in the oft-quoted S v Zinn11, a sentence must fit the crime, the criminal and be fair to society. Furthermore, it remains a salutary principle of our law that sentences have to be individualised to fit the peculiar circumstances of each accused. [20] Accordingly, taking into account all of the above, the effective sentence of eight years’ imprisonment imposed by the trial court on counts 5 and 6 appear to me to be inappropriate in the circumstances of the present case. As a result, it has to be set aside. Having given a proper consideration to all the facts, a sentence of four years’ imprisonment is appropriate. [21] In the result the following order is made. 1. The appeal is upheld. 2. The sentence imposed by the trial court in respect of counts 5 and 6 is set aside and substituted with the following: ‘Counts 5 and 6 are taken together for the purposes of sentence and the accused is sentenced to 4 years’ imprisonment.’ (SCA). 11 S v Zinn 1969 (2) SA 537 (A). 3. The suspended sentence on count 7 remains unaltered. ______________________ H K Saldulker Judge of Appeal APPEARANCES: For the Appellant: J H Van der Merwe Instructed by: Phillip du Toit Attorneys, Pretoria Van Pletzen Lambrechts Attorneys, Bloemfontein For the Respondent: P A Van Wyk SC Instructed by: Director of Public Prosecutions, Pretoria 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 22 September 2016 STATUS Immediate Els v The State (1241/2016) [2017] ZASCA 117 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 upheld an appeal and set aside and substituted a decision of the Gauteng Division of the High Court, Pretoria, from an effective sentence of eight years imprisonment to four years imprisonment, and with a suspended sentence remaining unaltered. The appellant, Mr Jan Karel Els, a game consultant manager, was charged in the regional court, Musina, Limpopo with 7 counts relating to the contravention of the Limpopo Environmental Management Act 7 of 2003. The State withdrew counts 1 to 4 against the appellant who pleaded guilty to counts 5, 6 and 7. The State accepted the plea, whereafter he was convicted on the said counts. Count 5 related to the purchasing, possession and conveying of 30 rhino horns without a valid permit; count 6 related to the receiving of four rhino horns without a valid permit; and count 7 related to the conveyance of eight rhino horns (being his property) without a valid permit. The trial court sentenced the appellant on counts 5 and 6, which were taken together as one for sentencing purposes, to ten years' imprisonment, of which two years was conditionally suspended for five years; and on count 7 to four years' imprisonment conditionally suspended for five years. In addition thereto, he was sentenced to a compensatory fine of R100 000 per month payable to the National Wildlife Crime Reaction Unit over a period of ten months for purposes of investigation into rhino related matters. The appellant launched an appeal against his sentence, which the trial court refused. The appellant then petitioned the Gauteng Division, Pretoria for leave to appeal against the sentence, which was partially successful. The appeal in respect of the sentences in respect of counts 5 to 7 was heard by the court a quo. The court a quo set aside the compensatory fine of R100 000, but left the sentence of eight years' imprisonment on counts 5, 6 and the suspended sentence on count 7. On appeal to the SCA, the SCA held that both the trial court and the court a quo incorrectly made an assumption, without any rational basis, that the purchasing of the rhino horns by the appellant emanated from illegal hunting of rhinos. These assumptions amounted to a misdirection entitling this Court to interfere. The SCA went further, qualifying its decision to impose a custodial sentence by stating that the rhino species was under serious threat of being slaughtered or commercially exploited, and to impose a non-custodial sentence would send out a wrong message. In the event, the SCA found that a sentence of four years' imprisonment was appropriate in the circumstances, on counts 5 and 6. The suspended sentence on count 7 remained unaltered.

2195

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No:  644/07 KPMG CHARTERED ACCOUNTANTS (SA) Appellant and SECUREFIN LIMITED First Respondent ING BHF­BANK AKTIENGESELLSCHAFT (formerly) BHF­BANK AKTIENGESELLSCHAFT      Second Respondent Neutral citation: KPMG Chartered Accountants v Securefin (644/07) [2009] ZASCA 7 (13 MARCH 2009) Coram: HARMS DP, CLOETE, LEWIS, PONNAN and SNYDERS JJA Heard: 17 FEBRUARY 2009 Delivered:  13 MARCH 2009 Updated: Summary: Contract  –  interpretation  –  evidence  –  admissibility  of evidence, expert or otherwise, to interpret. ORDER On appeal from: High Court, Pretoria (Van der Merwe J sitting as court of first instance): ‘The appeal is dismissed with costs, including the costs of three counsel.’ JUDGMENT HARMS DP (CLOETE, LEWIS, PONNAN and SNYDERS JJA concurring) Introduction [1] This  appeal  relates  to  the  existence,  validity  and  terms  of  an agreement  between  the  appellant  and  the  first  respondent.  The  first respondent as first plaintiff alleged that the appellant had breached the agreement and that it consequently had suffered damages for which the appellant  was  liable.  The  claim  of  the  second  respondent  as  second plaintiff  was  in  the  alternative  to  that  of  the  first  respondent  and  was based on delict. It is for present purposes unnecessary to deal with the alternative  claim.  The  appellant  denied  the  agreement  and  in  the alternative alleged that it was void because of error; and in the further alternative  it  denied  the  construction  placed  on  the  agreement  by  the respondents. The court below agreed to decide these and other related issues separately. It found for the respondents and issued a declaratory order accordingly. This appeal is with the leave of the court below. [2] During January 1998, the SA Mutual Life Assurance Society (also known as the Old Mutual), a life assurance society without shareholders decided  to  demutualise.  This  meant  that  it  would  become  a  company with shareholders listed on the Johannesburg Stock Exchange. Its free assets of about R29.3 billion were to be converted into share capital and the shares allocated to its members (policy holders) free of charge. To qualify for a share allocation one had to be a member and the policy had to be in force at the time of demutualisation. [3] A policy  holder  wishing to terminate a policy could surrender the policy in which event a surrender value was payable to the insured. In such event the policy holder lost the benefits of the bonuses that might attach to the policy since these were payable only if the policy matured. The  policy  holder  could instead  assign the  policy  to  a third  party  who might be prepared to maintain the policy until it matured by continuing to pay  the  premiums.  The  assignee  may  have  been  prepared  to  pay  an amount over and above the surrender value as the policy had a higher intrinsic value due to the bonuses that attached to it. [4] Some  Old  Mutual  endowment  policies  permitted  the  insured  to amend the  policy  conditions  within certain  parameters.  The  process is referred to as re­engineering. The insured amount could be increased or decreased; the amount of the premiums could be changed; the maturity date could be brought forward or be extended; and the policy could be paid up. There was a limitation: the maturity date could be changed only to  a  date  that  coincided  with  the  anniversary  of  the  policy  and  this change had to be effected more than a year before the next anniversary. Because  of  this  it  was  possible  to  create  value  by  re­engineering  the policy  purchased  –  increasing  the  insured  amount  and  bringing  the maturity  date  forward  –  thereby  obtaining  the  advantage  of  earlier maturity and increased bonuses. [5] Re­engineering requires some special skills and understanding of insurance  business.  One  David  Alexander,  the  moving  force  behind KNA  Insurance  &  Investment  Brokers  (Pty)  Ltd  (hereafter  ‘KNA’),  was such  a  person.  Re­engineering  also  required  large  capital  outlay.  The cost  of  a  single  policy  could  have  amounted  to  millions  and  normally exceeded the surrender value. Provision had to be made for future and increased premiums. [6] Alexander, with the assistance of one Stride, made contact with Mr N  Kirsch,  a  wealthy  businessman  with  business  interests  locally  and overseas. Kirsch valued Stride’s business acumen; Stride had been his auditor and long­time business associate. Kirsch, who saw the financial benefits  of  a  scheme  by  which  policies  are  purchased  and  re­ engineered, realised that it would be prudent for tax purposes to create a special off­shore vehicle for this purpose. This vehicle, ultimately, was the first  respondent,  Securefin  Ltd,  a  company  incorporated in  Jersey, Channel  Islands.  Kirsch  was  prepared  to  get  involved  only  in  a  large scheme.  For  finance  he  sought  the  assistance  of  a  bank,  the  second respondent, known then as BHF­Bank AG. [7] The  bank  was  prepared  to  advance  money  to  Securefin  for  a limited  period but  required security  in  the form  of  a cession of  the  re­ engineered policies. This by necessary implication meant that the bank would require the assurance that the money advanced was to be used for  acquiring  re­engineered  policies;  that  the  proceeds  of  the  matured policies  would  cover  Securefin’s  indebtedness;  and  that  the  policies would  mature  before  the  loan  became repayable.  It  is  accordingly  not surprising that the bank insisted on a verification or overview procedure by the appellant, KPMG Chartered Accountants (SA) (‘KPMG’), one of the big five (subsequently reduced to four) accounting firms in the world. KNA was to act as Securefin’s agent in purchasing and re­engineering the policies. The assured profit in the hands of Securefin would be the difference between maturity value and the cost of acquisition, including interest. An added advantage (referred to by Kirsch as ‘the cherry on the top’),  was  that  Securefin  would  have  become  entitled  to  the  relevant demutualisation  shares  if  the  policies  vested  in  Securefin  on demutualisation. [8] Lengthy negotiations between the different parties ensued.  There were negotiations between Securefin and the bank; between KNA and KPMG; and also between Securefin, KNA and KPMG. Many drafts were prepared as the proposed structure and contractual relationships around the scheme developed and changed. [9] Alexander, it later transpired, was an accomplished swindler who manipulated the scheme and allegedly caused the respondents a loss of some US $ 40m. Since KNA was liquidated and Alexander is in prison they wish to recoup their loss from KPMG. Alexander, understandably, was not called by either party as a witness but his absence made him a useful scapegoat. The procurement contract [10]  On 12 June 1998, Securefin and KNA entered into a procurement contract. It recorded the intention of Securefin to acquire a large number of policies. KNA was appointed as its procurement agent. KNA would be entitled  to  a  commission  of  five  per  cent  of  the  aggregate  acquisition price. KNA had to ensure that the necessary exchange control approval was  in  place  to  reflect  that  Securefin  was  acquiring  the  policies  as principal and that it could remit the proceeds of the matured policies in foreign currency used. [11]  The policies that KNA was to acquire had to be capable of being re­engineered  and  were  to  be  assignable  to  Securefin.  The  re­ engineered  policies  were  to  have  ‘a  maturity  date  not  later  than  1 January  2001’  unless  otherwise  stipulated.  The  relevance  of  this  date will become apparent in due course. The policies had to be fully paid­up, and, if not, the discounted value of future premiums had to be deposited in a bank account for future use. The funds to pay for the policies and the premiums were to be sourced from the bank. [12]  Of critical importance to the case is clause 5, which dealt with the verification  procedure  and  the  obligation  of  Securefin  to  pay  KNA  the ‘tranche  consideration’  within  five  days  after  the  receipt  of  ‘the verification  certificate’.  Clause  5.1  obliged  KNA  to  deliver  each  ‘policy tranche’,  together  with  supporting  documentation,  to  KMPG,  the ‘verification agent’. A policy tranche was defined in the definition clause as a batch of policies with a ‘tranche consideration’ of not less than US $500 000, ‘verified by the verification agent’. And ‘tranche consideration’ in turn was defined as the sum of (i) the total acquisition price (ie, the cost incurred by KNA in acquiring the policies) of the policies; (ii) agent’s commission  plus  VAT;  and  (iii)  all  future  premiums  discounted  to present­day values. It is apparent that the purpose of the exercise was to  verify  the  amount  due  by  Securefin  to  KNA  and  which  the  former could  draw  against  the  bank  loan.  It  is  common  cause  that  the percentage of the agent’s commission was later amended but nothing at this stage turns on this. [13]  Clause  5.1  also  provided  that  KPMG  had  to  perform  the verification procedures in  order  to provide  the  ‘verification  certificates’. ‘Verification  certificate’  was  defined  in  clause  2.1.15  to  mean  two certificates: the one was to be given by KPMG to Securefin and the bank and had to be ‘in accordance with Appendix C’. The other, for which no form  was  prescribed,  was  to  be  ‘a  certificate  verifying  the  cost  to Securefin of the tranche consideration.’ [14]  The next obligation of KPMG was set out in clause 5.2. It had to deliver  each  policy  tranche  to  Nedbank  International  to  hold  in accordance  with  a  custodial  agreement.  This  clause  holds  no significance for this judgment. Thereafter, under clause 5.3, KPMG had to  provide  to  Securefin  and  such  other  party  as  might  be  required  by Securefin ‘the verification certificates in terms of Appendix C.’ Appendix C,  which  was  to  be  prepared  by  KPMG,  did  not  exist  at  the  time  the procurement  contract  was  signed.  The  payment  clause,  clause  5.4, required payment by Securefin within five days of receipt by the latter of ‘the verification certificate’. In context this did not refer to the appendix C certificate  but  to  the  second  certificate  mentioned  in  the  definition clause. [15]  That  was  not  the  only  problem  with  the  construction  of  the document.  For  instance,  it  may  have  been  noted  that  the  terms ‘certificate’ and ‘certificates’ were used loosely and interchangeably. But in order to understand the contract it was unnecessary to deconstruct it, as counsel for KPMG sought to do, without submitting that it was void for uncertainty (Namibian Minerals Corporation Ltd v Benguela Concessions  Ltd  1997  (2)  SA  548  (SCA)  at  561G­562I).  The inconsistencies  are  the result  of  the  changes  that  were  brought  about during the preparation of the various drafts. The contract made perfect business sense and anticipated that KPMG as verification agent would perform two functions  that are relevant to these proceedings. The  first was that it would accept delivery from KNA of a policy tranche consisting of  policies  with  maturity  dates  of  not  later  than  1  January  2001. Furthermore, it had to verify the cost to Securefin (ie, the amount due to KNA)  for  each  tranche,  which  required  the  verification  of  the  tranche consideration.  That,  in  turn,  required  a  verification  of  the  acquisition price, calculating the commission, and verifying the future premiums and discounting them to present­day values. The verification contract [16]  The  signed  procurement  contract  of  12  June  was  soon  sent  to KPMG. On 26 June 1998, KPMG sent a letter to Securefin dealing with KPMG’s appointment as verification agents for the acquisition by KNA of Old Mutual policies on behalf of Securefin. It is common cause that this letter amounted to  an offer by KPMG  to act as Securefin’s verification agent,  and  it  is  also  common  cause  that  the  offer  was  accepted  by Securefin represented by Ms Salkinder, a business associate of Kirsch, who was closely involved with the negotiation of the various contracts in issue.  Although  prima  facie  a  verification  contract,  KPMG  alleged  that Securefin had failed to prove the contract and, in the alternative, that the contract was void due to error. Before dealing with these defences and the facts on which they were based it is convenient to deal first with the terms of the letter. [17]  Under the heading ‘background information’ the letter recorded the fact  of  conclusion  of  the  procurement  contract  which,  as  annexure  A, formed  an  attachment.  The  letter  mentioned  that  the  procurement contract required that KPMG perform certain procedures and report on certain  aspects  of  the  policy  acquisitions.  It  accepted  that  KPMG  was obliged  to  perform  the specific  procedures in  accordance with clauses 5.1, 5.2 and 5.3 of the procurement contract and contained the further undertaking  that  KPMG  would  ‘carry  out  certain  other  procedures’  in order  to  provide  Securefin  with  confirmation  of  nine  facts.  In  order  to ‘satisfy’  these  aspects  KPMG  undertook  to  perform  the  ‘detailed  audit procedures’ set out in a document compiled by KPMG, namely annexure B to the letter. [18]  The  letter  also  recorded  KPMG’s  understanding  that  it  had  to report  to  Securefin  on  the  verification  of  the  nine  points.  A  pro  forma report that would deal with those aspects was attached as annexure C, which also contained an example of a draw down report which was to be used  to  verify  at  a  given  date  the  total  maturity  value  of  the  verified batches in Rand terms. Annexure C did not deal with the certification of the cost to Securefin of the tranche consideration, and did not purport to incorporate the second  certificate required in  terms  of  the  definition of ‘verification certificate’. The annotation defence [19]  The first issue that arises from the letter concerns the identification of the correct version of the verification contract. The person at KPMG responsible for the matter, and who had drafted the letter and compiled the annexures for transmission to Securefin, was one Delaney. Although not a chartered accountant he occupied a senior position within KPMG but he had no authority to bind KPMG. He was intimately involved with the  development  of  offer  in  the  letter  and  had  sight  of  all  the  draft agreements  between  Securefin  and  KNA  and  was  in  contact  with  the bank  to  determine  its  involvement  and  interest.  KPMG  alleged  and Delaney testified that  when  he received the final procurement contract he  noticed an error in the contract.  It  concerned the maturity date. As mentioned, it provided that KPMG had to ensure that all the policies in a tranche had to mature before 1 January 2001. Delaney thought, so he said, that they had to mature after that date. Assured by Alexander, he said,  that  the  date  was  an  error  he  made  a  note  on  the  procurement contract against the relevant clause in these terms: ‘x Error – should be not  earlier.’  He  then  allegedly  attached  the  annotated  procurement contract to the letter. [20]  Securefin alleged that KPMG had failed to ensure that the policies would mature before 1 January 2001 and that amounted to a breach of the  contract.  The  reason  for  this  requirement  was,  according  to Securefin,  that  the  loan  facility  from  the  bank  was  to  terminate  on  31 January  2001  and  was  to  be  paid  with  the  proceeds  of  the  policies. Delaney,  while fully aware of the repayment date and that the policies had been ceded as security to the bank, said that he believed that the policies  had  to  mature  after  that  date  to  enable  Securefin  to  gain  the advantage of the demutualisation policies. [21]  KPMG’s case on this point went through an evolution process. It accepts  that  the  annotation  did  not  amount  to  an  amendment  of  the procurement contract and that the verification contract was not void due to a mutual error concerning the date. Its case is that Securefin, relying on the letter without the annotated annexure A, failed to prove that the agreement did not consist of the letter with the annotated annexure. [22]  KPMG’s  problem  was  that  Delaney  was  not  a  credible  witness and,  as  KPMG  accepts,  his  evidence  cannot  be  relied  on  unless corroborated by objective facts. The problem facing Securefin, who bore the onus of proving its contract,  was that  the original verification letter signed by Salkinder could not be found. Salkinder, one can accept, did not read annexure A when signing the verification letter since she had no reason to do so: the letter explicitly confirmed that annexure A was the contract  concluded between  Securefin  and KNA.  The fact  that  the letter assumed the obligations placed on KPMG under the procurement contract without qualifications, coupled with the fact that the annotation was on the face of it (and according to Delaney) not intended to amend or qualify that contract, means that this defence had no legal basis. [23]  The  defence  also  had  no  factual  basis.  It  is  unnecessary  to consider  whether  Delaney misunderstood the  reason for  the clause  or whether Alexander had told him that the date was a mistake. The trial court found Delaney’s  evidence unconvincing on this aspect and  dealt with the issue as a matter of probabilities. It found that it was improbable that the copy sent to Securefin contained the annotation. The reasons for  this  finding  were  these.  Salkinder  only  became  aware  of  the existence  or  significance  of  the  annotation  during  May  2002.  During October  1998  she  briefed  Price  Waterhouse,  another  firm  of accountants, to look into certain problems that had arisen in connection with the performance of the contract. These had nothing to do with the date issue. She handed her file to Price Waterhouse and they copied the whole  file.  They  retained  their  copy.  It  did  not  contain  the  annotation. During December 1999, Securefin instructed a firm of attorneys to bring liquidation proceedings against KNA. Salkinder again handed them her file and they, too, made a full copy. That copy also did not contain the annotation.  It  would  appear  that  the  attorneys  had  mislaid  the  original file. In May 2002, during Delaney’s interrogation at the KNA liquidation inquiry,  the  annotation  issue  came  to  the  fore  for  the  first  time.  In summary, the two copies made and kept independently are destructive of Delaney’s evidence and make Securefin’s version probable. [24] The  high  watermark  of  KPMG’s  argument  on  this  aspect  of  the case  was  that  Salkinder’s  version  was  questionable.  That  is  not  good enough. Her evidence on this aspect was not questioned during the trial and  the  trial  court’s  finding,  unless  shown  to  be  wrong,  has  to  stand. There  is  consequently  no  ground  to  interfere  with  the  finding  that Securefin  had  discharged  its  onus  to  establish  that  the  annexure  A attached to the verification letter did not have the annotation. The appendix C argument [25]  Another  defence  concerning  the  invalidity  of  the  verification contract raised by  KPMG  was based on the  fact that the  procurement contract required it to provide a certificate in terms of appendix C (not annexure  C).  There  was  no  such  appendix.  However,  it  was  common cause that the pro forma certificate had to be prepared by Delaney and was not yet ready when the procurement contract was signed. Delaney subsequently prepared annexure C, which was intended by all to be the pro forma certificate. The letter contained an  undertaking  by KPMG to provide a certificate in terms of annexure C. It was common cause on the evidence that annexure C was intended to be appendix C. Thus this defence too has no basis. The iustus error defence [26]  KPMG’s main defence was one of iustus error. The error related to the obligation to verify the acquisition price and the issue arose because KPMG apparently failed to verify it independently. It will be recalled that the  effect  of  clause  5.1  of  the  procurement  contract,  which  KPMG undertook to comply with, required it to provide verification certificates, one of which had to relate to the tranche consideration payable to KNA. This in turn required a verification of the acquisition price, ie, the costs incurred by KNA in acquiring any policy on Securefin’s behalf. Instead of independently  verifying  the  price,  KPMG  accepted  KNA’s  word  as  to what  it  had  paid.  It  would  appear  that  Alexander  provided  KPMG  with false information with the result that Securefin overpaid KNA. [27]  KPMG’s  case  in  this  regard  is  in  summary  as  follows.  Delaney never intended to verify the cost of acquisition since Alexander had told him that it was not possible to verify it. Salkinder knew or ought to have known of KPMG’s stance. The duty to verify the cost was not contained in  any  of  the  draft  procurement  contracts  that  had  been  perused  by Delaney. In particular, the document of 10 June 1998, which he had sent to his advisers in KPMG for comment, did not contain a reference to a certificate dealing  with the  tranche consideration.  He  believed  that  the 12 June  procurement contract  was the same and  he therefore had no reason  to  read  or  check  it.  It  follows  from  this,  according  to  the argument, that Salkinder had a duty to inform Delaney that the signed copy differed in a material respect from the 10 June copy; she failed to do so; and thus Delaney acted reasonably by assuming that there was no difference between the two documents. [28]  Basic to KPMG’s defence of justus error is a finding that Delaney had  not  read  the  signed  procurement  contract  before  transmitting  the verification  letter  to  Securefin  because,  as  Nicholas  J  said  in  Glen Comeragh (Pty) Ltd v Colibri (Pty) Ltd 1979 (3) SA 210 (T) at 215A­C: ‘The  fact  that  a  person  has  put  his  signature  to  a  document  gives  rise  to  a presumption of fact that he knew what it contained. The reason given (in Hoffmann South African Law of Evidence 2nd ed at 391) is that "people do not usually sign documents without reading them". . . . It would not in my view be at all unusual for a person signing such a document [a standard form of contract] not to read it, whether because  of  laxity,  unwariness,  heedlessness,  or  confidence  in  the  integrity  of  the [offeror]. In my view, a more satisfactory basis for the presumption of fact is that a person  by  his  conduct  in  putting  his  signature  to  a  document  admits  that  he  is acquainted with its contents (cf Knocker v Standard Bank of SA Ltd 1933 AD 128). The admission is not of course conclusive, but it is sufficient to establish that fact prima facie.’ [29]  As  mentioned,  Delaney  was  not  a  credible  witness  and,  absent material corroboration of his version that he had not read the letter, the defence cannot succeed. The only corroboration that counsel for KPMG could refer to was that Delaney had failed to verify the acquisition price. Although consistent with the version that he had not read the contract, his failure is equally consistent with a failure to comply with the terms of the contract. [30]  It  is  unlikely  that  Delaney  had  not  read  annexure  A  before attaching it to his letter. He was on his own version told that the 10 June copy was not final in form. Indeed, he had to change his draft letter after receipt of the signed contract. His letter specifically referred to clauses 5.1 to 5.3 of the procurement contract and they were different from those contained in the 10 June draft. Although the acquisition price verification was not all that obvious because it required a reference to the definition clause,  which  had  changed  on  the  12  June  version,  the  definition  of ‘verification certificate’ itself stood out because the amendment did not follow  the  paragraph  formatting  of  the  rest  of  the  document.  The responsible  partner,  one  De  Villiers,  who  was  the  directing  mind  of KPMG and who signed the letter on its behalf did not say that he had not read the attachments to the letter. If he had not done so, he would have been reckless. [31]  There is, furthermore, corroboration for a finding that Delaney had read the contract at the time and fully understood KPMG’s obligation to verify  the  acquisition  consideration.  Soon  after  the  conclusion  of  the verification contract (on 30 June 1998) a dry or test run was undertaken during which KPMG not only certified the total guaranteed maturity value in  accordance  with  annexure  C,  but  also  certified  the  total  purchase price  of  the tranche  in  the  same document. This  was  unacceptable  to Securefin  and  KPMG  consequently  issued  two  certificates,  one reflecting the verification of the total guaranteed maturity value and the other the total purchase price, both without qualification. Thereafter and for  more  than  a  year  KPMG  issued,  in  addition  to  the  annexure  C certificates,  22  further  verification  certificates,  certifying  on  the  face thereof  the  total  purchase  price  of  each  tranche  in  SA  Rands.  These certificates  were,  however,  accompanied  by  a  letter  qualifying  them, something to which I shall revert in another context. Except for the usual ‘blame  it  on  Alexander’­  excuse,  there  is  no  credible  explanation  why these certificates were issued if Delaney had not understood that KPMG was contractually bound to issue them. [32]  During  November  1998,  Delaney  had  occasion  to  consider  the terms  of  the  procurement  contract  carefully.  He  was  using  it  as  a precedent  for  another  engagement  to  verify  the  purchase  of  re­ engineered  policies  by  Alexander,  who  had  surreptitiously  created another  vehicle  to  divert  business  from  Securefin.  Delaney  compared the  two  documents  clause  by  clause  and  noted  the  differences.  He noticed  the  relevant  clause  and  made  an  annotation  against  it  to  the effect  that  KPMG  had  not  in  fact  verified  the  tranche  costs.  Although recognising the contractual obligation and the failure to comply, he did nothing. In particular, he did not alert Securefin to the alleged error in the contract. [33]  His  inaction may  have  been  due to his  professed belief  that  the duty to verify did not require the ascertainment of the correctness of the tranche consideration and that KPMG was instead entitled to rely in this regard on the information given to it by KNA. This may explain the fact that,  as  mentioned,  he  did  issue  certificates  albeit  that  they  were qualified.  This  indicates  that  Delaney  knew  of  the  obligation  but misconceived its ambit. [34]  As  mentioned,  KNA  was  liquidated  and  Delaney  testified  at  the liquidation  inquiry  during  May  2002. He  was  asked  about  KPMG’s failure to verify the acquisition price in the light of the provisions of the contract.  He  had  no  explanation.  He  did  not  express  surprise  at  the existence of the clause. He did not say that he had been unaware of the requirement. His explanation four years later at the trial was that he was too perplexed  at the inquiry to realise that  the clause should  not  have been in the contract. [35]  It  is  in  this  regard  significant  to  ascertain  how  the  error  defence developed. During consultation in preparation for trial and after a minute analysis of the paper trail, which was painfully replicated during the trial, the explanation that KPMG had never intended to verify the acquisition price,  and  that  Delaney  had  not  read  the  procurement  contract  at  the time,  apparently  sprang  to  mind.  It  resulted  in  an  amendment  to  the plea.  This  was  about  eight  years  after  the  event.  One  cannot  but conclude that Delaney contrived his evidence to fit the lawyers’ points. [36]  In the first drafts of the verification letter KPMG indicated it would not verify the acquisition costs. Significantly, that statement was omitted from later drafts and in the final letter. Counsel proffered an explanation for the change (namely that it was no longer necessary to state because it was implicit in the whole arrangement) but the explanation appears to me to  be too subtle  to  accept  and is, once again,  based  on counsel’s reading of the exhibits and not on Delaney’s evidence. [37]  A conclusive indication that the error defence was an afterthought appears from annexure B to the letter, which contained the ‘verification procedures’ devised by KPMG and which formed part of its undertakings under  the  letter.  KPMG  undertook  to  ‘ensure’  that  the  calculated  draw down value (ie, the amount that was to be drawn from the bank) was the lesser of the total purchase price of the policies and 80 per cent of the calculated total guaranteed maturity value. (The latter had to be certified in  accordance  with  annexure  C.)  This  requirement  arose  from  the provisions  of  the  loan  agreement  since  the  bank  was  prepared  to advance  only  the  amount  so  calculated.  This  Delaney  surely  knew. KPMG  could  not  have  complied  with  this  obligation  without  ensuring what the total purchase price of the policies was. The court below was accordingly  correct  when  it  held  that  KPMG  intended  to  verify  the acquisition  costs  and  that  the  late  amendment  to  the  procurement contract  did  not  add  any  substantive  obligation  that  had  not  been envisaged by the parties. The meaning of ‘verify’ [38]  Much  of  the  evidence  dealt  with  the  interpretation  of  the verification  contract.  Indeed,  each  party  called  an  expert  on  the  issue and  they  testified  for  about  fourteen  days  on  the  interpretation  of  the contract.  The  factual  witnesses,  too,  spent  most  of  their  time  dealing with  interpretation  issues.  The  parties  were  able  to  create  a  record consisting  of  6600  pages  of  evidence  and  exhibits.  It  is  difficult  to understand  why  the  trial  judge  permitted  the  evidence  or  the  cross­ examination  or  overruled  the  objection  to  the  leading  of  some  of  the evidence.  Obviously,  courts  are  fully  justified  in  ignoring  provisionally objections to  evidence if those  objections interfere with the flow of the case. It is different if a substantive objection is raised which could affect the scope of the evidence that will follow. In such a case a court should decide the issue and not postpone it. It is accordingly necessary to say something  about  the  role  of  evidence  and,  more  particularly,  expert evidence in matters concerning interpretation. [39]  First,  the integration  (or  parol  evidence)  rule  remains  part  of  our law.  However,  it  is  frequently  ignored  by  practitioners  and  seldom enforced  by  trial  courts.  If  a  document  was  intended  to  provide  a complete memorial of a jural act, extrinsic evidence may not contradict, add to  or modify its meaning (Johnson v  Leal 1980 (3) SA 927 (A) at 943B).  Second,  interpretation  is  a  matter  of  law  and  not  of  fact  and, accordingly, interpretation is a matter for the court and not for witnesses (or,  as  said  in  common­law  jurisprudence,  it  is  not  a  jury  question: Hodge  M  Malek  (ed)  Phipson  on  Evidence  (16  ed  2005)  para  33­64). Third,  the  rules  about  admissibility  of  evidence  in  this  regard  do  not depend  on  the  nature  of  the  document,  whether  statute,  contract  or patent  (Johnson  &  Johnson  (Pty)  Ltd  v  Kimberly­Clark  Corp  [1985] ZASCA 132 (at www.saflii.org.za), 1985 Burrell Patent Cases 126 (A)). Fourth, to the extent that evidence may be admissible to contextualise the document (since ‘context is everything’) to establish its factual matrix or  purpose  or  for  purposes  of  identification,  ‘one  must  use  it  as conservatively as possible’ (Delmas Milling Co Ltd v du Plessis 1955 (3) SA 447 (A) at 455B­C).  The time has arrived for us to accept that there is no merit in trying to distinguish between ‘background circumstances’ and  ‘surrounding  circumstances’.  The  distinction  is  artificial  and,  in addition, both terms are vague and confusing. Consequently, everything tends  to  be  admitted.  The  terms  ‘context’  or  ‘factual  matrix’  ought  to suffice. (See Van der Westhuizen v Arnold 2002 (6) SA 453 (SCA) paras 22 and 23 and Masstores (Pty) Ltd v Murray & Roberts (Pty) Ltd 2008 (6) SA 654 (SCA) para 7.) [40]  Trollip JA in Gentiruco AG v Firestone (SA) (Pty) Ltd 1972 (1) SA 589 (A) at 617F­618C dealt with the admissibility of expert evidence in interpreting a document (a patent specification in that case) and quoted with  approval  from  a  speech  of  Lord  Tomlin  in  British  Celanese  Ltd v Courtaulds Ltd  (1935) 52 RPC 171 (HL): ‘The  area  of  the  territory  in  which  in  cases  of  this  kind  an  expert  witness  may legitimately move is not doubtful. . . . He is entitled to explain the meaning of any technical terms used in the art. . . . He is not entitled to say nor is counsel entitled to ask  him  what  the  [document]  means,  nor  does  the  question  become  any  more admissible if it takes the form of asking him what it means to him as an [expert].’ Lord Tomlin spelt out the disadvantages of allowing expert evidence on interpretation: ‘In the first place time is wasted and money spent on what is not legitimate. In the second place there accumulates a mass of material which so far from assisting the Judge renders his task the more difficult, because he has to sift the grain from an unnecessary amount of chaff. In my opinion the trial Courts should make strenuous efforts to put a check upon an undesirable and growing practice.' That  was  in  1935,  but  the  chaff  is  still  heaping  up,  the  undesirable practice keeps growing and courts make no effort to curtail it. An expert may be asked relevant questions based on assumptions or hypotheses put by counsel as to the meaning of a document. The witness may not be asked what the document means to him or her. The witness (expert or  otherwise)  may  also  not  be  cross­examined  on  the meaning  of  the document  or  the  validity  of  the  hypothesis  about  its  meaning.  Dealing with  an  argument  that  a  particular  construction  of  a  document  did not conform  to  the  evidence,  Aldous  LJ  quite  rightly  responded  with  ‘So what?’  (Scanvaegt  International  A/s  v  Pelcombe  Ltd  1998  EWCA  Civ 436). All this was sadly and at some cost ignored by all. [41]  The debate about the meaning of the verification letter imploded during oral argument before this court and no one sought to rely on the expert evidence. KPMG accepted that if it was bound by the verification contract, it  was obliged to verify the tranche consideration by ensuring that it was accurate; and that it could not comply with that obligation by relying on information provided by KNA. [42]  The final argument raised by KPMG concerned its right to qualify a verifying  certificate.  It  has  been  mentioned  that  although  KPMG  had certified  the acquisition costs  it  added  a  qualification  with  a  statement that it had not verified the tranche consideration because it had relied on KNA  for  the  information  and  that  Alexander,  with  these  embarrassing documents  in  hand,  apparently  changed  them  and  transmitted unqualified  reports  to  Securefin.  This  issue  did  not  arise  on  the pleadings as they stand and was not considered by the trial court. Apart from  the fact  that  the submission amounts  to  a contradiction in  terms, this  issue  is  moot  in  view  of  the  findings  in  the  next  section  of  this judgment. [43]  The  trial  court  dealt  with  a  large  number  of  tacit  terms  of  the verification  contract  and  found  that  the  terms  alleged  by  the  plaintiffs were  indeed  terms  of  the  verification  contract.  Since  KPMG  did  not pursue  these  issues  on  appeal  it  is  unnecessary  to  deal  with  them.  I should, however, point out that once again much inadmissible evidence was led in this regard. Whether a tacit term can be inferred depends on the interpretation of the document and not on evidence. The amendment [44]  On  or  soon  after  4  August  1998,  KPMG  received  a  letter purportedly  signed  by  Salkinder  on  behalf  of  Securefin.  One  of  the aspects  covered  by  the  letter  was  an  instruction  that  the  completed reports  (the  certificates)  had  to  be  handed  to  KNA  for  onward transmission to Securefin and the bank. This instruction conflicted with the terms of the verification contract which required that KPMG ‘report direct’  to  Securefin.  KPMG  alleged  that  this  letter  amended  the verification agreement  while Salkinder  denied  that  she  had  written  the letter. The relevance of the dispute is this: KPMG handed the verification certificates  to  Alexander  who  apparently  amended  them  to  suit  his dishonest purposes and then sent them on to Securefin and the bank. If the letter did not amend the verification contract, the failure of KPMG to report directly to Securefin was a breach of the verification contract. [45]  The court below, while doubting that the letter had emanated from Salkinder,  dismissed  the  defence  by  holding  that  KPMG  had  not accepted the offer. KPMG argued that the finding was cynical but in my judgment it was fully justified. Paragraph 1 of the letter required KPMG first  to  issue  all  future  draw  down  reports  in  a  particular  format  and, second,  to  hand  the  reports  to  KNA  for  onward  transmission  to  the relevant  parties.  According  to  Delaney,  KPMG  was  not  prepared  to accept  the  first  obligation  but  it  accepted  the  second  by  transmitting reports in another format to KNA for onward transmission. This evidence established that  KPMG  had failed  to  accept the  offer in its terms. The answer of counsel was that the offer was divisible. That is not so. The letter contemplated that certificates in the format prescribed in the letter had  to  be  sent  to  KNA.  This  did  not  entitle  KPMG  to  send  other certificates to KNA on the basis that it had accepted part of the offer. It follows that this defence was correctly dismissed. Conclusion and order [46]  In the result the judgment of the court below should be upheld and the  appeal  dismissed.  The  costs  of  three  counsel  are  in  the circumstances appropriate. The following order is made: ‘The appeal is dismissed with costs including the costs of three counsel.’ ___________________ L T C HARMS DEPUTY PRESIDENT For Appellant: A O CooK SC L N Harris SC Instructed by: Deneys Reitz Sandton Matsepes Attorneys Bloemfontein For Respondent: A Subel SC S Symon SC R M Pearse Instructed by: Werksmans Inc Johannesburg Symington & De Kok 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 From:  The Registrar, Supreme Court of Appeal Date: 13 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 KPMG CHARTERED ACCOUNTANTS (SA) v SECUREFIN LIMITED The  SCA  dismissed  an  appeal  by  KPMG  against  a  decision  of  the  Pretoria  High Court. The case concerned the interpretation of a contract in terms of which KPMG undertook to verify certain facts relevant to the execution of a contract relating to the re­engineering  and  acquisition  of  certain  Old  Mutual  policies.  In  a  preliminary hearing the court had to decide on the question whether a document with or one without  an  annotation  was  the  contract  between  the  parties.  Another  question related to whether the contract was void due to error. The SCA upheld the decision of the High Court. The court also dealt with the admissibility of evidence, expert or otherwise, in interpreting contracts. The claim of Securefin of some US$40m against KPMG must now proceed in the High Court. ­­­ends­­­

3986

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 252/2022 In the matter between: PUTCO (PTY) LTD APPELLANT and CITY OF JOHANNESBURG METROPOLITAN MUNICIPALITY FIRST RESPONDENT THE SOUTH AFRICAN NATIONAL TAXI COUNCIL SECOND RESPONDENT ALEXANDRA, RANDBURG, MIDRAND, SANDTON TAXI ASSOCIATION THIRD RESPONDENT ALEXANDRA TAXI ASSOCIATION FOURTH RESPONDENT IVORY PARK TAXI ASSOCIATION FIFTH RESPONDENT MIDRAND TAXI ASSOCIATION SIXTH RESPONDENT RABIE RIDGE TAXI ASSOCIATION SEVENTH RESPONDENT RANDBURG LOCAL AND LONG DISTANCE TAXI ASSOCIATION EIGHTH RESPONDENT MEC FOR ROADS AND TRANSPORT, GAUTENG NINTH RESPONDENT Neutral citation: PUTCO (Pty) Ltd v City of Johannesburg Metropolitan Municipality and Others (Case no 252/22) [2023] ZASCA 31 (30 March 2023) Coram: SALDULKER, SCHIPPERS, MBATHA and MOLEFE JJA and UNTERHALTER AJA Heard: 10 March 2023 Delivered: 30 March 2023 Summary: Statutory interpretation – National Land Transport Act 5 of 2009 (NLTA) – negotiated contracts under s 41 – breakdown in negotiations – transport operator seeking interdict to refer dispute to mediation or arbitration under s 46(2) of the NLTA – inapplicable to disputes arising from negotiation of contracts under s 41 – operator not establishing prima facie right – appeal dismissed. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Gauteng Division of the High Court, Johannesburg (Mudau J sitting as court of first instance): The application to adduce further evidence is refused with costs, including the costs of two counsel. The appeal is dismissed with costs, including the costs of two counsel. ________________________________________________________________ JUDGMENT ________________________________________________________________ Schippers JA (Saldulker, Mbatha and Molefe JJA and Unterhalter AJA concurring) [1] The appellant, Putco (Pty) Ltd (Putco), operates a subsidised public bus service in Gauteng, which it has done for decades. The first respondent, the City of Johannesburg Metropolitan Municipality (the City), is a ‘planning authority’ as defined in the National Land Transportation Act 5 of 2009 (the NLTA).1 In terms of s 40 of the NLTA, planning authorities are required to integrate public transport services subject to contracts in their areas, as well as appropriate uncontracted services, ‘into the larger public transport system in terms of relevant integrated transport plans’. The second to eighth respondents are various taxi associations. They did not participate in the proceedings in the court below, nor in this appeal. The ninth respondent is the Member of the Executive Council responsible for the Gauteng Department of Roads and Transport (the GDRT), who abided the decision of the court below. 1 The NLTA defines ‘planning authority’ as meaning ‘a municipality in relation to its planning functions’. [2] The main issue in this appeal, which is with the leave of this Court, concerns the meaning and effect of ss 41 and 46 of the NLTA. Putco contends that the dispute resolution mechanism (mediation or arbitration) in s 46(2) applies to its dispute with the City regarding its market share of the integrated public transport network (IPTN) being implemented by the City. The City’s case is that the dispute arises from negotiations conducted under s 41 of the NLTA, to which s 46 is inapplicable. More specifically, the City asserts that s 46(2) applies only where a public transport operator has an existing contract, as defined in the now repealed National Land Transport Transition Act 22 of 2000 (the Transition Act), with the relevant contracting authority. Putco does not have such a contract with the City. [3] The basic facts are not contentious and may be briefly stated. The City has developed an Integrated Public Transport Operational Plan aimed at combining all existing modes of public transport (including bus and taxi routes) into a single network. The well-known feature of the Plan is the Rea Vaya Rapid Bus System (the Rea Vaya system), which is being implemented in phases on identified routes within the Municipality of Johannesburg. In order to implement this system, the City negotiated with bus and taxi operators, including Putco, whose routes were ‘affected’, ie those who were likely to lose passengers to the Rea Vaya system, to remove or reduce their existing services. In return, those operators were offered shares in bus operating companies which the City had incorporated to run the newly integrated network. [4] The City negotiated Phases 1A and 1B of the Rea Vaya system with affected taxi and bus operators, which culminated in negotiated contracts under s 41 of the NLTA. Putco became a 26% shareholder in the bus operating company that was incorporated for, and that currently operates, Phase 1B of the Rea Vaya system. Putco however submitted that its contract with the City in relation to Phase 1B was concluded in terms of s 46 and not s 41 of the NLTA. I return to this aspect below. Phase 1A commenced in 2010 and Phase 1B in 2013. [5] This case concerns Phase 1C(a), a component of Phase 1C, which covers an area from the Johannesburg central business district to Sandton, known as the North East Quadrant (NEQ). Implementation of Phase 1C(a) of the Rea Vaya system will affect the current services provided by Putco between Soweto and the greater Sandton area. Putco renders these services in terms of an Interim Contract 48/97, concluded on 26 March 1997 between the GDRT and Putco under the Transition Act (and amended on 6 August 1997 and 7 December 2007). [6] On 19 September 2017 the City, various taxi associations, Putco and another bus operating company, JR Choeu Express and Coaches (JR Choeu), entered into a Negotiation Framework Agreement in respect of the North East Quadrant Integrated Project (the NFA). The role of the NFA, essentially, is to facilitate negotiations between the parties in the restructuring of public transport services in the NEQ, by establishing rules and a framework for the various phases of the negotiations. The NFA records that the parties had agreed to develop and implement an integrated operational plan, which includes entering into negotiated contracts as envisaged in s 41 of the NLTA; and that the negotiated contracts to be concluded between the City and affected operators should be achieved through a structured and time-bound negotiation process, based on defined principles. The NFA contains specific dispute resolution procedures aimed at the final resolution of disputes between the parties. These include the appointment of independent facilitators to execute dispute resolution mechanisms.2 2 Clause 14 of the negotiation framework agreement provides: ‘DISPUTE RESOLUTION 14.1 In the event that the Parties are unable to reach agreement within a reasonable time, the Independent Facilitators will be requested to propose and execute a dispute resolution mechanism which can involve further internal or external mediation or facilitation and/or non-binding expert determination; 14.2 A dispute should be declared only after the Parties have extensively canvassed an issue and exhausted their own efforts. The Independent Facilitators should make a determination in this regard. 14.3 Facilitators may propose that the Core Group becomes involved; [7] For several years, Putco and the City negotiated how many shares Putco should have in the operating companies formed by the City to run each phase of the Rea Vaya system. Negotiations in relation to Phase 1C(a) broke down after the City would not budge from its offer to Putco of a 0.27% shareholding in the new bus operating company. Putco claimed that there was no agreement between it and the City on the ‘affectedness criteria’ to be applied to Phase 1C, and that the criteria used to conclude agreements between the City and minibus taxi operators could not be applied to Putco. The City however contended that all the parties, including Putco, had agreed upon a data collection and analysis exercise, the results of which were used to determine the extent to which an operator was affected by the Rea Vaya system; and that a report of a study conducted on behalf of the City showed that Putco was affected to a very limited extent. JR Choeu agreed with the study and its outcome, and withdrew from the process. The City also asserted that negotiations were held openly with the taxi industry, and that Putco refused to accept the outcome of negotiations because it was not what Putco had expected. [8] Thus, the central dispute between Putco and the City in the negotiation of the contracts under s 41 of the NLTA regarding Phase 1C(a), related to the affectedness criteria. The City appointed a facilitator to help resolve the dispute. However, there were delays that frustrated its resolution. Consequently, on 27 October 2020 Putco instituted proceedings in the Gauteng Division of the High Court, Johannesburg (the high court), to bring the dispute resolution process to finality by convening a meeting of the Core Group, contemplated in the dispute resolution procedures in the NFA. Subsequently, a meeting of the Core Group was convened and it was agreed that the dispute be resolved through arbitration, subject to agreement on the terms of reference and the identity of the arbitrator. 14.4 In the event that the Core Group, including Elders becomes involved, clear terms of reference of the role should be proposed by the Independent Facilitators. . . . 14.5 In the event that the above does not succeed, the Parties will revert to their principals for a further mandate in respect of the matter which had led to deadlock or a further dispute resolution process which could be binding.’ [9] However, Putco and the City could not agree on the terms of reference of the arbitrator and the dispute remained unresolved. On 30 June 2021 Putco launched an application in the high court, essentially for an order interdicting the City from incorporating a bus operating company or another corporate entity for the purposes of Phase 1C(a) of the Rea Vaya system; and from negotiating, concluding or implementing an agreement with any of the second to eighth respondents, regarding their shareholding in such bus operating company or corporate entity. The interdict was sought pending the final outcome of a dispute resolution process between Putco and the City under s 46(2) of the NLTA, including mediation under regulation 7 of the National Land Transport Regulations on Contracting for Public Transport Services, 2009 (the Regulations),3 and failing mediation, referral to an appropriate court for settlement of the dispute. [10] The high court (Mudau J) dismissed Putco’s application for an interdict, on the basis that it had not established a prima facie right. The court held that the question whether s 41 or s 46 of the NLTA applied to the negotiations between the parties had been settled in Golden Arrow Bus Services (Pty) Ltd v City of Cape Town and Others,4 in which this Court held that the two provisions deal with entirely different situations. Section 46 governs ‘[e]xisting contracting arrangements’ (although it does make provision for the inclusion of an operator in an existing contract) and does not apply to contracts that have yet to be concluded. By contrast, s 41 applies to ‘negotiated contracts’ and makes no provision for disputes that may arise out of s 41 negotiations to be referred to mediation or arbitration.5 3 The regulations are published under GN R877 in GG 32535, 31 August 2009. 4 Golden Arrow Bus Services (Pty) Ltd v City of Cape Town and Others [2013] ZASCA 154; [2014] 1 All SA 627 (SCA) (Golden Arrow Bus Services). 5 Ibid paras 11 and 14. [11] Before considering the parties’ submissions on this issue, it is necessary to deal with Putco’s application under s 19(b) of the Superior Courts Act 10 of 2013, to adduce further evidence on appeal. The evidence sought to be adduced comprises an Inter-Governmental Authorisation Agreement concluded between the City and the GDRT in February 2018 (the intergovernmental agreement). The stated purpose of the intergovernmental agreement is to provide efficient and continuous public transport services, which the parties acknowledge is the responsibility of government. The parties undertake to achieve that purpose, inter alia, by the GDRT assisting and supporting the City in building its capacity to manage subsidised service contracts; establishing an agreed framework for co- operation and co-ordination between the parties; and ensuring that the parties exercise their powers and perform their functions in a manner that does not encroach on each other’s functional and institutional integrity. [12] Putco’s basic contention is that the obligations imposed on the GDRT and the City by the intergovernmental agreement demonstrates that s 46 of the NLTA applies to its extant interim contract, even though that contract was concluded with the GDRT and not the City. Then it is said that the intergovernmental agreement puts paid to the City’s argument that it is not a party to Interim Contract 48/97 and therefore is not bound by the provisions of s 46(2). [13] The City opposes the application to adduce further evidence on two grounds. First, Putco has not met the requirements for adducing further evidence on appeal, as the intergovernmental agreement is irrelevant. Second, the appeal has become moot: more correctly, an interdict is not granted for a past invasion of rights.6 After the high court dismissed Putco’s application, the City concluded 6 Philip Morris Inc and Another v Marlboro Shirt Co SA Ltd and Another [1991] 2 All SA 177 (A) at 187; Stauffer Chemicals Chemical Products Division of Chesebrough-Ponds (Pty) Ltd v Monsanto Company [1988] 3 All SA 279 (T) at 283. contracts with the second to eighth respondents in respect of Phase 1C(a) of the Rea Vaya System. Consequently, the interdict sought would serve no purpose. [14] The principles governing the powers of an appellate court to receive further evidence are well-settled. Further evidence on appeal is allowed only in special circumstances because it is in the public interest that there should be finality to a trial or application.7 The basic requirements are that there must be some reasonably sufficient explanation why the evidence sought to be adduced was not presented at the trial; there should be a prima facie likelihood of the truth of the evidence; and the evidence should be materially relevant to the outcome of the proceedings.8 [15] The intergovernmental agreement is irrelevant to the main issue in this appeal. This is fundamentally because the proper construction of ss 41 and 46 of the NLTA is a matter of law and not fact, and cannot be based on evidence.9 This was rightly conceded by counsel for Putco, but then it was submitted that the intergovernmental agreement was reflective of the intention of the legislature. The submission is untenable and no more need be said about it. [16] Further, the argument that the intergovernmental agreement demonstrates that the City is bound by Interim Contract 48/97, despite not being a party to that contract, is unsound. The interim contract envisaged in s 46(1) and (2) is one ‘as defined in the Transition Act’. That Act defined an ‘interim contract’ as, ‘a contract, not being a current tendered contract, for the operation of a subsidised scheduled service, the term of which expires after the date of the commencement of this Act, and which- 7 Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail and Others 2005 (2) SA 359 (CC) para 41, following Colman v Dunbar 1933 AD 141 at 161-3. 8 See Van Loggerenberg Erasmus Superior Court Practice at A2-70–A2-72B and the authorities collected in fn 7. 9 KPMG Chartered Accountants (SA) v Securefin Ltd and Another [2009] ZASCA 7; 2009 (4) SA 399 (SCA) para 39. (a) was concluded before that date between the province and the Department on the one hand, and the public transport operator who is to operate that service, on the other hand, and is still binding between them or only binding between the province and that operator; or (b) is binding between that public transport operator and any transport authority or a core city or a municipality, due to the assignment to it, after the date of commencement of this Act, of the rights and obligations of the province under the contract contemplated in paragraph (a).’ There is no evidence on the papers that the Gauteng Province has assigned Interim Contract 48/97 to the City, and the intergovernmental agreement contains no such assignment. It follows that Interim Contract 48/97 is one between the GDRT and Putco, as envisaged in s 46(1) of the NLTA. The intergovernmental agreement cannot, and does not, change the statutory position. [17] The high court thus rightly held that the provisions of s 46 are inapplicable in this case because Interim Contract 48/97 is between the GDRT and Putco, not between the City and Putco. Thus, the submissions on behalf of Putco that the absence of a contract between it and the City ‘is no obstacle to the applicability of section 46’; and that ‘section 46 by design, superimposes itself onto, and disrupts, existing contractual relationships’, are incorrect. [18] The application to adduce further evidence on appeal must accordingly be refused. By reason of the conclusion to which I have come, it is unnecessary to consider the remaining ground of opposition to that application: the issue of mootness. In any event, the City has not tendered any evidence concerning the contracts allegedly concluded with transport operators after the interdict was refused, or the current status of Phase 1C(a) of the Rea Vaya System, in order for this Court to determine whether an interdict would no longer serve any purpose. [19] I return to the main issue – the proper construction of ss 41 and 46 of the NLTA. These provisions read in relevant part: ‘41 Negotiated contracts (1) Contracting authorities may enter into negotiated contracts with operators in their areas, once only, with a view to- (a) integrating services forming part of integrated public transport networks in terms of their integrated transport plans; (b) promoting the economic empowerment of small business or of persons previously disadvantaged by unfair discrimination; or (c) facilitating the restructuring of a parastatal or municipal transport operator to discourage monopolies. (2) The negotiations envisaged by subsections (1) and (2) must where appropriate include operators in the area subject to interim contracts, subsidised service contracts, commercial service contracts, existing negotiated contracts and operators of unscheduled services and non- contracted services. (3) A negotiated contract contemplated in subsection (1) or (2) shall be for a period of not longer than 12 years. (4) The contracts contemplated in subsection (1) shall not preclude a contracting authority from inviting tenders for services forming part of the relevant network. (5) Contracting authorities must take appropriate steps on a timeous basis before expiry of such negotiated contract to ensure that the services are put out to tender in terms of section 42 in such a way as to ensure unbroken service delivery to passengers. . . . 46 Existing contracting arrangements (1) Where there is an existing interim contract, current tendered contract or negotiated contract as defined in the Transition Act in the area of the relevant contracting authority, that authority may- (a) allow the contract to run its course; or (b) negotiate with the operator to amend the contract to provide for inclusion of the operator in an integrated public transport network; or (c) make a reasonable offer to the operator of alternative services, or of a monetary settlement, which offer must bear relation to the value of the unexpired portion of the contract, if any. (2) If the parties cannot agree on amendment of the contract or on inclusion of the operator in such a network, or the operator fails or refuses to accept such an offer, the matter must be referred to mediation or arbitration in the prescribed manner to resolve the issue. (3) The Minister may make regulations providing for the transition of existing contracting arrangements and the transfer of the contracting function in terms of this section or section 41, including the transfer or amendment of existing permits or operating licences to give effect to its provisions in the case of an assignment under section 11(2). . . .’ [20] These provisions make it plain that there is a clear distinction between contracts entered into in terms of s 41, and ‘existing contracting arrangements’ to which s 46 applies. The NLTA assigns the responsibility for the conclusion of s 41 contracts to the municipal sphere of government. Section 11(1)(c) of the NLTA provides: ‘The municipal sphere of government is responsible for – . . . (xxvi) concluding subsidised service contracts, commercial service contracts, and negotiated contracts contemplated in section 41(1) with operators for services within their areas;’. [21] The purposes of negotiated contracts are set out in s 41(1)(a), (b) and (c), which include integrating services forming part of an IPTN in terms of a municipality’s integrated transport plan, and discouraging monopolies. These are entirely new contracts negotiated in terms of the NLTA. The contracting authority, the City, is obliged under s 41(2) to negotiate – not to reach an agreement with an operator who has an interim contract. None of the operators with whom the City negotiates under s 41 has any pre-existing right to render a public transport service when it embarks on negotiations. As this Court has said, s 41 ‘facilitates the quick implementation of the transport system within a municipality’.10 This interpretation is buttressed by the immediate context: s 41(4) provides that the power to conclude negotiated contracts under s 41(1) shall not preclude a municipality from inviting tenders for the relevant services. [22] Section 46 on the other hand, deals with contracts concluded before the commencement of the NLTA and regulates existing rights.11 Its purpose is to 10 Golden Arrow Bus Services fn 4 para 11. 11 Ibid paras 11 and 13. ensure that existing contracts do not stand in the way of the conclusion and implementation of new contracts under the NLTA. [23] Flowing from the different situations to which ss 41 and 46 apply, there are two kinds of negotiations envisaged by the NLTA: (i) those which precede the conclusion of s 41 contracts; and (ii) negotiations that take place in terms of s 46(1)(b) to amend existing interim contracts. The negotiations under s 41 are aimed at the conclusion of once-off contracts for a maximum period of 12 years, and obviate the need for the contracting authority (a municipality) to tender for public transport services.12 Given its purposes, s 41 makes no provision for disputes that may arise out of s 41 negotiations to be referred to mediation or arbitration, and for good reason. As is evidenced by the NFA, these negotiations are technical, complex, and involve existing competitors (minibus taxi operators and bus operators), all with competing interests. The potential for disputes is manifest. In this case the City and transport operators have been engaged in protracted negotiations for several years – since 2017. [24] If Putco, or any negotiating party, could declare a dispute and demand its resolution by mediation or arbitration, the City could become bogged down in endless mediation and arbitration proceedings, and it would be impossible to reach timely s 41 contracts. This, in turn, would prevent the City from carrying out its duties under s 40 of the NLTA, which enjoins planning authorities ‘as soon as possible . . . to integrate services subject to contracts in their areas’, after the commencement of the NTLA – 8 December 2009.13 So too, since s 41 concerns the negotiation of new contracts, there can be no disputes to resolve in respect of existing rights. There is simply a process to negotiate new contracts which will either result in agreement or fail in that endeavour. 12 Ibid para 11. 13 Golden Arrow Bus Services (Pty) Ltd v City of Cape Town 2013 JDR 0828 (WCC) para 27. [25] Section 46(2) of the NLTA, by contrast, mandates the settlement of disputes by mediation and arbitration where, for example, negotiations for the amendment of an existing interim contract as envisaged in s 46(1) have failed. Section 46(1) grants a contracting authority (in this case, the GDRT) three alternative options to deal with the difficulties created by an existing interim contract, when an IPTN is introduced by way of a section 41 contract. The authority may (a) allow the contract to run its course; (b) negotiate an amendment of the contract with the operator to provide for its inclusion in an IPTN; or (c) make a reasonable offer of alternative services or a monetary settlement to the operator. The authority has a discretion as to which option to exercise. [26] Negotiations to amend an existing interim contract under s 46(1)(b) of the NLTA must be conducted by the parties to that contract: after all, only they can ‘agree on the amendment of the contract’ contemplated in s 46(2). However, counsel for Putco submitted that the City is bound by the provisions of s 46(2), for the following reasons. Putco’s existing interim contract is ‘in the area of the relevant contracting authority’, ie the City, within the meaning of s 46(1). The negotiations and the contract which resulted in Putco’s contract for Phase 1B of the Rea Vaya system were done in terms of s 46, as it is the holder of an existing interim contract. The City’s offer to Putco of a 0.27% shareholding in a new bus operating company, constitutes inclusion in an IPTN under s 46(1)(b); or an offer of a monetary settlement as envisaged in s 46(1)(c) of the NLTA. [27] These submissions are unsustainable for three reasons. First, they are insupportable on the facts. The NFA makes it clear that negotiations were conducted with the view to the conclusion of s 41 contracts. Putco itself invoked the dispute resolution procedures of the NFA. Moreover, the answering affidavit states that Phases 1A and 1B of the Rea Vaya System were concluded through negotiated contracts in terms of s 41. This was not disputed by Putco, save for a contention that s 41 and s 46 ‘are not mutually exclusive’. The offer to Putco of a 0.27% shareholding in a new bus operating company is an offer to enter into a negotiated contract under s 41(1) of the NLTA, pursuant to the negotiations envisaged in s 41(2). [28] Second, s 46 of the NLTA does not grant a municipality any power to conclude a contract for a public transport service: that power is conferred by s 11(1)(c)(xxvi), in terms of which a municipality may only enter into the contracts specified in that provision. The principle of legality dictates that a body exercising public power must act within the powers lawfully conferred on it.14 Putco’s submission that the City concludes negotiated contracts under s 41, with operators who do not have existing interim contracts, but that it does so with Putco in terms of s 46, is both illogical and at odds with the scheme of s 41 of the NLTA. [29] Third, as already stated, the authority vested with the power in s 46 cannot be the municipality because that power is conferred on the entity which concluded the existing contract; hence ‘that authority’ is given the three alternative options to deal with an existing interim contract in s 46(1)(a)-(c). In addition, Putco’s construction disregards the assignment of responsibilities to the three spheres of government in s 11(1) of the NLTA. It states that the national sphere of government is the acting authority for interim contracts concluded in terms of the Transition Act; and that where a province is performing a function contemplated in s 11(1)(a) on the date of commencement of the NLTA, it must continue to do so unless the Minister of Transport has assigned that function to a municipality.15 14 Fedsure Life Assurance Ltd v Greater Johannesburg Transitional Council [1998] ZACC 17; 1999 (1) SA 374 (CC) paras 56 and 58. 15 Section 11(1) of the NLTA provides: ‘(1) The responsibility of the three spheres of government are as follows: (a) The national sphere of government is responsible for- . . . (xi) acting as contracting authority for subsidised service contracts, interim contracts, current tendered contracts and negotiated contracts concluded in terms of the Transition Act; . . . [30] The dispute between Putco and the City relates to Phase 1C(a) of the Rea Vaya System, which is regulated by a s 41 contract. It is not a dispute envisaged in s 46(2) of the NLTA. Reading the dispute resolution mechanism in s 46(2) as applying to negotiated contracts under s 41, disregards the different objects of ss 41 and 46, and would impose a contract on parties who have not agreed to its terms, which is inimical to the scheme of s 41 of the NLTA.16 [31] Putco’s argument that it is entitled to invoke the dispute resolution mechanism in regulation 7 of the Regulations against the City to resolve the dispute arising from negotiations relating to a s 41 contract, can be dealt with shortly. As stated above, Interim Contract 48/97 is between Putco and the GDRT, not the City, and s 46 of the NLTA does not apply to contracts negotiated under s 41. That being so, Putco cannot invoke a regulation that gives effect to s 46(2), as the basis for the grant of an interdict. [32] In the result, the following order is issued: The application to adduce further evidence is refused with costs, including the costs of two counsel. The appeal is dismissed with costs, including the costs of two counsel. __________________ A SCHIPPERS JUDGE OF APPEAL (6) Subject to section 21, where a province is performing a function contemplated in subsection 1(a) on the date of commencement of this Act, it must continue performing that function, unless that function is assigned to a municipality by the Minister in terms of this Act.’ 16 Golden Arrow Bus Services fn 4 para 26. Appearances: For appellant: A E Franklin SC and J Mitchell Instructed by: Bowman Gilfillan Incorporated, Johannesburg McIntyre Van der Post Incorporated, Bloemfontein For first respondent: V Notshe SC and AM Rakhutla Instructed by: Poswa Incorporated, Johannesburg Poswa 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: 30 March 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 Putco (Pty) Ltd v City of Johannesburg Metropolitan Municipality and Others [2023] ZASCA 31 The Supreme Court of Appeal (SCA) today dismissed an appeal against an order by the Gauteng Division of the High Court, Johannesburg (the high court). The issue in the appeal was the meaning and effect of ss 41 and 46 of the National Land Transport Act 5 of 2009 (NLTA). The first respondent, the City of Johannesburg Metropolitan Municipality (the City), developed an Integrated Public Transport Network Plan (IPTN), aimed at combining all existing modes of public transport into a single network, known as the Rea Vaya Rapid Bus System (the Rea Vaya system) which was implemented in phases on various routes within the City. Operators whose services were affected, such as the appellant (Putco), were offered shares in bus companies which the City had incorporated to run the newly integrated network. The City negotiated Phases 1A and 1B of the Rea Vaya system with affected taxi and bus operators, which culminated in negotiated contracts under s 41 of the NLTA. Putco became a 26% shareholder in the bus company operating Phase 1B. Negotiations between the City and Putco regarding Phase 1C broke down when the City offered Putco a 0.27% shareholding in the bus operating company established for those routes. Putco approached the high court for an interdict restraining the City from incorporating any corporate entity for the purposes of Phase 1C of the Rea Vaya system or from concluding or implementing an agreement in that regard, pending the final outcome of a dispute resolution process (mediation or arbitration) under s 46(2) of the NLTA. The high court dismissed the application for an interdict on the basis that Putco failed to prove a prima facie right: s 46(2) did not apply to the dispute. On appeal, Putco asserted that the contract for Phase 1C of the Rea Vaya system is entered into in terms of s 46 and not s 41 of the NLTA; that the City was the contracting authority contemplated in its interim transport contract concluded with the Gauteng Department of Roads and Transport; and that the dispute resolution process (mediation and arbitration) envisaged in s 46(2) applied to its dispute with the City. The SCA held that the high court was correct in holding that s 41 and not s 46 applied to the dispute. Section 46 governs existing contractual relationships and does not apply to contracts that are negotiated under s 41 of the NLTA. The City has no power to enter into transport contracts under s 46; that power is conferred by s 41. Section 41 is aimed at conclusion of once-off contracts for a maximum period of 12 years, after which the municipality has to invite tenders for public transport services. It makes no provision for dispute resolution procedures. Section 46, on the other hand, provides for the settlement of disputes concerning existing transport contracts through mediation or arbitration. In the result, the SCA determined that the dispute between Putco and the City was regulated by s 41 and not s 46, and dismissed the appeal. --------oOo--------

3680

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 684/2020 In the matter between: PARK 2000 DEVELOPMENT11 (PTY) LTD APPELLANT and JOHAN MOUTON FIRST RESPONDENT VAN SCHALKWYK VERVOER CC SECOND RESPONDENT COMPANIES AND INTELLECTUAL PROPERTY COMMISSION THIRD RESPONDENT SMOKEN CONSULTING (PTY) LTD FOURTH RESPONDENT KENETH LOGAN STEWART N.O. FIFTH RESPONDENT Neutral Citation: Park 2000 Development 11 (Pty) Ltd v Mouton and Others (Case no 684/21) [2021] ZASCA 140 (06 October 2021) Coram: WALLIS, MBHA, PLASKET, CARELSE and MABINDLA-BOQWANA JJA Heard: 06 September 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 10h00 on 06 October 2021. Summary: Civil Procedure – Section 16(2)(a)(i) of the Superior Courts Act 10 of 2013, proscribes the hearing of an appeal which will not have any practical effect – as the only noteworthy property the appellant owned had since been lawfully sold and transferred to an independent purchaser, restoring appellant to its former status of being under business rescue would not have any practical effect – appeal dismissed with costs. ___________________________________________________________ REASONS ___________________________________________________________ Mbha JA (Wallis, Plasket, Carelse and Mabindla-Boqwana JJA concurring): [1] At the hearing of this appeal on, 06 September 2021, this Court made the following order: ‘1 In terms of s 16(2(a)(i) of the Superior Courts Act 10 of 2013, the appeal is dismissed with costs, such costs to include those consequent upon the employment of two counsel. 2 The reasons for this order will follow shortly.’ The reasons follow hereunder. [2] The appellant, a property development company and erstwhile registered owner of two pieces of land, to wit Erf 541 in Riversdale and Erf 4573 in Stilbaai West, the latter being the remainder of portion 60, Plattebosch Farm (the properties), appealed against the whole judgment of the Western Cape Division, Cape Town (Sher J) delivered on 23 July 2019, in terms of which a resolution adopted by a director of the appellant to place the appellant under business rescue, was declared invalid and set aside. In addition, the appointment of the fourth respondent as business rescue practitioner was discharged. [3] This appeal, with leave of this Court, mainly related to an application launched by the first respondent, Johan Mouton (Mr Mouton), in which he sought the above mentioned relief (the main application). The main application was heard together with two other related applications: one was launched by the fifth respondent, Kenneth Logan Stewart (Mr Stewart) in his capacity as the purported business rescue practitioner (the BRP) of the appellant seeking an order interdicting the intended sale in execution of the aforementioned properties belonging to the appellant (the interdict application). The other application was brought by two of the appellant’s creditors, in which they sought to intervene in the interdict application. The court a quo dismissed both applications with costs. [4] It is necessary to briefly set out the background facts underpinning the determination of this appeal. The appellant was a property development enterprise. The properties were the only noteworthy assets it owned. It had earmarked the two pieces of land for certain development in the course of its business activity. [5] For the purpose of raising finance for the Stilbaai development, from 2006 onwards, the appellant offered debentures which were limited to proposed erven. These debentures were redeemable by a certain date from the net proceeds which were to be realised from the sale of erven, unless the requisite rezoning of the remainder of portion 60 had not occurred by 01 December 2009, in which event the directors could extend the redemption date. It appears that extensions were effected, the last of which supposedly occurred during November 2017. [6] During May 2007, Mr Mouton purchased certain debentures from the appellant and on 04 February 2016 he sought to redeem the debentures by claiming repayment of the capital loan amount linked to the debentures plus interest alleging inter alia, that the extended redemption date for the debentures had since come and gone. As no payment was forthcoming, Mr Mouton issued summons against the appellant claiming the total amount of R400, 000.00 plus interest in respect of two debentures that he was holding and costs. In July 2016, default judgment was granted in favour of Mr Mouton after the appellant had failed to file a plea. However, the appellant successfully applied to have the judgment rescinded during February 2017. After the appellant had again failed to deliver a plea, Mr Mouton applied for and obtained default judgment against the appellant for a second time on 11 October 2017. [7] As the appellant failed to satisfy the judgment, Mr Mouton obtained a writ of execution against its movable property resulting in a nulla bona return. In July 2018 Mr Mouton obtained a writ of execution authorising the attachment and sale of the appellant’s immovable property by public auction which was advertised and scheduled to take place on 12 December 2018. [8] On 11 December 2018, the day before the auction for the sale of the immovable properties was to be held, Mr Mouton received, at around 15h44, an email from attorneys acting on behalf of a company called Meiprops Twee en Twintig (Pty) Ltd (Meiprops), notifying them that Meiprops had launched an application for the liquidation and winding up of the appellant. Furthermore, this application was enrolled for hearing on 14 December 2018. [9] About 15 minutes after the receipt of the notification of the intended liquidation application, Mr Mouton’s attorneys received a separate email from Smoken Consulting (Pty) Ltd, through which Mr Stewart conducted his business in consulting and business rescue services. This email advised Mr Mouton’s attorneys that the appellant had made an application that same day to be placed under business rescue. It is common cause that two days later, the Companies and Intellectual Property Commission (the CIPC) duly appointed Mr Stewart as the appellant’s business rescue practitioner (BRP). The liquidation application of the appellant by Meiprops was subsequently withdrawn on 12 December 2018. [10] It is not disputed that in both the liquidation and the business rescue applications, Mr Renier van Rooyen (Snr) a director of the appellant deposed to the motivating affidavits on 11 December 2018. In the liquidation application, he deposed to the founding affidavit on behalf of the creditor, Meiprops, of which he was a director, claiming that the appellant was indebted to this company in an amount of R2, 359,642, that it was unable to pay this amount and was therefore hopelessly insolvent. Consequently, it was just and equitable that it be wound up for the benefit of creditors. However, in stark contrast to these averments he alleged, in an affidavit he filed with the CIPC in support of the business rescue application, that the appellant was financially distressed, that it was ‘reasonably unlikely’ that it would be able to pay its debts within the ensuing six months, but that based on current sales volumes ‘it could in all probability trade profitably’ if it was placed in business rescue. [11] The auction for the sale of the immovable properties proceeded as scheduled on 12 December 2018. It took place notwithstanding the fact that the appellant had sought to place itself under business rescue and that Mr Stewart had demanded that the sale in execution should be suspended and not take place. Mr Mouton’s attorneys took the view that the business rescue proceedings were irregular, and that the appellant had not been validly placed in business rescue. The two properties, Erf 541 Riversdale and Erf 4573 Stilbaai West, were sold to the second respondent for R135, 000.00 and R3.89 million respectively. [12] The court a quo found, rightly in my view, that the averments by Mr van Rooyen (Snr) were mutually contradictory and that, in at least one of the affidavits, he was being mendacious. The court a quo justifiably had harsh words for the conduct of Mr van Rooyen and Mr Stewart, the BRP who deposed to the founding affidavit in support of the business rescue application. It concluded, rightly in my view, that the resolution adopted to place the appellant in business rescue was not passed in good faith, that it had no intention of attaining the objectives of the Companies Act 71 of 2008, as amended (the 2008 Act) in regard to business rescue and that it was done with a view to frustrate the sale in execution. Importantly, the court a quo found that on its assessment of the facts, the resolution to institute liquidation proceedings was adopted by Meiprops at some point prior to when the appellant adopted its resolution to go under business rescue. [13] In its judgment, the court a quo specifically granted an order declaring the sale in execution of the two properties valid and enforceable. Importantly, it also authorised the transfer of ownership in them to the purchaser, the second respondent against payment of any amount owing in respect thereof. It is significant to mention that transfer of ownership to the second respondent has since been effected. [14] The issues that arise from the appellant’s grounds of appeal against the court a quo’s judgment can be summarised as follows: whether the alleged failure of Mr Mouton to serve and join the appellants’ creditors in the main application was fatal; whether the resolution adopted to place the appellant under business rescue complied with the requirements contemplated in s 128 of the 2008 Act; whether the setting aside of the resolution commencing business rescue was just and equitable as contemplated in s 130(5) of the 2008 Act; and whether the court a quo erred in its treatment1 of the timing of the business rescue resolution and its regard to conflicting authorities regarding when liquidation proceedings are initiated. The court a quo was of the view that ‘initiation’ used in s 129(2) of the 2008 Act was intended to refer to the preceding causative act or conduct whereby the legal process in relation to such proceedings was set in motion. [15] In his answering affidavit to the appellant’s application for leave to appeal to this Court, Mr Mouton averred inter alia that the appeal is moot. His basis was the following: The appellant is no longer under business rescue and the two immovable properties concerned have since been sold and transfer into the name of the purchasers has been effected. In addition, the appellant did not apply for leave to appeal the costs order and accordingly, there is no live issue to be determined on appeal. [16] As the issue of mootness was not dealt with in the appellant’s heads of argument, this Court directed the Registrar to dispatch correspondence to the parties to file additional arguments on the question of mootness and any reasons why the Court should not consider and dispose of this point in terms of s 19(d) of the Superior Courts Act 10 of 2013. Both counsel duly filed their respective supplementary heads and the Court is indebted to them for their assistance. [17] The appellant submitted that if it were successful with the appeal i.e. if the appellant’s erstwhile business rescue status was restored, the transfer of the two properties to the second respondent could be set aside 1 The court a quo took a different stance to that of Swain J in First Rand Bank Ltd v Imperial Crown Trading (Pty) Ltd 2012 (4) SA 266 (KZN) where it was held that the word ‘initiated’ in s 129(2) of the 2008 Act must have been intended to have the same meaning as the word ‘commencement’ in s 131 (6) of the Companies Act 61 of 1973. retrospectively by the fifth respondent who should also have been reinstated to his previous position as the appellant’s BRP. The appellant sought to place reliance on the case of Knox N.O. v Mofokeng2 by drawing an analogy with the facts in casu. In that case the sale in execution had indeed been perfected, but the purchaser had knowledge of the proceedings instituted by the judgment debtor for rescission prior to registration. [18] The appellant submitted further that even if the second respondent was oblivious to the fact that the appellant was under business rescue at the time it purchased the properties, it undoubtedly subsequently gained knowledge of the fact of business rescue before transfer was taken. As the second respondent was alive to the appellant’s assertion that it was under business rescue and its attack on the validity of the sale due to s 133(1) of the 2008 Act might fail, so it was further argued, the second respondent assumed the risk that the sale might be set aside in due course. [19] In my view the aforesaid argument by the appellant cannot succeed and falls to be rejected outright. The reliance on Knox N.O was misconceived as the facts in that case, which concerned a rescission and not a business rescue are totally distinguishable. Significantly, the validity of the sales in execution was not even challenged in the court a quo. [20] It is important to note that the court a quo specifically granted an order dismissing with costs the application to interdict the transfer of the properties that was launched by the fifth respondent under case number 8488/2016. Significantly, that application does not form the subject matter of this appeal. In this regard, it is noted that in paragraph 24 of the founding 2 Knox N.O v Mofokeng 2013 (4) SA 46 (GSJ). affidavit of the appellant’s petition to this Court for leave to appeal, it stated as follows: ‘Although other interlocutory applications were also launched subsequently, it is the aforesaid (main) application that forms the subject matter of the current application. The other applications are rendered moot and need not be discussed here.’ (My emphasis) [21] It is clear from the aforesaid founding affidavit that the appellant accepted that it was no longer under business rescue and that Mr Stewart was the applicant’s erstwhile BRP. The appellant had the two immovable properties concerned as its only noteworthy assets and nothing else. It has no assets left to administer. Clearly in those circumstances restoring it to business rescue will serve no purpose. The grant of the appeal will not reverse the transfer of the properties. The submission that the BRP once restored to his previous position, will be able to reverse the transfer of the properties which were lawfully and validly authorised by the court a quo cannot be sustained. It is by no means clear that Mr Stewart wishes to be restored to that position. [22] Section 16(2)(a)(i) of the Superior Courts Act provides that ‘when at the hearing of an appeal the issues are of such a nature that the decision sought will have no practical effect or result, the appeal may be dismissed on this ground alone’. The effect is that if there is no longer any live controversy between the properties, then there is no longer an appeal that would have any practical effect. [23] In Legal Aid South Africa v Magidiwana and Others3 the court reiterated the position that ‘courts should not and ought not to decide issues of academic interest only’. [24] In light of what I have stated above, I find that there are no longer any live issues between the parties. The issues on appeal were accordingly of such a nature that the decision sought would have no practical effect or result between the parties. In the result, the Court granted an order dismissing the entire appeal with costs including the costs of two counsel, as set out in paragraph [1] above. _________________ B H Mbha Judge of Appeal 3 Legal Aid South Africa v Magidiwana and Others [2014] ZASCA 141; 2015 (2) SA 568 (SCA) paras 2 – 4; 18. APPEARANCES: For appellant: J P Steenkamp Instructed by: BDP Attorneys, Cape Town Honey Attorneys, Bloemfontein For 1st and 2nd respondents: T Dicker SC (with her, M A McChesney) Instructed by: ST Attorneys, Cape Town 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: 06 October 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 Park 2000 Development 11 (Pty) Ltd v Mouton and Others (Case no 684/21) [2021] ZASCA 140 (06 October 2021) This appeal was heard on 06 September 2021. On that day the Supreme Court of Appeal ((SCA) made an order dismissing with costs the appellant’s appeal against the judgment and order of the Western Cape Division, Cape Town, in terms of which a resolution adopted by a director of the appellant to place the appellant under business rescue, was declared invalid and set aside. Today the SCA handed down the reasons for its order. The appellant had failed to satisfy a judgment debt in favour of the first respondent. As a result the first respondent obtained a writ of execution which authorised the attachment and sale of the appellant’s two immovable properties by public auction. On the day before the auction for the sale of the immovable properties was to be held, the first respondent’s attorneys received two emails. The first email, from the appellant’s alleged creditor (Meiprops Twee en Twintig (Pty) Ltd (Meiprops)), notified that Meiprops had launched an application for the liquidation and winding up of the appellant. The second email was from the appellant’s alleged business rescue practitioner (BRP). This email advised the first respondent’s attorneys that the appellant had made an application that same day to be placed under business rescue. In both the liquidation and the business rescue applications, the director of the appellant deposed to the motivating affidavits. However, the averments contained in those affidavits were in stark contrast to each other. In the one the appellant is alleged to be hopelessly insolvent, whereas in the other it is alleged that the appellant could trade profitably if placed under business rescue. On the day of the auction, the liquidation application was withdrawn and the sale in execution took place notwithstanding the business rescue application. The two immovable properties were sold to the second respondent. The SCA held that the high court was correct in concluding that that the resolution adopted to place the appellant in business rescue was not passed in good faith, that it had no intention of attaining the objectives of the Companies Act 71 of 2008, as amended, in regard to business rescue and that it was done with a view to frustrate the sale in execution. Dealing with the issue of mootness, the appellant submitted that if its business rescue status was restored, the transfer of the two properties to the second respondent could be set aside retrospectively by the BRP who should also have been reinstated to his previous position as the appellant’s BRP. The appellant submitted further that even though the second respondent may not have been aware of the appellant’s business rescue ‘status’, it undoubtedly subsequently gained such knowledge before transfer could take place and therefore assumed the risk that the sale might be set aside in due course. The SCA held that the aforesaid argument by the appellant cannot succeed and fell to be rejected outright. The validity of the sales in execution was not even challenged in the high court. The SCA held further, that the appellant only had the two immovable properties concerned as its only noteworthy assets. It had no assets left to administer. Clearly in those circumstances restoring it to business rescue would serve no purpose. The grant of the appeal would not reverse the transfer of the properties. The SCA held further, that s 16(2)(a)(i) of the Superior Courts Act 10 of 2013 provides that ‘when at the hearing of an appeal the issues are of such a nature that the decision sought will have no practical effect or result, the appeal may be dismissed on this ground alone’. As a result, the SCA found that there were no longer any live issues between the parties and that an appeal would not have any practical effect. The SCA therefore dismissed the appeal. ~~~~ends~~~~

3751

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 404/2021 In the matter between: MARSHALL ALBERTS FIRST APPELLANT JEROME ARNOLDS SECOND APPELLANT ROBERT ATTIES THIRD APPELLANT THANDUXOLO BAATJIES FOURTH APPELLANT SIMPHIWE BEFILE FIFTH APPELLANT THOMBELANI BISHINI SIXTH APPELLANT MABUTHI BLAAUW SEVENTH APPELLANT THEMBINKOSI SIDWELL BLESS EIGHTH APPELLANT LUCKY BOKWANA NINTH APPELLANT NDUMISO BONGO TENTH APPELLANT and 128 OTHERS and THE MINISTER OF JUSTICE AND CORRECTIONAL SERVICES RESPONDENT Neutral citation: Alberts and Others v The Minister of Justice and Correctional Services (Case no 404/2021) [2022] ZASCA 25 (9 March 2022) Coram: SALDULKER, ZONDI, MAKGOKA, PLASKET and GORVEN JJA Heard: 18 February 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 09h45 on 9 March 2022. Summary: Summons – multiple plaintiffs – special plea of misjoinder – test whether issues of fact and law substantially the same for each plaintiff – issues of fact and law substantially the same – convenience and absence of prejudice – permissible to join in single action – appeal upheld and special plea dismissed. __________________________________________________________________ ORDER ______________________________________________________________________________ On appeal from: Eastern Cape Division of the High Court, Port Elizabeth (Rawjee AJ, sitting as court of first instance): The appeal is upheld with costs. The order of the high court is set aside and substituted with the following: ‘1 The special plea is dismissed. The defendant is directed to pay the costs arising from the special plea.’ __________________________________________________________________ JUDGMENT __________________________________________________________________ Gorven JA (Saldulker, Zondi, Makgoka and Plasket JJA concurring) [1] This appeal arises from a summons sued out by 138 plaintiffs (the plaintiffs). Each of them has claimed damages from the Minister of Justice and Correctional Services (the Minister). Each claim arises from an alleged assault on the particular plaintiff at St Albans Medium B Correctional Centre on 1 and 2 March 2014. The assaults are alleged to have been perpetrated by Correctional Services officials employed there by the Minister. They are alleged to have used batons, hands and feet to beat, slap and kick the plaintiffs. Different injuries and sequelae are pleaded for each plaintiff and each plaintiff claims R500 000 by way of general damages. [2] The action was instituted in the Eastern Cape Division of the High Court, Port Elizabeth (the high court). The plaintiffs annexed 138 separate sets of particulars of claim to the summons. [3] This prompted the Minister to enter a special plea which, in essence, raised two defences. First, that a combined summons is defined in rule 1 of the Uniform Rules of Court (the Uniform Rules) as a summons with a statement of claim annexed thereto. If one has regard to form 10 of the Uniform Rules, a summons must have annexed to it ‘a set of Particulars of Claim’. Because 138 sets of particulars of claim were attached to the summons, the summons was irregular as not complying with form 10. Secondly, that the particulars of claim of the respective plaintiffs do not comply with the requirement in rule 10(1) that the claims depend upon the determination of substantially the same question of law or fact. [4] The special plea was heard separately and initially in the high court. No evidence was led. Rawjee AJ upheld the special plea and dismissed the claims of the plaintiffs. She also dismissed the plaintiffs’ application for leave to appeal. The appeal is before us with the leave of this Court. [5] On appeal, the plaintiffs addressed the same issues for determination. The first issue is whether the annexing of 138 sets of particulars of claim to a summons by the individual plaintiffs, rather than one set referring to all of the plaintiffs, was irregular in failing to comply with rule 17(2)(a) read with form 10. This issue depends on whether annexing more than one document rather than a single one is an irregularity and, if so, a fatal one which should result in the dismissal of each plaintiff’s claim. [6] Rule 17(2)(a) reads: ‘In every case where the claim is not for a debt or liquidated demand the summons shall be as near as may be in accordance with Form 10 of the First Schedule, to which summons shall be annexed a statement of the material facts relied upon by the plaintiff in support of his claim, which statement shall inter alia comply with rule 18.’ There is no issue that rule 18 was not offended. And form 10 informs the defendant in the part dealing with the combined summons that the plaintiff institutes action against them: ‘. . . in which action the plaintiff claims the relief and on the grounds set out in the particulars annexed hereto.’ [7] I see no reason why, when a number of documents containing the particulars in respect of each plaintiff’s claim are annexed, this should result in the dismissal of all of the claims. After all, if a single, composite set of particulars had been annexed, the present action would simply include paragraphs describing each plaintiff in turn. The other 13 paragraphs which are, as shown below, virtually identical, could then follow one after the other. It may be that the manner in which the particulars of claim have been annexed is unwieldy but it is not irregular. Of course, this should not be understood as encouraging the practice. It must be said that, in argument before us, the Minister, while not abandoning this point, indicated that it was not being pressed. In my view this was prudent. [8] In any event, an overly formal approach to pleadings has always been discouraged. It is generally only where there is prejudice to a litigant that a different approach is taken by our courts. As was said in Trans-African Insurance Co Ltd v Maluleka:1 1Trans-African Insurance Co Ltd v Maluleka 1956 (2) SA 273 (A) at 278E-G. ‘If there was any insufficiency in those summonses there seems in all cases to have been ample room for a simple condonation, since no question of prejudice to the defendant seems to have arisen in any of them. No doubt parties and their legal advisers should not be encouraged to become slack in the observance of the Rules, which are an important element in the machinery for the administration of justice. But on the other hand technical objections to less than perfect procedural steps should not be permitted, in the absence of prejudice, to interfere with the expeditious and, if possible, inexpensive decision of cases on their real merits.’ No question of prejudice is raised in the present matter. If any irregularity arose, therefore, it is not a fatal one and could be condoned in the discretion of the court. It is certainly no basis for dismissing the claims as was done in the high court. [9] I now consider the second issue. This is whether the plaintiffs fall foul of a fatal misjoinder. Some texts suggest that at common law the general rule was that a number of plaintiffs with separate causes of action could not jointly sue the same defendant. Many of them rely for this proposition on the matter of Estate De Beer v Botha.2 In that matter, the plaintiffs were joint executors in the estate of one de Beer and his spouse who predeceased him. De Beer was found to have murdered her and had been executed as a result. An exception was taken to the declaration on the basis that the two estates had been wrongly joined as co-plaintiffs or, alternatively, that the estates should have made separate and distinct claims. The exception was upheld. It was held that, when his spouse died, the community of property terminated and, as a result, after the death of de Beer, there were two separate estates to administer. Since the claim of de Beer’s estate concerned the setting aside of an agreement struck after the death of his spouse, her estate had no such claim. The joint executors had also sued on two policies belonging to his spouse to which de Beer had no claim. The court held that the respective claims disclosed no cause of action since they lay 2 Estate De Beer v Botha 1927 CPD 140. at the instance of the separate estates. It held, further, that once the separate claims were brought, ‘. . . it may be that the Court will consider it desirable that the two actions should be heard together’. This matter does not constitute a total bar to two or more plaintiffs suing the same defendant on different causes of action. It envisages that this will be allowed in certain circumstances. I do not read it as authority for the blanket prohibition of such a joinder. [10] Some support for the proposition was alluded to in Sieff v Wilhelmina and Another.3 Here, two plaintiffs had sued a defendant for assault alleged to have been committed on the same day. The plaintiffs also sued a second defendant in the same action for a different assault which allegedly took place on a different day and which did not involve the first defendant. Exception was taken on the basis of a misjoinder of the second defendant. In the court of first instance, after argument, the plaintiffs withdrew the claim against the second defendant and proceeded to trial against the first, obtaining judgment. On appeal, it was argued that the entire summons was void as a result of the earlier misjoinder. Having reviewed English, Scottish and Roman Dutch authorities, Ward J held: ‘The rule, therefore, in Roman-Dutch law seems to approximate to the Scots' practice, and is founded upon convenience. I take it the Courts here would not allow an exception of misjoinder, when the cases could be easily disposed of together, and this seems to be borne out by what fell from DE VILLIERS, C.J., in Ettling v Schiff (5 SC 131). He said: “In cases of this sort (misjoinder) it seems to me that the Court in which the trial takes place is the best judge of what would be convenient in the course of its practice.”’ 3 Sieff v Wilhelmina and Another 1911 OPD 24 at 26. He mentioned certain cases involving misjoinder of plaintiffs where the courts had held that the summons was not void or a nullity but had given leave to the plaintiffs to amend the summons so as to allow one of them to withdraw from the action.4 [11] It seems, therefore, that at common law, the default position might have been that plaintiffs could not join together to sue a defendant on separate causes of action but that convenience was a factor by which a court could determine whether they should be heard together. This, of course, is a recognition that high courts have inherent jurisdiction to decide matters of procedure.5 This has now been specifically provided for in the Constitution6 and is also echoed in the uniform rules which allow a court to condone non-compliance with the rules.7 [12] With that in mind, I turn to rule 10(1) which reads: ‘Any number of persons, each of whom has a claim, whether jointly, jointly and severally, separately or in the alternative, may join as plaintiffs in one action against the same defendant or defendants against whom any one or more of such persons proposing to join as plaintiffs would, if he brought a separate action, be entitled to bring such action, provided that the right to relief of the persons proposing to join as plaintiffs depends upon the determination of substantially the same 4 Paterson v Pearson and Others 1875 Buchanan 45. In that matter, the plaintiff had sued on his own behalf and on behalf of his minor children. The court held: ‘If the plaintiff, wished to try the objections made on his own behalf, and those on behalf of his minor children, he must bring two actions. The exception of misjoinder of counts must be allowed.’ In Nigel Gold Mining Co v Croft and The Beatrice Syndicate 1889-1890 3 SAR TS 87, the summons had referred to the company as the plaintiff along with others. Some of the others were said to have no real interest in the claims. Exception was taken on the basis that they should not have been joined. The exception was upheld and it was ordered that the summons should be amended. The matter thus did not so much deal with multiple plaintiffs but with the fact that certain plaintiffs lacked locus standi to sue in the matter. 5 The common law position was succinctly explained by Corbett JA in Universal City Studios Inc v Network Video (Pty) Ltd 1986 2 All SA 192 (A); 1986 2 SA 734 (A) at 754 as ‘. . . an inherent reservoir of power to regulate . . . procedures in the interests of the proper administration of justice. . .’. 6 Section 173 of the Constitution of the Republic of South Africa, 1996, 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.’ 7 Rule 27(3) provides: ‘The court may, on good cause shown, condone any non-compliance with these Rules.’ question of law or fact which, if separate actions were instituted, would arise on such action, and provided that there may be a joinder conditionally upon the claim of any other plaintiff failing.’ It is clearly the first proviso which comes into focus in this matter. It serves to narrow an otherwise all-encompassing provision allowing multiple plaintiffs. There is no dispute that each plaintiff is entitled to bring an action against the Minister. The only issue is whether the plaintiffs may do so in a single action. The test for compliance with the rule is whether the right to relief of each plaintiff ‘. . . depends upon the determination of substantially the same question of law or fact which . . . would arise on . . .’ the other action or actions if brought separately. [13] Any action is based on facts and law. The facts are those which, if proved, would sustain in law the cause of action relied upon. Each action is a straightforward delictual claim under the actio legis aquiliae. The legal contours of the actions are the same for each one. The question before us thus resolves itself into whether the pleaded facts amount to substantially the same questions of fact which would arise in the notionally separate actions. [14] Three of the 138 particulars of claim were initially included in the appeal record. These were those of the first, second and third plaintiffs. Subsequently, the others were introduced on appeal. Apart from the identities of the plaintiffs and paragraph 7, each set of particulars of claim is identical. Paragraph 7 sets out the injuries allegedly sustained by the respective plaintiffs. Three of the subparagraphs are identical, alleging that each plaintiff sustained a psychological injury, suffered shock and trauma and suffered pain. Paragraph 8 sets out the sequelae alleged to have resulted from those injuries. These are pleaded in identical terms: that they required medical attention and medication to alleviate the pain, and that they experienced further pain, emotional trauma, discomfort and suffering. [15] The matter was argued against the likely backdrop that, if the action survived the special plea, there would be a separation of the issues under rule 33(4). The first issue would require proof of the alleged assault on the plaintiffs. The question is whether the different assaults, injuries and damages concerning each of the plaintiffs mean that they should be tried separately. It is so that each plaintiff will need to prove that they were assaulted and that they suffered the pleaded injuries. As such, 138 assaults and the injuries sustained as a result will need to be proved. If the plaintiffs, or any of them, succeeds in this task, an assessment of the damages sustained by each of the successful plaintiffs on the initial issue will be required. [16] The first thing to note is that the phrase, ‘the same question of fact’, is qualified by the word ‘substantially’. This means, at the very least, that the questions of fact to be determined need not be identical. What, then, is meant by ‘substantially’? The dictionary definition is not particularly helpful. In the present context it is said to mean ‘in large part’ or ‘to a large degree’.8 This begs the question what is meant by ‘large’. It seems to allow for a wide range of circumstances without a single determinative test. In the present context, I conceive that it connotes that there should be a significant overlap of the facts to be determined. [17] The Minister contended that the facts to be determined in respect of each plaintiff were not substantially the same. This because, although all the plaintiffs were detained at St Albans Correctional Facility and the assaults were alleged to have taken place during the same two-day period, they were detained in different cells and sections. In addition, the consequences of the assaults differed as did the treatment each plaintiff required. RE Allen (ed) The Concise Oxford Dictionary of Current English ed 1990 p 1216; https://dictionary.cambridge.org/dictionary/english/substantially?q=Substantially, accessed on 25 February 2022. [18] As against that, however, the causes of action are founded on incidents taking place at the same time and place. The claim is that the assaults took place in the same correctional centre over the same two-day period. It is unlikely that each alleged assault took place in isolation at a time and place unique to each plaintiff. As such, it is overwhelmingly probable that a number of the alleged assaults took place in the presence of a number of persons, whether employees or offenders. Evidence of many of the witnesses is likely to bear on a number of the alleged assaults. Those witnesses would need to be called once only in a joint action. It is only the specific details of each assault, their sequelae and the individual circumstances of the plaintiffs bearing on the quantification of damages that differ. To my mind, there are significantly overlapping facts. As such, substantially the same questions of fact fall to be determined as would be the case in separate actions. [19] Add to that the question of convenience. If heard separately in 138 actions, it may well be that different judges would arrive at different conclusions on the same or similar factual issues. The time of courts is likely to be taken up in a multiplicity of actions concerning claims arising from the same time and place as the others with a number of common witnesses. Multiple appeals might eventuate over an extended period of time with potentially different outcomes. The same witnesses would be called in multiple actions and face very similar cross-examination in each action. The weight attached to the evidence of different witnesses by different courts might well differ from action to action. It seems to me that both the plaintiffs and the Minister would be advantaged in calling each witness once only on the assault issue. This would probably result in a considerable saving of time and expense both at trial and in preparation for trial. In argument before us, the Minister conceded that the time spent would be no more than if separate actions were heard and the Minister would not be prejudiced in confronting a single action. [20] I accordingly do not agree that the Minister is correct in contending that there was a fatal misjoinder. On the basis that the facts concerning each plaintiff are substantially similar as also on the basis of convenience, the joinder of the plaintiffs in one action is appropriate and inoffensive. As a result, the special plea should have been dismissed. [21] The substantial success of the plaintiffs on appeal warrants an order that the Minister should pay their costs of the appeal. This applies equally to the costs arising from the special plea. No argument to the contrary was advanced. [22] 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 substituted with the following: ‘1 The special plea is dismissed. 2 The defendant is directed to pay the costs arising from the special plea.’ ____________________ T R GORVEN JUDGE OF APPEAL Appearances For appellants: A C Moorhouse Instructed by: Egon A Oswald Attorneys, Centurion Lovius Block Attorneys, Bloemfontein For respondent: A Beyleveld SC (with him I Dala) Instructed by: 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 From: The Registrar, Supreme Court of Appeal Date: 9 March 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. Alberts and 137 Others v The Minister of Justice and Correctional Services ZASCA 25 (9 March 2022) Today the Supreme Court of Appeal upheld an appeal from the Eastern Cape Division of the High Court, Port Elizabeth (per Rawjee AJ). Mr Alberts and 137 others sued out a summons against the Minister of Justice and Correctional Services for damages arising from alleged assaults on them. The alleged assaults all took place during a 2 day period at the St Albans Correctional Centre where the plaintiffs were incarcerated at the time. Attached to the summons were 138 sets of particulars of claim. The Minister entered a special plea. It contended that the Uniform Rules of Court required that only one set of particulars of claim can be annexed to a summons. In addition, it said that the plaintiffs could not join together in a single action since the claims did not depend upon the determination of substantially the same question of law or fact. The high court upheld the special plea and dismissed the plaintiffs’ claims with costs. On appeal, the Supreme Court of Appeal held that it was not impermissible to attach a number of sets of particulars of claim to a summons, although the practice of doing so was not to be encouraged. As to whether the plaintiffs were entitled to join together in a single action, the alleged assaults all took place at the same place, during the same time period, with the same witnesses present and the questions of law and fact to be determined were substantially the same. In addition, under the common law, for purposes of convenience, the actions could be heard as one. As a result, the appeal was upheld and the order upholding the special plea and dismissing the plaintiffs’ claims was set aside and substituted with an order dismissing the special plea with costs.

2235

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case no: 604/08 No precedential significance NURULLAH MIA Appellant and Respondent THE STATE ___________________________________________________________________ Neutral citation: Mia v The State (604/08) [2009] ZASCA 47 (22 May 2009) CORAM: STREICHER ADP, NUGENT, PONNAN, MLAMBO JJA and KROON AJA HEARD: 7 MAY 2009 DELIVERED: 22 MAY 2009 SUMMARY: Fraud – sentence – no substantial and compelling circumstances present – minimum sentence on each count confirmed – striking disparity between effective sentence imposed and that which appellate court would have imposed – sentence reduced from 20 to 15 years’ effective imprisonment. ___________________________________________________________________ ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: The Pretoria High Court (Seriti J and Mavundla J) sitting as a court of appeal. The appeal succeeds to the following limited extent: (a) The appellant’s sentence to a term of imprisonment of 15 years on each of the two charges is confirmed. (b) The second term of 15 years’ imprisonment is ordered to run concurrently with the first. (c) The appellant is thus sentenced to an effective term of imprisonment of 15 years. ___________________________________________________________________ JUDGMENT ___________________________________________________________________ PONNAN JA (STREICHER ADP, NUGENT, MLAMBO JJA and KROON AJA concurring): [1] The appellant, who was arrested on 2 July 2001, originally stood arraigned on six charges before the Pretoria Regional Court. At the commencement of the trial on 5 February 2004, three of the six charges were withdrawn by the State. To the remaining three – all charges of fraud – the appellant tendered a plea of not guilty. He did, however, admit the preamble to the charges in terms of section 220 of the Criminal Procedure Act 55 of 1977, save for paragraph 1.6. [2] The general preamble to the charges, provided: 'WHEREAS, at all times relevant to the charge sheet: 1.1 Cheques, which included a complete chequebook with cheque numbers 117801 to 118000, all of which were for the account of Vodacom Service Providers Co (Pty) Ltd-Creditors were stolen during 2001. 1.2 Vodacom Service Providers Co (Pty) Ltd held account number 421033894 with Standard Bank. 1.3 The accused opened an account with the Brooklyn branch of ABSA, bearing account number 4052197013 and styled as N Mia t/a Azra's Transporters. 1.4 Cheque number 118000 for R920 000-00, emanating from the range mentioned in 1.1, was deposited to the account of the accused on 26 April 2001. 1.5 Cheque number 117893 for R4 800 000-00, emanating from the range mentioned in 1.1, was deposited to the account of the accused on 18 May 2001. 1.6 The accused knew, or ought reasonably to have known, that the abovementioned deposits to his account were fraudulent in nature. 1.7 The accused purchased a BMW on 25 May 2001 from Outo Glen Motors for the amount of R394 000-00. The accused paid with cheque number 111 drawn on the account mentioned in 1.3. 1.8 The accused purchased another BMW on 5 June 2001 from Randburg Motorlink for the amount of R450 000-00. The accused paid with cheque number 128 drawn on the account mentioned in 1.3. 1.9 On 14 June 2001 the accused handed cheque number 152, also drawn on the account mentioned in 1.3, and for the value of R950 000-00 to the personnel of Randburg Motorlink. This was for the purchase of 3 Mercedes Benz motor vehicles. The accused cancelled this deal but received the cash value of this cheque. 1.10 On 4 June 2001 the accused purchased a VW Microbus for the amount of R160 000-00 from Paarl Vallei Motors. The accused paid with cheque number 118 drawn on the account mentioned in 1.3.' [3] The matter was then postponed and when the trial resumed on 24 May 2004, the court was informed that the appellant was desirous of altering his plea of not guilty to one of guilty on two of the remaining three charges. The court did not invoke the procedure envisaged in s 112 of the Act in respect of those two charges to which a plea of guilty had been tendered. Nor did the defence adduce a statement in terms of s 112(2) of the Act. Instead, a document headed ‘Formal Admissions in terms of s 220 of the Criminal Procedure Act, 1977’ was handed in on behalf of the appellant. It read: 'I, the undersigned, NURULLAH MIA (ID No. 620905 5246 087) hereby declare as follows: I am the accused in this matter. As far as Counts 2 and 3 are concerned, I hereby formally admit: 2.1 that cheques which included a complete cheque book with cheque numbers 117801 to 118000, all of which were for the account of Vodacom Service Providers Co. (Pty) Ltd– Creditors, were stolen during 2001; 2.2 that Vodacom Service Providers Co. (Pty) Ltd held account number 421033894 with Standard Bank; 2.3 that I opened an account with the Brooklyn Branch of ABSA Bank, bearing account 4052197013 and styled as N Mia t/a Azra's Transporters; 2.4 that cheque number 118000 for R920 000.00, emanating from the range mentioned in 2.1, was deposited in my said bank account on 26 April 2001; 2.5 that cheque number 117893 for R4 800 000.00, emanating from the range mentioned in paragraph 2.1 was deposited in my said banking account on 18 May 2001; 2.6 that at the time the said deposits were made into my banking account I in fact foresaw the possibility that these were fraudulent in nature and nevertheless accepted these deposits in my said banking account. I do hereby further admit: 3.1 that on 26 April 2001 and 18 May 2001, respectively, and at Southdale in the Regional Division of Southern Transvaal, I did unlawfully, falsely and with the intention to defraud, give out and pretend to ABSA Bank Limited that the respective cheque numbers 118000 for the amount of R920 000.00 and 117893 for the amount of R4 800 000.00, purported to be drawn by Vodacom Service Providers Co. (Pty) Ltd-Creditors on the Standard Bank Limited in favour of Azra's Transporters were good and valid cheques and that myself or Azra's Transporters were entitled to the proceeds of the said cheques; 3.2 that I induced ABSA Bank Limited to its prejudice to credit my said banking account with the respective amounts of the said cheques; 3.3 that when I gave out and pretended as aforesaid, I in fact foresaw the possibility that: - the said cheques were not valid cheques; - were not drawn by Vodacom Service Providers Co. (Pty) Ltd-Creditors; - I nor Azra's Transporters were not entitled to the proceeds of the said cheques. I do hereby further admit: 4.1 that I was not entitled to act as mentioned above and that I, at the time of my said conduct knew that what I was doing was wrong. I am making these admissions out of my own free will and was in no way induced or influenced to make the same.' [4] The state then closed its case without adducing any further evidence. As did the appellant. The appellant was thus duly convicted as charged on counts 2 and 3 and acquitted on count 4. [5] On 4 March 2005, the appellant was sentenced to 15 years’ imprisonment on each count, 10 years’ of which on the second count was ordered to run concurrently with the sentence on the first. The effective sentence was thus a term of imprisonment of 20 years. An appeal to the Pretoria High Court (per Seriti J, Mavundla J concurring) solely in respect of sentence, having proved unsuccessful, the further appeal is with the leave of this court. [6] It is common cause that Act 105 of 1997 (the so-called minimum sentencing legislation) finds application and that the offences in question fall 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 are found to exist in terms of s 51(3)(a), which would justify the imposition of a lesser sentence. Neither the trial court nor the high court could find such circumstances to indeed be present. Each thus found itself unable to depart from the statutorily prescribed minimum sentence. In that, given the paucity of information adduced by the appellant as to the circumstances surrounding the criminal enterprise and his own role in it, as also the staggering amounts involved, neither court can be faulted. [7] 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 S v Malgas 2001 (1) SACR 469 (SCA). (See also S v Fatyi 2001 (1) SACR 485 (SCA) para 5; S v Abrahams 2002 (1) SACR 116 (SCA) para 13.) [8] 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".' [9] It has not been suggested that the sentence was vitiated by any misdirection. The thrust of the argument advanced on behalf of the appellant is that the two offences although distinctly separate were closely related and were in reality the execution of the same broad criminal transaction. It followed, so the argument went, that the second term of imprisonment of 15 years should have been ordered to run concurrently in its entirety with the first. I agree – there appears to me to have been no warrant for ordering a portion of the second sentence to run consecutively with the first. Such a course resulted in a sentence, the cumulative effect of which was manifestly severe. In my view the degree of disparity between the effective sentence imposed and that which this Court would have imposed is such that interference is competent and warranted. For, as it was put 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.' [10] In the result the appeal succeeds to the following limited extent: (a) The appellant’s sentence to a term of imprisonment of 15 years on each of the two charges is confirmed. (b) The second term of 15 years’ imprisonment is ordered to run concurrently with the first. (c) The appellant is thus sentenced to an effective term of imprisonment of 15 years. ________________ V M PONNAN JUDGE OF APPEAL APPEARANCES: For Appellant: A B Booysen Instructed by: De Meyer Serfontein Attorneys Pretoria Honey Attorneys Bloemfontein For Respondent: A J Rossouw Instructed by: The Director of Public Prosecutions Pretoria 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 22 May 2009 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. MIA v THE STATE (604/08) [2009] ZASCA 47 (22 May 2009) Media Statement Today the Supreme Court of Appeal ('SCA') set aside the effective sentence of 20 years' imprisonment imposed upon Nurullah Mia and replaced it with a sentence of 15 years' imprisonment, Mr Mia was convicted by the Pretoria Regional Court during May 2004 on two charges of fraud. The facts giving rise to the conviction were, broadly stated, the following: During 2001, a complete cheque book for the account of Vodacom Service Providers Company (Pty) Ltd – Creditors was stolen. Two cheques from that cheque book to the total value of R 5,72million were deposited into a bank account operated by Mr Mia. He admitted that he had unlawfully, falsely and with the intention to defraud, held out that the cheques were good and valid cheques and that he had thereby induced the bank to act to its prejudice by crediting his bank account with the value of those cheques. The trial court concluded that were no substantial and compelling circumstances present. It accordingly found itself unable to depart from the minimum sentencing legislation that prescribed 15 years' imprisonment for an offence of that kind. He was thus sentenced to 15 years’ imprisonment on each charge – 10 years of which on the second charge was ordered to run concurrently with the first. An appeal to the Pretoria High Court against sentence proved unsuccessful. According to the SCA, given the paucity of information adduced by Mr Mia as to the circumstances surrounding the criminal enterprise and his own role in it, as also the staggering amounts involved, neither the trial court nor the High Court could be faulted in finding that there were no substantial and compelling circumstances present. The SCA held that the two offences although distinctly separate were closely related and were in reality the execution of the same broad criminal transaction. It followed, that the second term of imprisonment of 15 years should have been ordered to run concurrently in its entirety with the first. The SCA concluded that the cumulative effect of the sentence imposed by the trial court was manifestly severe and that interference in the sentence was competent and warranted. In the result it set aside the effective sentence of 20 years' imprisonment and replaced it with a sentence of 15 years' imprisonment. --- ends ---

3837

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not reportable Case No: 474/2021 In the matter between: THE NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS APPELLANT and TIMOTHY FRANS MOYANE RESPONDENT Neutral Citation: The National Director of Public Prosecutions v Moyane (474/2021) [2022] ZASCA 79 (31 May 2022) Coram: ZONDI, GORVEN and HUGHES JJA and MATOJANE and SMITH AJJA Heard: 5 May 2022 Delivered: 31 May 2022 Summary: Asset forfeiture – Prevention of Organised Crime Act 121 of 1998 – whether the vehicle was the proceeds of unlawful activities – substantial amount of money paid directly to the dealership for the purchase price emanated from third parties and was not accounted for – Procedure – full court treatment of evidence flawed – no real, genuine or bona fide dispute of fact arose on papers. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: The Gauteng Division of the High Court, Pretoria (Louw J, Jordaan AJ concurring, Fischer J dissenting) sitting as a Full Court: The appeal succeeds with costs. The order of the full court of the Gauteng Division of the High Court, Pretoria, is set aside and is replaced with the following: ‘1 An order is granted in terms of the provisions of s 50 of the Prevention of Organised Crime Act 121 of 1998 (the POCA) declaring forfeit to the state certain property (the property), which is presently subject to the preservation of property order granted by this Court under the above case number 51250/2011 on 9 September 2011 namely a 2010 Volkswagen 364 Scirocco motor vehicle with registration number FGC 937 MP; 2 The property shall vest in the State upon granting of the order; 3 The appointment of a curator bonis is dispensed with; 4 A duly authorised employee of the Asset Forfeiture Unit is authorised to: 4.1 Assume control of the property and take it into his/her custody; 4.2 Pay the proceeds of the property, once realized, into the Criminal Asset Recovery Account established under s 63 of the POCA, number 80303056, held at the South African Reserve Bank, Vermeulen Street, Pretoria. 5 Any person whose interest in the property concerned is affected by the forfeiture order, may, within 20 days after he or she has acquired knowledge of such order, set the matter down for variation or rescission by the Court. 6 The costs of the application are awarded to the applicant.’ ______________________________________________________________ JUDGMENT ______________________________________________________________ Zondi JA (Gorven and Hughes JJA and Matojane and Smith AJJA concurring): [1] This appeal, with special leave of this Court, concerns the question of whether a Volkswagen 364 Scirocco motor vehicle with registration number FGC 937 MP (the vehicle) represents ‘the proceeds of unlawful activities’ and/or is ‘an instrumentality of an offence’ within the meaning of the Prevention of Organised Crime Act 121 of 1998 (the Act), and so liable to forfeiture under s 50(1)(a) of the Act. The vehicle is registered in the name of one Albert Mathews Sithole (Sithole), who was the second respondent in the court of first instance. Although Sithole had filed a notice to oppose the forfeiture application, he did not file an answering affidavit setting out the basis of his opposition. [2] The appellant, the National Director of Public Prosecutions (NDPP), applied for and was granted a preservation order in terms of s 38 of the Act in respect of the vehicle by the Gauteng Division of the High Court, Pretoria (the high court), on September 2011 on the basis that the vehicle is an instrumentality of an offence and/or the proceeds of unlawful activities. In subsequent forfeiture proceedings in terms of s 48(1) of the Act, the high court (per Mavundla J sitting as court of first instance) found, amongst other things, that the vehicle was an instrumentality of unlawful activity and ordered its forfeiture to the state. The learned judge granted the respondent, Mr Timothy Frans Moyane (Moyane), leave to appeal to the full court. On appeal, the full court, of the same Division, in a majority judgment (per Louw J and Jordaan J concurring), upheld the appeal, set aside the order of the court of first instance and replaced it with an order dismissing the application with costs. Fisher J dissented and, in a minority judgment, held that she would have dismissed the appeal with costs. Aggrieved by the order of the full court, the NDPP sought and obtained special leave of appeal from this Court. [3] It was accepted by the parties in the appeal before the full court that the NDPP’s case based on the allegation that the vehicle was an instrumentality of an offence was not sustained by the evidence on which the NDPP relied. Therefore, the matter was adjudicated on the basis of whether the NDPP had established that the vehicle is the proceeds of unlawful activities, namely money laundering. I agree that was the correct approach, and I will approach the issues in this appeal on the same basis. [4] The appeal turns on whether the evidence adduced by the NDPP in support of its case, established that the concerned vehicle represents the proceeds of unlawful activities. This is so because, in terms of s 50 of the Act,1 as interpreted by this Court in National Director of Public Prosecutions v Parker, the onus is on the NDPP to prove on a balance of probabilities that it is entitled to a forfeiture order.2 [5] Section 1 of the Act defines ‘proceeds of unlawful activities’ as ‘any property or any services, advantage, benefit or reward which was derived, received or retained, directly or indirectly, in the Republic or elsewhere, at any time before or after the commencement of this Act, in connection with or as a result of any unlawful activity carried on by any person, and includes any property representing property so derived.’ 1 Section 50 of the Act provides as follows: ‘(1) The High Court shall, subject to section 52, make an order applied for under section 48(1) if the Court finds on a balance of probabilities that the property concerned— (a) is an instrumentality of an offence referred to in Schedule 1; or (b) is the proceeds of unlawful activities. (2) The High Court may, when it makes a forfeiture order or at any time thereafter, make any ancillary orders that it considers appropriate, including orders for and with respect to facilitating the transfer to the State of property forfeited to the State under such an order. (3) The absence of a person whose interest in property maybe affected by a forfeiture order does not prevent the High Court from making the order. (4) The validity of an order under subsection (1) is not affected by the outcome of criminal proceedings, or of an investigation with a view to institute such proceedings, in respect of an offence with which the property concerned is in some way associated. (5) The Registrar of the Court making a forfeiture order must publish a notice thereof in the Gazette as soon as practicable after the order is made. (6) A forfeiture order shall not take effect— (a) before the period allowed for an application under section 54 or an appeal under section 55 has expired: or (b) before such an application or appeal has been disposed of.’ 2 National Director of Public Prosecutions v Parker [2006] 1 All SA 317 (SCA) para 18. [6] This Court, in National Director of Public Prosecutions v RO Cook Properties (Pty) Ltd, held that the definition requires that the property in respect of which a forfeiture order is sought must have been ‘derived, received or retained’ ‘in connection with or as a result of’ unlawful activities.3 The proceeds must in some way be the consequences of unlawful activity. [7] Section 52, to which reference is made in s 50, permits a court to exclude from the operation of a forfeiture order certain interests in the property concerned if it is shown by the applicant for such exclusion that the interest was legally acquired and that the applicant ‘neither knew nor had had reasonable grounds to suspect’ that the property in which the interest is held, is the proceeds of unlawful activities.4 3 National Director of Public Prosecutions v R O Cook Properties (Pty) Ltd [2004] ZASCA 36 2004(2) SACR 208 (SCA) para 64. 4 See specifically s 52(2)(b)(ii). Section 52 of the Act provides that: ‘(1) The High Court may, on application— (a) under section 48(3); or (b) by a person referred to in section 49(4), and when it makes a forfeiture order, make an order excluding certain interests in property which is subject to the order, from the operation thereof. (2) The High Court may make an order under subsection (1) if it finds on a balance of probabilities that the applicant for such an order— (a) had acquired the interest concerned legally; and (b) neither knew nor had reasonable grounds to suspect that the property in which the interest is held— (i) is an instrumentality of an offence referred to in Schedule 1: or (ii) is the proceeds of unlawful activities. (3) (a) If an applicant for an order under subsection (1) adduces evidence to show that he or she did not know or did not have reasonable grounds to suspect that the property in which the interest is held, is an instrumentality of an offence referred to in Schedule 1, the State may submit a return of the service on the applicant of a notice issued under section 51(3) in rebuttal of that evidence in respect of the period since the date of such service. (b) If the State submits a return of the service on the applicant of a notice issued under section 51(3) as contemplated in paragraph (a), the applicant for an order under subsection (1) must, in addition to the facts referred to in subsection (2)(a) and (2)(b)(i), also prove on a balance of probabilities that, since such service, he or she has taken all reasonable steps to prevent the further use of the property concerned as an instrumentality of an offence referred to in Schedule 1. (4) A High Court making an order for the exclusion of an interest in property under subsection (1) may, in the interest of the administration of justice or in the public interest, make that order upon the conditions that the Court deems appropriate including a condition requiring the person who applied for the exclusion to take all reasonable steps, within a period that the Court may determine, to prevent the future use of the property as an instrumentality of an offence referred to in Schedule 1.’ [8] As the NDPP is seeking final relief in the forfeiture proceedings, any factual dispute arising on the papers should be resolved in terms of the Plascon-Evans rule5 as clarified by this Court in National Director of Public of Prosecutions v Zuma.6 In this case, this Court clarified the Plascon-Evans principle as follows:7 ‘Motion proceedings, unless concerned with interim relief, are all about the resolution of legal issues based on common cause facts. Unless the circumstances are special, they cannot be used to resolve factual issues because they are not designed to determine probabilities. It is well established under the Plascon-Evans rule that where in motion proceedings disputes of fact arise on the affidavits, a final order can be granted only if the facts averred in the applicant's (Mr Zuma’s) affidavits, which have been admitted by the respondent (the NDPP), together with the facts alleged by the latter, justify such order. It may be different if the respondent’s version consists of bald or uncreditworthy denials, raises fictitious disputes of fact, is palpably implausible, far- fetched or so clearly untenable that the court is justified in rejecting them merely on the papers. The court below did not have regard to these propositions and instead decided the case on probabilities without rejecting the NDPP’s version.’ [9] As regards the meaning of a denial by the respondent of a fact alleged by the applicant, which may be sufficient to raise a real, genuine or bona fide dispute of facts, this Court in Wightman t/a J W Construction v Headfour (Pty) Ltd and Another held:8 ‘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 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 5 Plascon-Evans Paints (TVL) Ltd. v Van Riebeck Paints (Pty) Ltd. [1984] 2 All SA 366 (A); 1984 (3) SA 623 at 634E -635C. 6 National Director of Public of Prosecutions v Zuma [2009] ZASCA 1; 2009 (2) SA 277 (SCA); 2009 (1) SACR 361 (SCA); 2009 (4) BCLR 393 (SCA); [2009] 2 All SA 243 (SCA). 7 Ibid para 26. (Footnotes Omitted.) 8 Wightman t/a J W Construction v Headfour (Pty) Ltd and Another [2008] ZASCA 6; [2008] 2 All SA 512 (SCA); 2008 (3) SA 371 (SCA) para 13. 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.’ [10] This is the background against which I seek to determine the issue identified in para 1 of the judgment, namely whether the vehicle is the proceeds of unlawful activities and if it is, whether it is liable to forfeiture. Reverting to the facts of this case, the evidence relied upon by the NDPP is set out in affidavits by Advocate Priyadarshnee Biseswar, the Deputy Director of Public Prosecutions and of Sergeant Penuel Sithembiso Mathanda Ngwenyama (Sgt Ngwenyama) of the Organised Crime Unit, Nelspruit. [11] It appears from the evidence of Sgt Ngwenyama that Moyane had been under police investigation for the crimes of gold and diamond smuggling, drug dealing and money laundering since 2008. During the search and seizure operation conducted by the police at Moyane’s house, several items were seized, including a cash amount of R120 000 found hidden under his mattress. It is common cause that the forfeiture proceedings relating to this amount are still pending. [12] In November 2010, Sgt Ngwenyama conducted an asset search in the course of the investigation of Moyane. The search revealed that in March 2010, Moyane acquired this vehicle, for which he paid an amount of R538 320. The acquisition was not subject to a credit agreement. A substantial amount of the purchase price was paid by various third parties who Moyane claimed were his business associates and/or friends. Three months later, after acquiring the vehicle, Moyane caused its ownership to be transferred to Sithole. [13] Sgt Ngwenyama investigated how the vehicle was acquired, first by Moyane and later by Sithole. His investigation revealed the following: The vehicle initially belonged to Palm Motors, a Volkswagen dealership in White River. According to Ms Juanita Anne Brinkman (Brinkman), a salesperson of Palm Motors, who was involved in the sale of the vehicle to Moyane, the latter had initially wanted to have the vehicle registered in Mr Gideon Casey Mchirawondu’s name (Mchirawondu). Mchirawondu was with Moyane when the terms of sale of the vehicle were discussed. But that became impossible as Mchirawondu died before Palm Motors could source the vehicle. It was thus registered in Moyane’s name. Moyane denied that he had told Brinkman that the vehicle, once sourced, was to be registered in Mchirawondu’s name. He contended that Brinkman must have misunderstood him because right from the beginning, he told her that he was the purchaser of the vehicle and that it was to be registered in his name. [14] On 22 September 2009, Moyane deposited an amount of R20 000 in cash into the bank account of Palm Motors. Moyane claimed that he withdrew this amount from his bank account held at First National Bank (FNB). This cannot be true because the bank statement for this account for the period of 1 September 2009 to 1 December 2009 indicates that no cash withdrawal of R20 000 was made from it on 22 September 2009 or shortly thereafter. This amount of R20 000, therefore, remains unaccounted for. It appears to me that Moyane’s evidence regarding the source of this amount, which is quite substantial, was untruthful and is a fact which tends to strengthen the NDPP’s case against Moyane.9 [15] On 1 February 2010, an amount of R100 000 was electronically transferred into the bank account of Palm Motors. This payment, Moyane 9 Smit v Arthur 1976 (3) SA 378 (A) at 386A. stated, was a loan emanating from the bank account of Richbar CC belonging to his friend, Aaron Mlambo. No particulars of the loan were given, including whether it was in writing or oral. Since a close corporation was involved, and Mlambo was a friend, the very least one would expect would be an excerpt from the books of that entity. If this was not available, it would be expected that Moyane would say why this was the case. [16] On 2 February 2010, another electronic payment of R60 000 was made into the bank account of Palm Motors. The explanation given by Moyane for this payment is that it was made by his business associate, John Thembe, for sub-contracting work Moyane’s Chihudho Trading CC had performed on his behalf. Thembe had obtained a tender from Eskom to provide certain services to it. Thembe provided such services through a close corporation in which he held an interest, namely Delta Blue Trading CC. Delta Blue Trading sub- contracted the performance of some of the services to Eskom to Moyane’s Chihudho Trading CC. The payment was thus made pursuant to the subcontracting agreement. Moyane had asked Thembe to transfer monies due to him directly into the account of Palm Motors instead of Chihudho Trading CC. Moyane produced no underlying documentation by way of either invoices, book entries for either close corporation, or contracts in support of his assertion that the amount paid to Palm Motors was for work Chihudho Trading CC had rendered on behalf of Thembe’s Delta Blue Trading. [17] On 19 March 2010, two cash deposits in the amounts of R150 000 and R94 000, respectively, were made into the account of Palm Motors. The bank deposits indicate that the person who deposited R150 000 was EN Ngwenya, and the payer of R94 000 was John Thembe. Moyane stated that the cash deposit of R150 000 from Ngwenya was a fee for a truck that Ngwenya had rented from Moyane and his brother. Ngwenya is deceased and thus cannot confirm this payment. But the fact that Ngwenya is no longer available to confirm this payment does not absolve Moyane from his obligation to secure confirmation of payment from his brother, the truck's co-owner, unless, of course, the payment was not disclosed to him. Regarding the payment of R94 000, Moyane explained that it was paid by Thembe in terms of a subcontracting agreement entered through Chihudho Trading CC for work done in accordance with the arrangement he had with Thembe. [18] On 20 March 2010, a cash deposit of R35 000 was made into Palm Motors’s account. Thembe is reflected in the bank deposit slip as the payer of this amount. Moyane’s version is that it was another payment for services rendered by Chihudho Trading CC to Thembe’s Delta Blue Trading. There are no supporting documents such as invoices for the payment received from Thembe. The financial accounts of Chihudho Trading CC were not disclosed to indicate how payments received from Thembe were treated from an accounting point of view. A further deposit of R9 400 was also made by Thembe, presumably also for subcontracting work. [19] Finally, a cheque payment of R70 000 was made to Palm Motors on 23 March 2010. Moyane claimed that it was from his personal funds. The cheque was drawn against Chihudho Trading CC’s account held with First National Bank, Nelspruit. A copy of this bank account indicates that between 30 November 2009 and 19 March 2010, no activity took place on this account. On 19 March 2010, two cash deposits in the amount of R11 200 and R60 000, respectively, were made into this account. Upon payment of the total purchase price, Palm Motors transferred the vehicle into Moyane’s name. [20] Moyane further stated that he generated sufficient income from his two close corporations to be able to afford the vehicle. He alleged that he is a member with 50 per cent interest in Chihudho Trading CC and a director of Advisor Progressive College CC, and that these entities are a source of his income. But he did not provide financial statements for these two entities in support of his claims. And, as indicated, there are no records of any salary or drawings paid into his personal account. [21] As I have alluded to, within three months of acquiring the vehicle, in June 2010, Moyane transferred it into Sithole’s name for no consideration. Sithole is physically challenged and unemployed. He is a recipient of a disability grant from the South African Social Security Agency, and he does not have a driver’s licence. [22] Moyane admitted that he transferred the vehicle to Sithole. This he did for two reasons, namely to keep it beyond the reach of his wife in the event of a divorce and secondly, to provide Sithole with some form of an asset he could liquidate as and when he needed money. Moyane explained that Sithole had been seriously injured in a motor vehicle collision in November 2008, and it was out of compassion that he gave Sithole his vehicle. [23] From the investigations conducted by the police regarding the cross- border movement of the vehicle, it emerged that between 25 February 2011 and 21 June 2011, Moyane used the vehicle on six occasions. On these occasions, Moyane travelled through Lebombo and Beitbridge Border Posts. Again, accompanied by one Charmaine Mtshali, Moyane went through the Beitbridge Border Post on 17 March 2011. [24] Between 30 April 2010 and 9 July 2011, Sithole travelled through Lebombo Border Post on six occasions, not as a passenger or driver but as a pedestrian. From the evidence regarding the vehicle's movement, it does not seem that Sithole used it. Even when the police seized it on 30 September 2011, it was driven by Moyane’s wife, and Sithole was nowhere near the vehicle. [25] Sithole denied that the vehicle was acquired with the proceeds of crime and/or acquired by way of an affected gift as defined in the Act.10 He claimed that he contributed to the purchase of the vehicle. However, Sithole provided 10 Section 12 of Prevention of Organised Crime Act 121 of 1998 defines it as follows: ‘(1) In this Chapter, unless the context indicates otherwise— “affected gift” means any gift— (a) made by the defendant concerned not more than seven years before the fixed date; (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.’ neither proof of his employment nor the contribution he allegedly made in respect of the vehicle. He also failed to produce proof of his driver’s licence. What he attached to his affidavit he deposed to in terms of s 39(5) of the Act is a copy of his identity document, not his driver’s licence. Although Sithole had filed a notice to oppose forfeiture proceedings, he failed to file his answering affidavit. Moyane sought to justify Sithole's failure to file his answering affidavit on the basis that he was not available, and was in Mozambique. Moyane, though he claimed to have authority from Sithole to depose to an affidavit on Sithole’s behalf, failed to provide proof of such authority. [26] The full court considered the allegations on which the NDPP relied for the contention that the vehicle was the proceeds of unlawful activities and the version put up by Moyane to dispute the NDPP’s allegations. To the extent that there were factual disputes between the NDPP’s version and that of Moyane, it resolved those disputes in favour of Moyane on the basis that it could not be said that Moyane’s version ‘is palpably implausible, far-fetched, or so clearly untenable that [it] would be justified in rejecting it on the papers.’ [27] The full court stated that what the court of first instance could have done was to refer the factual disputes for oral evidence in terms of rule 6(5)(g) of the Uniform Rules of Court. Although it was competent for the full court in the exercise of its discretion to make an order referring the disputes for oral evidence, notwithstanding that the NDPP had not asked for such referral, it declined to do so on the basis that the vehicle might have significantly lost its value having regard to the time that had passed since it was seized by the police in September 2011. This was not a correct basis for its failure to refer the disputed facts for oral evidence, if indeed, this was appropriate. [28] In my view, the full court’s approach to the assessment of the evidence was flawed. The evidence adduced by the NDPP in support of its case established that the vehicle is the proceeds of crime. The case for the NDPP was that the vehicle was acquired through money laundering. The majority of the funds to finance the vehicle emanated from various people and entities allegedly either as payment for services rendered by Moyane’s Chihudho Trading CC on behalf of such people or entities or as a loan to him. In relation to the cash deposit of R20 000 that Moyane paid to Palm Motors in September 2009, Moyane gave an untruthful version regarding its source. The NDPP established that it was not from the bank account, which he claimed was the source of the funds. If a cash deposit of R20 000 was from a legitimate source, why did he give an untruthful version about its origin? [29] I am not satisfied that a real, genuine and bona fide dispute of fact existed in this matter. Moyane’s averments regarding the source of funds for the purchase of the vehicle and his explanation why, shortly after its acquisition, he caused it to be registered in the name of Sithole, were of general nature and failed substantially to address the facts he disputed. He failed to produce documents to support his claims that the monies that were paid into the dealership’s account on his instruction were from legitimate sources. These were all matters within his knowledge. [30] Moyane made bald allegations unsupported by any evidence or reason, and which are designed simply to attempt to create disputes of fact. Moyane’s denials and averments failed to destroy the factual foundation of the NDPP’s case and are insufficient to raise a real, genuine or bona fide dispute regarding the facts alleged by the NDPP. The court of first instance correctly rejected them. [31] In my view, the NDPP had made out a case for the relief it sought. From the totality of the facts, the inescapable inference is that the funds were derived from unlawful activities and that the vehicle was thus shown to have been the proceeds of crime. Moreover, the fact that shortly after its acquisition, it was registered in the name of Sithole shows that the whole purpose was to conceal or disguise its ownership. [32] The full court should have approached the application upon the foundation that Moyane had failed to raise real, genuine and bona fide disputes of fact in relation to the source of funds used to finance the acquisition of the vehicle and the reason for its registration in the name of Sithole. That being the case, there was no basis for referring the matter to oral evidence.11 [33] In my view, the appeal should succeed. Regarding costs, it was correctly submitted by counsel for the NDPP that costs should be limited to costs of one counsel, even though the NDPP employed two counsel. This is the basis on which the costs order should be formulated. [34] In the result, I make an order in the following terms: The appeal succeeds with costs. The order of the full court of the Gauteng Division of the High Court, Pretoria, is set aside and is replaced with the following: ‘1 An order is granted in terms of the provisions of s 50 of the Prevention of Organised Crime Act 121 of 1998 (the POCA) declaring forfeit to the state certain property (the property), which is presently subject to the preservation of property order granted by this Court under the above case number 51250/2011 on 9 September 2011 namely a 2010 Volkswagen 364 Scirocco motor vehicle with registration number FGC 937 MP; 2 The property shall vest in the State upon granting of the order; 3 The appointment of a curator bonis is dispensed with; 4 A duly authorised employee of the Asset Forfeiture Unit is authorised to: 4.1 Assume control of the property and take it into his/her custody; 4.2 Pay the proceeds of the property, once realized, into the Criminal Asset Recovery Account established under s 63 of the POCA, number 80303056, held at the South African Reserve Bank, Vermeulen Street, Pretoria. 5 Any person whose interest in the property concerned is affected by the forfeiture order may within 20 days after he or she has acquired knowledge of such order, set the matter down for variation or rescission by the Court. 6 The costs of the application are awarded to the applicant.’ _______________________ D H Zondi Judge of Appeal 11 Lombaard v Droprop CC and Others [2010] ZASCA 86; 2010 (5) SA 1 (SCA); [2010] 4 All SA 229 (SCA) para 26. Appearances For appellant: J L van der Merwe SC (with S de Villiers) Instructed by: The State Attorney, Pretoria The State Attorney, Bloemfontein For respondent: M van der Westhuizen Instructed by: Krause Attorneys Incorporated, Johannesburg 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: 31 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 The National Director of Public Prosecutions v Moyane (474/2021) [2022] ZASCA 79 (31 May 2022) Today the Supreme Court of Appeal (SCA) handed down a judgment upholding, with costs, an appeal against the decision of the Gauteng Division of the High Court, Pretoria (the high court). The issue before the SCA concerned the question of whether a Volkswagen 364 Scirocco motor vehicle with registration number FGC 937 MP (the vehicle) represented ‘the proceeds of unlawful activities’ and/or was ‘an instrumentality of an offence’ within the meaning of the Prevention of Organised Crime Act 121 of 1998 (the Act), and so liable to forfeiture under s 50(1)(a) of the Act. The vehicle was first registered in the name of Moyane and shortly thereafter in the name of one Albert Mathews Sithole (Sithole), who was the second respondent in the court of first instance. Sgt Ngwenyama investigated how the vehicle was acquired, first by Moyane and later by Sithole. His investigation revealed the following: The vehicle initially belonged to Palm Motors, a Volkswagen dealership in White River. According to Ms Juanita Anne Brinkman (Brinkman), a salesperson of Palm Motors, who was involved in the sale of the vehicle to Moyane said, the latter had initially wanted to have the vehicle registered in Mr Gideon Casey Mchirawondu’s name (Mchirawondu). Mchirawondu was with Moyane when the terms of sale of the vehicle were discussed. But that became impossible as Mchirawondu died before Palm Motors could source the vehicle. It was thus registered in Moyane’s name. Moyane denied that he had told Brinkman that the vehicle, once sourced, was to be registered in Mchirawondu’s name. He contended that Brinkman must have misunderstood him because right from the beginning, he told her that he was the purchaser of the vehicle and that it was to be registered in his name. Payment for its purchase price emanated from various third parties, who on the in the instruction of Moyane made into dealership account. As the SCA had alluded, within three months of acquiring the vehicle, in June 2010, Moyane transferred it into Sithole’s name for no consideration. In September 2011, the appellant, the National Director of Public Prosecutions (NDPP), applied for and was granted a preservation order in terms of s 38 of the Act in respect of the vehicle by the high court on the basis that the vehicle was an instrumentality of an offence and/or the proceeds of unlawful activities. In subsequent forfeiture proceedings in terms of s 48(1) of the Act, the high court (per Mavundla J sitting as court of first instance) found that the vehicle was an instrumentality of unlawful activity and ordered its forfeiture to the state. On appeal, the full court, of the same Division, in a majority judgment (per Louw J and Jordaan J concurring), upheld the appeal, set aside the order of the court of first instance and replaced it with an order dismissing the application with costs. In contrast, Fisher J dissented and, in a minority judgment, held that she would have dismissed the appeal with costs. Aggrieved by the order of the full court, the NDPP sought and obtained special leave of appeal from this Court. It was accepted by the parties in the appeal before the full court that the NDPP’s case, based on the allegation that the vehicle was an instrumentality of an offence was not sustained by the evidence on which the NDPP relied. Therefore, the matter was adjudicated based on whether the NDPP had established that the vehicle was the proceeds of unlawful activities, namely money laundering. The SCA agreed that was the correct approach, and it approached the issues in this appeal on the same basis. Following this, the SCA held that the appeal turned on whether the evidence adduced by the NDPP in support of its case established that the concerned vehicle represented the proceeds of unlawful activities. Relying on case law, the SCA held that this was so because, in terms of s 50 of the Act, the onus was on the NDPP to prove on a balance of probabilities that it was entitled to a forfeiture order. Accordingly, the SCA held that the proceeds must in some way be the consequences of unlawful activity. In the SCA’s view, the full court’s approach to assessing the evidence was flawed. Accordingly, the SCA held that the evidence adduced by the NDPP in support of its case established that the vehicle was the proceeds of crime. Hence, the case for the NDPP was that the vehicle was acquired through money laundering. In addition, the SCA held that it was not satisfied that a real, genuine and bona fide dispute of fact existed in this matter. Thus, Moyane’s averments regarding the source of funds for the purchase of the vehicle and his explanation why, shortly after its acquisition, he caused it to be registered in the name of Sithole were of general nature and failed substantially to address the facts he disputed. The SCA found that he failed to produce documents to support his claims that the monies that were paid into the dealership’s account on his instruction were from legitimate sources. According to the SCA, these were all matters within his knowledge. Furthermore, the SCA found that Moyane made bald allegations unsupported by any evidence or reason and which were designed simply to attempt to create a dispute of fact. Given that, Moyane’s denials and averments failed to destroy the factual foundation of the NDPP’s case and were insufficient to raise a real, genuine or bona fide dispute regarding the facts alleged by the NDPP. Hence, the court of first instance correctly rejected them. In the SCA’s view, the NDPP had made out a case for the relief it sought, and that from the totality of the facts, there was an inescapable inference that the funds were derived from unlawful activities and that the vehicle was thus shown to have been the proceeds of crime. Moreover, the fact that shortly after its acquisition, it was registered in the name of Sithole showed that the whole purpose was to conceal or disguise its ownership. Finally, the SCA held that full court should have approached the application upon the foundation that Moyane had failed to raise real, genuine and bona fide disputes of fact in relation to the source of funds used to finance the acquisition of the vehicle and the reason for its registration in the name of Sithole. As a result, the appeal succeeded. ~~~~ends~~~~

3682

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 669/2020 In the matter of: THE NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS (EX PARTE APPLICATION) APPELLANT Neutral citation: The National Director of Public Prosecutions (Ex Parte Application) (Case no 669/2020) [2021] ZASCA 142 (7 October 2021) Coram: SALDULKER, PLASKET and MBATHA JJA and MOLEFE and UNTERHALTER AJJA 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 10h00 on 7 October 2021. Summary: Prevention of Organised Crime Act 121 of 1998 (POCA) – ss 26 and 38 – Uniform Rules of Court – preservation of property order – urgency – whether the appellant must prove urgency when applying for a preservation order. ______________________________________________________________________ ORDER ______________________________________________________________________ On appeal from: Mpumalanga Division of the High Court, Mbombela (Roelofse AJ sitting as court of first instance): The appeal is upheld. The order of the high court is set aside and substituted as follows: ‘(a) The appellant may re-enroll the application in terms of s 38(1) of the Prevention of Organised Crime Act 121 of 1998 (POCA), in its original form as an ex parte application, with the Registrar of the high court. (b) The application must be set down in accordance with rule 6(4)(a) of the Uniform Rules of Court. (c) A judge of the high court, as soon as may be reasonably and practically possible after such re-enrolment, shall consider and deal with the application as an ex parte application, without need for service, and decide the application on its merits in accordance with the requirements for the making of the order sought as laid down in s 38(2) of POCA.’ ______________________________________________________________________ JUDGMENT ______________________________________________________________________ Molefe AJA (Saldulker, Plasket and Mbatha JJA and Unterhalter AJA concurring): [1] This is an appeal against an order made by Roelofse AJ in the Mpumalanga Division of the High Court, Mbombela (the high court), striking from the roll an ex-parte application in terms of s 38 of the Prevention of Organised Crime Act 121 of 1998 (POCA) for a preservation order. The core issue in this appeal is whether the appellant, the National Director of Public Prosecutions (the NDPP), is required, when bringing an application in terms of s 38 of POCA, to deal with urgency in the founding affidavit, and to make out a case for urgency before the merits of the matter may be determined. [2] The facts are briefly that on 16 August 2019, three men were found in a timber plantation in Mpumalanga in possession of the carcasses of 11 grey duiker, four bush buck, one mountain reed buck and one serval cat, which had recently been poached. The carcasses and the rifle with which the animals were hunted were found in a Toyota Hilux vehicle (the vehicle) which belonged to one of the men. [3] The three men were arrested and charged with a number of offences in the Graskop Magistrates’ Court (the magistrates’ court), where they were subsequently admitted to bail. The vehicle and the rifle were seized by the South African Police Service (SAPS) on 16 August 2019. The seizure was effected in terms of s 20 of the Criminal Procedure Act 51 of 1997 (the CPA).1 1 This provision authorises the State, in accordance with Chapter 2 of the CPA, to seize an article which, inter alia, ‘is concerned in or is on reasonable grounds believed to be concerned in the commission or suspected commission of an offence’ or ‘which may afford evidence of the commission or suspected commission of an offence’. [4] The case was, without the knowledge of the prosecution, struck from the criminal roll on 30 January 2020, and no reasons were provided on the record as to why this occurred. The magistrate, mero motu, without an application brought on notice to the prosecution, and in violation of the CPA,2 ordered the police to return the vehicle to one of the accused, the registered owner of the vehicle. [5] This turn of events prompted the NDPP to apply to the high court for a preservation order in terms of s 38 of POCA. The matter served before Roelofse AJ who raised a concern about the delay in the bringing of the s 38 application. He struck the matter from the roll on the basis that urgency had not been established, as required by a practice directive of the court, although he accepted that a proper case had been made out for the granting of a preservation order on the merits. He granted the NDPP leave to appeal to this Court. [6] The NDPP does not accept that the requirements for urgency were not satisfied. The core issue which has to be addressed in this appeal is whether the NDPP is required, when bringing an application in terms of s 38 of POCA, to make out a case of urgency in the founding affidavit before the merits can be determined. This requires a consideration of the legislation, the practice directive, and case law, particularly the judgment of this Court in Ex parte National Director of Public Prosecutions3 (Ramadhani). [7] The starting point in this appeal is s 38 of the POCA, which sets out the procedure that may be used to apply for a preservation order. It provides: ‘(1) The National Director may by way of ex parte application apply to a 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. (2) The High Court shall make an order referred to in subsection (1) if there are reasonable grounds to believe that the property concerned— (a) is an instrumentality of an offence referred to in Schedule 1; 2 S v Vorster and Another 2006 (1) SACR 611 (T). 3 National Director of Public Prosecutions [2018] ZASCA 86; 2018 (2) SACR 176 (SCA) The case concerned a preservation order in relation to a vehicle owned by one Mr Ramadhani. (b) is the proceeds of unlawful activities; or (c) is property associated with terrorist and related activities. (3) A High Court making a preservation of property order shall at the same time make an order authorising the seizure of the property concerned by a police official, and any other ancillary orders that the court considers appropriate for the proper, fair and effective execution of the order. . . . .’ [8] Rule 6(4)(a) of the Uniform Rules of Court governs the procedure for setting down ex parte applications. It provides that every application brought ex parte shall be filed with the Registrar and set down before noon on the court day but one preceding the day on which it is to be heard. The court may dispense with the forms and service provided for in the rules, and may dispose of such matter at such time and place and in such manner, and in accordance with such procedure (which shall as far as practicable be in terms of the rules) as it deems fit. [9] The Constitutional Court held in National Director of Public Prosecutions and Another v Mohamed NO and Others,4 that s 38(1) ‘. . . means no more than that, if the National Director is desirous of obtaining an order under s 38, she or he may use an ex parte application. . .’. In other words, the procedure prescribed by the statute that may be used in an application for a preservation order is an ex parte application — which dispenses with notice to the respondent and service of the papers. [10] In Ramadhani,5 this Court decided an appeal against an order of the Mpumalanga Division of the High Court striking from the roll an ex parte application for a preservation order. This Court held: 10.1 that a then existing provision of a practice directive of the Mpumalanga Division of the High Court governing ex parte POCA applications was inconsistent with Uniform Rule 6(4)(a) and with s 38 of POCA; 4 National Director of Public Prosecutions and Another v Mahomed N O and Others 2003 (1) SACR 561; 2003 (5) BCLR 476; 2003 (4) SA 1 (CC) para 33. 5 Ramadhani paras 29-33. 10.2 that the practice directive could not be applied to restrict, undermine or negate these provisions; 10.3 that ex parte applications in terms of s 38 are by the by their nature urgent; and 10.4 that the approach to an ex parte application brought in terms of s 38(1) should be that a judge in chambers ought to consider the application and make the appropriate order as soon as it is reasonably and practically possible after such an application has been filed with the Registrar. [11] Pursuant to the Ramadhani judgment, the relevant practice directive was amended to bring the directive into conformity with the judgment. That practice directive was followed by one issued on 9 January 2020. The two practice directives embody similar provisions. Paragraph 11.3 of the January 2020 practice directive provides that applications in terms of POCA ‘shall be initiated by enrolment thereof on the unopposed roll or urgent roll provided urgency is justified’.6 In terms of paragraph 11.5 of the January 2020 practice directive, ‘[i]n granting an application brought ex parte . . . under [section] 38 of POCA, the court shall issue a rule nisi by completion of Form C to this Practice Directive seen in the context of the case of NDPP V Mohamed and Others 2003 (4) SA 1 (CC) at paras [32] and [51]. . .’.7 [12] It is important to highlight that paragraph 8 of the practice directive deals with unopposed applications. According to paragraph 8.1, unopposed applications are heard on Mondays and Fridays of the first, fourth and seventh weeks of every term, and the number of matters to be heard each day is limited to 100 matters divided between two judges. Paragraphs 8.4 and 8.5 deal with the setting down of unopposed matters. These paragraphs state: ‘8.4 The applicant shall ensure that papers are ready, i.e. indexed, paginated and bound together and filed with the Registrar’s clerk by not later than 12h00 on a Monday and Friday preceding the hearing on the following Monday and Friday of the motion week. 6 Paragraph 11.2 of the July 2019 Practice Directive contains a similar provision. 7 Paragraph 11.4 of the July 2019 Practice Directives contains a similar provision. 8.5 The Registrar’s clerk shall prepare the files and hand them over to the respective Judges by not later than 16h00 on a Monday and Friday preceding the week of hearing as indicated in 8.4 above.’ [13] Urgent applications may, according to paragraph 10.1 of the practice directive, ‘. . . be heard at 10h00 on every Tuesday of each week’, and according to paragraph 10.3, it is only in exceptional circumstances that urgent application will be heard at a different time or a different day. This paragraph regulates the setting down of ‘normal’ urgent application. They ‘must be filed with the Registrar by no later than 12h00 on Thursday of the preceding week to enable the Registrar to prepare and submit in time the file(s) to the judge on the urgent roll’. Paragraph 10.7 of the practice directive is one of the number of paragraphs dealing with ex parte applications. It provides that ‘[a]ll ex parte applications must be enrolled on the unopposed motion roll and unless urgency is averred and satisfied in the papers, it may be enrolled on the urgent roll’. (It appears that the word ‘unless’ is intended to be ‘if’.) [14] This Court in Ramadhani explained how a practice directive stands in relation to a statute, the Uniform Rules and the common law. Seriti JA held in this respect, that: ‘The practice directive is subordinate to any relevant statute, the common law and the Uniform Rules and it cannot be applied to restrict or undermine any piece of legislation, the Uniform Rules of Court or the common law. Practice directives deal essentially with the daily functioning of the courts and, their purpose is to supplement the rules of court. In this case, the court a quo afforded the practice directive statutory force overriding both s 38 of POCA and rule 6(4)(a) of the Uniform Rules which is impermissible. The practice directive should not negate the provisions of s 38 and rule 6(4)(a) of the Uniform Rules. In my view the portion of the practice directive dealing with ex parte applications is not applicable to ex parte applications brought in terms of s 38.’8 [15] The practice directives require an applicant in an urgent application to set out explicitly the circumstances which render the matter urgent. They further emphasise that while an application may be urgent, it may not be sufficiently urgent to be heard at the 8 Ramadhani para 31. time selected by the applicant. Furthermore, the practice directive provides that should the directives regarding urgent applications not be adhered to, the application will be struck off the roll. On the other hand, the NDPP contends that s 38 applications are by their nature inherently urgent, and there is no need to establish urgency in such matters. [16] It is important to note that the Ramadhani judgment was not the first judgment to pronounce on the nature of applications in terms of s 38 of POCA. The Ramadhani judgment quoted with approval the dictum in the National Director Public Prosecutions v Alexander and Others,9 where the court stated that it was to be presumed that the Legislature intended POCA proceedings to be ‘inherently sufficiently urgent’. [17] Regrettably, the aforementioned approach was overlooked by Roelofse AJ. The high court practice directives are incompatible with the nature of POCA applications and rule 6(4)(a). The misclassification of the s 38 applications as ordinary urgent applications was irregular. [18] The set down of urgent applications and unopposed applications in terms of paragraph 11.3 read with paragraphs 8.4 and 10.2 of the practice directives are clearly in conflict with the Uniform Rules. They set strict timelines and requirements as to the hearing of a s 38 POCA application, thereby detracting from Ramadhani, where this Court held that such applications must be heard as soon as reasonably and practicably possible , as they are inherently urgent. It is untenable to give effect to s 38 of POCA by recourse to practice directives that may delay the hearing of an application for a forfeiture order. [19] Practice directives provide essential guidance for the daily functioning of the courts. Practice directives may not derogate from legislation, the common law or rules of court that have obligatory force. A statute that permits the use of a procedure so as to make its enforcement effective must be adhered to. The competence of the courts to give practice directives is an important means by which the work of the courts may be carried 9 National Director Public Prosecutions v Alexander and Others 2001 (2) SACR 1 (T) at 13A-D. out. However, practice directives must facilitate what a statute requires. Practice directives should not place obstacles in the way of achieving the objects of a statute. [20] The high court, therefore, erred in the following respects. Firstly, in not finding that by its very nature, an application for a preservation order is inherently urgent, and that the appellant was entitled, as a matter of law, to approach the court ex parte, and by way of notice provided for in rule 6(4)(a), without having specifically to make out a case for urgency. Secondly, the high court erred in treating the practice directive as if it has statutory force that overrides the provisions of the POCA and the Uniform Rules. As the court below misdirected itself in these respects, when it struck the matter from the roll, the appeal must succeed. [21] In the result, I make the following order. The appeal is upheld. The order of the high court is set aside and substituted as follows: ‘(a) The appellant may re-enroll the application in terms of s 38(1) of the Prevention of Organised Crime Act 121 of 1998 (POCA), in its original form as an ex parte application, with the Registrar of the high court. (b) The application must be set down in accordance with rule 6(4)(a) of the Uniform Rules of Court. (c) A judge of the high court, as soon as may be reasonably and practically possible after such re-enrolment, shall consider and deal with the application as an ex parte application, without need for service, and decide the application on its merits in accordance with the requirements for the making of the order sought as laid down in s 38(2) of POCA.’ ____________________ D S MOLEFE Acting Judge of Appeal APPEARANCES: For Appellant: A J Freund SC (appearing with S J van der Walt) Instructed by: The State Attorney, Mbombela The 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: 7 October 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 National Director of Public Prosecutions (Ex Parte Application) (Case no 669/2020) [2021] ZASCA 142 (7 October 2021) Today the Supreme Court of Appeal (SCA) upheld the appeal by the appellant and set aside the order of the high court. The case concerned an appeal against an order made by Roelofse AJ in the Mpumalanga Division of the High Court, Mbombela (the high court), striking from the roll an ex-parte application in terms of s 38 of the Prevention of Organised Crime Act 121 of 1998 (POCA) for a preservation order. The practice directives required an applicant in an urgent application to set out explicitly the circumstances which render the matter urgent. The practice directive provided that should the directives regarding urgent applications not be adhered to, the application will be struck off the roll. The core issue in this appeal was whether the appellant, the National Director of Public Prosecutions (the NDPP), was required, when bringing an application in terms of s 38 of POCA, to make out a case of urgency in the founding affidavit, before the merits of the matter may be determined. The SCA held that this court had in National Director of Public Prosecutions [2018] ZASC 86; 2018(2) SACR 176 (SCA) (Ramadhani) decided an appeal against an order of the Mpumalanga Division of the High Court striking from the roll an ex parte application for a preservation order, and held there that an existing provision of a practice directive in that division governing ex parte POCA applications was inconsistent with Uniform Rule 6(4)(a) and with s38 of POCA. The SCA held that this court had explained in Ramadhani how a practice directive stood in relation to a statute. The SCA found that the high court, erred in the following respects. Firstly, in not finding that by its very nature, an application for a preservation order is inherently urgent, and that the appellant was entitled, as a matter of law, to approach the court ex parte, and by way of notice provided for in rule 6(4)(a), without having specifically to make out a case for urgency. Secondly, the high court erred in treating the practice directive as if it has statutory force that overrides the provisions of the POCA and the Uniform Rules. The SCA held that the high court practice directives are incompatible with the nature of POCA applications and rule 6(4)(a). Practice directives provide essential guidance for the daily functioning of the courts, and may not derogate from legislation, the common law, or rules of court that have obligatory force. Practice directives should not place obstacles in the way of achieving the objects of a statute. As the court below misdirected itself in these respects, when it struck the matter from the roll, the SCA found that the appeal must succeed. --------oOo--------

1842

non-electoral

2011

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 456/2010 In the matter between: CELLULAR INSURANCE MANAGERS (PTY) LTD Appellant and FOSCHINI RETAIL GROUP (PTY) LIMITED Respondent Neutral citation: CIM v FOSCHINI (456/2010) [2011] ZASCA 85 (27 May 2011) Coram: Nugent, Malan, Tshiqi and Seriti JJA and Petse AJA Heard: 18 May 2011 Delivered: 27 May 2011 Summary: Termination of agreement – accrued rights – term implied by law. ______________________________________________________________ ORDER On appeal from: Western Cape High Court, (Cape Town) (Fourie J sitting as court of first instance): The appeal is dismissed with costs including the costs of two counsel. ________________________________________________________________ JUDGMENT MALAN JA (Nugent, Tshiqi and Seriti JJA and Petse AJA concurring) [1] This is an appeal against the judgment of Fourie J in the Western Cape High Court (Cape Town) who ordered the appellant, Cellular Insurance Managers (Pty) Ltd (CIM), to pay over to the respondent, Foschini Retail Group (Pty) Limited (Foschini), some R6 million with interest, being administration fees collected by CIM in respect of cellular phone insurance policies sold by Foschini; to provide a monthly accounting to Foschini; and to pay the costs. The appeal is with the leave of the court below. [2] Foschini’s claim is based on an oral agreement between the parties concluded in 2001 pursuant to which Foschini would market insurance policies covering cellular phones sold by it to its customers on behalf of CIM. The premiums due under the policies were to be paid by the customer to CIM by way of monthly debit orders. Foschini’s staff would assist the customer in completing the application form for the policy and forward it to CIM. It would also assist the customer with any queries and claims, undertake the necessary head office claims verification and reconciliation functions, and manage the cellular phone replacement procedure and collection of any excess at the time of a claim. The policy would remain in force while the customer continued to pay the premiums. [3] It is not in dispute that it was an express term of the agreement that in respect of each policy sold, CIM was obliged to pay to Foschini an amount of R5,00 (later increased to R R7,00, R8,50 and eventually R10) as an administration fee upon receipt of each and every premium paid by the customer to CIM. However, CIM pleaded as follows to the express term of the oral agreement: ‘The defendant alleges that it was a material, express, alternatively implied, further alternatively tacit, term of the oral agreement concluded between the defendant and the plaintiff, that the defendant was obliged to pay the plaintiff an amount upon receipt of each and every premium paid by the customer to the defendant, only for so long as the oral agreement between the parties remained in force.’ [4] It is not in dispute that the oral agreement, which was silent as to its duration, was terminable by either party on reasonable notice.1 The oral agreement between the parties was terminated by Foschini by notice with effect from 2 April 2007. Foschini’s claim is for the total amount of the administration fee due after termination of the oral agreement and a monthly accounting. The only issue is whether it was an implied term of the oral agreement that the administration fee would be payable only for as long as the oral agreement remained in force. CIM has abandoned all reliance on an express or a tacit term. There was no express agreement between the parties supporting the term relied upon by CIM. As CIM’s only witness, Mr J de Klerk, testified: ‘We certainly didn’t discuss any terms and conditions of that nature.’ This is supported by Mr A D M Liquito who was called as a witness by Foschini. The appellant argues that the term relied upon by themselves is a term imported by law,2 and in particular the 1 Putco Ltd v TV & Radio Guarantee Co (Pty) Ltd & other related cases 1985 (4) SA 809 (A) at 827I-J. 2 Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A) at 531D-533E. rule of law that on termination of an agreement ‘there is no longer any debt or right of action in existence’.3 [5] In a careful and reasoned judgment Fourie J found that the oral agreement contained an express provision that, in respect of each policy sold to a Foschini customer, CIM was obliged to pay to Foschini the agreed administration fee upon receipt by CIM of each and every premium paid by the customer to CIM. Since no limitation of time was agreed upon, the administration fee remained payable for the duration of each policy sold. Fourie J accepted that, although termination of an agreement usually puts an end to the rights and obligations of the parties thereunder, this usually applies only to the executory portion of the contract unless the parties have agreed otherwise. The learned judge further relied on Maw v Grant4 where it was stated that where ‘executory’ or ‘running’ contracts are terminated, ‘either party can recover from the other the contra prestation for those portions of the contract he has performed’. What the contra prestation in a particular case is depends on the construction of the agreement. Fourie J found, and it was common cause, that the marketing of the policies prior to termination of the oral agreement created rights for Foschini, that is the entitlement to payment of the administrative fee upon receipt by CIM of each and every premium paid by the customer. The learned judge therefore declined to import the term contended for into the oral agreement because it would have deprived Foschini of the benefits of the rights that have accrued to it. Fourie J also had a ‘much shorter’ answer; stating that a term normally implied by 3 Atteridgeville Town Council & another v Livanos t/a Livanos Brothers Electrical 1992 (1) SA 296 (A) at 304H-I. 4 Maw v Grant 1966 (4) SA 83 (C) at 87A-C. See further Walker Fruit Farms Ltd v Sumner 1930 TPD 394 at 401; Crest Enterprises (Pty) Ltd v Rycklof Beleggings (Edms) Bpk 1972 (2) SA 863 at 870G-H; Shelagatha Property Investments CC v Kellywood Homes (Pty) Ltd; Shelfaerie Property Holdings CC v Midrand Shopping Centre (Pty) Ltd 1995 (3) SA 187 (A) at 193H-I . law is excluded where it would be in conflict with the express terms of the agreement.5 [6] Foschini’s particulars of claim contain no reference to the termination of the oral agreement. In its particulars of claim it alleged the facts set out above and continued that it sold insurance policies on behalf of CIM, completed the various forms on their behalf ‘and complied with all of its obligations in terms of the agreement in respect of each policy sold by it’. Termination of the oral agreement thus forms no part of its cause of action; nor was there any need to allege that the agreement was terminated. CIM admitted that Foschini sold the insurances but pleaded that Foschini by giving notice of termination repudiated the oral agreement which repudiation was accepted by CIM. Because the agreement had been terminated, CIM was no longer obliged to perform in terms of it. CIM, however, does not rely on the repudiation or breach of the agreement any more but only on its termination with the consequences implied by law referred to above. The principles are the same, whatever way the agreement is terminated.6 [7] The entitlement to the administration fees payable after termination had accrued to Foschini prior to termination of the oral agreement. Foschini established an ‘accrued right’, that is a ‘right which is accrued, due, and enforceable as a cause of action independent of any executory part of the contract.’7 I have not been persuaded that anything ‘executory’ remained on which payment of the administration fee depended. The case of CIM was that payment of the administration fee depended on continued marketing of the policies. But the term entitling Foschini to payment is not expressed as being reciprocal to its continued marketing of the policies. Continued marketing is not 5 Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A) at 531E-F; Group Five Building Ltd v Minister of Community Development 1993 (3) SA 629 (A) at 653F-G. 6 Thomas Construction (Pty) Ltd (in liquidation) v Grafton Furniture Manufacturers (Pty) Ltd 1988 (2) SA 546 (A) at 564B-C. 7 Crest Enterprises (Pty) Ltd v Rycklof Beleggings (Edms) Bpk 1972 (2) SA 863 (A) at 870G-H; Thomas Construction (Pty) Ltd (in liquidation) v Grafton Furniture Manufacturers (Pty) Ltd 1988 (2) SA (A) at 561A-B. the contra prestation to Foschini’s entitlement to the administration fee. Moreover, there is nothing in the reference to Maw v Grant8 to ‘running contracts’ that detract from this conclusion. Indeed, that decision supports the conclusion of the court below. In Maw’s case the appellant’s right to payment was not dependent upon his undertaking further work. However, his right to ‘payment’, that is his right to have his name coupled with that of his contracting party as architects on a builders’ signboard, had accrued but was postponed until a time after the consensual termination of the agreement, if and when the building was constructed. [8] After argument was heard in this matter the appellant directed a letter to the Registrar with the request that a further written submission be considered by this court. The submission arises from a question put to counsel for CIM by the court during argument. It is not only improper to place further submissions to the court after argument but particularly so where the other side has refused, as it did here, to consent to it. I have nevertheless considered the argument put forward on behalf of CIM in this submission. As I have said earlier, what the contra prestation for Foschini’s right to the administration fees is depends on the construction of the agreement. To my mind, the submission does not add to the contentions already advanced on behalf of CIM. I am in agreement with the judgment of the court below and the reasons advanced for its decision. It follows that the appeal should be dismissed. [9] The appeal is dismissed with costs including the costs of two counsel. ________________ F R MALAN JUDGE OF APPEAL 8 Maw v Grant 1966 (4) SA 83 (C) at 87B-D. APPEARANCES: For Appellant: L J Morison SC P R V Strathern Instructed by: Brian Kahn Inc Johannesburg Claude Reid Inc Bloemfontein For Respondent: R W F MacWilliam SC, and L B urger SC Instructed by: C K Friedlander Shandling Volks Inc Cape Town 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: 27 May 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. CIM v FOSCHINI The Supreme Court of Appeal today dismissed an appeal by Cellular Insurance Managers (Pty) Ltd against the judgment of the Western Cape High Court ordering it to pay to Foschini Retail Group Ltd an amount of some R 6 million with interest, being administration fees collected by CIM in respect of cellular phone insurance sold by Foschini to its customers; to provide a monthly accounting to Foschini; and to pay the costs. Foschini’s claim was based on an oral agreement concluded in 2001 pursuant to which Foschini would market insurance policies covering cellular phones to its customers on behalf of CIM. The premiums due under the policies were to be paid by debit order by the customer to CIM. CIM was obliged to pay the monthly administration fee in respect of each and every policy sold to Foschini if and when it received the premiums from the customers. When Foschini terminated the oral agreement in 2007 the question arose whether it remained entitled to the administration fees after termination. The Western Cape High Court held that it was on two grounds: the first is that a court would not import a term into a contract if it would be in conflict with the express terms of the contract. The term CIM relied upon was a term implied by law and it was in conflict with the express term relating to payment of the administration fees. The other basis of the judgment was that Foschini had acquired rights to the administration fees that survived the termination of the agreement. The Supreme Court of Appeal dismissed the appeal and confirmed the judgment and order of the Western Cape High Court.

2218

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 178/08 In the matter between: SOUTH AFRICAN BROADCASTING CORPORATION LTD APPELLANT v FRED PETER COOP & OTHERS RESPONDENT Neutral citation: SA Broadcasting Corporation v Coop (178/2008) [2009] ZASCA 30 (30 March 2009). Coram: Nugent, Jafta, Mlambo, Maya JJA et Hurt AJA Heard: 2 March 2009 Delivered: 30 March 2009 Summary: Court order – meaning and effect – SABC seeking to phase out and withdraw benefits it had been ordered to maintain – not shown by SABC that legal basis of order no longer in existence. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: High Court, Witwatersrand (Mogagabe AJ sitting as court of first instance). The following order is made: ‘The appeal is dismissed with costs including the costs of two counsel.’ _____________________________________________________________ JUDGMENT _____________________________________________________________ MLAMBO JA (Nugent, Jafta, Maya JJA, Hurt AJA concurring) [1] This is an appeal by the South African Broadcasting Corporation (SABC), against the judgment of the Johannesburg High Court (Mogagabe AJ) granting the respondents an interdict and other ancillary relief against it. The appeal is with the leave of the court a quo. [2] The matter has a somewhat chequered past spanning some 8 years of litigation between the parties and I sketch such to facilitate an appreciation of the issues of contestation. The respondents were part of a group of employees who left the employ of the SABC between 1993 and 2000 and were paid the full actuarial value of their pensions. They, however, remained members of the SABC medical scheme and the SABC continued paying a 60 per cent subsidy of their monthly medical scheme contributions, amongst other so-called retirement benefits (the subsidies).1 The SABC also paid the same subsidies to other employees who had left its employ and who had remained members of the medical scheme but who had not been paid the full actuarial value of their pensions. These latter employees came to be known as ‘bona fide pensioners’ and are regarded by the SABC as retirees in terms of its pension fund rules. [3] In 2001 the SABC gave notice to the respondents of its intention to withdraw their subsidies. The SABC justified its stance on the basis that the respondents were not retirees and that the subsidies paid on their behalf had not been authorised. The SABC relied on the fact that upon termination of their employment the respondents lost any claims they may have had in terms of its pension fund rules, having been paid the full actuarial value of their pensions. Having unsuccessfully disputed the SABC’s stance the respondents instituted motion proceedings in the Johannesburg High Court seeking an order, amongst others, for the reinstatement of their subsidies, which the SABC had withdrawn in keeping with its notice to the respondents. [4] In view of some irresoluble disputes of fact on the papers, the matter was referred to trial for the hearing of evidence. Blieden J heard the matter and rejected the SABC’s claims. He found that the SABC had ratified the decisions by its officials to extend the subsidies to the respondents, and granted the respondents the relief they sought. That judgment has since been reported: Coop & others v South African Broadcasting Corporation & others 1 The other subsidy related to television licenses. [2004] 25 ILJ 1933 W. Blieden J essentially ordered the SABC to reinstate the subsidies. [5] Having been granted leave by Blieden J the SABC appealed his orders to this court. In that appeal this court upheld Blieden J’s orders, albeit for different reasons. This court disapproved Blieden J’s finding that the SABC had ratified the decision of its officials in extending the subsidies to the respondents. It reasoned that the respondents had established that the SABC was estopped from denying the authority of its officials who had purported to represent it in agreeing that the respondents could be treated as retirees and therefore entitled to the subsidies. It further found it unnecessary to decide whether the respondents were contractually entitled to the subsidies as contended by them or whether these were gratuitous as asserted by the SABC. The decision of this court has also since been reported: South African Broadcasting Corporation v Coop & others 2006 (2) SA 217 (SCA). [6] Nearly a year after the handing down of the judgment and order of this court, the SABC sent out a standard letter to the respondents stating, amongst other things, that after intensive consultation with the so-called bona fide pensioners (retirees) it had decided to commence phasing out the subsidies paid to these retirees over a five year period. The SABC stated that it continued to hold the view that it was entitled to vary, withdraw or phase out the subsidies on reasonable notice. In that letter the SABC gave the respondents notice that it had decided to commence phasing out their subsidies at the rate of 20 per cent per annum with effect from 1 February 2007. On receipt of that letter the respondents disputed the SABC’s stance and threatened litigation to enforce their rights to the subsidies unless the SABC undertook not to phase them out. After eliciting no response the respondents again launched motion proceedings in the Johannesburg High Court inter alia seeking an order interdicting and restraining the SABC from withdrawing or in any way reducing or phasing out the subsidies. [7] In that matter the respondents’ stance was simply that the conduct of the SABC in phasing out or reducing their subsidies was in conflict with and in contempt of the judgment and order of Blieden J. On the other hand the SABC asserted that it was entitled to phase out the subsidies by virtue of the fact that it had commenced phasing out same in respect of the bona fide pensioners. The SABC’s interpretation of the reasoning underlying Blieden J’s order was that the respondents had to be treated in the same manner as the bona fide pensioners. On that basis its counsel submitted that because it had decided to phase out the subsidies of those pensioners, it was entitled to phase out the subsidies of the respondents as well. [8] Having heard argument Mogagabe AJ found in favour of the respondents and ordered the SABC to comply with the order issued by Blieden J. He also granted an order interdicting and restraining the SABC from phasing out the subsidies. In arriving at that conclusion Mogagabe AJ reasoned that the SABC was misguided in interpreting Blieden J’s order to mean that it was entitled to disregard that order so long as it was treating the respondents in the same manner as the bona fide pensioners. In this regard Mogagabe AJ reasoned that Blieden J’s order could not be interpreted to mean that the SABC was entitled to phase out and withdraw the subsidies of bona fide pensioners. [9] On appeal before us counsel for the SABC submitted that Mogagabe AJ had erred in holding against it. He submitted that Blieden J’s order did not mean that the SABC was bound to comply therewith in perpetuity. He submitted that the SABC’s decision to phase out the subsidies in conformity with its decision to do so in relation to bona fide pensioners was a new act that occurred after the order had been granted and relieved the SABC of its obligation to henceforth comply with the order. [10] I do not think a litigant who is bound by a continuing mandamus is able to escape those obligations merely by alleging that he or she has chosen to end them. It cannot be disputed that the order was made because it was found that the respondents had a legal right to continue to receive the subsidy. While it is correct that the order was not made in perpetuity it remains effective until the rights upon which it was founded come to an end. Where those rights emanate from a contract then no doubt they end when the contract lawfully terminates. But the SABC has laid no basis for finding that the rights have been lawfully terminated in this case. A mere assertion that it has terminated those rights, without establishing that the termination was lawful, does not seem to me to be sufficient to relieve it of the continuing obligations imposed by the order. [11] We were asked by counsel for the respondents to rule that the finding by Blieden J in the course of his judgment that the respondent’s contracts entitled them to the subsidies is res judicata between the parties. I do not think we are called upon to stray beyond what is properly required for our decision in this appeal. [12] The appeal is dismissed with costs including the costs of two counsel. _________________ D MLAMBO JUDGE OF APPEAL APPEARANCES: COUNSEL FOR APPELLANT: C E Watt-Pringle SC; M S Baloyi INSTRUCTED BY: Maserumule Inc; Johannesburg CORRESPONDENT: Honey Attorneys; Bloemfontein COUNSEL FOR RESPONDENT: J J Reyneke SC; A Mooij INSTRUCTED BY: Blake Bester Inc; Johannesburg CORRESPONDENT: Naudes ; 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. SOUTH AFRICAN BROADCASTING CORPORATION v COOP & OTHERS The Supreme Court of Appeal (SCA) today confirmed the decision of the Johannesburg High Court which had interdicted the SABC from phasing out certain subsidies enjoyed by the respondents who were no longer employees of the SABC but had remained on the SABC Medical Scheme,. The SABC had, years before, withdrawn the subsidies but the Johannesburg High Court ordered it to reinstate them. That order was confirmed by the SCA. Subsequently the SABC commenced phasing out the subsidies of another group of former employees and notified the respondents in this case that it would commence doing the same regarding the subsidies paid to them. As a result of an impasse the respondents instituted motion proceedings in the Johannesburg High Court. The Johannesburg High Court found that its previous order remained binding on the SABC. On appeal the SCA, upholding the judgment and order of the Johannesburg High Court, concluded that the previous order of the High Court remained effective until the rights upon which it was founded came to an end.

4159

non-electoral

2024

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 532/2022 In the matter between: MICHAEL JANTJIES APPELLANT and THE STATE RESPONDENT Neutral citation: Michael Jantjies v The State (Case no 532/2022) [2023] ZASCA 3 (15 January 2024) Coram: NICHOLLS, CARELSE and MATOJANE JJA and MUSI and TOKOTA AJJA Heard: Matter disposed of without oral hearing in terms of s 19(a) of the Superior Courts Act 10 of 2013 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 15 January 2024 at 11h00. Summary: Criminal appeal – courts must take all the evidence into account – a court cannot convict the accused unless it finds that the accused’s version is so improbable that it cannot be reasonably possibly true. ORDER On appeal from: Western Cape Division of the High Court, Cape Town (Boqwana J and Mayosi AJ sitting as court of appeal): The appeal is upheld. The order of the court below is set aside and replaced with the following order: ‘The appeal is upheld, and the convictions and the resultant sentences are set aside.’ JUDGMENT __ ___ Matojane JA (Nicholls, Carelse JJA and Musi and Tokota AJJA concurring): [1] This is an appeal against the judgment of the Western Cape Division of the High Court, Cape Town, per Mayosi AJ with Boqwana J concurring (the high court), in respect of which they dismissed an appeal by Mr Michael Jantjies (the appellant) against his conviction on three counts of rape by the regional magistrate in the Regional Division of Western Cape (the trial court). [2] On 5 June 2019, the trial court convicted the appellant on three counts of rape and sentenced him to an effective term of 16 years imprisonment. On 17 July 2019, the trial court granted the appellant leave to appeal against his conviction only in terms of s 309C of the Criminal Procedure Act 51 of 1977 (the CPA). The high court dismissed the appeal on the rape convictions. This is a further appeal against conviction, with the special leave of this Court. [3] In the trial court, the State led the evidence of the complainant and a retired police officer, Warrant Officer Johan Tobias Grobbelaar (Grobbelaar), to whom the complainant reported the incident. The appellant testified in his defence without calling any further witnesses. In summary, the evidence can be broadly set out as follows. [4] The complainant, a 48-year-old schoolteacher, met the appellant on a social media dating site in August 2014. The appellant held himself out as a private investigator and police officer. They communicated daily with each other through Facebook and WhatsApp. They met in person on 24 December 2014 and started seeing each other almost daily, including weekends and after school. They went away most weekends and would stay in one room together. The complainant testified that they went on weekend trips to Vredenburg on three occasions, always staying at St Helena Bay Hotel (the hotel) in St Helena Bay. She stated that, despite sharing a room and being alone with the appellant, he never made any sexual advances towards her. [5] Regarding the actual incident, the complainant testified that on 6 March 2015, she and the appellant booked themselves a room at the hotel. They shared a room but slept in separate beds. On 7 March 2015, she was awakened by the appellant climbing onto her bed. According to her, the appellant placed his arm under her neck, held her wrist, and prevented her from getting up. Despite her attempts, he pinned her down, turned her on her stomach, and proceeded to penetrate her anus with his penis, she testified that she experienced excruciating pain. After that, the appellant went to the bathroom, took a shower, returned to the bedroom, turned her on her back and inserted his penis into her vagina, and, after that, placed his penis into her mouth. None of these acts by the appellant were with the complainant’s consent. [6] The following Monday, the appellant went to the complainant’s house to inform her of a housing opportunity available for her children following an alleged cancellation on the council’s waiting list. The appellant asked for R50 000 to cover the deposit and transfer costs by Thursday. In response, the complainant and her children secured loans and provided the funds to the appellant. On Friday, as per the appellant’s request, the complainant drove him to town to facilitate the payment. However, upon exiting the car with the cash, the appellant disappeared and never returned. [7] During cross-examination, the complainant stated that she did not resist the alleged assault because the appellant had positioned a firearm between their beds. Significantly, in her evidence-in-chief and her statement to the police, there was no mention of a firearm or her efforts to engage in a conversation with the appellant before the alleged incident. [8] Grobbelaar was called to demonstrate the consistency of the complainant's account of being raped by the appellant. Grobbelaar met the complainant at Kenilworth Clinic during psychiatric treatment in April 2015, where she told him that she had been raped by her ex-boyfriend (the appellant) at a hotel in March 2015. Despite Grobbelaar advising her to file a rape case, the complainant delayed doing so until 19 September 2015. This delay coincided with the appellant's release on bail for a theft case previously filed by the complainant. Grobbelaar's testimony, therefore, not only contradicted the complainant's description of her relationship with the appellant but also raised questions about the timing of her decision to report the rape. [9] The complainant testified that she was advised by the South African Police Directorate for Priority Crime Investigation (the Hawks) to maintain contact with the appellant after the incident to facilitate his arrest and get her money back. This was her explanation for her continued expressions of love in text messages and emails she sent to the appellant after the alleged incident. Despite describing the appellant as merely a friend, the complainant was unable to explain under cross- examination why she allowed the appellant to engage in physical intimacy if their relationship was purely platonic. [10] The appellant vehemently denied all allegations against him, particularly that he was with the complainant at the hotel in March 2015. He insisted that all intimate encounters he had with the complainant were consensual. According to the appellant, their love relationship began in December 2014 and ended in March 2015. He stated that the sole purpose of his pursuing an affair with the complainant was in order to obtain money from her. He contended that the rape accusation was fabricated, attributing it to the complainant’s sense of betrayal after he stole R50 000 from her and terminated their relationship. The appellant portrayed the complainant as vengeful, asserting that she opened numerous police dockets against him and orchestrated media accusations of rape. He stated that their last weekend together was on 18 January 2015, during which he booked a bungalow in Lanesville to celebrate his birthday. [11] The trial court adopted an incorrect judicial approach to the evaluation of evidence and failed to exercise caution when it evaluated the evidence of a single witness. The trial court expressed itself as follows: ‘If indeed sexual intercourse was a regular occurrence between the two parties as alleged by the accused, the question would be, why would the complainant choose a particular venue and particular date to the exclusion of other dates.’ [12] The high court was satisfied with the findings of the trial court and, in paragraph 39 of its judgment, reasoned that: ‘The complainant’s account of the events of 7 March 2015 was consistent throughout and she did not veer from this account even under thorough cross examination by two different representatives of the Appellant. The events she described are reflected in the statement of Ms Coetzee to whom she reported the rape, nine days after it occurred. The complainant's account of what occurred is further consistent when viewed against the manner she described it to Mr Grobbelaar in April 2015. The only discrepancy between the complainant and Mr Grobbelaar is his reference to an 'ex-boy-friend' having committed the rape, in circumstances where the complainant was adamant that the Appellant was never her boyfriend. This discrepancy is not material. Mr Grobbelaar attributes his use of the term ‘boyfriend’ as opposed to ‘man’ to a difference of understanding of the terms or their interpretation depending on whether one speaks Afrikaans (his mother tongue) or English. His use of the term was not based on the complainant having told him that she had been in a relationship with the Appellant.’ [13] The high court materially misdirected itself by not taking into account the entirety of the evidence1 and neglecting the fundamental principle in criminal proceedings that the State must prove its case beyond a reasonable doubt. The high court failed to recognise that the accused is not obligated to prove the truth of any explanation he provides; rather, the burden lies with the State. If there is a reasonable possibility that the accused’s evidence might be true, the accused should be acquitted.2 [14] The high court also neglected to evaluate the appellant’s countervailing evidence that the complainant had a motive to falsely accuse him of the alleged rapes. The appellant highlighted the social media campaign initiated by the 1 In S v Shilakwe [2011] ZASCA 104; 2012 (1) SACR 16 (SCA) para 11, this Court underscored the importance of a detailed and critical examination of each component of the evidence and stressed the necessity of stepping back to consider the evidence as a cohesive whole to avoid missing the broader perspective; see also S v Hadebe & Others 1998 (1) SACR 422 (SCA) at 426F-H and S v Mbuli 2003 (1) SACR 97 (SCA) at 110C-E. 2 See R v Difford 1937 AD 370 at 373; and S v Kubeka 1982 (1) SA 534 WLD at 537 F-G. complainant following his refusal to return her stolen money. Importantly, the high court misdirected itself in overlooking significant email correspondence, text messages and newspaper articles that portrayed the complainant’s unwavering love for the appellant and her sense of betrayal after the appellant defrauded her and absconded with her money. This evidence could redound to the appellant’s favour. Furthermore, the court failed to address the inconsistencies in the complainant’s testimony and did not provide reasons for giving preference to her evidence over that of the appellant. The court is enjoined to consider the evidence in its totality.3 [15] At issue in the appeal before us is whether the State has proved the appellant's guilt beyond reasonable doubt on the evidence presented before the trial court. There is conflicting evidence as to whether the appellant was with the complainant at the hotel when the incident occurred. The State’s case is wholly dependent upon the testimony of the complainant. Section 208 of the CPA provides that an accused may be convicted of any offence on the evidence of a single competent witness.4 When assessing the credibility of a single witness, it is crucial to understand that there is no one-size-fits-all approach. The evidence presented by such a witness must undergo the same rigorous scrutiny as any other evidence. The trial court is tasked with meticulously evaluating the evidence, taking into account both its strong points and shortcomings. After this thorough examination, the court must then determine whether, despite potential flaws or inconsistencies in the testimony, it is convinced of the truthfulness of the witness's account 5. This careful and balanced evaluation is fundamental to ensuring a fair and just legal process. 3 S v Van der Meyden 1999 (1) SACR 447 (W) at 450A-B. 4 See R v Mokoena 1956 (3) SA 81 (A); S v Webber 1971 (3) SA 754 (A) at 758G; S v Sauls and Others 1981 (3) SA 172 (A) at 179G-180G; S v Stevens [2004] ZASCA 70; [2005] 1 All SA 1 (SCA) para 17 and S v Gentle [2005] ZASCA 26; 2005 (1) SACR 420 (SCA) para 17. 5 S v Sauls and Others 1981 (3) SA 172 (A) 180E-G. [16] The court must assess the credibility and reliability of the complainant’s evidence in light of all other evidence presented. It must weigh the potential risks associated with relying exclusively on the complainant’s account as a single witness and seek corroborative evidence from other sources when available. In this instance, no supporting evidence from other sources was available to validate any aspect of the complainant’s evidence. [17] First, the State could but did not provide evidence to support the claim that the appellant was at the hotel when the incident happened. When the complainant was shown a hotel register for bookings on March 6, 7 and 8 March 2015 on which their names did not appear, she alleged that their names were “tippexed off” by an employee who took their bookings and kept the money for herself. Additionally, the complainant claimed that Sergeant Vosloo was there when other workers confirmed that the employee had taken the money. No explanation was proffered for the State’s failure to call the necessary witnesses. [18] Second, the complainant testified that she saw a doctor two days after the incident due to abdominal pains and anal bleeding. However, the doctor was not called to testify. This prevented the court from hearing about the doctor's observations and conclusions, which could have provided corroboration for the complainant’s version.6 [19] The timing of the initial report of rape is just one aspect to consider. There is no strict guideline governing the behaviour of sexual assault victims, and a court may not draw inference only from the length of any delay between the alleged commission of such offence and the reporting thereof7. In this instance, the complainant’s explanation for not immediately disclosing the incident to the 6 MM v S [2012] ZASCA 5; 2012 (2) SACR 18 (SCA); [2012] 2 All SA 401 (SCA) para 24. 7 Section 59 of The Criminal Law (Sexual offences and related matters) Amendment Act 32 of 2007 doctor who treated her is that she underwent a complete mental shutdown, which, according to her, was later diagnosed by her psychiatrist as a dissociative disorder where the brain shuts off to protect the body. Again, the State failed to summon the said psychiatrist to offer substantiating evidence for the complainant's alleged mental health challenges. [20] Sister Ntwana, the medical professional who examined the complainant and completed the J88 medical form six months after the incident, was not called as a witness to discuss her findings or the information provided to her by the complainant. The form only noted a two-centimetre scratch mark on the complainant's left wrist area. Without Sister Ntwana's testimony, it is not possible to conclusively link the scratch mark to the complainant's allegation that the appellant cut her wrist during their separation after the incident. This gap in evidence and testimony presents a significant oversight in the case, impacting the interpretation of the medical evidence and its relevance to the complainant's claims. [21] The complainant made her first report of the alleged incident to her friend, Chantal Coetzee, only after the appellant had repeatedly reneged on his promise to refund her money. This is apparent from an email of 21 March 2015, about 13 days after the alleged incident, that the complainant wrote to the appellant showing her intense emotional distress at being defrauded and abandoned. There is no suggestion of the alleged rape. The email reads: ‘I have been isolating the past week…at work and at home. I even changed my email address and cell no so no one can contact me. I have been crying non stop the past week… at work and at home. I have been crying because I was disappointed, felt betrayed, used, confused abandoned, discarded. Then you made contact with me, and my heart hurt so much. I appreciated hearing from you but long to hear your voice, to see you.’ [22] I am unable to find anything in the evidence presented in this case that could be viewed as independent support for the complainant’s allegations. There is only the complainant’s word against that of the appellant that the appellant was at the hotel on 8 March 2015, where the incident allegedly occurred. When the evidence is weighed in its totality, it supports the conclusion that the appellant’s version of events could reasonably possibly be true and that the evidence of the complainant, when viewed with the appropriate caution called for, raises doubt about the appellant’s guilt. Accordingly, the State has failed to prove the appellant’s guilt beyond reasonable. [23] The court must express its concern about the poor quality of the investigation and evidence presented. This impacts the administration of justice and the public confidence in the legal system. Crucial steps, such as interviewing potential witnesses at the crime scene and scrutinising the appellant's alibi, were apparently neglected. Material witnesses were not called to testify with no explanation advanced for their absence. The absence of evidence from the investigating officer further suggests that a comprehensive investigation may not have been conducted at all. Not only is the legal process jeopardised, but the broader societal understanding and response to sexual assault cases is impacted8. 8 See S v Sebofi 2015 (2) SACR 179 (GJ) at [65] – [67] [24] In the premises, the following order issues: The appeal is upheld. The order of the court below is set aside and replaced with the following: ‘The appeal is upheld and the convictions and the resultant sentences are set aside.’ ____________________ K E MATOJANE JUDGE OF APPEAL Appearances For the Appellant: Instructed by S Kruger Instructed by: Legal Aid South Africa, Cape Town Legal Aid South Africa, Bloemfontein For the respondent: Instructed by P Thaiteng Instructed by: The Director of Public Prosecutions, Cape Town 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: 15 January 2024 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 Michael Jantjies v The State (Case no 532/2022) [2023] ZASCA 3 (15 January 2024) Today the Supreme Court of Appeal (SCA) upheld an appeal against the judgment of the Western Cape Division of the High Court, Cape Town (the high court), in respect of which it dismissed an appeal by Michael Jantjies (the appellant) against his conviction on three counts of rape by the regional magistrate in the Regional Division of Western Cape (the trial court). The SCA further set aside and replaced the high court’s order. On 5 June 2019, the trial court convicted the appellant on all three counts and sentenced him to an effective term of 16 years’ imprisonment. On 17 July 2019, the trial court granted the appellant leave to appeal against his conviction in terms of s 309C of the Criminal Procedure Act 51 of 1977 (the CPA). The high court dismissed the appeal on the rape convictions. In the trial court, the State led the evidence of the complainant and a police officer, retired Warrant Officer Johan Tobias Grobbelaar (Grobbelaar), to whom the complainant reported the incident. The appellant testified in his defence without calling any further witnesses. In summary, the evidence was that the complainant met the appellant on a dating site on a social media platform in August 2014. The appellant held himself out as a private investigator and police officer. They communicated with each other through Facebook and WhatsApp, chatting daily. They met in person on 24 December 2014 and started seeing each other almost every day after that, including during weekends and after school. They went away most weekends and would stay in one room together. The complainant testified that on three occasions, they went on a weekend away trips to Vredenburg, always staying at St Helena Bay Hotel (the hotel). She stated that, despite sharing a room and being alone with the appellant, he never made any sexual advances towards her. Regarding the actual incident, the complainant testified that on 6 March 2015, she and the appellant booked themselves a room at the hotel. They shared a room but slept on separate beds. On 7 March 2015, she was awakened by the appellant, who was getting onto her bed. According to her, the appellant placed his arm under her neck, held her wrist, and prevented her from getting up. Despite her attempts, he pinned her down, turned her on her stomach, and proceeded to penetrate her anus with his penis, where she experienced excruciating pain. After that, the appellant went to the bathroom, took a shower, returned to the bedroom, turned her on her back and inserted his penis into her vagina, and, after that, placed his penis into her mouth. All these acts by the appellant were without her consent. The following Monday, the appellant went to the complainant’s house to inform her of a housing opportunity available for her children following an alleged cancellation on the council’s waiting list. The appellant asked for R50 000 to cover deposit and transfer costs by Thursday. In response, the complainant and her children secured loans and provided the funds to the appellant. On Friday, as per the appellant’s request, the complainant drove him to town to facilitate the payment. However, upon exiting the car with the cash, the appellant disappeared and never returned. The State’s second witness, Warrant Officer Grobbelaar, contradicted the complainant’s portrayal of the appellant as a mere platonic friend rather than her boyfriend in his testimony. He testified that he met the complainant at Kenilworth Clinic, where they were both undergoing psychiatric treatment. The complainant, upon learning that he was a policeman, confided in him about the alleged rape by her ex- boyfriend (the appellant) at the hotel in March 2015. He advised her to report the rape to the police, which she did, on 19 September 2015, once she had been discharged from the clinic. The appellant vehemently denied all allegations against him, particularly denying the claim of being with the complainant at the hotel in March 2015. He insisted that all intimate encounters he had with the complainant were consensual. He contended that the rape accusation was fabricated, attributing it to the complainant’s sense of betrayal after he stole R50 000 from her and terminated their relationship. The appellant portrays the complainant as vengeful, asserting that she opened numerous police dockets against him and orchestrated media accusations of rape. He stated that their last weekend together was on 18 January 2015, during which he booked a bungalow in Lanesville to celebrate his birthday. The issue before the SCA was whether the State had proved the guilt of the appellant beyond reasonable doubt on the evidence presented before the trial court. In coming to a conclusion, the SCA reasoned that the trial court adopted an incorrect judicial approach to the evaluation of evidence and failed to exercise caution when it evaluated the evidence of a single witness. It further held that the high court materially misdirected itself by not taking into account the entirety of the evidence and neglecting the fundamental principle in criminal proceedings that the State must prove its case beyond reasonable doubt, pointing out that the high court failed to recognise that the accused is not obligated to prove the truth of any explanation he provides as the burden lies with the State. The SCA held that the high court neglected to appropriately evaluate the appellant’s countervailing evidence that the complainant had a motive to accuse him of the alleged rape falsely and that the high court misdirected itself in overlooking significant email correspondence, text messages and newspaper articles that portrayed the complainant’s unwavering love for the appellant and her sense of betrayal after the appellant defrauded her and absconded with her money. In the result, the SCA found that when the evidence was weighed in its totality, it supported the conclusion that the appellant’s version of events could reasonably possibly be true and that the evidence of the complainant, when viewed with the appropriate caution called for, raises doubt about the appellant’s guilt. In the circumstances, the SCA found that the State had failed to prove the appellant’s guilt beyond reasonable. The SCA expressed concern about the poor quality of the investigation and evidence presented at the trial. It noted that crucial steps were neglected, such as interviewing potential witnesses at the crime scene and scrutinising the appellant's alibi. this, according to the court, impacts the administration of justice and the public confidence in the legal system --------oOo--------

499

non-electoral

2016

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 463/2015 In the matter between: ROELOF ERNST BOTHA APPELLANT and ROAD ACCIDENT FUND RESPONDENT Neutral Citation: Botha v Road Accident Fund (463/2015) [2016] ZASCA 97 (2 June 2016). Coram: Leach, Saldulker, Dambuza JJA and Fourie and Victor AJJA Heard: 18 May 2016 Delivered: 2 June 2016 Summary: Contract ─ agreement in settlement of claim for damages made an order of court ─ agreement concluded on the strength of a representation of fact made by appellant’s attorney relied on by the respondent ─ agreement binding and not to be set aside under Uniform rule 42(1)(c). ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Hughes J, sitting as court of first instance): The appeal is dismissed with costs including the costs of two counsel. ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Leach and Dambuza JJA (Saldulker JA and Fourie and Victor AJJA concurring): [1] The issue in this appeal is whether the appellant is bound by a settlement agreement concluded with the respondent pursuant to a misrepresentation the appellant had made as to certain material facts. The agreement was made an order of court but the appellant subsequently applied for rescission or variation of that order under Uniform rule 42(1)(c). The application was dismissed. The appeal comes before us with the leave of the court a quo. [2] The appellant and his wife sustained serious bodily injuries in a motorcycle accident. They then instituted separate actions against the respondent, the Road Accident Fund, for damages suffered as a result of their injuries. Both claims were defended by the respondent. On 3 March 2014, both cases came to trial before different judges in the Gauteng Division, Pretoria. The respondent conceded liability for whatever damages the appellant and his wife were able to prove. The appellant’s wife’s claim then went to trial before Pretorius J for determination of her damages. Judgment in that matter was reserved. [3] In the meantime, parties entered into negotiations in regard to the appellant’s claim which was due to be heard by Molefe J. As I have said, the respondent conceded liability leaving only the quantum of the appellant’s damages in issue. The appellant’s claim for general damages was agreed at R1 million and his claim for past hospital and medical expenses was settled in an amount of R236 922.70, this despite the claim at that stage only being one for R150 000. The respondent, however, was persuaded to accept liability for the higher amount in the light of vouchers and documentation presented by the appellant’s attorney. The respondent also furnished an undertaking in respect of the appellant’s future hospital and medical expenses in terms of provisions of s 17(4)(a) of the Road Accident Fund Act 56 of 1996. Thus the only outstanding item of damages related to the appellant’s claim for loss of future earnings. The parties agreed to separate that claim from the other heads of damages under the provisions of Uniform rule 33(4), and to postpone the trial to determine those damages at a later stage. However, the respondent agreed to pay the appellant the sum of R1 236 922.70 in respect of his past medical expenses and general damages and to furnish the aforementioned undertaking. This agreement was embodied in the order Molefe J then issued by consent. [4] Subsequent to payment by the respondent of the amounts agreed, the appellant’s attorneys ascertained that the amount of R236 922.70 paid by the respondent in respect of the appellant’s past hospital and medical expenses, represented only a portion of the actual expenses incurred by the appellant, which in fact totalled R784 278.78. On investigation, the appellant‘s attorney discovered that source documents relating to some of the expenses incurred in respect of the appellant’s hospital and medical expenses had been placed in his wife’s file and had not been presented to the respondent when the settlement was negotiated. [5] The appellant’s attorney then wrote to the respondent’s attorneys advising them of this ‘mutual error’. He proposed that the court order obtained on 3 March 2014 be rescinded by agreement and that it be replaced by a court order reflecting an amount of R784 278.78 for past medical and hospital expenses. The respondent refused to agree, stating that as the agreement had been made an order of court, it was res judicata. [6] It is against this background that appellant’s attorneys approached the court a quo seeking rescission or variation of the aforesaid court order under Uniform rule 42(1)(c), contending ‘there had been a mistake common to the parties’ which rendered the settlement agreement void. [7] The application was opposed by the respondent, who maintained that the appellant (or his attorney) had misrepresented the facts on which the settlement had been rendered. The court a quo dismissed the application and found that the source documents relating to the unclaimed portion of the expenses constituted evidence that ‘came to the fore after the court [had] considered the vouchers and given judgment on same’. Consequently, the court held, the mistake relied upon by the appellant was a ‘retrospective mistake by means of fresh evidence’. [8] In seeking relief under Uniform rule 42(1)(c), the appellant was obliged to show that the settlement agreement had been concluded as a result of a mistake common to both himself and the respondent as to the correct facts. In attempting to do so the appellant relied heavily on this court’s decision in Tshivhase Royal Council & another v Tshivhase & another; [1992] ZASCA 185; 1992 (4) SA 852 (A). In that case Nestadt JA, writing for the court, described a mistake common to the parties as envisaged by the rule as a ‘common mistake’ as understood in the field of contract, which occurs where both parties are of one mind and share the mistake.1 He held further that where both sides had assumed a state of affairs that turned out to be wrong, the court was entitled to set aside an order made on the basis of their common mistake. [9] Tshivhase, however, is clearly distinguishable from the present matter. There both parties had acted in error on the strength of a representation made by a third party. Theirs was thus a common mistake of fact which vitiated their agreement. That is not here the case. In the present matter the error may be described as being a ‘unilateral mistake’ in that it was made by the appellant’s attorney who, through his misrepresentation, induced the respondent to contract on the terms they did. And this difference is fatal to the appellant’s claim. 1 Tshivhase Royal Council v Tshivhase supra at 863A-B. [10] Under the so-called reliance theory, if there is a material mistake by one party to a contract and therefore no actual consensus, the contract will be valid if the other party reasonably relied on the impression that there was consensus.2 This was recognised by this court in Sonap Petroleum (SA) (Pty) Ltd (formerly known as Sonarep (SA) (Pty) Ltd) v Pappadogianis [1992] ZASCA 56;1992 (3) SA 234 (A) at 239A. In that case, a mistake made by a firm of attorneys representing the appellant (a lessor of property) resulted in an erroneous reduction of the term of a property lease from 20 to 15 years. The respondent (the lessor) insisted that no mistake had been made. This led to the appellant seeking an order of rectification of the agreement by replacing the term of 15 years with 20 years. On appeal against the dismissal of that claim, this court found that there had been no common intention to agree on the 20 year term. More relevant for the issues at hand, the court defined mistake as implying a ‘misunderstanding, misrepresentation, and resultant poor judgment’,3 Harms AJA expressed the test as to whether reliance on a mistake entitles a party to resile from a resultant agreement as follows: ‘. . . did the party whose actual intention did not conform to the common intention expressed, lead the other party, as a reasonable man, to believe that his declared intention represented his actual intention? . . . To answer this question, a three-fold enquiry is usually necessary, namely, firstly, was there a misrepresentation as to one party’s intention; secondly, who made that representation; and thirdly, was the other party misled thereby? . . . The last question postulates two possibilities: Was he actually misled and would a reasonable man have been misled?’4 (Footnotes omitted.) [11] In this case the answers to these questions are self-evident. It was not suggested that a reasonable man would not have accepted the facts presented to the respondent’s attorneys, or that a reasonable man would have realised that there was a real possibility of a mistake in the amount of expenses the appellant’s attorney requested to be paid. The misrepresentation by the appellant misled the respondent, and this resulted in the conclusion of the settlement agreement. The appellant cannot rely on his own mistake to avoid the contract which was solely his fault. As stated by Christie: 5 2 S W van der Merwe et al Contract: General Principles 4 ed (2012) at 33. 3 At 238H. 4 This test being an adaptation of a dictum by Blackburn J in Smith v Hughes (1871) LR 6 QB 597 at 607 (at 239I-240B). 5 R H Christie & G B Bradfield Christie’s the Law of Contract in South Africa (2011) 6 ed at 329-330. ‘However material the mistake, the mistaken party will not be able to escape from the contract if his mistake was due to his own fault. This principle will apply whether his fault lies in not carrying out the reasonably necessary investigations before committing himself to the contract, that is, failing to do his homework; in not bothering to read the contract before signing; in carelessly misreading one of the terms; in not bothering to have the contract explained to him in a language he can understand; in misinterpreting a clear and unambiguous term, and in fact in any circumstances in which the mistake is due to his own carelessness or inattention, . . . ’ [12] In the light of this, the appellant sought refuge in an argument that both parties had assumed that the documents supporting the figure agreed in respect of past hospital and medical expenses were the only documents that were relevant and consequently that the compromise was concluded based on an incorrect assumption. However, as pointed out by this court in Van Reenen Steel (Pty) (Ltd) v Smith NO & another [2002] ZASCA 12; 2002 (4) SA 264 (SCA), this was no more than an assumption based on an unilateral mistake.6 And as Harms JA said in that case:7 ‘The first problem facing the appellants is that they are unable to rely on a unilateral mistake because, as mentioned, the respondents were not the cause of the mistake in the sense discussed in Sonap Petroleum (SA) (Pty) Ltd (formerly known as Sonarep (SA) (Pty) (Ltd) v Pappadogianis; 1992 (3) SA 234 (A). The next problem is that it is common cause that the written contract expresses the parties’ consensus.’ The argument that there was a mutual mistaken assumption is no more than an attempt to clothe a unilateral mistake in another garb. For the reasons already set out the appellant’s mistake does not void the agreement. [13] Confronted with all these difficulties the submission on behalf of the appellant was that this court should use its discretion under rule 42(1) to set aside the judgment although the settlement agreement was binding. In Theron NO v United Democratic Front (Western Cape Region)& others 1984 (2) SA 532 (C) at 536G this court held that a court has a discretion whether or not to grant an application for 6 Paragraph 9. 7 Paragraph 7. rescission under rule 42(1). But where, as here, the court’s order recorded the terms of a valid settlement agreement,8 there is no room for it to do so. [14] The appeal is dismissed with costs including the costs of two counsel. ____________________ L E LEACH ____________________ N DAMBUZA JUDGES OF APPEAL 8 Eke v Parsons [2015] ZACC 30; 2015 (11) BCLR 1319; (C) 2016 (3) SA (CC). APPEARANCES: For the Appellant: J C Bergenthuin Instructed by: Van Zyl Le Roux & Hurter, Pretoria c/o Honey Attorneys, Bloemfontein For the Respondent: N G D Maritz SC; J Lingenfelder Instructed by: Diale Mogashoa Attorneys, Pretoria c/o 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: 2 June 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 Neutral citation: Botha v Road Accident Fund (436/2015) [2016] ZASCA 97 (2 June 2016) The appellant in this case was severely injured in a motorbike accident. He sued the respondent, the Road Accident Fund, for damages and the matter proceeded to trial. At the hearing, it was agreed that the RAF was liable in full for whatever damages the appellant had suffered. The parties negotiated a settlement that the appellant’s general damages were R1 million while his past hospital and medical expenses were R236 922.70. The only outstanding item of his damages was a claim in respect of future loss of earnings. This claim was separated from the other heads of damage and the hearing on that issue postponed for later decision, with an order being issued by consent that the RAF pay the appellant R1 236 922.70 in respect of the agreed heads of damage. This amount was paid to the appellant shortly thereafter. The appellant’s attorneys then ascertained that through a mistake on their part they had failed to include additional past hospital and medical expenses in the appellant’s claim, and that the actual loss suffered by the appellant in respect of those costs was in fact R784 278.78. The appellants then applied under Uniform rule 42 for an order rescinding or varying the court order that had been granted, alleging that there had been a mistake common to the parties which rendered their settlement agreement void. This application was dismissed and the appellant appealed to the Supreme Court of Appeal. The Supreme Court of Appeal today dismissed the appellant’s appeal. It found that there had not been a ‘common mistake’ but merely a mistake on the part of the appellant’s attorney, and that there was nothing to suggest that the RAF realised that there had been a real possibility of a mistake in the amount of the expenses the appellant’s attorney had requested should be paid. This was a misrepresentation by the appellant that misled the respondent and had resulted in the conclusion of the settlement agreement which had been made an order of court. In the light of various authorities, the appellant could not rely on his own mistake to avoid the contract. The court also held that there had not been an underlying common but mistaken assumption in regard to the actual past hospital and medical expenses, and that the argument in that regard had been no more than an attempt to clothe the unilateral mistake made by the appellant in another garb. The appeal was therefore dismissed. ---ends---

2890

non-electoral

2012

IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT CASE NO: 230/12 and CASE NO: 233/12 Reportable In the matter between: ATWELL SIBUSISO MAKHANYA NO FIRST APPELLANT MINISTER OF WATER AND ENVIRONMENTAL AFFAIRS SECOND APPELLANT and GOEDE WELLINGTON BOERDERY (PTY) LTD RESPONDENT Neutral Citation: Makhanya v Goede Wellington Boerdery (Pty) Ltd (230/12) [2012] ZASCA 205 (30 November 2012) Coram: HEHER, BOSIELO, TSHIQI and THERON JJA and ERASMUS AJA Heard: 5 November 2012 Delivered: 30 November 2012 Summary: Administrative Law – whether the decision taken by the Water Tribunal in refusing an appeal against a decision of the Chief Director rejecting an application for a water licence constitutes administrative action reviewable under the Promotion of Administrative Justice Act 3 of 2000 – whether it was appropriate for the court below when setting aside the decision of the Tribunal, to substitute its own decision, rather than remitting the matter to the Tribunal – whether the court below was entitled to make a costs order against a presiding officer (the First Appellant) performing an adjudicative function in the event of the review against his findings being successful. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: North Gauteng High Court, Pretoria (Goodey AJ sitting as court of first instance). 1. The appeal of the first appellant is upheld with costs including the costs of two counsel. 2. The appeal of the second appellant is dismissed with costs including costs of two counsel. 3. The order of the court a quo is amended to read: (1) The decision taken on 5 May 2010 by the First Respondent, dismissing the Applicant’s appeal against the refusal by the Chief Director: Water Use in the Department of Water Affairs and Forestry of the Applicant’s application for a licence to use water from the Berg River is reviewed and set aside. The said decision is substituted with the following: ‘1. The appeal by Goede Wellington Boerdery (Pty) Ltd against the refusal on 11 April 2008 by the Chief Director: Water Use in the Department of Water Affairs and Forestry of the Applicant’s application for a licence to use water from the Berg River to which ECPA Boerdery (Pty) Ltd is currently entitled’, is upheld. 2. The said licence is granted to Goede Wellington (Pty) Ltd.’ 3. The Second Respondent is to pay the Goede Wellington’s costs, including the costs of two counsel.’ ______________________________________________________________ JUDGMENT ______________________________________________________________ ERASMUS AJA (HEHER, BOSIELO, TSHIQI and THERON JJA concurring) Introduction [1] This appeal, against the whole of the judgment and order of the North Gauteng High Court, Pretoria (high court), concerns a decision taken by Mr Makhanya (the first appellant), an additional member of the Water Tribunal (Tribunal) established in terms of s 146 of the National Water Act1 (the Act). The Tribunal dismissed an appeal against the refusal, by what was then the Department of Water Affairs and Forestry (the Department), of an application for a licence to use water for farming purposes from the Berg River in the Wellington area of the Western Cape. The high court reviewed and set aside the Tribunal’s dismissal of the appeal, substituted the Tribunal’s decision by upholding the appeal, granted the water licence and ordered the Minister of Water and Environmental Affairs (second appellant) and the first appellant to pay costs. [2] The first appellant heard the appeal in his capacity as an additional member of the Tribunal. His appeal in this court is confined to the high court’s order that he is to pay the costs in his official capacity. The second appellant’s appeal is confined to two issues, namely, whether the Tribunal’s decision constitutes administrative action reviewable under the Promotion of Administration Justice Act (PAJA)2 and (assuming it is), whether it was appropriate for the court a quo when setting aside the Tribunal’s decision, to substitute its own decision in place thereof, rather than remitting the matter to the Tribunal. 1 Act 36 of 1998 2 Act 3 of 2000. Background [3] The National Water Act came into force on 1 October 1998. The preamble reads as follows: ‘Recognising that water is a scarce and unevenly distributed national resource which occurs in many different forms which are all part of a unitary, inter-dependent cycle; Recognising that while water is a natural resource that belongs to all people, the discriminatory laws and practices of the past have prevented equal access to water, and use of water resources; Acknowledging the National Government’s overall responsibility for and authority over the nation’s water resources and their use, including the equitable allocation of water for beneficial use, the redistribution of water, and international water matters; Recognising that the ultimate aim of water resource management is to achieve the sustainable use of water for the benefit of all users; Recognising that the protection of the quality of water resources is necessary to ensure sustainability of the nation’s water resources in the interests of all water users; and Recognising the need for the integrated management of all aspects of water resources and, where appropriate, the delegation of management functions to a regional or catchment level so as to enable everyone to participate.’ [4] Goede Wellington Boerdery (Pty) Ltd (Goede Wellington), the respondent, is the owner of the farm Goede Hoop (Goede Hoop) in the Wellington area. ECPA Boerdery (Pty) Ltd (ECPA) is the owner of a farm Middelpos which is situated near Goede Hoop, approximately 300 meters apart. The sole shareholder of Goede Wellington, Mr Edward Malan, is also a trustee and a beneficiary of the Middelpos Trust which in turn is the sole shareholder of ECPA. [5] ECPA is the legal holder of an entitlement to use water from the Berg River in respect of Middelpos. A small portion of the water use entitlement held by ECPA in respect of Middelpos became available for transfer3 as a 3 Section 25 of the Act reads as follows: ‘(1) A water management institution may, at the request of a person authorised to use water for irrigation under this Act, allow that person on a temporary basis and on such result of an investment made in updated irrigation technology which resulted in the saving of water. In particular, ECPA shifted from the use of sprinkler and flood irrigation to drip irrigation. [6] Goede Wellington in turn owns an entitlement to use water from the Berg River in respect of Goede Hoop. It however needed further water to facilitate the development of a high quality citrus orchard. During July 2005 it thus entered into an agreement with ECPA according to which the latter would surrender some of its water use entitlement to Goede Wellington for use on Goede Hoop. Goede Wellington’s use was made conditional upon it obtaining the necessary licence from the Department. [7] In November 2005 Goede Wellington applied to the Department for a water licence in terms of the Act4 for the use of water in respect of seven hectares of irrigable land. It indicated that it intended to use the land for high quality citrus production. This would promote the efficient use of good agricultural land in the area; ensure better opportunities for sustainable permanent employment; contribute to investment; increase in economic activity and the influx of export revenue for the local economy. The application was supported by, amongst others, the Berg River Irrigation Board5 and the Department of Agriculture in the Western Cape Provincial Government. [8] In March 2006 the Regional Director: Western Cape of the Department (Regional Director) recommended the approval of the licence application. Its recommendation was accompanied by a detailed analysis of the application in relation to s 27(1) of the Act. Section 27(1) provides an open list of factors to conditions as the water management institution may determine, to use some or all of that water for a different purpose, or allow the use of some or all of that water on another property in the same vicinity for the same or a similar purpose. (2) A person holding an entitlement to use water from a water resource in respect of any land may surrender that entitlement or part of that entitlement – (a) in order to facilitate a particular licence application under section 41 for the use of water from the same resource in respect of other land; and (b) on condition that the surrender only becomes effective if and when such application is granted. . . .’ 4 See ss 40 and 41 of the Act. 5 Being responsible for the management of water in respect of the applicable catchment area. be considered by a licensing authority in the adjudication of a licence application. The section provides: ‘(1) In issuing a general authorisation or licence a responsible authority must take into account all relevant factors, including– (a) existing lawful water uses; (b) the need to redress the results of past racial and gender discrimination; (c) efficient and beneficial use of the water in the public interest; (d) the socio-economic impact– (i) of the water use or uses if authorised; or (ii) of the failure to authorise the water use or uses; (e) any catchment management strategy applicable to the relevant water resource; (f) the likely effect of the water use to be authorised on the water resource and on other water users; (g) the class and the resource quality objectives of the water resource; (h) investments already made and to be made by the water user in respect of the water use in question; (i) the strategic importance of the water use to be authorised; (j) the quality of water in the water resource which may be required for the Reserve and for meeting international obligations; and (k) the probable duration of any undertaking for which a water use is to be authorised.’ (My underlining.) [9] The Regional Director found in favour of Goede Wellington on each of the factors analysed and concluded that the existing legal uses of the water would not be affected by the transfer, that after the transfer the water will be put to more efficient use (this was also recognised by the Department of Agriculture) and that export revenue will be generated. Most importantly for present purposes, in relation to the factor relating to redressing the results of past racial and gender discrimination, the recommendation found, firstly, that the transfer would create new job opportunities in what, it can be remarked, is an unemployment stricken labour market and that ‘[i]f the transfer of the water use is not authorised, job opportunities will be lost’. Secondly, the report remarked that Goede Wellington employed both male and female workers. [10] In May 2007 the Chief Director: Water Use in the Department (the Chief Director) wrote to Goede Wellington. The Chief Director indicated, notwithstanding the Regional Director’s recommendation, that the ‘application neither contributes to redress of the results of the past racial discrimination nor promotes the equitable access to water’ and that Goede Wellington should show cause why the application should not be denied on that basis. In response, Goede Wellington submitted a ‘social and labour management report’ compiled by human resource consultants as well as an ‘economic report’. In these reports, along the lines of the Regional Director’s findings, it was again submitted that Goede Wellington is committed to affirmative action, that it has a skills development plan in place and that it is committed to employment equity. It also stated that it aids its employees by ‘increasing employee(s)(sic) access to educational institutions and by the inclusion of less advantaged groups in the company management structure and (furthermore)(sic) to empower women in its current service’. [11] In July 2008 the Chief Director, however, informed Goede Wellington that the licence application had been denied as issuance of the licence ‘will not contribute towards the need to redress the result of the past and racial gender discrimination’. Proceedings before the Tribunal [12] During August 2008 Goede Wellington appealed the decision of the Chief Director to the Tribunal, 6 whose decision was in turn the subject of the appeal to the court a quo. Item 6(1) of Schedule 6 of the Act provides that an appeal to the Tribunal must be heard by one or more members, as the chairperson may determine, and item 6(3) adds that an appeal takes the form 6 Section 148(1)(f) of the Act provides for an appeal against a decision of a responsible authority on a water licencing application. of a rehearing and that the Tribunal may receive evidence. In advance of the hearing, Goede Wellington provided the Tribunal with an affidavit which included an account of the factual background to the licence application and provided the relevant information in respect of all eleven factors listed in s 27(1) of the Act. In addition, the legal representative of Goede Wellington submitted detailed heads of argument to the Tribunal. [13] On 5 May 2010, the Tribunal found against Goede Wellington. It ruled that: ‘The Social and Labour Management Report presented by the applicant is silent on both the issues of land ownership and involvement at management level or participation in the running of agricultural enterprise by people from previously disadvantaged communities. When all was said and done . . . there existed no evidence before the Tribunal to the effect that the relevant factors set out in section 27(1) of [the Act] were not considered and no evidence was rendered proving that the application is in consonance with the objectives of section 27(1)(b) of the [Act].’ Proceedings before the high court [14] Consequently Goede Wellington approached the high court. It sought an order inter alia in terms of ss 6 and 8 of PAJA reviewing the decision of the Tribunal, setting it aside, substituting it with an order granting the licence to Goede Wellington and mulcting Mr Makhanya in costs in his official capacity. In the alternative, Goede Wellington asked for an order, inter alia, that its application be deemed to be an appeal in terms of s 149 of the Act. 7 The ground of appeal was that the Tribunal erred and misdirected itself and did not 7 Section 149 of the Act reads as follows: ‘(1) A party to a matter in which the Water Tribunal – (a) has given a decision on appeal under section 148, may, on a question of law, appeal to a High Court against that decision; or . . . (2) The appeal must be noted in writing within 21 days of the date of the decision of the Tribunal. . . . (3) The appeal must be prosecuted as if it were an appeal from a Magistrate’s Court to a High Court.’ comply with s 27(1) of the Act, read with Item 6(3) of Schedule 68 thereto, by determining the appeal with reference solely to one of the factors in s 27(1)(b) of the Act and evidence in relation to that factor, alternatively with inadequate regard to the other factors in s 27(1) of the Act and the evidence in relation to those factors. [15] The second appellant opposed the application for judicial review in principle, arguing that because decisions of the Tribunal are subject to appeals to the high court on questions of law under s 149(1)(a) of the Act the legislature did not intend to create a review or appeal procedure which is based on procedural irregularities or factual disputes. [16] The second appellant also opposed the application (whether for judicial review or an appeal under s 149) on its merits, saying, amongst other things, that the Department made a balancing act of the factors listed in section 27(1) and after that balance the application was refused on the basis that it did not satisfy section 27(1)(b), being one of the factors that must be taken into account. The second appellant added that the factor listed in s 27(1)(b) embodies all of the socio-economic factors defining the purpose of the Act as set out in s 2, and is the only viable way to achieve the purpose to ensure that the allocation of our water resources redress the result of past racial and gender discrimination. [17] The high court, referring to the constitutionally enshrined right to lawful, reasonable and procedurally fair administrative action, found that the mere fact that the Act is silent on a right to review an application for a licence does not mean that that right is excluded. It emphasised the fact that courts must treat the decisions of the executive with appropriate respect, but also that courts may not rubberstamp unreasonable decisions simply because of the complexity of the decision or the identity of the decision-maker and that their 8 Item 6(3) of schedule 6 of the Act reads as follows: ‘Appeals and applications to the Tribunal take the form of a rehearing. The Tribunal may receive evidence, and must give the appellant or applicant and every party opposing the appeal or application an opportunity to present their case.’ deference to the executive must not be shaped by an unwillingness to scrutinise administrative action, but by a careful weighing up of the need for and the consequences of judicial intervention. It found that the Act allows for review in appropriate circumstances and that the Goede Wellington’s case was such an instance. As a result of the court a quo’s decision to uphold the application for judicial review, it did not consider Goede Wellington’s alternative appeal under s 149 of the Act. [18] The court came to the conclusion that Mr Makhanya misinterpreted s 27(1) of the Act. In doing so, he committed a material error of law. It found that it was clear that the Tribunal adjudicated the appeal as if the factor provided for in s 27(1)(b) was a prerequisite for the granting of a water licence, and that it did not consider all relevant factors as required by s 27(1). This was also evidence of the fact that the Tribunal had not applied its mind properly. The decision therefore fell to be set aside. [19] The court further found that the required exceptional circumstances existed for substituting its decision for that of the Tribunal. It found that it was at least as well qualified as the Tribunal to decide the matter, that sending it back to be heard by the Tribunal would be a waste of time and that further delay would cause unjustifiable prejudice to Goede Wellington. Further, it found that the decision of both the Chief Director and the Tribunal displayed an alarming degree of ineptitude, a lack of appreciation of what was required of them, a lack of judgment, rationality, common sense and serious incompetence. [20] For those reasons and, in addition, for the Tribunal’s lack of expertise, legal prowess, failure to apply its mind and the failure to have a legal expert on board the court made a cost order against the second appellant and Mr Makhanya (first appellant) in his official capacity as a member of the Tribunal, the one paying the other to be absolved. The appeal in this court [21] The second appellant, whilst accepting that the Chief Director’s decision not to grant the water licence to Goede Wellington was an administrative action reviewable under PAJA, argues that the decision of the Tribunal did not constitute administrative action reviewable under PAJA. Further, and if it should be found that PAJA does apply, the second appellant argues, no exceptional circumstances were present which would allow the high court to substitute its decision for that of the Tribunal. Accordingly that court should have remitted the matter to the Tribunal. [22] The second appellant now also concedes that an error of law was made, which both underlies the main ground of review upheld by the court a quo and constitutes Goede Wellington’s ground of appeal that the Tribunal considered only one of the factors (being that under s 27(1)(b)) as essential and decisive, rather than considering all of the factors prescribed in the statute (and any other considerations that might be relevant) in reaching its decision. [23] The second appellant points to various indicators in the Act which, according to him, shows that the decision of the Tribunal in Goede Wellington’s case, was not ‘truly of an administrative nature’: the Tribunal sits as an appellate body, exercising what are in effect judicial functions akin to that of a court. In this regard, the second appellant submits that it is significant that the Act does not make an express reference to any right of review, instead the legislator provided for an appeal directed to the high court only on an issue of law. [24] Mr Makhanya only opposes the costs order made against him in his official capacity. [25] Goede Wellington essentially supports the judgment of the high court. It submits that the decision to dismiss the appeal against the Chief Director’s refusal of the licence application is administrative action as defined in PAJA and that the court a quo correctly substituted its decision for that of the Tribunal. The question of exceptional circumstances has substantially changed: new evidence was admitted in this appeal that the Tribunal has been dissolved. What is more, it says, there is no justification for this court to interfere with the court a quo’s discretionary decision to award costs against Mr Makanya in his official capacity. [26] I now turn to the consideration of whether the decision of the Tribunal was reviewable under PAJA and could be substituted by the court a quo. [27] The Tribunal effectively had to rehear the application for the water licence. It is well recognised that an application of that nature will ordinarily qualify as administrative action, since the advent of the Constitution.9 Administrative appeals usually allow for the reconsideration of an administrative decision by a higher authority.10 Indeed, Hoexter, writing in general, says that the ‘person or body to whom the appeal is made steps into the shoes of the original decision-maker, as it were, and decides the matter anew.’11 However, each Tribunal falls to be considered relative to its empowering legislation. 12 [28] This court in South African Technical Officials’ Association v President of the Industrial Court & Others 1985 (1) SA 597(A) at 610G-I held that a body that is empowered to perform some of the functions of a court of law is not necessarily to be regarded as a court of law.13 An administrative body can perform the duties and functions of a court of law without becoming one. The status and true identity of a particular body is not determined solely by the 9 Cora Hoexter Administrative Law in South Africa 2 ed (2012) at 184. Also see Lebowa Granite (Pty) Ltd v Lebowa Mineral Trust 1999 (4) SA 375 (T) at 382E-G; Commissioner, South African Police Service v Maimela 2003 (5) SA 480 (T) at 485D; and in relation to PAJA Magingxa v National Commissioner, South African Police Service 2003 (4) SA 101 (TkH) at 109J-110A. 10 Hoexter Administrative Law at 65. 11 Id. 12 Chapter 15 of the Act 13 Also see Sidumo & Another v Rustenburg Platinum Mines Ltd & others 2008 (2) SA 24 (CC) para 82. nature and the type of the functions it performs. Certain factors are indicative of whether a tribunal should indeed be seen as a court of law. This approach was approved in Sidumo, where Navsa AJ (with whom the majority of the Constitutional Court concurred on this issue) held that while there are similarities between arbitrations before the Commission for Conciliation, Mediation and Arbitration (“CCMA”) established by the Labour Relations Act 66 of 1995 and proceedings before a court of law, the CCMA is not a court of law because there are also significant differences, including that: a commissioner is empowered to conduct the arbitration with the minimum of legal formalities, there is no blanket right to legal representation, the CCMA does not follow a system of binding precedents, and commissioners do not have the same security of tenure as judicial officers or undergo judicial training. [29] In the instant matter the members of the Tribunal do not have the same security of tenure as judicial officers. Item 1 of Schedule 6 to the Act provides that a member is appointed for a period determined by the second appellant. In terms of item 4, read with s 146(8) of the Act, the appointment of a member may be terminated ‘for good reason’ by the second appellant and after ‘consultation with the Judicial Service Commission’. The uncertain tenure of the office those selected to comprise the Tribunal, is not compatible with judicial independence.14 [30] As to the training of the members of the Tribunal, some have no legal training or expertise. They may be appointed on the recommendation of the Water Research Commission established by s 2 of the Water Research Act15 because they are qualified in water resource management or engineering in related fields. It is thus perfectly possible and in accordance with the Act that an appeal to the Tribunal could to be conducted by a person who has no legal experience or training and merely has a degree in engineering. These factors go to show that the court is dealing with an administrative tribunal which 14 See Sidumo at 612D. 15 34 of 1971. performed an administrative action, as defined in s 1 of PAJA, in dismissing Goede Wellington’s appeal. [31] In President of the RSA v South African Rugby Football Union16 with reference to the right to administrative justice in terms of s 33 of the Constitution it was stated: ‘In s 33 the adjective “administrative” not “executive” is used to qualify “action”. This suggests that the test for determining whether conduct constitutes “administrative action” is not the question whether the action concerned is performed by a member of the executive arm of government. What matters is not so much the functionary as the function. The question is whether the task itself is administrative or not. It may well be, as contemplated in Fedsure, that some acts of a legislature may constitute “administrative action”. Similarly, judicial officers may, from time to time, carry out administrative tasks.17 The focus of the enquiry as to whether conduct is “administrative action” is not on the arm of government to which the relevant actor belongs, but on the nature of the power he or she is exercising.’ The nature of the power exercised by the Tribunal was no less and no more than a consideration of whether a water licence should be granted or not. Consequently the court a quo was correct in finding that the decision of the Tribunal constituted administrative action. [32] The second appellant conceded that the Tribunal made an error of law in only considering one of the factors as essential and decisive, rather than considering all the relevant factors prescribed in the statute. [33] To my mind, however, and according to Goede Wellington, the reasonableness of the decision must also be called into question. The Constitutional Court has previously had occasion to address administrative decision-making where the official is faced with a number of considerations of which racial redress is one. Much like the situation facing the court in Bato 16 2000 (1) SA 1 (CC) para 141. 17 There may be circumstances in which the performance of administrative functions by judicial officers infringes the doctrine of separation of powers. That, however, is not an issue we need consider here. Star,18 s 27(b) contains a wide number of objectives and principles. Some of them may be in conflict with one another, as they cannot all be fully achieved simultaneously. There may also be many different ways in which each of the objectives stand to be achieved. The section does not give clear guidance on how the balance an official must strike is to be achieved in doing the counterweighing exercise that is required.19 As opposed to the legislative scheme before the court in Bato Star, there is no indication in the Act that s 27(1)(b) is to be regarded as in any way more important than the other factors. [34] As to the s 27(1)(b) requirement itself, our courts recognise that, at least where there is no express legislative provision to the contrary, transformation such as that envisioned in the section can be achieved in a myriad of ways. Indeed, there is no one simple formula to achieve transformation. 20 [35] Section 6(2)(h) of PAJA requires a simple test: an administrative decision will be reviewable if it is one a reasonable decision-maker could not reach.21 In the instant case, where the administrator was faced with a balance to be struck, it is constitutionally endorsed and opportune to ask: did the administrator strike a balance fairly and reasonably open to him?22 [36] . It is not for the courts to consider whether the Tribunal’s decision was the best decision in the circumstances, and overstep the limits imposed on this court by our constitutionally enshrined separation of powers doctrine.23 The court in fulfilling its judicial function is to enquire whether the Tribunal’s decision struck a reasonable balance between all the factors set out in 18 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs 2004 (4) SA 490 (CC). 19 Bato Star (CC) para 32. 20Bato Star (CC) para 35. 21Bato Star (CC) para 25. 22Bato Star (CC) para 44 where R v Chief Constable of Sussex, ex parte International Trader’s Ferry Ltd [1999] 1 All ER 129 (HL) was quoted and said to provide “sound guidance” in determining what constituted reasonable action of an administrative decision-maker under PAJA. 23Bato Star (CC) para 54. s 27(b), and some not mentioned in the section, owing to its inclusive nature.24 [37] It must be observed that the need to redress the results of past racial and gender discrimination is only one factor in a non-exhaustive list of several factors that have to be taken into account when issuing a licence. It clearly does not presuppose a crude approach where a s 27(1)(b) sledgehammer should be taken to an otherwise exemplary application. In this case, it cannot even be said with any degree of certainty that Goede Wellington did not satisfy the s 27(1)(b) requirement standing on its own. The Regional Director Western Cape concluded that Goede Wellington’s application did indeed satisfy the requirement. [38] The preamble to the Act makes it clear that water is a natural resource that belongs to all people and that the discriminatory laws of the past have prevented equal access to water and the use of water resources. It makes it equally clear that water in South Arica is scarce. The preamble recognises that the ultimate aim of water resource management is to achieve the sustainable use of water for the benefit of all users. It states that the ’protection of the quality of water resources is necessary to ensure sustainability of the nation’s water resources in the interests of all water users’. [39] The Act provides many factors, one of which is the redress factor. It must be seen against the background of the constitutional commitment to achieving equality and remedying the consequences of past discrimination.25 Section 9 of the Constitution provides that ‘[t]o promote the achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may 24 As Schutz JA said in Minister of Home Affairs and Tourism & others v Phambili Fisheries (Pty) Ltd & Another; Minister of Environmental Affairs and Tourism & others v Bato Star Fishing (Pty) Ltd 2003 (6) SA 407 (SCA) para 50 ‘judicial deference does not imply judicial timidity or an unreadiness to perform the judicial function’. O’Regan J agreed with this statement. (Bato Star (CC) 46.) 25Ngcobo J in Bato Star (CC) para 75. be taken.’ But transformation can be achieved in various ways.26 How it is to be achieved in accordance with a particular Act is an issue of, among other things, legislative interpretation.27 The process to be followed in the instant case is not delineated by a points scoring system or the like to assist the Tribunal in assessing a particular application. The assessment is largely left to the official’s ability to assess a particular application in relation to the factors stipulated in s 27(b). [40] The Act provides an open and transparent means by which applications must be assessed. Although much is left to the discretion of the decision maker who is allowed to take factors into consideration not mentioned in the list, it is clear that s 27(b) and indeed the rest of the Act, requires these factors to be assessed by finding an appropriate balance after evaluating all the factors expressly provided for and others. Neither the Act nor the section attributes any significant weight to any of the factors. And, to my mind, a decision maker, who would not be able to add factors to a closed legislative list of factors, cannot on a whim decide to elevate one factor to pre- eminence. That this was done is clear from the reasons provided by the Tribunal. The court a quo was therefore correct in concluding that the decision not to grant the licence sought by Goede Wellington had been unlawful. [41] I now turn to the substitution order made. PAJA provides that in judicial review proceedings a court may grant any order that is just and equitable.28 It expressly provides for orders which are included within the just and equitable rubric. An order setting aside an administrative action can be coupled with other remedies such as remitting the matter for reconsideration, varying an administrative action and correcting a defect. PAJA further provides that it would be just and equitable for a court to substitute an administrative action with one of its own making in ‘exceptional circumstances’.29 It is this remedy that the court a quo thought competent. The high court quashed the 26Ngcobo J in Bato Star (CC) para 104. 27Ngcobo J in Bato Star (CC) para 77 et seq. 28 Section 8(1). 29 Section 8(1)(c)(ii)(aa). administrator’s decision and substituted its decision for that of the Tribunal, awarding the licence sought to Goede Wellington. [42] PAJA does not provide guidelines as to what may be understood under the term ‘exceptional circumstances’. However, the recognition of the principle that a court should be slow to assume a discretion which has been statutorily entrusted to another tribunal, which finds expression in the statutory requirement,30 predates the Act’s enactment in our law. In Johannesburg City Council v Administrator, Transvaal31 Hiemstra J after recognising the principle, held that where the end result is in any event a foregone conclusion and it would merely be a waste of time to refer the matter back to the administrative functionary, the court will depart from the ordinary course. Most relevant to the instant case is that it was held that a court would be particularly willing to substitute its decision for that of the administrative functionary where ‘much time has already been lost by an applicant to whom time is in the circumstances valuable, and the further delay which would be caused by the reference back is significant in the context.’32 It was held that the object of this consideration is to minimise future loss of time.33 Johannesburg City Council, written in 1969, has however been held not to fully describe the position under the Constitution and PAJA. [43] A case is exceptional when, on a proper consideration of the relevant facts, a court is persuaded that a decision to exercise the power in question should not be left to the designated functionary. That determination will be made with reference to established principles, like those in Johannesburg City Council, informed by the constitutional imperative that administrative action must be lawful, reasonable and procedurally fair.34 As the Constitution enshrines everyone’s rights to lawful, reasonable and procedurally fair 30 Hoexter Administrative Law at 552. 31 Johannesburg City Council v Administrator, Transvaal 1969 (2) SA 72 (T). 32 At 76E-G. 33 At 77D. 34 Gauteng Gambling Board v Silverstar Development Ltd & others 2005 (4) SA 67 (SCA) para 28. administrative action,35 a court has to have regard to considerations of fairness.36 There will be no remittal to an administrative authority in cases where such a step will operate procedurally unfairly.37 [44] A further important consideration is whether the court a quo was in a position to make the decision and whether, in addition, fairness dictated that it should have done so. It must be emphasised that an administrative decision making body is generally best equipped by its composition, experience, and access to sources and expertise to make the right decision.38 It is now established that the mere fact that a court considers itself as qualified to take the decision in place of the administrator is not sufficient for it to do so. Fairness to the applicant must also be considered and could tilt the scale in favour of an applicant. Considerations of fairness may in a given case require the court to make the decision itself provided it is able to do so.39 [45] The only reasonable decision that could have been reached by the Tribunal, had it assessed the appeal in accordance with the Act, is that Goede Wellington’s application for a licence should be granted. What is more, further delay will cause unjustifiable prejudice to Goede Wellington. The trees in the citrus orchard were already planted between six and eight years ago and they require the additional water as soon as possible in order to develop and produce to their full potential. [46] Furthermore, from what has come to the attention of the court, both from the Bar and from communications between the parties which form part of the record, the consideration of a referral back to the Tribunal for a speedy result would be to rely on wishful thinking. The Tribunal has been disbanded. 35 Section 33(1) of the Constitution provides: “Everyone has the right to administrative action that is lawful, reasonable and procedurally fair.” 36 Commissioner, Competition Commission v General Council of the Bar of South Africa & others 2002 (6) SA 606 (SCA) para 14. 37 Id. 38 Gauteng Gambling Board v Silverstar Development Ltd & others 2005 (4) SA 67 (SCA). Also see Minister of Enviromental Affairs and Tourism & others v Phambili Fisheries (Pty) Ltd; Minister of Enviromental Affairs and Tourism & others v Bato Star Fishing (Pty) Ltd 2003 (6) SA 407 (SCA) paras 47 -50. 39 Commissioner, Competition Commission para 15. Counsel for the second appellant informed the court that there are amendments to the Act in the offing. However, neither counsel could indicate whether and when the Tribunal would be functional again. The Goede Wellington could face an indefinite delay in consequence of remittal. [47] Astoundingly, after acknowledging the foregoing in a communication addressed to Goede Wellington, the State Attorney informed it that should this court rule in the second appellant’s favour the matter will be referred to a mediation panel in accordance with s 150 of the Act. I say astounding, as the mediation panel provided for in s 150 is aimed at the settling disputes through a process of mediation and negotiation. It is not a body appropriate to consider the application for awarding of licenses. [48] In the event, exceptional circumstances exist which show that the court a quo’s substitution order was well made. What is more, considerations of fairness overwhelmingly dictate that this matter be speedily resolved by this court. Costs [49] The high court awarded costs against Mr Makanya in his official capacity. As it will be recalled, Mr Makanya did not oppose the relief sought either in the high court or this court, he merely challenged the order of costs made against him. [50] It is trite that in awarding costs a court of first instance exercises a judicial discretion. A court of appeal cannot interfere in the exercise of that discretion merely because it would have made a different order.40 The power of this court, a court of appeal, to interfere is limited to those cases where the exercise of the judicial discretion is vitiated by misdirection, irregularity, or the 40 Protea Assurance Co Ltd v Matinise 1978 (1) SA 963 (A) at 976H; Minister of Prisons and another v Jongilanga 1985 (3) SA 117 (A) at 124B. absence of grounds on which the court below, acting reasonably, could have made the order in question.41 [51] The general principles relating to awards of costs against public officers were stated by Innes CJ in Coetzeestroom Estate and GM Co v Registrar of Deeds.42 The central tenet of these principles is that mulcting an official in costs where his action or attitude, though mistaken, was bona fide would be inequitable. It was also established that it would be detrimental to the proper functioning of the administration which is essential in the public interest to maintain. This is as the official would be hampered in making the decisions he is mandated to make in fear of a costs order being made against him in subsequent litigation. It was also laid down that this would be so whether he is indemnified from paying from his own pocket or not. What is more, where a public official does not oppose the relief sought or opposes with the motive merely to assist the court, no cost order will in the normal course be made against him.43 However, the court, in keeping with its discretion to make a costs order it deems fit, retains the right to make a costs order where an official’s actions are mala fide or grossly irregular.44 Proof of mala fides or grossly unreasonable conduct is necessary.45 [52] In the instant case no mala fides or grossly unreasonable conduct was proved and the high court erred in mulcting Mr Makhanya in costs. As has been shown, he at most struck a balance not open to him in law. Order [53] 1. The appeal of the first appellant is upheld with costs including the costs of two counsel. 41 See Attorney-General, Eastern Cape v Blom 1988 (4) SA 645 (A) at 670D – E. 42 1902 TS 216 223-224. 43 Fourie v Cilliers 1978 4 SA 163 (O) at 166 B - D. 44 See Flemming v Flemming 1989 (2) SA 253 (A) at 262B-263A; 45 Per Eloff AJP writing for the full bench in Hammond-Tooke v Stadsklerk van Pretoria 1989 (3) SA 977 (T) at 990E – G. 2. The appeal of the second appellant is dismissed with costs including costs of two counsel. 3. . The order of the court a quo is amended to read: (1) The decision taken on 5 May 2010 by the First Respondent, dismissing the Applicant’s appeal against the refusal by the Chief Director: Water Use in the Department of Water Affairs and Forestry of the Applicant’s application for a licence to use water from the Berg River is reviewed and set aside. The said decision is substituted with the following: ‘1. The appeal by Goede Wellington Boerdery (Pty) Ltd against the refusal on 11 April 2008 by the Chief Director: Water Use in the Department of Water Affairs and Forestry of the Applicant’s application for a licence to use water from the Berg River to which ECPA Boerdery (Pty) Ltd is currently entitled, is upheld. 2. The said licence is granted to Goede Wellington (Pty) Ltd.’ 3. The Second Respondent is to pay the Goede Wellington’s costs, including the costs of two counsel.’ ___________________ N ERASMUS ACTING JUDGE OF APPEAL APPEARANCES: FOR FIRST APPELLANT: M Mojapelo Instructed by: L Mbanjwa Incorporated, Pretoria Naudes Attorney, Bloemfontein FOR SECOND APPELLANT: P Kennedy SC (with him T Makhubele) Instructed by: The State Attorney, Pretoria The State Attorney, Bloemfontein FOR RESPONDENT: AM Breitenbach SC (with him EF van Huyssteen) Instructed by: Werksmans Incorporated, Tyger Valley Symington & de Kok, 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 November 2012 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Makhanya & another v Goede Wellington Boerdery (Pty) Ltd (230/12 & 233/12) [2012] ZASCA 205 (30 November 2012) The Supreme Court of Appeal (SCA) today dismissed an appeal by the Minister of Water and Environmental affairs against a decision of the North Gauteng High Court, Pretoria, in which it reviewed and set aside a Tribunal in terms of the National Water Act’s decision to refuse the transfer of a licence to use water for farming purposes from one farm to another. The high court further substituted its order for that of the Tribunal and granted costs against its presiding officer. The SCA upheld the appeal against a costs order and found that it would be inequitable to mulct an official with costs where his action, though mistaken, was bona fide. The SCA, found that the actions performed by the Tribunal in considering an appeal from an official constituted administrative action in terms of PAJA and thus is reviewable. The actions of the Tribunal amounted to an error in law in considering only one of a number of relevant factors applicable in the granting or transfer of water licences. The decision was also unreasonable and stood to be set aside. The court further found that exceptional circumstances existed that allowed a court to substitute its order for that of an administrative Tribunal. Hence it issued the following order: 1. The appeal of the first appellant is upheld with costs including the costs of two counsel. 2. The appeal of the second appellant is dismissed with costs including costs of two counsel. 3. The order of the court a quo is amended to read: (1) The decision taken on 5 May 2010 by the First Respondent, dismissing the Applicant’s appeal against the refusal by the Chief Director: Water Use in the Department of Water Affairs and Forestry of the Applicant’s application for a licence to use water from the Berg River is reviewed and set aside. The said decision is substituted with the following: ‘1. The appeal by Goede Wellington Boerdery (Pty) Ltd against the refusal on 11 April 2008 by the Chief Director: Water Use in the Department of Water Affairs and Forestry of the Applicant’s application for a licence to use water from the Berg River to which ECPA Boerdery (Pty) Ltd is currently entitled’, is upheld. 2. The said licence is granted to Goede Wellington (Pty) Ltd.’ 3. The Second Respondent is to pay the Goede Wellington’s costs, including the costs of two counsel.’

4174

non-electoral

2024

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case No: 947/2022 In the matter between: MALALA GEOPHREY LEDWABA APPELLANT and MINISTER OF JUSTICE AND CONSTITUTIONAL DEVELOPMENT FIRST RESPONDENT NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS SECOND RESPONDENT HEAD OF THE SPECIALISED CRIMES COURT UNIT, PRETORIA THIRD RESPONDENT Neutral citation: Ledwaba v Minister of Justice and Constitutional Development and Others (947/2022) [2024] ZASCA 17(16 February 2024) Coram: DAMBUZA and MAKGOKA JJA and KATHREE-SETILOANE AJA Heard: 23 August 2023 Delivered: This judgment was handed down electronically by circulation to the parties’ representatives by email, published on the Supreme Court of Appeal website, and released to SAFLII. The date and time for hand-down is deemed to be 11h00 on 16 February 2024. Summary: Malicious prosecution – whether inquiry into absence of reasonable and probable cause to precede that of malice or animus injuriandi. Assessment of reasonable and probable cause – at the time of proceeding with the prosecution. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Van der Westhuizen J sitting as court of first instance): The appeal is dismissed with costs, including those of two counsel. ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Kathree-Setiloane AJA (Dambuza and Makgoka JJA concurring): [1] This is an appeal against the judgment and order of the Gauteng Division of the High Court, Pretoria (the high court), in which it dismissed the damages claim of Mr Malala Geophrey Ledwaba (the appellant). The appellant’s claim arose from an alleged malicious prosecution by employees of the second respondent, the National Director of Public Prosecutions (the NDPP). In terms of s 179(1) of the Constitution,1 the NDPP is the head of prosecuting authority in South Africa, under which all Directors of Public Prosecutions and prosecutors fall. The National Prosecuting Act 32 of 1998 is the national legislation envisaged in s 179(4) of the Constitution to ‘ensure that the National Prosecuting Authority (the NPA) exercises its functions without fear, favour or prejudice.’ Section 32(1)(a) of the NPA gives expression to that objective. [2] The first respondent is the Minister of Justice and Constitutional Development (the Minister),2 who exercises final responsibility over the NPA in terms of s 33(1) of the Constitution. The third respondent is the head of the Specialised Commercial Crimes Unit of the National Prosecuting Authority, Pretoria (head of the SCCU). Its mandate is to effectively investigate and prosecute complex commercial crimes 1 Constitution of the Republic of South Africa, 1996. 2 The first respondent is cited as Minister of Justice and Constitutional Development (the previous designation). With effect from 24 May 2014, the Minister’s designation is Minister of Justice and Correctional Services. However, the respondents did not take issue with this and regard the first respondent as properly cited. emanating from the South African Police Service (SAPS) Commercial Crime Branch. The appeal is with the leave of the high court. The appeal is opposed by only the NDPP. Background [3] On 1 March 2003, the appellant was appointed as Deputy Head of the Directorate of Special Operations (DSO), which was colloquially known as the Scorpions. This was a specialized unit of the NPA that was tasked with investigating and prosecuting high-level and priority crimes, including organized crimes and corruption. It was disbanded in January 2009. As Deputy Head of the Directorate of Special Operations, the appellant occupied the rank of Investigating Director in the Unit. [4] The DSO operated a secret fund known as the Confidential-Fund (DSO C-Fund). DSO C-funds are described in the DSO Policy and Procedures document3 (Policy and Procedures document) as funds allocated out of the DSO budget that are used ‘only when security considerations, timeliness, opportunity, or other exceptional circumstances, peculiar to the collection of court-directed investigative information, prevent the use of mainstream DSO funds’. Mr Casper Jonker was the administrator in the appellant’s office responsible for the management of the DSO C-Fund. [5] In relation to the allocation and administration of funds, the Policy and Procedures document states that: ‘13. DSO C-Funds expenses necessitated in the ordinary course of DSO business and as such incurred before the DSO head of operations and the DSO C-Funds administrator have approved a particular project may be paid out of the DSO C-funds. The C-Funds Administrator must be informed of these expenses within two days after they were incurred. The following approval levels are required for the payment of each such DSO C-Funds expenditure: (a) Greater than R100 000 and all expenses to be incurred outside the RSA must be approved operationally by the head of the DSO and fiscally, by the DSO C-Funds administrator; 3 Directorate of Special Operations Policy and Procedures DSO (DSO C-Funds), PP1-2001, 22 November 2004. (b) between R10 000 and R100 000 must be approved operationally by the DSO head of operations and fiscally, by the DSO C-Funds administrator; (c) below R10 000 must be approved operationally by the relevant DSO regional/ divisional head and fiscally, by the designated DSO C-Funds custodian.’ [6] Section G of the Policy and Procedures document sets out the request procedures for DSO C-Funds, amongst others, as follows: ‘65. All DSO employees needing cash for DSO C- Funds expenses will submit an operationally approved (as per section F2 supra) request for advance of DSO C-Funds form, as per annexure 3, to his/her designated DSO C-Funds custodian. The justification for the expenditure must meet one of the approved usages of DSO C-Funds identified in section D supra.[4] In addition, DSO employees requesting to be imbursed, must also bring, with their claim forms, corresponding receipt(s), or other supporting documentation, not later than 3 working days after the expenditure, or as soon as practicably possible. 66. Furthermore, all DSO employees requesting C-Funds for informants and/or agents must also ensure that the designated informant’s/agent’s custodian acknowledges such request before they forward their request(s) with the C-Funds custodian. The Informant’s/agent’s custodian must do such acknowledgement by attaching his/her signature on the request form itself. 67. Where applicable, change brought back by the requestor, must be acknowledged in writing, by both the C-Funds custodian and the requestor on the original request form itself. 68. The request for reimbursement of DSO C-Funds form is also used to claim reimbursements for DSO C-Funds expenditure made without a prior advance of funds. 69. The DSO employee requesting the DSO C-Funds is responsible for obtaining accredited receipts (provided by widely known and recognized entities, the existence of which can be verified objectively, without compromising any security or other considerations that necessitated the use of DSO C-Funds in the first instance), whenever practical. 70. If an accredited receipt cannot be obtained, the DSO employee requesting the DSO C-Funds is responsible for the attainment of an official DSO C-Funds receipt, as per annexure 5. This DSO C-Funds receipt is to be signed by the DSO employee requesting the DSO C-Funds, the depository/beneficiary as well as another DSO employee in the capacity of a third party witness to the transaction. 4 Under section D policy approved usages of DSO funds are for: DSO undercover agents, rewards, inducements, operational remuneration expenditure, occasional operational contact expenses, evidence purchases, surveillance related expenses, interception and monitoring expenses, and ‘emergency/miscellaneous expenses’. 71. If, in exceptional circumstances, the depository/beneficiary of the requested DSO C-Funds cannot sign an official DSO C-Funds receipt or another DSO employee cannot co- sign an official DSO receipt, the DSO employee, who requested the DSO C-Funds, must submit a sworn statement in support of the particular expenditure. A further sworn statement of either the beneficiary/depository of the DSO employee as a third party witness to the transaction, must be obtained and attached to the request. These sworn statements must explicate the reasons why a depository of another DSO employee could not have co-signed the official DSO receipt. This would classically be the case with the unwitting DSO informant.’ (emphasis in the original text). [7] In early 2004, the Integrity Monitoring Unit of the NPA (IMU) commenced an investigation into allegations of misuse or abuse of the DSO C-funds by two members of the DSO. During this investigation, the investigation team submitted a report to the head of the IMU indicating possible misuse or abuse of the DSO C-funds by the appellant. On 25 January 2005, the IMU invited the appellant to comment on the allegations, which he did on 14 April 2005. [8] On 16 May 2005, the NDPP placed the appellant on special leave pending the finalization of the investigation and disciplinary proceedings into the allegations against him. On 25 July 2005 a meeting of senior officials of the NDPP was held. Amongst those in attendance were Mr Leonard McCarthy, then head of the DSO, and Mr Chris Jordaan SC, the head of the SCCU. Mr McCarthy and others briefed Mr Jordaan on the facts of the appellant’s matter, and requested him (Mr Jordaan) to consider the available evidence with a view to recommend to the NDPP on the way forward. The appellant resigned from the NPA with effect from 31 July 2005. This was before he could be charged with misconduct. The IMU referred the matter to the Serious Economic Offences Unit of the South African Police Service (the SAPS) to investigate possible criminal charges against, the appellant, among others. On 23 August 2005, pursuant to the meeting of 25 July 2005, Mr Jordaan forwarded a memorandum to the NDPP in which he (Mr Jordaan) stated, among other things, that he was of the view that there was prima facie evidence of criminality on the part of the appellant. He therefore recommended that criminal investigations be pursued against the appellant under the guidance of an experienced prosecutor. Ms Glynis Breytenbach was later identified and designated by Mr Jordaan for that purpose. On 3 April 2006, the SAPS appointed Price Waterhouse Coopers (PWC) to investigate the allegations against the appellant. On 12 February 2007 and 17 August 2007 respectively, PWC submitted its forensic report and the addendum thereto (the PWC report) to the SAPS and the NPA. The PWC report concluded that there was a shortage of R294 000 between the moneys advanced to the appellant from the DSO C-Fund and those which the appellant had reimbursed. [9] On 13 October 2006, the appellant was arrested and charged with 23 counts of fraud and theft (the original charges), and brought before the Special Commercial Crimes Court, Pretoria (the SCC Court).5 In the first seventeen counts the State alleged that the appellant had defrauded the NPA when he misrepresented to the employees of the NPA that certain amounts/advances/transactions against the DSO C-Fund were real and valid transactions that could be undertaken in terms of the policies governing the DSO C-Fund. In the alternative it was alleged that the appellant stole those monies. In counts 18 to 23 it was alleged that the appellant stole monies belonging to a close corporation of which he was a member with two others. The essence of the counts was that the appellant received payment in terms of his contract with his co-members and misrepresented to them that no payment had been received for the work done by the close corporation. The trial commenced in 2008 in the SCC Court (the first trial). Ms Glynnis Breytenbach led the prosecution in the first trial. She was assisted by Mr Willem van Zyl and Ms Sandiswa Nkula-Nyoni. This trial was discontinued on 31 May 2010, as the presiding Regional Magistrate had recused himself. [10] On 20 July 2010 the appellant made detailed representations to the NDPP, then Mr Simelane, in which he (the appellant) sought that the trial be discontinued as this would not be in the best interests of justice. He thus requested the NDPP to withdraw all charges against him. He further submitted that there were no reasonable prospects of successfully prosecuting him on the charges. The appellant pointed to the strained relationship between himself and Mr McCarthy as the reason why he was prosecuted. He alleged that Mr McCarthy had verbally declared his intention to destroy his professional career. The appellant also identified Ms Breytenbach as part of Mr 5 The Special Commercial Crimes Court has the same status as a Regional Court. McCarthy’s plan. He accused Ms Breytenbach of suppressing documents that would prove his innocence. In particular, he identified a ‘government issued stationery book’ in which he had ‘detailed all the projects that I approved as well as meetings I held with people in my office.’ With regard to the specific charges, the appellant focused on counts 1, 5, 14, 15, 18, 19-22. On the instruction of the NDPP, Ms Breytenbach, as the lead prosecutor, was requested to furnish the NDPP with a response to the appellant’s representations, which she did on 14 September 2010. A discussion of the essence of appellant’s representations and the NPA’s response thereto follows later in this judgment. Suffice to say for now that Ms Breteynbach’s response to the appellant’s representation was furnished to the then NDPP, Mr Simelane, who, on 11 October 2010, wrote to the appellant and informed him as follows: ‘I have taken the liberty to investigate the allegations that you made by requesting a detailed report from the office of the Director of Public Prosecutions, North Gauteng. After having carefully considered all the documents that were supplied to me as well as your representations, I have decided that the prosecution should continue against you.’ [11] After the rejection of the appellant’s representations, the NPA decided to start the trial de novo on a new indictment. The prosecution was again led by Ms Breytenbach. However, she was later suspended from her position and, subsequently, resigned from the NPA. Mr Van Zyl then became the lead prosecutor, assisted by Ms Nkula-Nyoni. [12] On 27 February 2011 the appellant again made written representations to the NDPP; to drop the charges against him. There, he reiterated his stance that Ms Breytenbach had an ulterior motive to charge him. Broadly, the appellant repeated what he had stated in his previous representations. On 18 March 2011 the Deputy National Director of Public Prosecutions, Ms Mokhatla, responded to the appellant’s second representations as follows: ‘I have been mandated by the National Director of Public Prosecutions (in light of your recent request for an impartial review of the matter) to revisit the issues that you have raised in your representations. After a careful and diligent perusal of the matter, it became clear that the decision which was communicated to you (in a letter dated 11 October 2010) by the National Director of Public Prosecutions was indeed the correct one. I therefore concur that [the] prosecution should continue against you.’ [13] As a result of the above letter, the trial de novo had to resume. Shortly before its commencement, Mr Van Zyl reconsidered the charge sheet and decided, in agreement with Ms Nkula-Nyoni, not to proceed with charges 4, 5, 9, 10, 12, 13, 15, 17, 18 and 19. They, however, added two additional charges: counts 2 and 4. On 31 October 2012, the trial de novo against the appellant commenced before a different Regional Magistrate in the SCC Court on 15 counts of theft and fraud. [14] On 5 April 2013, whilst the trial was pending, the appellant made further representations to the National Director of Public Prosecutions, alleging that his prosecution was malicious and that, based on how the prosecutors involved had acted, he would not receive a fair trial. He further pointed out what he contended were the weaknesses in the State’s case. He therefore requested, once more, for the prosecution to be stopped as, according to him, there was no reasonable prospect of a successful conviction on any of the remaining counts. [15] On 18 July 2013 Mr Mrwebi wrote an internal memorandum to the Head of the Regional SCCU, Johannesburg and informed him as follows: ‘I have perused the subsequent report submitted by Adv. Chabalala. The report makes it amply clear that following investigations, there is a strong prima facie case in the matter on at least the charges of defeating or obstructing the course of justice or attempts thereto, and Fraud. The prosecutor must also be requested to research the possibility of pursuing a corruption charge if possible…’ [16] At the close of the State’s case, the appellant was discharged in terms of s 174 of the Criminal Procedure Act 51 of 1977, on counts 1, 2, 5, 6, 7, 8 and 9. On 5 February 2014, the appellant was convicted on counts 3, 4, and 11 to 14, and acquitted on counts 10 and 15.6 He was sentenced to 10 years’ direct imprisonment. The appellant appealed against his conviction and sentence to the high court, which, on 15 January 2018, upheld his appeal in respect of counts 3, 4, and 11 to 14. 6 The presiding Regional Magistrate determined that charge 15 constituted a splitting of charges in respect of the overlapping charges 11 to 14. In the high court [17] On 10 December 2018, the appellant instituted an action for malicious prosecution in the high court against the NDPP and the head of the SCCU. He alleged in the particulars of claim that during 2006 the NDPP and the head of the SCCU, acting in the course and scope of their employment, wrongfully and maliciously set the law in motion by laying false criminal charges of fraud and theft against him. The charges were based on the alleged grounds that he had: (a) created and authorised fictitious projects and/or non-existent investigations; (b) misrepresented to the NPA that funds had to be utilised for these projects; and (c) misappropriated, embezzled and/or stole various amounts of money in cash from the DSO C-Fund. [18] The appellant named the following prosecutors, in the offices of the NDPP and the head of the SCCU, as responsible for wrongfully and maliciously prosecuting him on false charges of theft and fraud: Ms Breytenbach; Mr Van Zyl; Ms Nkula-Nyoni; and Mr Nash Ramparat. He contended, among other things, that: (a) the NDPP and/or the head of the SCCU and/or their prosecutors had no reasonable and probable cause for laying the criminal charges against him; and (b) they proceeded to prosecute him, despite the written representations which he made to the NDPP on 20 July 2010, 27 February 2011 and 5 April 2013 explaining his innocence. [19] In their plea, the respondents admitted that on 13 October 2006, the appellant was prosecuted for fraud and that the prosecution was instituted at the instance of the NDPP. They furthermore pleaded that: (a) after the IMU investigation and recommendation that criminal charges should be brought against, amongst others, the appellant, the case docket was opened with the SAPS; (b) it was only after careful consideration of the contents of the SAPS docket, together with other available material that a decision to prosecute the appellant was taken; (c) there was reasonable and probable cause for the prosecution of the appellant; and (d) the decision to prosecute him was not actuated by malice on the part of the employees of the NPA. [20] Thus, the high court had to determine whether the appellant had established the requisites for malicious prosecution, which are the following: (a) the defendant set the law in motion in instigating or instituting the proceedings; (b) the defendant acted without reasonable and probable cause; (c) the defendant acted with malice or animus injuriandi; (d) the prosecution has failed; and (e) the plaintiff has suffered damages.7 It was undisputed in the trial, which proceeded only on the issue of liability,8 that the first and fourth requirements were met. Accordingly, the high court had to determine whether (a) the NDPP acted without reasonable and probable cause and, (b) with malice or animus injuriandi. It concluded that the appellant had failed to prove the latter requirement and dismissed the appellant’s claim. In doing so, it reasoned as follows: ‘Where the [appellant] failed to prove the requirement of maliciousness or animus injuriandi, it would serve no purpose to consider whether [he] has proven the requirements of [lack of] reasonable or probable cause. The [appellant] is obliged to prove all four of the requirements, and should he fail to prove one of those, he cannot succeed in his action for malicious prosecution.’ In this Court Reasonable and probable Cause [21] The appellant submitted that the assessment of a claim for malicious prosecution must unfold sequentially in relation to the requirements of reasonable and probable cause on the one hand, and malice or animus injuriandi, on the other.9 He relied for this submission on Minister of Justice v Moleko (Moleko) .10 The appellant contended that the high court erred in first dealing with the question of whether the prosecution acted with malice or animus injuriandi and then concluding that this requirement was not proven. The correct approach, he argued, was to first enquire into whether the prosecution had reasonable and probable cause to prosecute him, which the court did not consider. 7 Beckenstrater v Rottcher and Theunnissen 1955 (1) SA 129 (A) at 135-136; Groenewald v Minister of Justice 1973 (2) SA 480 (O). 8 The high court made an order, in terms of rule 33(4) of the Uniform Rules of Court, separating the issue of liability from the quantum of damages. 9 The appellant was represented in the appeal by two counsel. After the appellant’s counsel had argued the matter and shortly before counsel for the NPA was to commence argument, the court was informed by the appellant’s counsel that their mandate, as well as that of their instructing attorney, was terminated by the appellant. Once his legal representatives were excused from the hearing, the appellant requested leave of the Court to argue his own case, which was granted. 10 Minister of Justice and Constitutional Development v Moleko [2008] ZASCA 43; [2008] 3 All SA 47 (SCA); 2009 (2) SACR 585 (SCA) para 8. [22] Although our law requires that the defendant must have acted with malice or animus injuriandi, that question will only become relevant when it is established that the defendant instigated the prosecution without reasonable and probable cause. The latter issue is anterior to the question of whether the defendant acted with animus injuriandi. To succeed on this leg of the enquiry, a plaintiff must not only prove intent to injure but also consciousness of wrongfulness. As held by this Court in Moleko, animus injuriandi ‘means that the defendant directed his or her will to prosecuting the plaintiff in the awareness that reasonable grounds for the prosecution were absent’.11 It follows from this that the determination of whether a defendant had reasonable and probable cause to prosecute the plaintiff, must precede the determination into whether it acted with animus injuriandi. The high court was, therefore, obliged to determine whether the NPA had reasonable and probable cause for the appellant’s prosecution. A further reason for this, is a litigant’s entitlement ‘to a decision on all issues raised, especially where they have the option of appealing further’,12 as in this case. [23] It is to the issue of reasonable and probable cause that I now turn. In Beckenstrater13 this Court held that: ‘When it is alleged that a defendant had no reasonable cause for prosecuting, I understand this to mean that he did not have such information as would lead a reasonable man to conclude that the plaintiff had probably been guilty of the offence charged; if, despite his having such information, the defendant is shown not to have believed in the plaintiff's guilt, a subjective element comes into play and disproves the existence, for the defendant, of reasonable and probable cause.’ There would, thus, be reasonable and probable cause for the prosecution where a defendant is of the honest belief that the facts, available at the time of taking the decision to prosecute the plaintiff, constituted an offence which would lead a reasonable person to conclude that the person against whom charges are brought, was probably guilty of such offence. This question must not be confused with whether there is sufficient evidence upon which the accused may be convicted. That question 11 Moleko para 63 citing Neethling, JM Potgieter & PJ Visser Neethling’s Law of Personality 2 ed (2005) p181. 12 Spilhaus Property Holdings (Pty) Limited and Others v MTN and Another [2019] ZACC 16; 2019 (6) BCLR 772 (CC); 2019 (4) SA 406 (CC) para 44. 13 Beckenstrater at 136. would ultimately be for the court, in the criminal trial, to decide at the conclusion of the evidence.14 [24] The appellant sought in his testimony, in the malicious prosecution trial (the trial), to justify his actions and prove his innocence. That is not the test for absence of reasonable and probable cause in a malicious prosecution. Whether there was reasonable and probable cause for the prosecution depends on the facts or material which was at the disposal of the prosecutor, at the time that the prosecution was instigated, and the careful assessment of that information. The pertinent date would be that on which the prosecution applied for a warrant of arrest for the plaintiff. In this case, that date is 11 October 2006. If there are representations along the way, the prosecutor is obliged to carefully assess those representations to decide whether to proceed with the prosecution or to withdraw the charges. [25] Mr Van Zyl was a member of the prosecution team from the date that the NPA applied for the warrant of arrest for the appellant. He testified that they decided to prosecute the appellant based on a careful assessment of the information in the docket, and after consultation with the state witnesses. He confirmed that the docket contained evidence relating to each of the counts on which the appellant was charged. This included the IMU full investigation file, the IMU investigation report and disciplinary file which included sworn statements made by various witnesses against the appellant, and other supporting documents. He testified that from his assessment of the evidence in the docket, he was of the honest belief that the charges against the appellant could be sustained as there was a prima facie case against him.15 [26] Where there are numerous discrete charges, such as we have here, each of them must be considered separately in determining whether the prosecution had reasonable and probable cause.16 In line with this approach, I will consider the evidence in the docket that the prosecution had at its disposal, when it decided to prosecute the appellant on each of the charges in the indictment. 14 C Okpaluba, ‘Reasonable and Probable Cause in the Law of Malicious Prosecution: A Review of South African and Commonwealth Decisions’ [2013] PER 8 at para 1. 15 The docket ran into more than 400 pages. 16 Minister of Safety and Security N.O. and Another v Schubach [2014] ZASCA 216 para 13. Counts 1 to 17 [27] In relation to the first 17 counts in the charge sheet, it is alleged that the appellant defrauded the NPA when he misrepresented to it, and its employees, that certain amounts/advances/transactions against the DSO C-Fund were real and valid transactions that could be undertaken in terms of the policies governing the DSO C- Fund. The charge sheet alleges, in the alternative, that the appellant stole the said amounts of money. Count 1 [28] This concerned an alleged fictitious claim that the appellant apparently authorized for a sting operation in the amount of R15 000 on 9 December 2003. This charge was supported by the affidavits of Mr Jan Marthinus Henning (Deputy National Director of Public Prosecutions); Mr Gordon Laersk (Chief Investigating Officer in the DSO), Ms Malebo Ramagoshi (DSO C-Fund Custodian) and a Request for Advance of DSO C-Funds form together with a memorandum compiled and signed on 9 December 2003 by the appellant. The appellant wrote in this memorandum that Mr Henning contacted him and Mr Leonard McCarthy, then head of the DSO, and requested assistance in staging a sting operation. This operation involved a public prosecutor stationed at the Benoni District Court, who purportedly sought a bribe from an accused to withdraw the charges against him. The DSO was tasked with managing the sting operation and arresting the prosecutor. R15 000 was requested for use as entrapment money in the operation. [29] R15 000 was advanced from the DSO C-Fund to the appellant for the operation. The appellant advanced R4 000 to Mr Laersk’s team. Mr Laersk deposed to an affidavit, in which he stated that he requested, and received, R4 000 from the appellant for the operation. He returned R4 000 to the DSO C-Fund because of the termination of the operation, as the accused in question denied that the prosecutor had tried to bribe him. After the commencement of the investigation into the allegations against him, the appellant returned R10 000 to the DSO C-Fund. Although R14 000 (including the R 4000 returned by Mr Laersk) was ultimately returned, an amount of R1 000 remained outstanding. On 6 June 2006, Ms Ramagoshi, the Custodian of the DSO C- Fund, confirmed on affidavit that the appellant received R15 000 from the DSO C- Fund for the sting operation; that Mr Laersk returned R4000; that the appellant returned R10 000 four months’ later; and that although he undertook to repay the shortfall of R1 000 from funds in his bank account, he never did. [30] There was no credible explanation from the appellant as to why he requested R15 000 from the DSO C-Fund when only R4 000 had been requested from him for the operation. This, coupled with the supporting evidence in the docket would have led a reasonable person to conclude that the appellant was probably guilty of the offence of fraud. There was accordingly reasonable and probable cause for the appellant’s prosecution on this charge. Count 2 (in the new indictment) [31] This charge concerned an advance of R22 000 from the DSO C-Fund to the appellant, on 23 January 2004, for use in an entrapment operation. This charge was supported by a Request for Advance of DSO C-Funds form from, Mr Nonpho Frans Doubada (Mr Doubada), a Senior Advocate in the DSO, to the appellant requesting R22 000 entrapment money. It was accompanied by a requesting memorandum that was approved by the appellant. [32] On 8 July 2004, Mr Doubada deposed to an affidavit in which he said that, on 23 January 2004, the appellant instructed him to draft a memorandum requesting the amount of R22 000 from the DSO C-Fund for purposes of an entrapment operation, which he did. The memorandum contained facts that the appellant instructed him to include. Mr Doubada stated, in the affidavit, that he knew nothing of the facts contained in the requesting memorandum and that he drafted it because the appellant instructed him to do so. In addition, Adv Doubada said: ‘Later during the day, Ledwaba contacted me and requested me to fetch R22,000.00 in cash from Ms. Malebo Ramagoshi, the DSO Confidential Funds Custodian. He further instructed me to hand over the R22, 000.00 to him once I had received it. I then went to Ramagoshi’s office and signed for the R22,000.00. Once I had received the R22, 000.00 as instructed, I handed it to Ledwaba personally at the office of Anthea Annandale (Office Manager, DSO).’ [33] The evidence in the docket would have led a reasonable person to conclude that the appellant was probably guilty of the offence of fraud. There was accordingly reasonable and probable cause for the appellant’s prosecution on this charge. Count 2 (in the old indictment) [34] This charge concerned an advance of R45 000 received on 27 February 2004 by the appellant from the DSO C-Fund. The advance was made based on a Request for Advance of DSO C-Funds form purportedly compiled by Mr Andrew Becker, at the request of the appellant. The request read in relevant part: ‘2. The matter involves a possible investigation of Nigerian Nationals for Drug Dealing. The suspects will be sending a Courier to travel to the UK to collect and bring some drugs back to South Africa…a source is being tasked to follow the Courier and establish all contacts he makes as well as the product and modus operandi of passing through the customs at the airport. 3. The source must urgently be provided with an amount of R45 000.00 for the operation. The project is not yet registered’. However, as is apparent from an affidavit deposed to by Mr Becker, he had no personal knowledge of the contents of the memorandum. Mr Becker confirmed in the affidavit that he signed the memorandum because the appellant instructed him to do so. He believed that the appellant had full knowledge of the operation and the contents of the memorandum. He signed the memorandum because he had no reason to doubt the truth of its contents. He was, therefore, surprised when the appellant informed him in September 2004 ‘that things were not well’ because of the two memoranda he had signed at his [the appellant’s] request. [35] Mr Tongwane deposed to an affidavit on 13 June 2005 in which he denied receiving or handling these amounts of money from the DSO C-Fund. He also said that he had no knowledge of the memorandum dated 27 February 2004, in which Mr Becker requested R45 000 for payment to a source in a drug-dealing operation. According to Mr Tongwane, on 14 April 2005, the appellant intimated that he was in trouble, and requested Mr Tongwane to inform the IMU investigators that he had received R45 000 and R66 000 from the appellant. If Mr Tongwane was amenable to doing so, then the appellant would provide him with the necessary paperwork. Mr Tongwane advised the appellant that he was not prepared to assist him to commit fraud. A day or two later, Mr Tongwane was informed by Mr Prince Mokotedi of the IMU that the appellant had informed the IMU that the amounts of R45 000 and R66 000 were requested by, and handed to, Mr Tongwane for operational purposes on 27 February 2004 and 23 April 2004, respectively. Mr Tongwane was shocked and angry, and explained to Mr Mokotodi what had transpired at the meeting with the appellant on 14 April 2005. [36] Mr Becker was also interviewed by Mr Mokotedi. After the interview, he asked the appellant for feedback on the investigation. He assured Mr Becker that there was nothing to be concerned about, as he had already repaid both amounts. Mr Becker considered the appellant’s response to be strange because both the memoranda he had signed, indicated that the requested money was for operational expenses. The appellant personally returned the R45 000 nine months after it was advanced. [37] In my view, it was reasonable to conclude that if the informer that was supposedly paid was not fictitious, there would have been no reason whatsoever for the appellant to reimburse the DSO C-Fund. This, coupled with the sworn statements, in the docket, of Mr Becker and Mr Tongwane, would have led a reasonable person to conclude that the appellant was probably guilty of the offence of fraud. There was accordingly reasonable and probable cause for the appellant’s prosecution on this charge. Count 3 [38] Count 3 concerned an advance of R20 000 from the DSO C-Fund to the appellant, on 7 March 2004, for an unknown project and without this claim being approved by the operational and fiscal authoriser as required by DSO C-Funds Policy and Procedure document. According to the sworn statement of Mr Pieterse, no supporting documentation could be found for this transaction. There was also no evidence indicating that the R20 000 advance was returned by the appellant. The supporting affidavit of Mr Pieterse would have led a reasonable person to conclude that the appellant was probably guilty of the offence of fraud. There was accordingly reasonable and probable cause for the appellant’s prosecution on this charge. Count 4 (in the new indictment) [39] This count concerned the payment of R40 000 on 5 April 2004 to the appellant from the DSO C-Fund. The advance was supported by a Request for Advance of DSO C-Funds form, dated 5 April 2004, for an amount of R40 000 signed by Mr Doubada as the claimant and Ms Ramagoshi as the fiscal authoriser. It was accompanied by a memorandum also signed by Mr Doubada. The memorandum did not describe the purpose for which the funds were to be used. It merely stated that: ‘[T]he source should be motivated by an award of source fee for the information already provided’. An amount of R40 000 was suggested taking into account the value of money principle’. This memorandum was approved by the appellant. [40] However, on 8 July 2005, Mr Doubada deposed to an affidavit in which he stated that he had no knowledge of the facts contained in the memorandum relating to the DSO Head Office C-Fund ‘Operation Catchment’ because: ‘On 5 April 2004, the appellant called me to his office and handed me a requesting memorandum that had already been typed and requested me to sign it. On page 2 of the Annexure X, my name and rank had already been typed in, and all I was required to do was sign my name. Ledwaba informed me that he needed the R40,000 referred to in Annexure X for an operation. As instructed, I duly signed Annexure X and handed it to Ledwaba. Later on, during the day, Ledwaba instructed me to fetch the R40 000 cash from the C-Fund Custodian (Ramagoshi). I then went to Ramagoshi and signed for receipt of the R40 000 cash (see Annexure Y). Once again, Ramagoshi did not query my receipt of this money. I then went to Ledwaba’s office and personally handed him the R40 000. I had no knowledge of the facts contained in Annexure X.’ [41] I am of the view that the evidence in the docket, especially the affidavit of Mr Doubada, would have led a reasonable person to conclude that the appellant was guilty of fraud. There was accordingly reasonable and probable cause to prosecute the appellant on this charge. Count 4 (old count 4) [42] This charge concerned an advance of R15 000 to the appellant on 12 March 2004. It was supported by two handwritten documents. The one note reads: ‘R15 000 – Geoph Ledwaba [the appellant]. Taken by Phillip Lebopa. Total money to Geoph that was not signed for: R35 000 on 12/03/2004. These comments were handwritten and signed by Ms Ramagoshi, the Custodian of the DSO C-Fund. In an affidavit deposed to by Ms Ramagoshi, she confirmed that she made these entries after the appellant, without the necessary documentation, requested her to give him an advance of R15 000 from the DSO C-Fund. The appellant requested the money telephonically, and informed her that Mr Phillip Lebopa, Assistant Director of Investigations in the DSO, would fetch it. This concerned Ms Ramagoshi as the appellant’s request was not supported by the requisite documentation in terms of the Policy and Procedure document. She raised this with Mr Jonker, the Administrator of the DSO C-Fund, who said that ‘we cannot deny Ledwaba the money because he is the ‘big boss’. She also approached Ms Ayanda Dlodlo, then Deputy Head of the DSO, to intervene, on a different occasion, when the appellant requested funds without completing the requisite documentation. [43] Mr Lebopa also deposed to an affidavit on 6 July 2005 in which he confirmed that the appellant had instructed him to collect a sum of money from Ms. Ramagoshi, which he did. Ms Ramagoshi handed him an envelope which she said contained R15 000 in cash. Since the appellant did not inform Mr Lebopa of the purpose for which the money was to be used, Mr Lebopa refused to sign the receipt that Ms Ramagoshi requested him to sign. As instructed by the appellant, Mr Lebopa handed the money to the appellant at the Rosebank Mall. The claim was not supported by an operationally approved request form as required by the Policy and Procedures document. [44] The sworn statements in the docket in respect of this charge would have led a reasonable person to conclude that the appellant was probably guilty of fraud. There was accordingly reasonable and probable cause to prosecute the appellant on this charge. Count 5 [45] This charge concerned the payment of R150 000, on 5 April 2004, from the C- Fund to a certain Mr Yusuf Patel, an alleged informer in the investigation into the South African National Association of Clients (SANAC). The Official DSO C-Fund receipt reflects that Mr Patel acknowledged receipt of R150 000 and the funds were paid to him for the purpose of ‘source information in the SANAC matter’ on 19 March 2005. The receipt contains the signatures of the appellant and Mr Kasper Jonker, the Administrator of the DSO C-Fund. They were apparently present when the funds were handed over to Mr Patel. Mr Koobendran Naidoo, the Investigating Officer in the SANAC investigation stated in an affidavit deposed to on 21 June 2005, that he used two sources, namely Mr Jannie Van der Sandt and Mr Ebrahim Dawood in the investigation. However, on 14 March 2005, Mr Naidoo received a telephone call from the Chief Investigating Officer, Mr Marion, who informed him that the appellant had requested Mr Naidoo to draft a memorandum motivating the payment of money to a source in the SANAC investigation. In the belief that the requested memorandum related to Mr Dawood, Mr Naidoo advised Mr Marion that he had difficulty with his request, as Mr Dawood was an accomplice and accomplices were never rewarded. [46] The next morning, Mr Marion again requested Mr Naidoo to draft the memorandum. Mr Naidoo refused, asserting that he was unaware of any source (informant) who qualified for a reward for information supplied in the SANAC investigation. Mr Marion then spoke to the appellant, who called Mr Naidoo and insisted that he draft the memorandum. When Mr Naidoo refused, the appellant told him that he had interviewed the informant who qualified for a reward as he had supplied information relevant to the investigation. Mr Naidoo considered this to be very strange as, in his experience, the ‘Head of Operations does not become involved with informants… all information, supplied by informants or potential informants, was channeled through to the investigating officers of the matters concerned’. [47] Mr Naidoo subsequently received a call from Mr Lawrence Mrwebi, the DSO Durban Regional Head, who instructed him, at the behest of the appellant, to submit a motivation for payment to a source in the SANAC investigation. Mr Naidoo refused but offered to send Mr Mrwebi a report on the status of the SANAC investigation, which he did. On 19 March 2004, Mr Naidoo became aware of a memorandum, dated 16 March 2004, signed by Mr Mrwebi and Officer Ngema (on behalf of Mr Marion). The memorandum detailed a list of successes in the SANAC investigation which were contained in Mr Naidoo’s report. It, however, went further and recommended payment of R150 000 to a source (informant) in the SANAC investigation, even though Mr Naidoo’s report made no reference to any such source. This concerned Mr Naidoo, as it appeared that his successes in the investigation were now used to motivate payment to an unknown source (informant), whom he had no knowledge of. He immediately expressed this concern to Mr Mrwebi and Mr Marion in a memorandum dated 19 November 2004. [48] Mr Naidoo subsequently requested Mr Mrwebi to provide him with access to the source, but to no avail. During the appellant’s visit to the DSO Durban Office, Mr Naidoo requested the appellant to make the source available to him. The appellant undertook to do so, but never made good on his undertaking. The affidavits of Mr Dawood, Mr Mrwebi, Mr Pieterse and Ms Dlodlo were also in the docket. Mr Dawood, a source inside SANAC explained how it defrauded members of NEHAWU. He, however, categorically stated that: ‘I do not know and never heard of a person called Yusuf Patel. During the course of involvement with SANAC I never met a person called Yusuf Patel’. [49] Mr Mrwebi explained, in his affidavit, that based on the information and reports he had received, ‘I have always been aware that a source (informant) Mr Ibrahim Dawood approached the President of NEHAWU with information and the latter contacted the DSO in Gauteng where Mr Dawood was debriefed and the investigation in the matter commenced’. Notably, Mr Mrwebi did not mention Mr Patel as an informer. Ms Dlodlo explained in her affidavit why she co-signed for the payment of R150 000 to the appellant. She apparently did so because she was advised by the appellant that the money had been used for operational expenses, relating to information he had received concerning the possible disruption of the 2004 national elections by a political party. Mr Pieterse deposed to an affidavit, dated 5 June 2005, in which he confirmed the version of Mr Naidoo. He also confirmed that the source – Mr Patel – was not registered with the DSO. Mr Pieterse was also unable, despite a diligent search, to locate a file in respect of Mr Patel in the DSO informant files. [50] The appellant testified in the trial that when the prosecution decided to charge him on this count, they failed to consider CCTV footage in which Mr Patel could be seen entering his office. Mr Van Zyl testified that this footage was not part of the material in the docket and was not considered in their evaluation. In the light of the sworn statements, in the docket, relating to the non-existence of the informant, a reasonable person would have concluded that there was sufficient evidence to sustain a conviction on the charge. The prosecution clearly had reasonable and probable cause to prosecute the appellant on this charge. Count 6 [51] Count 6 concerned an advance of R66 000 from the DSO C-Fund, to the appellant, on 23 April 2004. The advance was supported by a Request for Advance of DSO C-Funds form and a memorandum from Mr Doubada to the appellant, motivating the claim as entrapment money. However, Mr Doubada stated in an affidavit deposed to on 8 July 2005 that he compiled the memorandum requesting the amount of R66 000 on the instructions of the appellant. The appellant called him to his office and instructed him to sign a requesting memorandum that had already been typed. His name and rank were also already typed in, and all he had to do was sign, which he did. He said that he had no personal knowledge of the facts contained in the memorandum, and that he did not collect the cash on behalf of the appellant. The appellant only returned these funds approximately 8 months after they were advanced. [52] Mr Tongwane’s affidavit, dated 13 June 2005, which supported charge 3 also supports this charge. In my view, it was reasonable to conclude that the money was refunded to the DSO C-Fund because the entrapment project was fictitious. This, coupled with the sworn statements in the docket, of Mr Doubada and Mr Tongwane, would have led a reasonable person to conclude that the appellant was probably guilty of fraud. There was accordingly reasonable and probable cause to prosecute the appellant on this charge. Count 7 [53] Count 7 concerned an advance of R22 000, on 6 May 2004, to the appellant from the DSO C-Fund. On 14 June 2005, Ms Mercier Fryer, who was at the time employed at the DSO as the Project Management Officer, deposed to an affidavit in which she stated that prior to this appointment she was employed in Operational Support where she worked on undercover operations. From time to time, she received money for these operations. She had an amount of R114 258 in her custody and under her control, which was assigned to rent undercover accommodation. On 6 May 2004, the appellant instructed her to provide him with R22 000 of the funds in her custody, for use in an undercover entrapment operation. She obliged and handed over the funds to the appellant. She asked him to sign an official DSO C-Fund receipt, dated 6 May 2004, which he did. She indicated on the receipt that the appellant had received the funds for purposes of ‘evidence/purchase/trap’. The appellant informed her that he would hand her the authorising documentation the following day, but never did so. [54] The appellant returned the money on 27 August 2004. No supporting documentation could be located for this transaction. Again, it was reasonable to infer that if this transaction was not fictitious, there would have been no reason for the appellant to reimburse the DSO C-Fund. This, coupled with the supporting sworn statements in the docket would have led a reasonable person to conclude that the appellant was probably guilty of fraud. There was, accordingly, reasonable, and probable cause to prosecute the appellant on this charge. Count 8 [55] Count 8 concerned an advance of R5 000 from the DSO C-Fund, to the appellant, on 28 May 2004. This advance was not supported by an approved Request for Advance of DSO C-Funds form as required by the Policy and Procedures document. The appellant returned the funds approximately 9 nine months after they were advanced. As in the case of the other charges, I am of the view that it was reasonable to deduce that if this transaction was not fictitious, there would have been no reason to reimburse the DSO C-Fund nine months later. The sworn statements in the docket in relation to this charge would have led a reasonable person to conclude that the appellant was probably guilty of fraud. There was accordingly reasonable and probable cause to prosecute the appellant on this charge. Counts 9 and 12 [56] These counts concerned advances of R35 000 to the appellant on 18 June 2004, and R25 000 on 13 July 2004 (total of R60 000). The advances were not supported by approved Request for Advance of DSO C-Funds forms. In a memorandum dated 28 June 2004, supposedly from Mr Becker to the appellant, Mr Becker motivated a claim for R60 000 to be used by a source for payment of an airflight to the United Kingdom (UK) and accommodation and subsistence costs whilst there. The appellant approved the memorandum. However, Mr Becker deposed to an affidavit in which he said that he did not compile the memorandum requesting R60 000. The appellant only returned these monies eight months after they were advanced to him. According to the affidavit of Mr Pieterse, the facts mentioned in the memorandum were not consistent with the facts of an existing investigation, relating to the Department of Home Affairs, namely Project Zealot. [57] On this basis, a reasonable prosecutor would have concluded that there was no reason for the appellant to reimburse the DSO C-Fund other than that the transaction was fictitious. The sworn statements in the docket in relation to this charge would have led a reasonable person to conclude that the appellant was probably guilty of fraud. There was accordingly reasonable and probable cause to prosecute the appellant on this charge. Counts 10 and 11 [58] Counts 10 and 11 concerned two advances of R24 000 and R15 455 to the appellant on 6 July 2004 and 12 July 2004, respectively. In relation to both these advances, the appellant issued memoranda indicating that he had authorized the use of these amounts for operational purposes and that the money was handed over to the ‘team’. However, the advances made were not supported by approved Request for Advance of DSO C-Funds forms. The appellant only returned both these amounts five months later. It was reasonable to conclude that the appellant reimbursed the DSO C-Fund because the purported transaction was fictitious. The sworn statements in the docket in respect of these charges would have led a reasonable person to conclude that the appellant was probably guilty of fraud. There was accordingly reasonable and probable cause to prosecute the appellant on this charge. Count 13 [59] Count 13 concerned an advance of R13 000, from the DSO C-Fund to the appellant, on 20 July 2004. The advance was not supported by an approved Request for Advance of DSO C-Funds form. According to the affidavit of Mr Doubada dated 8 July 2005, he received R13 000 from Ms Ramagoshi with an instruction from the appellant that it be handed to him at the Menlyn Park Shopping Centre, in Pretoria. Mr Doubada tried to contact the appellant but failed to do so. Later that evening, the appellant went to Mr Doukada’s home and collected the money from him. The appellant only returned the advance of R13 000 nine months after it was advanced to him. [60] In my view, it was reasonable to conclude that the appellant reimbursed the DSO C-Fund because there never was a legitimate transaction underlying the advance of the R13 000. The sworn statements in the docket in relation to this charge would have led a reasonable person to conclude that the appellant was probably guilty of fraud. There was accordingly reasonable and probable cause to prosecute the appellant on this charge. Count 14 [61] Count 14 concerned a payment of R50 000, on 23 July 2004, to a source that was never registered as an informer. Payment was authorized based on a memorandum, dated 23 July 2004, prepared by Mr Doubada. However, Mr Doubada stated, in the affidavit deposed to on 8 July 2005, that the appellant instructed him to sign a requesting memorandum, for an advance of money for an operation at the OR Tambo International Airport. The memorandum had already been typed and included Mr Doubada’s name. Mr Doubada signed the memorandum as duly instructed. He, however, said that he had no personal knowledge of the facts in the memorandum, and did not collect the money on behalf of the appellant. The appellant approved the memorandum and payment of R50 000 to the informer, whom he claimed to have spoken to on several issues. No official receipt was found in which the source acknowledged receipt of the money. [62] The evidence in the docket in respect of this charge would have led a reasonable person to conclude that the appellant was probably guilty of fraud. There was accordingly reasonable and probable cause to prosecute the appellant on this charge. Count 15 [63] Count 15 concerned an advance of R30 000 to the appellant. This advance to the appellant was made without any Request for Advance of DSO C-Funds form. The request was made by Mr Tongwane for R20 000. However, the appellant, in his own handwriting, increased the amount to R30 000. No other documents relating to this transaction could be traced. The money was refunded on 6 October 2004, but could not be linked to a specific advance. [64] Once again it was reasonable to conclude that there was no legitimate basis for this transaction. And the way it was conducted did not accord with the applicable Policy and Procedures document. This, coupled with the evidence in the docket in relation to this charge, would have led a reasonable person to conclude that the appellant was probably guilty of fraud. There was accordingly reasonable and probable cause to prosecute the appellant on this charge. Count 16 [65] This count concerned an advance of R7 000 from the DSO C-Fund, to the appellant, on 23 October 2004. Payment was made to the appellant based on an unsigned and unauthorized Request for Advance of DSO C-Funds form from the appellant as claimant. No additional documents could be located. The appellant returned this amount in February 2005. For reasons similar to the previous charge, the evidence in the docket in relation to this charge would have led a reasonable person to conclude that the appellant was probably guilty of fraud. There was accordingly reasonable and probable cause to prosecute the appellant on this charge. Count 17 [66] Count 17 concerned an advance of R22 000, from the DSO C-fund to the appellant, on 25 January 2005. The appellant received an advance of R22 000, on 6 May 2004, for the purposes of an ‘evidence purchase/ trap’ without providing Ms Fry with the necessary supporting documentation. In the affidavit deposed to by Ms Fry, the appellant returned this advance on 27 August 2004 (See count 7 above). However, according to a handwritten note (annexure 31 to the PWC Report), dated 25 January 2005, the R22 000 was returned by the appellant on 18 January 2005 and withdrawn again on 25 January 2005. The handwritten note was signed by Mr Jonker, the administrator of the DSO C-Fund. The advance of R22 000 made on 25 January 2005 was not supported by a Request for Advance of DSO C-Funds form and the annexures as required by the Policy and Procedures document. [67] According to the affidavit of Ms Joline Lamprecht, she handed the R22 000 to the appellant on his mere instruction, and without receiving any proper authorised documents. The evidence in the docket in respect of this charge would have led a reasonable person to conclude that the appellant was probably guilty of fraud. There was accordingly reasonable and probable cause to prosecute the appellant on this charge. Counts 18 and 19 to 23 [68] In respect of count 18 of the charge sheet (Count 10 in the new indictment), it was alleged that the appellant committed fraud in failing to inform the NPA/DSO that he was doing remunerated work (not authorised by the NPA) whilst he was still employed by the NPA. In counts 19 to 23 of the charge sheet (counts 11 to 15 in the new indictment), it was alleged that the appellant, on four separate occasions, stole money that belonged to Ndumiso Trust CC trading as Kagiso Consulting (Kagiso). It was also alleged that the appellant defrauded members of Kagiso when he represented that a certain project had been terminated, and that no money was received as payment, whereas this was not true. Count 18 was supported by a letter of resignation from the appellant, as well as the affidavit of Mr Lloyd Charles Lephoko deposed to on 9 October 2006. Counts 19-23 are also supported by the affidavit of Mr Lephoko and the annexures thereto. [69] The events that led up to the appellant becoming involved in the business of Kagiso are explained by Mr Lephoko in his affidavit. He states that he and Ms Rose Nonyane decided to conduct an insolvency practice and registered Ndumiso Trust as a close corporation for that purpose. Ndumiso Trust CC was registered on 27 January 2004. In August/September 2004, they met with the appellant, who was his brother- in-law, to explore the possibility of getting work for their insolvency practice from the Asset Forfeiture Unit (AFU). During this time, the appellant expressed an interest in becoming involved in their insolvency practice, and they, in principle, agreed that the appellant would become a member of Ndumiso Trust CC. [70] According to Mr Lephoko, the appellant approached him again towards the end of November 2004 and requested him to register a close corporation for him. The appellant informed Mr Lephoko that a close corporation was needed as there was a possibility of obtaining work from the Gauteng Department of Safety and Liaison (the Department). The appellant proposed that the close corporation be named Kagiso Consulting. Since it would have taken some time to register a close corporation, Mr Lephoko suggested that they do the work through Ndumiso Trust CC, which was already registered, and that Kagiso Consulting be its trading name. The appellant agreed and suggested that Ms Nonyane and Mr Lephoko should be involved. Ms Nonyane agreed to the arrangement, and they registered the appellant as a member of Ndumiso Trust CC. They secured office space to conduct the business. [71] The appellant provided Mr Lephoko with some background information about the possible work and requested him to prepare a quotation and a company profile for the Department. They agreed to quote an hourly fee of R900 per hour for the appellant, R800 per hour for Mr Lephoko, and R800 per hour for Ms Nonyane. They also agreed that the appellant would be available all the time to do the work of the business, and that Mr Lephoko and Ms Nonyane would assist on an alternate basis. Mr Lephoko specifically asked the appellant if the work for the Department, which they envisaged would take about 30 working days, would not interfere with his work at the DSO. The appellant assured him that it would not be a problem as he had obtained permission to do the work. [72] As requested, Mr Lephoko drafted a quotation and a company profile which he gave to the appellant. A few days later the appellant informed Mr Lephoko that Kagiso was given work by the Department. They then started their research for the project, which consisted of three different phases. During December 2004, Mr Lephoko visited the offices of the Department and met Ms Dlodlo, then Head of the Department. [73] In early January 2005, Mr Lephoko and the appellant met with Ms Dlodlo and a certain Mr Mpanza and they reported on the progress of the project. Towards the end of the first phase of the project, Mr Lephoko got the impression that the appellant was not keen on having him and Ms Nonyane involved and wanted to do all the work himself. Despite the problems they continued to work together. On the due date for the report on the first phase, Mr Lephoko met with the appellant who informed him that the report was almost complete, and that he would submit it the next morning, which he did. They then began working on phase two but shortly thereafter, the appellant informed Mr Lephoko that the Department had taken the project away from Kagiso and given it to another entity. Mr Lephoko stopped and did no further work. He, however, asked the appellant, on numerous occasions, to be paid for the work done in the first phase. The appellant informed Mr Lephoko that he could not be paid, because the Department had not paid Kagiso for the work done. [74] Mr Lephoko only discovered, after receiving copies of invoices and other relevant documents from the SAPS, that Kagiso had received payment for the work done, and that it was paid into the private bank account of the appellant. The documentation revealed that the appellant had submitted invoices made out in the name of Kagiso to the Department on the dates and for the amounts as follows: 10 January 2005 for R193 422.20; 1 February 2005 for R165 375.98; 11 February 2005 for R110 250.65; and 16 February 2005 for R27 079.11. These invoices were attached to the affidavit of Mr Lephoko and were, therefore, part of the docket. [75] The appellant testified that he resigned from the NPA in January 2005 and was, as such, not employed by the NPA when he was involved in the business of Kagiso during the period in question. Therefore, he said that he did not need permission from the NDPP to carry out work outside the NPA. This was put to Mr Van Zyl in cross- examination. He responded by making it clear that this information was not before them when they took the decision to prosecute the appellant on charge 18. He said that what they had before them were documents which indicated that the appellant had resigned with effect from August 2005. He also said that the appellant’s letter of resignation, dated 15 June 2005, which was shown to him in court was not in the docket. Nor was the appellant’s earlier application to the NDPP (attachments to that letter) to be released from service to pursue a career, as an advocate, at either the Johannesburg Bar or the Pretoria Bar. The appellant’s resignation, in terms of the letter of 15 June 2005, was with effect from 31 July 2005. [76] Although this letter of resignation refers to an earlier application to be released from office during January 2005, it is clear from the letter itself that the appellant was persuaded by the NDPP, at the time, Mr Vusi Pikoli to reconsider his request which he did. As stated by him, in the letter, the appellant subsequently withdrew his request to be released from office and ‘continued [his] responsibilities as Investigating Director in the DSO’.17 [77] Mr Lephoko’s affidavit and the annexures thereto which he received from the SAPS, coupled with the appellant’s resignation from the NPA with effect from 31 July 17 Resignation letter from the appellant to the NDPP dated 15 June 2005. 2005, would have led a reasonable person to conclude that the appellant: (a) probably committed fraud in failing to inform the NDPP that he was doing remunerated work (not authorised by the NPA) whilst he was still employed by the NPA, and (b) probably stole money that belonged to Kagiso on four separate occasions; and (c) probably committed fraud against the members of Kagiso when he represented that the project was terminated and that no payment was received for the work done. Withdrawal of Charges [78] The prosecution took the decision to start the trial de novo and to proceed on a new indictment. The PWC report was only completed on 27 February 2007. It was, therefore, not part of the docket when the decision to prosecute the appellant, on the original charges, was taken on 11 October 2006. The PWC Report was, however, in the docket when the prosecution decided to start the trial de novo on the new indictment. [79] Mr Moepi compiled the PWC report. It detailed the findings of PWC in respect of the DSO C-Fund transactions and other related transactions in respect of, amongst others, the appellant. The main findings were that: (a) A review of the appellant’s personal bank account revealed that some of the refunds which the appellant had made to the DSO C-Fund, coincided with his receipt of funds from the Department; (b) On 24 February 2005, a total of R82 500 in cash withdrawals was made from the appellant’s bank account. On the same day, the appellant refunded an amount of R79 000 to the DSO C-Fund; (c) A net amount of R234 000 advanced to the appellant from the DSO C-Fund was still outstanding; (d) Payments amounting to R496,127.94, from the Department to Kagiso, were deposited into the appellant’s personal bank account on 28 January 2005, 23 February 2005, 16 March 2005 and 25 March 2005, respectively. [80] Mr Moepi testified on some of these findings in the first trial. However, before he could complete his evidence, the trial was terminated because of the recusal of the Regional Magistrate. [81] The appellant contended in the appeal that the withdrawal of 10 of the 23 charges by the prosecution, at the commencement of the trial de novo, demonstrated that it had no reasonable and probable cause to prosecute him on those charges. I disagree. In this regard, Mr Van Zyl testified that on the day before the trial de novo was to commence, he decided in agreement with Ms Nkuna-Nyoni to withdraw counts 4, 5, 9, 10, 12, 13, 15, 17, 18 and 19 against the appellant. He testified that although Mr Moepi had testified in support of some of these charges in the first trial, it was going to be too expensive, due to his high fee rate, to recall him to testify in the trial de novo. Mr Van Zyl said that he was initially of the view that these charges could be proved, in the trial de novo, by leading the evidence of other witnesses on the documents referenced in the PWC report. However, on reconsideration, he realised that Mr Moepi’s testimony was essential because in respect of certain transgressions he relied on a single document for his findings, but in respect of others he relied on several documents. Mr Van Zyl furthermore testified that after listening to Mr Moepi’s testimony in the first trial and understanding his methodology, he believed that if he omitted to call Mr Moepi to testify in the trial de novo, he would struggle to prove some charges. However, to avoid the costs of recalling Mr Moepi to testify in the trial de novo, he considered it prudent to withdraw those charges. [82] Mr Van Zyl’s explanation for withdrawing the charges was not implausible, because there was no evidence to gainsay it. In the circumstances, no adverse inference can be drawn from the prosecution’s decision to withdraw these charges. Neither does it matter that the appellant was discharged in terms of s 174 of the CPA, in respect of counts 1, 2, 5, 6, 7, 8 and 9. What matters is that when the prosecution authority originally decided to prosecute the appellant on these charges, it was of the honest belief, based on the contents of the docket, that there was reasonable and probable cause for his prosecution. [83] Prior to the commencement of the trial de novo, the appellant made two sets of representations to the NDPP to have the charges against him withdrawn based on his innocence. These representations were rejected by the respective NDPPs. The appellant, however, did not give a version in his warning statement in the first trial. Nor did he give a version or state his defense in his plea explanation, as he exercised his right to remain silent. This meant that the only material available to the NPA to decide whether to continue with the prosecution was the docket itself. Mr Van Zyl testified, under cross-examination, that he did consider the representations of the appellant when he decided, in consultation with Ms Nkuna-Nyoni, to withdraw the ten charges. He, however, testified that ultimately, his decision to withdraw these charges and add two additional ones, was based on his own assessment of the information in the docket, which included the PWC report. According to Mr Van Zyl, charges 2 and 4 were added to the new indictment because they were erroneously omitted from the original charge sheet. These charges were supported by the sworn statements and the PWC report which were in the docket. Malice or animus injuriandi [84] The overall premise of the appellant’s case in so far as this requirement is concerned, was that there was a conspiracy instigated by his direct superior, Mr McCarthy, to destroy his career. The appellant testified in this regard that he had an acrimonious relationship with Mr McCarthy and Ms Breytenbach from the inception of his employment at the NPA. He said that once Mr McCarthy discovered that certain DSO C-Fund transactions that the appellant had authorised were not fully compliant with the Policy and Procedures document, he used that as an opportunity to make his stay at the NPA very unpleasant. The appellant furthermore stated that their relationship deteriorated even further when he told Mr McCarthy that, in terms of the Policy and Procedures document, accountability for the DSO C-Fund lay with him. According to the appellant, McCarthy became angry and threatened that he would destroy the appellant’s career and would use the services of Ms Breytenbach in the SCCU to do so. [85] Neither Mr McCarthy nor Ms Breytenbach testified at the trial. The appellant contended that given the failure of the NPA to call them to testify, his evidence against them remains unchallenged and conclusively demonstrates that the NPA acted with malice and animus injuriandi in deciding to prosecute him. I disagree. Although the appellant may have had an acrimonious relationship with Mr McCarthy and Ms Breytenbach, I fail to see how this could have led to a conspiracy by at least four officers of the Court to destroy his career. The appellant named four individuals in his particulars of claim but did not name Mr McCarthy. Yet in his testimony, in the trial, Mr McCarthy was the main perpetrator. Mr McCarthy had, however, relocated to Washington DC in 2007/8 and could not have driven the prosecution. The prosecution proceeded even after he had left the country. [86] It is clear from the factual background that the initial decision to prosecute the appellant was a joint one. The meeting of 25 July 2005, where the decision was taken, was attended by several senior officials of the NDPP, including Mr McCarthy and Jordaan. Moreover, on the unchallenged evidence, the decision to institute criminal proceedings against the appellant was made by Mr Chris Jordaan (Mr Jordaan), the head of the SCCU. He appointed Ms Breytenbach, Mr Van Zyl and Ms Nkula-Nyoni as the prosecutors in the matter. They took their instructions directly from Mr Jordaan. Ms Breytenbach was only involved in the first trial and the original charges. By the time the trial de novo commenced, she had been suspended from the NPA and had subsequently resigned. [87] Although Ms Breytenbach did not testify in the trial, it is clear from her written response to the 20 July 2010 representations of the appellant, that the prosecution had a prima facie case against the appellant in respect of all 23 original charges, based on her evaluation of the evidence in the docket. The essence of the appellant’s representations were denials that he had committed the offences that he was accused of. In respect of count 1 (retaining R11 000 of the R15 000) the appellant merely denied that that the underlying case was fictitious, to which Ms Breytenbach responded that the nub of the charge was his representation that the amount of R15 000 was required as trap for the project, when all that had been required was R4 000, and his retention of the R11 000 on termination of the project. In respect of count 5 (payment of R150 000 to Mr Patel, a fictitious informer) he argued that the payment of the reward to the informer was witnessed by himself and Mr Jonker. He also relied on two affidavits deposed to by Mr Mrwebi. In the first one he had prepared a report in support of payment of the R150 000. In the second affidavit Mr Mrwebi had stated that the amount of R150 000 had not been dictated to him by the appellant. To this Ms Breytenbach responded that the decision to prosecuted was based on the responses by Senior Special Investigator in the case, Mr Pieterse, and the lead investigator, Mr Naidoo, to th effect that there was no informer in the matter. Furthermore, according to a report prepared by a handwriting expert, Mr Jonker’s signature had been forged. In addition, the alleged informer was not registered with the DSO, and Mr Jonker seemed ambivalent on the payment to the alleged informer. [88] With regard to count 14 (alleged payment of R50 000 to an informer that was never registered as such with DSO) the appellant’s representation was that the payment was made on the basis of a handwritten note dated 25 January 2005 with the inscription: ‘”R50 000 23/7/2004 Geoph Ledwaba”’ and Mr Jonker’s comment thereon that ‘”To get original from Malebo with receipts”’. In response Ms Breytenbach reiterated that the alleged informer was never registered with the DSO, that the appellant that the appellant had instructed his junior, Mr Doubada, to authorize the payment without the latter having any knowledge about the matter, and that no official receipt of payment by the [89] In respect of count 15 (R30 000 paid out to the appellant without completion of a Request for Advance or the DSO C-Fund claim form) the appellant had referred to two documents in the forensic report on which was the inscription: ‘The advance is supported by a hand-written document (Annexure 57) with comments as follows ‘Ref 21 Mr Ledwaba R30 000”’. The advance is marked Ref 21 (Annexure 58 for bookkeeping purposes’. He asserted that the documents supported advance payment. He also maintained that the money was requested by Mr Tongwane, not him. Ms Breytenbach responded that State case was that the advance payment was made without the required documents. She stated that Mr Pieterse had confirmed that no other documents could be traced in relation to the transaction, and, Mr Tongwane had initially made a request for payment of R20 000 which the appellant changed to R30 000. [90] In respect of count 18 (engagement in unauthorised remunerated project while employed by the NPA) the appellant argued that he had resigned from the NPA with effect from October 2005. Ms Breytenbach pointed out that the State case was that the tender was awarded in December 2004 and the appellant resigned in August 2005. In conclusion, Ms Breytenbach submitted that ‘the National Prosecuting Authority cannot afford not to prosecute one of its own senior officials if such a strong case exists’. [91] As to counts 19 to 22 (theft of moneys paid in respect of the project awarded to Ndumiso Trust or Kagiso Consulting) the appellant explained that the reason that the money was paid into his personal account was that the bank account for Kagiso Consulting had not yet been opened. He argued that he did pay the one interest holder, Mr Tshepo Nkadimeng, his share of the money, but did not pay the second one, Mr Lephoko because he had not contributed anything to the project. In response Ms Breytenbach highlighted that the appellant refunded some of the moneys to the NPA. [92] After Ms Breytenbach’s suspension, the prosecution then continued under the leadership of Mr Van Zyl assisted by Ms Nkula-Nyoni. His involvement in the trial de novo was also short-lived, as he withdrew from the case due to a suspicion that he had been compromised by the appellant. Although this fact alone does not show absence of animus iniuriandi on the Mr Van Zyl’s part, his withdrawal from the case and the withdrawal of the 10 charges against the appellant, demonstrated his willingness to acknowledge and take the necessary steps in relation to defects in the case against the appellant. As was Ms Nkula-Nyoni’s support of the appellant’s s 174 application for a discharge on counts 1, 2, 5, 6, 7, 8, and 9. The appellant’s accusations of malice and intent to injure against them are therefore baseless and unsupported on the evidence. [93] The appellant’s conspiracy is not supported by the objective facts, especially when one has regard to how his three sets of representations were handled. First, having assessed Ms Breytenbach’s response to the first set of representations, the National Director of Public Prosecutions, Mr Simelane, was satisfied that there was a prima facie case in respect of the charges, and that the prosecution should continue. Second, the Deputy National Director of Public Prosecutions, Ms Mokhatla, was requested to review the charges against the appellant in the light of his second set of representations. She too, having assessed the charges, was of the view that there was a prima facie case against the appellant. She directed that the prosecution should continue. Third, Mr Mrwebi, in response to the third set of representations, was similarly of the view that there was a prima facie case against the appellant, and implored the prosecution to consider adding a charge of corruption. [94] Were the appellant’s conspiracy theory to be accepted, it would have had to imply that all the above were too, biased against him. There is no such suggestion by the appellant that any of these senior prosecutors was biased against him or that they were part of the conspiracy to convict him on false charges. There is no suggestion that they did not objectively and independently apply their minds to his representations. [95] On an assessment of the totality of the evidence that served before the high court in the trial as well as the probabilities, I am of the view that the appellant’s conspiracy theory is improbable. The appellant presented no credible evidence to demonstrate that when the prosecution team took the decision to prosecute him, and when it decided to proceed with the prosecution after considering his representations, they directed their will to doing so in the awareness that reasonable grounds for the prosecution were absent. Conclusion [96] For these reasons, I conclude that appellant had failed to prove, on a balance of probabilities, that the employees of the NPA had no probable cause to instigate the prosecution against the appellant or that they acted with malice or animus injuriandi. [97] In the result, the appeal must fail. I make the following order: The appeal is dismissed with costs including those of two counsel. ________________________ F KATHREE-SETILOANE ACTING JUDGE OF APPEAL Appearances: Counsel for the appellant: ME Manala (with him MT Matlapeng) Instructed by: KS Dinaka Attorneys, Pretoria Webbers Attorney, Bloemfontein The appellant (In person) Counsel for the respondent: MC Erasmus SC (with him NAR Ngoepe and HA Mpshe) 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: 16 February 2024 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 Malala Geophrey Ledwaba v The Minister of Justice and Constitutional Development and Correctional Service and Others (Case no 947/2022) [2024] ZASCA 17 (16 February 2024) Today the Supreme Court of Appeal dismissed an appeal by Mr Malala Godfrey Ledwaba against a judgment of the Gauteng Division of the High Court, Pretoria. That court dismissed Mr Ledwaba’s damages claim for malicious prosecution against the Minister of Justice and Correctional Services, the National Director of Public Prosecutions and the head of the Specialised Commercial Crimes Unit. Mr Ledwaba’s claim for damages arose from more than twenty charges of fraud and theft that were preferred against him in relation to certain withdrawals from a secret fund known as the Confidential Fund (the C-Fund), allocated to the Directorate of Special Operations (the erstwhile Scorpions, also known as the DSO). In the ensuing criminal trial before the Specialised Commercial Crimes Court the state advanced a case that, while he was employed as the Deputy Head of the DSO Mr Ledwaba had, on various occasions, committed fraud by misrepresenting to the National Prosecuting Authority (the NPA) that certain withdrawals of money from the C-Fund were made for the purposes provided for under the policies governing the Fund. The charges were based on sworn statements by functionaries of the DSO and investigations done by the Integrity Monitoring Unit of the NPA and Price Waterhouse Coopers. In the charges, the NDPP asserted that Mr Ledwaba had created and authorised fictitious projects and non-existent investigations; that he misrepresented to the NPA that the funds had to be used for these projects or for payment of informants/sources; and that he thereby committed fraud alternatively stole the moneys from the DSO C-Fund. Included in these charges were allegations by the State that Mr Ledwaba had defrauded his business partners in a consultancy business that provided services to the Gauteng Department of Safety and Liaison (the Department). It was alleged that he misrepresented to his partners in the consultancy business, that the Department had not paid the consultancy business for services that Mr Ledwaba and one of his partners had rendered. The state’s case was that this was untrue as the Department had made payment for the services rendered directly into Mr Ledwaba’s personal bank account. Furthermore, it was alleged that Mr Ledwaba had committed fraud by failing to inform the NPA/DSO that he was doing remunerated work (not authorised by the NPA) whilst he was still employed by the NPA. The criminal trial proceeded before the Specialised Commercial Crimes Court. At the end of the state’s case, the court discharged Mr Ledwaba on seven of the charges. He was convicted on four of the six remaining charges, and was sentenced to 10 years imprisonment. However, all the convictions were reversed by the high court on appeal. The damages claim followed the successful appeal. In his damages claim, Mr Ledwaba alleged that Ms Glynnis Breytenbach, Mr Willem Van Zyl; Ms Sandiswa Nkula-Nyoni and Mr Nash Ramparat, all members of the prosecution team appointed to prosecute him, wrongfully and maliciously laid false criminal charges of fraud/theft against him. He maintained that there was no reasonable and probable cause for his prosecution. The high court dismissed Mr Ledwaba’s claim, finding that he had failed to prove maliciousness or intention to injure on the part of the NDPP. That court took the view that because Mr Ledwaba had not shown malice or animus injuriandi (intent to injure) on the part of the NDPP, it was unnecessary for it to deal with the requirement of reasonable and probable cause which is also necessary to succeed in a claim of malicious prosecution. On appeal to the SCA, it held that the correct approach to the issues before it was to first consider the question of whether Mr Ledwaba had shown absence of reasonable and probable cause on the part of NDPP prior to dealing with the issue of malice or intention to injure. That is because the law requires that for a defendant to have acted maliciously they must have been conscious of the wrongfulness of the prosecution but proceeded regardless. The SCA, however, dismissed Mr Ledwaba’s appeal. It held that the evidence in the docket in respect of counts 1 to 17 would have led a reasonable person to conclude that the appellant was probably guilty of fraud. It accordingly held that the NDPP had reasonable and probable cause to instigate the prosecution against Mr Ledwaba on the basis of the evidence that was in the docket. The evidence in the docket included sworn statements by various members of the DSO unit of the NPA, the investigation report of the IMU and the PWC forensic report. In relation to counts 18, and 19 to 21, the SCA held that the sworn statement of Mr Ledwaba’s business partner and invoices and other relevant documents attached thereto which formed part of the docket, coupled with the appellant’s resignation from the NPA with effect from 31 July 2005, would have led a reasonable person to conclude that Mr Ledwaba: (a) probably committed fraud in failing to inform the NDPP that he was doing remunerated work whilst he was still employed by the NPA, and (b) probably stole money that belonged to the consulting business on four separate occasions; and (c) probably committed fraud against the members of the consulting business when he represented that the project was terminated and that no payment was received for the work done. The documentation revealed that Mr Ledwaba had submitted four invoices, made out in the name of the consultancy business, to the Department for services rendered. The PWC forensic report demonstrated that payments amounting to R496,127.94, from the Department to the consultancy business, were deposited into the appellant’s personal bank account on four occasions during the first quarter of 2005. Mr Ledwaba’s letter of resignation dated 15 June 2005 in terms of which he resigned from the NPA with effect from 31 July 2005, showed that even though he claimed that he had tendered his resignation from the NPA in 2004 and, therefore, did not require the permissions of the NPA to carry out paid work for the consultancy business, he withdrew that letter of resignation after being persuaded to do so by his superior at the time, and continued to provide his services to the NPA. Thus, he was still employed by the NPA/DSO when he carried out paid work for the consultancy business. The SCA also found that there was no substance in Mr Ledwaba’s argument that the state’s withdrawal of 10 charges, prior to the start of the new trial, demonstrated that the NDPP had no reasonable and probable cause to prosecute him. The State’s reason for withdrawing these charges, as explained by one of the prosecutors, was that it was too expensive to call the forensic expert from PWC to prove those charges. The SCA held that the State’s explanation for withdrawing the charges was not implausible, because there was no evidence to gainsay it. In the circumstances, it held that no adverse inference could be drawn from the prosecution’s decision to withdraw these charges. The SCA held that neither did it matter that the appellant was discharged, in terms of s 174 of the Criminal Procedure Act, in respect of seven other counts because what mattered was that when the NDPP took the original decision to prosecute the appellant on those charges, it was of the honest belief, based on the contents of the docket, that there was reasonable and probable cause for his prosecution. Mr Ledwaba’s case in relation to the requirement of malice or animus injuriandi, was that his prosecution emanated from a conspiracy instigated by his direct superior, Mr Leonard McCarthy, to destroy his career with the assistance of Ms Breytenbach of the Specialised Commercial Criminal Court. The SCA found that although Mr Ledwaba might have had an acrimonious relationship with Mr McCarthy and Ms Breytenbach, it failed to see how this could have led to a conspiracy by at least four officers of the Court to destroy his career. The SCA found that: although Mr Ledwaba named four prosecutors in his particulars of claim, he did not name Mr McCarthy; yet in his testimony, in the trial, Mr McCarthy was the main perpetrator; Mr McCarthy had, however, relocated to Washington DC in 2007/8 and could not have driven the prosecution as it proceeded even after he had left the country. The SCA also found that the decision to institute criminal proceedings against Mr Ledwaba was made by Mr Chris Jordaan (Mr Jordaan), the head of the Specialised Comercial Crime Unit. He appointed all the prosecutors including Ms Breytenbach. They took their instructions directly from Mr Jordaan. Ms Breytenbach was only involved in the first trial and the original charges. By the time the trial de novo commenced, she had been suspended from the NPA and had subsequently resigned. The SCA concluded that the NDPP did not act with malice or intent to injure Mr Ledwaba when it took the decision prosecute Mr Ledwaba, as he presented no credible evidence to demonstrate that when the prosecution took the decision to prosecute him, they directed their will to prosecuting him in the awareness that reasonable grounds for the prosecution were absent. For all these reasons, the SCA dismissed Mr Ledwaba’s appeal. --------oOo--------

2718

non-electoral

2012

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 203/11 (Not reportable) In the matter between: B B S EMPANGENI CC Appellant (FORMERLY ZTC CASH BUILD CC) and PHOENIX INDUSTRIAL PARK (PTY) LTD First Respondent MORELAND ESTATES (PTY) LTD Second Respondent Neutral citation: BBS Empangeni CC v Phoenix Industrial Park (Pty) Ltd (203/2011) [2012] ZASCA 33 (29 March 2012). Coram: Brand, Heher, Van Heerden, Cachalia JJA, Boruchowitz AJA Heard: 16 February 2012 Delivered: 29 March 2012 Summary: Extinctive Prescription – claim prescribed – contractual obligations underlying claim no longer enforceable – contract not capable of being repudiated. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: KwaZulu-Natal High Court, Durban (Swain J sitting as court of first instance): The appeal is dismissed with costs, such costs to include the costs of two counsel for the first respondent and one counsel for the second respondent. ________________________________________________________________ JUDGMENT ________________________________________________________________ CACHALIA JA (Brand, Heher, Van Heerden JJA, Boruchowitz AJA concurring): [1] This is an appeal from a judgment of Swain J sitting in the KwaZulu-Natal High Court. He held that a contractual claim arising from the sale of certain vacant land in an industrial township had become prescribed. The appellant, represented by its member, Mr Donovan William Balmer, bought the land from the respondents under a sale agreement on 11 January 1990. With leave from the high court, it appeals against the finding of that court. [2] The dispute goes back many years – more than two decades – and it is necessary to describe its history. In terms of the agreement the appellant paid to the respondents a stipulated deposit of R45 500 – which amounted to ten per cent of the purchase price. The balance was to be paid upon registration of transfer. The sale was subject to two suspensive conditions: first, the Surveyor- General’s approval of the sub-divisional diagram consolidating the four lots of land that were the subject of the agreement and second, the City Engineer’s certification of compliance in terms of s 148 of the Durban Extended Powers Consolidated Ordinance 18 of 1976. The agreement stipulated that the property would become transferable as soon as these conditions were fulfilled. [3] A dispute arose between the parties almost immediately over aspects of the completion of the industrial township. Mr Balmer was troubled that there was inadequate provision made for features relating to security, street lighting, tarred roads and services. I shall refer to these as the security features. His unease arose because the industrial township was located near an area with high unemployment and criminality. The country was also in a state of political uncertainty and there was some unrest in the area. Mr Balmer therefore felt that he would not be able to commence business on the property. [4] These circumstances made Mr Balmer less enthusiastic about taking transfer of the property and he approached the respondents to cancel the agreement. They demurred and insisted that he pay the balance of the purchase price. His attorneys then made written representations to the respondents to delay transfer of the property until his security concerns were allayed, but they accepted ‘unequivocally’ that he was ‘bound to take transfer’. In other words, Mr Balmer did not dispute his obligation to take transfer of the property and to pay the purchase price. [5] The respondents, however, maintained that the security provided for in the development was adequate and that, in any event, there were no warranties regarding the security features in the agreement. They proceeded to enforce the agreement by demanding payment of the balance of the purchase price against tender of registration of transfer. The appellant responded to the demand by reiterating its earlier stance regarding the delay of the transfer. It also offered to give the respondents ‘a bank guarantee for the payment of the purchase price against transfer at some later stage’. [6] The respondents indicated that they were willing to delay payment of the full purchase price only until 29 February 1992 on condition that the appellant paid an additional sum of R100 000 as consideration by 18 October 1991. Mr Balmer did not pay this amount and now insisted that he would pay for the land only when the development was completed as originally envisaged. This stance was a change from his earlier acknowledgment that he was liable to take transfer. To support his new standpoint he referred to the contents of a pamphlet that the respondents had shown him at the time he agreed to buy the land. The pamphlet depicted the detail of the completed development including the security features. [7] The dispute was not resolved and, on 13 August 1992, the respondents applied to the high court to order the appellant to pay the transfer costs and the balance of the purchase price against tender of transfer of the land. The appellant duly delivered its answering affidavit in which it asserted – reflecting its new stance – that the agreement was to be rectified to include the security features referred to in the pamphlet so as to accord with the common intention of the parties. [8] The appellant also disputed that the second suspensive condition mentioned above – the City Engineer’s compliance certificate – had been fulfilled. The City Engineer issued a certificate on 15 March 1991. The appellant took the point that s 148(2) of Ordinance 18 of 1976 called for the Town Clerk – not the City Engineer – to sign the certificate. This meant, so the appellant asserted, that the respondents were not in a position to pass transfer of the property. The respondents did not file a replying affidavit and, during February 1992, they enrolled the matter to be heard on an allocated date, but the matter did not then proceed. The parties took no further steps and, on 11 September 1992, the respondents removed the matter from the roll. [9] In the interim the respondents were advised by counsel that Mr Balmer’s defence concerning the fulfilment of one of the two suspensive conditions – the compliance certificate – was good. The implication of this advice was that this condition had not been fulfilled and the property was therefore not registrable. During June to October 1994 the respondents’ attorneys again attempted to persuade Mr Balmer to take transfer, but he remained unyielding. [10] On 4 October 1994, the respondents were registered as the title holders in the Certificate of Registered Title – an event of which Mr Balmer was at the time not aware. Nevertheless, the consequence was that it was no longer in dispute that both suspensive conditions had now been fulfilled, and the property could have been transferred to the appellant in terms of the agreement. [11] Although there was further communication between the parties concerning the implementation of the agreement, the respondents made no particular mention that the property had become registrable. However, on 17 October 1994, Mr Yarker, the respondents’ attorney, wrote to Mr Balmer to discuss finalisation of the matter. [12] By December 1994 the respondents considered cancelling the sale, but there is no clear evidence that they did so. At about this time there was a telephone conversation between Mr Kenneth Forbes of the respondents and Mr Balmer during which Mr Forbes asked Mr Balmer whether he was prepared to take transfer of the property. Mr Balmer again refused. Beyond this, what exactly was said had faded from their memories. What is clear is that Mr Balmer remained unwilling to take transfer of the property as the issues pertaining to his security concerns had not been resolved. Mr Forbes was left with the impression that Mr Balmer was not interested in proceeding with the sale. The respondents then began to explore options to find another buyer for the property. There was no further communication between the parties for several years. [13] On 18 October 2000, unbeknown to the appellant, the respondents sold the property to the eThekwini Municipality, and transfer was passed on 20 December 2002. Three more years went by. [14] On 4 November 2005 – almost 11 years after his last communication with the respondents – Mr Balmer stirred. He requested his attorneys to establish what had happened to the property, and discovered that the municipality owned it. So he instructed his attorneys to recover the deposit he had paid in 1990 together with interest, but the parties were not able settle this dispute either. The appellant believed that the sale and transfer of the property was a breach of the agreement between the parties and an ‘uncommunicated’ repudiation of it. [15] On 11 July 2006 the appellant notified the respondents’ attorneys that it had elected to cancel the contract and to claim repayment of the deposit plus ‘damages’ in the amount of R390 000, ‘being the return which [the appellant] would have earned on the [deposit] over the last 16 years’. These amounts were not forthcoming. [16] On 19 July 2006, the appellant resuscitated the dormant application by delivering a supplementary affidavit and, on 21 August 2006, it commenced an action against the respondents for recovery of the deposit as well as damages for breach of contract amounting to R3 125 500. The amount of damages was calculated by subtracting the purchase price of the property from its market value as at 11 July 2006. It is evident that there had been a dramatic increase in the value of property since the agreement was concluded in 1990. [17] The respondents delivered their pleas and special pleas in the action on 20 November 2006 and their replying affidavits in the application proceedings on 11 May 2007. On 15 May 2007 the high court referred the question of costs – which was the only remaining issue in the application proceedings – to the trial court. The trial commenced on 19 October 2009. Proceedings were adjourned and resumed on 1 December 2010. The court delivered its judgment promptly on 6 January 2011. It dismissed the appellant’s action and granted it leave to appeal on 4 March 2011. The proceedings before the trial court [18] The central issue before the trial court was whether the respondents had repudiated the agreement with the appellant by selling the property to the municipality in October 2000. The appellant’s case was that they had, which entitled it to cancel the agreement. The respondents pleaded that they had cancelled the agreement before selling the property and had informed Mr Balmer that they had done so, after the appellant had repudiated the agreement by refusing to take transfer. The respondents also advanced alternative defences. The first respondent alleged that the appellant had waived or abandoned its rights under the agreement. The second respondent contended that the appellant had represented to the respondents that it no longer wished to be bound by the agreement, and was thus estopped (prohibited) from asserting the contrary. [19] The respondents further pleaded that the appellant’s claim had become prescribed. In this regard two distinct periods, associated with two distinct claims, were in issue: first, from the time when the suspensive conditions had ultimately been satisfied on 4 October 1994 and the transfer of the property to the municipality on 20 December 2002, when the respondents were alleged to have repudiated the agreement, and second, the period between 20 December 2002 and the issue of summons on 21 August 2006. If the first period applied, the appellant’s claim to demand transfer of the property would have become prescribed on 3 October 1997. In the case of the second period the prescriptive period would have expired by 19 December 2005 in respect of the appellant’s right to claim cancellation of the agreement, payment of the deposit and damages. [20] In deciding whether or not the respondents had validly cancelled the agreement before transferring the property to the municipality, the judge considered that, once they had changed their election from specific enforcement in the application proceedings to cancellation, they were obliged under the agreement to notify the appellant of this fact. He held that the evidence did not establish that the respondents had done so. In the light of this conclusion the court deemed it unnecessary to consider whether the appellant’s conduct in refusing to take transfer amounted to a repudiation of the agreement, entitling the respondents to cancel the agreement. The court also briefly considered the first and second respondent’s waiver and estoppel defences respectively, and rejected both. This left prescription. [21] Concerning the first period referred to above – 4 October 1994 to 20 December 2002 – the trial court held that prescription had begun to run in respect of the respondents’ right to claim payment and also of the appellant’s right to claim transfer on 4 October 1994, when the suspensive conditions were satisfied. It also held that the appellant ought reasonably to have ascertained this fact by December 1994, when – from the communications between the parties’ representatives – it would have been clear to the appellant that the respondents were ready to transfer the property. Furthermore, the court concluded, there was no merit in the appellant’s contention that the respondents had wilfully concealed the fulfilment of the suspensive conditions from it. The appellant’s claim was thus held to have become prescribed. [22] The court also considered and rejected another of the appellant’s contentions – that the launching of application proceedings by the respondents in August 1992 constituted an acknowledgment of liability to transfer the property and therefore ‘interrupted’ the running of prescription as contemplated in s 14(2) of the Prescription Act 68 of 1969 (the Act). The judge reasoned that when the respondents began those proceedings, they did so because the appellant had maintained that it was not obliged to pay the purchase price. Whether the appellant was justified in its stance, the court said, was of no consequence. What was relevant, it continued, was that the respondents had not believed that they were liable to transfer the property to the appellant without the latter’s payment of the balance of purchase price and the transfer costs. And, the court concluded, in the absence of the respondents’ unconditional acknowledgment of liability to pass transfer, prescription had not been interrupted. [23] The conclusion that the claim had become prescribed during the first period made it unnecessary for the trial court to consider the second period, 20 December 2002 to 21 August 2006. The judge nevertheless did so ‘for the sake of completeness’. He found that the appellant had consciously refrained from enquiring what had happened to the property for fear that this may revive the respondents’ demand that it take transfer. And, the court concluded, in the light of the fact that the respondents had sold the property to the municipality in October 2000, this information would have been available to the appellant – at the latest by the end of 2001 – by the exercise of reasonable care. [24] As to whether the respondents had wilfully refrained from disclosing the sale of the property, the court held – as it did regarding the disclosure of the fulfilment of the suspensive conditions – that they had not. In this regard the court accepted the respondents’ evidence that, by the time they had decided to sell the property to the municipality, they had assumed that the agreement had been cancelled. There was consequently no reason, the court said, for the respondents to have intentionally withheld this information from the appellant. Therefore, and allowing the appellant another reasonable period of six months after the end of 2001 within which to make an election to treat the contract as at an end, prescription, the court held, began to run from no later than 1 July 2002, and would thus have run its course by 30 June 2005. Therefore, the judge concluded, because the appellant served its summons only on 21 August 2006, its claim for cancellation of the agreement, payment of the deposit and damages had also become prescribed during the second period. The grounds of appeal [25] As will become apparent later in this judgment, I think that the judge’s finding that prescription had begun to run on 4 October 1994, when the suspensive conditions were fulfilled, and that the appellant’s claim had become prescribed well before the respondents transferred the property to the municipality in December 2002, disposes of the appeal. The appellant advanced three grounds of criticism against the finding. First, that the high court had erroneously assumed that the appellant’s cause of action was for the transfer of the property because of the respondents’ correlative right to demand payment as at 4 October 1994. The appellant’s true cause of action, it was contended, was based on the respondents’ repudiation of the agreement, which occurred when they transferred the property to the municipality much later. And the claim arising from the repudiation only arose on 11 July 2006, when the appellant exercised its election to cancel the contract. Second, it was contended, the appellant’s cause of action on 4 October 1994, as pleaded in its opposing affidavit in the application proceedings, was for the agreement to be rectified, which is a claim that cannot prescribe because it is not a claim in respect of a debt. Third, the respondents’ cause of action was in any event not complete on 4 October 1994 because they had not installed the security features under the rectified agreement. This means, so the contention went, that the respondents’ claim to receive payment (and the appellant’s obligation to take transfer) could not have begun to run then. I deal with the appellant’s three contentions in turn. [26] As to the first – that its claim was not for the transfer of property, I do not believe that the judge misunderstood the nature of the appellant’s claim. What the court found under this heading was that the appellant’s claim for the transfer of the property had become prescribed before the respondents sold the property to the municipality – and the appellant thus had no enforceable obligation against the respondents. In consequence the sale could not constitute a repudiation of the agreement. I have no conceptual difficulty with this line of reasoning. [27] It is beyond dispute that the suspensive conditions were fulfilled by 4 October 1994. This means that the respondents’ claim for payment of the purchase price as against their obligation to transfer the property to the appellant arose then. So prescription would have begun to run against this claim – and the appellant’s correlative claim for transfer of the property – on 4 October 1994, when the debt became due in terms of s 12(1) of the Act. Both claims, being reciprocal, would thus have become prescribed three years later, on 3 October 1997.1 However, if the respondents had wilfully withheld information regarding the fulfilment of the suspensive conditions – and that the debt was therefore due – from the appellant, prescription would not have commenced running until the appellant became aware of the existence of the debt.2 The appellant would be deemed to have had such knowledge if it could have acquired it by exercising reasonable care.3 As I have mentioned the high court decided these issues in the respondents’ favour. The appellant takes issue with these findings. [28] Concerning the first finding, that the non-disclosure of the fulfilment of the suspensive conditions was wilful, the appellant submits that the respondents deliberately withheld this information – the consequence of which was that the property had become registrable – from it for fear of having to pay its costs in the application proceedings. [29] The evidence shows that after their attorneys advised them that the point taken by the appellant regarding the validity of the certificate was good, the respondents resubmitted the sub-divisional diagram for endorsement after correcting the error, even though it had been pointed out to them that 1 Santam Ltd v Ethwar 1999 (2) SA 244 (SCA) at 255B-G. 2 Section 12(2) of the Prescription Act provides: ‘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 Section 12(3) of the Prescription Act 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.’ resubmission might lead to an adverse costs order against them. The respondents instructed their attorneys to oppose such an order on the ground that the practice had always been for transfers to take place under the city engineer’s endorsement. However, there is not a scintilla of evidence to support the suggestion that the respondents had deliberately withheld information regarding the resubmission from the appellant. The high court correctly found that the evidence showed that the respondents had throughout, at least until the discussion between Mr Forbes and Mr Balmer in December 1994 – two months after the certificate of registered title had been granted – evinced an intention to proceed with the transfer. It is any event improbable that the respondents would have consciously prevented the appellant from coming to know that the property had become registrable for the simple reason that they wanted the property transfer to go ahead – not delayed or terminated – and were frustrated because Mr Balmer appeared to be intent on delaying it. Furthermore, it was never put to any of the respondents’ witnesses that they had withheld this information from the appellant for fear that the appellant would seek a costs order against them. The evidence simply falls far short of establishing that the respondents deliberately withheld this information from the appellant, and the high court was correct to dismiss this argument. [30] I turn to the appellant’s second submission – that the high court erred in finding that Mr Balmer ought to have known by no later than December 1994 that the property had become registrable had he exercised reasonable care. In this regard the appellant contends that it was perfectly reasonable for it to have done nothing while the dispute regarding the non-fulfilment of the suspensive conditions and rectification were, in Mr Balmer’s words, ‘locked . . . up in the courts’. This was a reference to the fact that nothing had come of the motion proceedings that the respondents had initiated (but removed from the roll). The judge, however, meticulously recorded the interactions between the respondents and Mr Balmer from June to December 1994, and particularly the conversation between Mr Forbes and Mr Balmer in December – when Mr Forbes pressed Mr Balmer to take transfer of the property. As the evidence showed, Mr Balmer demurred and informed Mr Forbes that he was not in a position to take transfer then. In effect Mr Balmer again wanted to delay the transfer as he had done virtually from the beginning. [31] Although Mr Forbes could not recollect the detail of the conversation – understandably, because it had taken place so long ago – there is no evidence that Mr Balmer enquired whether the requisite certificate from the municipality had been obtained. This behaviour is strange for a person who was advised to resist the respondents’ attempt to enforce the agreement by taking a technical point that the certificate was not signed by the correct official, and a few months later, when he was asked whether he was prepared to take transfer, did not enquire – then or soon afterwards – whether this problem had been solved. [32] I do not think that Mr Balmer’s excuse that he had no need to do anything while the motion proceedings were pending passes the test for the exercise of reasonable care. The contrary is true. By December 1994, following the conversation with Mr Forbes, it must have been clear to Mr Balmer that the respondents were ready to transfer the property to him whatever the status of their legal dispute. But it is equally clear that Mr Balmer was not interested in taking transfer of the property; at best he was intent on delaying the process until his security concerns were addressed, at worst he wanted to walk away from the agreement, and was prepared to use any excuse to achieve this. This attitude, rather than the fact that the litigation had not been finalised, appears to have been the probable reason for Mr Balmer’s failure to act diligently to establish whether the suspensive conditions had in fact been satisfied. Again, the appellant’s criticism of the high court’s judgment must founder. [33] This brings me to the appellant’s third submission – that its rectification defence in the application proceedings, being a claim that cannot prescribe, meant that its claim on the ‘rectified’ contract could not have become prescribed. The corollary of this submission is that prescription could not have begun to run against the respondents’ claim for payment of the purchase price on the unrectified agreement on 4 October 1994. [34] This submission has no merit. The appellant’s cause of action as pleaded in its particulars of claim was that the respondents repudiated the agreement concluded in 1990 – not the rectified agreement. In respect of that agreement, as I have mentioned, it is common cause that prescription began to run on 4 October 1994 against both the respondents’ claim for payment of the purchase price and the appellant’s corresponding obligation to take transfer. And once the claim based on that agreement became prescribed, the respondents could logically no longer have repudiated it. [35] Moreover, the respondents are correct in their submission that the claim for rectification was not one that, if successful, was an answer to their claim for payment of the purchase price. This is because the clause that the appellant sought to have inserted into the contract, as formulated in its answering affidavit, did not create reciprocal obligations – it provided only that the respondents install the security features within a reasonable time of the fulfilment of the suspensive conditions. The respondents were never placed in mora in respect of the obligation that that clause would create. So the appellant’s assertion that prescription of the respondents’ claim for payment of the purchase price had not started to run because the security features had not been installed is incorrect. [36] Finally, the appellant submitted that, if prescription had begun to run against it on 4 October 1994, the respondents’ admission in their founding papers in the application that they were obliged to give transfer to the appellant upon fulfilment of the suspensive conditions, amounted to an express or tacit admission of liability to give transfer to the appellant against payment of the purchase price. Therefore, so the submission went, in terms of s 14(1) of the Act the running of prescription was interrupted when these admissions were made. [37] Section 14(1) of the Act says that the running of prescription is interrupted when a debtor acknowledges liability, and s 14(2), that prescription runs afresh from the day of the interruption. The appellant contends that, when the respondents acknowledged their legal responsibility to transfer the property to the appellants in the application proceedings – which, it said, was a continuing or recurring admission of liability – prescription was interrupted. The trial court rejected the contention holding that the tender to transfer the land was conditional upon the appellant’s unconditional acceptance of an obligation to furnish a guarantee to secure payment of the purchase price and to pay transfer costs, which did not happen. Being conditional, so it was held, the respondents’ acknowledgment was not an admission of liability as contemplated by the section. [38] The appellant contends that the court was incorrect to characterise the respondents’ tender to transfer the property against payment of the purchase price as a ‘conditional’ acknowledgement, which fell outside the ambit of s 14(1). In my view the judge again was correct. In Road Accident Fund v Mothupi4 this court said that whether or not a statement constitutes an acknowledgement of liability for the purpose of s 14 of the Act is a question of fact turning on the intention of the debtor – the respondents in this case. It is clear from a fair reading of the respondents’ founding affidavit in the application proceedings and their evidence at the trial that they were only prepared to give transfer of the property if the appellant accepted its reciprocal obligation to take transfer and pay the purchase price. And, even though the appellant had initially accepted that it was ‘bound to take transfer’, it changed tack because of Mr Balmer’s security concerns; its stance was that it was not obliged to take transfer or to pay the balance of the purchase price – hence the respondents’ decision to enforce the contract. The respondents’ tender to transfer the property was therefore conditional upon the appellant accepting that it was liable to take transfer and to 4 See Road Accident Fund v Mothupi 2000 (4) SA 38 (SCA) para 37. pay the purchase price – and did not amount to an acknowledgment of liability contemplated by s 14 of the Act. [39] To conclude, the high court correctly held that both the appellant’s and the respondents’ claims arising from the agreement had become prescribed before the property was transferred to the municipality in 2002. This means that when the property was transferred there was nothing left of the agreement to be repudiated. This conclusion renders it unnecessary to consider the other findings of the high court. [40] The following order is made. The appeal is dismissed with costs, such costs to include the costs of two counsel for the first respondent and one counsel for the second respondent.5 ______________ A CACHALIA JUDGE OF APPEAL 5 The second respondent engaged the services of only one counsel for the appeal. APPEARANCES For Appellant: G D Harpur SC Instructed by: Pearce Du Toit and Moodie, Durban Naudes Attorneys, Bloemfontein For first Respondent: P J Olsen SC (with him P J Combrinck) Instructed by: Livingston Leandy Inc, Durban McIntyre & Van der Post, Bloemfontein For second Respondent: A M Stewart SC Instructed by: Garlicke & Bousfield Inc, Durban Webbers Attorneys, 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 March 2011 STATUS: Immediate BBS Empangeni CC v Phoenix Industrial Park (Pty) Ltd (203/2011) 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 an appeal with costs from the KwaZulu-Natal High Court, Durban finding that BBS Empangeni CC’s claim from Phoenix Industrial Park for breach of contract over the sale of land in 1990 had become prescribed. The appellant (BBS Empangeni) bought a land in an industrial township from the respondents (Phoenix Industrial Park) under a sale agreement. The sale was subject to two suspensive conditions one of them being the City Engineer’s certification of compliance. BBS Empangeni refused to take transfer of property based on its concerns about the security features of the industrial township. Phoenix Industrial Park applied to the high court to order BBS Empangeni to pay the transfer costs and the balance of the purchase price against tender of transfer of the land. BBS Empangeni in response disputed the fulfilment of the suspensive condition for the sale of the land on the ground that the wrong official had signed the compliance certificate; hence, transfer of the land could not take place. Phoenix Industrial Park subsequently fulfilled the suspensive conditions of the sale and acting in the knowledge that BBS Empangeni was still unwilling to take transfer of the property sold the property to a third party. When BBS Empangeni discovered that the land had been sold, it instituted an action for damages for breach of contract against Phoenix Industrial Park. It alleged that the sale and transfer of the property was a breach of the agreement between the parties and a repudiation of it. The central issue before the high court, which was also the issue on appeal, was whether BBS Empangeni’s claim had become prescribed. The high court held that prescription had begun to run from the date the suspensive conditions of the sale had been fulfilled, in 1994, and that the BBS Empangeni’s claim had become prescribed three years later, long before the property was sold to a third party. The court also held that Phoenix Industrial Park had not wilfully concealed the fulfilment of the suspensive conditions and that BBS Empangeni would have discovered this fact had it exercised reasonable care. The SCA confirmed the high court’s findings.

1399

non-electoral

2010

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 532/09 WEST COAST ROCK LOBSTER ASSOCIATION First Appellant STEPHAN FRANCOIS SMUTS Second Appellant SPARKOR (PTY) LIMITED Third Appellant SOUTH AFRICAN SEA PRODUCTS LIMITED Fourth Appellant and THE MINISTER OF ENVIRONMENTAL AFFAIRS First Respondent AND TOURISM THE DEPUTY DIRECTOR-GENERAL: MARINE AND Second Respondent COASTAL MANAGEMENT, DEPARTMENT OF ENVIRONMENTAL AFFAIRS AND TOURISM THE CHIEF DIRECTOR: RESOURCE MANAGEMENT Third Respondent (MARINE): MARINE AND COASTAL MANAGEMENT DEPARTMENT OF ENVIRONMENTAL AFFAIRS AND TOURISM FURTHER RESPONDENTS Fourth to 1245th Respondents __________________________________________________________________________________ Neutral citation: West Coast Rock Lobster Association v The Minister of Environmental Affairs and Tourism (532/09) [2010] ZASCA 114 (22 September 2010) CORAM: Navsa, Lewis, Ponnan and Mhlantla JJA and K Pillay AJA HEARD: 31 August 2010 DELIVERED: 22 September 2010 SUMMARY: Fishing rights in terms of the Marine Living Resources Act 18 of 1998 ─ dispute involving access to West Coast Rock Lobster ─ unnecessary to answer questions concerning Minister’s power of exemption in terms of s 81 of the Act ─ appeal fails at two related preliminary levels ─ first, no practical effect ─ measures by Minister were regarded as interim ─ time and circumstances have overtaken the relief sought in the high court ─ no indication that similar facts would come before court in the future ─ second, nature and extent of declaratory order ─ order sought too wide ─ purports to bind category of persons not all of whom were before court ─ formulation not such as to deal with nub of complaint. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: Western Cape High Court (Cape Town) (Davis J sitting as court of first instance). The appeal is dismissed. The appellants are ordered to pay the respondents’ costs, including the costs attendant upon the employment of two counsel ______________________________________________________________ JUDGMENT ______________________________________________________________ NAVSA JA (LEWIS, PONNAN and MHLANTLA JJA and K PILLAY AJA concurring) [1] For a fortunate few, rock lobsters conjure up images of exotic cuisine. For others, like communities who engage in subsistence fishing, they are a means of survival and a modest source of income. In South Africa, West Coast rock lobster (WCRL) is a scarce resource, with commercial entities, subsistence and recreational fishers all competing for access to this rare crustacean. Coastal fishing communities, including many previously disadvantaged individuals, assert an entitlement to this scarce resource. Established commercial fishing entities, on the other hand, are equally insistent about maintaining their existing long-term fishing rights and preventing any incursion from new competitors. The State, in its regulatory role, has to achieve a balance between these competing interests. The litigation leading up to this appeal was about whether the State legitimately went about that task. [2] The appellants had applied in the Cape High Court for an order reviewing and setting aside decisions by the first three respondents granting subsistence fishers generally, and the fourth to 1 245th respondents in particular, rights to catch and sell WCRL. In addition, the appellants had sought a declaratory order in the following terms: ‘[T]hat the First Respondent is precluded from using section 81 of the Marine Living Resources Act 18 of 1998 in order to grant [subsistence] fishers generally, and the Fourth to 1 245th Respondents in particular, a right to catch and sell West Coast rock lobster for commercial purposes.’ [3] The application was dismissed with costs, including the costs of two counsel. This appeal is before us with the leave of this court. [4] The first appellant, the West Coast Rock Lobster Association, describes itself as a non-profit organisation whose members presently all hold long-term fishing rights in terms of s 18(1) of the Marine Living Resources Act 18 of 1998 (the MLRA), to undertake commercial fishing for WCRL. The second appellant, Stephan Francois Smuts, is the holder of long-term commercial fishing rights in the WCRL Nearshore fishery. The third appellant is Sahra Luyt, who also holds long-term commercial fishing rights in the WCRL Nearshore fishery. The fourth appellant, Sparkor (Pty) Ltd, is a company that holds long-term commercial fishing rights in the WCRL Offshore fishery. The meaning of nearshore and offshore fishing rights will become clear in due course. [5] The first three respondents are the Minister of Environmental Affairs and Tourism (the Minister), his Deputy Director-General Marine and Coastal Developments, and his Chief Director. The fourth to 1 245th respondents are individuals to whom the Minister, purportedly in terms of s 81 of the MLRA, either granted rights, or who have been identified as possible recipients of rights to catch WCRL. The 134th respondent is Kenneth Blaauw, a subsistence fisher, who was represented during the appeal and who, in turn, came to be representative of the remaining respondents. [6] Section 81 of the MLRA, under the heading ‘Exemptions’, provides: ‘(1) If in the opinion of the Minister there are sound reasons for doing so, he or she may, subject to the conditions that he or she may determine, in writing exempt any person or group of persons or organ of state from a provision of this Act. (2) An exemption granted in terms of subsection (1) may at any time be cancelled or amended by the Minister.’ [7] The decisions by the first three respondents sought to be impugned in the court below, referred to in para 2, are no longer in issue because time and circumstance have overtaken them. This appeal is against the refusal by the court below to grant the declaratory order set out above. It was submitted on behalf of the appellants, both in the court below and before us, that whilst the power set out in s 81 may rightly be employed to exempt persons from requirements such as having to lodge applications for fishing rights within a prescribed time, or from having to pay fees for fishing permits it may not, as happened in this case, be employed to grant fishing rights. The appellants sought to persuade us that by resorting to s 81 of the MLRA, in the manner more fully described later in this judgment, to grant rights to the fourth to 1 245th respondents to catch and sell WCRL, the Minister was subverting other applicable provisions of the statute, more particularly those dealing with the manner in which fishing rights are to be allocated. [8] As will become apparent the appeal falls to be determined within a narrow compass. The question whether a decision on the issues referred to in the preceding paragraph will have any practical effect and the ambit of the declaratory order are crucial in that regard and are aspects which I shall deal with in due course. For the benefit of the reader, however, it is necessary to first set out the background. [9] The MLRA, which was promulgated on 21 May 1998 and came into effect on 1 September 1998, signalled a new era in marine ecosystem conservation. The preamble to the MLRA reads as follows: ‘To provide for the conservation of the marine ecosystem, the long-term sustainable utilisation of marine living resources and the orderly access to exploitation, utilisation and protection of certain marine living resources; and for these purposes to provide for the exercise of control over marine living resources in a fair and equitable manner to the benefit of all the citizens of South Africa; and to provide for matters connected therewith.’ [10] In line with the MLRA’s conservation objective s 18 prohibits commercial or subsistence fishing unless ‘a right to undertake or engage in such an activity . . . has been granted . . . by the Minister’. The relevant parts of s 14(2) of the MLRA provide that the Minister ‘shall determine the portions of the total allowable catch, . . . or a combination thereof, to be allocated in any year to subsistence, recreational, local, commercial and foreign fishing, respectively’. [11] As set out in the judgment of the court below the total allowable catch (the TAC) is the maximum quantity of fish that is legally available during each fishing season for combined recreational, subsistence, commercial and foreign fishing. It is one of the principal means by which the Minister ensures that fish stocks are not over-exploited. It is within that TAC that fishing rights granted by the Minister are exercised. Section 18(5) of the MLRA provides that in granting fishing rights the Minister ‘shall . . . have particular regard to the need to permit new entrants, particularly those from historically disadvantaged sectors of society’. [12] WCRL is but one of the many species of marine life requiring protection and in respect of which the Minister grants fishing rights. WCRL and abalone are very valuable and are naturally under intense pressure of over- exploitation. The pressure arises not only from legitimate and regulated fishing but also from unregulated illegal fishing operations and conservation measures are self-evidently a national imperative. [13] WCRL occurs inside the 200-metre depth contour from just north of Walvis Bay in Namibia to East London in the Eastern Cape. Female size at maturity ranges from approximately 57 mm carapace length (CL) to 66 mm CL. Male lobsters attain a larger size and grow faster than females. As a result of the size limit of 75 mm CL that is currently imposed on commercial fishers, male lobsters make up virtually the whole of the catch. Commercial exploitation of WCRL in South Africa occurs from the mouth of the Orange River in the north-west to Danger Point in the Cape South Coast. Recreational fishing covers the same area, but also extends further eastwards towards Mossel Bay. [14] Commercial fishing for WCRL dates back more than a century. Initially there was very little regulation of the WCRL industry. Notwithstanding a minimum size of 89 mm CL introduced in 1933 and a tail mass quota limitation in 1946, catches in excess of 10 000 tons per annum were maintained from 1950 to 1965 putting enormous strain on the resource and endangering its long-term sustainability. Predictably, by the mid-1960’s WCRL hauls had begun to decline appreciably. In response, tail mass production quotas were reduced. In the 1970’s tail mass production quotas were replaced by a whole lobster (landed mass) quota, in tandem with a TAC limitation. Various other measures were also introduced, including the introduction of area limitations, the stipulation of size limitations, the establishment of a closed season and the banning of catches of berried or soft-shelled WCRL. These measures combined to restore some balance to the WCRL industry, and TAC stabilised at between 3 500 and 4 000 tons per annum. [15] In the 1990/1 season there was another notable decline in the somatic growth rate of WCRL.1 There were fewer WCRL of legal size. Up until the mid 90s the commercial TAC was gradually reduced reaching as low as 1 500 tons in the 1995/6 season. There was a slow recovery of the resource up to the 2004/5 season when the global TAC was 3 527 tons. Unfortunately, in recent seasons, WCRL has been placed under renewed significant pressure. The global TAC in the 2007/8 season was decreased to 2 571 tons. WCRL is a slow-growing crustacean and due to the slow recruitment of the adult population any recovery plan must be a long-term one. [16] In his affidavit opposing the relief sought by the appellants in the court below, the Minister explained that the short, medium and long-term fishing rights allocation processes with which his department’s Marine and Coastal 1 This means the extent of the physical growth of the creature itself. Development branch (MCM) had been involved over the past decade had focused primarily on the interests of medium and large sized commercial entities. The interests of surrounding coastal communities and subsistence fishers and their access to the use of the marine living resources have hitherto been neglected, notwithstanding the provisions of s 18(5) set out above.2 Only in recent years have their interests received the necessary attention. The dispute giving rise to the litigation that culminated in the present appeal arose from that historical imbalance. [17] The Minister described the problems attendant upon the allocation of fishing rights to subsistence and smaller scale users of our country’s marine living resources. Coastal communities have historically depended and relied on fishing along the coast to earn a living. WCRL fishing, as indicated above, is lucrative and the demand from this category of users far exceeds the sustainability of the resources. Although the number of participants in this group is large the quantum of fish involved in their quota is relatively small compared to that exploited by medium and large commercial enterprises. It has been difficult to assess their impact on the resources they access, legally and illegally. [18] Government set in motion a process to develop a management policy in order to deal with the growing clamour by subsistence users and small commercial entities for access to a share of the TAC. This process has taken longer than anticipated. According to the Minister this was due to a larger group of fishers than initially anticipated having to be accommodated in the consultation process. [19] One of the issues facing government in its regulatory function is that it has obligations towards coastal communities under international treaties, principally the United Nations Convention on the Law of the Sea and the Voluntary Code of Conduct for Responsible Fisheries adopted by the Food 2 Section 2(j) of the MLRA provides that the Minister and any organ of State ‘shall in exercising any power under this Act have regard to . . . the need to restructure the fishing industry to address historical imbalances and to achieve equity within all branches of the fishing industry’. and Agricultural Organisation of the United Nations on 31 October 1995. These instruments oblige the government of the Republic of South Africa to heed the economic and socio-economic needs of coastal fishing communities.3 [20] Problems hampering government in its attempts to accommodate subsistence and small-scale fishers who were seeking access to WCRL are largely due to its own making. Around the beginning of the new millennium the Ministry had phased out subsistence permits and restyled them as ‘limited commercial rights’. In allocating these limited commercial rights the Minister had failed to accommodate a large number of subsistence fishers from coastal communities seeking access to the limited resource. The ‘limited commercial rights’ that had been granted were part of a medium-term fishing allocation of four-year duration. [21] In 2005 the Minister invited applications for long-term fishing rights of ten-year duration. The former full-term commercial rights, which catered for medium and large scale commercial entities, were re-branded as ‘rights in the off-shore fishery’ and comprised rights allocations greater that 1.5 tons. The previous ‘limited commercial rights’ were now known as commercial ‘rights in the near-shore fishery’ and accommodated 820 individuals who were historically dependent on the resource. They ran relatively small-scale commercial operations, in inshore areas using smaller boats and hoop-nets. The changes brought about by renaming categories were changes in form rather than substance. Thus, the Minister had committed himself to these right-holders on a long-term basis and was still facing further calls by a large number of individuals for inclusion in the near-shore fishery. [22] As the calls by subsistence and small scale fishers for inclusion grew ever louder, so too did the resistance by those already in possession of long- 3 Section 2(i) obliges the Minister and any organ of State, in exercising any power under the MLRA to have regard to ‘any relevant obligation of the national government or the Republic in terms of any international agreement or applicable rule of international law’. term rights. The battle lines were drawn and tensions mounted. Consultations with and representations to the Ministry followed. [23] The consultation and policy development processes dragged on and the pressure increased on the Minister to find a means to accommodate those who had previously been excluded and who desperately sought access to the resource. The Minister’s problems were compounded when a non- governmental organisation, Masifundise, assisted subsistence fishers in the Equality Court to seek relief against him, based on their alleged wrongful exclusion from access to WCRL. The present appellants were not party to that litigation. [24] In May 2007 the Minister, in settlement of that litigation, and in accordance with an agreement which was made an order of the Equality Court, publicly announced ‘interim measures to accommodate fishers along the Western and Southern Cape coastline’. In terms of that arrangement Masifundise undertook to identify 1 000 bona fide ‘artisanal’ (subsistence) fishers who were not holders of existing commercial fishing rights allocated in terms of s 18 of the MLRA and who could ‘demonstrate both historical dependence and reliance’. It was agreed that the names of those so identified would be submitted to the Minister’s Department. Those who qualified would be required to apply for a recreational fishing permit.4 The Minister, in turn, after considering whether they met the criteria, would: ‘[B]y way of exemption, until 31 December 2007 or any earlier date identified herein, permit the identified fishers to engage in fishing and to sell the lawfully caught catch under the authority of the recreational permit the following: . . . 4.1 four West Coast rock lobster per day, every day of the week until 31 May 2007; . . .’. In addition, the persons who qualified and who were holders of recreational permits were granted the right to catch stipulated quantities of other species of marine life until 30 September 2007. 4 Recreational fishing is defined in s 1 of the MLRA as ‘any fishing done for leisure or sport and not for sale, barter, earnings or gain’. (My emphasis.) [25] The order of the Equality Court records that ‘the exemption may be renewed for a further stipulated period if necessary. . .’. The order of the Equality Court is dated 2 May 2007 and, as can be seen from what is set out in the preceding paragraph, the initial ‘interim’ right to fish for WCRL was for a very limited duration. [26] Following on the public announcement the first appellant and its members, considering this exercise of the power of exemption as an abuse of the provisions of the MLRA, engaged the Minister in correspondence and discussions. That process dragged on for months during the latter half of 2007 and the beginning of 2008. When the Minister appeared bent on proceeding with further interim measures in the same vein as referred to above, but for a longer period the appellants resorted to the litigation in the court below in March 2008. [27] The Minister’s own scientific advice indicated that the further interim measures he intended proceeding with would result in the TAC for WCRL being exceeded and not being absorbed within the recreational catch, which was the Minister’s objective. Nonetheless, the Minister took the view that there were compelling reasons to proceed. The following part of the Minister’s answering affidavit is significant: ‘[F]rom a humanitarian and socio-economic perspective understood in the context . . . of the MLRA and the considerations that led to the settlement of the Equality Court case, it was very important that the affected group of fishers be accommodated, inter alia, with access to WCRL. Time did not permit a process of rights allocations to them under s 18 coupled with a possible re-allocation for commercial TAC under s 14. The development of the policy had been held up longer than expected, not due to the fault of the interim relief fishers. Not addressing their needs could, and probably would, cause very severe hardship for the interim relief fishers. . . . In my opinion, these were sound reasons for addressing this issue by way of exemptions under s 81.’ [28] The following statement by the Minister is of some importance: ‘To the extent that the small scale fishers would compete with the existing commercial rights holders, I considered that their impact would probably be minimal and would in any event not be in a market sector in which the large commercial interests participated meaningfully.’ [29] The court below (Davis J),5 in considering whether the Minister had properly used the power of exemption provided for in s 81 of the Act, had regard to the full bench decision in Laingville Fisheries (Pty) Ltd v The Minister of Environmental Affairs and Tourism.6 In that case the power of exemption provided for in s 81 of the MLRA was described as a ‘wide discretion’ to exempt a person from any provision of the Act. The court below concluded that there was no basis for a contention that the Minister may only exempt a person from certain provisions of the Act but not others. Davis J said the following (para 31): ‘No section remains untouchable or out of reach of the exemption power contained in section 81. That conclusion does not follow from the wording of the provision and the interpretation of the provision by the Full Bench.’ [30] The learned judge went on to say (para 34): ‘In effect what happened was the following: The respondent fishers were exempted from the provision that they would not undertake commercial fishing without having been granted a right thereto by the first respondent. To the extent that the exemption letter constituted a permit, they were also exempted from paying any fee for this permit.’ [31] The court below held that the Minister had acted rationally and that the transformative agenda of the MLRA, of restructuring the fishing industry to address the historical imbalances of the past, had rightly been taken into account. Davis J described the Minister’s decision-making as follows: ‘That he did so in the fashion set out in the evidence is indicative of a decision maker having to make a difficult decision in the allocation of limited resources but doing so in a fashion in which he was cognisant of the competing interests which, in any event, may be intrinsic to section 2 of the MLRA.’ He held that the Minister had acted intra vires in his application of s 81 and went on to dismiss the application with costs. [32] Subsequent to the judgment of the court below the respondents approached the Equality Court once again and once more an order was made by that court in accordance with an agreement reached with the Minister. That order is dated 19 November 2008 (approximately six weeks after the 5 [2008] ZAWCHC 123 (7 October 2008). 6 [2008] ZAWCHC 28 (30 May 2008). judgment of the court below). In terms of the order the Minister undertook to finalise the policy development process by publication in the Government Gazette by 31 July 2009. Furthermore, subsistence fishers who were identified in the same way as before and who held recreational fishing permits would, by way of exemption by the Minister, be granted the right to catch, inter alia, 20 WCRL per person per week from 15 November 2008 to 15 April 2009 (on weekdays only). [33] In refusing leave to appeal, Davis J thought it important that the decision by the Minister was ‘buttressed’ by the two orders of the Equality Court, which he reasoned it was not competent for him to overturn. In addition, Davis J was not persuaded that another court would come to a different conclusion on the interpretation and application of s 81 of the MLRA. [34] The facts in Laingville, where applications for fishing rights were lodged beyond a time deadline set by the Minister and where the court held that s 81 could be employed by him to exempt persons from that requirement, are of course far removed from the facts of the present case. [35] It was submitted on behalf of the appellants that the Minister could not re-categorise subsistence fishers and pretend they were recreational fishers in order to get around the seemingly already fully subscribed rights in the subsistence sector. The appellants contended that by employing s 81 in the manner referred to above, the Minister was subverting the very purpose of the Act and that the granting of rights ought to be dealt with in terms of s 18 of the MLRA. [36] There is some force in the attack by the appellants on the Minister’s application of s 81 of the MLRA. There is also the allied concern that permitting such a wide power of exemption could result in the executive being able to undo the structure, purpose and principles of the legislation. That concern would have as a concomitant that the jurisdictional lines between the various arms of government would be blurred. It was argued that the effect of using an exemption provision in the manner resorted to by the Minister is to subvert not only the definition of recreational fishing, referred to above, but also s 20(1) of the MLRA which provides that ‘no person shall sell, barter or trade any fish caught through recreational fishing’. [37] On the other hand, it was submitted on behalf of the respondents that s 81 of the MLRA could rightly be used, as the Minister did in this case, to grant fishing rights. It was contended that s 18 militated against the common-law entitlement to retain a catch from the sea and that by granting an exemption in terms of s 81 of the MLRA the Minister was restoring the common-law position, thereby, in effect, granting the rights challenged by the appellants. The counter-submission by the appellants in that regard was that the MLRA now regulated the fishing industry and that its core provisions, in the interests of conservation, had to be maintained and enforced. [38] It is unnecessary to deal with all the submissions in this regard and to decide that issue finally, because the appeal fails at two related fundamental preliminary levels. [39] Before dealing with them it is necessary to deal briefly with a submission on behalf of the 134th respondent, namely, that the appellants lacked locus standi. It was contended that the appellants have no direct and substantial interest in the interim relief afforded to the subsistence fishers: a mere financial or personal interest did not suffice and that the interest had to be related to the relief sought by the appellants. They contend that the appellants’ commercial rights were not infringed upon by the rights granted to the subsistence fishers. I am willing to assume in favour of the appellants, without deciding the matter finally, that they have the necessary locus standi. I turn to deal with the two fundamental reasons why the appeal should fail. [40] First, courts will not decide issues of academic interest only. In Radio Pretoria v Chairman, Independent Communications Authority of South Africa 2005 (1) SA 47 (SCA) this court had regard to s 21A(1) of the Supreme Court Act 59 of 1959 which provides: ‘(1) When 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.’ [41] In that case this court was concerned about a proliferation of appeals that had no prospect of being heard on the merits as the orders sought would have had no practical effect and referred to Rand Water Board v Rotek Industries (Pty) Ltd 2003 (4) SA 58 (SCA), at 63H-I, where the following was said: ‘The present case is a good example of this Court’s experience in the recent past, including unreported cases, that there is a growing misperception that there has been a relaxation or dilution of the fundamental principle . . . that Courts will not make determinations that will have no practical effect.’ [42] In National Coalition for Gay and Lesbian Equality v Minister of Home Affairs 2000 (2) SA 1 (CC) the Constitutional Court said the following (para 21, fn 18): ‘A case is moot and therefore not justifiable if it no longer presents an existing or live controversy which should exist if the Court is to avoid giving advisory opinions on abstract propositions of law.’ [43] As set out above, the time periods during which the Equality Court orders operated have passed. The measures reflected therein were described as ‘interim’ and it was always understood by all that a policy would some day be finalised that would inform future conservation measures and the granting of fishing rights in the future. The Equality Court orders certainly did not operate at any time so as to prevent the court below from deciding the dispute. The second Equality Court order, obtained pending an application for leave to appeal, contemplated a date for finalisation of the new policy, namely 31 July 2009. That time too has come and gone. A further fishing season has passed since then and we are unaware of how subsistence fishers were accommodated therein, if at all. There is no indication on the record that the interim measures contained in the Equality Court orders are to be repeated in respect of the new fishing season that begins in November 2010. [44] In Radio Pretoria, at para 40, this court said: ‘[T]here is no clear indication that another case on identical facts will surface in the future.’ The same applies here. [45] It is true that this court said more than four decades ago, in Ex parte Nell 1963 (1) SA 754 (A), that the absence of an existing dispute was not an absolute bar to the grant of a declaratory order. What was required was that there should be interested parties upon whom the declaratory order would be binding. In considering whether to grant a declaratory order a court exercises a discretion with due regard to the circumstances. The court must be satisfied that the applicant has an interest in an existing, future or contingent right or obligation. If the court is so satisfied it must consider whether or not the order should be granted.7 In exercising its discretion the court may decline to deal with the matter where there is no actual dispute.8 The court may decline to grant a declaratory order if it regards the question raised before it as hypothetical, abstract or academic. Where a court of first instance has declined to make a declaratory order and it is held on appeal that that decision is wrong the matter will usually be remitted to the lower court. [46] All interested parties were not before the court below and there was no indication on the record that a declaratory order, assuming it to be enforceable in its proposed form, would have any practical effect. These factors in themselves presented an insurmountable obstacle for the appellants. [47] Second, and as fundamentally fatal to the appellants’ case as the first, is the nature and extent of the declaratory order sought in the court below. In the light of the reasoning of the court below and its refusal to review and set 7 Cordiant Trading CC v Daimler Chrysler Financial Services (Pty) Ltd 2005 (6) SA 205 (SCA) at 213E-G. 8 Ex parte Nell 1963 (1) SA 754 (A) at 760B. aside the Minister’s decision, it was unnecessary for it to go further and deal specifically with the terms of the proposed declaratory order. The appellants sought thereby to bar the Minister from using s 81 of the MLRA to grant subsistence fishers a right to catch and sell WCRL for commercial purposes. [48] It appears that insufficient thought was given to the wording of the order sought. Subsistence fishers are entitled to engage in limited commercial activity. A subsistence fisher is defined in s 1 of the MLRA: ‘[A] natural person who regularly catches fish for personal consumption or for the consumption of his or her dependants, including one who engages from time to time in the local sale or barter of excess catch, but does not include a person who engages on a substantial scale in the sale of fish on a commercial basis.’ [49] The effect of granting the proposed order would be to bar subsistence fishers as a class from activity they can lawfully engage in, albeit in a limited manner, namely, the sale of a part of their catch. The order proposed does not deal with the nub of the appellants’ complaint that subsistence fishers are being dressed up by the Minister as recreational fishers, to get around the already fully-subscribed subsistence quota. They point out that by definition recreational fishers are precluded from selling any part of their catch. The appellants contend, as I have said, that it is this unworkable fiction that is subversive of the objectives and principles of the Act. The proposed declaratory order does not address the appellants’ complaint. [50] The problem is compounded for the appellants by the fact that the proposed order is in substance a perpetual interdict purporting to prejudicially affect a whole class of persons (subsistence fishers), including persons who are not joined as parties to the litigation but who might have wanted to say something in opposition to the relief sought. It is a fundamental principle that all interested parties should be joined in an application that may affect their rights. See in this regard Farlam, Van Loggerenberg and Fichardt Erasmus Superior Court Practice at A1-33 and the authorities there cited. [51] There might conceivably be circumstances in which subsistence fishers could rightly be granted an exemption in terms of s 81, entitling them to sell fish that they might otherwise have consumed. There may well be permutations that do not readily suggest themselves to the parties presently before us but which might occur to subsistence fishers who are not parties to the present litigation. Granting the declaratory order in the terms sought would be closing the door forever and a day to that possibility and would bind persons who are strangers to the present dispute. A declaratory order cannot affect the rights of persons who are not parties to the proceedings.9 [52] An attempt was made during the dying seconds of final submissions in reply on behalf of the appellants to amend the terms of the declaratory order to deal with the problems referred to in paras 47 to 49 above. Alas, it likewise did not satisfactorily address the concerns alluded to and for the various reasons set out above, that attempt too must fail. [53] There is one remaining aspect. This court has recently seen a number of cases in which10 jurisdictional questions have arisen in relation to Equality Court matters. The dissonance in the interplay between the Equality Court and high courts has been brought into sharp focus. In this case Davis J, sitting as a high court judge, questioned whether he could validly cut across a decision of the Equality Court in a case not involving all the parties before him. Parties have sometimes resorted to parallel and cross-cutting litigation. Legal uncertainty arises and litigation abounds, the antithesis of what was intended by the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000.11 These are issues that should be of concern to the legislature and other interested parties. The Registrar is therefore directed to bring this judgment to the attention of the Chief State Law Advisor and the Minister for Justice and Constitutional Development. 9 See SA Mutual Life Assurance Society v Durban City Council 1948 (1) SA 1 (N) and Farlam et al op cit at A1-33 to A1-34. 10 Minister of Environmental Affairs and Tourism v George 2007 (3) SA 62 (SCA); Manong & Associates (Pty) Ltd v Department of Roads and Transport, Eastern Cape (No 1) 2009 (6) SA 574 (SCA); Manong & Associates (Pty) Ltd v Department of Roads and Transport Eastern Cape (No 2) 2009 (6) SA 589 (SCA). 11 See the remarks of this court in Manong (No 2) op cit para 53. [54] In light of the conclusions set out above the following order is made: The appeal is dismissed. The appellants are ordered to pay the respondents’ costs, including the costs attendant upon the employment of two counsel. _________________ M S NAVSA JUDGE OF APPEAL APPEARANCES: For Appellant: S Burger SC E Fagan SC Instructed by Webber Wentzel Cape Town Matsepes Inc Bloemfontein For first to third Respondent: W R E Duminy SC Instructed by The State Attorney Cape Town The State Attorney Bloemfontein For 134th Respondent: J J Gauntlett SC F B Pelser Instructed by Legal Resources Centre Cape Town 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: 22 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 On 22 September 2010 the Supreme Court of Appeal handed down judgment in West Coast Rock Lobster Association & others v The Minister of Environmental Affairs & others dismissing an appeal against a refusal by the Cape High Court to grant a declaratory order in terms of which the Minister of Environmental Affairs and Tourism Marthinus van Schalkwyk would have been precluded from using s 81 of the Marine Living Resources Act 18 of 1998 in order to grant subsistence fishers generally and the fourth to 1 245th respondents in particular the right to catch and sell West Coast Rock Lobster for commercial purposes. The appellants who are established commercial fishers were ordered to pay the respondents’ costs including the costs of two counsel. The court expressed the view that there was some force in the attack by the appellants on the Minister’s application of s 81 of the Act. It had been submitted that the effect of using the power of exemption in terms of s 81 of the Act to grant subsistence fishers the right to fish as ‘recreational fishers’ was to subvert not only the definition of recreational fishing but also s 20(1) of the Act which provides that no person shall sell, barter or trade any fish caught through recreational fishing. It had been submitted on behalf of the respondents that the prohibition against commercial fishing in terms of s 18 of the Act, unless one was in possession of a permit by the Minister, militated against the common-law entitlement to retain a catch from the sea and that by granting an exemption the Minister was restoring the common-law position. This court found it unnecessary to finally decide this issue because the appeal failed at two fundamental preliminary levels. The measures by the Minister were regarded as interim. They had been overtaken by time and circumstances. There was no indication that similar facts would come before court in the future. Courts were disinclined to grant orders that had no practical effect. For that reason alone the appeal was destined to fail. There was a second reason why the appeal could not succeed. The declaratory order sought was couched too widely purporting to bind an entire category of fishers not all of whom were before court. In any event, the declaratory order sought did not deal with the nub of the appellants’ complaint. The appeal was accordingly dismissed with costs. Finally, the court expressed concern about the dissonance in the interplay between the Equality Court and the high court. It noted a number of cases that had come before it in which jurisdictional questions were raised. In the present case the Cape High Court questioned whether it could issue an order that cut across a decision of the Equality Court. Parties some times resorted to parallel and cross-cutting litigation. Legal uncertainty arose and litigation abounded which was the antithesis of what was intended by the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000. These were issues that should be of concern to the legislature and other interested parties. The Registrar was directed to bring this judgment to the attention of the Chief State Law Advisor and the Minister for Justice and Constitutional Development.

2931

non-electoral

2015

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT CASE NO: 20028/2014 Reportable In the matter between: THE MINISTER OF TRANSPORT NO FIRST APPELLANT THE ACTING DIRECTOR GENERAL FOR THE DEPARTMENT OF TRANSPORT NO SECOND APPELLANT and PRODIBA (PTY) LTD RESPONDENT Neutral Citation: Minister of Transport v Prodiba (Pty) Ltd (20028/2014) [2015] ZASCA 38 (25 March 2015). Coram: Navsa ADP, Wallis & Mbha JJA et Dambuza & Gorven AJJA Heard: 19 February 2015 Delivered: 25 March 2015 Summary: Agreement with service provider signed by Director-General without approval of Minister – held no authority to sign on behalf of the Department of Transport – decision with financial implications of approximately R1 billion – decision polycentric in nature – within province of the Executive – agreement signed without competitive process – if agreement upheld it would mean that following upon the award of a single tender in 1997 one service provider would have had a monopoly in the production of drivers’ licences for over 20 years – militates against constitutional principles of transparent and accountable government – imperative statutory and treasury requirements flouted – agreement held to be void. ______________________________________________________________________ ORDER ______________________________________________________________________ On appeal from: The North Gauteng High Court, Pretoria (Ebersohn AJ sitting as court of first instance). The following order is made: 1. The appeal is upheld with costs including the costs of two counsel. 2. The order of the court below is set aside and substituted as follows: „(a) The application is dismissed with costs, including the costs of two counsel. (b) The third addendum agreement is declared void ab initio and set aside. (c) The respondent in the counter-application is ordered to pay the costs of the counter application, including the costs of two counsel.‟ ______________________________________________________________________ JUDGMENT ______________________________________________________________________ Navsa ADP (Wallis & Mbha JJA et Dambuza & Gorven AJJA concurring): Introduction [1] At the beginning of 1997 a tender was awarded by the Department of Transport (the Department) for the provision of a bureau service that would produce a personalised new style South African drivers‟ licence, administer the production process and keep the licences safe until they were delivered to the licencing authority. This service was to be provided for a period of five years. Shortly after the award of the tender, and the conclusion during February 1997 of an agreement, the rights vested in the successful tenderer were ceded to Prodiba (Pty) Ltd (Prodiba). Some extension periods were provided for in the agreement concluded upon the award of the tender. That fact and further proposals by Prodiba and negotiations with the Department resulted in the former providing the services referred to above at substantial remuneration until 28 February 2014. The present appeal by the first and second appellants, the Minister of Transport (the Minister) and the Acting Director-General in the Department (the ADG), respectively, followed on a successful application by Prodiba, in the North Gauteng High Court, to enforce an agreement concluded on 1 February 2013 by the erstwhile Director-General of the Department, whose authority is disputed by the appellants. In terms of that agreement Prodiba was entitled to produce new smart-card drivers‟ licences for a period of five years, commencing on 1 March 2014. The financial implications for the state were estimated at R1 097 billion. The present appeal, with the leave of this court, is directed against those results. If Prodiba were to succeed it would mean that following upon a single tender process during 1995-1997, a single contractor would have had an uncontested monopoly in the production of drivers‟ licences for a period of more than 20 years. Do our constitutional norms and values countenance such a situation? The short answer is no. The present appeal might rightly be described as the Department belatedly coming to its senses. The detailed background and the reasons for the aforesaid non-affirmative conclusion are set out below. Detailed background [2] During 1995/1996 the Cabinet took a policy decision to migrate from the old drivers‟ licence regime to a new card system for drivers‟ licences. As a result the Department issued a tender through the State Tender Board to provide the services referred to in the preceding paragraph. After following proper tender processes the tender was awarded to Face Technologies (Pty) Ltd (Face Technologies), Idmatics and Nkobi Holdings (Pty) Ltd, which led to the Department and Face Technologies concluding a written agreement on 28 February 1997, for the manufacture of driver‟s licence cards. It is common cause that shortly thereafter Face Technologies ceded its contractual rights to Prodiba. The contract period was repeatedly extended. The last extension was from 1 March 2012 until 28 February 2014. These repeated extensions, by virtue of contractual provisions and negotiations, appear legally suspect but for present purposes need detain us no further. [3] Prior to the last extension the Department considered updating and changing the technology related to drivers‟ licences. There was a dispute about whether the idea to change the technology and migrate to a new system, namely a smart-card driver‟s licence, emanated from the Department or Prodiba. That dispute was ultimately irrelevant. [4] On 1 February 2013 the erstwhile Director-General of the Department, Mr George Mahlalela, signed the agreement at the centre of the present dispute. That agreement purported to bind the Department and South Africa to migration from the initial card system to a smart card microchip-based driving licence system, with Prodiba being responsible for its production, with the concomitant financial implications set out in paragraph 1. The agreement was entitled „the Third Addendum Agreement‟. The agreements that followed on the one concluded upon the award of the tender were entitled and referred to as the First and Second Addendum agreements, respectively. I shall, in due course, deal with that description and the employment of what I consider to be semantic stratagems. In adjudicating the validity of the third agreement it is necessary to consider the events and processes leading up to its conclusion. [5] During October 2012 an internal memorandum was prepared by the Department, which envisaged the migration to the new smart-card technology and anticipated negotiations in that regard with the current service provider, Prodiba. The internal memorandum was in line with a written business case prepared by the Department. What was ultimately intended was a Departmental takeover of the entire production process. The stated purpose of the memorandum was to seek approval from the Minister for the take-over „of the services currently provided by the service provider and to change the current paper format driving licence card to plastic chip based card.‟ [6] The documents reflect a commonplace process of seeking approval within the structures of government. The proposal was prepared by an Acting General Manager, Ms Zwane, in a memorandum addressed to the Minister of Transport. Its recommendations were supported by the Acting Chief Financial Officer and the Deputy Director-General: Roads Transport. It was then referred to Mr Mahlalela, who recommended it and who made a written note stating the following: „Need to brief Deputy Minister and the Minister on their proposals.‟ The memorandum was then sent to the Deputy Minister, who noted this recommendation and said that it was highly supported. That was on 20 December 2012. When the memorandum was placed before the Minister of Transport on 24 February 2013, he deleted the words „APPROVED/NOT APPROVED‟ and added a hand-written note stating the following: „Briefing to precede approval.‟ [7] In the answering affidavit the Department was emphatic that the briefing of the Minister had not occurred prior to the conclusion of the agreement. It was adamant in its assertion that there had been no approval of this migration to the new technology or of the cost implications, by the Executive arm of Government, either in the form of a Cabinet decision or indeed even by the individual responsible member of the Cabinet, the Minister. The sequence of events, set out in the preceding paragraph, supported the Department‟s stance. [8] I consider it necessary to record that in the litigation leading up to and including this appeal, Mr Mahlalela was conspicuously absent. No affidavit by him was filed by either party, setting out the basis on which he had purported to conclude the agreement. It was unchallenged that Mr Mahlalela was informed, during September 2012, that his contract as Director-General in the Department would not be renewed when it expired on 28 February 2013. Mr Mahlalela signed the agreement in question on 1 February 2013. The evidence demonstrates that he did so without having briefed the Minister and without having obtained his approval. [9] On 5 February 2013, Mr Mahlalela, purporting to act on behalf of the Department, wrote the following letter to the Director-General of National Treasury, ostensibly to create the impression that he had complied with statutory or Treasury prescripts: „1. The Department of Transport (“the Department”) produced driving licence cards on a fully outsourced Bureau service since March 1998 on contract RT6969SA(G). 2. The original contract was for a period of 5 (five) years. The contract was then extended for a period of 13 (thirteen) months, before a second production period of 5 (five) years was included. The contract was subsequently extended on various occasions for multiple periods ranging from 1 (one) month to 18 (eighteen) months. 3. The Department on several occasions advertised tender specifications for a new service provider but failed to complete the process due to the technical nature, and due to legal challenges. 4. The Department subsequently took a strategic decision, supported by the Ministry and EXCO not to go out on open tender for the continuation of this service but rather to perform this function in-house. 5. The bureau service for the production of driving licence cards will be performed by the Driving Licence Trading Entity (“DLTE”). The Department together with the entity is currently planning and creating capacity within the entity to take over this service. Technical services will be supplied by the Department‟s integrated transport information technology hub (“IT Hub”). 6. The Department developed a service level agreement between the entities to regulate this arrangement (attached and marked Annexure A). The Department developed a business case (attached and marked Annexure B) for the handover of services from the current service provider to the DLTE. 7. The Department had successful negotiations with the current service provider and has agreed that following the upgrade of the current card production infrastructure to enable it to print smart cards, export of biometric and spatial data to the IT Hub and upgrade the live capture infrastructure, the bureau service will be transferred to the DLTE. The current service provider further agreed to assist the Department in capacitating the DLTE including training personnel, operations, transfer of staff and equipment. 8. The Department is of the opinion that this is a major milestone achieved in taking essential services performed on an outsourced basis in-house. The Department intends to follow the same strategy with the eNaTIS contract RT1194KA. However a protracted legal battle with the service provider is currently delaying this process. 9. Your co-operation in this regard is appreciated.‟ [10] As pointed out above, the contested agreement contemplated that Prodiba would produce the new licence cards and be responsible for the related administrative processes for a further period of five years, commencing on 1 March 2014. As can be seen, there was no mention of that fact in the letter that appears in the preceding paragraph. In fact the second annexure referred to in paragraph 6 of the letter said expressly that the existing contract would expire at noon on 1 March 2014 and that the current extension of that contract was final. It added that from 1 March 2014 Prodiba would „no longer provide any services‟ and the entire process of producing drivers‟ licences would be managed in-house. The letter could not have been construed as reporting on the conclusion of the Third Addendum Agreement. [11] In an answering affidavit filed in support of the appellant‟s case, it was pointed out that there had been an unseemly haste in signing the agreement, prior to Mr Mahlalela‟s departure, at a time when he knew that the Department had taken a strategic decision that the appointment of service providers for the migration to the new system was not a viable option and that it intended to provide the service itself. The Department insisted that it had acquired the technology to do so. Prodiba, on the other hand, disputed the Department‟s ability to produce the new cards. That was neither here nor there. One cannot create a contract with a government department by asserting its inability to perform the work that is the subject matter of the alleged contract. In the replying affidavit on behalf of Prodiba there was no effective challenge to the assertion that the Department had taken a policy decision not to continue to employ a service provider to provide the services described at the commencement of this judgment. The following part of the executive summary of the internal memorandum is significant: „4.1.3 In order for the Department to proceed with bringing the card production services in- house, the Department will need to cancel the Current Tender and inform the bidders by publication in the state tender bulletin.‟ In other words, because the Department was to undertake the production of drivers‟ licences in-house, there was no need to continue with a tender process to appoint an outside contractor to do so. [12] It is also necessary to record that in 2008 and 2009 two tenders had been issued by the Department for a new smart-card drivers‟ licence system. In response to the 2009 tender, 16 bids were received, six of which were susceptible to further evaluation and one of which was Prodiba‟s. However, the Department decided, for undisclosed reasons, not to proceed with the tender process.1 1 In the appellant‟s heads it is postulated that this was done because the Department was to take the card production in-house. However, in the answering affidavit the following appears in relation to the 2009 tender: „This tender was however not proceeded with for reasons that are not relevant to this application. The applicant was one of the entities that submitted a bid for this tender.‟ These statements were followed immediately by the following: „What the new agreement has now done was to essentially award a tender for migration to a new drivers license system in a manner that is unfair and clearly not transparent. It has also taken away the principle of cost effectiveness in a sense that the Department is now not in a position to assess which of the bidders could deliver a cost effective service, if it still needed to procure these services.‟ [13] Subsequent to the conclusion of the agreement, and in anticipation of it being implemented, Prodiba placed orders with suppliers for the necessary materials and equipment to enable it to comply with its contractual obligations. A cash flow schedule appears to have been agreed with Mr Mahlalela in terms of which a total amount of R122 037 084 would be advanced to Prodiba. In April 2013, when Prodiba sought to obtain payment from the Department of three invoices totalling some R38,5 million, it met with resistance. [14] On 27 April 2013 the ADG purported to cancel the agreement. The letter reads as follows: „1. The above matter refers. 2. I advise that unbeknown and without instructions from the Minister of Transport, the former Director-General, Mr George Mahlalela concluded an addendum agreement no. 3 with Prodiba on 01 February 2013. 3. I advise that at present there is a contract between the parties (the Department and Prodiba) which terminates at the end of February 2014. 4. Mr Mahlalela was in full knowledge that during 2012, the Department took a strategic decision that the continued extension of the current contract with Prodiba (Pty) Ltd and any further appointment of service providers is no longer viable. The Department was to continue the services in-house with effect from 01 March 2014. 5. I advise further that Mr Mahlalela, has inter alia, acted: 5.1 in violation of the provisions of the Treasury Regulations; 5.2 without the authority of the Minister when concluding addendum agreement no. 3 on behalf of the Department of Transport; 5.3 in violation with the provisions of section 217 of the Constitution; 5.4 in breach of his fiduciary duties vice versa the Department of Transport; 5.5 in breach of his duties in concluding a further contract when an existing contract is still in operation. 6. I further advise that the card production extension is not affordable by the trading entity and it will cause the latter to become commercially insolvent and operate on an overdraft. This is not allowed by Treasury Regulation 19.2.3. 7. You have further submitted a claim for an advance payment of R32 million under payment Certificate 307 for upgrade. This is in violation of Treasury Regulation 15.10.1.2(c). 8. I further advise that Mr Mahlalela was not entitled to have concluded a further contract when an existing contract was still in operation. 9. I hereby advise you as I hereby do that the addendum agreement No. 3 concluded by Mr Mahlalela on the 1st of February 2013 with yourself is herewith cancelled. 10. Should you fail to accept the cancellation herewith, the Department will have no alternative but to approach the High Court to have the agreement set aside.‟ [15] That letter caused Prodiba to launch an application in the North Gauteng High Court for an order declaring the decision by the ADG to cancel the agreement unlawful and directing the Department to comply with its obligations in terms of thereof. Although couched as a challenge to the validity of the cancellation it said expressly that it was seeking specific performance of the agreement. In a counter-application the Minister sought an order to the effect that the third addendum agreement was void ab initio. Judgment and order of the court below [16] The high court (Ebersohn AJ) considered the submission on behalf of the Minister and the ADG that Mr Mahlalela did not have the authority to enter into the agreement on behalf of the Department and rejected it. Ebersohn AJ stated that the „objective facts‟ set out hereunder destroyed the respondent‟s allegation that Mr Mahlalela, the erstwhile Director-General of the Department, did not have the authority to enter into the third addendum agreement: First, the Department itself had prepared a written „business case‟ for migrating to the smart-card drivers‟ licences. Second, the department had indicated, since 2009, that it intended to upgrade and update the technology relating to drivers‟ licence cards. Third, the Department was aware that Prodiba‟s contract would come to an end on 1 March 2014. Fourth, it had to consider who would manage the card production facility and it had to take into account the new technology to be employed post 1 March 2014. Fifth, the Department had various alternatives open to it, such as allowing a tender to be awarded to a service provider, partial in-house administration and technical functions, a turn-key solution whereby a new service provider manages the entire process, a public and private sector corroboration whereby a government department manages the technical functions, an upgrading of the current manufacturing infrastructure together with a phased takeover of all functions by the Drivers Licence Card Account established by the Department. [17] Ebersohn AJ held, with reference to the provisions of the agreement itself, that the Department had chosen a phased takeover of the production of the driving licence card and entered into negotiations with Prodiba which culminated in the Department concluding that agreement. He found that this was in line with the Department‟s own business plan and held in favour of Prodiba, having regard to the following part of the internal memorandum referred to earlier: „Negotiations should be undertaken with the current service provider on the effective and smooth takeover including the upgrading, replacement of certain components of the production machine with the components capable of printing the new plastic chip based cards.‟ [18] Ebersohn AJ reasoned that the Minister‟s lack of objection on the record was a factor in Prodiba‟s favour. He held that the letter from Mr Mahlalela to National Treasury, recorded in paragraph 9 above, was sufficient to fulfil the Department‟s legal obligation to apprise National Treasury in respect of the financial implications of the agreement. He had regard to the fact that the letter set out in paragraph 9 was copied to the Chief Financial Officer of the Department and the Chief Executive Office of the relevant division of the Department and considered this fact to support Prodiba‟s application to enforce the agreement. [19] Ebersohn AJ considered the following objections to the validity of the agreement: (a) that the Cabinet had not approved the policy change; (b) that Mahlalela failed to obtain the Minister‟s approval; (c) that, in terms of the Public Finance Management Act 1 of 1999 (PFMA), approval had to be obtained from National Treasury as the effect of the agreement was to increase the value of the existing contract in excess of fifteen per cent; and (d) that Mahlalela failed to obtain the approval of a Bid Committee as required by the Department‟s supply chain policy. [20] The court below was dismissive of these objections, stating that none bore scrutiny. Ebersohn AJ held it against the appellants that they failed to refer, in the letter of cancellation mentioned above, to the absence of the necessary approvals from National Treasury and Bid Committee. He reasoned that the belated introduction of these defences impacted negatively on the Department. He considered Prodiba to be an innocent party that would be prejudiced in the event that the Department was permitted to rely „on non-compliance with its internal procedures‟. He had regard to what he considered to be a concession by the Department in its answering affidavit that, up until 24 February 2013, Mr Mahlalela was its Accounting Officer and had the necessary authority to conclude the third addendum agreement. [21] Ebersohn AJ held that there was no provision in the PFMA requiring Mr Mahlalela to obtain the Minister‟s approval before binding the Department by concluding the agreement. He considered the following statements in the internal memorandum to give the lie to the appellants‟ assertion that Cabinet approval was required: „6.1 National Treasury must be [apprised], upon approval, of the Department‟s decision to take over the driving licence services currently provided by service provider. 6.2 Upon approval Cabinet must be apprised of the decision of the Department to change the current driving licence card.‟ The court below reasoned that these statements proved that all that was required was that the Department had to apprise the Cabinet and National Treasury of its decision to change to the new technology. It is this reasoning that led to his conclusion that there was no substance to the contention that the migration to the new system involved a policy change which required Cabinet approval. [22] Ebersohn AJ thought it decisive that the respondents were unable to identify any provision in either the Constitution, the PFMA or the Treasury Regulations dictating that approval had to be obtained from the Minister. He viewed a statement in the appellant‟s answering affidavit that the Department would produce the smart cards in conjunction with the Government Printing Works as proof that the Minister had approved the migration to the new system. In this regard he also took into account, in favour of Prodiba, the statement on behalf of the Department that it had already migrated to smart card technology. He did not appear to consider it relevant that, in the affidavit under scrutiny, it was stated that the cards would be produced „once the approval process has been completed‟. In the view of the court below the failure by the Minister to supply an affidavit in which he denied that he had approved the agreement impacted negatively on the appellant‟s case. [23] Ebersohn AJ rejected appellants‟ reliance on s 38(2) of the PFMA which provides: „An accounting officer may not commit a department, trading entity or constitutional institution to any liability for which money has not been appropriated.‟ In his view the existing card production and distribution services generated sufficient income to fund the requirements of the present agreement. He went on to state that the internal documents of the Department demonstrated that the services were self-funding. [24] The court below considered the appellants‟ reliance on Treasury Regulations which provide that, when it is impractical to invite competitive bids, and when goods and services of over R500 000 are to be procured, an accounting officer has to record the reasons for not adopting a competitive procedure and can only deviate on the basis of recommendations of a Bid Adjudication Committee. It concluded that Mr Mahlalela had sound reasons for opting to use his powers to conclude the agreement without engaging a competitive process and that any omissions on his part could not be laid at Prodiba‟s door. He relied on the decisions in Buena Vista Trading 15 (Pty) Ltd v Gauteng Department of Roads and Transport 2012 JDR 2198 (GSJ) and the decision in City of Tshwane Metropolitan Municipality v RPM Bricks (Pty) Ltd 2008 (3) SA 1 (SCA) to support his conclusions. Finally he held that the Department was estopped from relying on a failure of internal management processes. In the result the following order was made: „2. The decision taken by the second respondent on 27 April 2013 to cancel the third addendum agreement and the attempted cancellation thereof by the respondents is reviewed and set aside and it is confirmed that the third addendum agreement is in force for the full contractual period thereof. 3. It is directed and ordered that the Department of Transport is obliged to comply with its obligations arising from the third addendum agreement and to make payments to the applicant punctually and to facilitate full compliance by the applicant of its obligations in terms of the third addendum agreement. 4. The counter-application of the respondents is dismissed. 5. The respondents are ordered to pay the applicant‟s costs including the costs of two counsel, jointly and severally, payment by the one absolving the other respondents.‟ Conclusions [25] There are several fundamental flaws in the approach of the court below. First, it did not pause to consider that, on the undisputed facts, what was in contemplation by the Department was an entirely new technological framework for drivers‟ licences with major cost implications. The epithet „Third Addendum Agreement‟ is deceptive. It creates the impression that the agreement in question was merely an extension of an existing agreement. As stated above, previous extensions of the agreement originally concluded by Face Technologies were termed „First Addendum Agreement‟ and „Second Addendum Agreement‟ respectively. The first two „addendums‟ extended the five year period in respect of which the tender was awarded from 1997 to March 2014, a period of 17 years. The word „addendum‟, in my view, was consciously and strategically employed. One must bear in mind that during that period there had been two tender processes embarked on by the Department which were abandoned. The abandonment remained unexplained. [26] Policy decisions such as those to migrate to a new style drivers‟ licence system which impact meaningfully and, in this case nationally, on the population and which have significant fiscal implications, fall rightly within the province of the Legislature or the Executive. The decision to migrate to new technology on the scale envisaged in the agreement in question is typically a policy-laden or polycentric decision. The Constitutional Court and this court have recognised the importance of appreciating the proper role and functions of the legislature, the executive and the judiciary within the Constitution. In this regards see Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs 2004 (4) SA 490 (CC) paras 46–48, Logbro Properties CC v Bedderson NO and 2003 (2) SA 460 (SCA) para 20 and also Cora Hoexter „The future of Judicial review in South African administrative law‟ (2000) SALJ 484 at 501. See also Minister of Home Affairs v Scalabrini Centre 2013 (6) SA 421 (SCA) paras 57-59. Policy making is traditionally primarily the task of the highest ranking officials in government, namely, the Cabinet or its constituent Ministers or, at provincial level, the executive council or its individual members.2 [27] It is undisputed that the Cabinet made the decision during 1995/1996 to change from the old drivers‟ licence system to the smart-card system. This was clearly in line with what is set out in the preceding paragraph. To reason, as the high court did, from the statement in the internal memorandum that the Cabinet would be apprised of the Department‟s decisions to change the driving licence system, meant that Cabinet approval was not required, demonstrates, first, a lack of appreciation of where the power to make policy resides. Second, it does not appreciate the context in which the statement set out in paragraph 21 above appeared, nor does it appreciate that a Cabinet colleague, in the form of the Minister of Finance, would have had a material interest in the implementation of the new system. It also had the effect of letting the internal memorandum dictate the legal requirements for the validity of the agreement. I shall, in due course, deal with the reasoning of the court below that there were no budgetary implications since the licencing scheme was self-funding. [28] The court below failed to appreciate that Mr Mahlalela was a Director-General operating within the Minister‟s department and subject to the latter‟s authority. This was expressly recognised in the internal memorandum, the purpose of which was to seek Ministerial approval for the new drivers‟ licence regime. The Department was best placed to say whether the Minister was briefed, as contemplated in the memorandum. It was emphatic that this did not occur. More importantly, the documentation disclosed in the litigation, bears this out. There is no effective counter in the replying affidavit to the assertion that, towards the end of his tenure, Mr Mahlalela, with unseemly haste, 2 C Hoexter Administrative Law in South Africa 2ed (2012) at 6, 7 and 24. concluded the agreement, ostensibly, on behalf of the Department when he knew that a decision had been taken not to continue with an outside service provider. [29] There was no effective response by Prodiba to the assertion on behalf of the Department that it had taken a policy decision not to continue with an outside service provider. The only counter on behalf of Prodiba appeared to be that the Department does not have the capacity to produce the new card on its own, something which, as pointed out in paragraph 11 above, was neither here nor there. It was clear from the documentation on record that the Department had decided to produce the new card in- house. [30] Contrary to the finding of the court below, the letter written by Mr Mahlalela to National Treasury, the contents of which appear in paragraph 9 above, instead of supporting Prodiba‟s case, detracted from it. First, it recorded that a decision had been taken to perform the function in-house with effect from 1 March 2014. Second, it omitted to mention that Ministerial approval had not been obtained. Third, it did not record that a new agreement to provide a new service with significant cost implications had been concluded with Prodiba. Fourth, it did not record why a non-competitive process was not followed. Lastly, it was deliberately vague. All these factors were ignored in the reasoning of the high court when it dealt with Mr Mahlalela‟s authority to conclude the agreement. The court below took an unjustifiably benign approach towards Mr Mahlalela and Prodiba in its consideration of the documentation. [31] To sum up, the court below failed to appreciate that policy decision-making power, particularly in matters such as the one under discussion, resides in the upper echelons of government, more particularly the Cabinet and the responsible Minister or Ministers. In contractual terms, there was a failure to appreciate that Mr Mahlalela not only acted without the approval of his principal, the Minister, but did so against an express decision by the Department, which he purported to represent, that it would no longer continue with an outside service provider. Proper representation can only occur if a person who acts on behalf of another has authority to do so. Whether a person has authority is a question of fact. It is clear from what is set out above that Mr Mahlalela had no such authority.3 I shall in due course deal with the question of estoppel which the court below held operated against the appellants. [32] Perhaps even more fundamentally, the court below failed to pay sufficient attention to the procurement principles set out in the Constitution. Section 217 of the Constitution was designed to ensure transparency and accountability on the part of organs of state which we must all be intent on promoting. The relevant parts of s 217 read as follows: „(1) When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective. . . . (3) National legislation must prescribe a framework within which the policy referred to in subsection (2) must be implemented.‟ [33] Section 38(1)(a)(iii) of the PFMA reads as follows: „(1) The accounting officer for a department, trading entity or constitutional institution – (a) must ensure that that department, trading entity or constitutional institution has and maintains – (iii) an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost-effective.‟ Mr Mahlalela was the accounting officer of the Department. It was incumbent on him to have regard to Constitutional principles, the provisions of the sub-section set out above and other statutory prescripts. The high court erred by not having sufficient regard to constitutional norms and statutory requirements and concluding that the decision to produce the new licences in-house could only have been facilitated by an extension of Prodiba‟s contract and that a competitive bid would not have been viable where the supply of services would have been for a very limited duration. The high court ignored the very extensive period during which Prodiba enjoyed a monopoly and did not properly appreciate that the five year extension period was not of very limited duration. 3 See S W J van Der Merwe et al Contract: General Principles 4ed (2012) at 222. More importantly, the agreement was one in respect of which Prodiba was required to provide a new service dealing with new technology in respect of which potential competitors were not engaged. Moreover, in describing Prodiba as an innocent party which would be prejudiced if the agreement was to be terminated, the court below ascribed to it a level of naivety that was unjustified. At the outset it succeeded a successful tenderer. In 2009 it was a bidder when a new tender was invited and ultimately not proceeded with. Prodiba knew that new technology and a new process was required and that the cost implications for the State were enormous. It must have been obvious that what was required was a competitive process which was circumvented by the agreement under discussion. [34] As indicated above, s 38(2) of the PFMA precludes an accounting officer from committing a department to any liability for which money has not been appropriated. The court below reasoned that the production of the cards would be self-funding in that a driver to whom such a card has been issued would be required to pay for it. This was a complete misapprehension about budgetary processes in general and more specifically in relation to the State. It ignored the fact that what precipitated the litigation leading up to this appeal was that Prodiba had sought an advance payment. The money would only be recouped (if at all) at intervals in the future upon the issue of the drivers‟ licences. In any event, it is in the prerogative of the Department to allocate its earnings as it sees fit. A budget for a financial year yet to commence would take into account what amounts are required in respect of capital expenditure and operational expenses and would make a decision about how any potential future earnings would come into play. It was unchallenged that money was not appropriated to ensure compliance with the Department‟s obligations in relation to the agreement in question. That, in itself, was sufficient ground on which to invalidate the agreement. [35] There is a further regulation with which there was non-compliance. Section 76(4)(c) of the PFMA provides as follows: „76. The National Treasury may make regulations or issue instruction applicable to all institutions to which this Act applies concerning – (c) the determination of a framework for an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost-effective.‟ The applicable Reg, 16A6.4 reads as follows: „If in a specific case it is impractical to invite competitive bids, the accounting officer or accounting authority may procure the required goods or services by other means, provided that the reasons for deviating from inviting competitive bids must be recorded and approved by the accounting officer or accounting authority.‟ In addition, National Treasury issued an instruction note, 8 of 2007/2008, paragraph 3.4.3 of which provided inter alia, that in urgent or emergency cases or in case of a sole supplier, other means such as reg 16A6.4 may be followed. It too provided that the reasons for deviation should be recorded and approved by the accounting officer. [36] No reasons at all were recorded by Mr Mahlalela for not employing a competitive bid process. In Chief Executive Officer, South African Social Security Agency v Cash Paymaster Services (Pty) Ltd 2012 (1) SA 216 (SCA) at 22 the following appears in relation to the National Treasury Regulations here under discussion: „That is a formal requirement. The basis for these requirements is obvious. State organs are as far as finances are concerned first of all accountable to the National Treasury for their actions. The provision of reasons in writing ensures that Treasury is informed of whatever considerations were taken into account in choosing a particular source and of dispensing with a competitive procurement process. This enables Treasury to determine whether there has been any financial misconduct and, if so, to take the necessary steps in terms of reg 33.‟ In Cash Paymaster this court was dealing with the review of a decision by the South African Social Security Agency to enter into an agreement with the South African Post Office Limited for the provision of basic banking services to eligible members of the South African public in order to facilitate the payment of social grants to them. It is true that this court in that case did not conclude that a failure to comply with the Treasury Regulations ipso iure rendered the decision void. It said the following at para 29: „Considerations of public interest, pragmatism and practicality should inform the exercise of a judicial discretion whether to set aside administrative action or not.‟ [37] On 31 May 2011 National Treasury issued an Instruction Note. In terms of paragraphs 3.9.3 and 3.9.4 of that Instruction Note, accounting officers and authorities were directed that as from 31 May 2011, no contracts may be expanded or varied by more than 20 per cent or R20 million (including all applicable taxes) for construction related goods, works and/or services and 15 per cent or R15 million (including all applicable taxes) for all other goods and/or services of the original value of the contract, whichever is the lower amount, without Treasury‟s written approval. The financial implications of the agreement were over R1 billion and these requirements must be met and for good reason – to ensure transparent and accountable governance. [38] The court below erred in holding that Mr Mahlalela was acting well within his powers in concluding the agreement without a competitive process as the option he chose, namely to sign the agreement, was justified. In doing so, it ignored the principles set out above and misconstrued the facts. [39] It is now necessary to deal with the conclusion of the court below, that in any event the appellants were estopped from relying on non-compliance with internal procedures. In my view the description of non-compliance with the fundamental principles referred to above can hardly appropriately be described merely a failure to comply with internal procedures. The decision in Buena Vista, contrary to the finding of the court below, is no support for its conclusions. In that case, Mbha J determined that the contracts there concluded were not ulta vires the powers of the Department concerned. The decision of this court in RPM Bricks, likewise does not assist Prodiba. In that case Ponnan JA said the following in para 23: „Estoppel cannot, as I have already stated, be used in such a way as to give effect to what is not permitted or recognised by law. Invalidity must therefore follow uniformly as the consequence. That consequence cannot vary from case to case. “Such transactions are either all invalid or all valid. Their validity cannot depend upon whether or not harshness is discernible in a particular case.”‟ [40] By not embarking on a competitive bid process, particularly given the nature and scale of the services to be provided, including the cost implications, Mr Mahlalela erred fundamentally. By concluding the agreement without the approval of his employer and political principal and/or of the Cabinet, he acted without authority. By concluding the agreement and incurring a liability for which there had been no appropriation, he not only erred, but acted against mandatory statutory prescripts and against the constitutional principles of transparent and accountable governance. For all these reasons the agreement is liable to be declared void ab initio. Consequently the appeal must be upheld. [41] The following order is made: 1. The appeal is upheld with costs including the costs of two counsel. 2. The order of the court below is set aside and substituted as follows: „(a) The application is dismissed with costs, including the costs of two counsel. (b) The third addendum agreement is declared void ab initio and set aside. (c) The respondent in the counter-application is ordered to pay the costs of the counter application, including the costs of two counsel.‟ ________________________ M S NAVSA ACTING DEPUTY PRESIDENT APPEARANCES: FOR APPELLANT: Adv. D Unterhalter SC (with him M du Plessis and J A Motepe) Instructed by: The State Attorney, Pretoria The State Attorney, Bloemfontein FOR RESPONDENT: J G Wasserman SC (with him H J Smith) Instructed by: Cliffe Dekker Hofmeyr Inc., Johannesburg Matasepes, 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 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. Minister of Transport v Prodiba (Pty) Ltd (20028/2014) [2015] ZASCA 38 (25 March 2015) The Supreme Court of Appeal (SCA) today upheld an appeal against a decision of the Gauteng High Court Division, Pretoria in terms of which it upheld an application by the respondent, Prodiba (Pty) Ltd (Prodiba) to enforce an agreement concluded by an erstwhile Director-General of the Department of Transport, in terms of which Prodiba was granted the right to produce a new style drivers‟ licence for a period of five years, commencing on 1 March 2014, with costs implication for the State in excess of R1 billion. The high court also dismissed a counter application by the Department declaring the agreement void ab initio. At the outset the SCA said the following: „If Prodiba were to succeed [in the appeal] it would mean that following upon a single tender process during 1995-1997, a single contractor would have had an uncontested monopoly in the production of drivers‟ licences for a period of more than 20 years. Do our constitutional norms and values countenance such a situation? The short answer is no.‟ The agreement in question had been signed in haste by an erstwhile Director- General shortly before his contract ended. The Department was emphatic that he had signed it without ministerial authorisation. The Department contended that the agreement was signed against constitutional values and statutory prescripts which required a competitive bidding process so as to ensure transparent and accountable governance. It was submitted on behalf of the Department that the migration to a new, technologically advanced, drivers‟ licence system was a policy decision that was within the province of the Executive and ought to have been approved by the Cabinet or, at the very least, by the Minister. The high court had held that the agreement was authorised. The SCA agreed with the contentions on behalf of the Department and said the following: „Perhaps even more fundamentally, the court below failed to pay sufficient attention to the procurement principles set out in the Constitution. Section 217 of the Constitution was designed to ensure transparency and accountability on the part of organs of state which we must all be intent on promoting.‟ The SCA went on to state: „[I]n describing Prodiba as an innocent party which would be prejudiced if the agreement was to be terminated, the court below ascribed to it a level of naivety that was unjustified. At the outset it succeeded a successful tenderer. In 2009 it was a bidder when a new tender was invited and ultimately not proceeded with. Prodiba knew that new technology and a new process was required and that the cost implications for the State were enormous. It must have been obvious that what was required was a competitive process which was circumvented by the agreement under discussion.‟ The SCA dealt with the reasoning of the high court that the provisions of the Public Finance Management Act 1 of 1999 did not preclude the conclusion of the agreement in question. In that regard the SCA said the following: „As indicated above, s 38(2) of the PFMA precludes an accounting officer from committing a department to any liability for which money has not been appropriated. The court below reasoned that the production of the cards would be self-funding in that a driver to whom such a card has been issued would be required to pay for it. This was a complete misapprehension about budgetary processes in general and more specifically in relation to the State. It ignored the fact that what precipitated the litigation leading up to this appeal was that Prodiba had sought an advance payment. The money would only be recouped (if at all) at intervals in the future upon the issue of the drivers‟ licences. In any event, it is in the prerogative of the Department to allocate its earnings as it sees fit. A budget for a financial year yet to commence would take into account what amounts are required in respect of capital expenditure and operational expenses and would make a decision about how any potential future earnings would come into play. It was unchallenged that money was not appropriated to ensure compliance with the Department‟s obligations in relation to the agreement in question. That, in itself, was sufficient ground on which to invalidate the agreement.‟ The SCA held that the high court had adopted an unjustifiably benign approach towards Prodiba. It made the following order. „1. The appeal is upheld with costs including the costs of two counsel. 2. The order of the court below is set aside and substituted as follows: “(a) The application is dismissed with costs, including the costs of two counsel. (b) The third addendum agreement is declared void ab initio and set aside. (c) The respondent in the counter-application is ordered to pay the costs of the counter application, including the costs of two counsel.”‟

2918

non-electoral

2015

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT REPORTABLE Case No: 086/2014 In the matter between: NEWLANDS SURGICAL CLINIC (PTY) LTD APPELLANT and PENINSULA EYE CLINIC (PTY) LTD RESPONDENT Neutral citation: Newlands Surgical Clinic v Peninsula Eye Clinic (086/2014) [2015] ZASCA 25 (20 March 2015). Coram: Brand, Lewis, Pillay JJA and Dambuza and Mayat AJJA Heard: 5 March 2015 Delivered: 20 March 2015 Summary: Jurisdiction of SCA – confined to grounds upon which leave to appeal had been granted – no inherent jurisdiction to go beyond these grounds. Companies Act 71 of 2008 – reinstatement of deregistered company by virtue of s 82(4) has complete retrospective effect – including validation of corporate activities during period of deregistration – parties prejudiced by complete reinstatement afforded the opportunity to seek relief under s 83(4) of the Act. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Western Cape Division of the High Court, Cape Town (Binns-Ward J sitting as court of first instance): 1 Paragraphs (a) and (b) of the order of the court a quo are set aside and replaced by the following: „(a) It is declared that the reinstatement of the first respondent as a company in terms of s 82(4) of the Companies Act 71 of 2008 had retrospective effect from the date of its deregistration which included the retrospective validation of its corporate activities during that period.‟ 2 Paragraphs (c) and (d) of the order of the court a quo are renumbered to (b) and (c) respectively. 3 Save for the aforegoing amendment, the order of the court a quo is confirmed and the appeal is dismissed with costs including the costs of two counsel. ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Brand JA (Lewis, Pillay JJA and Dambuza and Mayat AJJA concurring): [1] This appeal turns on the interpretation of s 82(4) of the Companies Act 71 of 2008 (the Act) as juxtaposed with s 83(4) of the Act. Both sections are concerned with the restoration of the name of a company onto the companies register after its previous deregistration. More pertinently the issues are, first, whether the reinstatement of a company by the Companies and Intellectual Property Commission (CIPC) under s 82(4) operates retrospectively so as to validate actions performed on behalf of the company during its period of deregistration. Secondly, if not, whether this reinstatement can be afforded such retrospective effect by the court in the exercise of its powers in terms of s 83(4). When the matter came before Binns-Ward J in the Western Cape Division of the High Court, Cape Town, he decided on the first issue that, in the main, the effect of reinstatement under s 82(4) is not automatically retrospective. On the second issue he held, however, that the court indeed has the power under s 83(4) to render the reinstatement of the company retrospective to the extent that it is just and equitable and thereupon proceeded to exercise that power in favour of the respondent. The appeal against that judgment, which has since been reported sub nom Peninsula Eye Clinic (Pty) Ltd v Newlands Surgical Clinic & others 2014 (1) SA 381 (WCC), is with the leave of the court a quo. Background [2] The appeal is another round in a long lasting legal contest between the parties over a sum of money which has clearly by now been far outstripped by the costs of litigation. Be that as it may, for present purposes the background facts can be confined to the following broad outline. The appellant, Newlands Surgical Clinic (Pty) Ltd (Newlands), operated a surgical clinic in Newlands, Cape Town. The respondent, Peninsula Eye Clinic (Pty) Ltd (Peninsula), is essentially an incorporated association of ophthalmic surgeons. Since Peninsula did not have its own clinic, its members made use of the facilities offered by Newlands. To encourage the use of its clinic, Newlands evolved an informal system of incentives, referred to in the course of the proceedings as kickbacks, by which payments were made to Peninsula at the end of each financial year in accordance with the income generated by its doctors for Newlands. [3] The situation changed when the Health Professions Council of South Africa (HPCSA) adopted a policy prohibiting the payment of incentives of this kind which it conveyed by means of draft guidelines that were published during or about 2000. So it happened that the last incentives or kickbacks were paid to Peninsula during 1999. By 2001 there was an accumulation of kickbacks that had not been paid. The attitude of Newlands was that it would not in these circumstances pay kickbacks, but that it was willing to make an equivalent payment provided that it could avoid the stigma of acting in contravention of the HPCSA policy formulated in the draft guidelines. The initial solution explored was that Peninsula would purchase ten per cent of the shares in Newlands for the amount of R570 000, which was the equivalent of the accumulated kickbacks it would by then have received, but that Newlands would pay the same amount to Peninsula disguised as some sort of charge raised by Peninsula against Newlands. Not surprisingly in the circumstances, the auditors of Newlands indicated that they would treat these payments as kickbacks. A new idea was then conceived by the parties, which was to exchange the ten per cent shares for equipment belonging to Peninsula in actual use at the Newlands clinic to be valued at R570 000 though its true value was far less. Subsequently the relationship between the parties soured. In the event, Newlands purported to cancel this sale agreement on the basis that the value of the equipment sold was nowhere near R570 000. [4] Peninsula then launched an application in the Western Cape Division to assert its rights. But the parties agreed to refer their dispute to a single arbitrator, who eventually upheld Peninsula‟s claim for the ten per cent shares. He also ordered Newlands to pay dividends on these shares, together with interest and the costs of both the arbitration and the earlier proceedings in the high court. The ratio for the arbitrator‟s decision appears from the following passage in his award: „Accordingly I reject [Newlands‟] contention that the agreement was to transfer equipment with a market value of R570 000.00 to [Newlands] in exchange for the 10% shareholding. The transfer of the equipment and the value put on it was in my view only meant to camouflage the true intention of the parties namely to pay for the shares by cancelling the kickbacks.‟ [5] After the arbitrator had published his award, Newlands sought to introduce a new issue which relied on s 38 of the old Companies Act 61 of 1973 (the 1973 Act) that essentially barred a company from rendering financial assistance in the acquisition of its own shares. When the arbitrator declined to entertain the s 38 issue, Newlands brought an application in the high court to review his decision not to do so. In the event, the court upheld the arbitrator‟s decision and in consequence the review application was dismissed with costs. Newlands then exerted its right in terms of the arbitration agreement to appeal against the arbitrator‟s award to an arbitration panel of three members. Newlands was, however, again unsuccessful in that the appeal tribunal confirmed the arbitrator‟s award and in consequence dismissed the appeal with costs. [6] At that point in time, it came to Peninsula‟s notice that on 4 January 2008, which was before the commencement of the arbitration proceedings, Newlands had been deregistered as a company, in terms of s 73 of the 1973 Act, for failure to submit its annual returns to the Registrar of Companies. Peninsula then made application to the CIPC in terms of s 82(4) of the Act for the reinstatement of Newlands‟ registration as a company. The response it received from the CIPC led to its belief that the application was successful. On that premise Peninsula brought an application in the high court, inter alia, for an order declaring that Newlands had been reinstated as a company retrospectively as from the date of its deregistration. The matter came before Binns-Ward J in February 2012. In a judgment since reported as Peninsula Eye Clinic (Pty) Ltd v Newlands Surgical Clinic (Pty) (Ltd) & others 2012 (4) SA 484 (WCC), he dismissed the application, essentially for lack of proof by Peninsula that Newlands had in fact been reinstated. But he gave Peninsula leave to apply again on the same papers once that fact had been established. [7] Eventually, Newlands‟ registration was formally reinstated by the CIPC in terms of s 82(4) on 3 April 2012. When this happened, Peninsula renewed its application in the court a quo for an order (a) affording the reinstatement retrospective effect so as to validate the arbitration proceedings during its period of deregistration and (b) declaring the arbitration awards to be orders of court, as contemplated in terms of s 31 of the Arbitration Act 42 of 1965. As I have said by way of introduction, the matter again came before Binns-Ward J who granted both orders sought. Although Newlands applied for leave to appeal in respect of both aspects, the court a quo essentially confined its leave to appeal to (a) alone. As Newlands did not subsequently seek this court‟s leave to appeal the order in (b), proceedings on appeal were confined to (a). Newlands’ application to file supplementary heads [8] This is where matters stood some two weeks before the hearing of the appeal. At that stage Newlands brought an application in which it purported to seek no more than permission to file supplementary heads of argument. Why I say purported is that, in reality, the import of the relief sought went much deeper. What Newlands actually sought to introduce by means of these supplementary heads, was the substantive defence that the share sale agreement on which Peninsula‟s claim rested was contra bonos mores, in that it was in conflict with the HPCSA policy against incentives; and that the contract relied upon by Peninsula was in consequence invalid and unenforceable. As the first gateway for the introduction of this defence, Newlands contended that, on a proper interpretation of the court a quo‟s order in the application for leave to appeal, it was afforded permission to do so. This contention relied exclusively on paragraph 1 of that order which provided: „The application for leave to appeal to the Supreme Court of Appeal is granted only against this court‟s finding that the applicant in the principal case was entitled to obtain further relief from the court in terms of s 83(4) of the Companies Act 71 of 2008 subsequent to the administrative reinstatement of the respondent company‟s registration at its instance in terms of s 82(4) of the said Act.‟ [9] Building on the foundation of this paragraph, Newlands argued as follows. In its application of s 83(4) – to which reference is made in the paragraph – the court a quo held that it was just and equitable – as contemplated by the section – that the arbitration proceedings, which were concluded during Newlands‟ period of deregistration, should be declared valid retrospectively. In considering what was just and equitable, the court failed to take into account, however, that the share sale transaction which formed the basis of Peninsula‟s claim, was a simulated transaction. Its real import was to camouflage the payment of accumulated kickbacks which was in conflict with HPCSA policy. Had this consideration been taken into account, so the argument went, the court would have concluded that it was not just and equitable to give its imprimatur to an agreement which was contra bonos mores and therefore illegal and void. [10] The flaw in the argument, as I see it, is that it loses sight of the principle that a court order, as in the case of any other document, must be read in the context of the judgment as a whole and particularly in the light of the court‟s reasons for that order (see eg Firestone South Africa (Pty) Ltd v Genticuro AG 1977 (4) SA 298 (A) at 304D-F). Approached in this way, it is clear to me that the court a quo never intended to and never did afford Newlands leave to appeal on the just and equitable issue or, for that matter, on the issue whether or not the share sale agreement could be characterised as contra bonos mores. On the contrary, it is obvious that leave to appeal on those issues was pertinently refused. That much appears from various statements in the carefully formulated judgment on leave to appeal, of which the order forms an integral part. Included amongst these are the following: „The grounds upon which the application for leave to appeal is made are fourfold, namely (i) that this court erred in finding that the contract which underpinned the arbitral award that was the subject of the application in terms of s 31 of the Arbitration Act had not been shown to have been one in contravention of s 38 of the 1973 Companies Act, (ii) that the court erred in failing to consider whether the underlying transaction was contra bonos mores, and thus enforceable, (iii) that the court erred in not holding that [Peninsula], which had obtained the administrative reinstatement of the registration of [Newlands] in terms of s 82(4) of the 2008 Companies Act, was thereby precluded from subsequently applying for any relief in terms of s 83(4) of the said Act and (iv) that even if the judgment were correct in its interpretation of the pertinent statutory provisions, the court erred by finding that it was just and equitable to validate the arbitration proceedings conducted while [Newlands] was “in a state of deregistration”. As described in the judgment in the principal case, the proper construction and effect of sections 82 and 83 of the 2008 Companies Act is a matter on which divergent views have been expressed in a number of judgments in the High Court. It is thus evident that the interpretation of those provisions has given rise to sufficient difficulty for there to be a reasonable prospect that another court might well determine on a proper construction different from that propounded in the judgment in the principal case. . . I do not consider, however, that there is a reasonable prospect that another court would be persuaded to come to the applicant‟s assistance on any of the other three grounds on which the application for leave to appeal has been brought.‟ And: „I do not consider therefore that this court was qualified on the evidence before it in the application in terms of s 31 of the Arbitration Act to determine whether the contract was in fact in contravention of the guidelines [of the HPCSA] or, if it had been, what the legal consequences would be. An appeal court will be in no better position than I was, and thus equally disabled from dealing with the argument on the record before it.‟ [11] The alternative basis relied upon by Newlands for the introduction of the contra bonos mores or illegality defence rested on the proposition that, even if it should be held – as I did – that the leave granted by the court a quo was insufficiently broad to permit an enquiry into the validity of the underlying share sale agreement, this court should „. . . in any event, in terms of its inherent power, decline to validate those arbitration proceedings.‟ In support of this proposition Newlands sought to rely on the principle thus formulated by Trollip JA in Yannakou v Apollo Club 1974 (1) SA 614 (A) at 623G-H: „. . . It is the duty of the court to take the point of illegality mero motu, even if the defendant does not plead or raise it; but it can and will only do so if the legality appears ex facie the transaction or from the evidence before it, and, in the latter event, it is also satisfied that all the necessary and relevant facts are before it.‟ [12] I do not believe, however, that Newlands‟ reliance on the legality principle can be sustained. The reason appears from the following succinct statement by Hefer JA in Moch v Nedtravel (Pty) Ltd t/a American Express Travel Service 1996 (3) SA 1 (A) at 7E-G: „The short answer is that the court‟s “inherent reservoir of power to regulate its procedures in the interests of the proper administration of justice” (per Corbett JA in Universal City Studios Inc and Others v Network Video (Pty) Ltd 1986 (2) SA 734 (A) at 754G), does not extend to the assumption of jurisdiction not conferred upon it by statute. . . Nowadays [this court‟s] jurisdiction derives from the Supreme Court Act [59 of 1959] and other statutes but the position remains basically the same.‟ [13] Since the decision in Moch, the statutory basis for this court‟s jurisdiction has been superseded by the Superior Courts Act 10 of 2013. It is now to be found in s 16(1)(a) of that Act, which provides that an appeal against a decision of the high court as a court of first instance lies „. . . upon leave being granted . . . either to the Supreme Court of Appeal or to a full court of that division . . .‟. Leave to appeal therefore constitutes what has become known, particularly in administrative law parlance, as a jurisdictional fact. Without the required leave, this court simply has no jurisdiction to entertain the dispute. Section 17 of the Superior Courts Act then proceeds to govern the ways in which the required leave can be obtained. In essence, s 17(2) provides that it may be granted by the court of first instance and, if refused, it may be granted on application to this court. [14] It has by now become well-settled that, when a high court grants leave to appeal it may limit the grounds of appeal or it may grant leave generally. In the latter event, all relevant issues may be canvassed, including – so it was held in Yannakou and other cases – issues of legality albeit that those had not been pleaded or raised by the defendant, as long as they appear from the evidence before the court. But when the high court has limited the grounds of appeal, as it did in this case, this court has no jurisdiction to entertain an appeal on grounds which had been specifically excluded. The fact that these excluded grounds involve issues of illegality does not detract from this principle. If an appellant is dissatisfied with the high court‟s decision to limit the grounds of appeal, its remedy is to petition this court to do away with the limitation. Since Newlands has failed to do so, it follows that this court has no jurisdiction to entertain the ground of appeal resting on public policy or illegality, which had specifically been excluded from the ambit of leave granted by the court a quo. The retrospective effect of reinstatement [15] This brings me to the issues relating to the retrospective effect of Newlands‟ reinstatement as a company under s 82(4) of the Act, those being the only ones arising from the ground upon which leave to appeal was obtained and hence the only ones open for reconsideration. The issues thus arising must be understood in the context of the established principle that deregistration puts an end to the existence of a company. It brings an end to its corporate personality „in the same way that a natural person ceases to exist at death‟ (see Miller & others v Nafcoc Investment Holding Co Ltd & others 2010 (6) SA 390; (324/09) [2010] ZASCA 25 (SCA) para 11). All subsequent actions purportedly taken on behalf of the deregistered company are consequently void and of no effect. Its property passes automatically – ie without any form of delivery – into the ownership of the State as bona vacantia (see eg Rainbow Diamonds (Edms) Bpk & andere v Suid-Afrikaanse Nasionale Lewensassuransiemaatskappy 1984 (3) SA 1 (A) at 10-11). It follows that unless the reinstatement of Newlands has, or is afforded, retrospective effect, (a) the arbitration proceedings, (b) the associated court proceedings, together with (c) the orders and awards that were made in favour of Peninsula against Newlands in those proceedings, would simply be null and void. This is so because, as far as dates are concerned, we know that Newlands was deregistered on 4 January 2008 and that all these proceedings occurred before it was reinstated on 3 April 2012. To say that a conclusion of non-retrospectivity would have a seriously detrimental effect on Peninsula would clearly be an understatement. [16] Peninsula submitted (a) that the court a quo had erred in finding that reinstatement by the CIPC in terms of s 82(4) did not automatically validate the arbitration proceedings with retrospective effect; but (b) that the court was right in holding that it was authorised and that it should afford the reinstatement such retrospective effect in terms of s 83(4). Newlands‟ contentions, on the other hand, were a mirror image of these, in that it submitted (a) that the court was right in finding that the reinstatement in terms of s 82(4) did not automatically operate retrospectively so as to validate the arbitration proceedings; but (b) that the court erred in finding that it was authorised in terms of s 83(4) to afford the reinstatement under s 82(4) such retrospective effect. Evaluation of these contentions clearly revolves primarily around the provisions of these two sub-sections. But before I turn to them, it is appropriate to deal with their legislative background. Legislative history [17] Under the 1973 Act, deregistration and subsequent restoration of the registration of a company so deregistered were governed by s 73. In terms of sections 73(1) - (3), a company was liable to be deregistered by the Registrar of Companies if it had failed, for a period of more than six months, to lodge an annual return in compliance with s 173 of that Act or if the Registrar had reasonable cause to believe that the company was not carrying on business, and the company failed to respond adequately to the Registrar‟s consequent inquiries. As to restoration of a company so deregistered, s 73(6)(a) and 73(6A) provided: „6 (a) The Court may, on application by any interested person or the Registrar, if it is satisfied that a company was at the time of its deregistration carrying on business or was in operation, or otherwise that it is just that the registration of the company be restored, make an order that the said registration be restored accordingly, and thereupon the company shall be deemed to have continued in existence as if it had not been deregistered. (b) Any such order may contain such directions and make such provision as the Court deems just for placing the company and all other persons in the position, as nearly as may be, as if the company had not been deregistered. . . . (6A) Notwithstanding subsection (6), the Registrar may, if a company has been deregistered due to its failure to lodge an annual return in terms of section 173 on application by the company concerned and on payment of the prescribed fee, restore the registration of the company, and thereupon the company shall be deemed to have continued in existence as if it had not been deregistered. Provided that the Registrar may only so restore the registration of the company after it has lodged the outstanding annual return and paid the outstanding prescribed fee in respect thereof.‟ [18] On the basis of these provisions this court held in Insamcor (Pty) Ltd v Dorbyl Light & General Engineering (Pty) Ltd; Dorbyl Light & General Engineering (Pty) Ltd v Insamcor (Pty) Ltd 2007 (4) SA 467; (63/06, 319/06) [2007] ZASCA 6 (SCA) para 23 that the consequence of restoring a deregistered company to the register under s 73(6) was ipso facto to revive all rights and obligations of the company that had been extinguished by deregistration with retrospective effect. More recently it was held in CA Focus CC v Village Freezer t/a Ashmel Spar 2013 (6) SA 549; (731/12) [2013] ZASCA 136 (SCA) para 10-21, with reference to the virtually identically worded s 26(7) of the Close Corporations Act 69 of 1984, that the consequence of restoration was to validate retrospectively all acts done on behalf of the company during the interim period as if deregistration had never occurred (see also Kadoma Trading 15 (Pty) Ltd v Noble Crest CC 2013 (3) SA 338; (452/2012) [2013] ZASCA 52 (SCA) paras 13 and 14). In all these cases it was recognised at the same time that the indiscriminate automatic retrospective reinstatement of all corporate activity could have a severely detrimental effect on third parties. So it was said, for example, in Insamcor (para 24): „. . . it is an oversimplification to regard a restoration order as no more than an 'as you were'. It can clearly cause severe prejudice to third parties. In [Ex parte Sengol Investments (Pty) Ltd 1982 (3) SA 474 (T) at 477C] Van Dijkhorst J gave the example of those who, upon deregistration, acquired rights to company property, who will lose those rights when the registration of the company is restored. Examples of such prejudice have also been recognised in other jurisdictions. . . .‟ And that in consequence (para 27): „. . . it is, in my view, self-evident that third parties who will or may be prejudiced by the restoration order must be given the opportunity to persuade the Court not to exercise its discretion in favour of a restoration order. Alternatively, they may endeavour to persuade the Court to make the order subject to such directions under s 73(6)(b) as may serve to alleviate its prejudicial consequences.‟ [19] Despite these potentially prejudicial consequences resulting from automatic retrospective validation, it was held, however, that this construction of s 73(6) and s 73(6A) could not be avoided. What compelled this conclusion was, of course, the pertinent provision contained in both subsections (and in s 26(7) of the Close Corporations Act) that upon restoration, „. . . the company shall be deemed to have continued in existence as if it had not been deregistered.‟ Unlike s 73(6)(b), however, and similar to s 73(6A) of the 1973 Act, s 26(7) of the Close Corporations Act left no room for alleviation of these consequences by court order or otherwise. [20] It will be observed that neither s 73(6) nor s 73(6A) pertained to the deregistration of companies that were wound up after liquidation, nor to the possible restoration of a company deregistered in this way. These matters were dealt with in chapter XIV of the 1973 Act under the heading „Winding-up of companies‟. More pertinently, s 419 in this chapter provided for the dissolution of companies after they had been completely wound up. In terms of s 420, the court was then afforded the authority to declare „. . . the dissolution [under s 419] to have been void and, thereupon any proceedings may be taken against the company as might have been taken if the company had not been dissolved.‟ Unlike s 73(6) and 73(6A) this section therefore made no express reference to retrospectivity. Section 420, incidentally, still governs the position with regard to companies wound up by reason of insolvency. This is so because, despite the repeal of the 1973 Act, chapter XIV of that Act – including s 420 – remains in force with regard to insolvent companies until further notice, by virtue of para 9, schedule 5 of the 2008 Act. Nonetheless, because the wording of s 420 is so different from the provisions that are of direct concern to us, the section fortunately does not have to detain us. I say fortunately because the construction of s 420 is known to have given rise to problems of its own (see eg Motala & others v Master of the High Court (North Gauteng) & others [2014] 2 All SA 154; (313/13) [2013] ZASCA 185 (SCA) ). The pertinent provisions of the 2008 Act [21] Subsections 82(4) and 83(4) both form part of chapter 2, part G, of the Act which appears under the heading „Winding-up of solvent companies and deregistering companies‟. Sections 79 to 81 are exclusively concerned with the winding-up of solvent companies (while the winding-up of insolvent companies, as I have said, are still governed by chapter XIV of the 1973 Act). Sections 82 and 83 thus constitute the main focus of our enquiry. For this reason a full quotation of the sections cannot be avoided. They provide: ‟82 Dissolution of companies and removal from register (1) The Master must file a certificate of winding up of a company in the prescribed form when the affairs of the company have been completely wound up. (2) Upon receiving a certificate in terms of subsection (1), the Commission [defined as the CIPC] must- (a) record the dissolution of the company in the prescribed manner; and (b) remove the company's name from the companies register. (3) In addition to the duty to deregister a company contemplated in subsection (2) (b), the Commission may otherwise remove a company from the companies register only if- (a) the company has transferred its registration to a foreign jurisdiction in terms of subsection (5), or- (i) has failed to file an annual return in terms of section 33 for two or more years in succession; and (ii) on demand by the Commission, has failed to- (aa) give satisfactory reasons for the failure to file the required annual returns; or (bb) show satisfactory cause for the company to remain registered; or (b) the Commission- (i) has determined in the prescribed manner that the company appears to have been inactive for at least seven years, and no person has demonstrated a reasonable interest in, or reason for, its continued existence; or (ii) has received a request in the prescribed manner and form and has determined that the company- (aa) has ceased to carry on business; and (bb) has no assets or, because of the inadequacy of its assets, there is no reasonable probability of the company being liquidated. (4) If the Commission deregisters a company as contemplated in subsection (3), any interested person may apply in the prescribed manner and form to the Commission, to reinstate the registration of the company. (5) A company may apply to be deregistered upon the transfer of its registration to a foreign jurisdiction, . . . ; (6) The Minister may prescribe criteria and procedural requirements that must be satisfied by a company before it may be deregistered in terms of subsection (5). Effect of removal of company from register (1) A company is dissolved as of the date its name is removed from the companies register unless the reason for the removal is that the company's registration has been transferred to a foreign jurisdiction, as contemplated in section 82 (5). (2) The removal of a company's name from the companies register does not affect the liability of any former director or shareholder of the company or any other person in respect of any act or omission that took place before the company was removed from the register. (3) Any liability contemplated in subsection (2) continues and may be enforced as if the company had not been removed from the register. (4) At any time after a company has been dissolved- (a) the liquidator of the company, or other person with an interest in the company, may apply to a court for an order declaring the dissolution to have been void, or any other order that is just and equitable in the circumstances; and (b) if the court declares the dissolution to have been void, any proceedings may be taken against the company as might have been taken if the company had not been dissolved „ Decisions of different divisions of the high court [22] The question as to the retrospective effect of reinstatement under s 82(4) has resulted in conflicting decisions in different divisions of the high court. In fact, interpretations given to the section in the various decisions cover the whole spectrum from no retrospectivity on the one hand, to complete retrospectivity on the other, with the concept of partial retrospectivity in between. An example of the first kind is to be found in Bright Bay Property Service (Pty) Ltd v Moravian Church in South Africa 2013 (3) SA 78 (WCC). Complete retrospectivity, on the other hand, appears to be supported by Amarel Africa Distributors (Pty) Ltd v Padayache (236/2011) [2013] ZAGPPHC 87 and the effect of the judgment of this court in Fintech (Pty) Ltd v Awake Solutions (Pty) Ltd & others [2014] 3 All SA 664; (218/13) [2014] ZASCA 63 (SCA). But neither in Amarel nor in Fintech was the issue of retrospectivity fully considered. In the result, the construction that a reinstatement under s 82(4) has complete retrospectivity is not borne out by any fully reasoned authority. The concept of partial retrospectivity, on the other hand, is supported by the court a quo in this matter, as will presently appear from the more detailed discussion of its judgment that is to follow. But what this thesis amounts to in short is that, while reinstatement brings in its wake retrospectivity to the extent of revesting the company with its former assets, it does not validate corporate activity purportedly conducted on behalf of the company during its period of deregistration. This approach also appears to be supported by Missouri Trading CC & another v Absa Bank Ltd & others 2014 (4) SA 55 (KZD) paras 37 and 42. [23] Before us both parties, each for reasons of its own, contended that the court a quo was right in not subscribing to the proposition that reinstatement in terms of s 82(4) has no retrospective effect at all. In consequence we did not have the benefit of any argument to support this extreme. Nonetheless, I am quite confident to endorse the approach of the court a quo in this regard. It seems that the only decision that lends support to no retrospectivity is Bright Bay Property Services. That decision relies on one argument only, namely that the deeming provisions to the effect that the company had „. . . continued in existence as if it had not been deregistered‟ at all, which was found by the courts to indicate retrospectivity in s 73(6) and 73(6A) of the 1973 Act, was not repeated in s 82(4). I agree that, on the face of it, the omission of the deeming provision may be regarded as a pointer to a change of intent on the part of the legislature. But I believe it is not more than just an indication, which is outweighed by counter-indications. [24] First of all, the indication of a different intent that usually follows from a change of wording in amending legislation, is diluted by the fact that the new Act is not merely an amendment to the 1973 Act. It is a complete reinvention of our corporate law. The organisation and arrangement of its provisions are completely different, particularly with regard to deregistration and reinstatement. In this light, different wording used in a completely new scheme can hardly be construed, in itself, as indicative of a complete reversal of intent. Secondly, the concept of reinstatement of the company‟s registration, as opposed to re-registration, appears to support the notion of placing the company in its former position. But most significant of all, I think, is the consideration underscored by the court a quo (para 44) namely that reinstatement would hardly serve any practical purpose if it did not at least have the effect of retrospectively revesting the company with title to its property. Even after reinstatement, a company will still be deprived of its property and the whole reason for its continued existence. Its formerly secured creditors would remain unsecured. It will become no more than a name on the company register. [25] Once it is accepted that in principle revestment under s 82(4) operates retrospectively, the question arises – is there any basis for going only halfway? In other words, is there any basis for the interpretation of s 82(4) which found favour with the court a quo, that reinstatement of a company serves to revest it with its property but does not validate its corporate activity? The justification for the limitation found by the court a quo appears from the following statements in its judgment: (para 48): „. . . [T]he potentially prejudicial effect on third parties of a necessary or inevitable validation of purported corporate activity inherent in the indiscriminately automatic retrospective reinstatement of companies is a consideration weighing against the ready acceptance of giving reinstatement in terms of s 82(4) unqualified retrospective effect of the nature provided in terms of the materially differently worded s 73(6A) of the 1973 Act and s 26(7) of the Close Corporations Act . . . . As a matter of general principle consequences with a potentially prejudicial effect on third parties should not be allowed to occur administratively without an opportunity for such parties first to be heard.‟ And (para 49): „An administrative process is not as well suited as a judicial process to determine and afford appropriate remedies applying justness and equity to address the prejudicial consequences to third parties that can arise as a consequence of the restoration of deregistered companies to the register.‟ And (para 50): „The ambit of s 83(4) is wide enough to empower a court to deal not only with the validation, conditionally or otherwise, of corporate activity purportedly conducted on behalf of the company during its period of deregistration, but also, if it is just and equitable to do so, with any prejudicial consequences of the ordinarily retrospective effects of reinstatement, viz the re-establishment of corporate personality, the reinvestment of ownership of property and the reconstitution of the company's board of directors and general body of members.‟ And (para 51): „Construing the provisions of s 82(3) and s 82(4) to the effect that administrative reinstatement of a company's registration retrospectively re-establishes its corporate personality and title to its property, but does not validate its corporate activity during the period that it was deregistered, seems to me to give the preferred result given the choice of meanings available.‟ [26] There can be no doubt that retrospective validation of the corporate activities of a company during its period of deregistration as a matter of course holds the inherent risk of prejudice to third parties. That much had been recognised and discussed in cases like Insamcor, CA Focus and Kadoma Trading. What the court a quo‟s reasoning seems to lose sight of, however, is that, as pointed out in Insamcor, revesting the company with its property can have the same detrimental effect on third parties who have in the meantime acquired rights to that property. But, more significantly in my view, is the consideration that refusal to validate the corporate activities of a company during its period of demise can be equally devastating to the interests of bona fide third parties who were unaware of the deregistration. That much is well-illustrated by the facts of this case and by Absa Bank Ltd v Companies and Intellectual Property Commission & others 2013 (4) SA 194 (WCC). The truth is that deregistration of a company bears that inherent risk. It results from the fact that a comparison between the deregistration of a company, on the one hand, and the death of a person, on the other, is not entirely correct. Unlike a deceased person, a deregistered company often, as in this case, carries on with its business as if the deregistration never occurred and with third parties having no knowledge of its disability. Indiscriminate validation of corporate activities, on the one hand, and the indiscriminate refusal to validate these activities, on the other, therefore cut both ways. Potential prejudice to third parties therefore affords no reason to interpret s 82(4) so as to exclude retrospective validation in principle. [27] Closely linked to its views on prejudice to third parties caused by complete retrospectivity, is the further consideration which weighed with the court a quo, namely, that in the light of the potential prejudice to third parties, reinstatement through an administrative process could not have been intended by the legislature to result in the automatic retrospective validation of corporate activities. It follows, so the court‟s reasoning went, that the legislature must have intended to reserve the power of retrospective validation to the courts to be exercised on the basis of what is just and equitable in terms of s 83(4). This means, of course, that those who seek retrospective validation are compelled to resort to the costly exercise of an application to court. That raises the rhetorical question – assuming that s 83(4) is available after administrative reinstatement under s 82(4) – why could the legislature not have intended it to be the other way around? Once it is recognised that validation and non-validation cut both ways, why could it not have been intended that the party who seeks to prevent validation of a particular transaction be afforded the opportunity to approach the court? [28] In addition, the consequence which the court a quo found unlikely, namely that in the circumstances the legislature would have intended complete retrospectivity to result from an administrative process, was in fact the position that prevailed under previous legislation. The consequence of automatic retrospective validation of corporate activities did not only follow from reinstatement by the court in terms of s 73(6). It also resulted from the administrative process in terms of s 73(6A) and in terms of s 26(7) of the Close Corporations Act. Another more peripheral consideration that seems to have swayed the court a quo was that no provision is made for notice of the application for reinstatement to potentially interested third parties (see also Missouri Trading para 33). That, however, is fortunately not so. Although s 82(4) itself does not provide for notice of the application to third parties, regulation 40(7) of the Companies Regulations, GN R351 of 2011, GG 34239, 26 April 2011, promulgated under the Act, read with the practice note issued by the CIPC pursuant to the regulations, published as GenN 204, GG 36225, 15 March 2013, inter alia, requires for an application under s 82(4), an „[a]dvertisement in a local newspaper giving 21 days‟ notice of proposed application for reinstatement‟. Third parties are thus given the opportunity to prevent reinstatement. [29] But what finally renders the position of partial retrospectivity held by the court a quo, in my view, untenable is that the wording of s 82(4) simply leaves no room for this construction. Once „reinstatement‟ in s 82(4) is construed as indicating retrospective operation, there is no justification for construing it to mean that retrospective operation must stop halfway, in the sense that it pertains to revestment of the company‟s property only. As appears from the court a quo‟s judgment (para 51) it clearly held the view that its interpretation of s 82(4) read with 83(4) of the Act has „the preferred result given the choice of meanings available‟. Although the preference of outcome may be debatable, my real problem is that I do not think the wording of the section renders the meaning preferred by the court a quo available. As I see it, the wording of the section leaves no room for the pragmatic approach adopted by the court a quo. The only meaning available on that wording, as I see it, is that s 82(4) has automatic retrospective effect, not only in revesting the company with its property but also in validating its corporate activities during the period of its deregistration. In short, there is no textual basis to distinguish between revesting of property and revesting the company with the capacity to continue operating. It follows that, in my view, the arbitration proceedings and related court proceedings during the period of deregistration, together with the awards and orders made in those proceedings, were automatically validated by the reinstatement of Newlands under s 82(4). Unlike the court a quo, I therefore do not think there was any need for a special declaratory order to that effect. To that extent, the order of the court a quo requires amendment, but as far as the dispute between the parties in this case is concerned, that seems to be the end of the matter. [30] Yet, with regard to the interpretation of s 82(4), read in juxtaposition with s 83(4), something more should be said, particularly since the matter was fully argued in this court. As a starting point I agree with the view expressed by the court a quo (para 52) that s 83(4) is available even where the company has already been administratively reinstated in terms of s 82(4) (cf Absa Bank Ltd v CIPC above paras 43-44). And like the court a quo, I do not believe that there is any support in the wording of s 83(4) for the contrary interpretation contended for by Newlands. Section 83(4)(a) allows any „person with an interest in the company‟ to apply for relief connected with the dissolution of the company. Upon such application the court is afforded authority to make „any . . . order that is just and equitable in the circumstances‟. Moreover, s 83(4) expressly provides that this application can be brought „[a]t any time after the company had been dissolved‟. In the light of this wide wording at every level, I find no justification to restrict this wide meaning so as to exclude a company, which had subsequent to dissolution been reinstated by administrative action, from the ambit of the section. Thus understood, the legislature had, in my view, intended to alleviate the prejudicial effect on third parties or even the company which may be brought about by the retrospective effect of reinstatement under s 82(4). Any party who is prejudiced by this automatic retrospective action, is afforded the opportunity to seek amelioration under s 83(4) of the Act, in which event the court is authorised to grant any relief it considers just and equitable. [31] It follows that, in my view, the appeal should be dismissed with costs and the judgment of the court a quo confirmed, save for such amendments to its order (in para 64) that are necessitated by our different reasoning, albeit that this difference in reasoning leads to an outcome which is essentially the same. In the result it is ordered that: 1 Paragraphs (a) and (b) of the order of the court a quo are set aside and replaced by the following: „(a) It is declared that the reinstatement of the first respondent as a company in terms of s 82(4) of the Companies Act 71 of 2008 had retrospective effect from the date of its deregistration which included the retrospective validation of its corporate activities during that period.‟ 2 Paragraphs (c) and (d) of the order of the court a quo are renumbered to (b) and (c) respectively. 3 Save for the aforegoing amendment, the order of the court a quo is confirmed and the appeal is dismissed with costs including the costs of two counsel. F D J Brand Judge of Appeal Appearances For the Appellant: M A Albertus SC (with him G M Quixley) Instructed by: J Ramages Attorneys, Cape Town Honey Attorneys, Bloemfontein For the Respondent: J Butler SC (with him M Ioannou) Instructed by: Clyde & Co, Cape Town Lovius Block 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 20 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. Newlands Surgical Clinic v Peninsula Eye Clinic (086/2014) [2015] ZASCA 25 (20 March 2015). MEDIA STATEMENT Today the Supreme Court of Appeal dismissed the appeal in this matter against the judgment of the Western Cape High Court, Cape Town. The appeal turned on the interpretation of s 82(4) of the Companies Act 71 of 2008 which is concerned with the restoration of the name of a company onto the Companies Register after it had previously been registered. More pertinently, the issue was whether the reinstatement of a company by the Companies and Intellectual Property Commission (CIPC) under s 82(4) operates retrospectively so as to validate actions performed on behalf of the company during its period of deregistration. The issue arose from the following facts: The respondent, Peninsula Eye Clinic, is essentially an incorporated association of ophthalmic surgeons. Newlands Surgical Clinic, the appellant, operated a surgical clinic in Newlands, Cape Town. Since the respondent did not have its own clinic, its members made use of the facilities offered by the appellant. Arising from this business relationship, the respondent claimed an amount of R570 000 from the appellant. By agreement the parties went to arbitration. During the arbitration proceedings that followed, the arbitrator held in favour of the respondents. The appellant then went on appeal before an appeal arbitration tribunal of three members who dismissed the appeal and confirmed the award of the first arbitration. At that point it came to the respondent’s notice that before the arbitration proceedings started, the appellant had been deregistered as a company. According to the established legal position, that meant that the arbitration proceedings were nul and void. In consequence, the respondent brought an application before the CIPC for the reinstatement of the appellant in terms of s 82(4) of the Companies Act, which application was successful. The question then arose whether reinstatement under the section had retrospective effect to the date of deregistration, which would validate the arbitration proceedings, or whether it worked prospective from date of reinstatement only, which would mean that the award in favour of the respondent remained nul and void. The respondent contended for the former while the appellant argued for the latter. The high court decided that the respondent’s interpretation was correct. On appeal the Supreme Court of Appeal essentially confirmed that point of view.

3942

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not reportable Case no: 693/2021 In the matter between: MILLENIUM ALUMINIUM AND GLASS SERVICES CC FIRST APPELLANT MOHANLALL BRIDGENUN SECOND APPELLANT FAST TRACK CONTRACTING AFRICA (PTY) LTD THIRD APPELLANT and GROUP FIVE CONSTRUCTION (PTY) LTD FIRST RESPONDENT CONSTANTIA INSURANCE COMPANY LIMITED SECOND RESPONDENT Neutral citation: Millenium Aluminium and Glass Services CC and Others v Group Five Construction (Pty) Ltd and Another (693/2021) [2022] ZASCA 180 (14 December 2022) Coram: ZONDI and MOTHLE JJA and NHLANGULELA, SALIE-HLOPHE and SIWENDU AJJA Heard: 22 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 11:00 am on 14 December 2022. Summary: Construction guarantee – whether the requirements were met - insurer’s obligation to pay – failure by the subcontractor to pay the certified payment advice triggers insurer’s liability to pay – terms of the guarantee met. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Gauteng Division of the High Court, Johannesburg (Matojane J, sitting as court of first instance): The appeal is dismissed with costs. ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Zondi JA (Mothle JA and Nhlangulela, Salie-Hlophe and Siwendu AJJA concurring): [1] The first respondent, Group Five Construction (Pty) Ltd (Group Five Construction), had, in the Gauteng Division of the High Court, Johannesburg (the high court), claimed payment of an amount of R1 490 364.09 including interest and costs, from the second respondent, Constantia Insurance Company Limited (Constantia) and the first appellant, Millenium Aluminium and Glass Services CC (Millenium), in terms of the guarantee. [2] Subsequently, Constantia had, by way of a third party notice procedure, sought and obtained from the high court an order joining Millenium, Mr Mohanlall Bridgenun, the second appellant, and Fast Track Contracting Africa (Pty) Ltd (Fast Track), the third appellant, as third parties on the basis of the indemnity and the deed of suretyship signed by these third parties in favour of Constantia. [3] Millenium’s defence was that Group Five Construction did not comply with the terms of the guarantee when it demanded payment from Constantia, because it presented Constantia with a payment advice which did not, on its face, entitle Group Five Construction to receive payment in terms of agreement. [4] The high court ordered Constantia to pay Group Five Construction the amount claimed, together with interest and costs. It also granted relief in a dispute between Constantia and Millenium which did not concern Group Five Construction.1 The appeal is before this Court with the leave of the high court and is directed at paragraphs 3-7 of the high court order. [5] The relevant parts of the high court order read as follows: ‘3. The First Respondent is ordered to make payment to the Applicant in the amount of R1 419 364.09. 4. The first respondent is ordered to pay applicant's costs. 5. It is declared that the third parties are obliged, jointly and severally, to indemnify Constantia Insurance Company Limited (“Constantia”) from the demand made on Guarantee 117929J by Group Five Construction Proprietary Limited (in business rescue) (“Group Five”). 6. The third parties, jointly and severally, the one paying the other to be absolved, are ordered to pay Constantia the sum of R 1 419 364.09 together with interest at a rate of 10% per annum from 18 May 2020 to date of final payment. 7. The third parties pay all costs, on an attorney and client scale, incurred by Constantia in resisting Group Five's claim against it and pursuing the third party proceedings against the third parties.’ [6] The issue therefore is whether Group Five Construction in making a demand on the guarantee complied with its requirements. The facts within which the issue must be determined are the following. During or about 26 May 2015, Group Five Construction was appointed as a building contractor to carry out a project in Durban known as Pearls of Umhlanga – Pearl Sky. Group Five Coastal (Pty) Ltd (Group Five Coastal), acting as an agent of Group Five Construction, appointed Millenium as a subcontractor to carry out the design, supply and installation of the residential windows and shopfronts at the sub-contract sum of R20 750 937 excluding VAT. The sub- contract sum was fixed and not subject to contract price adjustment for the duration of the contract. In terms of the letter of appointment, it was agreed that the contractual relationship between Group Five Construction and Millenium would be governed by the provisions of the JBCC Series 2000 Nominated/Selected Sub-contract Agreement, edition 5.0, 2007. 1 The high court granted an order which included prayers 1 and 2 of the notice of motion. The order that was sought in prayer 1 was ‘The First Respondent’s purported cacellation of guarantee 117929J is revoked and set aside’ and in prayer 2 was ‘The Applicant’s call on guarantee 117929J is declared valid and enforceable’. Group Five abandoned those prayers in the high court. Therefore, to the extent that the high court order included prayers 1 and 2, it was made in error. [7] As part of Millenium’s contractual obligations, it was required to provide and maintain performance guarantees in favour of Group Five Construction. Millenium obtained and provided a guarantee2 from Constantia. The relevant terms of the guarantee are as follows: ‘ N/S CONSTRUCTION GUARANTEE NO. 117929J for use with the JBCC Nominated/Selected Sub-Contract Agreement JBCC SERIES 2000 GUARANTOR DETAILS AND DEFINITIONS Guarantor means : CONSTANTIA INSURANCE COMPANY LIMITED (Reg. No. 1952/001514/06) . . . Contractor means : GROUP FIVE COASTAL (PTY) LTD ACTING AS AGENTS FOR GROUP FIVE CONSTRUCTION (PTY) LTD (Reg. No. 1974/003166/07) Subcontractor means : MILLENIUM ALUMINIUM & GLASS SERVICES CC (Reg. No. 2006/140485/23) . . . Works means : PEARL SKY – SUPPLY AND INSTALLATION OF RESIDENTIAL WINDOWS & SHOPFRONTS . . . Agreement means the JBCC Series 2000 Nominated/Selected Subcontract Agreement . . . 3.1 Any reference in this Guarantee to the Agreement is made for the purpose of convenience and shall not be construed as any intention whatsoever to create an accessory obligation or any intention whatsoever to create a suretyship.’ Clause 3.1 of the guarantee makes it clear that the reference in the guarantee to the agreement should not be construed as an intention to create ‘an accessory obligation’ or ‘to create a suretyship’. [8] Clause 4 regulates the circumstances under which Constantia would become obliged to honour the guarantee. It provides as follows: 2 Guarantee 117929J. ‘4. Subject to the Guarantor’s maximum liability referred to in clause 1. above, the Guarantor hereby undertakes to pay the Contractor the sum certified upon receipt of the documents identified in clauses 4.1 to 4.3 below. 4.1 A copy of a first written demand issued by the Contractor to the Subcontractor stating that payment of a sum certified by the Contractor in a payment advice has not been made in terms of the Agreement and failing such payment within seven (7) calendar days, the Contractor intends to call upon the Guarantor to make payment in terms of clause 4.2. 4.2 A first written demand issued by the Contractor to the Guarantor at the Guarantor’s domicilium citandi et executandi with a copy to the Subcontractor stating that a period of seven (7) calendar days has elapsed since the first written demand in terms of clause 4.1 and the sum certified has still not been paid; therefore the Contractor calls up this N/S Construction Guarantee and demands payment of the sum certified from the Guarantor. 4.3 A copy of the said payment advice which entitles the Contractor to receive payment in terms of the Agreement of the sum certified in clause 4.’ Further, clause 12 provides as follows: ‘12. This N/S Construction Guarantee, with the required demand notices in terms of clauses 4. or 5., shall be regarded as a liquid document for the purpose of obtaining a court order.’ [9] On 25 April 2018, Group Five Coastal issued a payment certificate to Millenium confirming that it was indebted to it in the sum of R12 239 967.24 and called upon it to pay the certified sum within twenty-one days. Millenium failed to pay. Pursuant to the terms of clause 4.1 of the guarantee, on 18 May 2018, Group Five Coastal sent a written demand to Millenium calling on it to make payment within seven days. The email sent to Millenium on 25 April 2018 was attached to this written demand. The payment certificate and reconciliation statement which accompanied the demand was issued by Group Five Coastal under its new trading name, Group Five KZN (Pty) Ltd (Group Five KZN). [10] When payment was not forthcoming pursuant to the written demand, Group Five Coastal on behalf of Group Five Construction on 28 May 2018, and in terms of clause 4.2 made a demand on Constantia. Constantia refused to pay and in consequence, on 22 October 2018, Group Five Construction approached the high court seeking payment in terms of the guarantee. Constantia did not oppose the application. It is not opposing this appeal and has filed a notice to abide. [11] Millenium opposed the application on two grounds. It contended that no proper demand was made by Group Five Construction on Constantia in terms of the Construction Guarantee with the result that Millenium’s obligation to pay in terms of the indemnity in favour of Constantia was not triggered. Millenium alleged that the payment certificate was issued by Group Five KZN, an entity that was not a party to the construction contract or the guarantee. It contended that the payment advice was thus not a contractual document upon which Constantia could rely. It argued that absent a payment advice entitling Group Five Construction to receive payment, it was not entitled to call up the guarantee, as the guarantee’s jurisdictional requirements were not met. [12] The high court rejected Millenium’s argument. It held, among other things, that Group Five KZN is the same company as Group Five Coastal, which it found was supported by the registration number 2002/011542/07 and that it changed its name on 19 July 2010. It reasoned that Group Five Coastal, acting as agents for Group Five Construction, is listed as a contractor in the guarantee and ‘any instruction payment [advice] or other document issued by Group Five Coastal was done in its capacity as agents for Group Five Construction (Pty) Ltd’. The high court accordingly concluded that Group Five Construction had presented the demand to Constantia properly and had met all the jurisdictional requirements set out in clause 4 of the guarantee. [13] Millennium attacked the findings of the high court. Relying on OK Bazaars (1929) Ltd v Standard Bank of South Africa Ltd3 and Lombard Insurance Co Ltd v Landmark Holdings (Pty) Ltd and Others,4 Millenium submitted that the high court erred in finding that the call on the guarantee was lawful and valid in the circumstances where the payment advice and guarantee make no reference to Group Five KZN or its registration number. It argued that those judgments require strict compliance with demand guarantees. Millenium submitted that the absence of a payment certificate 3 OK Bazaars (1929) Ltd v Standard Bank of South Africa Ltd 2002 (3) SA 688 (SCA). 4 Lombard Insurance Co Ltd v Landmark Holdings (Pty) Ltd and Others [2009] ZASCA 71; [2009] 4 All SA 322 (SCA); 2010 (2) SA 86 (SCA). and reconciliation statement in the name of the contractor identified in the guarantee ought to have been sufficient for the high court to find that the requirements of the guarantee were not met. [14] This Court, in First Rand Bank Ltd v Brera Investments CC,5 had this to say regarding a guarantee: ‘The guarantee is thus of the same nature as a performance guarantee, performance bond or letter of credit and consists of an undertaking to make payment of an amount of money on the happening of a specified event (see Cloete JA in Dormell Properties 282 CC v Renasa Insurance Co Ltd & others [2011] 1 All SA 557 (SCA), 2011 (1) SA 70 para 61). A guarantee of this nature must be paid according to its terms and liability under it is not affected by the relationship between other parties to the transactions that gave rise to its issue, particularly not with the question whether the sub-contractor performed in terms of his contract with the contractor (see Lombard Insurance Co Ltd v Landmark Holdings (Pty) Ltd & others 2010 (2) SA 86 (SCA) paras 19 and 20; Loomcraft Fabrics CC v Nedbank Ltd 2010 (2) SA 86 (SCA) para 38 and Minister of Transport and Public Works, Western Cape & another v Zanbuild Construction (Pty) Ltd & another 2011 (5) SA 528 (SCA) paras 11-15). The words of the guarantee under consideration make it clear that it is not a suretyship but an independent, and not accessory, agreement that must be performed according to its terms (see also Compass Insurance Co Ltd v Hospitality Hotel Developments (Pty) Ltd 2012 (2) SA 537 (SCA) para 15).’ [15] In Schoeman and Others v Lombard Insurance Co Ltd,6 a defence similar to the one raised by Millenium was raised. In rejecting it, this Court held: ‘The argument proceeded from the basis that a demand guarantee was, like a letter of credit, subject to strict and precise compliance in all respects. I am in agreement with Maier-Frawley AJ in the court below that there is “little to gain from attempts to divine the essential distinction between letters of credit, on the one hand, and demand guarantees, on the other”: the real issue, which involves an interpretation of this particular demand guarantee, is “simply whether there was compliance with the terms of the guarantee under circumstances where the beneficiary’s demands for payment were made to the guarantor at its address, rather than at the address of the beneficiary”.’ 5 First Rand Bank Ltd v Brera Investments CC [2013] ZASCA 25; 2013 (5) SA 556 (SCA) para 2. 6 Schoeman and Others v Lombard Insurance Company Ltd [2019] ZASCA 66; 2019 (5) SA 557 (SCA) para 22. [16] Accordingly, Millenium’s defence should fail. As I see it, the issue is about the interpretation of the demand guarantee and the question is whether there was compliance with the terms of the guarantee in circumstances where an entity which made a demand on guarantee is not the same as an entity that issued a payment certificate and the reconciliation statement. Clause 4 of the guarantee stipulates the requirements that should be met first in order to establish the liability of guarantor under the guarantee. Clause 4.1 states that there must be a first written demand issued by the Contractor to the Subcontractor stating that the payment of a sum certified by the Contractor in a payment advice was not made. The payment advice was issued by Group Five KZN (Group Five Coastal), which was in terms of the guarantee the appointed Group Five Construction’s agents. As required by clauses 4.2 and 4.3, the payment advice which entitled Group Five Construction to receive payment accompanied a demand on guarantee that was made on Constantia by Group Five Coastal. [17] Constantia was in no doubt about the identity of the Contractor, because that was easily ascertainable from the guarantee itself which it had issued. The demands for payment were made to Millenium and to Constantia on the basis of the payment advice which identified the contract in respect of which it related, namely Pearls of Umhlanga – Pearls Sky. Millenium is identified as a subcontractor in the payment advice. The purpose of the guarantee was to enable Group Five Construction to obtain payment from Constantia in the event of default by Millenium. [18] During argument, Millenium contended for the first time that the high court erred in granting Group Five Construction relief on a copy of the guarantee which did not meet the requirements of clause 12 of the Construction Guarantee. Clause 12 on which Millenium relies provides that the ‘N/S Construction Guarantee, with the required demand notices in terms of clause 4 or 5, shall be regarded as a liquid document for the purpose of obtaining a court order’. [19] Millenium’s contention has no merit. In the first instance this contention does not form part of its grounds of appeal. It is raised for the first time on appeal. When this difficulty was pointed out to him, counsel conceded that this was indeed the case, but he argued that it was a legal point and that the court was not precluded from considering it. [20] I will assume in favour of Millenium that the point it raises is a legal one and that the court is not precluded from considering it. Millenium is however opportunistic to argue that the high court should not have granted relief to Group Five Construction because the guarantee on which it made a demand was a copy and not the original. Millenium was aware of the reason why Group Five Construction did not submit the original guarantee to Constantia. The original guarantee that was reissued after the expiry of the initial one was returned by Mr Rakesh Chunilall, Millenium’s director and the deponent to Millenium’s answering affidavit, to Constantia for cancellation, purportedly on the basis that the project was practically complete. Thus, Group Five Construction never had in its possession the reissued original guarantee and could not be blamed for having submitted a copy of the guarantee to Constantia. [21] The high court was therefore correct to find that Group Five Construction had properly presented the demand to Constantia and that it had met all the jurisdictional requirements set out in clause 4 of the guarantee. The demand triggered Millenium obligations to Constantia to indemnify it against Group Five Construction’s demand and to pay to Constantia an amount equal to Group Five Construction’s demand. [22] In the result, the appeal is dismissed with costs. _________________ D H ZONDI JUDGE OF APPEAL APPEARANCES For the appellants: A Collingwood Instructed by: V Chetty Incorporated, Durban Lovius Block Attorneys, Bloemfontein For the first respondent: A V Voormolen SC Instructed by: Cox Yeats Attorneys, Durban McIntyre Van der Post, Bloemfontein For the second respondent: Abides the decision of this Court Instructed by: Ryan D Lewis Attorneys, Sandton Pieter Skein 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 December 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 Millenium Aluminium and Glass Services CC and Others v Group Five Construction (Pty) Ltd and Another (693/2021) [2022] ZASCA 180 (14 December 2022) The Supreme Court of Appeal (SCA) dismissed an appeal with costs against the judgment of the Gauteng Division of the High Court, Johannesburg (the high court), which ordered that the second respondent, Constantia Insurance Company Limited (Constantia), pay an amount of R1 490 364.09 plus interest and costs, to the first respondent, Group Five Construction (Pty) Ltd (Group Five Construction), in terms of a construction guarantee. The high court had further ordered the first appellant, Millenium Aluminium and Glass Services CC (Millenium), the second appellant, Mr Mohanlall Bridgenun, and the third appellant, Fast Track Contracting Africa (Pty) Ltd (Fast Track), to pay Constantia, on the basis of the indemnity and the deed of suretyship signed by these parties in favour of Constantia. The issue before the SCA was whether Group Five Construction, in making a demand on the guarantee, complied with its requirements. The facts of the matter were the following. During or about 26 May 2015, Group Five Construction was appointed as a building contractor to carry out a project in Durban known as Pearls of Umhlanga – Pearl Sky. Group Five Coastal (Pty) Ltd (Group Five Coastal), acting as an agent of Group Five Construction, appointed Millenium as a subcontractor to carry out the design, supply and installation of the residential windows and shopfronts at the sub- contract sum of R20 750 937 excluding VAT. In terms of the letter of appointment, it was agreed that the contractual relationship between Group Five Construction and Millenium would be governed by the provisions of the JBCC Series 2000 Nominated/Selected Sub- contract Agreement, edition 5.0, 2007. As part of Millenium’s contractual obligations, it was required to provide and maintain performance guarantees in favour of Group Five Construction. Millenium obtained and provided a guarantee from Constantia. On 25 April 2018, Group Five Coastal issued a payment statement to Millenium confirming that it was indebted to it in the sum of R12 239 967.24 and called upon it to pay the certified sum within twenty-one days. Millenium failed to pay. Pursuant to the terms of clause 4.1 of the guarantee, on 18 May 2018, Group Five Coastal sent a written demand to Millenium calling on it to make payment within seven days. The email sent to Millenium on 25 April 2018 was attached to this written demand. The payment certificate and reconciliation statement which accompanied the demand was issued by Group Five Coastal under its previous trading name, Group Five KZN (Pty) Ltd (Group Five KZN). When payment was not forthcoming pursuant to the written demand, Group Five Coastal, on 28 May 2018, and in terms of clause 4.2, made a demand on Constantia. Constantia refused to pay and in consequence, on 22 October 2018, Group Five Coastal approached the high court seeking payment in terms of the guarantee. The SCA found that the issue was about the interpretation of the demand guarantee, and the question was whether there was compliance with the terms of the guarantee in circumstances where an entity which made a demand on guarantee was not the same as an entity that issued a payment certificate and the reconciliation statement. In this regard, the SCA found that the payment advice was issued by Group Five KZN (Group Five Coastal), which was in terms of the guarantee the appointed Group Five Construction’s agents. As required by clauses 4.2 and 4.3, the payment advice which entitled Group Five Construction to receive payment accompanied a demand on guarantee that was made on Constantia by Group Five Coastal. The SCA found further that Constantia was in no doubt about the identity of the Contractor, because that was easily ascertainable from the guarantee itself, which it had issued. The demands for payment were made to Millenium and to Constantia on the basis of the payment advice which identified the contract in respect of which it related, namely Pearls of Umhlanga – Pearls Sky. Millenium was identified as a subcontractor in the payment advice. The purpose of the guarantee was to enable Group Five Construction to obtain payment from Constantia in the event of default by Millenium. Accordingly, the SCA held that the high court was correct to find that Group Five Construction had properly presented the demand to Constantia and that it had met all the jurisdictional requirements set out in clause 4 of the guarantee. The demand triggered Millenium obligations to Constantia to indemnify it against Group Five Construction’s demand and to pay to Constantia an amount equal to Group Five Construction’s demand. However, the SCA also found that in the high court Group Five Construction had abandoned orders sought in prayers 1 and 2 of the notice of motion, and thus they should not have been granted. Accordingly, the SCA held that the high court erroneously granted paragraphs 1 and 2 of the order, and they would not be confirmed in the appeal. ~~~~ends~~~~

1512

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 484/07 RAND MUTUAL ASSURANCE COMPANY LIMITED Appellant and ROAD ACCIDENT FUND Respondent Neutral citation: Rand Mutual Assurance Company Ltd v Road Accident Fund (484/2007) [2008] ZASCA 114 (25 SEPTEMBER 2008) Coram: HARMS ADP, SCOTT, JAFTA JJA, LEACH AND KGOMO AJJA Heard: 12 SEPTEMBER 2008 Delivered: 25 SEPTEMBER 2008 Corrected: Summary: Insurance – subrogation – right of insurer to sue wrongdoer in own name – Compensation for Occupational Injuries and Diseases Act 130 of 1993 s 36(1). ORDER On appeal from: High Court, Pretoria (R D Claassen J sitting as court of first instance). 1. The appeal is upheld with costs. 2. The order of the court below is substituted with the following: (a) Judgment for the plaintiff in the sum of R 191 078,85 with 15,5% interest a tempore morae. (b) The defendant is to pay the costs including the preparation fee of Dr du Plessis and Ms Vos. JUDGMENT HARMS ADP (SCOTT, JAFTA JJA, LEACH AND KGOMO AJJA concurring) [1] The appellant, Rand Mutual Assurance Company Ltd, is an insurer. It is, for purposes of the Compensation for Occupational Injuries and Diseases Act 130 of 1993 (COIDA), a mutual association, which means that it is licensed to carry on the business of insuring employers against their liabilities under COIDA to employees (s 30(1)).1 In that capacity it insured a company 1 Section 30(1): ‘The Minister may, for such period and subject to such conditions as he may determine, issue a licence to carry on the business of insurance of employers against their liabilities to employees in terms of this Act to a mutual association which was licensed on the date of commencement of this Act in terms of section 95 (1) of the Workmen’s Compensation Act: Provided that the Minister may, from time to time, order that, in addition to any securities deposited in terms of the Insurance Act, 1943 (Act No. 27 of 1943), and the Workmen’s Compensation Act, securities (presumably Harmony Gold Mining Co Ltd). An employee of the insured, one Young, was injured in a motor vehicle accident, which was caused by the negligence of the driver of another vehicle, one Maziya. The accident arose out of and in the course of Young’s employment. Young was consequently entitled to the benefits provided for in COIDA (s 22(1)). Because of the insurance policy the appellant, and not the Director-General, was obliged to compensate Young in the sum of R191 078,85 as determined in accordance with COIDA by the Director-General.2 [2] The respondent, the Road Accident Fund, is liable for the damages caused by Maziya’s negligent driving. The appellant sought to recover the compensation paid to Young from the respondent, relying on the provisions of s 36(1)(b) of COIDA,3 which provides in essence that if an occupational injury was caused in circumstances resulting in a third party (in this case the respondent) being liable for them, ‘the Director-General or the employer by whom compensation is payable may institute action in a court of law against the third party for the recovery of compensation that he is obliged to pay in terms of this Act.’ [3] The appellant is not an ‘employer’. Accordingly, it was not covered by the wording of the provision although it was a party by whom, in terms of COIDA, compensation was payable. This, said its counsel, was more than unfair because the appellant is entitled to be in the same position against third parties as are the Director-General or the employer ‘by whom compensation is considered by the Director-General to be sufficient to cover the liabilities of the mutual association in terms of this Act be deposited with the Director-General or his or her nominee.’ 2 Section 29: ‘If an employee is entitled to compensation in terms of this Act, the Director-General or the employer individually liable or the mutual association concerned, as the case may be, shall be liable for the payment of such compensation.’ 3 Section 36: ‘(1) If an occupational injury or disease in respect of which compensation is payable, was caused in circumstances resulting in some person other than the employer of the employee concerned (in this section referred to as the “third party”) being liable for damages in respect of such injury or disease— (a) the employee may claim compensation in terms of this Act and may also institute action for damages in a court of law against the third party; and (b) the Director-General or the employer by whom compensation is payable may institute action in a court of law against the third party for the recovery of compensation that he is obliged to pay in terms of this Act.’ payable’. He accordingly submitted that we should by some or other process of interpretation hold that the phrase ‘employer by whom compensation is payable’ includes a mutual association by whom compensation is payable. The argument was premised on the proposition that a mutual association would otherwise be without a right of recourse against a wrongdoer. In support of this, counsel argued that the employer in casu was not one by whom compensation was payable. Accordingly, he said, the employer had nothing which it could cede to the plaintiff and that subrogation does not apply. As I shall seek to show, since the premise is false, the conclusion is also false. [4] To understand the argument and my conclusion it is necessary to turn to the repealed Workmen’s Compensation Act 30 of 1941, the precursor of COIDA. Under that Act, compensation had to be paid to any workman entitled thereto either (a) by the employer individually liable, or (b) by the commissioner (s 37). The term ‘employer individually liable’ was defined to mean an employer who was exempt from paying contributions to the accident fund (s 2). There were two types of employers individually liable, namely the state and certain other authorities and, secondly, employers who had, with the approval of the commissioner, obtained from a mutual association a policy of insurance for the full extent of their potential liability under the Act (s 70). Compensation was payable irrespective of the common-law liability of the employer (i e, irrespective of negligence) and the Act thereby increased the rights of the employee but, on the other hand, the right to compensation substituted all other remedies the workman may have had (s 7).4 The 4 Jooste v Score Supermarket Trading (Pty) Ltd (Minister of Labour intervening) 1999 (2) SA 1, 1999 (2) BCLR 139 (CC) discussed the constitutionality and ratio of the legislation is detail. It said (at para 14): ‘By way of contrast [to the common-law position] the effect of the Compensation Act may be summarised as follows. An employee who is disabled in the course of employment has the right to claim pecuniary loss only through an administrative process which requires a Compensation Commissioner to adjudicate upon the claim and to determine the precise amount to which that employee is entitled. The procedure provides for speedy adjudication and for payment of the amount due out of a fund established by the Compensation Act to which the employer is obliged to contribute on pain of criminal sanction. Payment of compensation is not dependent on the employer’s negligence or ability to pay, nor is the amount susceptible to reduction by reason of the employee’s contributory negligence. The amount of compensation may be increased if the employer or co-employee were negligent but not beyond the extent of the claimant’s actual pecuniary loss. An employee who is dissatisfied with an award of the Commissioner has recourse to a court of law which is, however, commissioner or ‘the employer by whom compensation [was] payable’ had a right of action against the third party for the recovery of the compensation they were obliged to pay (s 8(1)(b)). The Act was ambivalent about who had to pay compensation. In some instances it had to be either the commissioner or ‘the employer individually liable’ (e.g. s 40(2), s 46(2), s 48, s 90) while in other circumstances it was either the employer individually liable or the mutual association (s 63). However, the Act also said that the association, that had to insure employers, had ‘liabilities under this Act’ (s 95(5)). [5] It is difficult to conceptualise the liability of the employer towards the employee which could be insured against. This is because even an uninsured employer or one who had failed to pay contributions to the commissioner had no potential liability towards the employee under the Act. An employer who had failed to pay the required contributions may have had to pay a penalty but even then no common-law or statutory liability towards the employee arose (s 72). [6] These inconsistencies were not only carried over to COIDA but were in a sense exacerbated. This is because COIDA distinguishes between employers individually liable (consisting of government organs) on the one hand and, on the other, employers who have obtained from a mutual association a policy of insurance for ‘the full extent of their potential liability’ (s 84(1)). Liability is no longer attached to an employer as in the 1941 Act; instead it is attached to either the Director General (who replaced the Commissioner), the employer individually liable or the mutual association (s 29, 61, 62). The employer is also not liable to the employee unless the liability arises under COIDA (s 35). [7] However, COIDA provides (as mentioned) for ‘insurance of employers against their liabilities to employees in terms of this Act’ by a mutual association (s 30(1) and (2)).5 This implies that employers do have a liability bound by the provisions of the Compensation Act. That then is the context in which section 35(1) deprives the employee of the right to a common-law claim for damages.’ 5 See footnote 1 above. under COIDA although the nature and extent of their liability is not spelled out. The implication is that the liability is borne by either the Director-General or the mutual association. (The position of the employer individually liable as currently defined does not require consideration.) Although the employee is the only person entitled to benefit under the insurance policy (he, and only he, receives compensation) the legal effect of all this is that the employer is insured against this transient claim of the employee. [8] Reverting to s 36(1)(b):6 it provides, as mentioned, that either the Director-General or the employer by whom compensation is payable may institute action against a third party for the recovery of compensation. The emphasised words would obviously include an employer individually liable but they go wider. They also include an insured employer. But they do not include a mutual association. This means that although the insured employer does not pay, he is entitled to recover, obviously on behalf of the insurer. [9] I accordingly agree with the respondent’s counsel who argued that an employer who obtains a policy of insurance for the full extent of its liability under COIDA is exempted from paying assessments to the Director-General; that a mutual association is nothing other than an insurer; and that once the mutual association has indemnified the employer by paying compensation in full to the employee, the association may exercise the right of recourse against a third party by either obtaining a cession from the employer or by bringing a subrogated claim for recovery under s 36(1)(b). [10] The insured’s indemnity claim has been paid in full. The insured employer was accordingly entitled to recover from the respondent, not only by virtue of s 36(1)(b), but also under ordinary legal principles. However, the employer did not seek to recover; the appellant did not obtain a cession; and the appellant did not sue in the name of the insured but in its own name. This, and only this, non-compliance with the subrogation doctrine was, according to the respondent, fatal to the appellant’s claim, and the court below agreed. 6 See footnote 3 above. [11] During argument the question was raised whether the rule that the insurer must sue in the name of the insured forms part of our law and, if so, whether it could be justified. The answer requires a consideration of the history of the reception of the English law of subrogation, the nature of the rule that a subrogated claim must be brought in the name of the insured, and a reflection of whether the rule requires adaptation or amendment. [12] Lord Hoffman once said that ‘the subject of subrogation is bedevilled by problems of terminology and classification which are calculated to cause confusion.’7 Bearing that in mind, it is useful to commence the discussion with the following extract from the chapter in Lawsa8 on insurance: ‘In its literal sense the word “subrogation” means the substitution of one party for another as creditor. In the context of insurance, however, the word is used in a metaphorical sense. Subrogation as a doctrine of insurance law embraces a set of rules providing for the reimbursement of an insurer which has indemnified its insured under a contract of indemnity insurance. The gist of the doctrine is the insurer’s personal right of recourse against its insured, in terms of which it is entitled to reimburse itself out of the proceeds of any claims that the insured may have against third parties in respect of the loss.’ The authors also mention (at para 374) that the doctrine as part of insurance law was established only during the 18th Century and that it was imported into South African law through Ackerman v Loubser 1918 OPD 31. [13] The plaintiff in Ackerman v Loubser was an insured who had been fully paid by the insurer and who sought to recover the loss from the defendant on behalf of the insurer. The defence was that since the plaintiff’s loss had been made good by the insurer the plaintiff had no further claim against the defendant. In rejecting the argument the court referred to the English law of 7 Banque Financière De La Cité v Parc (Battersea) Ltd [1998] UKHL 7, [1999] AC 221, [1998] 1 All ER 737, [1998] 2 WLR 475. 8 MFB Reinecke, SWJ van der Merwe, JP van Niekerk, PH Havenga and J Church Lawsa (reissue) vol 12 para 373. See also D M Davis Gordon & Getz on The South African Law of Insurance 4 ed (1993) 257. subrogation (as set out in the preceding paragraph) and applied it to the case before it. The court also mentioned that in English law, should the insured refuse to litigate, the court would allow the insurer to do so ‘in the name of the insured whether the latter likes it or not’ (at 34). [14] What is easily overlooked is that when Ackerman v Loubser was decided the law of insurance applicable in the Orange Free State was English law. The General Law Amendment Ordinance 5 of 1902 (ORC) had introduced the law applicable in the Cape Colony. The General Law Amendment Act 8 of 1879 (Cape), in turn, had introduced the English law of insurance and replaced the Roman Dutch law in the Cape Colony. In other words, the court in Ackerman v Loubser was bound to apply the English law of insurance and it did not purport to infuse our law with English law principles. [15] The next case that dealt with the issue was Teper v McGees Motors (Pty) Ltd 1956 (1) SA 738 (C). It, too, was bound to apply English law being a Cape case. However, the law in Transvaal and Natal remained Roman Dutch, something not considered in Schoonwinkel v Galatides 1974 (4) SA 388 (T) when it adopted the principle of subrogation as set out in Ackerman v Loubser. Importantly, neither case held that the insurer may not sue in his own name.9 [16] The Cape and Orange Free State laws were repealed by s 1 of the Pre-Union Statute Revision Act 43 of 1977 – ‘with the result that the English law (as it existed in 1879) concerning fire, life and marine insurance is no longer binding authority in the Cape Province or in the Orange Free State Province. . . . Hence, the South African law of insurance is governed mainly by Roman-Dutch law as our common law.’10 9 Also Chi v Lodi 1949 (2) SA 507 (T). 10 Mutual & Federal Insurance Co Ltd v Oudtshoorn Municipality 1985 1 SA 419 (A) at 430F-G. The effect of this repeal is that, subject to statutory law, our courts are entitled to look at other legal systems in developing our law of insurance and that we are not bound to follow English law and precedent.11 [17] Nevertheless, this court,12 with reference to the Ackerman v Loubser and Teper, held that – ‘an insurer under a contract of indemnity insurance who has satisfied the claim of the insured is entitled to be placed in the insured’s position in respect of all rights and remedies against other parties which are vested in the insured in relation to the subject matter of the insurance. This is by virtue of the doctrine of subrogation which is part of our common law.’13 What this court had in mind in Commercial Union were the three rules of the lex mercatoria (and not only of the English law of insurance): that the wrongdoer is not entitled to benefit from the fact that the person wronged was insured; that the insured may not be enriched at the expense of the insurer by receiving both the insurance indemnity and damages from the wrongdoer; and that the insurer replaces the insured, i.e., the insured is subrogated by the insurer, which entitles the insurer to claim the loss from the wrongdoer.14 [18] In English law ‘the doctrine of subrogation in insurance rests upon the common intention of the parties and gives effect to the principle of indemnity embodied in the contract.’15 In our law it would be a case of implied terms (but 11 J P van Niekerk Subrogasie in die versekeringsreg (unpublished LLM thesis UNISA 1979) ch 1. 12 Commercial Union Insurance Co of SA Ltd v Lotter [1999] 1 All SA 235, 1999 (2) SA 147 (SCA). 13 See also Avex Air (Pty) Ltd v Borough of Vryheid 1973 (1) SA 617 (A) at 625H. Samancor v Mutual and Federal Insurance Company Limited [2005] 4 All SA 193, 2005 (4) SA 40 (SCA) is not in point. 14 Somersall v Friedman 2002 SCC 59 (CanLII), [2002] 3 SCR 109, (2002) 215 DLR (4th) 577 at para 50: ‘First, it is important to keep in mind the underlying objectives of the doctrine of subrogation which are to ensure (i) that the insured receives no more and no less than a full indemnity, and (ii) that the loss falls on the person who is legally responsible for causing it. The doctrine of subrogation operates to ensure that the insured received only a just indemnity and does not profit from the insurance. Consequently, if there is no danger of the insured’s being overcompensated and the tortfeasor has exhausted his or her capacity to compensate the insured there is no reason to invoke subrogation. Similarly, if the insured enters into a limits agreement or otherwise abandons his or her claim against an impecunious tortfeasor the insurer has lost nothing by the inability to be subrogated.’ (Citations omitted.) Castellain v Preston (1883), 11 Q.B. 380 at 386 -387. See Visser & Potgieter Skadevergoedingsreg/The law of damages 2 ed (2003) para 10.4. 15 Banque Financière De La Cité v Parc (Battersea) Ltd [1998] UKHL 7, [1999] AC 221, [1998] 1 All ER 737, [1998] 2 WLR 475. in the sense of naturalia of the contract as opposed to tacit terms)16 of the contract of insurance.17 [19] Significantly, in formulating the doctrine of subrogation, this court has not as yet held that the insurer is not entitled to sue in its own name.18 Different laws deal with this aspect differently. The English common law, as has been said, requires the insurer to sue in the name of the insured. This requirement gives rise to a number of procedural anomalies.19 American law apparently adopts a different approach: although it is accepted that in strict law the action ought to be brought in the name of the insured, the insurer institutes the litigation in its own name to protect litigants from harassment and to avoid confusion over the identity of the real plaintiff.20 This appears to be similar to the position in Continental law.21 [20] These differences may be due to legislative activities and, especially as far as Continental law is concerned, to the fact that the effect of subrogation may differ from one legal system to another. It may amount to something akin to cession of the claim against the wrongdoer ex lege or it may simply mean that although the claim against the wrongdoer still vests in the insured, the insurer has certain procedural rights against both the insured and the wrongdoer.22 Locally, there is an academic debate about the correct approach to the substantive aspect but this is not the case to decide the matter.23 For present purposes I shall assume that a transfer ex lege akin to cession does not take place. That does not, however, mean that the procedural rule that the 16 Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A); Delfs v Kuehne & Nagel (Pty) Ltd 1990 (1) SA 822 (A). 17 The MT ‘Yeros’ v Dawson Edwards & Associates [2007] 4 All SA 922 (C) at 930 18 Goodwin Stable Trust v Duohex (Pty) Ltd [1996] 3 All SA 119, 1999 (3) SA 353 (C) is not of assistance as it dealt with cession. 19 MacGillivray on Insurance Law 10 ed (2003) para 22-43 to 22-51; E C Schlemmer ‘’n Selfstandige reg van verhaal vir ‘n versekeraar gegrond op ‘n solidêre medeskuldverhouding’ 1996 TSAR 68. 20 American Jurisprudence 2 ed (2001) vol 73 s v Subrogation para 82 (p 610-611). 21 H J Moll ‘Die subrogasieleerstuk in die versekeringsreg’ 1977 TSAR 138. 22 For the position in the case of cession: Homes for SA (Pty) Ltd v Rand Building Contractors (Pty) Ltd 2004 (6) SA 373 (W). 23 E C Schlemmer ‘’n Selfstandige reg van verhaal vir ‘n versekeraar gegrond op ‘n solidêre medeskuldverhouding’ 1996 TSAR 68; J P van Niekerk ‘Subrogation and cession in insurance law: a basic distinction confounded’ (1998) 10 SA Merc LJ 58; J P van Niekerk ‘Insurance subrogation, implied or expressed: in the name of the insured, always’ (2007) 19 SA Merc LJ 502. insurer has to sue in the name of the insured is in accordance with the general principles of our law.24 [21] In Freudmann-Cohen v Long Tran25 the Ontario Supreme Court had to consider whether an insurer, who is a defendant in an action by an insured, would be entitled to institute third party proceedings (similar to those contemplated by our Uniform rule 13) against a wrongdoer apparently on the ground that if the insurer were to be held liable, a declaration would follow entitling the insurer to an indemnity from the wrongdoer. The insurer/defendant could hardly have issued the notice in the name of the insured/plaintiff. The court held that it was entitled to proceed in its own name. The reason for the conclusion was that the rule in question was a procedural rule of English origin and not a substantive rule whereas the other subrogation rules were of a substantive nature. Courts are entitled to regulate their own procedure. It is therefore not surprising that common-law courts outside Britain, on occasion, have permitted the insurer to litigate in its own name.26 [22] J P van Niekerk points out that the rule ‘is hoogstens ‘n noodwendige aanhangsel tot die skadeloosstellingsbeginsel en die gevolg van die gelding van daardie beginsel in ‘n besondere geval.’27 He refers to others who had stated that the rule is a ‘corollary’ or ‘consequence’ of the indemnity principle and ‘not a basic principle in itself’. More recently he said that subrogation is ‘for a large part nothing more than a procedural device in the service of the indemnity principle.’28 [23] This court is duty-bound to consider whether the procedural requirement is consonant with our constitutional values and our law of procedure. I believe that it is not. To require a party to litigate in the name of 24 Locus standi may either be a purely procedural matter or it may impact on the substance of the case. See the diverging views on the facts in Pentz v Gross 1996 (4) SA 617 (SCA) at 630G-H (per Corbett CJ) and 632B-G (my judgment). Also in [1996] 4 All SA 63. 25 2003 CanLII 35516, (2003) 66 OR (3d) 106. 26 J P van Niekerk Subrogasie in die versekeringsreg 105-110. 27 Subrogasie in die versekeringsreg at 62. 28 J P van Niekerk ‘Subrogation in terms of a marine insurance contract governed by foreign law: the untraceable or no longer existing insured creates a dilemma for insurers’ 2008 TSAR 575. another appears to me to fly in the face of the requirement of transparency that underlies all litigation. The rule serves no public interest in modern times, as appears from the position in the USA. It is formalistic and creates anomalies. It enables the insurer to litigate in the name of the insured without taking any risks as far as litigation costs are concerned.29 The supposed advantage, namely that the insurance company may be able to retain its anonymity,30 is clearly not to the advantage of the wrongdoer and also probably not to that of the insured. [24] It is safe to assume if regard is had to the prevailing practice that insurance companies have been acting on the basis that they have to litigate in the name of the insured. Although this is in my view a less than desirable practice it would be wrong to abolish it by judicial fiat. This court is reluctant to interfere with settled legal principles, even when they have their origin in an incorrect interpretation of the law because members of the public may have arranged their affairs on the assumption that they were settled.31 Communis error facit ius. Consequently, this judgment does not hold that the insurer must litigate in its own name and may not litigate in the name of the insured. What it does hold is that the English rule in its stark form cannot be justified and that, unless the wrongdoer will be prejudiced in a procedural sense, courts may permit the insurer to proceed in its own name. It might be necessary to adapt other procedural rules in such an event as requiring, by analogy with Uniform rule 35(5)(b), discovery by the insured. [25] I therefore hold that the plaintiff was not non-suited by litigating in its own name, particularly where there is no discernible prejudice to the respondent. It may be noted that the respondent did not file an exception to the claim and raised the point only at the trial. Consequently, the appeal has to succeed and the appellant is entitled to judgment. 29 Storegate Africa (Pty) Ltd v Airlink Cargo International (Pty) Ltd [2005] JOL 14054 (SCA). 30 J P van Niekerk ‘Subrogation and cession in insurance law: a basic distinction confounded’ (1998) 10 SA Merc LJ 58 at 59. 31 Business Aviation Corp (Pty) Ltd v Rand Airport Holdings (Pty) Ltd [2007] 1 All SA 421, 2006 (6) SA 605 (SCA) at para 38. [26] The following order is made: 1. The appeal is upheld with costs. 2. The order of the court below is substituted with the following: (a) Judgment for the plaintiff in the sum of R 191 078,85 with 15,5% interest a tempore morae. (b) The defendant is to pay the costs, including the preparation fee of Dr du Plessis and Ms Vos. _________________________ L T C HARMS ACTING DEPUTY PRESIDENT APPEARANCES: For Appellant: J J Wessels SC Instructed by: Van Velden Duffey, Pretoria Lovius Block Attorneys, Bloemfontein For Respondent: B P Geach SC Instructed by: Maponya Incorporated, Pretoria Honey 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: 25 SEPTEMBER 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 RAND MUTUAL ASSURANCE COMPANY LTD v ROAD ACCIDENT FUND The SCA today upheld the appeal by an insurer who sued the RAF to recover compensation paid to an employee under the Compensation for Industrial Injuries and Diseases Act. The SCA held that an insurer, who had recompensed an insured in full, is entitled to litigate in its own name against a wrongdoer and need not litigate in the name of the insured. ---ends---

3243

non-electoral

2007

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT REPORTABLE CASE NO: 614/2006 In the matter between KAREN HARRIET ELEY (formerly MEMMEL) APPELLANT and LYNN & MAIN INC RESPONDENT CORAM: MTHIYANE, LEWIS, PONNAN JJA, HURT AND KGOMO AJJA HEARD: 2 NOVEMBER 2007 DELIVERED: 22 NOVEMBER 2007 Summary: Whether the claim against a surety in respect of a debt where judgment has been given against a principal debtor prescribes after three years as contemplated in s 11(d) of the Prescription Act 68 of 1969, or after 30 years as contemplated in s 11(a)(ii) of the Act. Neutral Citation: This judgment may be referred to as KH Eley v Lynn & Main Inc [2007] SCA 142 (RSA). MTHIYANE JA MTHIYANE JA: [1] Section 11(a)(ii) of the Prescription Act 68 of 1969 (‘the Act’) provides that the period of prescription shall be thirty years in respect of ‘any judgment debt’ and in terms of s 11(d), three years in respect of ‘any other debt’. In terms of s 15(4) of the Act ‘prescription shall commence to run afresh on the day on which the judgment of the court becomes executable’. This appeal is concerned with the question whether the claim against a surety who has bound herself as surety and co-principal debtor in respect of a debt which was confirmed and reinforced by a judgment against the principal debtor, became prescribed after three years or after 30 years as contemplated in s 11(a)(ii) of the Act. [2] The appeal is against the order of Goldstein J in the Johannesburg High Court in terms of which he dismissed an application by the appellant for the rescission of a default judgment. The appellant as surety had raised a defence that the claim against her had become prescribed after three years, notwithstanding that a judgment had been obtained against the principal debtor. [3] The salient features of the history of the matter are set out in the appellant’s affidavit in support of her application for rescission. On 29 February 1996 the appellant executed a deed of suretyship in terms of which she bound herself as surety and co-principal debtor in solidum for the repayment of ‘all or any sum or sums of money which the debtor may now or from time to time hereafter owe or be indebted to the bank, its successors or assigns . . . whether such indebtedness arises from money already advanced or hereafter to be advanced . . . or otherwise howsoever . . .’. The bank referred to in the deed of suretyship is Nedbank Limited (later known as Nedcor Bank Limited). The deed of suretyship was executed to provide the bank with collateral security for the amounts advanced or to be advanced to Help Seat It Southern Africa (Pty) Ltd (the principal debtor) on overdraft. The appellant had, as director of the principal debtor, signed an application form on the principal debtor’s behalf on 9 September 1994, for the opening of a cheque account with Nedbank Limited (‘the bank’). When she was asked by the bank to provide security she readily acceded to their request. As the appellant put it in her supporting affidavit: ‘An overdraft was required and Nedbank Limited approached me for a suretyship which I gave to them.’ [4] A year after executing the deed of suretyship the appellant experienced marital problems. In 1997 she left her husband and her chosen domicilium citandi as stated in the suretyship deed, was divorced and remarried. In the meantime the principal debtor fell into debt and apparently failed to meet its financial obligations to the bank. The appellant blames her former husband for the financial woes of the principal debtor. She emphatically declares that it was he who ‘caused it to suffer financial hardship.’ Nothing, in my view, turns on this. [5] As was to be expected the bank sued the principal debtor for the recovery of the moneys it had advanced and on 21 May 2001 it obtained judgment by default, for: ‘1. Payment of the sum of R157 685,55 2. Interest on R157 685,55 to date of payment at the rate of 15.50 per centum per year from 1 March 2000. 3. Costs in the amount of R650,00 plus sheriff’s fees in the sum of R117,07.’ [6] On 25 March 2003 the bank ceded all right, title and interest in and to the book debts to the respondent with effect from 2 January 2003. [7] The respondent, as cessionary, thereafter instituted action against the appellant as surety and co-principal debtor in solidum, for the repayment of the amount then due and owing by the principal debtor. Summons was served at the appellant’s chosen domicilium citandi on 14 September 2005. As no appearance to defend was delivered, the respondent duly took judgment by default on 18 October 2005, for: ‘1. Payment of the sum of R157 685,55 2. Interest on R157 685,55 to date of payment at the rate of 15,50 per centum per year from 1st March 2000 3. Costs of suit on the scale as between attorney and client to be taxed.’ [8] Subsequently, the appellant launched an application for rescission of the default judgment. In her supporting affidavit she alleged that she had been unaware that summons had been issued against her as she had left her domicilium by the time summons was served. She averred that if she had been aware of the true situation she ‘would have entered an appearance to defend immediately.’ She denied that she was liable to the bank and premised her defence on two points. First, she contended that the respondent’s claim had become prescribed. This because judgment against the principal debtor was obtained on 21 May 2001 and summons was served only on 14 September 2005, more than three years later. Second, she denied that there had been a cession of the claim based on the judgment debt by the bank. [9] When the matter came before Goldstein J the second point was not argued for reasons that are not readily apparent; the parties requested the learned judge ‘to decide finally whether the [appellant’s] defence of prescription is valid, and depending on [his] decision on this point to grant or dismiss the application.’ The application for rescission was dismissed with costs. The judge followed and applied Jans v Nedcor Bank Ltd.1 He held that the prescriptive period in respect of the claim against the appellant was the same as that in respect of the claim against the principal debtor, that is 30 years, and granted the appellant leave to appeal to this court. [10] The main issue in the appeal is whether the respondent’s claim against the appellant has become prescribed. In terms of s 15(4), read with s 11(a)(ii), the period of prescription of the debt owed by the principal debtor to Nedbank Limited (the judgment creditor) was thirty years from the date of judgment on 21 May 2001. The question debated in the court below and in the appeal before us was whether the claim against the appellant as surety who bound herself as surety and co- principal debtor would prescribe after the same period or after the lesser period of three years referred to in s 11(d). In Rand Bank Limited v De Jager2 the court held that in spite of a judgment against the principal debtor the period of prescription applicable to the claim against the surety remained three years and is therefore considerably shorter than that applicable to the claim against the principal debtor. [11] In Jans v Nedcor Bank Ltd, Scott JA undertook an exhaustive analysis of the fundamental principles applicable to suretyship under South African law. The earlier cases of Cronin v Meerholz3 and Union 1 2003 (6) SA 646 (SCA). 2 1982 (3) SA 418 (C). 3 1920 TPD 403. Government v Van der Merwe,4 which were not followed in Randbank Limited v De Jager, were fully discussed and referred to with apparent approval in Jans. The court held that Randbank was incorrectly decided. The common thread that runs through these cases (other than Randbank) is that the obligation of the principal debtor and the surety relate to the same debt. The thrust of the dicta is, therefore, that if the principal debt is kept alive by a judgment, the surety’s accessory obligation by common law continues to exist. [12] The appellant sought to distinguish Jans v Nedcor Bank Ltd from the present matter on the basis that Jans was concerned with the interruption or delay in the running of prescription and not directly with the issue whether a judgment against the principal debtor results in prescription against a surety being extended in terms of s 11(a)(ii) of the Act. Although counsel does not say so in so many words, in my view the argument advanced on the appellant’s behalf coincides with the approach adopted in Rand Bank v De Jager, where it was held that in spite of the judgment against the principal debtor, the period of prescription in favour of the surety remained three years. That case has, as I have said, been overruled. [13] The distinction which the appellant seeks to draw is illusory. Jans v Nedcor Bank Ltd sets out the fundamental principles applicable to suretyship contracts in general and is not confined to the effect of the interruption of the running of prescription against the principal debtor. This is particularly clear from the judgment where, after discussing the nature of the contract of suretyship, Scott JA makes the following 4 1921 TPD 318. observation, relevant to the question we are concerned with in the present matter:5 ‘The very existence of the debt is therefore dependent upon the existence of the suretyship while the object and function of the latter is, of course, to ensure proper payment of the former. To permit the claim against the surety in these circumstances to prescribe before the claim against the principal debtor, in the words of Wessels JP in Union Government v Van der Merwe (supra at 320), would be “almost subversive of the whole contract of suretyship.”’ [14] In the appeal before us it was not argued that Jans v Nedcor Bank Ltd was wrongly decided. There is no reason why it should not be followed. Accordingly the contention that the claim against the appellant had become prescribed after three years falls to be rejected. [15] The judgment in Bulsara v Jordan & Co Ltd6 also relied on by the appellant does not assist her. In Bulsara, judgment was given against the principal debtor on 23 May 1989 after summons had been served on him on 20 March 1987. Summons was served on Bulsara (as surety) on 28 May 1990. In construing the deed of suretyship the court held that it included the judgment debt against the principal debtor as the subject of the suretyship. In any event the summons on Bulsara was served well within the three-year period of prescription referred to in s 11(d). The court in Bulsara expressly refrained from considering the correctness of the decision in Randbank, but there is nothing in the judgment that is inconsistent with the principles laid down in Jans. And there is nothing in the deed of suretyship at issue in this matter that warrants a different construction. 5 Para 30. 6 1996 (1) SA 805 (A). [16] I turn to the second point which was raised on the pleadings but not argued in the court a quo. Counsel for the appellant submitted that the cession of the claim based on the judgment debt was not apparent from the deed of cession annexed to the summons. The argument is without merit. In terms of the deed of cession Nedbank Limited ceded to the respondent ‘all right, title and interest in and to the book debts and any judgment in respect of any such book debts . . . . For purposes of the foregoing, ‘book debts’ means collectively the book debts owed to Nedbank by various debtors, a list of which is annexed hereto, and includes all claims . . . against any third party (whether or not such third party is jointly or severally liable with such debtors) for, or in relation to, the debts comprising such book debt . . . and includes all security provided to Nedbank’. . . . (My emphasis.) The principal debtor’s name (Help Seat It Southern Africa (Pty) Ltd) appears on the schedule to the cession. The said schedule was annexed to the particulars of claim. [17] The case pleaded is that Nedbank ceded to the respondent its claim against Help Seat It Southern Africa (Pty) Ltd (the principal debtor) including any judgment in respect thereof and all security provided to Nedbank in respect thereof. The appellant bound herself to Nedbank Limited as surety and co-principal debtor, in consequence of which the respondent was entitled to claim the debt from the appellant. It has never been suggested that the judgment against the principal debtor related to something other than the banking facilities which the appellant applied for as director of the principal debtor. The wording of the suretyship deed expressly covers a judgment against the principal debtor. I agree with counsel for the respondent that it would be artificial to hold that the suretyship covers the book debt, but not a judgment obtained in respect of the book debt. It follows that the argument that the claim was not properly pleaded must also fail. [18] Accordingly the appeal is dismissed with costs. ______________________ KK MTHIYANE JUDGE OF APPEAL CONCUR: LEWIS JA PONNAN JA HURT AJA KGOMO 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: 22 November 2007 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. KH ELEY v LYNN & MAIN INC [2007] SCA 142 (RSA). [1] Today the Supreme Court of Appeal dismissed an appeal by Ms Karen Harriet Eley (formerly Memmel) against an order of the Johannesburg High Court. Ms Eley had signed a deed of suretyship on 9 September 1994, binding herself as surety and co-principal debtor for the repayment by a company of which she was a director, Help Seat It Southern Africa (Pty) Ltd, of the sums of money lent and advanced by Nedcor Bank to the company. The bank obtained judgment against the company on 21 May 2001. [2] When Ms Eley was sued by Lynn & Main Inc, to which Nedcor Bank had ceded its claim against the principal debtor amounting to R157 685,55 plus interest and costs on 14 September 2005, she pleaded that the claim against her had become prescribed, in that she had not been served with the summons within three years after judgment was obtained against the principal debtor, Help Seat It Southern Africa (Pty) Ltd. [3] This defence was however rejected by the SCA which held that the principal debt is kept alive by a judgment, and that the surety’s accessory obligation by common law continues to exist, because the obligation of the surety and that of the principal debtor relate to the same debt. [4] The SCA also rejected an alternative defence raised by Ms Eley that there had not been a proper cession of the debt. It was clear from the deed of cession, held the SCA, that the judgment debt against the principal debtor was included.

3467

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 1147/2019 In the matter between: CITY POWER (SOC) LIMITED APPELLANT and THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE RESPONDENT Neutral citation: City Power (SOC) Limited v CSARS (1147/2019) [2020] ZASCA 150 (20 November 2020) Bench: PONNAN, SALDULKER and MAKGOKA JJA and MATOJANE and SUTHERLAND AJJA Heard: 6 November 2020 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 10:00 am on 20 November 2020. Summary: Income Tax Act 58 of 1962 – appellant not a municipality or local sphere of government – appellant’s accruals and receipts not exempt from normal tax under s 10(1)(a) and (b). __________________________________________________________________ ORDER __________________________________________________________________ On appeal from: Tax Court of South Africa, Gauteng (Victor J): judgment reported sub nom ABC Limited v Commissioner for the South African Revenue Service [2019] ZATC 11. The appeal is dismissed with costs, including those of two counsel. __________________________________________________________________ JUDGMENT __________________________________________________________________ Ponnan JA (Saldulker and Makgoka JJA and Matojane and Sutherland AJJA concurring) [1] The issue for determination in this appeal, against a judgment of the Tax Court (Victor J, sitting in Gauteng), is whether the appellant’s accruals and receipts are exempt from normal tax under s 10(1)(a) and (b) of the Income Tax Act 58 of 1962 (ITA). [2] The appellant, City Power (SOC) Limited (City Power), is a state-owned company, registered as such in terms of the Companies Act 71 of 2008.1 On 2 June 1 A ‘state-owned company’ is defined in s 1 of the Companies Act 71 of 2008 as: ‘[a]n enterprise that is registered in terms of this Act as a company, and either— 2014 the respondent, the Commissioner for the South African Revenue Service (SARS), issued income tax assessments in respect of the 2010-2012 years of assessment and disallowed doubtful debt allowances claimed by City Power. [3] City Power had contended that, because it is a municipal entity2 and performs the functions that would otherwise have been performed by the City of Johannesburg (the City), it qualified for an exemption under: (a) section 10(1)(a) of the ITA, with effect from 1 January 2011; and (b) section 10(1)(b), prior to that date. It accordingly objected to the assessment and, upon the objection being disallowed, appealed to the Tax Court. By agreement between the parties, this issue was determined in limine, and separately from the merits, by the Tax Court. (a) is listed as a public entity in Schedule 2 or 3 of the Public Finance Management Act, 1999 (Act 1 of 1999); or (b) is owned by a municipality, as contemplated in the Local Government: Municipal Systems Act, 2000 (Act 32 of 2000), and is otherwise similar to an enterprise referred to in paragraph (a)…’ 2 The definitions section of the Local Government: Municipal Systems Act 32 of 2000 (the Systems Act) provides that a ‘municipal entity’ is: (a) a private company referred to in s 86B(1)(a); (b) a service utility; or (c) a multi-jurisdictional service utility…’ A ‘municipal service’ is in turn defined to mean ‘a service that a municipality in terms of its powers and functions provides or may provide to or for the benefit of the local community irrespective of whether— (a) such a service is provided, or to be provided, by the municipality through an internal mechanism contemplated in section 76 or by engaging an external mechanism contemplated in section 76; and (b) fees, charges or tariffs are levied in respect of such a service or not…’ Finally, in terms of s 76: ‘A municipality may provide a municipal service in its area or a part of its area through— (a) an internal mechanism, which may be— (i) a department or other administrative unit within its administration; (ii) any business unit devised by the municipality, provided it operates within the municipality's administration and under the control of the council in accordance with operational and performance criteria determined by the council; or (iii) any other component of its administration; or (b) an external mechanism by entering into a service delivery agreement with— (i) a municipal entity; (ii) another municipality; (iii) an organ of state…’ [4] Section 5 of the ITA provides that income tax (normal tax) shall be payable in respect of the taxable income received by or accrued to or in favour of any person during the year of assessment or any company during every financial year of such company.3 Section 10 of the ITA is an exemption provision. It provides that certain specified receipts and accruals are exempt from normal tax. The list is a closed one, with the result that, unless specifically mentioned in s 10, the receipts and accruals are taxable in terms of s 5 of the ITA. [5] Prior to 7 February 2007, ss 10(1)(a) and (b) of the ITA provided as follows: ‘There shall be exempt from normal tax: (a) the receipts and accruals of the Government, any provincial administration or of any other state; (b) the receipts and accruals of local authorities…’ Those provisions were amended by the Revenue Laws Amendment Act 20 of 2006. The words ‘of any other state’ in subsection (a) were deleted and the expression ‘local authorities’ in subsection (b) was replaced by the word ‘municipalities’. The subsections accordingly came to read: ‘(a) the receipts and accruals of the Government or any provincial administration; (b) the receipts and accruals of municipalities.’ [6] Following the amendment, the s 10(1)(b) exemption came to apply to ‘the receipts and accruals of municipalities’. The reasons for the amendment appear in an Explanatory Memorandum on the Revenue Laws Amendment Bill, 2006,4 issued by National Treasury. In this Memorandum, Treasury explains that ‘the Income Tax 3 See s 5(1)(c) and (d) of the Income Tax Act 58 of 1962 (ITA). 4 National Treasury Explanatory Memorandum on the Revenue Laws Amendment Bill, 2006 WP2 – 06. Act contains various forms of exemption for different spheres of Government. National and provincial governments are fully exempt under s 10(1)(a)’.5 It added: ‘Certain institutions, boards and bodies subject to the Public Finance Management Act, 1999 (Act 1 of 1999) (PFMA) are exempt from income tax under s 10(1)(cA), along with their wholly owned subsidiaries. Municipalities receive exemption as a “local authority” under s 10(1)(b), but municipal entities that are subject to the Municipal Finance Management Act, 2000 (Act 32 of 2000) (MFMA) are fully taxable.’ [7] The reason advanced for the change was that: ‘[t]he Income Tax system fails to provide a coherent regime for Government entities’. According to Treasury: ‘The various references to local councils, boards and committees are outdated. The definition of local authority will accordingly be scrapped in line with the new system for local government as prescribed by the Local Government: Municipal Structures Act, 1998 (Act 117 of 1998). Henceforth, only “municipalities” (Categories A, B and C) will be exempt as opposed to “local authorities”. Collateral changes in this regard have already been made in the Value-Added Tax Act along with corresponding changes to the Transfer Duty Act.’6 [8] Section 10(1) of the ITA was amended once again, on 2 November 2010, by the Taxation Laws Amendment Act 7 of 2010. Subsection (1)(b) was deleted, while subsection (1)(a) was substituted by the following: ‘There shall be exempt from normal tax— (a) the receipts and accruals of the government of the Republic in the national, provincial or local sphere…’ Thus, after 1 January 2011, City Power had to qualify as ‘the government of the Republic in the ... local sphere’ for it to be exempt from normal tax. 5 Ibid at 40. 6 Ibid. [9] In terms of s 40(1) of the Constitution of the Republic of South Africa, 1996 (the Constitution), the Government of the Republic of South Africa is constituted as national, provincial and local spheres of government, which are distinctive, interdependent and interrelated.7 Chapter 7 of the Constitution provides, among other things, for the establishment of municipalities for the whole of the territory of the Republic. In terms of s 155(6) of the Constitution, each provincial government must establish municipalities in its province in a manner consistent with the legislation enacted in terms of s 155(2) and (3).8 Municipalities established throughout the territory of the Republic constitute the local sphere of government.9 The local sphere of government is structured as ‘(a) self-standing municipalities, (b) municipalities that form part of a comprehensive coordinating structure, and (c) municipalities that perform coordinating functions.’10 [10] As the Explanatory Memorandum to the Tax Law Amendment Bill, 201011 makes plain, ‘[t]he proposed amendment seeks to update the wording of the Income Tax Act in line with the current concept of the three spheres of government in the Constitution’.12 [11] ‘Municipality’ is defined in s 1 of the ITA as meaning: 7 Democratic Alliance and Another v Masondo NO and Another 2003 (2) SA 413 (CC) para 7. 8 Section 155(6) of the Constitution. Section 1 of the Local Government: Municipal Demarcation Act 27 of 1998 defines a municipality as ‘a municipality mentioned in s 155(6) of the Constitution and includes a municipality which existed when this Act took effect…’ 9 Section 151(1) of the Constitution. 10 Ex Parte Chairperson of the Constitutional Assembly: In re Certification of the Amended Text of the Constitution of the Republic of South Africa, 1996 1997 (2) SA 97 (CC) para 77. 11 National Treasury Explanatory Memorandum on the Taxation Laws Amendment Bill, 2010 WP – 10. 12 Ibid at 104. ‘[a] municipality which is within a category listed in s 155(1) of the Constitution13 … and which is an organ of state within the local sphere of government exercising legislative and executive authority within an area determined in terms of the Local Government: Municipal Demarcation Act, 1998 (Act 27 of 1998).14 City Power plainly did not qualify as a municipality as defined. That ought to be the end of the enquiry insofar as the s 10(1)(b) exemption is concerned. However, it was contended that the exemption found application because, in discharging the constitutional functions that the City was obliged to perform, City Power acted qua City. Accordingly, so the argument went, its receipts and accruals fell to be treated on the same footing as those of a municipality. What this contention boils down to is that City Power must, for all intents and purposes, be deemed to be a municipality, with the result that the s 10(1)(b) exemption applies. Although by no means persuaded, I shall assume in City Power’s favour that it is permissible to approach the enquiry in this fashion. For, it seems to me that even on this footing City Power fails to bring itself within the exemption. [12] In this regard, Income Tax Case No 32715 is instructive. The Court had to there consider whether an individual who was employed by a Board that was established by and on behalf of Government is a ‘government employee’ for the purposes of qualifying for an exemption. It reasoned: 13 Section 155(1) of the Constitution provides: ‘There are the following categories of municipality: (a) Category A: A municipality that has exclusive municipal executive and legislative authority in its area. (b) Category B: A municipality that shares municipal executive and legislative authority in its area with a category C municipality within whose area it falls. (c) Category C: A municipality that has municipal executive and legislative authority in an area that includes more than one municipality.’ 14 The definition of ‘municipality’ was inserted by Act 20 of 2006 and accords with s 2(a) of the Local Government: Municipal Systems Act 32 of 2000. 15 Income Tax Case No 327 (1935) 8 SATC 254 (U) at 256-8. ‘Now, the letter of the Governor of the Colony does not appear to bear out the appellant's contention that he is a Government servant. The letter states that the Board is a body established by Statute; that its purpose is to foster the demand for the products of the Colony in the markets of the world; and that the Board has appointed appellant to act as Commissioner for the Union of South Africa. When we have regard to the terms of the Ordinance it appears to us that this is a body similar to bodies which have been created in recent times for the purpose of furthering the trade of a country in other countries. But the terms of the Ordinance do not indicate that the body in question is under the direct control of a Government department. It is free to act at its discretion, and the only question which raises any difficulty is regarding the levy and destination of the money. Its moneys are derived from the levy of a special export duty. That duty when recovered is paid direct to the Board monthly by the Principal Collector of Customs, and no part is credited to the general revenue of the Colony. That is a departure from the recognised and accepted way of dealing with Government revenue. The Board has a very general discretion, and what seems to be of great importance is the language which is used in the Ordinance with regard to the appointment of officers. … In terms of the subsection the Board appoints, employs, etc, its own officers, and it decides the administration of its own affairs. Now, those words “its own” indicate in both cases that this is something entirely separate from the Government or any other authority in the Colony. In other words, although created by Statute like a great many non-government bodies are, and although it derives its funds under the subsection mentioned from the Collector of Customs by means of the levy mentioned, it is quite independent. It appoints its own employees and remunerates and controls its own officers. Now, the fact that it controls its own officers indicates that the officers are not subject to the ordinary control which is exercised over government officers of the Public or Civil Service in the ordinary sense of the term. It is an entirely independent control. It is true, as argued by the appellant, that if the Government is dissatisfied with the work of the Board, or in an extreme case, with the work of an individual officer, it may withhold the funds of the Board, and thus virtually terminate its existence, but those same powers would appear to belong to any body to which government funds are contributed, whether hospital or charitable institutions, or even private institutions. A government is under no obligation to continue to provide funds to an object whose proceedings it does not approve of. That, however, is not the test whether an individual is in the employment of the Government. Here the appellant is appointed, employed, remunerated and controlled by the Board itself, and the Board is a totally independent body.’ [13] Those factors are present here. The City simply enjoys the ordinary powers of a shareholder over City Power. City Power has an independent Board of Directors (the Board), which is autonomous, exercises its powers independently and is enjoined to act in the interests of City Power. Its powers, as appear in City Power’s memorandum of incorporation, are wide and substantial; and are, crucially, in the nature of those ordinarily associated with private companies. The Board has the power, inter alia, to: purchase or acquire shares, debentures and every other kind or description of movables and immovables; apply for, purchase or by any other means acquire, transfer, protect, prolong or renew patents, patent rights, licences, trade-marks, concessions or any other rights and to deal with and alienate them; borrow money in accordance with policies and within the ambit of the authorisation of the Board of Directors; secure the payment of moneys borrowed in any manner, including the mortgaging and pledging of property and without detracting from the generality thereof, in particular by the issue of any kind of debenture stock, with or without security; lend money to any person or company; invest money in accordance with the investment policies approved by the directors; and to open and operate banking accounts. [14] City Power may also form and have an interest in any company or companies, amalgamate with other companies and take part in the management, supervision and control of the business or operations of any similar company or business. It may also enter into partnerships. In terms of the Service Delivery Agreement concluded between City Power and the City on 1 September 2006, the services to be provided by the former are electricity distribution services, which constitutes its core business. It may however undertake any business other than its core business, albeit with the City’s consent, which consent shall not be unreasonably withheld. [15] Moreover, Parts 5 and 6 of Chapter 8A of the Local Government: Municipal Systems Act 32 of 2000 (the Systems Act) contain a range of measures that are designed to ensure the independence of the Board. Section 93A(b) provides that the parent municipality of a municipal entity ‘must allow the board of directors and chief executive officer of the municipal entity to fulfil their responsibilities’. Section 93E regulates the appointment of Directors of the Board and provides that the board of directors of a municipal entity must have the requisite range of expertise to effectively manage and guide the activities of the municipal entity. At least a third of the directors must be non-executive directors. In addition, the Chairperson of the Board must also be a non-executive director.16 Once appointed, it is then the duty of the Board to inter alia ‘provide effective, transparent, accountable and coherent corporate governance and conduct effective oversight of the affairs of the municipal entity’.17 The Board must appoint a Chief Executive Officer (CEO) of the entity, who then reports to the Board.18 [16] The Local Government: Municipal Finance Management Act 56 of 2003 (MFMA) is also of relevance. Section 85(1) and (2) of the MFMA provides that: ‘(1) A municipal entity must open and maintain at least one bank account in the name of the entity. (2) All money received by a municipal entity must be paid into its bank account or accounts, and this must be done promptly and in accordance with any requirements that may be prescribed.’ 16 Section 93E(1)(a)-(c) of the Local Government: Municipal Systems Act 32 of 2000 (the Systems Act). 17 Section 93H(1)(a) of the Systems Act. 18 Section 93J of the Systems Act. The bank account must be administered by the accounting officer (the CEO), who is accountable to the Board for the entity’s bank accounts.19 As such, the fact that City Power might have agreed, through a service level agreement, to grant the City access to its accounts, does not change the fact that any decision over that bank account is exercised solely by the Accounting Officer and the Board. [17] City Power’s formation is explained in a letter to SARS dated 24 February 2014. It stated that the City housed municipal entities in separately registered companies from 2001 for various reasons, some of which include the attraction of quality top management to create efficiency in the City and its municipal entities, for business and commercial reasons and to create better ownership. The business was to be run along commercial lines, its object being to generate profit in the course of distributing electricity. There appears to be no restriction on City Power generating a profit. The effect of creating a private company for purposes of performing the functions of electricity distribution is that the receipts and accruals are those of the company, whereas in instances where the City itself directly distributes electricity (ie after purchasing in bulk from Eskom for downstream on- selling to consumers within its geographical jurisdiction), the receipts and accruals in relation to the supply of electricity would fall into the general funds of the municipality. [18] It is not in dispute that the income from the supply of electricity by City Power is the income of City Power, notwithstanding that the City may have access to such monies. Such income is reflected in City Power’s financial statement. The funds thus 19 Section 85(5) of the Systems Act. accrued to City Power.20 What it decides to do with such funds at a later stage does not change its character.21 [19] I turn to consider whether City Power falls within the concept of the ‘local sphere of government’. In Independent Electoral Commission v Langeberg Municipality,22 the Constitutional Court explained that a ‘sphere of government’ is a clearly defined concept and does not necessarily include an organ of state which performs a function that would ordinarily have been performed by the government. It held: ‘In this broad sense, the Commission does perform a governmental function. More specifically, it implements national legislation concerning the conduct of elections. … That does not mean, however, that the Commission falls within the national sphere of government as contemplated by chapter 3 of the Constitution.’23 [20] In that matter, the Constitutional Court concluded: ‘The Commission has tried to make some point of the fact that the conduct of the election falls within the national legislative authority of Parliament, contending that this is a factor which points to the Commission being part of the national sphere of government. This is an oversimplification. … The Commission is clearly a State structure. The fact that a State structure has to perform its functions in accordance with national legislation does not mean that it falls within the national sphere of government.’24 [21] In a similar vein, in Minister of Home Affairs and Another v Public Protector, this court held that the Office of the Public Protector is ‘not a department of state or 20 Commissioner for Inland Revenue v Cactus Investments (Pty) Ltd 60 SATC 141 at 152. 21 Commissioner for Inland Revenue v Witwatersrand Association of Racing Clubs 1960 (3) SA 291 (A) at 180. 22 Independent Electoral Commission v Langeberg Municipality [ZACC 23] 2001 (3) SA 925 (CC) (Langeberg Municipality) paras 22, 27 and 29-31. 23 Ibid para 24. (Footnotes omitted.) 24 Ibid para 30. administration and neither can it be said to be part of the national, provincial or local spheres of government’.25 With reference to s 239 of the Constitution,26 Plasket AJA stated: ‘It is therefore not an organ of state as contemplated by subsection (a) of the definition. It is, however, an institution that exercises both constitutional powers and public powers in terms of legislation. It is, consequently, an organ of state as contemplated by subsection (b) of the definition.’27 [22] These considerations apply equally to City Power. It is not part of the local sphere of government and is thus not located within such sphere. The mere fact that it performs constitutional functions, which would ordinarily have been performed by the City, does not mean that it is part of or located within the local sphere of government. [23] The appellant relies on Grinpal28 and Joseph29 and contends that in those judgments, the Constitutional Court ‘characterised City Power through its functions’. The appellant’s reliance on these judgments is, however, misplaced. Those judgments merely reiterated a trite principle, namely that City Power performs 25 Minister of Home Affairs and Another v Public Protector [2018] ZASCA 15; 2018 (3) SA 380 (SCA) para 34. (Footnotes omitted.) 26 Section 239 of the Constitution defines ‘organ of state’ to mean: ‘(a) any department of state or administration in the national, provincial or local sphere of government; or (b) any other functionary or institution— (i) exercising a power or performing a function 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, but does not include a court or a judicial officer.’ 27 Minister of Home Affairs (above fn 25) para 34. 28 City Power (Pty) Ltd v Grinpal Energy Management Services (Pty) Ltd and Others [2015] ZACC 8; 2015 (6) BCLR 660 (CC). 29 Joseph and Others v City of Johannesburg and Others [2009] ZACC 30; 2010 (4) SA 55 (CC). a public function.30 That much is not in dispute. Grinpal and Joseph do not state that simply because City Power performs a public function it falls within the local sphere of government. Nor does Allpay.31 [24] The ratio in Grinpal appears at para 23, whereafter the court stated that, ‘[h]aving found that City Power is a municipal entity governed by [the Systems Act] and that Grinpal is an organ of state, the next question is whether s 197 of the [Labour Relations Act 66 of 1995] is applicable to both entities’.32 It then proceeded to find that s 197 applies to City Power.33 That, however, is a far cry from finding that City Power is located within the local sphere of government. Significantly, the Constitutional Court observed that City Power performs public functions ‘akin to those of a municipality’.34 [25] The same can be said of Joseph and Allpay 2. In Joseph the Constitutional Court was concerned with the question of whether City Power was performing a public or a private function when providing electricity to the residents of Ennerdale Mansions. It found that it was performing a public function and that public-law duties, such as the duty of procedural fairness, thus applied to City Power.35 Similarly, in Allpay 2 the Constitutional Court was dealing with the question whether Cash Paymaster was performing a public function and was thus bound by the Constitution. Importantly, it held that ‘[i]n our constitutional structure, [the entity] 30 This principle had already been confirmed by the Constitutional Court in AAA Investments (Pty) Ltd v Micro Finance Regulatory Council and Another [2006] ZACC 9; 2007 (1) SA 343 (CC) at paras 40-43 (Yacoob J) and 119 (O’Regan J). 31 Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South African Social Security Agency and Others (No 2) [2014] ZACC 12; 2014 (4) SA 179 (CC) (Allpay 2). 32 Grinpal (above fn 28) para 24. 33 Ibid para 34. 34 Ibid para 23. 35 Joseph (above fn 29) para 46. … does not have to be part of government or the government itself to be bound by the Constitution as a whole’.36 [26] There is accordingly no merit in the suggestion that City Power falls within the local sphere of government. As the receipts and accruals of City Power are not those of ‘the government of the Republic’ in any of the spheres (ie the national, provincial or local spheres), and were at no stage the ‘receipts and accruals of municipalities’, the s 10(1)(a) and 10(1)(b) exemptions do not apply in respect of the income in issue. [27] It follows that the appeal must fail. In the result: The appeal is dismissed with costs, including those of two counsel. _________________ V M Ponnan Judge of Appeal 36 Allpay 2 (above fn 31) para 53, referring to the dictum of Yacoob J in AAA Investments (above fn 30) para 41. APPEARANCES For Appellant: P J J Marais SC (with him P A Swanepoel SC) Instructed by: Edward Nathan Sonnenbergs Inc, Johannesburg McIntyre van der Post, Bloemfontein For Respondent: A Subel SC (with him L Kutumela) Instructed by: The State Attorney, Pretoria The State Attorney, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED City Power (SOC) Limited v The Commissioner for the South African Revenue Service (Case no 1147/2019) [2020] ZASCA 150 From: The Registrar, Supreme Court of Appeal Date: 20 November 2020 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 Today the Supreme Court of Appeal (SCA) handed down judgment in an appeal against a decision of the Tax Court of South Africa, Gauteng (Victor J), concerning exemptions under the Income Tax Act 58 of 1962. The appeal was dismissed with costs. The appellant, City Power Soc Limited (City Power), is a state-owned company that is wholly owned by the City of Johannesburg (the City). In 2014 it was issued with income tax assessments in respect of the 2010-2012 years of assessment by the respondent, the Commissioner for the South African Revenue Service (the Commissioner). City Power took the view that, as a municipal entity, performing functions that would otherwise have been performed by the City of Johannesburg, its receipts and accruals stood to be exempted from normal tax under the Income Tax Act. It accordingly objected to the assessment and, upon the objection being disallowed, appealed to the Tax Court. This appeal was dismissed. In a further appeal to the SCA, the issue for determination was thus whether City Power’s receipts and accruals are exempt from normal tax under the Income Tax Act. The SCA held that City Power did not qualify as a ‘municipality’ as defined in the Income Tax Act. Nevertheless, City Power argued that by discharging constitutional functions which the City was obliged to perform, its receipts and accruals fell to be treated on the same footing as those of a municipality. The SCA rejected this line of reasoning on the basis that City Power was a private company, to be run along commercial lines, with the object of generating profit through the distribution of electricity. The receipts and accruals were thus those of City Power. The SCA further held that City Power does not fall within ‘local sphere of government’. The fact that City Power performed a public function did not mean that it fell within the local sphere of government. The receipts and accruals of City Power were thus not those of ‘the government of the Republic’ in any of the spheres (ie the national, provincial or local spheres), nor at any stage the ‘receipts and accruals of municipalities’. The SCA accordingly held that the exemptions do not apply. In the result, the appeal was dismissed with costs, including the costs of two counsel. ________________________________________

4093

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 301/2022 In the matter between: SILVERBACK TECHNOLOGIES CC FIRST APPELLANT OMNICO (PTY) LTD SECOND APPELLANT CYTEK CYCLE DISTRIBUTORS CC THIRD APPELLANT and COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE RESPONDENT Neutral citation: Silverback Technologies CC & Others v Commissioner, South African Revenue Service (301/2022) [2023] ZASCA 128 (09 October 2023) Coram: PETSE AP and MABINDLA-BOQWANA and WEINER JJA and MALI and MASIPA AJJA Heard: 03 May 2023 Delivered: 09 October 2023 Summary: Revenue – customs duty – importation of bicycle parts for use in assembling bicycles – classification of such parts as constituting the essential character of a bicycle under tariff heading 8712.00.10 confirmed on further appeal. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Mokoena AJ sitting as court of first instance): The appeal is dismissed with costs, including the costs of two counsel. JUDGMENT ___________________________________________________________________ Petse AP and Mali AJA (Mabindla-Boqwana and Weiner JJA and Masipa AJA concurring): Introduction [1] The present litigation involves a trilogy of cases that were heard together in the Gauteng Division of the High Court, Pretoria (the high court). They essentially raise the same question of law and fact that can conveniently be dealt with in a composite judgment. They primarily concern the classification, for purposes of customs duty, of certain bicycle parts imported into the country for use in assembling bicycles in order to determine the appellants' liability for import duties, if any. [2] Section 47(1)1 of the Customs and Excise Act2 (the Act) provides, amongst other things, that customs duty is payable on certain goods imported into the country in accordance with the provisions of Part I of Schedule I (the Schedule) to the Act. The appeal raises the question whether the goods in question, ie. bicycle parts, as presented upon importation bear the essential character of a bicycle or are merely parts or accessories of a bicycle. The significance of this distinction lies in the fact that bicycle parts that bear the essential character of a bicycle are liable, under tariff heading 8712.00 of Part I of Schedule I to the Act, for import duties of 15 per cent of 1 Section 47(1) reads: 'Subject to the provisions of this Act, duty shall be paid for the benefit of the National Revenue Fund on all imported goods, all excisable goods, all surcharge goods, all environmental levy goods, all fuel levy goods and all Road Accident Fund levy goods in accordance with the provisions of Schedule No. 1 at the time of entry for home consumption of such goods.' 2 Customs and Excise Act 91 of 1964. their value. By contrast, parts and accessories that lack the essential character of a bicycle are exempt from customs duty. The parties [3] The first appellant, Silverback Technologies CC (Silverback) is a close corporation registered in terms of the Close Corporations Act.3 It conducts business as an importer into and distributor of bicycle parts and accessories in the Republic of South Africa (RSA). The second appellant, Omnico (Pty) Ltd (Omnico), is an incorporated entity in terms of the company laws of the RSA. It, too, conducts business as an importer of bicycle parts for local distribution. Similarly, the third appellant, Cytek Cycle Distributors CC (Cytek Cycle) is a close corporation, which, as part of its name suggests, conducts business as an importer of bicycles and their parts for local distribution. For convenience, these parties will collectively be referred to as the appellants. But when it is convenient to refer to any one of them individually we shall do so by their respective names. [4] The Commissioner for the South African Revenue Service (SARS) features as a respondent in each of the three cases. For convenience, we shall refer to the respondent as either the Commissioner or SARS, depending on the context. Litigation history [5] At different times during 2016 and 2017 the appellants independently instituted legal proceedings in the high court against the Commissioner. For its part, Silverback sought orders against SARS, inter alia, in the following terms: '1. That the Respondent's tariff determinations (annexed to the Founding Affidavit as annexures "SV3", "SV4" and "SV6" determining the products under issue under tariff heading 8712.00.10, be set aside and replaced with a tariff determination under tariff heading 8714.19. 2. Alternatively to the above, that the tariff determination be set aside and replaced with a determination that the products are classified under TH8714.99 or further alternatively per corresponding part under TH8714.9.' [6] In view of the fact that the principal issue for determination in all three cases 3 Close Corporations Act 69 of 1984. overlapped, they were heard together in the high court pursuant to a directive issued by the Acting Deputy Judge President. [7] We pause here to mention that the proceedings in the high court were in truth appeals in terms of s 47(9)(e)4 of the Act against tariff determinations issued by the Commissioner pursuant to s 47(9)(a)5 of the Act against each one of the appellants. Also in contention in these proceedings were certain guidelines to which the Commissioner had regard in making his determinations. [8] The issue to be determined by the high court was formulated by the parties as follows: whether the products, as presented on importation, are bicycles as such or parts and accessories of bicycles. Thus, in essence, the outcome of the litigation was to a large degree dependant on the proper interpretation of the General Interpretation Rule (GIR) 2(a) read with the relevant tariff heading and relative interpretation notes. The high court was therefore called upon to determine what constitutes the essential character of a bicycle in the light of the bicycle parts imported by the appellants, having regard to the most appropriate tariff heading. In this regard, it bears mentioning that according to GIR 2(a),6 an incomplete or unfinished article, including an article that is unassembled or disassembled, shall, for purposes of determining liability for import duties, be classified as a complete article. However, this is subject to the rider that such an article, in its condition as presented on importation, bears the essential character of the finished or complete article. 4 Section 47(9)(e) of the Act reads: 'An appeal against any such determination shall lie to the division of the High Court of South Africa having jurisdiction to hear appeals in the area wherein the determination was made, or the goods in question were entered for home consumption.' 5 Section 47(9)(a) of the Act reads: 'The Commissioner may in writing determine– (aa) the tariff headings, tariff sub-headings 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'. 6 General Interpretation Rule 2(a) reads: 'Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this Rule), presented unassembled or disassembled.' [9] At the outset, it bears mentioning that before the high court, the appellants expressly disavowed any reliance on the expert evidence7 presented by them.8 They also brought applications (in all three cases) in which they sought that certain expert evidence presented by or on behalf of the respondent be struck out.9 We shall revert to the applications to strike out later. [10] The main and interlocutory applications all served before Mokoena AJ. The learned Judge dismissed all of these applications in a composite judgment delivered in January 2022.10 The present appeal is against the dismissal of the appeals and is before us with the leave of the high court. [11] As to the expert evidence presented by SARS, the learned Judge held that it was relevant and admissible on account of the fact that the court itself lacked the requisite skill to determine, without the aid of experts, how 'a bicycle is made up and functions and, the nature and characteristics of its components.' The learned Judge then proceeded to point out that Mr Du Toit (SARS's expert) could differentiate 'between two types of bicycles and their respective purpose' and how 'the different components which are part of the bicycle' work. And that because Mr Du Toit's credentials as a bicycle expert were not in dispute there was no cogent reason why the court should not have regard to his expert evidence. With respect to the expert evidence of Mr Stickells, the high court held that it supported, in material respects, that of Mr Du Toit. And although the appellants had disavowed any reliance thereon, such evidence remained part of the papers. Thus, so the high court concluded, absent its withdrawal or expungement, the high court was not only not at liberty, but also duty bound to consider it. 7 This was the expert evidence contained in the affidavit of Mr Graeme Stickells filed in the cases of Omnico and Cytek Cycle on the grounds that it constituted opinion evidence and therefore inadmissible on account of it being irrelevant. 8 No expert evidence was presented on behalf of Silverback. 9 This was the expert evidence presented by Mr Du Toit on behalf of SARS on the grounds that it was irrelevant and therefore inadmissible. 10 As consequential relief, the high court ordered the appellants to pay excise duty on the imported goods as previously determined by the Commissioner. [12] Reverting to the merits of the case, the high court stated that they raised the question as to 'what the essential character or essence of a bicycle is.' It then adverted to SARS' answering affidavit in which the following assertion is made: 'The Respondent elaborated in its Answering Affidavit and said:- "The guideline incorporates the six main bicycle components identified above. The frame and fork are required to be present. This is so because they are the "core components" to which all other components are attached. Also, these two components are central in recognising the product as a bicycle, both in design and appearance. Regarding the other components, the Commissioner is of the view that the presence of any two of those components (together with the frame and fork) would be sufficient to capture the essence of a bicycle." ' (Emphasis added by the high court.) [13] After making reference to various guidelines,11 the high court concluded that the bicycle parts imported by each of the appellants bore the essential character of a bicycle. Thus, so the high court held, the appellants were liable to pay customs duty on the articles imported by them as determined by the Commissioner. It was therefore on that footing that the appeals were dismissed. Discussion [14] As will have become readily apparent from what has been said thus far, this appeal is about import duty. In particular, it concerns the question whether the bicycle parts imported into the country by the appellants, properly classified, rightly attracted import duties. To answer this question, it is necessary first to determine which one between two tariff headings, namely tariff heading 8712.0012 and 8714.913 is applicable. If the imported goods are classified under tariff heading 8712.00.10, import duty will be payable. By contrast, if tariff heading 8714.9 is applicable, the relevant goods will be free of duty on importation. In order to classify the goods, in this instance 11 The guidelines are referenced in para 27 below. 12 Tariff heading 8712.00 reads: 'Bicycles and other cycles (including delivery tri-cycles), not motorised.' Sub-heading 8712.00.10 reads: 'Bicycles.' 13 Tariff heading 8714.9 reads: 'Other.' Sub-heading 8714.91 reads: 'Frames and forks, and parts thereof.' bicycle parts, one must ask whether the parts, viewed collectively when assembled, have the essential character of a bicycle. [15] It bears mentioning at this juncture that the relevant explanatory note to Chapter 87 states as follows: 'An incomplete or unfinished vehicle is classified as the corresponding complete or finished vehicle provided it has the essential character of the latter.' Then GIR 2(a), in turn, provides three examples of an incomplete or unfinished vehicle. For present purposes it is sub-paragraph (C) that has a bearing on what is at issue in this appeal. It reads: '(C) A bicycle without saddle and tyres.' [16] Classification of goods for purposes of import duties as between different tariff headings is 'a three-stage process'. This is what Nicholas AJA said in International Business Machines SA (Pty) Ltd v Commissioner for Customs and Excise.14 The learned Judge of Appeal explained that the first stage involves interpretation, namely, 'the ascertainment of the meaning of the words used in the headings (and relative Section and Chapter Notes) which may be relevant to the classification of the goods concerned.' Secondly, it involves the 'consideration of the nature and characteristics of those goods', and, thirdly, 'the selection of the heading which is most appropriate to such goods.'15 [17] Insofar as the first stage of the process is concerned, we need only state that the principles to be applied and the proper approach to adopt in the interpretation of statutory instruments (and any written document for that matter) are well settled. Thus, no useful purpose would be served by rehashing the oft-quoted passage from the judgment of this Court in Natal Joint Municipal Pension Fund v Endumeni Municipality.16 Suffice it to state that in Endumeni this Court reiterated that the process 14 International Business Machines SA (Pty) Ltd v Commissioner for Customs and Excise [1985] ZASCA 87; [1985] 2 All SA 596; 1985 (4) SA 852 (A) (International Business Machines). 15 Ibid at 863 B-C. 16 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; [2012] 2 All SA 262 (SCA); 2012 (4) SA 593 (SCA) para 18 (Endumeni). of interpretation is a unitary and objective exercise that pays due regard not only to the text but also to the context and purpose of the document being interpreted.17 [18] The relevant interpretive principles were usefully summarised recently by the Constitutional Court in Minister of Police and Others v Fidelity Security Services (Pty) Limited18 thus: '(a) Words in a statute must be given their ordinary grammatical meaning unless to do so would result in an absurdity. (b) This general principle is subject to three interrelated riders: a statute must be interpreted purposively; the relevant provision must be properly contextualised; and the statute must be construed consistently with the Constitution, meaning in such a way as to preserve its constitutional validity. (c) Various propositions flow from this general principle and its riders. Among others, in the case of ambiguity, a meaning that frustrates the apparent purpose of the statute or leads to results which are not businesslike or sensible results should not be preferred where an interpretation which avoids these unfortunate consequences is reasonably possible. The qualification “reasonably possible” is a reminder that Judges must guard against the temptation to substitute what they regard as reasonable, sensible or businesslike for the words actually used. (d) If reasonably possible, a statute should be interpreted so as to avoid a lacuna (gap) in the legislative scheme.'19 Cautioning that the triad of the text, context and purpose should not be used in a mechanical fashion, this Court in Capitec Bank Holdings Limited and Another v Coral Lagoon Investments 194 (Pty) Ltd and Others20 said the following: 'It is the relationship between the words used, the concepts expressed by those words and the place of the contested provision within the scheme of the agreement (or instrument) as a whole that constitutes the enterprise by recourse to which a coherent and salient interpretation is determined.'21 17 See also: Cool Ideas 1186 CC v Hubbard and Another [2014] ZACC 16; 2014 (4) SA 474 (CC) para 28; Road Traffic Management Corporation v Waymark (Pty) Limited [2019] ZACC 12; 2019 (5) SA 29 (CC) paras 30-32. 18 Minister of Police and Others v Fidelity Security Services (Pty) Limited [2022] ZACC 16; 2022 (2) SACR 519 (CC). 19 Ibid para 34; see also Chisuse and Others v Director-General, Department of Home Affairs and Another [2020] ZACC 20; 2020 (6) SA 14 (CC) para 52. 20 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). 21 Ibid para 25. [19] It is against the foregoing backdrop that we now turn to deal with what is at the core of this appeal. As already mentioned above, the central issue is whether the learned Judge erred in upholding the determination made by the Commissioner, namely that the bicycle parts imported by the appellants had the essential character of a bicycle and, therefore, subject to payment of import duties. [20] It is apposite at this juncture to mention that in the high court the appeal of Silverback was by agreement between the parties selected as a test case. It was further agreed that the outcome of the Silverback appeal would also bind Omnico and Cytek Cycle. [21] It is common cause between the parties that on 31 July 2015 Silverback imported a consignment of bicycle parts comprising the following: Frame; fork; front derailleur; handlebar; complete brake set (ie. brake levers, cables, brake blocks and callipers); stem; grip; crank set (chainwheel and the two pedal arms); shifters; bottom bracket parts; saddle, seat posts; cables and or complete gear and brakes. [22] Taking our cue from what Nicholas AJA said in International Business Machines,22 we are enjoined to consider at this point the second stage in the classification process, namely the nature and characteristics of the goods imported by Silverback. On this score, we record that the parties are in agreement as to the meaning of a bicycle. [23] It is common cause that Silverback, Omnico and Cytek Cycle imported a wide variety of bicycle parts. And that none of these consignments contained bicycle wheels. Nevertheless, in terms of GIR 2(a), an incomplete or unfinished article, including an article that is unassembled, shall, for purposes of determining whether import duty is payable in respect of such article, be classified as a complete article if in its incomplete state as presented on importation, 'it bears the essential character' of a complete or finished article, such as a bicycle in this instance. We shall elaborate on 22 See footnote 14 above. this later. [24] In making his determination as to whether customs duty was payable in respect of the consignments of imported bicycle parts, the Commissioner had regard to two relevant tariff headings, namely tariff headings 8712.00.10 and 8714.9. The former essentially provides that 'bicycles and other cycles, including delivery tricycles, that are not motorised are subject to customs duty of 15%.' And the latter, in turn, provides that 'parts and accessories of vehicles under headings 87.11 to 87.13' are not subject to payment of customs duty. [25] The all-embracing contention advanced by the appellants, briefly stated, is that on a proper interpretation of the wording of tariff heading 8712.00 read with the relevant chapter, section and explanatory notes, wheels are the indispensable components that give a bicycle its essential character. Absent the wheels, so the argument went, the collection of parts under consideration in these proceedings are but parts and accessories of bicycles which, as a result, lack the essential character of a bicycle. According to the appellants the wheels, together with the other parts, are what give a bicycle its essential character. [26] For his part, the Commissioner contended that the nub of the issue is 'whether the collection of the imported parts represents the essential character of a bicycle'. In elaboration, the Commissioner submitted that in the context of the facts of this case the essential character of a bicycle ought to be determined with reference to all the components making up the consignments. Viewed in that light, counsel emphasised, the collection of the parts imported by the appellants were undoubtedly an embodiment of the essential character of a bicycle. [27] The Commissioner further bolstered his case by employing the guidelines of Her Majesty's Revenue and Customs (HMRC), the European Union and the United Kingdom. HMRC referred SARS to the Combined Nomenclature Explanatory Note (CNEN) issued by Europe. The CNEN is contained in Regulation 2015/C 076/01. The Official Journal of the European Union, insofar as it pertains to this appeal, reads: '8712.00 Bicycles and other cycles (including delivery tricycles), not motorised This heading includes incomplete bicycles that have essential characteristics of complete bicycles (general rule 2(a) for the interpretation of the Combined Nomenclature). An incomplete bicycle, whether or not assembled, is to be classified under heading 87 12 00 if it consists of the frame, the fork and at least two of the following components: – a set of wheels; – a crank-gear (see the explanatory note subheading 87 14 96 30); – a steering unit (including handlebar and handlebar stems); – a brake system.' The decision of the Harmonised System Committee made by the World Customs Organisation (WCO) is to the effect that the three configurations provided by SARS were classified in heading 87.12 by application of GIRs 1 and 2(a). Whilst the appellants complained about the approach adopted by the Commissioner in classifying the relevant goods, it is generally accepted practice that members of the WCO follow the same approach. However, it must be said that the guidelines are by their nature only of persuasive force and are not meant to substitute or override principles of interpretation. [28] It is necessary at this juncture to make reference to s 47(8)(a) of the Act. It reads, to the extent here relevant, as follows: 'The interpretation of– (i) any tariff heading or tariff subheading in Part 1 of Schedule No. 1; . . . (iii) the general rules for the interpretation of Schedule No. 1; and (iv) every section note and chapter note in Part 1 of Schedule No. 1, shall be subject to the International Convention on the Harmonized Commodity Description and Coding System done in Brussels on 14 June 1983 and to the Explanatory Notes to the Harmonised System issued by the Customs Co-operation Council, Brussels (now known as the World Customs Organisation) from time to time: Provided that where the application of any part of such Notes or any addendum thereto or any explanation thereof is optional the application of such part, addendum or explanation shall be in the discretion of the Commissioner.' The effect of this, we observe, is that in determining the fate of this appeal, we must have regard not only to the provisions of the Act and the relevant Schedule thereto but also to the tariff headings or tariff sub-headings and Explanatory Notes. [29] As to the invocation of the relevant heading, read with relative sections and chapter notes and section and chapter notes when classifying particular goods, Trollip JA cautioned in Secretary for Customs and Excise v Thomas Barlow & Sons Ltd23 that 'one must bear in mind that they are merely intended to explain or perhaps supplement those headings and notes and not to override or contradict them. They are manifestly not designed for the latter purpose, for they are not worded with the linguistic precision usually characteristic of statutory precepts; on the contrary they consist mainly of discursive comment and illustrations.' [30] What this Court said in Commissioner for the South African Revenue Service v Toneleria Nacional RSA (Pty) Ltd24 in relation to the 'Harmonised System' bears repeating. The Court said that '[...t]he Harmonised System is the product of international agreements between states, and like any international agreement it should as far as possible be interpreted uniformly by national courts.'25 [31] Counsel for the appellants sought to circumvent the unequivocal statement in Toneleria, quoted in the preceding paragraph, and contended that International Business Machines is still good law insofar as customs administration and international organisations are concerned and that the Harmonised System is not authoritative in a South African court until it is reflected in an explanatory note as the latter decision was not overruled by Toneleria. That may well be so, but this is an issue we need not venture into for present purposes. However, what is beyond question is that South Africa is a signatory to the 1983 Brussels Convention and is therefore bound by its terms. As the Harmonised System is a product of international agreements between states that seek to promote uniformity in international trade relative to customs duty, it is as well to remember that in interpreting the Act, sub-headings and explanatory notes, national courts are enjoined to prefer any reasonable interpretation of the legislation that is consistent with international law.26 23 Secretary for Customs and Excise v Thomas Barlow & Sons Ltd 1970 (2) SA 660 at 676C-D. 24 Commissioner for the South African Revenue Service v Toneleria Nacional RSA (Pty) Ltd [2021] ZASCA 65; [2021] 3 All SA 299 (SCA); 2021 (5) SA 68 (SCA) (Toneleria). 25 Ibid para 25. 26 See s 233 of the Constitution which reads: What is the essential character of a bicycle? [32] We now come to the contentions advanced on behalf of the appellants in relation to what is at the core of this appeal and the authorities relied upon in support of those contentions. By way of prelude, we pause to observe that the appellants submitted in their heads of argument that the essential character of a bicycle must be determined with reference to the meaning of the words employed in the tariff headings. And that such words must be given their ordinary meaning in the light of their context. In Autoware (Pty) Ltd v Secretary for Customs and Excise27 Colman J had occasion to consider, for purposes of customs duty, whether a certain type of vehicle was a panel van or an incomplete station wagon. The learned Judge found that the relative simplicity and low-cost modification was not a decisive criterion, because the enquiry does not turn on what the product was going to be or what it will be adapted to be. Rather, the court must consider what the product was at the time of importation. [33] Colman J continued to say that the issue– '. . .must be decided on the basis of the presence or absence, in the unmodified vehicle, of the essential features or components of a station wagon. . .What I mean by an essential feature of a station wagon is not a feature which is important, for one reason or another, or even one which is necessary for the proper functioning of a station wagon. I mean a feature which is essential in that it embodies the essence of a station wagon, and differentiate such a vehicle from others which are not station wagons.'28 [34] Further, what this Court said in Commissioner for the South African Revenue Service v L G Electronics SA (Pty) Ltd29 is instructive. Citing the statement by Colman J referenced in the preceding paragraph, this Court said: 'While it is clear that each determination must be according to the salient facts attaching to the goods in question (and, in particular, its objective characteristics), and while in one case an 'When interpreting any legislation, every court must prefer any reasonable interpretation of the legislation that is consistent with international law over any alternative interpretation that is inconsistent with international law.' 27 Autoware (Pty) Ltd v Secretary for Customs and Excise 1975 (4) SA 318 (W). 28 Ibid at 327G-328A. 29 Commissioner for the South African Revenue Service v L G Electronics [2010] ZASCA 79; 2012 (5) SA 439 (SCA). engine may properly be regarded as the essence of the goods, in another a frame or chassis may be sufficient to satisfy the test.'30 [35] We interpose here to observe that some of the well-known English Dictionaries define a bicycle as a 'vehicle consisting of two wheels held by a frame one behind the other, propelled by pedals and steered with handlebars attached to the front wheel.'31 [36] Placing much store on definitions such as the one mentioned in the preceding paragraph, counsel for the appellants argued that wheels, in combination with a collection of some other parts, is what constitutes the essential character of a bicycle. In elaboration, counsel stressed that the essential character of a bicycle would be lacking where one or both wheels were absent. For this submission, counsel heavily relied mainly on the decision of the Australian Administrative Appeal Tribunal in Toyworld Ltd and the Collector of Customers.32 In Toyworld the Appeals Tribunal endorsed the contention that if one or both wheels are lacking whatever else remains will not have the essential character of a bicycle. Counsel for the appellants buttressed his argument with reference to s 23333 of the Constitution that decrees that courts must prefer any reasonable interpretation of the legislation that is consistent with international law over any alternative interpretation that is inconsistent with international law. [37] There are at least three insurmountable difficulties in the appellants' path. In the first place it is as well to remember that in interpreting any legislation our courts are enjoined to do so consistently with the Constitution. In addition, the expression 'the essential character of a bicycle' under consideration in this case must be interpreted purposively34 and must also be properly contextualised.35 The wording of the most 30 Para 15. 31 See, for example, the Concise Oxford English Dictionary, Twelfth Edition by the Oxford University Press. 32 Toyworld Ltd and the Collector of Customers 1984 (7) ALD 67 (Toyworld). 33 See footnote 26 above. 34 Dengetenge Holdings (Pty) Ltd v Southern Sphere Mining And Development Company Ltd and Others [2013] ZACC 48; 2014 (3) BCLR 265 (CC); 2014 (5) SA 138 (CC) paras 84-86; Department of Land Affairs and Others v Goedgelegen Tropical Fruits (Pty) Ltd [2007] ZACC 12; 2007 (10) BCLR 1027 (CC); 2007 (6) SA 199 (CC) para 5. 35 North East Finance (Pty) Ltd v Standard Bank of South Africa Ltd [2013] ZASCA 76; 2013 (5) SA 1 (SCA); [2013] 3 All SA 291 (SCA) para 24; KPMG Chartered Accountants (SA) v Securefin Limited and appropriate heading, namely 8712.00 and the explanatory notes to Chapter 87, which must be read in conjunction with sub-heading 8712.00.10, are clear and unambiguous. GIR 2(a)(C), too, provides a clear example of an incomplete or unfinished vehicle (to be understood as a reference to a bicycle on the facts of this case). [38] Secondly, the appellants' reliance on s 233 of the Constitution is misplaced. Section 233 refers not to foreign law which is what Toyworld is all about. Rather, it explicitly refers to international law. There is a fundamental difference between international law on the one hand and foreign law on the other, a point that requires no elaboration. [39] In the third place, the appellants' reliance on the decision of the Australian Administrative Appeal Tribunal in Toyworld is unavailing. This is so because in Toyworld the Appeal Tribunal undoubtedly placed great reliance on the important role of wheels which give a bicycle its functionality. But this is not what tariff heading 8712.00 read with GIR 2(a) and the explanatory notes to Chapter 87, on their proper interpretation, require. [40] As already indicated, the relevant tariff heading – read in the context of GIR 2(a) (C) and explanatory notes in Chapter 87 – speaks not of a collection of parts constituting a bicycle. Rather, it speaks of parts that have 'the essential character' of a bicycle. Significantly, GIR 3(b)(viii) provides that the 'factor which determines essential character will vary as between different kinds of goods'. And by way of examples, it proceeds to, inter alia, state that this may be determined by the nature of the component, quantity or the role of the consistent material in relation to the use of the goods. Implicit in what GIR 3(b)(viii) says is that the nature and characteristics of the relevant goods must be determined. Thereafter, the most appropriate heading (and relative section and chapter notes) must be selected and applied. [41] To our mind the distinction between that which constitutes a bicycle as a finished article on the one hand and what bears the essential character of a bicycle on Another [2009] ZASCA 7; 2009 (4) SA 399 (SCA) ; [2009] 2 All SA 523 (SCA) para 39; Jaga v Dönges, NO And Another; Bhana v Dönges, NO And Another 1950 (4) SA 653 (A) at 664E-H. the other hand is self-evident. In relation to the former the collection of the parts is transformed into a bicycle when assembled to produce a finished or complete product. By contrast, a collection of parts which do not produce a complete or finished product when assembled, may nevertheless have the essential character of the finished product. Differently put, whilst bicycle wheels, in combination with other parts, collectively make up a bicycle as a finished or complete article, their absence does not have the consequence that the remaining parts will necessarily lack the essential character of a bicycle. Application to strike out [42] It remains to address two subsidiary issues advanced on behalf of the appellants. These relate to the expert evidence of both Mr Stickells and Mr Du Toit, the two expert witnesses called by the appellants and SARS respectively. With respect to the evidence of Mr Du Toit, it was submitted that the high court should never have relied on such evidence for two reasons. First, it was argued that Mr Du Toit was not an expert as he claimed. Secondly, it was submitted that what was presented as expert evidence was in truth opinion evidence which, by its very nature, was inadmissible. As to the first point the learned authors D T Zeffertt, A P Paizes and A St Q Skeen in The South African Law of Evidence36 say the following: 'It is the function of the judge [including a magistrate] to decide whether the witness has sufficient qualifications to be able to give assistance. The court must be satisfied that the witness possesses sufficient skill, training or experience to assist it. His [or her] qualifications have to be measured against the evidence he or she has to give in order to determine whether they are sufficient to enable him or her to give relevant evidence. It is not always necessary that the witness's skill or knowledge be acquired in the course of his or her profession – it depends on the topic. Lack of formal training may indicate inadequate theoretical training but, in the circumstances of a particular case, this may be offset by practical experience. Thus, in R v Silverlock [1894] 2 QB 766 it was said that a solicitor who had made a study of handwriting could give expert evidence on the subject even if he had not made any professional use of his accomplishments.' [43] In our view the appellants' argument falls to be rejected. There is nothing militating against the acceptance of Mr Du Toit's evidence as an expert witness. He 36 D T Zeffert and AP Paizes The South African Law of Evidence 3rd ed pages 337-338. asserted that he had acquired vast knowledge in bicycles through his extensive experience spanning some 30 years dealing with bicycles and their components. In the appellants' heads of argument, it was contended, that in his affidavit, Mr Du Toit did no more than merely express an opinion on matters that are in the exclusive domain of the court itself. This argument, too, must falter for the simple reason that, ultimately, at any rate it remains the task of the court to evaluate such evidence to determine whether and to what extent the opinion expressed is founded on logical reasoning.37 [44] Accordingly, taking a critical view of the tenor of Mr Du Toit's evidence, we can see no reason why reliance, albeit limited, cannot be placed on his views which are in no small measure aligned with those of Mr Stickells in certain material respects. With respect to the appellants' application to strike out Mr Du Toit's affidavit, it is well to remember that, as a general rule, a court will not grant an application for any matter to be struck out from any affidavit because such matter is irrelevant unless it is satisfied that the applicant will be prejudiced in his or her case if the alleged offending material is not struck out.38 In the context of the facts of this case it is difficult to conceive of any prejudice that the appellants will suffer if their application is declined. And none has, in any event, been identified and articulated by the appellants. [45] As to the evidence of Mr Stickells, it was argued that the high court erred in considering such evidence 'in circumstances where the appellants [had] indicated during argument that no reliance [was] placed on his evidence because [it] was inadmissible.' Moreover, it was emphasised that Silverback did not, for its part, rely on expert evidence at all. The point about the inadmissibility of Mr Stickells' expert evidence must fail for essentially the same reason already stated in relation to Mr Du Toit. The second contention that Silverback did not rely on expert evidence altogether cannot avail Silverback because all three appeals were, for convenience and by 37 Compare: Michael and Another v Linksfield Park Clinic (Pty) Ltd and Another [2001] ZASCA 12; 2001 (3) SA 1138 (A) para 36. There, the remarks were made in the context of a delictual claim; Sentrachem Ltd v Prinsloo 1977 (2) SA 1 (A) at 17A-D in which this Court held that the trial court was justified in regarding the respondent and his son as expert witnesses because of their sophisticated farming methods and scientific approach to farming. 38 See Uniform Rule 6(15). agreement, dealt with together on the basis that they involved the same question of law and based on facts as presented in the parties' affidavits. Conclusion [46] Therefore, for all the aforegoing reasons the appeal must fail. In the result the following order is made: The appeal is dismissed with costs, including the costs of two counsel. __________________ X M PETSE ACTING PRESIDENT SUPREME COURT OF APPEAL _________________________ N P MALI ACTING JUDGE SUPREME COURT OF APPEAL APPEARANCES: For the appellants: JP Vorster SC (with him HJ Snyman) Instructed by: Shepstone & Wylie Attorneys, Johannesburg Webbers Attorneys, Bloemfontein For the respondent: JA Meyer SC (with him L Harilal) 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: 09 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 Silverback Technologies CC & Others v Commissioner, South African Revenue Services [2023] ZASCA 128 Today, the Supreme Court of Appeal (SCA) dismissed an appeal from the Gauteng Division of the High Court, Pretoria. The appeal arose from three matters brought by the appellants, Silverback Technologies CC, Omnico (Pty) Ltd and Cytek Cycle Distributors (the appellants), pertaining to the same question of law which was addressed in a single judgment. The appeal revolved around the classification of imported bicycle parts destined for assembly and the related customs duty payable on such imports. Liability for customs duty attached to imported components if they bore the essential characteristics of a bicycle, which was the contention of the respondent, the Commissioner for the South African Revenue Service (SARS). The high court determined that SARS was correct in determining that the goods were liable for import duty and this Court was tasked with determining whether the high court was correct in confirming SARS' determination. In order to determine whether the imported goods attracted import duties, this Court considered which of the two relevant tariff headings, namely, 8712.00.10 or 8714.9 applied. If the former tariff heading applied, customs duty would be payable and not in the case of the latter. The state of the law in regard to classification of goods for purposes of import duty is well-established: the Court must have regard to the ascertainment of the meaning of the words used in the relevant tariff headings, as well as the nature and characteristics of the goods, and the Court must, in addition, consider the heading which is most appropriate to such goods. In light of these factors, this Court considered the high court’s determination that the imported goods were liable for payment of import duty. Section 47(8)(a) of the Customs and Excise Act 91 of 1964 (the Act) required the Court to also have regard to the accompanying explanatory notes and headings. To this end, the appellants contended that, upon a proper understanding of the tariff headings, the Act and the aforementioned criteria regarding the classification of goods, wheels were the definitive aspect of a bicycle, and because the imported components did not include wheels, they could not constitute an ‘essential characteristic’ of a bicycle. However, SARS submitted that, in context, the essential character of a bicycle ought rather to be determined with reference to all the components making up the consignments, not only certain components. To determine the question posed, this Court held that reliance on headings and explanatory notes when classifying goods must be understood as intended to provide explanations and guidance; they were not intended to override or contradict legislation. The Act held that any interpretation shall be subject to the International Convention on Harmonized Commodity Description and Coding Systems adopted in Brussels on 14 June 1983. This Court highlighted that the Harmonized System was the product of international agreements between states and should be interpreted uniformly by our courts. As such, courts are enjoined to interpret the Act and any tariff headings in a manner that is consistent with international law. It held that the expression ‘the essential character of a bicycle’ must be interpreted purposively and contextually. The wording of tariff heading 8712.00, as well as the interpretive notes, were clear and unambiguous with regards to an incomplete or unfinished vehicle, namely a bicycle. The tariff heading, as well as the explanatory notes did not refer to a collection of parts constituting a bicycle, but to parts that have the ‘essential character’ of a bicycle. Finally, in regard to the expert evidence presented by the parties, this Court, held that it was satisfied that SARS' expert witness possessed sufficient training and experience, and that there was therefore nothing militating against the acceptance of such evidence. In the result, the SCA dismissed the appeal. ~~~~ends~~~~

4072

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 413/2022 In the matter between: DE BEERS MARINE (PTY) LTD APPELLANT and HARRY DILLEY (PTY) LTD RESPONDENT Neutral citation: De Beers Marine (Pty) Ltd v Harry Dilley (Pty) Ltd (Case no 413/22) [2023] ZASCA 110 (19 July 2023) Coram: SCHIPPERS, GORVEN, HUGHES, MABINDLA- BOQWANA and WEINER JJA Heard: 16 May 2023 Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives via e-mail, publication on the Supreme Court of Appeal website and released to SAFLII. The date and time for hand-down are deemed to be 19 July 2023 at 11h00. Summary: Law of Salvage – International Convention on Salvage, 1989 – article 13(1) – recovery of autonomous underwater vehicle run aground on rocks – towage into harbour – recovery voluntary not under charter agreement – salvage operation – whether criteria for fixing salvage reward properly applied – reward disproportionate to services rendered in salvage operation – reward adjusted. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Western Cape Division of the High Court, Cape Town (Le Grange J, sitting as court of first instance): The appeal succeeds in part. The order of the high court is set aside and replaced with the following: ‘1. In terms of article 13(1) of the International Convention on Salvage, 1989, being the schedule to the Wreck and Salvage Act 94 of 1996, a salvage reward of R80 000 is fixed. 2. The said reward shall bear interest a tempore morae in terms of s 5(2)(f) of the Admiralty Jurisdiction Regulation Act 105 of 1983, from the date of the service of summons to date of payment. 3. The defendant shall pay the costs of the action, including the costs of two counsel.’ Each party shall bear its own costs of appeal. ________________________________________________________________ JUDGMENT ________________________________________________________________ Schippers JA (Gorven, Hughes, Mabindla-Boqwana and Weiner JJA concurring) [1] The appellant, De Beers Marine (Pty) Ltd (De Beers), is the owner of an autonomous underwater vehicle (AUV), a robotic submarine which it uses to map the seabed in its mining operations off the coast of Namibia. In September 2017 De Beers concluded an agreement with the respondent, Harry Dilley (Pty) Ltd (HD), for the charter of a work boat to assist De Beers in conducting sea trials in False Bay, Western Cape, to commission new equipment installed on the AUV (the sea trials). In what follows, I refer to that agreement as ‘the 2017 contract’. The work boat, MV Nkwaza (the Nkwaza), is owned and skippered by Mr Harry Dilley, the sole director of HD. [2] During the sea trials on 27 October 2017, the AUV suffered a communication breakdown and ended up washed ashore on the rocks near Simon’s Town. The AUV was re-floated and towed by the Nkwaza to Simon’s Town harbour. HD subsequently instituted action against De Beers in the Western Cape Division of the High Court, Cape Town (the high court), claiming R10 million as a salvage reward. That amount was later reduced to R7 647 231.54, alternatively R5 525 288.23. [3] The high court (La Grange J) held that HD was entitled to a salvage reward of R 5 525 288.23, assessed at 10% of the replacement cost of the AUV in 2017 – US $3.5 million or R55 252 882.20. The reward was said to have been determined with reference to article 13(1) of the International Convention on Salvage, 1989 (the Salvage Convention), which forms part of our law by virtue of s 2(1) of the Wreck and Salvage Act 94 of 1996. The high court granted De Beers leave to appeal to this Court. The factual background [4] The basic facts are uncontroversial and can be shortly stated. HD had assisted De Beers in carrying out sea trials to test equipment on its two AUVs in False Bay, for several years. On 15 October 2015 De Beers and HD concluded a written contract in terms of which HD agreed to charter its vessels, namely the MV Zest II and the Nkwaza, to De Beers to support the latter in carrying out research and development of its survey equipment (the 2015 charter agreement). That agreement came to an end on 31 August 2017. [5] The 2017 contract was concluded after HD provided De Beers with a quotation for the charter of the Nkwaza for the sea trials. The quotation was for an eight-hour day (R9 850 excluding VAT) and an hourly rate of R1 250 excluding VAT, for any additional time. It was common ground that the terms of the 2015 charter agreement were tacitly incorporated into the 2017 contract. Clause 9 of the 2015 charter agreement provided: ‘9. PERFORMANCE OF THE CHARTER AGREEMENT 9.1 The Charter shall be conducted in accordance with the Charter Agreement. Dilley shall be responsible for aspects of the operation of the Workboats subject to DBM’s [De Beers Marine’s] direction as to the nature of the support services to be provided by Workboats during the test work. 9.2 In the event that Dilley’s representatives deeming the conditions as being unsafe for the test work, he shall immediately notify DBM’s representative. This decision is final and not subject to negotiation. As soon as the test work is capable of being carried out, Dilley shall advise DBM of this fact and advise that length of time that the Workboats was not able to operate. For this period, the Workboat shall be regarded as being off hire and no hire shall be payable by DBM.’ [6] It was further common ground that the sea trials were carried out in accordance with De Beers’ standard Operational Procedures for AUV Sea Trials, dated 24 April 2009 (the Operational Procedures). These procedures include an ‘emergency AUV recovery procedure’ set out in clause 3.3.1, which provides: ‘Loss of Communication while on the Surface: In the event that communication is lost to the AUV, while the vehicle is on the surface, as a result of rough seas or equipment failure, a towing line is then attached on the AUV and the rubber duck will tow the AUV back to the harbour or the towing line passed on to the workboat.’ [7] On the morning of 27 October 2017, the AUV was launched for sea trials without any difficulty. At Mr Dilley’s instance, the area in which the trials were being conducted was moved north and east, because the wind was too close to the rocks at the Lower North Battery (where the AUV ran aground later). Mr Dilley was not willing to operate his vessel near the rocky area. A short test dive was conducted at that site and no problem was encountered. [8] The AUV then commenced a long dive of some three hours. Everything seemed to be in order until approximately 13h30 on 27 October 2017, when Mr Esterhuizen, a geo-technician employed by De Beers and its Contract Manager nominated in the 2015 charter agreement, was informed that the AUV had been washed ashore on the rocks at the Lower North Battery near Simon’s Town. Mr Esterhuizen contacted Mr Makholiso, De Beers’ representative on board the Nkwaza and reported the grounding and position of the AUV to him. [9] The Nkwaza returned to Simon’s Town harbour and Mr Dilley and Mr Makholiso drove to the North Battery site of the grounded AUV. It was not disputed that the AUV had to be recovered from that position as soon as possible to prevent any further damage. At the site Mr Dilley met with Mr Esterhuizen and two commercial divers, Mr Stephen Garthoff and his business partner, Mr Robin Day. In the ensuing discussion the divers offered to assist De Beers in re-floating the AUV. Mr Dilley suggested that Mr Garthoff and Mr Day should discuss a fee for their services, which they did. It was R10 000, which Mr Esterhuizen accepted after obtaining authority from De Beers. [10] There was no discussion about the use of the Nkwaza in the re-floating of the AUV. Mr Dilley testified that he thought that Mr Esterhuizen might have assumed that De Beers had a contract with HD and therefore that the Nkwaza would be used to tow the AUV to Simon’s Town harbour. Mr Esterhuizen in fact made that assumption. During the discussion Mr Dilley did not indicate that HD was no longer fulfilling its obligations under the 2017 contract, nor that the recovery of the AUV would be a salvage operation. It was agreed that the divers would collect their equipment and meet Mr Dilley at the harbour. [11] Mr Dilley returned to Simon’s Town harbour and met the divers. The Nkwaza left the harbour around 16h15 with the divers on board, and proceeded to a location some 150 metres off-shore where its echo sounder showed a depth of eight metres. At that location, just before Mr Garthoff left the Nkwaza to start his swim, Mr Dilley decided that he was embarking on a salvage operation. It was around 16h30 on 27 October 2017. He did not inform Mr Makholiso, who was on board the Nkwaza, of that decision. [12] Mr Garthoff left the Nkwaza and with a tow rope, swam to the AUV in a wetsuit, using dive-fins, a mask and a snorkel. After he commenced his swim, the Nkwaza took up a position 250 to 300 metres off-shore. When he reached the AUV, Mr Garthoff manoeuvred it in order to set it afloat. As he put it, ‘all it needed was just a tiny little push from me to spin it around and she was already floating’. He secured the rope from the Nkwaza to the front of the AUV. The AUV was re-floated at approximately 16h58. Mr Garthoff then attached himself to the AUV with a rigging-sling. He remained on the AUV as it was being towed by the Nkwaza into Simon’s Town harbour, as he thought it was the safest place to be through the surf, and he had some concern about sharks. The Nkwaza brought the AUV alongside in the harbour. The entire recovery operation lasted just over an hour. [13] The high court held that HD had rendered voluntary services which exceeded what could reasonably be considered as due performance of the 2017 contract. The sea trials came to an end when the AUV had run aground on the rocks and the Nkwaza had returned to the harbour. The court concluded that the evidence, the express terms of the charter agreement and the surrounding circumstances, did not justify the inference that HD had rendered towage services under the contract. This meant that instead of a contract fee, HD was entitled to a salvage reward. [14] In determining the salvage reward, the high court took into account the following factors. The replacement value of the AUV was R55 252 882.80. The salvage service was rendered promptly. HD had all the necessary equipment for the salvage operation. Mr Dilley’s skills as a mariner and experienced salvor were essential to the successful recovery of the AUV, and to prevent it from sustaining further damage. Given the weather conditions during the salvage operation, the Nkwaza was exposed to ‘a fair degree of danger’. [15] Against this background there are two questions which this Court must consider. The first is whether the services by HD were rendered voluntarily or in accordance with its obligations under the 2017 contract. If the services were rendered voluntarily, the second issue is whether the salvage reward of R5 525 288.23 is justified, having regard the criteria for fixing the reward set out in article 13(1) of the Salvage Convention. Were the services rendered voluntarily? [16] It is a settled principle that a claimant’s entitlement to a salvage reward depends on whether it rendered the services in respect of which it claims ‘voluntarily’, ie without any pre-existing contractual or other legal duty.1 As stated in Kennedy & Rose,2 the adjective ‘voluntary’ has acquired a specific meaning in the law of salvage, namely, ‘that the service was not rendered by virtue of a pre-existing legal obligation, in particular a contractual or public duty’. [17] Although the Salvage Convention does not expressly include a general rule that in order to qualify for a salvage reward, a salvage operation must be voluntary, ‘it does so by implication, by laying down general rules for the recovery of salvage and certain qualifications’.3 Thus, article 17 of the Salvage 1 F D Rose, D Steel and RAA Shaw Kennedy & Rose: Law of Salvage 8 Ed (2013) para 8-001; Transnet Ltd t/a National Ports Authority v The MV Cleopatra Dream and Another [2011] ZASCA 12; 2011 (5) SA 613 (SCA) para 30; Transnet Ltd v MV Mbashi and Others 2002 (3) SA 217 (D) at 224B-C. 2 Kennedy & Rose fn 1 para 8-001. 3 Kennedy & Rose fn 1 para 8-002. Convention restates the general principles of English common law that a salvor must be a volunteer to claim a reward.4 Article 17 provides: ‘No payment is due under the provisions of this Convention unless the services rendered exceed what can be reasonably considered as due performance of a contract entered into before the danger arose’. [18] Counsel for De Beers submitted that the services rendered by HD were services as contemplated in article 17 of the Salvage Convention, and that they constituted performance of its obligations under the 2017 contract. This submission was founded on certain tacit terms allegedly incorporated into the 2017 contract (the alleged tacit terms), which De Beers pleaded as follows: ‘5.5.2 The charter services would include the following: 5.5.2.1 The work boat would be positioned according to instructions given by the defendant to enable it to monitor the AUV offshore during the trials; 5.5.2.2 The work boat would tow the AUV should the need arise. 5.5.2.3 The work boat would patrol the boundary of the area where the sea trials were taking place and to warn other vessels in the vicinity that the defendant was conducting sea trials. 5.5.2.4 The plaintiff would comply with all reasonable instructions given by the defendant’s responsible employee on board the work boat, which instructions would include where the trials were to take place, where the work boat was to be positioned to monitor the AUV, when dives were to be executed and when and where to tow the AUV should the need arise.’ [19] The alleged tacit terms, so it was argued, fall within the general text of clause 9.1 of the 2015 charter agreement and the description of the AUV recovery procedure in clause 3.1.1 of the Operational Procedures. Any request by De Beers that HD render the services described in paragraph 5.5.2 of the plea, would have been subject to HD’s right (preserved in clause 9.2 of the 2015 charter agreement) to declare the conditions for test work unsafe, and the work boat would have been regarded as being off-hire. The wording of the 2015 charter agreement, 4 D Rheeder Halsbury's Laws of England 5 ed (2008) Vol 94 para 908. incorporated into the 2017 contract, it was submitted, supports the conclusion that the parties would have agreed to the alleged tacit terms. Mr Dilley had recorded overtime hours in his diary for the day in question, which showed that he regarded the relevant services as having been rendered under the 2017 contract. A further pointer to that fact is that the Nkwaza was not insured for salvage and HD would not have been able to claim from its insurer, had the Nkwaza suffered loss or damage in the recovery of AUV. [20] In Alfred McAlpine,5 Corbett AJA said that an ‘implied term’ (in the sense of a tacit term or a term implied from the facts): ‘. . . is used to denote an unexpressed provision of the contract which derives from the common intention of the parties as inferred by the Court from the express terms of the contract and the surrounding circumstances. In supplying such an implied term the Court, in truth, declares the whole contract entered into by the parties.6 Corbett AJA went on to say: ‘The Court does not readily import a tacit term. It cannot make contracts for people; nor can it supplement the agreement of the parties merely because it might be reasonable to do so. Before it can imply a tacit term the Court must be satisfied, upon a consideration in a reasonable and businesslike manner of the terms of the contract and the admissible evidence of surrounding circumstances, that an implication necessarily arises that the parties intended to contract on the basis of the suggested term.’7 [21] The first inquiry is whether there is any room for importing the alleged tacit terms into the 2017 contract, having regard to its express terms and those of the 2015 charter agreement.8 The 2017 contract essentially confirms the booking of the vessel charter for the sea trials at a daily and hourly rate. HD’s obligations in terms of clause 5 of the 2015 charter agreement, mainly comprise the provision, 5 Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration [1974] 3 All SA 497 (A), 1974 (3) SA 506 (A) at 532H. 6 Alfred McAlpine fn 5 at 531. 7 Alfred McAlpine fn 5 at 532H-533A; City of Cape Town (CMC Administration) v Bourbon-Leftley and Another NNO [2006] 1 All SA 561 (SCA); 2006 (3) 488 (SCA) para 19. 8 Pan American World Airways Inc v SA Fire and Accident Insurance Co Ltd [1965] 3 All SA 24, 1965 (3) SA 150 (A) at 175C. operation and maintenance of the work boats, and making them available for test work for the duration of the charter agreement. Clause 6 sets out the duties of De Beers, namely to advise HD timeously of the work boat required, the test area, and the duration of the requested charter agreement. [22] Nothing in these agreements point to a tacit term, not even remotely, that HD would be required to position its work boat ‘to monitor the AUV when dives were executed’, let alone to enable HD or De Beers ‘to monitor the AUV offshore’. On the contrary, the parties never contemplated that HD would monitor the AUV – for which De Beers was solely responsible – nor that HD would render recovery services if the AUV ran aground on the rocks. This construction of the express terms of the 2015 charter agreement is consistent both with clause 9, quoted in paragraph 5 above, and clause 3.3.1 of the Operational Procedures. [23] Clause 9 underscores HD’s responsibility for all aspects of the operation of the work boats, subject to De Beers’ direction concerning the nature of the support services provided by HD. Clause 9 necessarily excludes any support services by HD if the AUV runs aground and lands on the rocks, for the simple reason that such event brings an end to the test work. As is evidenced by clause 3.3.1 of the Operational Procedures, the parties applied their minds to, and made express provision for, the towage of the AUV to the harbour by HD in defined circumstances: where communication is lost with the AUV as a result of rough seas or equipment failure while it is on the surface of the water. Plainly, the parties deliberately and unambiguously excluded a recovery operation by HD when the AUV is out of the water, as happened in this case. In these circumstances, an alleged tacit term – that the work boat would tow the AUV should the need arise – cannot be incorporated into the 2015 charter agreement or the Operational Procedures.9 In short, the alleged tacit terms contradict the express terms of the contract between the parties.10 [24] Apart from this, when the terms of the 2017 contract and the 2015 charter agreement are considered in a reasonable and businesslike manner, the parties would not have intended that the alleged tacit terms should be included in their contract.11 It was agreed that the HD would charter work boats to De Beers to enable it to undertake research and development of its survey equipment; and that in order to perform particular test work, De Beers required work boats best suited to that test work, which would be done by way of a charter agreement. In terms of that agreement, De Beers chartered particular work boats from HD, which was responsible for their operation. [25] Had the alleged tacit terms been suggested to the parties at the time, they would not have agreed to them. More specifically, they would not have agreed to the term that ‘the work boat would tow the AUV should the need arise’, which would include recovery of the AUV if it was grounded on rocks. Viewed objectively, the alleged tacit terms cannot be inferred from the express terms of the contract or the surrounding circumstances. So, nothing turns on the fact that Mr Dilley recorded overtime hours in his diary concerning the towage of the AUV. In any event, it also contains the following note: ‘AUV salvage done on a no cure no pay contract’. This shows that he considered that HD had been engaged in a salvage operation. And the fact that the Nkwaza was not insured for salvage operations is neither here nor there. So too, Mr Dilley’s failure at the relevant time to disclose to De Beers’ representatives that he was embarking on a salvage operation. 9 South African Mutual Aid Society v Cape Town Chamber of Commerce 1962 (1) SA 598 (A) at 615D; See G B Bradfield Christies’ Law of Contract in South Africa 7 ed (2016) at 197 and the authorities collected in fn 139. 10 Denel (Edms) Bpk v Vorster 2004 (4) SA 481 (SCA); [2005] 4 BLLR 313 (SCA) para 15. 11 City of Cape Town v Bourbon-Leftley fn 7 para 19. [26] The high court thus correctly declined to import the alleged tacit terms into the parties’ contract. It follows that HD’s services in taking Mr Garthoff out to sea to enable him to swim to the AUV and secure a tow rope to it, and its towage by the Nkwaza to Simon’s Town harbour, cannot ‘be reasonably considered as due performance of a contract entered into before the danger arose’, within the meaning of article 17 of the Salvage Convention. HD’s services were rendered voluntarily: it was engaged in a salvage operation. The salvage reward [27] The high court accepted the evidence of Mr David Abromowitz, an expert yacht broker and maritime appraiser called by HD, regarding the replacement cost of the AUV in 2017, namely $3.5 million or R55 252 882.80. The court fixed the salvage reward at 10% of the replacement value – R5 525 288.23 which, it said, was fair and just ‘as contended by [HD’s senior counsel]’. [28] Article 12 of the Salvage Convention states that a salvage operation must have a useful result before there is a right to a reward. Article 13(1) sets out the criteria for fixing the reward. It provides: ‘The reward shall be fixed with a view to encouraging salvage operations, taking into account the following criteria without regard to the order in which they are presented below: (a) the salved value of the vessel and other property; (b) the skill and efforts of the salvors in preventing or minimizing damage to the environment; (c) the measure of success obtained by the salvor; (d) the nature and degree of the danger; (e) the skill and efforts of the salvors in salving the vessel, other property and life; (f) the time used and expenses and losses incurred by the salvors; (g) the risk of liability and other risks run by the salvors or their equipment; (h) the promptness of the services rendered; (i) the availability and use of vessels or other equipment intended for salvage operations; (j) the state of readiness and efficiency of the salvor's equipment and the value thereof.’ [29] Before considering the appropriateness of the reward in this case, it is necessary to consider the parties’ submissions concerning the nature of the discretion conferred by article 13(1) of the Salvage Convention. Counsel for De Beers submitted that it was a discretion in the loose sense, ie that the high court was entitled to have regard to a number of disparate and incommensurable features in coming to a decision.12 On behalf of HD, it was submitted that the high court exercised a discretion in the true sense when determining the salvage reward: the court had a wide range of equally permissible options available to it.13 [30] In Trencon,14 it was held that the nature of the power determines the standard for appellate intervention. In essence, a standard of correctness in the case of a loose discretion, and in the case of a true discretion, a stricter standard of judicial exercise.15 The nature of the discretion depends on the proper interpretation of the power conferred. But not every power fits into the binary distinction drawn in Trencon and often used in our law to understand a discretion. Article 13(1) of the Salvage Convention appears on its face to be a loose discretion, ie, a decision reached by recourse to stated criteria that is subject to appeal if an incorrect decision is made. [31] However, the English law of salvage, which now is also subject to the Salvage Convention,16 indicates that the power in article 13(1) is more nuanced, and does not fit into the distinction between a true and loose discretion. Rather, it is a power to fix a reward that must serve a particular purpose (to encourage salvage operations) and is determined by reference to stated criteria. In this regard, the cases establish two principles. The first is the general principle that 12 Knox D’Arcy Ltd and Others v Jamieson and Others 1996 (4) SA 348 (A); [1996] 3 All SA 669 (A) at 361H-I, [1996] 3 All SA 669; Trencon Construction (Pty) Ltd v Industrial Development Corporation of South Africa Ltd and Another [2015] ZACC 22; 2015 (5) SA 245 (CC); 2015 (10) BCLR 1199 (CC) paras 86-87. 13 Media Workers Association of South Africa and Others v Press Corporation of South Africa Limited (Perskor) 1992 (4) SA 791 (A) at 800D-E; Trencon Construction fn 12 paras 85 and 88. 14 Trencon Construction fn 12 para 83. 15 Trencon Construction fn 12 paras 86-88. 16 Kennedy & Rose fn 1 para 16-009. the determination of the amount of a salvage reward is a matter of discretion on which views may differ. In The ‘Amerique’,17 the Privy Council referred to the general principle stated in The Clarisse,18 in which Lord Justice Knight Bruce said: ‘It is a settled rule, and one of great utility with reference to cases of this description, that the difference (that is the difference between the sum awarded, and that which the Appellate Court may think ought to have been awarded) must be very considerable to induce a Court of Appeal to interfere upon a question of mere discretion.’ [32] In other words, if the judge of first instance had taken into consideration everything that needed to be considered, the reward could be set aside only if the appellate court is satisfied that ‘it is so exorbitant, so manifestly excessive, that it would not be just to confirm it’.19 It follows that an appellate court does not vary the decision of the court of first instance merely because it might have awarded a smaller sum, had the case come before it.20 It also does not interfere with a salvage reward because the amount is so large, or so small, that no reasonable person could fairly arrive at that sum. 21 [33] The second principle, and the one on which The ‘Amerique’ was decided, was stated by Sir James Colville as follows:22 ‘The rule seems to be that though the value of the property salved is to be considered in the estimate of the remuneration, it must not be allowed to raise the quantum to an amount altogether out of proportion to the services actually rendered.’ [34] That principle was echoed in The Glengyle,23 where the Glengyle had been involved in a collision with another ship. She had been abandoned by her master, 17 The ‘Amerique’ 1874 LR 6 PC 468 at 475. 18 12 Moore PC 340 at 346. 19 The ‘Amerique’ fn 17 at 472. 20 Master and Owners of SS, Baku Standard v Master and Owners of SS Angele [1901] AC 549 at 552. 21 The Accomac [1891] P 349 at 354. 22 The ‘Amerique’ fn 17 at 472. 23 The Glengyle CA 1898 P 97. See also The Ocean Crown [2009] EWHC 3040 Admlty; [2010] 1 Lloyd’s Rep 468 paras 43-45. passengers and crew who feared that the sinking of the Glengyle was imminent. Her cargo and freight (of very large value) were rescued from certain total loss by purpose built, dedicated salvage vessels, kept in readiness to assist vessels in distress, which towed the Glengyle to a place of safety. At first instance, Gorell Barnes J found that values of the salving vessels were large and that ‘these vessels and the lives of those on board were exposed to grave danger’. The value of the salved fund was £76 596 and the salvage reward, £19 000 – about 25% of the value of the fund. After citing The ‘Amerique’, the judge said: ‘The value salved is an element – an important element – in considering the amount to be awarded; but the Court must not be induced by it to award a sum which is out of proportion to the services of the salvors.’ [35] The Court of Appeal declined to reduce the salvage reward. It held that the judge in the court below had not placed too much stress on the value of the property salved. It could not be said that the reward was so excessive that it had to be set aside, having regard to ‘not only imminent danger of the certain loss of the Glengyle and her cargo, but danger and possible loss to the salving vessels and their crews’.24 [36] It should however be noted that prior to the Convention, the tribunal or court would consider the factors present in the case at hand, whereas the Convention prescribes, in article 13(1), the criteria to be taken into account when fixing a salvage reward.25 The court is required to analyse those criteria in the light of the facts, so as to distil an appropriate award in money terms.26 The main criteria in the assessment of a salvage reward are the dangers to the property salved, the nature and burden of the services provided by the salvors, and the salved value,27 having regard to the policies of encouraging salvage and 24 The Glengyle fn 23 at 110 and 111. 25 Kennedy & Rose fn 1 para 16-019. 26 The Voutakos [2008] EWHC 1581 (Admlty); [2008] 2 Lloyd’s Rep 516 para 9. 27 Articles 13(1) (a), (d), (e) and (g) of the Salvage Convention. environmental services, and promoting the safety of human lives. The other criteria are effectively emanations of the main criteria.28 [37] In this case the whole salvage operation took about an hour. Its success was mainly due to the efforts of the divers. Mr Garthoff assumed all the risks and was exposed to the most danger, for example, the swell and wind conditions at the rocks, where he had to gain access to the AUV so as to secure the tow line, and the risk of being hit by the AUV whilst the line was being secured to it. Mr Day was on the Nkwaza and set up the ropes from the stern to the bow. Although they were paid R10 000 for their services, it should be borne in mind that this was an agreed fee – not a salvage reward. [38] By contrast, the Nkwaza, which is not a dedicated salvage vessel, was not really imperilled, given the distance that the boat maintained from the coast at all times. Although Mr Dilley has extensive experience and skill as skipper of the Nkwaza, and making a 180 degree turn to transfer the tow rope from the bow to the stern of the vessel (in order to tow the AUV) involved some difficulty, the towage of the AUV was uneventful. It did not require any special or extraordinary nautical skill. As already stated, the towage of the AUV while on the surface of the water by a work boat to a position of safety, was envisaged in clause 3.3.1 of the Operational Procedures. And the finding that the Nkwaza was exposed to a fair degree of danger is unsustainable on the evidence. The value of the Nkwaza was not high (a market value of R500 000 and a replacement value was R6 million). HD is not a professional salvor, incurred no loss or additional expenses, and did not use any of its own salvage equipment in the operation. All the equipment used was supplied by the divers.29 28 Kennedy & Rose fn 1 para 16-018. 29 Articles 13(1)(f) and (i) of the Salvage Convention. [39] That leaves the salved value of the AUV: ‘the worth, in financial terms, of the property which has been saved for the benefit of its owners’.30 HD bore the onus of proving all matters in issue, including values.31 Both Mr Abromowitz and De Beers’ expert, Captain Godfrey Needham, a salvage broker and consultant, and Master Mariner, agreed with the statement on the technical condition and value of the AUV provided by its supplier, Atlas Maridan, based in Denmark. According to that statement, De Beers is the only company in the world operating an AUV of the kind in question. At the time, its estimated value in a purchase condition was 100 000 EUR; and 10 000 EUR if the vehicle was scrapped. Captain Needham valued the AUV at R2 766 000, using the Atlas Maridan estimate in a purchase condition with additional equipment, less the costs of repairs. [40] The high court erred in rejecting Captain Needham’s evidence concerning the salved value of the AUV. The court could not attribute to the AUV a value of some R55 million based on its replacement value determined many years after it was built, because that was not the value of what was salved. Article 13(1)(a) of the Salvage Convention refers to the ‘salved value of the vessel and other property’. That is the value of the AUV after it has been salved. It is not even its value before the mishap that led to it being salved. It is what survives after salvage that matters. If the property salvaged is worthless, there can be no reward. This Court is therefore at large to determine an appropriate reward in the light of the criteria in Article 13(1). [41] The analysis of the article 13(1) criteria above, shows that there was no risk or danger to the Nkwaza during the salvage operation, making it very nearly a question of towage. Although the AUV was not at risk of loss or destruction, there was valuable equipment on board which had been damaged. It was imperative 30 Kennedy & Rose fn 1 para 15-001. 31 Kennedy & Rose fn 1 para 15-002. that the AUV had to be recovered as soon as possible to prevent it from sustaining further damage. That would have happened had it not been recovered promptly. [42] The salved value of the AUV at the relevant time was R2 766 000 and on the evidence, it was of strategic and operational importance to De Beers. The salvage operation was successful and carried out promptly, not least because of HD’s readiness to respond. Looking at the case objectively, and having regard to the role of the court which is to take account of all the circumstances in assessing the award, which must not be out of proportion to the services rendered or to the value of property salved,32 it seems to me that a salvage reward of R80 000 is appropriate. On an overall application of the criteria, this reward is fair to both parties and gives effect to the principle that the salvee should pay for the benefit received; that the salvor should be rewarded for the service provided; and that the reward should reflect public policy.33 And public policy in the law of salvage is implemented in the practice of making awards on a generous scale, so as to encourage salvage services.34 Costs [43] It was argued on behalf of De Beers that in the event of a substantially smaller reward being made, HD should be ordered to pay De Beers’ costs of the action. The argument however loses sight of the fact that De Beers had denied liability for any salvage reward, and HD was compelled to institute the action to enforce its claim. There is accordingly no reason to interfere with the high court’s order in relation to costs. [44] Both parties were partly successful on appeal. For this reason, the appropriate order is that each party should pay its own costs. 32 The ‘Voutakos’ fn 26 para 44. 33 Kennedy & Rose fn 1 para 16-013. 34 Kennedy & Rose fn 1 para 16-014. [45] In the result, the following order is issued: The appeal succeeds in part. The order of the high court is set aside and replaced with the following: ‘1. In terms of article 13(1) of the International Convention on Salvage, 1989, being the schedule to the Wreck and Salvage Act 94 of 1996, a salvage reward of R80 000 is fixed. 2. The said reward shall bear interest a tempore morae in terms of s 5(2)(f) of the Admiralty Jurisdiction Regulation Act 105 of 1983, from the date of the service of summons to date of payment. 3. The defendant shall pay the costs of the action, including the costs of two counsel.’ Each party shall bear its own costs of appeal. __________________ A SCHIPPERS JUDGE OF APPEAL Appearances: For appellant: M Wragge SC Instructed by: Hiscox and Associates, Cape Town Symington De Kok Attorneys, Bloemfontein For respondent: M Fitzgerald SC and R Fitzgerald Instructed by: Edward Nathan Sonnenbergs Inc, Cape Town 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 July 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 De Beers Marine (Pty) Ltd v Harry Dilley (Pty) Ltd (Case no 413/22) [2023] ZASCA 110 (19 July 2023) The Supreme Court of Appeal (SCA) today handed down judgment upholding, in part, an appeal against an order of the the Western Cape Division of the High Court, Cape Town (the high court). The appellant, De Beers Marine (Pty) Ltd (De Beers), owns an autonomous underwater vehicle (AUV) used to map the seabed in its mining operations. De Beers concluded an agreement with the respondent, Harry Dilley (Pty) Ltd (HD), to charter a work boat, the Nkwaza, to assist De Beers in conducting sea trials of the AUV in False Bay (the charter agreement). During the sea trials on 27 October 2017, the AUV suffered a communication breakdown and ran aground on the rocks near Simon’s Town. Two commercial divers assisted De Beers in recovering the AUV, for a fee of R10 000. The Nkwaza took up a position about 150 metres offshore. One of the divers swam to AUV with a rope which he secured to the AUV, and using a rigging sling, he attached himself to the AUV. The Nkwaza then towed the AUV with the diver on top of it, and brought it alongside in Simon’s Town harbour. The entire operation took about an hour. Subsequently HD sued De Beers for a salvage reward of R10 million, later reduced to R5 525 288, relying on article 13(1) of the International Convention on Salvage, 1989 (the Salvage Convention), which forms part of our law by virtue of s 2(1) of the Wreck and Salvage Act 94 of 1996. De Beers denied that the recovery of the AUV was a salvage operation. It contended that HD was obliged to tow the AUV under the charter agreement. The high court held that the HD’s towage of the AUV was voluntary and that it was therefore entitled to a salvage reward. The court fixed the reward at R5 525 288 – 10% of the replacement cost of the AUV in 2017 (R55 252 882). The SCA held that the high court was correct in finding that HD’s services were rendered voluntarily and that it was engaged in a salvage operation. However, the high court erred in attributing a value of R55 252 882 when fixing the salvage reward, because that was not the value of what had been salved. Article 13(1) of the Salvage Convention refers to the ‘salved value of the vessel and other property’, ie the value of the AUV after it had been salved. Further, the salvage reward of R5 525 288 was altogether out of proportion to the services rendered by HD. The whole salvage operation took only an hour. Its success was mainly due to the efforts of the diver who swam to the AUV, attached a rope to it and was exposed to the most danger. The towage was uneventful and the Nkwaza had not really been imperilled. The SCA concluded that on an overall application of the criteria, a reward of R80 000 was fair to both parties. It gave effect to the principle that the salvee should pay for the benefit received; that the salvor should be rewarded for the service provided; and that the reward should reflect public policy. And public policy in the law of salvage is implemented in the practice of making awards on a generous scale, so as to encourage salvage services. ~~~~ends~~~~

3823

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 298/2021 In the matter between: A PENGLIDES (PTY) LTD FIRST APPELLANT TUNA SOUTH AFRICA (PTY) LTD SECOND APPELLANT and MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES FIRST RESPONDENT THE DEPUTY DIRECTOR GENERAL OF THE FISHERIES BRANCH OF THE DEPARTMENT OF AGRICULTURE, FORESTRY AND FISHERIES SECOND RESPONDENT Neutral citation: A Penglides (Pty) Ltd and Another v Minister of Agriculture, Forestry and Fisheries and Another (Case no 298/2021) [2022] ZASCA 74 (26 May 2022) Coram: PONNAN, DAMBUZA, SCHIPPERS, NICHOLLS and MOTHLE JJA Heard: 16 May 2022 Delivered: 26 May 2022 Summary: Marine Living Resources Act 18 of 1998 – s 80(2) – appeal to Minister – when Department’s offices closed on the last day of the 30-day period envisaged in Regulation 5 of the Marine Living Resources Regulations – the appeal will be served within the designated period if served on the next day on which the offices are open. __________________________________________________________________ ORDER __________________________________________________________________ On appeal from: Western Cape Division of the High Court, Cape Town (Francis AJ, sitting as court of first instance): (1) The appeal is upheld with costs. (2) The order of the high court dismissing the application under case no 20760/18 is set aside. (3) The matter is remitted to the high court. __________________________________________________________________ JUDGMENT __________________________________________________________________ Ponnan JA (Dambuza, Schippers, Nicholls and Mothle JJA concurring) [1] This appeal, which concerns a preliminary point of law, has its genesis in the use of foreign vessels in the large pelagic longline fishery. The fishery has long depended on such vessels for the successful exploitation of South Africa’s regional allocation of tuna. The majority of foreign registered vessels that fish in South African waters have been built in either Japan, Korea or Taiwan, but mostly Japan. The typical Japanese super freezer long-liner is between 47 to 54 metres (overall length), between 400 to 500 tons (gross registered weight), steel-hulled, has a large catch capacity and is equipped with ultra-low freezers. South African vessels, by contrast, are typically only about 24 metres or less in length, weigh less than 100 tons, are constructed of fibreglass reinforced plastic (although some are steel-hulled) and lack both ultra-low freezing capability and large hold capacities. Whilst Japanese vessels are equipped to freeze its catch to approximately -60°C, most South African vessels use ice or refrigerated seawater to store their catch at only about 0°C. [2] The longer-range Japanese vessels allows them to undertake trips for Southern Bluefin Tuna (the most valuable species for sashimi) well beyond South Africa’s 200 nautical mile exclusive economic zone. Because of their smaller size, South African vessels cannot venture as far south, where weather conditions are extreme and, given the inadequacy of their freezing capacity, each trip is usually restricted to 14 days or less. The sashimi-grade portion of each catch is air-freighted to Japanese and other foreign markets, while the non-sashimi grade portion is either sold in local markets, processed into fresh and frozen tuna products or frozen whole for export. [3] On 1 September 1998, the Marine Living Resources Act 18 of 1998 (the Act) came into effect. The Act empowered the first respondent, the Minister of Agriculture, Forestry and Fisheries (the Minister), to grant access to South African fishing resources and to manage such access. In anticipation of the granting of the first large pelagic commercial fishing rights to South African fishing companies for a ten-year period, commencing in 2005 and expiring at the end of February 2015, the then Minister published a policy for the Management and Allocation of Commercial Fishing Rights in the Large Pelagics (Tuna and Longline) Fishery on 24 March 2004 (the 2004 policy). The 2004 policy recognised that South African participation in the longlining sector was ‘fairly new’, that the harvesting of tuna (and swordfish) by longline had ‘historically been undertaken by Japanese and Taiwanese fleets’, and that there was a ‘need to develop a performance history for the harvesting of tunas’. [4] The 2004 policy stated that rights would only be granted to applicants who demonstrated ‘ownership of or a right of access to a suitable vessel’, which meant a vessel with a minimum length of ‘approximately 24m’ that preferably had ‘onboard freezing facilities’. It recognised that ‘due to South Africa’s limited participation in the large pelagic longline fishery . . . there are a limited number of suitable South African flagged vessels’. It, accordingly, provided that foreign-flagged vessels would be considered as long as they are re-flagged as South African vessels within 12 months of the large pelagic longline fishing right being granted. [5] The first appellant, A Penglides (Pty) Ltd, successfully applied for a long-term fishing right for the period 2005 to 2015 that entitled it to catch tuna. The second appellant, Tuna South Africa (Pty) Ltd, a joint venture company, sources Japanese longline fishing vessels and facilitates the partnering of its six members (including the first appellant), who are all large pelagic longline fishing rights holders, with Japanese vessel owners in charter arrangements. [6] The re-flagging of foreign vessels provided for in the 2004 policy (which obliged vessels to reflag as South African after 12 months) proved too onerous. The foreign vessel owners were unable to re-flag as the economics of operating on the South African register were prohibitive. Thus, all of the foreign owners withdrew their vessels upon completion of the first year of the long-term fishing right. As a result, catches of tuna dropped drastically: from over 4500 tons in 2005 to approximately 1500 tons in 2006. This decline, because of the withdrawal of foreign- flagged vessels, undermined one of the objectives of the 2004 policy, namely to improve catch history and to thus make South Africa more competitive when negotiating quotas at a regional level. [7] In 2008, and after the under-catching of tuna in 2006, the regulatory authority for managing fishing - and marine resource - related activities, in particular the allocation, administration and management of fishing rights, the Fisheries Branch of the Department of Agriculture, Forestry and Fisheries (the Department), conducted a further review and published a further policy for the large pelagic fishery. The policy was adopted with effect from January 2009 (the 2009 policy). [8] The 2009 policy removed the one-year reflagging requirement of the 2004 policy and instead adopted an approach of gradually phasing in reflagging. In 2013, and in anticipation of the expiry of the ten-year right, the Department invited applications for fishing rights for a period of fifteen years in a number of sectors, including the large pelagic longline sector. The allocation process was known as the Fishing Rights Application Process (Frap) 2013. The Frap 2013 allocation process, which appears to have been marred by corruption, was ultimately abandoned by the then Minister and replaced by Frap 2015/2016. [9] On 12 June 2015, the Minister published a draft policy on the allocation and management of fishing rights in the large pelagic (Tuna and Swordfish Longline) sector for purposes of Frap 2015/2016 (the draft 2015 policy). The draft 2015 policy altered the 2009 policy in only one respect, by the addition of the following requirement in paragraph 7.3(b)(i) ‘. . . the foreign fishing vessel shall reflag within the first three years when operating as a joint venture’. The draft 2015 policy was replaced by the final policy,1 published on 16 November 2015 (the final policy). The final policy on foreign vessels is contained in paragraph 7.2(e). It accords with the 1 ‘Policy on the Allocation and Management of Commercial Fishing Rights in the Large Pelagic Longline Fishery: 2015 GG 1128, 16 November 2015’. draft 2015 policy, except that it also included the following paragraph: ‘[t]o prevent fronting each vessel and each right holder will only be considered once for the duration of the fishing right to enter into a joint venture’. [10] The first appellant, and all of the other members of the second appellant, applied for 15-year large pelagic longline rights in terms of Frap 2015/2016. This, for a share in the total allowable effort in the sector, expressed as ‘vessel units’. In its application, the first appellant applied for three units of effort and nominated three vessels (one vessel per unit of effort). Having sourced vessels from its Japanese correspondent, Japan Tuna International, those were allocated by the second appellant to five of its six members (the one member having chosen to use its own vessels). The vessel, Matsufuku Maru No. 28, was allocated to the first appellant, who entered into a chartering agreement with Kushikino Maguro Kabushiki Kaisha, the vessel’s owner. That vessel was included by the first appellant in its application as a nominated vessel for purposes of one unit of effort. In terms of the chartering agreement, the vessel’s owner reserved the right to substitute a different vessel for the Matsufuku No. 28. In its Frap 2015/2016 application, the first appellant applied for two further units of effort in respect of two South African-flagged vessels: the MFV Martin J and the MFV Elize, neither of which had the freezing capacity, equipment or capability of the foreign vessels. [11] On or about 25 January 2017, the second respondent, the Deputy Director General of the Department (the DDG), as the Minister’s delegated authority in terms of s 79(1) of the Act, decided on the allocation of fishing rights in the large pelagic longline sector. The first appellant, as well as the other members of the second appellant, were successful, the DDG having decided to allocate no more than two units of effort per applicant, irrespective of the allocation applied for. Successful applicants were required to confirm their two vessels within 90 days of the publication of the final decisions. [12] The first appellant confirmed its nomination of the vessel Matsufuku Maru No. 28 in respect of one unit of effort and the MFV Elize in respect of the second unit of effort. On 6 February 2017, the Department wrote a letter to the first appellant, confirming the grant of its fishing right in the sector. Similar letters were issued to other successful applicants in the sector. Paragraph 8.3 of the Grant of Right Letter provided: ‘8.3 Large Pelagic Longline Rights granted to Right Holders who have nominated access and have been granted the right to use a foreign flagged fishing vessel are subject to the following specific conditions: 8.3.1 The joint venture between the Right holder and the owner of the foreign-fIagged vessel shall be majority controlled and managed by the Right Holder. 8.3.2 The foreign-flagged fishing vessel shall have 3 years from the date of this letter to finalise its registration on the South African merchant fishing vessel register. 8.3.3 The Right Holder shall, on behalf of the Joint Venture, submit a comprehensive skills transfer programme and foreign vessel re-flagging timetable inclusive of milestones and targets. This submission shall be made by not later than 28 February 2018. 8.3.4 Where the Right Holder fails to provide the submissions mentioned in paragraph 8.3.3 above, alternatively, where the Department refuses to approve the skills transfer programme and/or the foreign vessel re-flagging timetable, the Right holder must nominate an alternative fishing vessel, which shall be a South African-flagged fishing vessel only. 8.3.5 No Right Holder will be permitted to nominate access to a foreign flagged fishing vessel to replace the current approved foreign flagged fishing vessel during the duration of the Right. Right Holders shall only be permitted to nominate a South African-flagged vessel to replace a nominated vessel. 8.3.6 Right Holders shall accommodate Fishery Observers nominated by the Department on all fishing voyages. 8.3.7 Prior to the commencement of fishing in terms of this Right, the Right Holder shall submit to the Department an official letter from the nominated Vessel’s flag-state confirming that all catches harvested by the vessel while utilising the Right shall accrue to the South African catch registry.’ [13] Shortly after the allocation of the long-term rights, the first appellant was advised that the Matsufuku Maru No 28 would not be available to it, apparently because of catch-scheduling commitments that the vessel’s owner had to fulfil elsewhere. On 28 April 2017 (being some three months after the allocation of the long-term rights), the first appellant applied to the Department to allow a temporary replacement vessel, the Koei Maru No. 1, to be employed on its behalf, in the stead of the Matsufuku No. 28. The application was rejected on 17 May 2017. [14] On 19 June 2017, the first appellant lodged an appeal with the Minister challenging both the rejection of its vessel-change application and the conditions limiting the use of foreign vessels in the fishery. The first appellant pointed out that the basis on which the DDG had refused the vessel change application, namely paragraph 8.3.5 of the Grant of Rights Letter, had never formed part of any policy published in respect of Frap 2015/16 and its inclusion was administratively unfair. It further pointed out that paragraph 8.3.5, which had never been the subject of a consultative process, was absurdly restrictive; undermined South Africa’s tuna industry; was at odds with sound fisheries management and was irrational. It was submitted that the only possible rationale for paragraph 8.3.5 was a misguided attempt to prevent fronting, but that it did not achieve that purpose, accordingly, so it was contended, it should be set aside. [15] Almost a year later, on 9 May 2018, the Minister dismissed the appeal. In dismissing the appeal, the Minister relied on paragraph 8.3.5 of the Grant of Right Letter, as well as various other grounds, not all of which emerge from the record, because the Minister did not depose to an affidavit to explain his decision. The Minister also noted that the appeal had been submitted two days late. [16] The first appellant, supported by the second appellant, then applied to the Western Cape Division of the High Court, Cape Town (the high court) for inter alia an order in the following terms: ‘2. Reviewing and setting aside the decision of the First Respondent, dated 9 May 2018, in respect of the [first appellant’s] appeal against a refusal to allow its application for a vessel change in the large pelagic longline fishery; 3. Remitting the appeal to the First Respondent for him to decide in accordance with law and such directions as the above Honourable Court deems appropriate; 4. Declaring paragraph 8.3 of the Grant of Right Letter issued to successful applicants in the large pelagic longline fishery to be unlawful; 5. Directing the First Respondent, when reconsidering the [first appellant’s] appeal, to take account of the fact that paragraph 8.3 of the Grant of Right Letter, and specifically paragraph 8.3.5 thereof, is unlawful.’ [17] The high court (per Francis AJ) approached the application as follows: ‘[17] . . . The court was cognisant of the decision of the Supreme Court of Appeal in Fischer and Another v Ramahlele and Others where it was held that it is not for a court to determine an application on legal points not emerging from the papers and not raised by the parties. However, the situation in this matter is somewhat different because the issue of the late filing of the appeal was expressly raised as a ground of refusal in the first respondent’s decision and this fact was common cause between the parties on the papers before me. The court would be placed in an intolerable position if it were to be precluded from giving the right decision on accepted facts merely because a party failed to raise a legal point in argument, whether by design or due to an oversight (cf. the comments of the then Appellate Division in Paddock Motors (Pty) Ltd v Igesund). [18] In addition, and depending on the parties’ response to the issue of the late filing of the appeal, the court directed the parties to make further written submissions on whether the declaratory relief in paragraph 4 of the Notice of Motion – to declare condition 8.3 of the Grant of Right letter to be unlawful – was a stand-alone form of relief which could be determined on the papers before the court without further elaboration. [19] From the papers before this court, including the response of the parties to the invitation to furnish supplementary written argument on the legal consequences of what appeared to be common cause facts, it is possible to distill the following broad areas which require determination: [19.1] Was the appeal lodged timeously? If it was, does the decision of the first respondent to refuse the [first appellant’s] appeal fall to be set aside? [19.2] If the appeal was lodged late, and has lapsed, can this court determine on the papers before it, and without elaboration, the relief sought in the Notice of Motion to declare condition 8.3 in the Grant of Right letter to be unlawful? . . . [39] In light of the foregoing, I am of the view that the first respondent correctly found that the appeal was lodged out of time. Given the peremptory language used in the relevant statutory enactments, the first respondent did not, and does not, have the discretion to entertain the [first appellant’s] appeal which was lodged late. Accordingly, in the circumstances, the relief sought by the [appellants] to review, set aside, and remit, the appeal, must fail. [40] . . . The first respondent cannot reconsider the appeal because it has lapsed. Since the appeal has lapsed, it stands to reason that the substantive relief claimed in paragraph 4 of the Notice of Motion – to declare the conditions unlawful – cannot be determined by this court since the relief claimed is contingent on the appeal which has lapsed. . . . [42] In the circumstances, I am not persuaded that this court is in a position to consider the relief sought by the [appellants] in paragraph 4 of the Notice of Motion as a separate, self-standing, ground of review.’ [18] The approach of the high court is regrettable. How an issue that was, at best, only somewhat obliquely raised on the papers, assumed centre stage, is far from clear. Despite having intimated that it ‘was cognisant of the decision . . . in Fischer and Another v Ramahlele and Others’,2 the high court promptly proceeded to ignore the note of caution sounded by this Court in that matter. And, having decided that the first appellant’s appeal to the Minister was lodged out of time, it declined to enter into the substantive merits of the application. Nor, can we. This, because we do not have the benefit of a judgment from the high court on the merits of the appellant’s application. Were we to enter into the merits, without the benefit of the high court’s view on the subject, we would, in effect, be sitting both as a court of first, and (likely) final, instance. The unfortunate consequence is that if we incline to a contrary view to the high court on the preliminary question, which was held by the high court to be decisive, then the matter would have to be remitted to it for consideration and adjudication of the substantive relief sought by the appellant, in particular paragraph 2 In Fischer and Another v Ramahlele and Others [2014] ZASCA 88; 2014 (4) SA 614 (SCA); [2014] 3 All SA 395 (SCA) (Fischer), it was stated: ‘[13] Turning then to the nature of civil litigation in our adversarial system it 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. That is so even where the dispute involves an issue pertaining to the basic human rights guaranteed by our Constitution, for ‘it is impermissible for a party to rely on a constitutional complaint that was not pleaded’. There are cases where the parties may expand those issues by the way in which they conduct the proceedings. There 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] It is not for the court to raise new issues not traversed in the pleadings or affidavits, however interesting or important they may seem to it, and to insist that the parties deal with them. The parties may have their own reasons for not raising those issues. A court may sometimes suggest a line of argument or an approach to a case that has not previously occurred to the parties. However, it is then for the parties to determine whether they wish to adopt the new point. They may choose not to do so because of its implications for the further conduct of the proceedings, such as an adjournment or the need to amend pleadings or call additional evidence. They may feel that their case is sufficiently strong as it stands to require no supplementation. They may simply wish the issues already identified to be determined because they are relevant to future matters and the relationship between the parties. That is for them to decide and not the court. If they wish to stand by the issues they have formulated, the court may not raise new ones or compel them to deal with matters other than those they have formulated in the pleadings or affidavits. [15] This last point is of great importance because it calls for judicial restraint.’ 4 of the notice of the motion. Because of the approach followed by the high court, the very issue that compelled the application and brought the parties to court, remains unresolved. What is more, the approach of the high court has opened the door to a fractional disposal of issues and the proliferation of piecemeal hearings and possible appeals. Thus, the parties, through no fault of their own, have been put to the trouble and expense of having to follow this rather convoluted and circuitous route, as a result of the high court’s failure to appreciate, as Fischer made plain ‘. . . that it is for the parties to identify the dispute and for the court to determine that dispute and that dispute alone’.3 [19] With that perambulation, I now turn to consider whether the high court was correct in concluding that appellant’s appeal to the Minister was lodged out of time. When considering an appeal from a person affected by a decision of the DDG, the Minister acts in terms of s 80(1) of the Act, which provides: ‘[a]ny affected person may appeal to the Minister against a decision taken by any person acting under a power delegated in terms of this Act or section 238 of the Constitution’. According to s 80(2), ‘[a]n appeal under subsection (1) must be noted and shall be dealt with in the manner and in accordance with the procedure prescribed by the Minister’. Regulation 5 of the Marine Living Resources Regulations prescribes the procedure envisaged in s 80(2) of the Act. It provides: ‘(1) An appeal by any person in terms of section 80 of the Act shall be submitted in writing to the Minister within 30 days after the appellant has been notified of the decision against which he or she is appealing. 3 Fischer fn 2 above para 13. (2) An appeal shall set out all the relevant facts as well as the grounds of appeal and shall be accompanied by any relevant document or a copy thereof certified as true by a Commissioner of Oaths. (3) The appeal contemplated in subregulation (2) shall be served by the appellant on the person against whose decision the appeal is made, and that person shall submit a report on the appeal to the Minister within 30 days after the appeal had been served on him or her.’4 [20] The decision by the DDG to refuse the first appellant’s vessel-substitution application was made on 17 May 2017. The next day, 18 May 2017, was what may be described as ‘day 1’. Thursday 15 June 2017 was day 29. The day thereafter, namely Friday 16 June 2017, was a public holiday and not a ‘day’ for purposes of the Interpretation Act 33 of 1957 (the Interpretation Act).5 Nor was Sunday 18 June 2017.6 The appeal was served on the Department on 19 June 2017. It was not in dispute that the Department’s offices had been closed on that Saturday, as they generally were over weekends. The Interpretation Act does not deal with the situation where the last day, not being a public holiday or a Sunday, is a day on which the accomplishment of the task cannot be achieved because the offices where the task is to be performed are closed. [21] Accordingly, the question facing the high court (as recognised by it) was whether Saturday, 17 June 2017, was the last ‘day’ of the defined period. If it was, 4 ‘Regulations in terms of the Marine Living Resources Act GN R1111, 2 September 1998’. 5 The Interpretation Act 33 of 1957 does not define ‘day’, consequently the reference to day there is a reference to ‘calendar day’. The effect of s 4 (read with s 1) of the Interpretation Act is that its provisions govern the calculation of days prescribed for any purpose in other legislation which contains nothing to indicate that a different method was meant to be employed (Mooi River Valley Seed Potato Growers’ Association v Steyn 1975 (3) SA 642 (N) at 647). 6 Section 4 of the Interpretation Act provides: ‘When any particular number of days is prescribed for the doing of any act, or for any other purpose, the same shall be reckoned exclusively of the first and inclusively of the last day, unless the last day happens to fall on a Sunday or on any public holiday, in which case the time shall be reckoned exclusively of the first day and exclusively also of every such Sunday or public holiday’. then that would mean that the appeal was served one day late. The effect of regarding Saturday, 17 June 2017, as a ‘day’, would be to interpret regulation 5(1) as requiring the first appellant to have served its appeal on 15 June 2017 (because service on the Saturday was impossible). This would have the effect of abridging the right given by regulation 5(1) and would mean that the appellant had only 29 days to submit its appeal. [22] In Road Accident Fund v Masindi, this Court had to consider how a five-year prescriptive period applicable to the respondent’s claim should be computed, in circumstances where the last day of that period fell on a day when the court is closed so that the summons could not be issued and served. It stated: ‘The principle set out in [Pritam Kaur v S Russel & Sons Ltd7 and Nottingham City Council v Calverton Parish Council8] provides the answer which ties in with the protection afforded to the respondent in s 34 and, in general, the interpretation provided in s 39(1)(b) and (c) and (2) of the Constitution. Applying this approach to the facts of this matter, the respondent could not have issued the summons on 16 June 2014, as it was a public holiday. It was therefore a question of an impossibility to perform. The impossibility was not of her own doing nor created by her but by law; the court was closed on the public holiday. To interpret the law with the result that the respondent fails to enjoy the full benefit of the five-year period — as she is entitled to — would result in an injustice and prejudice to her.’9 [23] The facts in Pritam Kaur v S Russel & Sons Ltd were these: On 5 September 1967, Mr Bikar Singh was killed at his place of employment. On 7 September 1970, his widow, Ms Pritam Kaur, issued a writ against his employers, claiming damages 7 Pritam Kaur v S Russel & Sons Ltd [1973] 1 QB 336; [1973] 2 WLR 147; [1973] 1 All ER 617 (Pritam Kaur). 8 Nottingham City Council v Calverton Parish Council [2015] EWHC 503 [2015] WLR (D) 99; [2015] PTSR 1130. 9 Road Accident Fund v Masindi [2018] ZASCA 94; 2018 (6) SA 481 (SCA) para 19. for breach of statutory duty and for negligence. The court was required to decide, as a preliminary point of law, whether the action was commenced within the period of 3 years allowed by the statute or whether it was statute-barred. As Lord Denning MR put it: ‘the first thing to notice is that, in computing the three years, you do not count the first day, September 5, 1967, on which the accident occurred. . . If you count three years from September 5, 1967, you get the last day as September 5, 1970. The writ here was issued on September 7, 1970. If you looked at the dates, therefore, and nothing else, the action would appear to be two days out of time. But when you look at the days of the week, you see that September 5, 1970, was a Saturday, and September 6, 1970, was a Sunday. On both those days the offices of the court were closed. As soon as they reopened on Monday, September 7, 1970, the plaintiff issued the writ’.10 [24] Lord Denning then proceeded to state: ‘The arguments on each side are evenly balanced. The defendants can say: “The plaintiff has three years in which to bring his action. If the last day is a Saturday or Sunday, or other dies non, he ought not to leave it till the last day. He ought to make sure and issue it the day before when the offices are open.”. . . The plaintiff can say: “The statute gives me three years in which I can bring my action. If I go in to the offices on the last day, and find them closed, I ought not to be defeated on that account. I should be allowed to go next day when the offices are open. Otherwise, I should be deprived of three years which the statute allows me.” . . . Those arguments are so evenly balanced that we can come down either way. The important thing is to lay down a rule for the future so that people can know how they stand. In laying down a rule, we can look to parallel fields of law to see the rule there. The nearest parallel is the case where a time is prescribed by the Rules of Court for doing any act. The rule prescribed in both the county 10 Pritam Kaur fn 7 above at 619. court and the High Court is this: If the time expires on a Sunday or any other day on which the court office is closed, the act is done in time if it is done on the next day on which the court office is open. I think we should apply a similar rule when the time is prescribed by statute. By so doing, we make the law consistent in itself: and we avoid confusion to practitioners. So I am prepared to hold that when a time is prescribed by statute for doing any act, and that act can only be done if the court office is open on the day when the time expires, then, if it turns out in any particular case that the day is a Sunday or other dies non, the time is extended until the next day on which the court office is open.’11 [25] In a separate concurring judgment in Pritam Kaur, Megarry J put it thus: ‘. . . There are a number of cases which support the general rule that a statutory period of time, whether general or special, will, in the absence of any contrary provision, normally be construed as ending at the expiration of the last day of the period. The rule remains; but there is a limited but important exception or qualification to it . . . If the act to be done by the person concerned is one for which some action by the court is requisite, such as issuing a writ, and it is impossible to do that act on the last day of the period because the offices of the court are closed for the whole of that day, the period will prima facie be construed as ending not on that day but at the expiration of the next day upon which the offices of the court are open and it becomes possible to do the act.’ [26] Nottingham City Council v Calverton Parish Council, was concerned with an application to quash a development plan document, which had to be made no later than the end of the period of six weeks starting with the date of the adoption of the document. The development plan document had been adopted on 8 September 2014. The application to quash was made on Monday 20 October 2014. The court office was closed on Sunday 19 October 2014 and an application could not be made on that day. Lewis J had this to say: 11 Pritam Kaur fn 7 above at 619-620. ‘In my judgment, the approach set out in Kaur and approved and followed in other cases, sets out a general approach to the interpretation of statutory provisions prescribing periods within which proceedings must be brought. I recognise that the precise provisions of a particular statute may be such that a different approach is called for in relation to that particular statute. In general terms however, where a statutory provision provides that proceedings must be brought no later than the end of a specified period, and the bringing of proceedings requires that the court office be functioning, and the last day of the prescribed period falls on a day when the court office is closed, then the statutory provision is to be interpreted as permitting the proceedings to be brought on the next day when the court office is open.’12 [27] To those two English authorities may be added a third, which went somewhat further, namely Mucelli v Government of Albania (Mucelli).13 In Mucelli, Lord Neuberger, after having expressly approved the dictum of Lord Denning in Pritam Kaur, added: ‘. . . I can see no reason not to apply the same principle to service on a respondent in relation to the respondent's office. The fact that fax transmission can be effected at any time does not cause me to reconsider that conclusion.’ In the matter here under consideration, the high court ignored the extension of the Pritam Kaur principle to service by fax (or likewise email), in finding that ‘the appeals could be lodged by email’. [28] The principle laid down in Pritam Kaur resonates with the approach adopted by our courts. Over a century ago, in National Bank of South Africa v Leon Levson Studios (Leon Levson), Innes J stated: ‘Now, I am in entire agreement with the learned Judge that where rent is payable at a Bank or business place, that implies that the payment is to be made on a day when offices or banks 12 Nottingham City Council v Calverton Parish Council fn 8 above para 33. 13 Mucelli v Government of Albania [2009] UKHL 2; [2009] 1 WLR 276; [2009] 3 All ER 1035 para 84. are open, and that the lessee, therefore, is only called upon to pay on a business day. Indeed, that exact point was decided in Davis v Pretorius (1909, T.S. 868), where the court held that the parties must, under such circumstances, be taken to have contemplated that the payment would not be due at the office or the bank on a Sunday or a public holiday when that place either ought, or in the ordinary course of business might be expected, to be closed. The obligation becomes due upon the days in question, but its discharge having been stipulated to be performed at a place not open on those days, the debtor is excused from then tendering performance, and is in time on the next succeeding business day.’14 [29] In Davis v Pretorius, which was cited with approval by Innes J in Leon Levson, Mason J (Bristowe J concurring) had this to say: ‘It seems to me that a contract of that kind necessarily implies that the payment shall be made on a day when offices or banks are open; and I think the parties must be taken to have contemplated that the payment would not be due at the office of the attorney or at the bank on a day which was either a Sunday or a public holiday, when both either ought to be closed or might in the ordinary course of business be expected to be closed. The decision which we give, therefore, falls exactly in line with that in Lawley and Others v Van Dijk (1881-1884 (2) SAR 246) by KOTZÉ, C.J., where he held that where a contract of lease provided that the payment was to be made on the 1st January, and that date fell on a Sunday, the parties must necessarily have contemplated that the payment need not be made on that particular day.’15 [30] The facts in Leon Levson16 were these: The respondent was the lessee of premises under a lease, which provided: ‘should the lessee fail to pay the monthly rental within 15 days after same shall have become due . . . the lessor shall thereupon have a right to cancel this lease’. The rental was payable monthly in advance on the first day of the month at the appellant Bank. The respondent failed to pay or tender 14 National Bank of South Africa Ltd v Leon Levson Studios Ltd 1913 AD 213 at 218. 15 Davis v Pretorius 1909 TS 868 at 871-872. 16 National Bank of South Africa Ltd v Leon Levson Studios Ltd fn 14 above. the rent for the month of December until the 17th of that month. On 15 December, which was a Sunday, and 16 December, which was a public holiday, the Bank was closed. [31] Maasdorp JP, writing separately in the Leon Levson matter, put it thus: ‘In my opinion it was open to the respondent to pay the rent on Monday the 16th December. What prevented his paying on that day was not his own negligence, but the fact that the applicant Bank was closed. Under ordinary circumstances, where there is nothing to prevent it, I think payment should be made on the day stipulated, although it happens to be a Sunday or a holiday. But it is very different where payment is to be made at a place of business which happens to be closed to business on those days. The view taken at one time by the applicant, which was, however, abandoned by his counsel, was that tender of payment after 3 p.m. was futile, because although bank officers happened to be on the premises it was after business hours; the idea being that out of business hours no business could be done. But now the suggestion is made that although Monday was a holiday and the bank was closed to business, the respondent would have found people on the premises if he had gone there on that date. I agree in thinking that it was not contemplated that payment should be made either on Sunday, the 15th December, or Monday, the 16th December, which days were holidays, on which no business was done at the Bank. I am, therefore, of opinion that the respondent was not in default when he tendered payment on Tuesday, the 17th December’.17 [32] The above conclusion reached by Maasdorp JP addresses as well the finding of the high court in this matter that apart from emailing the appeal, it ‘could [have been] delivered to the security on the ground floor’ of the building housing the Department’s offices. Service on the ‘security on the ground floor’ would, in any 17 National Bank of South Africa Ltd v Leon Levson Studios Ltd fn 14 above at 221. event, stand on a similar footing to fax or email service to an unattended number or email address on a non-business day. [33] There is thus long-standing authority in this country, albeit in the field of the law of contract, that accords with the approach adopted in Pritam Kaur (and the other English cases that have since followed it) that the high court could have called in aid. Somewhat surprisingly, it did not. It must follow that regulation 5(1) can only be interpreted to mean that when the Department’s offices are closed on the last day of the 30-day period for the serving of an appeal, the appeal will be served within the designated period if served on the next day on which the offices are open. This is the effect of the South African and English authorities. The high court’s conclusion to the contrary accordingly cannot stand. It follows that the appeal must succeed. [34] In the result: (1) The appeal is upheld with costs. (2) The order of the high court dismissing the application under case no 20760/18 is set aside. (3) The matter is remitted to the high court. _________________ V M PONNAN JUDGE OF APPEAL APPEARANCES For the appellants: D Melunsky SC Instructed by: Andrew de Vos & Associates, Cape Town Symington & De Kok Inc, Bloemfontein For the respondents: E A de Villiers-Jansen SC Instructed by: State Attorney, Cape Town 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: 26 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 A Penglides (Pty) Ltd and Another v Minister of Agriculture, Forestry and Fisheries and Another (Case no 298/2021) [2022] ZASCA 74 (26 May 2022) Today the Supreme Court of Appeal (SCA) handed down judgment upholding, with costs, an appeal against a decision of the Western Cape Division of the High Court, Cape Town (the high court). The issue before the SCA was whether the appeal lodged by the first appellant, A Penglides (Pty) Ltd (Penglides), challenging the decision of the Deputy Director General of the Department Agriculture, Forestry and Fisheries (the Department), was served a day late – under circumstances where the last day for service was a Saturday and the offices of the Department were closed on that day. On 1 September 1998, the Marine Living Resources Act 18 of 1998 (the Act) came into effect. The Act empowered the first respondent, the Minister of Agriculture, Forestry and Fisheries (the Minister), to grant access to South African fishing resources and to manage such access. In anticipation of the granting of the first large pelagic commercial fishing rights to South African fishing companies, the then Minister published a policy for the Management and Allocation of Commercial Fishing Rights in the Large Pelagics (Tuna and Longline) Fishery on 24 March 2004 (the 2004 policy). It, accordingly, provided that foreign-flagged vessels would be considered as long as they are re-flagged as South African vessels within 12 months of the large pelagic longline fishing right being granted. The re-flagging of foreign vessels provided for in the 2004 policy proved too onerous. Thus, all of the foreign owners withdrew their vessels upon completion of the first year of the long-term fishing right. As a result, catches of tuna dropped drastically. On 12 June 2015, the Minister published a draft policy on the allocation and management of fishing rights in the large pelagic (Tuna and Swordfish Longline) sector (the draft 2015 policy). The draft 2015 policy altered the 2009 policy in only one respect, by the addition of the following requirement in paragraph 7.3(b)(i) ‘. . . the foreign fishing vessel shall reflag within the first three years when operating as a joint venture’. The draft 2015 policy was replaced by the final policy, published on 16 November 2015 (the final policy). It accorded with the draft 2015 policy, except that it also included the following paragraph: ‘[t]o prevent fronting each vessel and each right holder will only be considered once for the duration of the fishing right to enter into a joint venture’. On or about 25 January 2017, the second respondent, the Deputy Director General of the Department (the DDG) decided on the allocation of fishing rights in the large pelagic longline sector. Penglides was successful. Successful applicants were required to confirm their two vessels within 90 days of the publication of the final decisions. Penglides confirmed its nomination of the Matsufuku Maru No. 28 and the MFV Elize. Shortly after the allocation of the long-term rights, Penglides was advised that the Matsufuku Maru No 28 would not be available to it. On 28 April 2017, Penglides applied to the Department to allow a temporary replacement vessel, the Koei Maru No. 1, to be employed on its behalf, in the stead of the Matsufuku No. 28. The application was rejected on 17 May 2017. On 19 June 2017, the first appellant lodged an appeal with the Minister challenging both the rejection of its vessel-change application and the conditions limiting the use of foreign vessels in the fishery. Almost a year later, on 9 May 2018, the Minister dismissed the appeal on a number of grounds. The Minister also noted that the appeal had been submitted two days late. Regulation 5 of the Marine Living Resources Regulations (regulation 5) provides that an appeal ‘shall be submitted in writing to the Minister within 30 days after the appellant has been notified of the decision against which he or she is appealing’. The high court held that the appeal was lodged out of time as the first appellant failed to lodge its appeal by 17 June 2017. As a result, the high court declined to adjudicate the lawfulness of the conditions limiting the use of foreign vessels. In considering whether the appeal was out of time, the SCA reasoned that: The decision by the Minister was made on 17 May 2017. The next day, 18 May 2017, was ‘day 1’. Thursday 15 June 2017 was day 29. The day thereafter, namely Friday 16 June 2017, was a public holiday and not a ‘day’ for purposes of the Interpretation Act 33 of 1957 (the Interpretation Act). Nor was Sunday 18 June 2017. The appeal was served on the Department on 19 June 2017. It was not in dispute that the Department’s offices had been closed on that Saturday, which was the last day for service, as they generally were over weekends. The Interpretation Act does not deal with the situation where the last day, not being a public holiday or a Sunday, is a day on which the accomplishment of the task cannot be achieved because the offices where the task is to be performed are closed. After considering South African and English authorities, the SCA held that regulation 5(1) could only be interpreted to mean that when the Department’s offices are closed on the last day of the 30-day period for the serving of an appeal, the appeal will be served within the designated period if served on the next day on which the offices are open. The SCA therefore upheld the appeal with costs and remitted the matter to the high court. ~~~~ends~~~~

471

non-electoral

2016

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 535/2015 In the matter between: CHAIRPERSON OF THE NATIONAL COUNCIL OF PROVINCES APPELLANT and JULIUS MALEMA FIRST RESPONDENT ECONOMIC FREEDOM FIGHTERS SECOND RESPONDENT Neutral citation: Chairperson of the National Council of Provinces v Malema (535/2015) [2016] ZASCA 69 (20 May 2016) Bench: Ponnan, Leach, Petse, Saldulker and Swain JJA Heard: 6 May 2016 Delivered: 20 May 2016 Summary: Parliament – suspension of member – for refusal to retract a statement ruled unparliamentary. _____________________________________________________________________ ORDER ______________________________________________________________________ On appeal from: Western Cape Division of the High Court, Cape Town (Bozalek and Cloete JJ sitting as court of first instance): reported sub nom Malema & another v Chairman National Council of Provinces & another 2015 (4) SA 145 (WCC). (1) Subject to para (2) below, the appeal is dismissed with costs, such costs to include those consequent upon the employment of two counsel. (2) The costs of the application for condonation in respect of the respondents‘ failure to timeously serve and file their heads of argument shall be paid by their attorney, Mr Godla, de bonis propriis on the attorney and own client scale. ______________________________________________________________________ JUDGMENT ______________________________________________________________________ Ponnan JA (Leach, Petse, Saldulker and Swain JJA concurring): [1] Freedom of speech is a privilege essential to every free council or legislature. As it was put by the English House of Commons, at a conference on 11 December 1667: ‗The members must be as free as the houses‘.1 Freedom of speech and debates in Parliament are matters of the highest constitutional importance. Parliament, by its very 1 The conference resulted in the reversal of the conviction in 1629 of Sir John Eliot and others: ‗No man can doubt,‘ they said, ‗but whatever is once enacted is lawful; but nothing can come into an Act of Parliament, but it must first be affirmed or propounded by somebody: so that if the Act can wrong nobody, no more can the first propounding. The members must be as free as the houses; an Act of Parliament cannot disturb the state; therefore the debate that tends to it cannot; for it must be propounded and debated before it can be enacted.‘ See Lord Campion & T G B Cocks (eds) Sir Thomas Erskine May’s Treaties on the Law, Privileges Proceedings and usage of Parliament 15 ed (1950) at 46. nature, functions through a deliberative process. Debate is key to the performance of its functions. That process can only be meaningful if members are afforded sufficient room to freely express themselves. Parliamentary privilege and especially the absolute privilege or immunity in law which it gives, amongst others, to statements made by Members of Parliament is essentially of English origin.2 [2] As Corbett CJ pointed out in Poovalingam v Rajbansi 1992 (1) SA 283 (A) at 286C-H: ‗In 1688 . . . the English Parliament passed the Bill of Rights, which settled the succession to the Crown and declared the ―Rights and Liberties of the Subject‖. The latter included freedom of speech and the Bill of Rights declared (in the ninth article) ―(t)hat the freedome of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament‖. The rights and liberties declared are referred to in the Bill of Rights as ―auntient‖ (ancient) and it is clear that as far as freedom of speech in Parliament is concerned the Bill of Rights was merely declaratory of the legal position as it had been for many years . . . . In England there is thus in law an absolute Parliamentary privilege of freedom of speech, the effect of which is to protect Members of Parliament from being sued for damages or being criminally prosecuted in a court of law for words spoken or written in the course of Parliamentary proceedings. The privilege rests upon two bases: (1) that Parliament must have complete control over its own proceedings and its own members and that accordingly matters arising in this sphere should be examined, discussed and adjudged in Parliament and not elsewhere; and (2) that a Member must have a complete right of free speech in Parliament without any fear that his motives or intentions or reasoning will be questioned or held against him thereafter . . . . 2 In Campion & Cocks (eds) Sir Thomas Erskine May’s Treaties on the Law, Privileges Proceedings and usage of Parliament 15 ed (1950), chapter IV on ‗Privilege of freedom of speech‘ the following relevant parts appear on the necessity of freedom of speech in Parliament at 46-52: ‗NECESSITY OF FREEDOM OF SPEECH ―There could be no assured government by the people, or any part of the people, unless their representatives had unquestioned possession of this privilege. Thus only the House of Commons was concerned in its vindication, and only in its connection with that House could it be a matter of constitutional importance. The Lords, of course, possess the right equally with the Commons, and thus it is considered one of the common privileges of Parliament. But it seems never to have been an issue with the Lords‖ (White, Eng. Const., p. 440). As Stubbs says, ―he would have been a bold king indeed who had attempted to stop discussion in the House of Lords‖ (Stubbs Const. Hist., III (4th ed.) 507).‖‘ According to Blackstone‘s Commentaries on the Laws of England 4th ed by R M Kerr (1876) at 132, the privileges of Parliament were principally established in order to protect its members not only from being molested by their fellow-subjects, but also more especially from being oppressed by the power of the Crown‘. [3] The first respondent, Mr Julius Malema, is the President and Commander in Chief of the second respondent, the Economic Freedom Fighters (the EFF), a political party registered as such in terms of s 15 of the Electoral Commission Act 51 of 1996. On 17 June 2014, the President of the Republic of South Africa delivered his State of the Nation Address to a joint sitting of the National Assembly (the NA) and the National Council of Provinces (the NCOP). The next day and during the course of a debate on the President‘s address, which was then chaired by the appellant, the Chairperson of the NCOP (the Chairperson), Mr Malema, the leader of the EFF‘s delegation in the NA, stated: ‗The President said a minimum wage shall be investigated. There is no need to investigate. This House must show leadership and courage. The workers have already shown the way. For five months now, workers in the platinum belt have been on strike, which demonstrates their genuine determination. They were striking for R12 500, when the ANC massacred 34 of them two years ago for doing so. In honour of those who died in Marikana, let this House legislate for R12 500. This will be a sign of remorse and regret for the Marikana massacre. We also demand the establishment of a parliamentary commission on the conditions and salaries of mine workers, including the auditing of the financial books . . .‘ [4] Mr BA Radebe, a member of the ruling party, the African National Congress (the ANC), rose on the following point of order: ‗The speaker said the ANC government massacred people two years ago. Is that parliamentary? Is there any proof of that? Could you rule on that, Chairperson?‘ The unrevised Hansard then records: ‗The Chairperson of the NCOP: Mr Malema? Mr JS Malema: I maintain that. The Chairperson of the NCOP: Mr Malema . . . Mr JS Malema: The ANC government massacred the people in Marikana. Those police were representing the ANC government. The Chairperson of the NCOP: Mr Malema! Mr JS Malema: I am not going to withdraw. The Chairperson of the NCOP: Morena! Mr JS Malema: It‘s not going to happen that. The Chairperson of the NCOP: Hon Malema, hon Malema . . . Mr JS Malema: I‘m all yours, Chair. The Chairperson of the NCOP: Hon Malema! Mr JS Malema: Hon Chair. The Chairperson of the NCOP: Please accept that this House and all our Houses of Parliament have simple Rules to follow in a debate. The last time we said hold your horses, because we were taking a point of order. I was asked to rule, and even before I gave you the go-ahead you were on. Please do not do that again. The hon member of the ANC raised a point. You contest that point – you said that you were sustaining it. I wish to take this point on advice, hon members, and we will rule on it tomorrow, because it is not an open-and-shut statement that you make and conclude with. There are many implications with it. I would like to be properly advised when I come back to this House with a ruling tomorrow. You may continue, Ntate Malema.‘ [5] On 19 June 2014, and as per her intimation of the previous day, the Chairperson ruled: ‗Hon members, having perused the Hansard, I have arrived at the conclusion that the statements made by hon Malema are unparliamentary and do not accord with the decorum of this House. Although members enjoy freedom of speech during the proceedings of this House, this freedom is subject to limitations imposed by the Constitution and the Joint Rule. The statements made by hon Malema suggest that the government – which is made up of members of this House – deliberately decided to massacre the people of Marikana. This does not only impute improper motives to those members of the House, but it also accuses them of murder. Secondly, I must also indicate that there commission has been set up by the President to enquire into this matter and that that commission has not yet made any findings. It is therefore undesirable to make statements which will second-guess the outcomes of commissions. I want to further remind hon members of this House that a Ruling made by a Presiding Officer is final. Statements like ―I am not going to withdraw‖ sound contemptuous and are also challenging to the authority of the officer presiding. Having said that, hon members, I request hon Malema to withdraw his statements which said that the ANC and the ANC government massacred the people in Marikana.‘ [6] Not only did Mr Malema refuse to withdraw his previous statement, he added: ‗Chair, when the police reduce crime, you come here and say that the ANC has reduced crime. When the police kill people, you don‘t want us to come here and say that the ANC government has killed people. That is inconsistent, hon Chair‘ . . . ‗Mr SJ Malema: Chair, I maintain that the ANC government killed people in Marikana.‘ He was then commanded by the Chairperson to leave the House. [7] Aggrieved by the Chairperson‘s conduct, Mr Malema (as the first applicant) and the EFF (as the second) applied to the Western Cape Division, Cape Town for, inter alia, an order in the following terms: ‗1.1 The following decisions made by the first respondent [the Chairperson] on 19 June 2014 (the first respondent‘s rulings) are reviewed and set aside: 1.1.1 Her decision that statements made by the first applicant ―are unparliamentary and do not accord with the decorum of this House.‖ 1.1.2 Her decision to request and order the first applicant to withdraw his statement that the ANC government had massacred the mineworkers at Marikana in that the police who killed them represented the ANC government. 1.1.3 Her decision to ask the first applicant ―to leave the House.‖ 1.2 It is declared that the first respondent‘s rulings were unlawful and invalid. 1.3 The first respondent is ordered to apologise in public to the applicants for her rulings. 1.4 The first respondent is interdicted from abusing her powers to protect the governing party against lawful criticism in parliamentary debate.‘ The Chairperson was cited as the first respondent in the application and the ANC as the second. But the latter took no part in the proceedings. [8] In opposing the application the Chairperson filed a fairly detailed affidavit. I entertain some doubt as to whether regard can be had to the explanation and elaboration furnished in her affidavit in order to construe her ruling. After all one imagines that her ruling ought to speak for itself and that what was stated before the joint sitting constitutes the exclusive memorial of her ruling – a ruling, which, no doubt, was intended to define and govern the rights and privileges of all the Members of the House not just the respondents. However, the issue not having been raised or properly considered, I shall assume in favour of the Chairperson (without deciding) that such evidence is admissible for present purposes. To the extent here relevant the Chairperson stated: ‗15.3 I made it clear that the statements which I considered unparliamentary were those which suggested that the government, which is made up of Members of the House, deliberately decided to massacre the people of Marikana. I went on to say that this did not only impute improper motives to those Members of the House, but also accused them of murder. 15.4 This was the reason for calling on the deponent to withdraw the statements. . . . 15.11 I wish to emphasise that the deponent was not ordered to leave the House because he maintained that the ANC government had killed people in Marikana, but because he refused to comply with my request and later with my instruction to withdraw the offending statement. 15.12 By refusing to comply with my instruction and request, the deponent was in contempt or disregard of my authority and I was therefore entitled, by virtue of the provisions of Joint Rule 14G, to order him to withdraw immediately from the Chamber for the remainder of the day‘s sitting, the customary sanction when members decline to withdraw statements that have been ruled unparliamentary. . . . 18.5 That the deponent claims to have expressed his opinion on a matter of high public interest and that he and his party hold the ANC responsible for what happened at Marikana, is immaterial. It is what he said of the government, not the ANC, that prompted my ruling. . . . 18.63 In this regard it has to be pointed out that my decision requiring the deponent to leave the House for the remainder of the day‘s sitting was not punishment for what the deponent had previously said of the government, but involved the exercise of a power in terms of Joint Rule 14G (NA rule 51) to the effect that if a Member is in contempt of or disregards the authority of the Chair, he or she may be ordered to withdraw immediately from the House for the remainder of the day‘s sitting. 18.64 The Chair‘s rulings constitute precedents by which subsequent Chairs, Members and Officers are guided and such precedents are noted and, in the fullness of time, may be formulated as principles, or rules of practice. 18.65 It is absolutely imperative that the Chair should be invested with authority to repress disorder and to give effect promptly and decisively to the Rules and Orders of the relevant House. . . . 23.4 I reiterate that the only reason why I insisted that the deponent should withdraw his offending remarks was because he imputed improper motives to Members of the House and accused them of murder, thereby abusing them verbally and casting reflection on their integrity. . . . 24.4 In casu I carefully weighed the deponent‘s remarks against the constitutional value of freedom of political speech and concluded that they reflected particularly adversely upon the integrity of Members of the Cabinet who are Members of the NA. . . . 26.8 Finally, I point out, again, that the offending statement was not one in relation to the governing party but in relation to the government. It was thus not a reference to the governing party that made the statements unparliamentary or objectionable, it was the reflection on Members of the NA that was unparliamentary and underpinned my ruling. . . . 27.2 It was not his criticism of the ANC that offended against the rules and precedent, it was his criticism of the ANC government.‘ [9] The application succeeded before the high court. Bozalek J (Cloete J concurring) issued the following order: ‗1. That the following decisions by First Respondent on 19 June 2014 are reviewed and set aside: 1.1 her decision that statements made by first applicant ―are unparliamentary and do not accord with the decorum of this House‖. 1.2 her decision to request and order first applicant to withdraw this statement that the ANC government had massacred the mineworkers at Marikana in that the police who killed them represented the ANC government. 1.3 her decision to ask first applicant to ―leave the House‖. 2. That the Applicants‘ costs, including the cost of two counsel, are to be paid by first respondent.‘ [10] The high court found that there was ‗no basis at all‘ for the Chairperson to ‗be ordered to apologise in public to the applicants for her rulings‘.3 Likewise, so held the high court, ‗the applicants [had] failed to make out a case for the further order sought, namely that [the Chairperson] be interdicted from abusing her powers to protect the governing party against “lawful criticism in parliamentary debate”.‘4 The appeal by the Chairperson is with the leave of the high court. [11] The constitutional regime which operated when Poovalingam’s case was decided was the Republic of South Africa Constitution Act 110 of 1983, which had no provisions corresponding with the important provisions of the present Constitution (Constitution of the Republic of South Africa, 1996). South Africa is a constitutional democracy, foundational to which is an open and democratic society based on freedom and equality. The notion of an open and democratic society is ‗not merely aspirational or decorative, it is normative, furnishing the matrix of ideals within which we work, the source from which we derive the principles and rules we apply, and the final measure we use for testing the legitimacy of impugned norms and conduct.‘ (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) para 46). [12] As Sachs J put it in Democratic Alliance & another v Masondo NO & another [2002] ZACC 28; 2003 (2) SA 413 (CC) para 42: ‗The requirement of fair representation emphasises that the Constitution does not envisage a mathematical form of democracy, where the winner-takes-all until the next vote-counting exercise occurs. Rather, it contemplates a pluralistic democracy where continuous respect is 3 Malema & another v Chairman National Council of Provinces & another 2015 (4) SA 145 (WCC) para 62. 4 Ibid para 63. (My emphasis.) given to the rights of all to be heard and have their views considered. The dialogic nature of deliberative democracy has its roots both in international democratic practice and indigenous African tradition. It was through dialogue and sensible accommodation on an inclusive and principled basis that the Constitution itself emerged. It would accordingly be perverse to construe its terms in a way that belied or minimised the importance of the very inclusive process that led to its adoption, and sustains its legitimacy.‘ [13] The first section of the Constitution upon which reliance is placed on behalf of the Chairperson is s 57, which provides that the NA ‗may determine and control its internal arrangements, proceedings and procedures; and make rules and orders concerning its business, with due regard to representative and participatory democracy, accountability, transparency and public involvement‘.5 There can be no doubt that this authority is wide enough to enable the NA to maintain internal order and discipline in its proceedings. As Mahomed CJ observed in Speaker of the National Assembly v De Lille [1999] ZASCA 50; 1999 (4) SA 863 (SCA) para 16: ‗This would, for example, include the power to exclude from the Assembly for temporary periods any member who is disrupting or obstructing its proceedings or impairing unreasonably its ability to conduct its business in an orderly or regular manner acceptable in a democratic society. Without some such internal mechanism of control and discipline, the Assembly would be impotent to maintain effective discipline and order during debates.‘ [14] The right to freedom of speech in the NA is expressly constitutionalised in s 58(1)(a), which provides that Cabinet Members and Members of the NA have freedom of speech in the Assembly and its committees, subject to its Rules and orders. Section 5 Section 57 provides: ‗(1) The National Assembly may— (a) determine and control its internal arrangements, proceedings and procedures; and (b) make rules and orders concerning its business, with due regard to representative and participatory democracy, accountability, transparency and public involvement. (2) The rules and orders of the National Assembly must provide for— (a) the establishment, composition, powers, functions, procedures and duration of its committees; (b) the participation in the proceedings of the Assembly and its committees of minority parties represented in the Assembly, in a manner consistent with democracy.‘ The equivalent constitutional provision applicable to the National Council of Provinces is section 70. 58(1)(b)(i) goes on to provide that such members are not liable to civil or criminal proceedings, arrest or imprisonment or damages ‗for anything they have said in, produced before or submitted to the Assembly or any of its committees‘. Section 58(2) states that ‗[o]ther privileges and immunities of the National Assembly . . . may be prescribed by national legislation‘.6 Without those immunities, free speech would be severely curtailed. According to the Constitutional Court (Dikoko v Mokhatla [2006] ZACC 10; 2006 (6) SA 235 (CC) para 39): ‗Immunising the conduct of members from criminal and civil liability during . . . deliberations is a bulwark of democracy. It promotes freedom of speech and expression. It encourages democracy and full and effective deliberation. It removes the fear of repercussion for what is said. This advances effective democratic government.‘7 [15] But, as Madlanga J observed in Democratic Alliance v Speaker of the National Assembly [2016] ZACC 8 (DA v Speaker of the NA) paras 38-39: ‗Surely, the privilege contained in sections 58(1)(a) and 71(1)(a) can never go so far as to give members a licence so to disrupt the proceedings of Parliament that it may be hamstrung and incapacitated from conducting its business. This would detract from the very raison d'être of Parliament. . . . More pertinently, sections 58(1)(a) and 71(1)(a) of the Constitution make freedom of speech in the two Houses subject to ―the rules and orders‖ envisaged in sections 57 and 70. That must mean rules and orders may – within bounds that do not denude the privilege of its essential content – limit parliamentary free speech.‘ 6 Section 58(1) provides: ‗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.‘ 7 This was stated in the context of municipalities, but it is of equal relevance to Parliament. [16] Here the respondents do not dispute Parliament‘s power to self-regulate within constitutional bounds. Nor is the validity of the standing order, which reads: ‗…Members should not be allowed to impute improper motives to other Members, or cast personal reflections on the integrity of Members, or verbally abuse them in any other way‘, challenged. What is in dispute is whether the Chairperson lawfully and rationally applied the standing order. The legality and rationality thresholds are not lowered because the decisions were made in Parliament.8 And testing the Chairperson‘s exercise of what, after all, is a public power against those thresholds falls well within the judiciary‘s constitutional province.9 [17] Mr Malema spoke in Parliament about what has been described as ‗a burning issue of immense public interest‘. The Constitution guards Parliament‘s role as an incubator of political speech.10 There is nothing unparliamentary about robust, emotive language. In Democratic Alliance v African National Congress [2015] ZACC 1; 2015 (2) SA 232 (CC) para 133, the Constitutional Court pointed out that: ‗Political life in democratic South Africa has seldom been polite, orderly and restrained. It has always been loud, rowdy and fractious. That is not a bad thing. Within the boundaries the Constitution sets, it is good for democracy, good for social life and good for individuals to permit as much open and vigorous discussion of public affairs as possible.‘ [18] The purpose of the standing order is to ensure that parliamentary debates are not clouded by personal insults. Ad hominem attacks do not contribute to democratic discourse, hence they are not protected. But the standing order does not – and 8 Democratic Alliance v President of the Republic of South Africa [2012] ZACC 24; 2013 (1) SA 248 (CC) para 44; Economic Freedom Fighters v Speaker of the National Assembly & others; Democratic Alliance v Speaker of the National Assembly & others [2016] ZACC 11 (EFF v Speaker of the NA) para 98 (the Constitutional Court was rightly unconcerned about the separation of powers when finding that the President‘s failure to comply with the Public Protector‘s remedial action was unconstitutional). 9 Affordable Medicines Trust & others v Minister of Health of RSA & another [2005] ZACC 3; 2006 (3) SA 247 (CC) paras 48, 49, 75-77; International Trade Administration Commission v SCAW South Africa (Pty) Ltd [2010] ZACC 6; 2012 (4) SA 618 (CC) paras 92-93; and most recently EFF v Speaker of the NA paras 43 and 45. See also I Mahomed ‗The role of the judiciary in a constitutional State‘ (1998) 115 SALJ 111. 10 Speaker of the National Assembly v De Lille [1999] ZASCA 50; 1999 (4) SA 863 (SCA) (De Lille) para 29. constitutionally cannot – go as far as impeding political speech. It does not censor criticism of the government or its ruling party. Importantly, Mr Malema initially referred only to the ANC. It was Mr Radebe who incorrectly attributed the words ‗ANC government‘ to him. The word ‗government‘ was thereafter embraced by Mr Malema. On any reckoning therefore Mr Malema‘s initial statement was not unparliamentary and did not give cause for Mr Radebe to rise on a point of order. The point of order was plainly based on a misconception of what had initially been stated by Mr Malema. [19] In any event, even when regard is had to all of Mr Malema‘s utterances on the matter, it is plain that his primary target was the ruling party, not members of Parliament. On any sensible interpretation of his words, he was criticising the government and its ruling party for the conduct of the police at Marikana. He did not target Members of Parliament, either individually or collectively. As he explains in his founding affidavit: ‗My statements had made it clear that I hold the ruling party responsible for the massacre of the 34 mineworkers because the police who had killed them ‗were representing the ANC government‘. No reasonable person could have interpreted my statement to mean that all the ANC Members of Parliament were guilty of murder.‘ [20] The ANC is not the same as the ANC caucus in Parliament. For this reason, the Chairperson has been forced to concede that criticism of the ANC does not contravene the standing order. She says it was rather ‗what [the first respondent] said of the government, not the ANC, that prompted my ruling‘. But the standing order does not mention the government either. It only talks of Members of Parliament. For the standing order to apply, Mr Malema‘s words had to have targeted Members of Parliament. And so the Chairperson attempts to build an interpretive bridge between ‗ANC government‘ and ‗Members of Parliament‘. She does so by reasoning that the government is ‗largely comprised of Members of Parliament‘ and so, to paraphrase her, criticism of ‗the government‘ should be understood as criticism against ‗a large component of Members of Parliament‘. But it is absurd to link ‗the ANC‘ and ‗the ANC government‘ to ANC parliamentarians. The Chairperson‘s logic is that ‗the government‘ is largely comprised of Members of the National Assembly. But that is a linguistic leap. Mr Malema makes plain that the police were representing the ANC government. That can only be a reference to the ANC-led executive and it being vicariously liable for the conduct of the police. The fact that Mr Malema initially mentioned ‗the ANC‘ confirms that his criticism was levelled against the ruling party and its policies. In fact, he never mentioned ‗the government‘ without prefixing it with ‗the ANC‘. His target was thus political, not parliamentary. [21] The Chairperson‘s interpretation of the standing order cannot withstand constitutional scrutiny. The implication of that interpretation is that any criticism made against the government is also criticism against individual Members of Parliament who are members of the ANC (or at least the national executive). It means that Members of Parliament may no longer freely accuse the government of any improper conduct. On the Chairperson‘s interpretation of the standing order, criticism of government would always constitute criticism of Members of Parliament (and/or the Executive). Such an interpretation serves censorship, not free expression. But even if one were to assume that Mr Malema‘s words did target the ANC caucus, there was no imputation of improper motives or the casting of personal aspersions on the integrity of members. Rather it was the Chairperson who chose to put a gloss on Mr Malema‘s words, when she attributed the following to him – that the government ‗deliberately decided to massacre the people of Marikana‘. She further misconstrued his statement as accusing ANC parliamentarians of murder. However, that is not what he said. The ordinary meaning given to his words – heard in context by a reasonable person – is that the ANC-led government is vicariously liable for the conduct of the police. Mr Malema‘s words cannot sensibly be interpreted to mean that the ANC government planned to kill mineworkers. Nor can they be sensibly interpreted to be a reference to any particular person in government or for that matter any individual member (or class of members) of Parliament. [22] Sensibly interpreted, Mr Malema‘s words constituted legitimate criticism of the conduct of the police at Marikana. The police fall under the authority of the ANC-led government. If that criticism reverberated to ANC parliamentarians, it did so because they are members of the ANC, not because they are Members of Parliament. By equating ‗the ANC‘ and ‗the ANC government‘ with ANC parliamentarians, the Chairperson misconstrued her powers under the standing order. The purpose of her powers under the standing order is to ensure that parliamentary debates are not marred by personal insults directed at members (either individually or collectively). Mr Malema did not name an individual member or a collective group of members. Nor did he cross the bounds of legitimate, if robust, political speech. The Chairperson‘s decisions were thus not rationally related to the purpose of the standing order. [23] But even if Mr Malema‘s words targeted Members of Parliament, they were protected by s 58(1) of the Constitution. While Parliament may be empowered to make rules, its rules must be interpreted in conformity with the crucial guarantee of freedom of speech in Parliament afforded by s 58(1) of the Constitution.11 That right is a necessary incident of representative government in a democratic society.12 To once again borrow from Masondo (para 43): ‗The open and deliberative nature of the process goes further than providing a dignified and meaningful role for all participants. It is calculated to produce better outcomes through subjecting laws and governmental action to the test of critical debate, rather than basing them on unilateral decision-making. It should be underlined that the responsibility for serious and meaningful deliberation and decision-making rests not only on the majority, but on minority groups as well. In the end, the endeavours of both majority and minority parties should be directed not towards exercising (or blocking the exercise) of power for its own sake, but at achieving a just society where, in the words of the Preamble, ―South Africa belongs to all who live in it‖‘. 11 De Lille paras 20 and 29. 12 Ibid para 29. [24] Moreover, s 39(2) of the Constitution requires an interpretation of the standing order that promotes the spirit, purport, and objects of the Constitution. Whatever the standing order means, it cannot be interpreted to prohibit criticism of the government and other species of political speech. That interpretation would be inconsistent with the plain language of the standing order, its purpose, and s 58(1) of the Constitution. For, as it was put in De Lille (para 20): ‗[Freedom of speech in the Assembly] is a crucial guarantee. The threat that a member of the Assembly may be suspended for something said in the Assembly inhibits freedom of expression in the Assembly and must therefore adversely impact on that guarantee.‘ [25] It follows that even if Mr Malema had directed criticism at members of parliament, the standing order still did not find application because his words were constitutionally protected political speech. He engaged in robust criticism of government conduct. His words fell in the heartland of political speech, and were therefore protected by section 58(1) of the Constitution. For democracy to flourish, free speech cannot be stifled. Free speech, in parliament, lies at the heart of parliamentary processes. The standing orders cannot be interpreted so as to nullify free speech. The interpretation advanced by the Chairperson has that exact consequence. Recently in DA v Speaker of the NA paras 11 and 17, the Constitutional Court emphasized that free speech operates as a bulwark against tyranny. It stated: ‗South Africa is a constitutional democracy. Hard-won democracy that came at a huge cost to many; a cost that included arrest, detention, torture and – above all – death at the hands of the apartheid regime. The importance of our democracy, therefore, cannot be overstated. It is the duty of all – in particular the three arms of state – jealously to safeguard that democracy. Focussing on Parliament, the pluralistic nature of our parliamentary system must be given true meaning. It must not start and end with the election to Parliament of the various political parties. Each party and each Member of Parliament have a right to full and meaningful participation in and contribution to the parliamentary process and decision-making. By its very nature, Parliament is a deliberative body. Debate is key to the performance of its functions. For deliberation to be meaningful, and members effectively to carry out those functions, it is necessary for debate not to be stifled. Unless all enjoy the right to full and meaningful contribution, the very notion of constitutional democracy is warped. . . . Parliament is also entrusted with the onerous task of overseeing the Executive. Tyrannical rule is usually at the hands of the Executive, not least because it exercises control over the police and army, two instruments often used to prop up the tyrant through means like arrest, detention, torture and even execution. Even in a democracy, one cannot discount the temptation of the improper use of state organs to further the interests of some within the Executive. Needless to say, for Parliament properly to exercise its oversight function over the Executive, it must operate in an environment that guarantees members freedom from arrest, detention, prosecution or harassment of whatever nature. Absent this freedom, Parliament may be cowed, with the result that oversight over the Executive may be illusory.‘ [26] Lastly, the Chairperson attempts to shift the focus of this appeal to Mr Malema‘s alleged contempt for her authority. Once she had made a ruling, so her argument goes, he was not entitled to disobey it. But it does not follow from this that the Chairperson necessarily had the constitutional authority to suspend Mr Malema from the proceedings in the circumstances in which she did. It is clear that he was not suspended because his behaviour was obstructing or disrupting or unreasonably impeding the management of orderly business within the House, but rather as some kind of punishment for simply making a speech (which did not obstruct or disrupt the proceedings in the House at the time), but was nevertheless considered objectionable and unjustified by others, particularly, so it would seem, members of the majority party.13 It is important to emphasise that the former kind of suspension is a necessary protective measure, the latter not.14 When Mr Malema refused to withdraw his statement that had been ruled unparliamentary by the Chairperson, he did so on pain of sanction. The sanction imposed by the Chairperson was his suspension from the House for the rest of the day. He did – as he was obliged to – comply with the directive of the Chairperson that he leave the House. In that he acted correctly for until that decision was set aside by a 13 Interference and disruption that may be sufficient for the removal of a member must be of a nature that hamstrings and incapacitates Parliament from conducting its business (Democratic Alliance v Speaker of the National Assembly & others [2016] ZACC 8 para 45). 14 De Lille para 17 relying on the Privy Council decision in Kielley v Carson & others (1841-1842) 4 Moo PC 63; 13 ER 255 (PC). court it could not simply be ignored (Oudekraal Estates (Pty) Ltd v City of Cape Town & others [2004] ZASCA 48; 2004 (6) SA 222 (SCA) para 26). [27] The respondents reviewed both rulings by the Chairperson. If her ruling on his words was unlawful and irrational, then it seems to me, so too must be her consequent ruling that he leave the house. In any event, even if the appellant‘s ruling on the words used by Mr Malema was not the ultimate reason for him being asked to leave the House, it necessarily played a significant role in that outcome. If, as has been shown, it was bad, then her consequent ruling that he be suspended from the house likewise falls to be impugned. In this regard it is important to emphasise, as Madlanga J did in DA v Speaker of the NA para 44, that: ‗It cannot be all conduct that annoys and tests the patience of the presiding officer and some in Parliament that amounts to interference or disruption. Robustness, heatedness and standing one‘s ground inhere in the nature of parliamentary debate. To warrant removal from the Chamber, interference or disruption must go beyond what is the natural consequence of robust debate. Otherwise the very idea of parliamentary free speech may be eroded. In the heat of a debate one must expect that – from time to time – a member‘s contributions will not come to a screeching, mechanical halt once the presiding officer has ruled that the member desist from further debate on a subject.‘ [28] To sum up: First, the Chairperson‘s case rests on a false equivalence between ‗government‘ and members of Parliament. However, they are not the same – criticism of government is not criticism of members of Parliament. The standing order only applies when speech targets Members of Parliament. Mr Malema‘s speech did not. That, in and of itself ought to dispose of the appeal. But, second, even if the linguistic leap contended for by the Chairperson is taken, namely that Members of Parliament were implicated, Mr Malema‘s speech is protected political speech. On a constitutionally compliant interpretation of the standing order, it was thus inapplicable to his legitimate, if robust, criticism of the government. That too is dispositive of the appeal. It follows that the appeal must fail and it accordingly falls to be dismissed with costs including those consequent upon the employment of two counsel. [29] One further aspect remains: Leave to appeal was granted by the high court on 2 June 2015. On 2 July 2015 the notice of appeal was filed by the Chairperson‘s attorney with the registrar of this court in terms of SCA rule 7(1)(a). On 30 September 2015 and in terms of SCA rule 8(1) the record of appeal was lodged with this court. An accompanying letter from the attorney for the appellant read: ‗. . . Kindly note that the record was served on Godla & Partners [attorneys for respondents] in Cape Town. . . We confirm that at this point in time the respondents‘ Cape Town correspondent did not appoint a Bloemfontein correspondent to accept all pleadings on their behalf.‘ On 19 October 2015 the Chairperson‘s heads of argument was served and filed. In terms of SCA rule 10(1)(b) the respondents‘ heads of argument had to be filed within one month from receipt of the appellant‘s heads of argument, being 11 December 2015. That did not happen. On 10 February 2016 the attorney for the Chairperson addressed the following letter to the registrar of this Court: ‗The respondents have not complied with the rules in that they have not filed their heads of argument despite numerous requests from our offices. Can you please allocate a date for the hearing of this matter?‘ On 21 March 2016, the registrar served a notice of set down on both parties. On 14 April 2016, the registrar wrote to Mr Godla: ‗Kindly confirm if your client abides by the Ruling of this Court since there are no heads of argument filed by yourselves, nor have you appointed a correspondent in this matter. The case is set down but you do not respond. I telephoned your office but no one answers the phone. Kindly contact me to indicate what your client‘s position is.‘ When that failed to elicit a response, the registrar once again wrote on 19 April 2016 ‗I have not heard anything from you. Your response is eagerly awaited.‘ Only then did Mr Godla reply: ‗I have received communication from your goodself and wish to acknowledge same. I have seen the attachment of Notice of Set Down. I have discussed the date with my counsel and he is not available on the 6th May 2016. In the circumstances kindly assist with an alternative date or if it is possible with you I can get the dates of my counsel and forward same to you in order for you to determine the convenient date for all the parties. Kindly indicate if this is acceptable to you.‘ The next day the registrar wrote: ‗You have been notified of the notice of set down on 21 March 2016 by email already. I have sent the notice again on 14 April 2016.The matter has been set down and will proceed. You have neither appointed a correspondent firm in Bloemfontein as per requirement of the Rules, nor have you filed heads of argument and you are far out of time. If you still want to participate in this appeal, you will have to file without delay together with an application for condonation. If a case is set down for hearing of an appeal in this court, the parties must arrange themselves accordingly. If your counsel is not available, you should consider to appoint alternative counsel. Unless you can agree with the opposition for a postponement with an agreement as far as costs are concerned the case will not be postponed.‘ Eventually after 4 pm on 4 May 2016 we were furnished with electronic copies of the respondents‘ heads of argument and a practice note. An application for condonation followed the next day. The explanation tendered by Mr Godla for his failure to comply with the rules of this court is woefully inadequate. In short it amounts to him stating that he did nothing because he did not appreciate that anything had to be done. This court has repeatedly admonished attorneys who purport to practice in this court for their failure to familiarise themselves with and comply with its rules.15 Although the application for condonation was initially opposed, at the hearing of the appeal Counsel for the Chairperson did not persist in the opposition. We accordingly granted the condonation sought and intimated then that an appropriate order for the costs of the application would be incorporated in the court‘s order. In his affidavit Mr Godla tendered costs on behalf of the respondents. In my view there can however be no warrant for the respondents to be mulcted with these costs. As Mr Godla accepts that: ‗The delay in filing the respondents‘ heads of argument was my mistake‘, he should be saddled with these costs. And given what can only be described as a flagrant disregard for the rules of this court, any costs order that issues has to be on the punitive scale. Indeed Counsel for the respondents was constrained to concede that such an order would be just and appropriate in the circumstances of this case. 15 Government of the Republic of South Africa v Maskam Boukontrakteurs (Edms) Bpk 1984 (1) SA 680 (A) at 692H-693A, where Corbett JA held for the unanimous court that a failure on the part of attorneys to perform duties imposed by the rules of this court amounts to a breach of duty of care owed by the attorney to his client; see also Blumenthal & another v Thomson NO & another 1994 (2) SA 118 (A); and Darries v Sheriff Magistrate’s Court Wynberg & another [1998] ZASCA 18; 1998 (3) SA 34 (SCA) and the authorities cited therein. And also see L T C Harms ‗What irritates Judges?‘ Advocate (2001) 14(3) 24-25. [30] In the result: (1) Subject to para (2) below, the appeal is dismissed with costs, such costs to include those consequent upon the employment of two counsel. (2) The costs of the application for condonation in respect of the respondents‘ failure to timeously serve and file their heads of argument shall be paid by their attorney, Mr Godla, de bonis propriis on the attorney and own client scale. _________________ V M Ponnan Judge of Appeal APPEARANCES: For Appellant: J C Heunis SC (with him N Mayosi) Instructed by: The State Attorney, Cape Town The State Attorney, Bloemfontein For Respondents: T Ngcukaitobi (with him J Mitchell) Instructed by: Godla & Partners Inc, Cape Town

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 2016 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Chairperson of the National Council of Provinces v Malema (535/2015) [2016] ZASCA 69 (20 May 2016) MEDIA STATEMENT Today, the Supreme Court of Appeal (SCA) dismissed the appeal by the Chairperson of the National Council of Provinces against a decision of the Western Cape Division of the High Court, Cape Town, and accordingly upheld an order reviewing and setting aside certain rulings that she had made against Mr Julius Malema (the first respondent) while chairing a joint sitting of the National Assembly and the National Council of Provinces. The issue before the SCA was whether the court a quo was correct in reviewing and setting aside as unlawful the Chairperson’s rulings during a parliamentary debate following the 2014 State of the Nation Address that: (i) Mr Malema’s statement that the African National Congress (ANC) government had ‘massacred the people in Marikana’ was unparliamentary; (ii) Mr Malema must withdraw that statement; and (iii) Mr Malema’s refusal to comply with her order to withdraw the statement amounted to contempt of her authority, justifying an order that he must leave the House. The respondents (Mr Malema and his political party, the Economic Freedom Fighters) did not dispute Parliament’s power to self-regulate its procedures within constitutional bounds, or the validity of a standing order prohibiting Members of Parliament (MPs) from imputing improper motives to other MPs, or casting personal aspersions on the integrity of MPs, or verbally abusing them. Rather they argued that the Chairperson unlawfully and irrationally applied this standing order. The SCA held that the purpose of the standing order is to ensure that parliamentary debates are not clouded by personal insults. However, according to the SCA, it does not, and cannot, go as far as impeding political speech. Nor can it operate to censor the criticism of the government or the ruling party. Mr Malema was clearly criticising the government and its ruling party, and not ANC MPs, either individually or collectively. The Chairperson’s interpretation of the standing order could not withstand constitutional scrutiny, as the consequence would be that any criticism made against the government is also criticism against individual MPs who are members of the ANC. Accordingly, the Chairperson misconstrued her powers under the standing order, and her ruling that Mr Malema’s statement was unparliamentary fell to be set aside. In addition, the SCA held that even if Mr Malema’s words had targeted MPs, he still would have been constitutionally protected. While Parliament is empowered to make rules, its rules must be interpreted in conformity with the crucial guarantee of freedom of speech in Parliament afforded by s 58(1) of the Constitution. Whatever the standing order means, it cannot be interpreted to prohibit criticism of the government and other species of political speech, and Mr Malema’s criticisms fell in the heartland of protected political speech. Finally, the SCA rejected the Chairperson’s argument that Mr Malema’s disobedience justified his removal, regardless of the correctness of the ruling. The SCA found that Mr Malema was not suspended because his behaviour was obstructive or disruptive or impeding the management of orderly business within the House, but rather as a punishment for making a speech which was considered objectionable by some. The former kind of suspension is a necessary protective measure, while the latter is not. And in the light of the setting aside of the basis for the suspension, the SCA held that the decision ordering the suspension must also be set aside. Accordingly, the SCA dismissed the appeal. --- ends ---

3075

non-electoral

2015

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 438/2015 Not Reportable In the matter between: SITHEMBISO RONALD NGCULU APPELLANT and THE STATE RESPONDENT Neutral citation: Ngculu v The State (438/15) [2015] ZASCA 184 (30 November 2015) Coram: Bosielo, Zondi, Mathopo JJA and Van der Merwe, Baartman AJJA Heard: 18 November 2015 Delivered: 30 November 2015 Summary: Criminal appeal against conviction on murder and assault with intent to cause grievous bodily harm – sentenced to life imprisonment in respect of murder and 3 years’ imprisonment in respect of assault with intent to cause grievous bodily harm – single witness – adequacy of the evidence – fair trial – sentence of life imprisonment disturbingly inappropriate. ORDER On appeal from: Limpopo High Court, Thohoyandou (Makhafola J sitting as court of first instance). a) The appeal against convictions is dismissed. b) The appeal against the sentence imposed succeeds partially and to the following extent: ‘The sentence of life imprisonment in respect of murder is set aside and replaced with a sentence of 20 years’ imprisonment. The sentence of 3 years’ imprisonment in respect of the assault with intent to cause grievous bodily harm is confirmed. In terms of s 280 of the Criminal Procedure Act 51 of 1977, the sentence of 3 years’ imprisonment is ordered to run concurrently with the sentence of 20 years’ imprisonment in respect of murder.’ c) The sentence is antedated to 22 September 2011. ________________________________________________________________ JUDGMENT ________________________________________________________________ Bosielo JA (Zondi, Mathopo JJA and Van der Merwe, Baartman AJJA concurring) [1] The appellant who was accused 6, stood trial together with six others in the Limpopo High Court, Thohoyandou on a number of counts. He was ultimately convicted on the counts of murder and assault with intent to do grievous bodily harm. He was sentenced to imprisonment for life in respect of murder and 3 years’ imprisonment for assault with intent to cause grievous bodily harm. The appellant’s application for leave to appeal against his conviction and sentence was refused by the court below. The appeal before us is with the leave of this Court. [2] The state called several witnesses. The appellant’s conviction is predicated on the medical evidence by Dr NT Mutshembele and the evidence of a complainant who survived the assault, Tshifaro Funanani (Funanani). According to Funanani, he was accosted by the former accused 5 whilst at a bar lounge in the village. He was accused of having stolen some cables at accused 2’s mill. He was forcibly taken to accused 2’s mill where he was assaulted by accused 1 and 3 with a cable. They were saying ‘he, the complainant, knows and he will talk’. [3] In no time, the deceased was brought in by accused 1, 2, 3, 5, 6 and 7. Accused 3 and 7 started to assault the deceased all over his body with pieces of cables. Accused 3 and 7 then took cables and started to assault the deceased all over his body. Both the deceased and Funanani were then shocked with electric wires by accused 1 and 7. All seven accused continued to assault them. Later, they were hung upside down from the rafters. Funanani testified that as he was escaping he saw the deceased lying on the ground whilst accused 2 was standing next to him. He was later separated from the deceased. He saw the deceased walking with great difficulty whilst being taken to another room. Accused 7 was physically supporting and helping him to walk. According to Funanani all the accused including the appellant assaulted him and the deceased. He later consulted with Dr Mutshembele who treated him for the injuries he had sustained from the assault. According to Funanani, the accused were drinking intoxicating liquor whilst assaulting them. [4] Dr Mutshembele testified and elaborated on multiple soft tissue injuries which he observed on Funanani during his medical examination. His professional opinion is that ‘these injuries were consistent with the injuries that were caused by a blunt object’. [5] I pause to state that the appellant made formal admissions in terms of s 220 of the Criminal Procedure Act 51 of 1977 (CPA) where he admitted having ‘kicked Tshifaro [the deceased] in order to induce him to disclose information pertaining to his involvement in the theft of electric cables around Tshisaulu area’. The appellant did not testify in his defence but testified in mitigation of sentence. [6] Before us, the appellant’s counsel’s main attack against the judgment of the court below was that the appellant did not get a fair trial. This was premised on the fact that all seven accused were represented by one counsel. The contention is that their common counsel was conflicted as accused 2 in particular implicated the appellant during his testimony. It was contended further that the appellant was unfairly denied the right to testify due to this conflict of interest. This resulted in the appellant’s version not being put before the court below, so the contention went. [7] On the other hand, the respondent’s counsel supported the convictions as being unassailable. He contended that the state’s evidence was clear and overwhelming. Furthermore, he submitted that the appellant placed himself at the scene of crime and further admitted participating in the assault on the deceased. Based on this, he contended that the appellant’s failure to testify to dispute the state’s version was fatal to his case. Regarding the appellant’s role, he submitted that by being at the crime scene and participating in the assault, irrespective the role he played, he associated himself with the entire assault, and thus made himself guilty by common purpose. [8] As I indicated earlier, the appellant’s main contention is that he did not receive a fair trial on the basis that all seven accused were represented by one counsel. The appellant contends that this made it very difficult for the same counsel to effectively cross-examine accused 2 who implicated him. A second string to his bow was the contention that the appellant was ill-advised by his counsel not to testify in his defence. As a result, his version was never put before the court below, resulting in an unfair trial. [9] The record does not bear out these complaints. It is correct that Mr Mushasha represented all the accused. As he was on a private and not on a Legal Aid Board brief, it follows that he was counsel of choice by the accused. This is in line with s 35(3) (f) of the Constitution which states that ‘every accused person has a right to a fair trial, which includes the right to choose, and be represented by a legal practitioner.’ Once an accused person has chosen his or her legal representative, he or she enters into what is called a lawyer-client relationship. This relationship is unique. It requires the lawyer to receive full and clear instructions from his or her client which include the client telling the lawyer the truth about what his or her case is. Whatever the client discloses to the lawyer is privileged and can only be disclosed with the client’s consent. No person, including the court can insist on such lawyer-client confidential discussions being disclosed. This will enable the lawyer to determine and advise the client accordingly. [10] Ordinarily, in the course of consultation, both the lawyer and the client will discuss and agree on the strategy to be adopted during the trial. Once this has happened, the conduct of the trial is left in the hands of the lawyer, who presumably will act on the client’s mandate. Should the lawyer either ignore or go beyond or even against the client’s mandate, the client is free to take remedial actions which he or she may find appropriate, which may include correcting the lawyer or at worst, terminating the lawyer’s mandate. Because of the confidentiality of the consultations between the lawyer and the client, a court will not know if and when the lawyer is not acting in accordance with the mandate. It is the accused who will know. A court will only know if an accused brings it to its attention. Even then a court has very limited powers to intervene, save where it is clear that an injustice is happening to the accused. There was absolutely no indication in this case that the appellant was not satisfied with the manner in which Mr Mushasha conducted his trial. In fact all evidence points to the contrary. [11] In this matter, Mr Mushasha received instructions from the appellant. He executed his mandate. Throughout the trial, the appellant never complained about how he conducted the trial. As part of their strategy they had agreed with him that only accused 2 would testify. Mr Mushasha explained the strategy and the rationale behind it to all the accused including the appellant. They all accepted his advice. It follows that they made an informed decision. Ordinarily, no court can circumvent this and interrogate the accused about the wisdom of his or her choice. I venture to say that a court can do this in exceptional circumstances. Such as where the lawyer is patently incompetent and there is a real indication that the decision is ill-considered and might result in a failure of justice. Fortunately, that is not the case in this matter. In this case, the appellant was satisfied with the manner in which Mr Mushasha conducted the trial. This is demonstrated by the fact that even after he withdrew from the case due to lack of funds, the appellant and the other accused raised money and reinstated him. Why is the appellant complaining now? This is clearly the case where an accused person is satisfied with the strategy adopted by his or her lawyer. Once the strategy has backfired as it did here, such an accused cannot be allowed to try to avoid the unpleasant results of the trial by imputing the blame to his or her lawyer. This is an age-old trick often adopted by disgruntled accused. Such a stratagem can never be allowed to undermine the administration of justice by setting aside convictions which are proper. It follows that this ground has no merit. [12] I am fortified in this finding by two important events which occurred during the trial and which undermine the appellant’s complaint about his counsel. Firstly, on 15 March 2010, some time before the trial started, Mann AJ asked Mr Mushasha, who appeared for all seven accused if there is no conflict amongst any of the seven accused which may necessitate the obtaining of the services of another counsel to represent some of the accused. He responded and assured the court that there is no such conflict. Notably, none of the accused, including the appellant raised any objection to this. Secondly, during the trial Mr Mushasha withdrew from defending all the accused due to lack of funds. The accused requested the court to grant them a postponement to enable them to raise funds as they preferred to retain Mr Mushasha as their counsel. Suffice to state that after they had resolved their financial difficulties, Mr Mushasha was placed on brief to continue defending all seven of them, including the appellant. Why would they have him reinstated if they were not satisfied with how he conducted their defence? Thirdly, the record shows that at the end of the cross- examination of the state witnesses, Mr Mushasha would, with the court’s leave, approach all seven accused to verify if he had covered all relevant aspects of the case in his cross-examination. None of the seven accused, including the appellant ever indicated their dissatisfaction with the manner in which Mr Mushasha cross-examined the state witnesses. The facts of this case show indubitably that the appellant was either satisfied with the manner in which Mr Mushasha conducted his trial or acquiesced therein. S v Louw 1990 (3) SA 116 (AD). [13] It is worth noting that the appellant is not illiterate or unsophisticated. At the time of the trial, he was busy with his thesis research for his honours degree on microbiology at the University of Venda (Univen). This would qualify him for MSc (Master of Science). It is not the appellant’s case that he did not follow the court proceedings. With his level of education, it is unthinkable that he did not appreciate the importance of the decisions which he took regarding his choice of counsel. It is axiomatic that counsel acts on instructions from his or her client and never on his own. Based on this, I accept that whatever Mr Mushasha did, he did it with the informed consent of the appellant. This explains why throughout the trial the appellant never complained to the court regarding any decision which Mr Mushasha took. The truth is that whatever strategy Mr Mushasha opted for was discussed and agreed upon with all the accused, including the appellant. This case is different from what happened in S v Majola 1982 (1) SA 125 (A) where the appellant had expressed disagreement with the conduct of his case by his counsel during the trial. Faced with a similar problem, this Court held in R v Matonsi 1958 (2) SA 450 (AD) at 457F that ‘since the appellant took no steps to withdraw his counsel’s mandate and expressed no disagreement with the conduct of his case until after the verdict had been given the trial was regular and the correctness of the verdict cannot be challenged on appeal to this Court’. It suffices to state that by parity of reasoning this appeal must suffer the same fate. [14] I now turn to deal with the appeal against the sentence. The appellant’s counsel submitted that, although the assault was brutal, concerted, prolonged and perpetrated by a group of men, it was not so serious as to call for life imprisonment. However, he conceded correctly in my view that, having taken all the circumstances into account, a sentence of 20 years’ imprisonment in respect of murder would be appropriate as it would punish the appellant appropriately whilst reflecting the gravity and seriousness of the offence, particularly as this amounted to self-help. He did not attack the 3 years’ imprisonment imposed for the assault with intent to do grievous bodily harm. [15] The court below sentenced the appellant in terms of the Criminal Law Amendment Act 105 of 1997. This is notwithstanding the fact that neither in the indictment nor at any stage during the trial, was any mention made of the state’s desire to invoke the minimum sentence prescribed in the Act. Such a step is improper and impermissible as the appellant had not been pre-warned of the applicability of the minimum sentence regime. See S v Ndlovu (75/2002) [2002] ZASCA 144; 2003 (1) SACR 331 (SCA); S v Legoa (33/2002) [2002] ZASCA 122; 2003 (1) SACR 13 (SCA); S v Makatu (245/05) [2006] ZASCA 72; 2006 (2) SACR 582 (SCA). [16] Given the peculiar circumstances of this case, I find a sentence of imprisonment for life imposed on the appellant shockingly inappropriate. However, it cannot be gainsaid that the appellant made himself guilty of a serious offence. Any offence which involves a deliberate infliction of harm to another is serious. It is a violation of his or her right to his or her dignity and physical integrity. What makes it even more serious is that it was perpetrated by a group who assaulted the appellant and the deceased randomly. They used an electric cable which in itself can inflict serious injuries. The assault was prolonged, indiscriminate, brutal and barbaric. The medical report shows that the deceased died of serious injuries to his body, whilst Funanani suffered serious injuries all over his body. [17] The reason advanced for this wanton assault on the deceased and Funanani is that accused 2 had suffered theft of his cables at his mill. The deceased and Funanani were the suspects. It is clear that accused 2 was aggrieved and angry because of the loss he had suffered. His co-accused including the appellant were merely assisting him to investigate the theft and apprehend the culprits. However, their biggest mistake is that once they found them, they did not take them to the police station to allow the criminal justice system to take its course. They attempted to turn themselves into police officers, prosecutors and a court. In simple terms, they took the law into their own hands. Needless to state that we are living in a constitutional democracy underpinned by the rule of law and the principle of legality. Section 34 of the Constitution guarantees everybody the right of access to justice. Citizens must learn to respect and abide by the law. It is reprehensible for the appellant and his co- accused to have taken the law into their own hands. Our constitutional architecture has no room for self-help. See Lesapo v North West Agricultural Bank & another (CCT 23/99) [1999] ZACC 16; 2000 (1) SA 409 (CC); (1999 (12) BCLR 1420). [18] The offences for which the appellant has been convicted call for a severe sentence. Both counsel for the appellant and the state suggested a sentence of 20 years’ imprisonment as being balanced and appropriate. I agree. I think that a sentence of imprisonment for 20 years’ although not necessarily destroying the appellant, will punish him effectively and, importantly will cater for society’s outrage at such conduct, lest we create the impression, unwittingly that owners whose property has been stolen may take the law into their own hands with impunity. This will be a fertile ground for vigilantism to thrive – a recipe for lawlessness. [19] On the other hand, I do not think that the sentence of 3 years imprisonment for assault with intent to cause grievous bodily harm on Funanani, is shockingly inappropriate. None of the counsel argued to that effect. However, sight cannot be lost of the fact that essentially the two crimes constitute one continuous act committed at the same place, same time, by the same accused and for the same reason. Although it is correct to punish him separately for the two offences, the cumulative sentence of 23 years’ imprisonment induces a sense of shock. Justice requires that it be tempered. I think that the severity of the sentence can be ameliorated by ordering the sentence of 3 years’ imprisonment to run concurrently with the 20 years’ imprisonment imposed for murder in terms of s 280 of the CPA. [20] In the result, the following order is made: a) The appeal against convictions is dismissed. b) The appeal against the sentence imposed succeeds partially and to the following extent: ‘The sentence of life imprisonment in respect of murder is set aside and replaced with a sentence of 20 years’ imprisonment. The sentence of 3 years’ imprisonment in respect of the assault with intent to cause grievous bodily harm is confirmed. In terms of s 280 of the Criminal Procedure Act 51 of 1977, the sentence of 3 years’ imprisonment is ordered to run concurrently with the sentence of 20 years’ imprisonment in respect of murder.’ c) The sentence is antedated to 22 September 2011. ____________ L O Bosielo Judge of Appeal APPEARANCES: For Appellant: LM Manzini Instructed by: Legal Aid South Africa, Polokwane Legal Aid South Africa, Bloemfontein For Respondent: A Madzhuta Instructed by: Director Public Prosecutions, Thohoyandou 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 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. NGCULU V THE STATE (438/15) [2015] ZASCA 184 (30 NOVEMBER 2015) [1] Today the SCA dismissed the appeal against the appellant’s conviction on murder and assault with intent to cause grievous bodily harm. [2] The appellant’s main contention was that he did not receive a fair trial. This contention was premised on the fact all the six accused persons who were charged with him, including himself were represented by one counsel. The nub of his submission is that his counsel committed two fundamental irregularities. Firstly, he continued to defend him even when he knew that there was a conflict interest with accused 2 which made it difficult for him to cross- examine him effectively. Secondly, that he closed the appellant’s case without allowing him to testify and put his version before the trial court. [3] The SCA dismissed both grounds as unmeritorious. This is because the SCA found that the appellant had chosen and instructed his own counsel and that he never expressed any dissatisfaction with the manner in which his counsel conducted the trial. To the contrary, the SCA found that, throughout the trial, he was satisfied with his counsel’s performance to the extent that even after their counsel withdrew due to lack of funds, he together with his six co- accused raised funds and had their counsel reinstated to continue defending them. The SCA found that he knowingly and freely allowed his counsel to continue with his defence, alternatively that he acquiesced therein. Regarding the merits, the SCA found that the state had proved its case against the appellant based on common purpose beyond reasonable doubt. Consequently, the appeal against the convictions was dismissed. [4] Regarding the sentence, the SCA found, notwithstanding that this was an assault by a group which endured over a long period, that the court below erred by sentencing the appellant to life for murder in terms of s 51(1) of the Criminal Law Amendment Act 105 of 1997. The SCA found that the minimum sentence regime was not applicable as the appellant was never informed of its applicability either at the beginning of the trial or even during the trial. The SCA held that the sentence of life was in the circumstances inappropriate. Consequently, it set it aside and replaced it with imprisonment for 20 years. Regarding the 3 years’ imprisonment for assault with intent to cause grievous bodily harm, the SCA found the sentence to be appropriate. [6] In the result, the appeal against the convictions was dismissed. The appeal against sentence succeeded partly to the extent that the sentence of imprisonment for life in respect of murder was set aside and replaced with imprisonment for 20 years whilst the sentence of 3 years’ imprisonment for assault with intent to cause grievous bodily harm was confirmed. To ameliorate the severity of the cumulative sentence, the SCA ordered the 3 years’ imprisonment for assault with intent to cause grievous bodily harm to run concurrently with 20 years’ sentence for murder. The sentence was antedated to 22 September 2011. ---END---

3116

non-electoral

2007

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT CASE NO 103/06 Not reportable In the matter between: PROPFOKUS 49 (PTY) LIMITED First Appellant THOMAS NICHOLAS JOHN STEYNBERG Second Appellant DAVID JOHANNES STEYNBERG Third Appellant and WENHANDEL (PTY) LIMITED Respondent Coram: Nugent, Van Heerden et Combrinck JJA Heard: 27 February 2007 Delivered: 20 March 2007 Summary: Written agreement – rectification – requirements for Neutral citation: This judgment may be referred to as Propfokus (Pty) Ltd v Wenhandel (Pty) Ltd [2007] SCA 15 (RSA) VAN HEERDEN JA: [1] This is an appeal against a judgment of the Cape High Court granting, on application, an order for rectification of a written agreement for the sale of land. The agreement was entered into between the first appellant (Propfokus 49 (Pty) (Ltd)) and the respondent (Wenhandel 4 (Pty) (Ltd)) on 5 July 2004. The second and third appellants are the only two shareholders in Propfokus. For the sake of convenience the appellants will hereafter be referred to collectively as ‘Propfokus’ and the respondent as ‘Wenhandel’. [2] In terms of the agreement, Propfokus sold certain immovable property known as Erf 1410 Kuils River, Western Cape (the property) to Wenhandel, a property development company. The purchase price was formulated as follows in clause 2 of the original agreement: ‘Die Koopprys is die bedrag van R1 000 000-00 (EEN MILJOEN Rand) betaalbaar op datum van Registrasie van Oordrag in die koper se naam plus 2 standaard eie titel wooneenhede alternatiewelik 3 deeltiteleenhede met ’n gesamentlike waarde van R800 000 (Agthonderd Duisend Rand) op die verkoper of sy genomineerde se naam oorgedra te word so spoedig as moontlik. Die verkoper moet die eenhede op plan nomineer binne 7 dae nadat die koper of sy agent daartoe versoek.’ [3] At a later stage, the parties agreed to amend clause 2 of the written agreement to provide for the delivery of two standard separate title units to the exclusion of any sectional title units. The words ‘alter- natiewelik 3 deeltiteleenhede’ were deleted and the words ‘[s]ien aanhangsel A en B hierby aangeheg vir besonderhede oor die 2 eenhede’ were inserted at the end of clause 2. There is an irreconcilable dispute on the papers concerning the date upon which and the reasons why this amendment was effected. [4] In a subsequent development Wenhandel brought an urgent application consisting of two parts before the court a quo. The first part sought a rule nisi prohibiting Propfokus from selling, burdening or alienating, or attempting to sell, burden or alienate the property, or to alter or attempt to alter the status of the property in any way pending the final determination of the second part of the application, to which I will refer as ‘the main application’. In the main application, Wenhandel sought, inter alia, an order rectifying clause 2 of the agreement by amending the first sentence of the clause to read as follows: ‘Die Koopprys is die bedrag van R1 800 000.00 betaalbaar op die datum van registrasie van oordrag in die koper se naam, alternatiewelik die bedrag van R1 000 000-00 (EEN MILJOEN Rand) betaalbaar op datum van registrasie van oordrag in die koper se naam plus 2 wooneenhede in die beoogde ontwikkeling met ’n gesamentlike waarde van R800 000-00 (Agthonderd Duisend Rand) op die verkoper of sy genomineerde se naam oorgedra te word so spoedig as moontlik.’ It is worth noting that clause 2, as sought to be rectified, makes no mention of the type of dwelling unit to be transferred. [5] The rule nisi was granted on 27 May 2005 by agreement between the parties. On 8 December 2005, Allie J granted an order for rectification of the agreement in the terms set out above, together with a further order declaring the agreement as rectified to be valid and enforceable. Propfokus was also ordered to do everything necessary to transfer the property to Wenhandel within seven days of the date of the order ‘teen betaling van die volle koopprys’, failing which the Registrar of the High Court was ordered to take the necessary steps to effect the transfer on behalf of Propfokus. With the leave of the High Court, Propfokus now appeals against this order. [6] Wenhandel purchased the property for the purpose of erecting dwelling units thereon. Prior to the amendment of the agreement and for some time thereafter, the parties laboured under the impression that the relevant local authority would permit separate title units to be built upon the property. That impression was gained from information which Wenhandel had received from the local authority. Pursuant to the agreement as amended, Propfokus chose two separate title dwelling units off plan and, in October 2004, concluded purchase and building agreements with Wenhandel in respect of each of these units. [7] The local authority thereafter decided to zone the property exclusively for sectional title development. Propfokus apparently became aware of this decision only on 20 April 2005, when Wenhandel’s attorney wrote to Propfokus’ attorney in respect of the delays relating to registration of transfer of the property and stated that: ‘Ons wil vir die rekord daarop wys dat dit nie langer eie titel eenhede is nie, maar deeltitel eenhede ooreenkomstig die magtiging deur die plaaslike owerheid’ [8] In subsequent correspondence between the respective attorneys, Propfokus referred to the amendment to the agreement and insisted that it had never intended to accept two sectional title units as part payment for the property, but only two separate title units. In these circumstances, so Propfokus contended, the nature of the property rights attached to the dwelling units had changed materially from that stipulated in the amended agreement. Propfokus accordingly purported to cancel the agreement. Wenhandel subsequently tendered to pay R1 800 000.00 against registration of transfer of the property, but this was refused by Propfokus. Wenhandel regarded the cancellation as unlawful, while Propfokus adopted the stance that, even if it were to be found that the agreement was not validly cancelled, it was on Wenhandel’s own version not possible for it to perform in terms thereof. [9] After settlement negotiations between the parties had failed, Wenhandel launched the application culminating in the order which is the subject of this appeal. [10] At the hearing before us, counsel for Wenhandel argued that, even in the absence of rectification, a proper interpretation of the agreement between the parties entitled Wenhandel to an order that Propfokus transfer the property to the former against payment of ‘the full purchase price’ of R1 800 000. Relying on a number of cases dealing with the legal nature of so-called ‘trade-in agreements’ in the context of the sale of motor vehicles,[1] counsel submitted that that the agreement, properly construed, provided for a purchase price of R1 800 000, part of which was to be paid, at the option of the purchaser, in the form of two units. Thus, so it was contended, Wenhandel as purchaser was entitled to tender R1 800 000 in payment of the purchase price if (for example) transfer of the two units became impossible. According to counsel, [1] Viz where the parties to a contract of sale of a motor vehicle agree that the purchase price is to be paid partly in cash and partly by the trade-in by the purchaser of another motor vehicle: see Antonie v The Price Controller & Another 1946 TPD 190; Massyn’s Motors v Van Rooyen 1965 (3) SA 717 (O); Wastie v Security Motors (Pty) Ltd 1972 (2) SA 129 (C); Mountbatten Investments (Pty) Ltd v Mahomed 1989 (1) SA 172 (D). See also G J Dawson (Clapham) Ltd v H & G Dutfield [1936] 2 All ER 232 (KB). clause 2 had to be interpreted to mean that Wenhandel always had the option of paying the ‘full purchase price’ of R1 800 000 in cash against registration of transfer of the property. [11] I do not think that this is the correct construction of the agreement. The cases relied upon by counsel deal with a materially different factual matrix and are not in point.[2] Moreover, the construction sought to be placed on clause 2 of the agreement as amended goes contrary to the well-established rules for the interpretation of contracts. As was stated by Joubert JA in Coopers & Lybrand & others v Bryant[3] with regard to the ‘golden rule’ of interpretation, the language in the document is to be given its grammatical and ordinary meaning, unless this would result in some absurdity, or some repugnancy or inconsistency with the rest of the instrument. [12] In this case, giving the wording of clause 2 (as amended), its grammatical and ordinary meaning does not result in any ambiguity, absurdity or inconsistency with the rest of the agreement. The wording of clause 2 is clear: the purchase price of the property is R1 000 000 plus two separate title dwelling units in the proposed development (as nominated by the seller off plan and with a combined value of [2] Quite apart from any other differences, a trade-in motor vehicle is generally an asset which will not appreciate in value over time, while in this case, it is common cause that the units in the proposed development could very well increase in value after the conclusion of the agreement. [3] 1995 (3) SA 761 (A) at 767E–768A. R800 000)[4]. The construction contended for by counsel would have made no commercial sense for Propfokus. Not only would Wenhandel have had the benefit of not being obliged to pay the full price in cash ‘up front’ upon registration of transfer but, should the value of the dwelling units increase after the date of conclusion of the agreement, Propfokus would be unable to insist on reaping the benefit of this increase in value. To my mind, such an interpretation would in fact conflict with the ‘nature and purpose’ of clause 2 as amended. [13] I turn now to the aspect of rectification. In order to succeed with its claim for rectification, Wenhandel had to allege and prove the following: (a) that an agreement had been concluded between the parties and reduced to writing; (b) that the written document does not reflect the true intention of the parties – this requires that the common continuing intention of the parties, as it existed at the time when the agreement was reduced to writing, be established; [4] It is common cause on the papers that the reference in clause 2 to ‘a combined value of R800 000’ meant a minimum combined value. (c) an intention by both parties to reduce the agreement to writing – in the present case, the agreement was for the sale of land and, therefore, had to be in writing in order to be valid and binding; (d) a mistake in drafting the document, which mistake could have been the result of an intentional act of the other party or a bona fide common error; and (e) the actual wording of the true agreement.[5] [14] It is to requirement (b) that I immediately turn for it seems to me that it is at that level that the case for rectification fails. [15] Propfokus’ case throughout the proceedings was that the true agreement between the parties is correctly reflected in the written agree- ment, as amended. Wenhandel never disputed this stance during the course of the correspondence exchanged between the parties’ respective attorneys. So, for example, when Propfokus’ attorney, in a letter dated 8 April 2005, purported to put Wenhandel to terms as a result of ‘die onnodige vertraging in hierdie oordrag’ and (incorrectly) claimed payment of R1 800 000 within 14 days ‘in terme van klousule 12 van die koopkontrak’, the response of Wenhandel’s attorney was to suggest that the sum of R1 000 000 immediately be placed in trust for Propfokus’ [5] LTC Harms Amler’s Precedents of Pleadings 6ed (2003) p 298-299 and the cases there cited. benefit pending registration of transfer of the property, and further to refer to ‘die eenhede wat u kliënt toekom’. Moreover, after Propfokus’ attorney had purported to cancel the agreement on its behalf, Wenhandel’s attorney threatened Propfokus, on 5 May 2005, with ‘’n aansoek vir ‘n verklarende bevel dat gemelde koopkontrak geldig en afdwingbaar is en vir ‘n bevel wat oordrag gelas’. There is nothing in the correspondence preceding the launch of the proceedings by Wenhandel to indicate that it was of the view that the written agreement as amended did not reflect the common intention of the parties and, accordingly, fell to be rectified. [16] As was contended by counsel for Propfokus, notwithstanding the fact that Propfokus’ attitude towards clause 2 of the written agreement as amended was conveyed several times to Wenhandel, the latter did not challenge this attitude at any time prior to the launch of the application. On the contrary, the issue of rectification was raised by Wenhandel for the very first time in the notice of motion. That being so, Wenhandel could hardly have established that its intention, independently of Propfokus, was different to that reflected in the written agreement as amended. Much less could Wenhandel have established that both parties had an intention which differed to that appearing from the (amended) written agreement. [17] Moreover, clause 2 of the agreement, as rectified by the High Court, gives Wenhandel the choice of either paying R1 800 000 against transfer, alternatively R1 000 000 plus two units in the envisaged development. As indicated above, the units would of course be sectional title units. The papers do not, however, establish that, at any stage after the amendment of clause 2 by the deletion of the reference to three sectional title units, Propfokus was prepared to accept two sectional title units. On the contrary, in its answering affidavit, Propfokus dealt in detail with its reasons for not being prepared to accept sectional title units and claimed that, since August 2004, it was not interested in sectional title units at all and that the agreement was accordingly expressly amended, as set out above. [18] Insofar as there may be any factual dispute in this regard, the matter must be decided on the version advanced by Propfokus.[6] As pointed out by counsel for Propfokus, the deponent to the answering affidavit filed on its behalf stated the following in opposition to Wenhandel’s claim for rectification: ‘Dit word ontken dat daar enige grondslag bestaan waarop hierdie agbare Hof genader kan word vir die rektifikasie van klousule 2 van die koopkontrak. Daar word nie namens die Appellant verwys na enige feite wat daarop dui dat die koopkontrak, [6] Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634C-635C. aanhangsel CM1, soos uitdruklik gewysig deur die verdere kontrak, aanhangsel CM3, nie die gemeenskaplike bedoeling van die partye weerspieël nie. Daar word ook nie beweer of bewys dat die bewoording van aanhangsel CM3 verkeerd of foutief is as gevolg van ‘n gemeenskaplike dwaling veroorsaak deur die Respondente nie.’ [19] It cannot be said that Propfokus’ allegations or denials of the facts relevant to the aspect of rectification are so far-fetched or clearly untenable that the court would be justified in rejecting them merely on the papers.[7] Applying the Plascon-Evans rule, it is thus clear that the papers before the court do not establish the essentials of rectification and that Wenhandel’s claim should not have succeeded. [20] It follows that the appeal must be upheld. As far as costs are concerned, although Propfokus was represented before us – and, it would appear, in the High Court – by two counsel, I do not consider that the nature and complexity of the matter warranted the employment of more than one counsel. Order [21] In the circumstances, the following order is made: 1. The appeal is upheld with costs. [7] See Plascon-Evans Paints above at 635C. 2. The order made by the Cape High Court on 8 December 2005 is set aside and substituted with the following: ‘The application is dismissed with costs.’ B J VAN HEERDEN JUDGE OF APPEAL CONCUR: NUGENT JA COMBRINCK JA

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL PRESS RELEASE 20 March 2007 STATUS: Immediate Propfokus 49 (Pty) Ltd and Others v Wenhandel 4 (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 today upheld an appeal against a judgment of the Cape High Court granting, on application, an order for rectification of a written agreement for the sale of land. An agreement was entered into between the first appellant and the respondent. The essence of the dispute related to the interpretation of the purchase price clause contained in the agreement and whether the method of payment reflected the true intention of the parties. The Supreme Court of Appeal held that the clause containing the method of payment, if given its grammatical and ordinary meaning, did not result in any ambiguity, absurdity or inconsistency. The wording of the clause clearly reflected the intention of the parties as it was when the agreement was concluded and subsequently amended. The court went on to say that, as the respondent could not establish that the parties’ common intention was different to that reflected in the written agreement as amended, it had failed to establish the essential requirements for rectification.

3978

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 737/2021 In the matter between: THE THABA CHWEU RURAL FORUM First Appellant APPELLANTS LISTED IN ANNEXURE “A” TO THE NOTICE OF APPEAL Second and Further Appellants and THE THABA CHWEU LOCAL MUNICIPALITY First Respondent THE SPEAKER OF THE MUNICIPAL COUNCIL OF THE THABA CHWEU LOCAL MUNICIPALITY Second Respondent THE MUNICIPAL MANAGER OF THE THABA CHWEU LOCAL MUNICIPALITY Third Respondent Neutral Citation: The Thaba Chweu Rural Forum & Others v The Thaba Chweu Local Municipality and others (737/2021) [2023] ZASCA 25 (14 March 2023) Coram: MOLEMELA, NICHOLLS and MOTHLE JJA and MALI and SIWENDU AJJA Heard: 15 November 2022 Delivered: 14 March 2023 Summary: Constitutional Law – local government – Municipal Property Rates Act 6 of 2004 – whether the impugned rates notices ought to be declared invalid – what appropriate order should be made in terms of s 172(1)(b) of the Constitution – whether the appellants were entitled to the interdictory relief claimed. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: Mpumalanga Division of the High Court, Mbombela (Legodi JP with Sigogo and Greyling-Coetzer AJJ concurring, sitting as a court of appeal): 1. The appeal succeeds. 2. The order of the Full Court of the Mpumalanga Division of the High Court is set aside and substituted by the following order: ‘2.1 The rate notices published by the respondents in terms of s 14(2) of the Local Government: Municipal Property Rates Act 6 of 2004 in the Mpumalanga Provincial Gazette of 10 July 2009, 9 July 2010; 27 May 2011, 29 August 2012; 19 August 2013, 22 July 2015; 22 July 2016; 25 August 2017 and 6 October 2018, as well as the further rates notice published by the respondents dated July 2014 in respect of the 2014/2015 financial year, including the resolutions of the municipal council on which all such rates notices were based, where applicable, are hereby declared unlawful and invalid to the extent that they relate to agricultural properties used or permitted to be used for crop and/or animal farming (agricultural property); 2.2 The respondents may recover from the members of the appellants, only the amounts of the agricultural property rates calculated based on the Local Government: Municipal Property Rates Act 6 of 2004 and the Regulations promulgated in terms thereof, less any amount in excess of the legally permissible limit, in respect of each financial year from 2009 to 2018; 2.3 The respondents are further liable to credit the accounts of the appellants’ members who were levied and paid municipal rates, only to the extent of the amounts in excess of the legally permissible limit of the rates chargeable to the agricultural properties in its municipal jurisdiction in respect of each financial year from 2009 to 2018; and 2.4 On recovery of arrear municipal rates due, the respondents may charge the rate of interest as published in terms of section 96 read with section 97(1)(e) of the Local Government: Municipal Systems Act 32 of 2000 in respect of each financial year from 2009 to 2018. 3. The respondents are ordered in future not to levy property rates on any agricultural property in its municipal jurisdiction at a rate that exceeds that legally prescribed and, such rate must be determined in terms of the procedures prescribed by law. 4. The first respondent is ordered to pay the appellants the costs of the appeal, including costs of two counsel, but excluding the costs of delivering the heads of argument after the hearing of the appeal. The costs against the first respondent shall include the costs in the high court and those on appeal in the full court of the Mpumalanga Division of the High Court. JUDGMENT ______________________________________________________________ Mothle JA (Molemela and Nicholls JJA and Mali and Siwendu AJJA concurring) [1] At the heart of the dispute that triggered the litigation which resulted in this appeal, is a challenge by the first, second and further appellants to the lawfulness and validity of the municipal rates imposed on their properties, through resolutions and notices published by the Thaba Chweu Local Municipality, cited as the first respondent, (the municipality). The municipality was established for the area of Lydenburg/Mashishing in Mpumalanga. The municipal rates at issue in this appeal were levied on farm properties, (as opposed to urban or residential properties) during the period 1 July 2009 to 1 June 2017. [2] The factual background is briefly that prior to the advent of Constitutional democracy in South Africa in 1994, farms in general were excluded from the rateable properties within the jurisdiction of municipalities. Consequently, the farm owners were not levied municipal rates for their properties. In establishing the local sphere of government, the Constitution1 put paid to that arrangement. Section 151(1) of the Constitution provides that ‘The local sphere of government consists of municipalities which must be established for the whole of the territory of the Republic.’ As a result, every patch of land in the Republic, including farms, fell under one or other municipality. For the first time, the farm owners became liable for payment of municipal rates levied on their properties, as a source of revenue for the municipality. [3] This development, compounded by the fact that the levying of the municipal rates was unlawfully implemented by the municipality, caused discontent on the part of the farmers whose properties fell under its jurisdiction. In 2008, and in anticipation of the municipal rates being levied, the farm owners resolved to establish a voluntary association named the Thaba Chweu Rural Forum (the appellants). The appellants’ purpose was, amongst others, to represent the farmers in their engagement with the municipality, mainly on the issue of levying of municipal rates. Some of the farmers have been refusing to pay the rates levied since inception in July 2009. [4] The legal framework for the levying of municipal rates has its genesis in s 229 of the Constitution, which empowers a municipality to impose rates on property and surcharges on fees for services provided by or on behalf of the municipality and, if authorised by national legislation, other taxes, levies and duties appropriate to local government. The national legislation is the Local Government: Municipal Property Rates Act 6 of 2004 (the Rates Act). Section 1 The Constitution of the Republic of South Africa, 1996. 3 of the Rates Act provides that a municipality must exercise its powers to levy rates, subject to the other sections of the same statute, including the Regulations promulgated by the Minister for Provincial and Local Government (Minister) in terms of s 19 of the Rates Act, as well as the policy resolutions adopted by the municipal council in terms of s 14 of the Rates Act. [5] Section 8 of the Rates Act authorises the municipality to levy different rates for different categories of properties. The categories of properties for levying rates are determined according to the actual or permitted use of that property and its location within the municipality. The Regulations as published by the Minister in terms of s 19 of the Rates Act, determined that the effective rate to be levied on agricultural properties conducting crop and/or animal farming, may not exceed 25% of the effective rate levied on residential properties. The rates are generally determined as the amount in a Rand, calculated on the market value of the property, which market value is in turn determined by a valuer appointed by a municipality. The valuation of the properties are published in the valuation roll in terms of sections 30; 33(1) and 49(1) of the Rates Act. [6] The appellants allege that between 2009 and 2017, the respondents failed to meaningfully comply with the provisions of the Rates Act, the Regulations and the municipal councils’ policy concerning the levying of property rates and granting of rebates. The appellants further contended that in determining the rates payable, the respondents failed to consult with the population in the area, as prescribed by law. Each financial year, they levied excessive rates above the 25% prescribed ratio for agricultural properties and failed to comply with the process allowing objections to the valuations in terms of s 49 of the Rates Act, specifically in respect of the compilation of the 2014/2015 second valuation roll. As a result, there are recorded examples of farm properties that experienced sudden massive increases in market value, such as a company known as Moon Cloud 25 (Pty) Ltd, whose property’s market value appreciated from R1 170 000 since the 2009 initial valuation, to R12 180 000 in the 2014/2015 second valuation roll. That increase in market value of the property translated in the levied rates of that property escalating from R1 432.08 levied in the 2013/2014 financial year to R149 448.60 levied from the 2014/2015 and subsequent financial years. [7] For each of the years between 2009 and 2017, the appellants attempted, without success, to persuade the respondents to enable public participation in the process. In 2017, the appellants turned to the Gauteng Division of the High Court Pretoria, functioning as the Mpumalanga Circuit Court in Mbombela, Mpumalanga (the high court), for appropriate relief. [8] The following is a brief trajectory of the litigation that ensued, resulting in the appeal before this Court. On 7 June 2017, the appellants launched an application in the high court which had two parts: A and B. In part A, they essentially sought relief against the municipality, the Speaker of the Municipal Council (the second respondent) and the Municipal Manager of the municipality (the third respondent), (in this judgment collectively referred to as ‘the respondents’). The respondents include the previous officials of the municipality as the predecessors who were in office at the time the impugned rates were levied. The relief sought against the respondents was that they be ordered to deliver to the appellants, their members’ property rates accounts for the period 1 July 2009 to 1 June 2017, including the notices published and resolutions adopted by the municipal council concerning the determination of the rates, as well as copies of minutes of meetings held concerning the rates, and ancillary relief. [9] The relief sought in part A was granted by Basson J on 20 August 2018. After receiving some of the documents from the respondents, it became evident that not all the appellants’ members were conducting agricultural farming in crops and/or animals as defined, and therefore some of them did not qualify for the rates determined for that category of properties. Some of these excluded members’ farms fell under categories of properties conducting business in game-farming, hospitality and residence. These categories were not levied the rates which are the subject of the review in this case. [10] Part B of the application, which became opposed by the respondents as successors in title of the erstwhile municipal office bearers, was placed under case management. On 2 October 2018, the Judge President of the high court, following a case management meeting, decided on a truncated period of exchanging affidavits and documents between the parties, and scheduled the date of hearing as 10 June 2019. In part B the appellants sought relief, in essence that the rates published annually in the Mpumalanga Provincial Gazette in terms of s 14(2) and (3) the Rates Act, as well as publication of further rates notices in newspapers and the resolutions of the municipality’s council, authorising the publication of such rates notices, be declared unlawful and be set aside. Further, that the municipality be directed not to levy property rates on any farm or agricultural property in its municipal area at a rate exceeding the prescribed ratio of 1:025, i.e. 25% of the effective rate applicable to the residential property, as contemplated in s 8 of the Act, unless the Regulations providing for the effective rates are repealed or amended by the Minister in terms of s 83 read with s 19(1)(b) of the Rates Act. [11] The respondents in their answering affidavit conceded that at all relevant times mentioned in the founding affidavit, the levying of property rates on agricultural farms, the adoption of resolutions by the municipal council concerning the rates as well as the published notices concerning the impugned rates, were inconsistent with the Rates Act, and therefore unlawful and invalid. The records of the municipal council including notices and minutes of meetings evidencing the determination of the second valuation roll for the 2014/2015 and subsequent years, went missing. The significance of these missing documents means that there is no evidence in support of the determination of the municipality’s second valuation roll. It is this second evaluation roll adopted in the 2014/2015 financial year, which caused massive increases in property values, resulting in the determination and levying of inflated municipal rates. [12] All these factual allegations were not disputed. In fact, the respondents concede that much. However, though the respondents do not dispute that their predecessors acted unlawfully, they remain opposed to the order sought by the appellants to have the impugned property rates set aside. The basis of opposing the relief is that the appellants delayed instituting the litigation. The respondents further contend that consequent to such delay, a retrospective invalidation of the rates levied will impact on the budgets approved in the previous years, resulting in prejudice to the municipality. The prejudice lies in the fact that the subsequent budgets, of which the municipal rates were an integral part, were determined and are reliant on the basis of the budgets of the preceding financial years. As such, it will not be feasible to turn the clock back, as it were. [13] The judgment of the high court on part B was delivered by Jansen van Rensburg AJ on 4 July 2020. The high court declined to grant an order declaring the conduct of the respondents unlawful and therefore invalid, and also declined to set aside the impugned rates, as a consequence of the invalidity. The court essentially ordered the respondents that in future, they must comply with the statutory prescripts applicable to Local Government in regard to tabling, amending and publication of future budgets, and awarded costs against the respondents. [14] The appellants, aggrieved by the failure of the high court to order a declaration of constitutional invalidity and setting aside of the impugned rates, turned to the Full Court of the Mpumalanga Division of the High Court (the full court). The respondents lodged a cross-appeal, also contending that the high court erred in failing to issue a declaration of invalidity, but requested the full court, for reasons stated in para 11 of this judgment, not to grant an order setting aside the unlawful and invalid conduct of the respondents. The respondent also challenged the order of the high court awarding costs to the appellants. [15] The full court’s judgment was delivered by Legodi JP on 26 March 2020. Although the full court judgment accepted that the high court had erred in not declaring the unlawful actions of the municipality invalid, the full court refrained from granting any order setting aside the invalid conduct of the respondents, mainly because the appellants had delayed in approaching the high court. The full court, as had the high court, included an order to the respondents, in a form of what was no more than an admonition to the effect that in future, the respondents should comply with the legal prescripts. [16] The appellants, still aggrieved that the full court did not set aside the unlawful conduct of the respondents, successfully approached this Court on petition. Initially in their papers, the appellants sought relief in this Court that the unlawful and invalid municipal rates be set aside. At the commencement of the hearing of the appeal, the appellants’ counsel indicated that the appellants who are yet to pay the municipal rates, are willing to pay the amount owing minus the portion which exceeded the prescribed ratio of 1:025 of the effective rate applicable to the residential property, as contemplated in s 8(2)(b) of the Rates Act. The appellants no longer pressed for the relief from the Court setting aside the impugned conduct. The respondents declined that offer and insisted on their demand to recover the full amount of the impugned rates levied, including the rates unlawfully imposed in excess of the legally prescribed limit for agricultural properties. [17] The appellants’ contention is based on s 172(1) of the Constitution which provides: ‘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.’ [18] The respondents having conceded the appellants’ request for the declaration of invalidity in terms of s 172(1)(a) of the Constitution, the crisp issue in this appeal is therefore, whether this Court should grant an order that is just and equitable in terms of s 172(1)(b) of the Constitution. This form of relief is discretionary. The Court may, for reasons of equity and in the interest of justice, invoke such relief where circumstances of the case cry out for justice to be served. [19] The judgment of the full court relied on this Court’s majority decision in South African Property Owners Association v Johannesburg Metropolitan Municipality and others2 (SAPOA). In SAPOA, the members of the property- owners association, who were business property owners in Johannesburg, applied to have the court review and set aside, alternatively to declare null and void, the 2009/2010 budget determined on the property rate of 1,54 cents in the Rand, levied by the Johannesburg Metropolitan Municipality in contravention of s 19 of the Rates Act. The high court had found that the levying of property rates is not an integral part of the budget process. Consequently, the high court concluded thus: ‘. . . the grant of the relief sought by SAPOA was not in the public interest because it would probably bankrupt the City and, as a result, the City would not be able to perform its constitutional duties.’ As a result, SAPOA’s contention that the City of Johannesburg failed to comply with the prescribed statutory requirements and procedures in imposing the impugned rates, was dismissed. SAPOA turned to this Court on appeal. [20] The majority3 in this Court upheld the appeal. In doing so, the Court, contrary to the high court, declared that the City of Johannesburg in fact and in law, failed to comply with the prescribed statutory requirements and procedures in imposing the impugned rates. The impugned rates were, however, not set aside. Instead, this Court further declared that in future, the first respondent was obliged to comply with the provisions of the Rates Act and other listed legal prescripts. Further and contrary to the finding by the high court, the majority in this Court also concluded that the municipal rates are an integral part of the budget process. The majority reasoned in para 71 and 72 as follows: 2 South African Property Owners Association v Johannesburg Metropolitan Municipality and others [2012] ZASCA 157; 2013 (1) SA 420 (SCA). 3 The honourable Mr. Justice Southwood AJA, dissented as to the order only. ’Although counsel on behalf of SAPOA persisted in having the rate improperly imposed set aside, he advisedly recognised the difficulties of a court even attempting to set aside the 2009/2010 budget, two budgetary periods thereafter. Successive budgets are based on surpluses or deficits from prior periods. One is built on the outcome of the other. This, in modern language, is called a knock-on effect. The legality of the budgets for the successive periods has not been challenged. Considering the knock-on effect it must be so that any subsequent increase in rates would have owed its genesis to and been premised on the rate presently sought to be impugned. Another factor militating against the setting aside of the 2009/2010 budget is that, given the historical over-recovery from the commercial sector, the lapse of time – three years hence – will have a harsh impact on struggling individual home-owners who would not in the intervening years have made provision for dealing with the effects of the setting-aside of the budget.’ [21] The full court in the present appeal declined to set aside the unlawful rates levied by the respondents or grant some form of just and equitable relief to the appellants. Likewise, it grounded its reasoning on the delay by the appellants in launching the litigation against the respondents. It is common cause that the appellants made their objections and disapproval on the unlawfulness of the imposition of the rates known to the respondents’ predecessors since 2009, with the view to achieve meaningful participation and consultation as prescribed by law. I will return to this aspect later in this judgment. For the record, the impugned rates were levied from the 2009/2010 financial year. I turn to deal with the full court’s finding that the appellants delayed instituting the litigation against the respondents. [22] In the case of a review which is based on the grounds stated in s 6 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA), s 7(1) thereof, prescribes the period within which such review has to be instituted, which is 180 days.4 The subject of delay when instituting a review becomes more complex where the grounds of review are based on the principle of legality or rationality, as in such instance, there is no statutorily prescribed period within which a party may institute a review challenge. [23] The appellants’ application was launched in 2017, attacking the rates imposed from 2009/2010 financial year. The respondents in this Court, as before in the full court, argued on authority of SAPOA, that the delay by appellants instituting litigation would have ‘a knock-on effect’ and result in the retrospective invalidation of the municipality’s previous annual budgets. Such invalidation was expressed metaphorically as an exercise similar to ‘unscrambling an egg’. The subject of delay in instituting proceedings has been considered by our courts over the years. The approach in dealing with the delay in review applications has somewhat crystallised. [24] In Khumalo and Another v MEC for Education, KwaZulu-Natal5 (Khumalo), the Constitutional Court considering the significance of delay in instituting proceedings, wrote: ‘(A) court should be slow to allow procedural obstacles to prevent it from looking into a challenge to the lawfulness of an exercise of public power. But that does not mean that the Constitution has dispensed with the basic procedural requirement that review proceedings are to be brought without undue delay or with a court’s discretion to overlook a delay.’ [25] In 2017, the same Court in Merafong City v AngloGold Ashanti Ltd6 (Merafong), addressing the question of delay when instituting review proceedings, stated thus: ‘The rule against delay in instituting review exists for a good reason: to curb the potential prejudice that would ensue if the lawfulness of the decision remains 4 Aurecon South Africa (Pty) Ltd v Cape Town City [2015] ZASCA 209; 2016 (2) SA 199 (SCA). 5 Khumalo and another v MEC for Education, KwaZulu-Natal 2014 (5) SA 579 (CC) (2014) (3) BCLR 333; [2013] ZACC 49 para 45. 6 Merafong City v AngloGold Ashanti Ltd [2016] ZACC 35; 2017 (2) SA 211 (CC). uncertain. Protracted delays could give rise to calamitous effects. Not just for those who rely upon the decision but also for the efficient functioning of the decision- making body itself.’7 [26] In State Information Technology Agency Soc Ltd v Gijima Holdings (Pty) Ltd8 (Gijima), the Constitutional Court wrote: ‘The reason for requiring reviews to be instituted without undue delay is thus to ensure certainty and promote legality: time is of outmost importance.’ and ‘… Here it must count for quite a lot that SITA has delayed for just under 22 months before seeking to have the decision reviewed. Also, from the outset, Gijima was concerned whether the award of the contract complied with legal prescripts. As a result, it raised the issue with Sita repeatedly. Sita assured it that a proper procurement process had been followed.’ [27] Gijima was followed by Buffalo City Metropolitan Municipality v Asla Construction (Pty) Ltd9 (Buffalo City), where the Constitutional Court, formulating an approach on the question of delay in bringing a legality review, was, firstly, to examine whether the delay was reasonable. This was to be answered by considering the explanation proffered. If, indeed, the delay was reasonable, the matter could be heard. But, if the delay was unreasonable, the second enquiry was whether the interests of justice required it to be overlooked, and the matter be heard. That would be decided by considering four factors: (a) the consequences of setting the decision side; (b) the decision and the challenge to it (the asserted illegality); (c) the applicant’s conduct; and (d) the court’s duty to declare the unlawful decision invalid. The Court found that the explanation for the delay was insufficient to declare it reasonable but supported overlooking the delay due to the clear illegality of the decision. 7 Ibid para 73. 8 State Information Technology Agency Soc Ltd v Gijima Holdings (Pty) Ltd [2017] ZACC 40 (CC); 2018 (2) SA 23 (CC) (Gijima) paras 44 and 53 9 Buffalo City Metropolitan Municipality v Asla Construction (Pty) Ltd [2019] ZACC 15; 2019 (6) BCLR 661 (CC) (Buffalo City) paras 43 to 66. [28] In May 2018, this Court in the City of Tshwane Metropolitan Municipality v Lombardy Development (Pty) Ltd & others10 (Lombardy), was seized with the issue of a municipality which failed to comply with s 49 of the Rates Act, in compiling a supplementary valuation roll. Lombardy instituted litigation some 22 months late. The Court accepted the delay as reasonable due to the extent of illegality in the manner the supplementary valuation roll was determined by the City of Tshwane. The Court upheld the high court’s order invalidating and setting aside the supplementary roll of 2012, the effect of the order being that until the causes of invalidity are addressed by the City, the subsequent valuation rolls are consequentially invalid. Thus, the impediment to granting a just and equitable relief resulting in a possible ‘knock-on effect on the budget’ as stated in SAPOA, was not followed in Lombardy. In any event, nothing in SAPOA suggests that in all such matters, any just and equitable relief would be untenable. SAPOA’s order was considered and fashioned on the relief in the form of an attack on the budget. The relief sought in this appeal is to have the rates set aside. (Own emphasis) [29] The period of delay in instituting litigation in SAPOA was three years, while in Lombardy the delay was about 22 months, as in Gijima. In this appeal, the appellants delayed for a period of about 7 (seven) years. Applying the approach in Buffalo City, the first inquiry is to determine whether the delay was reasonable or unreasonable. If it was reasonable, this Court will consider the merits forthwith. If the delay was unreasonable, the second inquiry to be conducted will be whether the interest of justice requires the delay to be overlooked. This latter phase of the inquiry has to consider the four factors referred to in Buffalo City. [30] The conspectus of the evidence in this appeal, succinctly stated, reveals the following objective facts: 10 City of Tshwane Metropolitan Municipality v Lombardy Development (Pty) Ltd & Others [2018] ZASCA 77; [2018] 3 All SA 605 (SCA) (Lombardy). (a) The respondents, being a local sphere of government, blatantly and repeatedly flouted the applicable legal provisions, specifically by non- compliance with the provisions of the Rates Act in regard to public participation. In levying some rates and determining the second valuation roll there is no evidence of public participation on record. This conduct deprived aggrieved ratepayers the right to raise objections, should they elect to do so as provided in s 49 of the Rates Act. Further, the respondents disregarded the Regulations when determining the rates of various categories of properties, in particular, that of the agricultural farming; (b) As distinct from other cases, here the respondents contravened the law not as a once off event such as unlawful awarding of a tender, but were engaged in unlawful conduct repeatedly in every financial year from 2009 to 2017, for the duration of the delay. The unlawful conduct continued, even when the appellants, as in Gijima, were vociferous in consistently questioning the illegality of the respondents’ conduct. The warnings were ignored; (c) The language of the applicable legislative instruments was unambiguous. There was thus no question of legal uncertainties which required to be cleared through litigation. The respondents simply refused to implement the clear letter of the law. There is no explanation for this conduct. As in Lombardy, the respondents offered no alternative relief to correct the excessive municipal rates they imposed on the appellants. (d) Some members of the appellants have, since 2009, misguidedly refused to pay any rebates, including what they, on their own, determined to be the correct applicable rate. At the time of the hearing of this appeal, some were still withholding payment, regardless of the decision of the full court; (e) Apart from the fact that the appellants had continuously made representations to the respondents in an attempt to resolve the excessive levying of rates, there was no explanation on the papers as to the cause of the delay in instituting this litigation; and (f) Should this Court grant any order setting the impugned rates aside, the consequence of such relief would be a retrospective invalidation of the budgets of the previous financial years, on which the current budgets are reliant. It is not disputed that the rates levied in a particular financial year are an integral part of the budget of that financial year. [31] There are two reasons which stand out from the objective facts above, which militate against a finding that the delay was reasonable. First, the appellants have not provided cogent reasons or some explanation for the delay in instituting this litigation. Second, the seven-year delay was inordinate and, as a result, the retrospective setting aside of the impugned rates will render void the approved and finalised budgets for the previous financial years. For these two reasons, I conclude that the delay by appellants in commencing with this litigation was unreasonable. However, that is not the end of the matter. The second inquiry as formulated in Buffalo City has to be conducted. That is, whether the interest of justice dictate that the delay be overlooked. [32] Before considering the second phase of the inquiry, it is apposite to address the argument that by refusing to pay, the appellants initially set out to defy the authority of the municipality to levy rates on their properties. This argument is, in my view, irrelevant to the determination of the issues in this appeal. For starters, and assuming that the appellants had such motive initially, which must be said, seriously borders on sedition, the futility of such a misguided stance became evident and was wisely abandoned in this Court. Not only have some of the appellants’ members since decided to pay the rates as levied, those still holding out have also, through their counsel in this Court, indicated their intention to pay. It needs to be said, however, that whatever motive that caused the appellants’ initial resolve not to pay, such motive does not justify or confer any authority on the respondents to levy municipal rates in excess of the legally prescribed limit, as some form of retribution. This contention by the respondents concerning the appellants’ initial intent not to pay municipal rates, is not relevant to the determination of the issues in this appeal. [33] Returning to the issue of the unreasonable delay in instituting this litigation, this appeal is in two instances distinguishable from other cases where the conduct of the municipality is under review. First, that the conduct of the respondents in over-charging the municipal rates was not a once off contravention of the law, but was repeated over successive financial years for the duration of the delay, in spite of objections from appellants. Second, the respondents are yet to recover from some of the appellants’ members, the municipality’s unpaid rates for the duration of the delay. These unpaid rates for agricultural properties from the previous financial years, would be reflected in the current municipality budget as book debts. [34] The appellants’ members have indicated their preparedness to pay the rates due. That would remedy the default of having created a shortfall on the budgets of the municipality. However, the municipality cannot seriously argue that it is entitled to claim the spoils of unlawfully overcharging the ratepayers. A balance must be struck between the two. The recovery of such municipal rates due for the past financial years, has to be limited to the rate chargeable in terms of the law that was applicable during that financial year. Conversely, those members of the appellants who have paid rates levied by the municipality in excess of the limit imposed by law, should be credited the amount that was in excess of the rate permissible by law, in each financial year. The scales of justice and equity must be balanced, and the principle of legality must be vindicated. It is thus in the interest of justice that the unreasonableness of the delay, under these circumstances, must be overlooked. [35] The practical difficulties attendant upon retrospectively setting aside of the municipal rates and by implication, the annual budgets, was considered and acknowledged by this Court in SAPOA. However, in this appeal, such difficulties do not impede the consideration of any order that would be just and equitable for the appellants. This would be so because the favourable municipal rate determined for the category of agricultural properties, serves the public interest, in that it is intended to ensure the continuous supply of food, a factor vital for the nation’s food security. Therefore the delay in instituting litigation in this case cannot impede the consideration of just and equitable relief for the appellants, which subject I turn to deal with. [36] In Gijima the Constitutional Court held11: ‘However, under s 172(1)(b) of the Constitution, a court deciding a constitutional matter has a wide remedial power. It is empowered to make “any order that is just and equitable”. So wide is that power that it is bounded only by considerations of justice and equity.’… In fashioning appropriate just and equitable relief, the approach in Lombardy finds application whereby this Court has to weigh the consequences of retrospectively invalidating the impugned municipality rates against the imperative to vindicate the principle of legality. Should matters be left as they are, the respondents stand to unjustifiably claim the unlawfully imposed excessive portion of the municipal rates, levied on the agricultural properties of the ratepayers. The scale of justice will be tilted. [37] It is important to bear in mind that in the fabric of our Constitution, the first respondent is a sphere of government and the second and third respondents are organs of state. Our constitutional democracy is based on the rule of law. As stated by this Court in Kalil N.O. and Others v Mangaung Metropolitan Municipality and Others:12 ' . . . the function of public servants . . . is to serve the public, and the community at large has the right to insist upon them to act lawfully and within the bounds of their authority . . .'.13 The municipalities are thus expected not only to be conversant with the law applicable to their sphere of government, but also to conduct their affairs within the confines of the law. Should they fail to do so, the courts should not be impeded from considering and granting an appropriate order that would have the effect of vindicating the principle of legality. A trend should not develop, or precedent established, where there would be no consequences when municipalities 11 Ibid para 53 12 Kalil N.O. and Others v Mangaung Metropolitan Municipality and others [2014] ZASCA 90; 2014 (5) SA 123 (SCA). 13 Ibid para 30. function outside the parameters of the law. In Lombardy, this Court cautioned against the implications of such practice when it commented as follows: ‘It cannot plausibly be so that the City proceeded to arrange its affairs in the confident expectation that ratepayers would not challenge its conduct. Indeed, the City does not even attempt to suggest what other remedy might be preferable from the standpoint of Justice and equity other than that the Court should decline to set aside the 2012 valuation roll.’ [38] In order to mitigate the impact of the recovery of unpaid rates on the appellants and also the respondents crediting the accounts of the appellants who paid in excess of the legal limit, the parties may agree to reciprocally arrange the payments to be effected over a reasonable period, concurrent with the payment of the current rates, or make other suitable arrangements. Just as the process of agricultural food production by the taxpayers has to be protected, the inflow of revenue for the municipality must also not be disrupted. [39] After hearing argument from counsel in Court, a request was directed to the parties to deliver supplementary heads of argument specifically on Lombardy and its implication to the question of the relief in terms of s 172 of the Constitution in this appeal. The counsel for both parties delivered the supplementary heads of argument. Regrettably, the submissions as regards Lombardy were scant and unhelpful. The parties took the opportunity to instead rehash the arguments as presented in Court. I am of the view that the supplementary heads of argument should be excluded from any costs to be awarded. The costs shall follow the result. [40] I accordingly make the following order: 1. The Appeal succeeds. 2. The order of the Full Court of the Mpumalanga Division of the High Court is set aside and substituted by the following order: 2.1 ‘The rate notices published by the respondents in terms of s 14(2) of the Local Government: Municipal Property Rates Act 6 of 2004 in the Mpumalanga Provincial Gazette of 10 July 2009, 9 July 2010; 27 May 2011, 29 August 2012; 19 August 2013, 22 July 2015; 22 July 2016; 25 August 2017 and 6 October 2018, as well as the further rates notice published by the respondents dated July 2014 in respect of the 2014/2015 financial year, including resolutions of the municipal council on which all such rates notices were based, where applicable, are hereby declared unlawful and invalid to the extent that they relate to agricultural properties used or permitted to be used for crop and/or animal farming (agricultural property); 2.2 The respondents may recover from the members of the appellants, only the amounts of the agricultural property rates calculated based on the Local Government: Municipal Property Rates Act 6 of 2004 and the Regulations promulgated in terms thereof, less any amount in excess of the legally permissible limit, in respect of each financial year from 2009 to 2018; 2.3 The respondents are further liable to credit the accounts of the appellants’ members who were levied and paid municipal rates, only to the extent of the amounts in excess of the legally permissible limit of the rates chargeable to the agricultural properties in respect of each financial year from 2009 to 2018; and 2.4 On recovery of arrear municipal rates due, the respondents may charge the rate of interest as published in terms of section 96 read with section 97(1)(e) of the Local Government: Municipal Systems Act 32 of 2000 in respect of each financial year from 2009 to 2018. 3. The respondents are ordered in future not to levy property rates on any agricultural property in its municipal jurisdiction at a rate that exceeds that legally prescribed and, such rate must be determined in terms of the procedures prescribed by law.’ 4. The first respondent is ordered to pay to the appellants the costs of the appeal, including costs of two counsel, but excluding the costs of delivering the heads of argument after the hearing of the appeal. The costs against the first respondent shall include the costs in the high court and those on appeal in the full court of the Mpumalanga Division of the High Court. __________________________ SP MOTHLE JUDGE OF APPEAL APPEARANCES: For appellants: J A van der Westhuizen (with G J Bensch) Instructed by: Du-Toit Smuts & Partners, Nelspruit Phatshoane Henney, Bloemfontein For respondents: E van As (with V Mabuza) Instructed by: Len Dekker Attorneys Inc, Pretoria Rosendorff Reitz Barry, 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 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 The Thaba Chweu Rural Forum & Others v The Thaba Chweu Local Municipality and others [2023] ZASCA 25 Today, the Supreme Court of Appeal (SCA) upheld an appeal from the Mpumalanga Division of the High Court, Mbombela (high court). The order of the high court was set aside and substituted with one declaring the rates notices published in the Mpumalanga Provincial Gazette for the 2009 to 2018 financial years, in terms of the Local Government: Municipal Property Rates Act 6 of 2004 (Rates Act), as unlawful and invalid to the extent that it relates to arable or pastoral farming. The Thaba Chweu Local Municipality (first respondent) was prohibited from recovering from the appellants amounts greater than the legally permissible limit as calculated in terms of the Rates Act and was also required to credit the accounts of members from whom amounts in excess were recovered. This matter revolved around the lawfulness and validity of municipal rates imposed on farms by the first respondent. Agricultural rates have been levied on the appellants since 2009 in terms of s 8 of the Rates Act and were subject to conditions set out in the Regulations to the Rates Act, namely that the effective rate applicable to farms could not exceed 25% of the rate applicable to residential properties. However, the applicants were, each financial year in question, levied excessive rates pertaining to inflated property valuations in excess of the prescribed 25%. The appellants sought an order declaring that the conduct of the first respondent was unlawful and should have been set aside. The respondents, however, held that, if the court were to set the impugned property rates aside, it would prejudice the first respondent. Subsequently, the high court only ordered that that the appellants comply with the prescripts applicable to local government in the future. Upon appeal to the full bench, the high court found that the first respondent’s conduct was indeed unlawful and invalid. However, the invalid conduct was not set aside and, as with the court a quo, the full court declined to set the invalid conduct aside on account of the delay by the appellants to institute proceedings. Upon appeal, this Court was requested to review the decision not to set the invalid conduct aside. This Court held that the subject of delay in instituting proceedings became complex as the matter revolved around the principle of legality to which there was no statutorily prescribed period within which a party may institute a review challenge. To this end, the SCA found that the respondents, being the local sphere of government, performed vital services to the general public of South Africa. As public servant, the respondents repeatedly and blatantly flouted the applicable legal provisions with regards to the Rates Act and repeatedly contravened the law from 2009 to 2017, regardless of any objection or questioning emanating from the appellants. Furthermore, the Court also found that the language used in the various legislative instruments was unambiguous, which left no room for any legislative uncertainty. The conclusion was, therefore, that the respondents simply failed to clearly implement the letter of the law and flouted the principle of legality and sought to profit from amounts unlawfully levied. In the result the SCA upheld the appeal and ordered that the first respondent was prohibited from recovering from the appellants amounts greater than the legally permissible limit as calculated in terms of the Rates Act and was also required to credit the accounts of members from whom amounts in excess were recovered. ~~~~ends~~~~

3534

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 509/2019 In the matter between: THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE APPELLANT and LEVI STRAUSS SOUTH AFRICA (PTY) LTD RESPONDENT Neutral citation: Commissioner: SARS v Levi Strauss SA (Pty) Ltd (509/2019) [2021] ZASCA 32 (7 April 2021) Coram: WALLIS, MBHA and SCHIPPERS JJA and EKSTEEN and ROGERS AJJA Heard: 4 March 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 7 April 2021 Summary: Customs and Excise Act 91 of 1964 – section 49(7) – appeal against origin determination – importation of goods from SADC countries – certificates of origin in terms of Annex I to Rules of Origin to the Protocol on Trade in the Southern African Development Community (SADC) Region – validity – goods produced in a member state and sold to purchaser in non-member state – purchaser on-selling goods to an end user in a member state – goods dispatched by producer directly to end user – whether goods consigned directly from one member state to another member state – whether qualifying for favourable rate of duty in terms of Protocol. Valuation of goods for purpose of calculating customs duty – determination of transaction value in terms of ss 65, 66 and 67, read with s 74A(1), of the Act – inclusion of commissions other than buyer's commission under s 67(1)(a)(i) of the Act – what constitutes buyer's commission – international procurement process – manufacturing process under agent's control – scope of purchaser's control of agent – whether commission on purchases through a related company constituted buyer's commission. Transaction value – inclusion of royalties in terms of s 67(1)(c) of the Act – whether royalties due directly or indirectly as a condition of sale of the goods for export to South Africa. ORDER On appeal from: Gauteng Division of the High Court, Pretoria (Satchwell 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: '(a) The appeal in terms of s 49(6) of the Customs and Excise Act 91 of 1964 succeeds in relation to the Commissioner's determination dated 25 March 2014 that the Certificates of Origin accompanying the bills of entry for goods imported by Levi SA and consigned from countries within the SADC area during the period from 1 July 2010 to 5 February 2014 were invalid. (b) The determination and demand for payment of the sums of R52 466 124.19 and R87 240 129.71 in consequence thereof are set aside. (c) The application and appeal in terms of s 65(6) is otherwise dismissed. (d) The respondent is to pay the applicant's costs, such costs to include those consequent upon the employment of two counsel.' JUDGMENT Wallis JA (Mbha and Schippers JJA and Eksteen and Rogers AJJA concurring) [1] The respondent, Levi Strauss South Africa (Pty) Ltd (Levi SA), is locked in a dispute with the appellant, the Commissioner for the South African Revenue Services (the Commissioner or SARS, as appropriate), over the import duties and value-added tax (VAT) payable by it in respect of clothing imports that at the relevant time made up some sixty percent of its sales. After a protracted audit lasting over two years, SARS issued a determination on 25 March 2014 in which it determined that the place of origin certificates issued in respect of imports from countries in the South African Development Community (SADC) and used to clear imports emanating from such countries were invalid, and therefore disentitled Levi SA from entering these goods at a favourable rate of zero percent duty under the Protocol on Trade in the Southern African Development Community (SADC) Region (the Protocol). This involved by far the largest amount in dispute. The other disputes related to the determination of the transaction value of the imported goods on which duty was payable. SARS determined that certain commissions and royalties paid by Levi SA to other companies in the Levi Strauss group fell to be included in determining the transaction value. [2] Levi SA launched the present application proceedings by way of an appeal under s 49(7)(b) of the Customs and Excise Act 91 of 1964 (the Act) against the origin determination and an appeal under s 65(6) of the Act against the transaction value determinations. In pursuing those appeals the determinations were presumed to be correct so that the onus rested on Levi SA to show that they were incorrect.1 After a disputed reference to oral evidence – Levi SA having contended that there was no dispute of fact warranting such a reference – some evidence was led and the appeals were argued before Satchwell J. She upheld them in their entirety, set aside the 1 Sections 49(7)(b)(i) in the case of the origin determination. Although there is no similar provision in respect of the transaction value determination, on ordinary principles the onus rested on Levi SA to satisfy the trial court that SARS' determination was wrong. In terms of s 65(4)(a)(ii)(bb) a transaction value determination is operative from the date of the determination unless it is set aside by a court. determinations and substituted them in terms proposed by Levi SA. This appeal is with her leave. Background and the issues [3] Levi Strauss & Co (LS & Co) is the ultimate holding company of an international group of companies. It is one of the world's largest brand- name apparel marketers operating in more than 110 countries through three divisions, the Americas, Europe and Asia Pacific. Clothing bearing its well-known trademarks is sold in over 55 000 retail outlets, including a number that are either company-owned or franchised and dedicated solely to its brands. Levi SA is the wholly-owned subsidiary responsible for its trading operations in Southern Africa. Apart from its manufacturing activities, which do not feature directly in this appeal, its role is best described as that of a wholesale distributor of clothing on behalf of LS & Co.2 [4] During the period from 2010 to 2014, with which this appeal is concerned, Levi SA manufactured approximately forty percent of the clothing that it sold. It imported the rest, much of it from Mauritius and Madagascar, both members of the SADC. Until about 2011 this clothing was purchased directly from the producers in the SADC. The arrangements with these producers to manufacture, or assemble,3 this clothing, in accordance with the stringent requirements of LS & Co, were made by Levi Strauss Asia Pacific Division Pte Ltd (Levi APD), a company incorporated 2 The description is that ascribed to subsidiaries performing the same role in the group in Transfer Pricing Reports prepared by PricewaterhouseCoopers LLP on behalf of LS & Co for submission to the US authorities under its Transfer Pricing Regulations. The same reports recorded that LS & Co conducted its operations as a worldwide marketer of apparel through foreign subsidiaries owned directly or indirectly by it. Counsel for Levi SA accepted the accuracy of these descriptions 3 It is not clear from the papers whether the producers in Mauritius and Madagascar produced clothing from scratch, using designs and fabrics determined by LS & Co, or whether theirs was a CMT (cut, make and trim) operation. It makes no difference so far as the issues in this appeal are concerned. in Singapore. On 1 December 2005, Levi APD and Levi SA concluded an agreement entitled ‘Buying Agent Agreement’ (the BAA) to regulate their relationship. It was amended on 1 December 2010. The BAA initially provided that Levi APD was to be paid an amount of seven percent of the purchase price of the goods for its services. This was described as a buying commission. Under the amendment in 2010 this increased to twelve percent. I will refer to these arrangements as the Levi APD regime. [5] From 2011 this system was altered. The aim was that instead of purchasing directly from these producers, Levi SA would purchase them from Levi Strauss Global Trading Company Limited (Levi GTC) incorporated in Hong Kong. A Master Sales Agreement (the MSA), dated 1 January 2011, but only signed by Levi SA on 18 March 2011, provided for Levi SA to purchase clothing from Levi GTC. In turn Levi GTC would purchase the clothing from the same contracted suppliers in SADC countries as before, and sell them to Levi SA at a mark-up of twelve percent. The suppliers dispatched the garments directly to Levi SA. I will refer to this as the Levi GTC regime. The manner in which I have described it suggests a seamless transition from the one regime to the other, but this did not necessarily occur in all instances.4 Some established producers were unable to operate under the new system and accommodations were made to deal with this. Nevertheless for the purpose of considering the issues of principle in this case it is convenient to distinguish between the two regimes in the manner I have done. 4 There was a dispute on the papers whether the transition from the one regime to the other was as smooth as suggested in the founding affidavit, but at the end of the day nothing turns on this. If any producer continued to supply Levi SA directly, the customs entries in relation to such supplies should have been treated as if Levi GTC was fulfilling the functions previously performed by Levi APD. [6] The transition to the Levi GTC regime gave rise to what was conveniently described in argument as the origin issue. Article 2 of the Protocol provided that 'originating goods' would qualify for favourable treatment in accordance with the provisions of Annex I to the Protocol. Levi SA contended that all the clothing it imported from producers in Mauritius and Madagascar was consigned directly from Member States of the SADC to it, as the consignee in another Member State, and were accordingly originating goods that qualified for the favourable duty, which at all times relevant to these proceedings was set at zero percent. SARS contended that the position was not that simple. It argued that the purpose of the Protocol was to promote trade between countries in the SADC region. Under the Levi APD regime Levi SA had purchased clothing directly from producers in Mauritius and Madagascar and that clothing had been consigned directly to it in South Africa, thereby satisfying the origin criteria in Rule 2.1. However, under the Levi GTC regime the producers in Mauritius and Madagascar were selling the clothes to Levi GTC, which was on-selling them to Levi SA from Hong Kong, but causing them to be sent directly from the producers to Levi SA. SARS contended that this undermined the purpose of the Protocol and that it should be construed as requiring that the commercial relationship giving rise to the goods being imported to South Africa needed to be between parties, both of whom were based in SADC countries. [7] The other two issues arose because s 65(1) of the Act, provides that the value at which goods must be entered for customs duty purposes shall be the transaction value thereof within the meaning of s 66. Section 66(1) provides that: ‘Subject to the provisions of this Act, the transaction value of any imported goods shall be the price actually paid or payable for the goods when sold for export to the Republic, adjusted in terms of section 67 . . .’ The adjustments with which this appeal is concerned are dealt with in ss 67(1)(a)(i) and 67(1)(c) respectively. [8] Section 67(1)(a)(i) provides that 'any commission other than a buying commission' is to be added to the price actually paid or payable for the goods to the extent that it was incurred by the buyer and not included in that price. Levi SA said that the commission it paid to Levi APD under the BAA – initially seven percent and, after the amendment, twelve percent – was a buying commission. SARS disputed this and determined that Levi APD was not a buying agent, so that the commission paid to it was not a buying commission and fell to be included in determining the transaction value of these goods. [9] Section 67(1)(c) of the Act provides that in determining the transaction value of goods there shall be added to the price actually paid or payable for the goods: ‘royalties and licence fees in respect of the imported goods, including payments for patents, trademarks and copyright and for the right to distribute or resell the goods, due by the buyer, directly or indirectly, as a condition of sale of the goods for export to the Republic, to the extent that such royalties and fees are not included in the price actually paid or payable, but excluding charges for the right to reproduce the imported goods in the Republic . . .’ Levi SA pays a royalty to LS & Co at varying rates on every sale of garments it makes, whether manufactured by it or imported. These are paid in terms of a Trademark License Agreement (the TLA) dated 1 December 2010. The issue is whether the royalties payable by Levi SA were 'in respect of the imported goods' and were due ‘directly or indirectly, as a condition of sale of the goods for export to the Republic’. SARS determined that they were and accordingly that the transaction value of the clothing should be adjusted to take account of the royalty. [10] If SARS is unsuccessful in its appeal on the origin issue, but successful on the issues relating to the adjustment of the transaction value of the clothing, this would have no effect as far as the payment of import duty is concerned because the zero percent rate under the Protocol would still apply. It would however affect the amount of VAT payable and to that extent a decision on those questions would have a practical effect. It would also provide guidance to SARS and other importers as to the correct approach to the relevant provisions. The origin issue [11] Rule 2.1 in Annex I to the Protocol is the applicable rule for the purpose of identifying originating goods. It provides that: 'For the purpose of implementing this Protocol, goods shall be accepted as originating in a Member State if they are consigned directly from a Member State to a consignee in another Member State.'5 Levi SA's approach was simple. It said that the goods were produced in SADC countries and were sent – consigned – directly to it in South Africa, also an SADC country, and were therefore originating goods. SARS accepted that this construction was one that Rule 2.1 bore linguistically. It argued that there was a further requirement that the commercial relationship giving rise to the consignment had to be between parties in two SADC countries. Levi SA submitted that there was no construction of the 5 Rule 2.1 also requires that the goods must have been wholly produced or sufficiently worked in a Member State, but compliance with these local-production rules was not in dispute. language used that could impose the qualification for which SARS contended. [12] Starting with the language of Rule 2.1 it says that goods shall be accepted as originating in a Member State if they are consigned directly from that state to another Member State. In ordinary parlance that is what occurred with the goods in this case. They were produced or sufficiently worked in Mauritius and Madagascar and were sent either by air or sea directly from there to South Africa. Both the air waybills and the bills of lading identify Levi SA as the consignee and the producer in either Mauritius or Madagascar as the consignor. Each shipment constituted a consignment as defined in Rule 1 of the Annex as having been sent 'from one exporter to one consignee'. Each was accompanied by a declaration of origin given under Rule 9.1 in the form of Appendix II to Annex I. The two examples in the record, which I assume were typical, reflect the producer of the clothing as the exporter. [13] This is consistent with the structure of the Act, which is concerned with the movement of goods in and out of South Africa, rather than the commercial transactions underlying such movements. Indeed, in the case of both there may be no commercial transaction, yet the movement of the goods may attract duty. Customs duty is defined as a duty leviable on goods imported into the Republic. The duty is leviable irrespective of the commercial basis, if any, upon which the goods came into the country. An importer, such as Levi SA, is simply a person who brings goods into the Republic. Goods are deemed to be imported in the circumstances set out in s 10 of the Act, but nothing in that section requires consideration to be given to anything other than the physical movement of the goods. It is unconcerned with any commercial relationship behind that movement. Section 38 requires that the importer must make due entry of the goods within seven days of their deemed entry into the Republic. The Protocol is likewise concerned with the physical origin of the goods in a Member State of the SADC, not with their commercial origins. [14] This approach accords with the definitions of 'exportation' and 'importation' in the Glossary of International Customs Terms published by the World Customs Organisation, of which South Africa and all other SADC countries, with the exception of the Democratic Republic of Congo, are members. It defines 'exportation' as 'the act of taking out or causing to be taken out of any goods from the Customs territory'. Conversely 'importation' is 'the act of bringing or causing any goods to be brought into a Customs territory'. A 'declaration of origin' is: 'An appropriate statement as to the origin of the goods made, in connection with their exportation, by the manufacturer, producer, supplier, exporter or other competent person on the commercial invoice or any other document relating to the goods.' The focus is on the physical situation and transport of goods, not the commercial dealings giving rise to them. [15] In its determination SARS took the view that Levi GTC was the exporter because it placed the orders with the producers, paid for the goods, bore the risk in them and sold them to Levi SA. SARS relied first upon the definition of 'exporter' in s 1 of the Act. That definition reads as follows: 'exporter' includes any person who, at the time of exportation- (a) owns any goods exported; (b) carries the risk of any goods exported; (c) represents that or acts as if he is the exporter or owner of any goods exported; (d) actually takes or attempts to take any goods from the Republic; (e) is beneficially interested in any way whatever in any goods exported; (f) acts on behalf of any person referred to in paragraph (a) (b), (c), (d) or (e), and, in relation to imported goods, includes the manufacturer, supplier or shipper of such goods or any person inside or outside the Republic representing or acting on behalf of such manufacturer, supplier or shipper'. [16] SARS did not identify the portion of the definition on which it relied. Before its amendment by s 1(1) of Act 112 of 1977, the definition consisted only of the words appearing after 'in relation to imported goods'. It was accordingly only concerned with identifying the exporter in relation to imported goods. Presumably, in relation to exported goods, the ordinary meaning of exporter, namely the person responsible for sending the goods out of the country applied. The purpose of the amendment appears to have been to clarify, and possibly broaden, the scope of the concept of an exporter in relation to goods being exported from South Africa. There is no indication of a need to alter the existing definition in relation to imported goods. The new sub-sections correspond mutatis mutandis with the sub- sections of the definition of an importer. They are couched in language apt to apply to the removal of goods from South Africa and, in the case of sub- sec (d), can only apply in that situation. They are not applicable to the identification of the exporter in relation to imported goods. [17] The exporter in relation to imported goods includes any person who would naturally be regarded as the exporter, as well as the manufacturer, supplier or shipper of the goods. There is nothing unusual in this. The Act is deliberately cast in broad terms in order to ensure that duty is paid. There may be several people to whom SARS may look to recover duty or perform functions in terms of the Act. Whether Levi GTC would fall within the general understanding of an exporter, as the party securing the exportation of the goods to South Africa, is irrelevant. The producers in Mauritius and Madagascar were the manufacturers, suppliers and shippers of the goods. In accordance with the definition, they were the exporters of those goods. The statement in para 6.7.4 of the determination that they were not regarded as the exporters to South Africa was incorrect. As exporters they were permitted to provide certificates of origin under Rule 9 of the Origin Criteria. It was no doubt convenient for them to do so as that obviated the need to provide a separate certificate from them as producers of the goods in terms of Appendix III to Annex I to the Protocol. [18] SARS also relied in its determination on certain provisions of Rule 49B.10(9) of the Rules promulgated under the Act,6 but this was misconceived. Where the rule deals with exporters, it is concerned with South African persons and entities that export goods to other SADC Member States. It requires them to be registered as exporters (Rule 49B.01(f)). The issue of certificates of origin under Rule 49B.10(9)1(h) referred to by SARS concerns the issue of certificates by South African exporters. The rule requires Box 1 of the certificate (identifying the exporter) to refer to a natural person ordinarily resident in the Republic, or a person whose business or the place of business of which is in the Republic. That has nothing to do with such certificates in the context of the importation of goods into South Africa. [19] SARS is correct to say that the Protocol's purpose is to encourage trade within the SADC and it aims to do this by removing tariffs and other barriers to trade. In dealing with barriers to trade caused by tariffs its aim is to reduce the number of situations where someone in Member State A could procure goods from Member State B, but tariffs make it economically more sensible to procure them domestically, or from a non- 6 Rules published in GNR 1874 of 8 December 1995 (GG 16860), as amended. Member State. Removing tariffs and encouraging trade is aimed at stimulating productive activity in State B by enhancing competitiveness, and providing the economic benefit of cheaper prices to businesses and consumers in State A. [20] SARS' argument focussed on the twelve percent mark-up paid by Levi SA to Levi GTC. It contended that the economic benefits flowing from the purchase of imported apparel from Levi GTC did not accrue to the countries from which the goods were shipped to South Africa. This was incorrect as is apparent from comparing the purchasing of goods under the Levi APD regime, with the purchase of the same goods under the Levi GTC regime. In each case the goods were procured from the same producers in the same countries and shipped to Levi SA in South Africa. Under the former regime, Levi SA paid twelve percent of the producer's price to Levi APD and, in the latter, it paid Levi GTC a mark-up of twelve percent on that price. The overall cost was the same and the cash flows identical, save that the additional twelve percent accrued to a different Levi Strauss group company outside the SADC. Commercially, the situations were indistinguishable. The economic benefits to the producing countries were unchanged, as were the economic benefits to Levi SA and South African consumers. Yet SARS conceded – clearly correctly – that in the case of the Levi APD regime the Origin Rules were satisfied, while contending that under the Levi GTC regime they were not. There is nothing in the evidence to show that any portion of the economic benefit which the SADC manufacturers could commercially have expected to receive for their input was diverted. The twelve percent ‘buying commission’ in the Levi APD regime and the twelve percent mark-up in the Levi GTC regime was compensation for services unrelated to anything done by the SADC manufacturers. [21] The basic flaw in SARS's contention is illustrated by the following scenario. Instead of Levi GTC purchasing the clothes from the producer, another Levi Strauss group subsidiary in, say Mauritius,7 did so at the same price and sold the clothes to Levi SA. SARS accepted that this would satisfy the Origin Rules, but was unable to point to the economic advantage accruing to Mauritius in that situation. Twelve percent accruing to the Mauritian entity would, after deducting any local expenses, still be remitted to Levi GTC to cover the latter's costs. [22] SARS argument misconceived both trade and the effect of the relevant commercial relationships. Nothing illustrates this better than the following passage from the answering affidavit: ‘By structuring the trade transaction in this manner, Levi ensures that the goods meet the requirements of the rules of origin whereas a significant portion of the economic benefits of the trade transaction are diverted to Hong Kong or Singapore at the expense of the member states. The economic benefits of the trade transaction that accrue to the manufacturing member state are limited to the amount of the invoice issued by the contract-manufacturer to … Levi GTC. Similarly, the value for customs in the importing member state (South Africa) is also limited to the same amount which attracts customs duty at preferential rate (as opposed to the full rate). Although the actual amount that is paid by the Applicant in South Africa is 12% more than the amount that flows to the contract-manufacturer, the additional 12% is diverted to … Levi GTC duty-free.’ The deponent recognised that the transactions satisfied the Origin Rules, but then misunderstood their effect, leading to the erroneous conclusion that the twelve percent was 'diverted … duty-free' to Levi GTC. 7 The example is not far-fetched. There is a wholly-owned subsidiary in Mauritius called Levi Strauss Mauritius Ltd. [23] For all those reasons there was no merit in the origin argument on behalf of SARS. The words 'consigned directly from a Member State to a consignee in another Member State' refer to the physical transport of the goods from one Member State to another and not to the underlying commercial transactions giving rise to that. The conclusion in the determination that the certificates of origin presented by Levi SA in support of its entry of goods from Mauritius and Madagascar were invalid was incorrect and that determination was correctly set aside by the high court. The alternative origin argument [24] A subsidiary issue concerning the validity of the SADC certificates of origin was raised by SARS in argument. In the course of the audit, it transpired that notwithstanding the change from the Levi APD regime to the Levi GTC regime, some producers had continued to send invoices to Levi SA as well as to Levi GTC and, in some instances, these had been used when entering the goods, instead of the invoices rendered by Levi GTC. The auditors provided Levi SA with a schedule reflecting 47 instances where this was discovered. Vouchers of correction were prepared and lodged with SARS and any additional amounts due were paid. One instance referred to in the answering affidavit was not reflected on the schedule, but according to the evidence was dealt with subsequently. [25] SARS submitted that the 47 cases in the schedule, plus the one referred to in its affidavit, showed that the SADC certificates of origin were 'issued on the basis of declarations tainted by misrepresentation using fictitious invoices' and were invalid. For this reason, it submitted that the relevant imported goods did not qualify for SADC preferential rates. It extrapolated these cases to the general body of such imports by claiming that Levi SA did not establish, the onus being on it, that there were no other cases and that none of the other invoices suffered from the same taint. [26] I do not think this argument is open to SARS on these papers. An appeal under s 49(7)(b) of the Act is an appeal against the determination. While it is an appeal in the wide sense, involving a complete re-hearing and determination of the merits,8 it remains an appeal against what was determined in the determination and nothing more. It is open to SARS to defend its determination on any legitimate ground, but it is not an opportunity for it to make a wholly different determination, albeit one with similar effect. [27] The determination in issue in this appeal was that the SADC certificates of origin used to enter goods were invalid, because GTC was not an exporter to South Africa from within SADC, but an exporter from outside the SADC. The foundation for this was embodied in the following paragraphs of the answering affidavit, which encapsulated the origin argument: 'The economic benefits flowing from the purchases of imported apparel by the Applicant from Levi GTC … did not accrue to the countries from which the goods were shipped to South Africa. Accordingly, the main objective of the SADC Trade Protocol is not achieved when the Applicant purchases the goods from sellers in Hong Kong or Singapore but shipped from an SADC Treaty member state. Consequently, the goods do not qualify for the preferential tariff treatment in terms of the SADC Protocol. The purpose of the preferential rules of origin is to achieve genuine trade between businesses of the member states where the economic benefits of that trade accrue to the relevant member states. The interposition of non-member state entities between the manufacturer and the importer is a stratagem aimed at defeating the very objective of 8 Pahad Shipping CC v Commissioner South African Revenue Service [2009] ZASCA 172; [2010] 2 All SA 246 (SCA) para 14. the SADC Treaty Protocol by diverting the economic benefits of the transaction from the member states to a non-member state to the prejudice of the member states. The state of export derives significantly less economic benefits from the transactions, higher profits are diverted and the state of import suffers a loss on import duties.' [28] Contentions that the certificates of origin emanating from the producers in Mauritius and Madagascar were tainted by misrepresentation and based on fictitious invoices, appear nowhere in the determination, or indeed in the answering affidavit. Had they been the subject of the determination the proceedings in the high court would have taken a very different course. Levi SA would have been required to demonstrate not only that it had properly and adequately responded to the 48 cases identified by SARS, where an incorrect invoice had been used to enter the goods and determine their transaction value, but that there were no other cases where that had happened. [29] In any event there are three reasons why there is no merit in the argument. First, under the Protocol, the certificates of origin are validated by the country of origin of the goods. Such a certificate, once given, may only be queried in exceptional circumstances in terms of Rule 9.3 in Annex I to the Protocol. These certificates have never been queried by SARS and it has accepted vouchers of correction and the payment of duties and VAT in accordance with those vouchers. It is not open to it in those circumstances to challenge them at this late stage. [30] Second, where the customs authority of a Member State asks that a certificate of origin be verified, the verification consists of nothing more than advising that the certificate was issued by the relevant Customs Office or designated authority and that the information therein is accurate. There is nothing to indicate that an inadvertently incorrect reference to the invoice number invalidates the certificate, or that a reference to the invoice to Levi GTC, would result in a certificate being withheld. On Levi SA’s version, supported by affidavits from the SADC manufacturers, certificates of origin were in the vast majority of cases issued on the strength of the correct invoices issued by the SADC manufacturer to Levi GTC, indicating that the use of an incorrect invoice in 47 or 48 instances did not mislead the competent authorities in Mauritius and Madagascar into authenticating certificates of origin for which they would otherwise have withheld authentication.9 The essential facts to which the certificates attest are that the goods emanated and were consigned from the state issuing the certificate, after being produced or undergoing sufficient working or processing there, and were consigned to the state seeking verification. These certificates did that and there is no challenge to their correctness in that regard. [31] Third, SARS wanted us to extrapolate from the cases in the schedule and the extra one referred to in the answering affidavit, to a conclusion that all the certificates suffered from the same defect. It is impossible to do that, not least because it is not apparent from the schedule that all the cases listed involved imports from SADC countries. There are only four where the preferential rate of duty of zero percent was charged. Save in one case where the rate was 30 percent, the balance attracted duty at rates of 45 percent. The determination referred to both SADC and EUR1 certificates, as had the original letter containing the prima facie audit findings. An online search reveals that EUR1 certificates are issued by certain European 9 The exception was Aquarelle, where Aquarelle Madagascar (by whom the goods were produced) invoiced Aquarelle International Ltd in Mauritius. Certificates of origin were obtained by Aquarelle Madagascar on the strength of its invoices to Aquarelle International. countries under a variety of pan-European trade entities, such as the European Union or the European Free Trade Association. Levi SA's Global Shipping Manual for imports to South Africa required that EUR1 certificates be provided for all shipments produced and loaded from European Union member countries. It seems possible that the cases where a duty other than zero percent was levied may not even have emanated from an SADC member state. Given this confusion it is impossible to draw the inference that SARS asked us to draw. It reinforces the point that the determination had nothing to do with this issue and, as a result, the appeal was not pursued by SARS on this basis. The argument falls to be rejected. The buying commission issue [32] Was the amount Levi SA paid to Levi APD under the BAA a buying commission that fell to be excluded under s 67(1)(a)(i) of the Act in determining the transaction value of the imported goods?10 A buying commission is defined in s 65(9) of the Act, in accordance with para 1(a)(i) of the Explanatory Notes to Article 8 of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (the Implementation Agreement), as: ‘. . . any fee paid by an importer to the importer’s agent for the service of representing the importer abroad in the purchase of goods being valued’. Levi SA contended that Levi APD was appointed under the BAA as its agent in order to represent it abroad in the purchase of the imported apparel and the fee paid to it for these services was therefore a buying commission. SARS contended that properly construed in the light of a complete 10 Because of the confusion during the transition between the Levi APD regime and the Levi GTC regime it was suggested that some shipments involving Levi GTC were dealt with under the BAA. That is irrelevant to whether the commission paid to Levi APD was a buying commission. Insofar as some transactions involving Levi GTC may have been undertaken under the BAA and on the same basis as those with Levi APD, the decision in relation to Levi APD will apply equally to that situation and any issue concerning such cases must be resolved at a later stage in the light of the judgment. understanding of the procurement process adopted by the Levi Strauss group at the time, Levi APD was not the agent of Levi SA and accordingly the commission was not a buying commission. [33] Broadly speaking the principal functions of a buying agent are to: find suppliers for the goods the importer wants; express the importer's needs to the seller; obtain samples of the goods for the importer's inspection and approval; assist the importer in negotiating prices; assist in arranging the transportation of the goods from seller to importer; and perform administrative functions. The functions may vary from case to case and be more or less extensive. The range of functions undertaken by the intermediary is not decisive of whether they are acting as a buying agent and earning a buying commission. Of more fundamental importance is the nature of the relationship between them and the importer. This is clear by reference to the international approach to the issue of buying agents and buying commission. [34] The position under the Implementation Agreement is that buying commissions should be excluded when determining the value of goods on which duty is levied varies. It appears to have been a basic principle of customs valuations in the United States of America for many years.11 Prior to the conclusion of the Implementation Agreement in its current form the position was unclear.12 Some countries contended that the value for customs purposes should include all costs incurred in procuring the imported goods, whether incurred by the seller or the buyer, and whether or not included in the price. Others took the view that only costs that the 11 United States v Nelson Bead Co 42 C.C.P.A. 175 (1955); JC Penney Purchasing Corp. v United States 451 F. Supp. 973 (Cust. Ct. 1978) 983. 12 Sussan (Wholesalers) Pty Ltd v Collector of Customs [1978] AATA 92 seller would have to incur in order to complete the transaction by delivering the goods to the importer should be included. On that basis a buying commission incurred in the procurement of the goods, that is, their identification, the negotiations for their acquisition and administrative measures related thereto, would be excluded.13 [35] The reason for excluding buying commissions in determining the transaction value of imported goods seems to be that in terms of Article 1.1 of the Implementation Agreement the starting point for determining the transaction value is the price actually paid or payable for the goods when sold for export to the country of importation. The inclusions under Article 8 seek to capture the total payment made by the buyer to, or for the benefit of, the seller, whether in money or otherwise.14 In setting its price, the seller is generally not concerned with the costs the importer incurs in order to procure the goods. Nor is it concerned with whether the importer undertakes the procurement itself or through a third party, or what costs the importer incurs in doing so. It is only concerned with the price that those goods would secure in a sale on commercial terms to another party. Although payment of a buying commission may form part of the importer's cost of sales the underlying assumption is that these are costs that would otherwise have to be incurred by the importer and do not enure for the benefit of the seller. The position is otherwise, however, where the intermediary is acting for its own advantage or for the seller. The assumption then is that were the intermediary not involved the seller would demand a higher price for the goods if selling them on commercial terms, so that the real commercial price should include the commission paid to the intermediary. 13 Ibid. 14 Note to Article 1 of the Implementation Agreement. [36] There is little guidance as to the meaning of the different terms in the definition of a buying commission. The commission is described as a fee paid by the importer to the importer's agent. It is not necessarily expressed as a percentage of the price of the goods. It may be determined on some other basis. While an importer is clearly identified in the Act, there is no definition of 'importer's agent'. When dealing with an international agreement, one must always be cautious not to import domestic legal concepts into its construction that may not be internationally recognised. It is desirable that there should, so far as possible, be uniformity among nations.15 This is consistent with the requirements of Articles 31(1) and (4) of the Vienna Convention,16 which apply to the interpretation of the Implementation Agreement. Accordingly, I do not think that we should determine whether Levi APD would be regarded as an 'agent' in the technical sense of our law of agency. In my opinion an agent is a representative chosen by the importer to act on its behalf and in accordance with its wishes in return for payment of a fee or commission. [37] The notion of representation necessarily implies that the agent acts at the behest of the importer. While the agent may bring its own expertise to bear in the recommendations it makes to the importer, the important decisions must be those of the importer. Where the importer has little or no freedom of action in regard to the actions of the intermediary the 15 Pan American World Airways Incorporated v SA Fire and Accident insurance Co Ltd 1965 (3) SA 150 (A) at 167H-168A. This is the approach in other jurisdictions. See, for example, Riverstone Meat Co Pty Ltd v Lancashire Shipping Co Ltd (the Muncaster Castle) [1961] 1 All ER 495 (HL) at 513 (per Lord Merriman) and 524-5 (per Lord Hodson); Integrity Cars (Wholesale) Ltd v Chief Executive of New Zealand and Another [2001] NZCA 113 para 19 and the authorities there cited; and De Danske Bilimportører v Skatteministeriet (Case C-98/05); [2010] BVC 132 para 40. 16 Vienna Convention on the Law of Treaties, 1969. The Treaty is applicable in South Africa as part of our customary international law. Law Society of South Africa and Others v President of the Republic of South Africa and Others [2018] ZACC 51; 2019 (3) SA 30 (CC) paras 35 and 36. While that judgment concerned article 18 its terms extend to the Convention as a whole. intermediary is not an agent in any realistic sense. It is for that reason that the nature of the relationship between importer and 'agent' is of fundamental importance. Commentary 17.1 issued by the Technical Committee on Customs Valuation of the World Customs Organisation, discusses buying commissions and says: 'Despite the existence of an agency contract, the Customs is entitled to examine the totality of the circumstances to determine whether the so-called agent is, in fact, acting on behalf of the buyer and not on the account of the seller, or even on his own account.' Section 74A directs that our interpretation of the relevant provision of the Act is subject to both the Implementation Agreement and the explanatory notes and commentaries issued under it. The terms of the sections under consideration are derived from the Implementation Agreement and corresponding statutes internationally are broadly similar. It is therefore helpful to examine the approach adopted in other countries to the identification of a buying agent and buying commission. [38] The United States cases consistently hold that the relationship between the importer and the intermediary is central, and the extent to which the importer can control the actions of the intermediary in procuring the goods is fundamental.17 A compliance document on buying and selling commissions published by the United State Customs and Border Protection,18 expands upon this in the following terms: 'Whether a person is a bona fide buying agent depends upon all the relevant facts of each case and the totality of the evidence. The fact that a person is called a buying agent does not mean that he/she is in fact a bona fide buying agent. Also, the fact [that] a person enters into a buying agency agreement with the buyer does not mean that such 17 B W Wholesale Co v United States 436 F. 2d. 1399 (C.C.P.A. 1971). 18 Buying and Selling Commissions issued after revision in October 2006 by the US Customs and Border Protection as a compliance publication, sv 'When is the intermediary a bona fide buying agent?' So far as I can ascertain this remains applicable in the USA. It was treated as authoritative in New Zealand in Integrity Cars (Wholesale) Ltd v Chief Executive of New Zealand and Another [2001] NZCA 113 op cit, fn 15. person is a bona fide buying agent. Having authority to act as a bona fide buying agent is not the same as actually performing as one. What needs to be considered is whether the services actually performed by the agent is what the parties agreed to and whether such actions are consistent with a bona fide buying agency. In order to be considered a bona fide buying agent, the purported agent must be acting on behalf of and primarily for the benefit of the buyer, rather than for the seller or himself/herself. The main factor which determines whether a party is a bona fide buying agent is the right of the buyer to control the agent’s conduct with respect to those matters entrusted to the agent. The buyer should control the purchasing process and the buying agent should take directions from the buyer and act upon the buyer’s instructions. For example, a buying agent usually does not control who the manufacturer is or what is to be purchased. Normally, the buyer makes such decisions and the buying agent carries them out. Also, a buying agent usually does not control the manner of payment and other significant aspects of the purchase. While a buying agent may exercise some discretion, the ultimate purchasing decisions should be made by the buyer and not by the buyer’s agent. The more discretion a purported agent has, the less likely it is that such person is a bona fide buying agent.’ [39] The approach in the United Kingdom is the same. It asks whether the intermediary acted as an agent on behalf of the importer when the relationship is examined as a whole. The description of the intermediary as an agent is not decisive, as it is capable of describing someone who acts as a true agent in a representative capacity as well as someone acting on their own behalf.19 The test is one of the substance of the relationship, not the form.20 [40] In my opinion neither the nature, nor the extent, of the services provided by the intermediary are decisive. The primary question is whether 19 Potter and Another v Customs and Excise Commissioners [1985] STC 45 at 48. 20 Umbro International Ltd v Revenue and Customs [2009] EWHC 438; [2009] STC 1345 para 27. Here the existence of a written agency agreement was held not to override the other indications that the intermediary was acting as seller of the goods for its own account. the intermediary is not only acting on behalf of the importer, but also in accordance with the wishes and directions of the latter. If the intermediary is the one making the decisions and acting of its own accord, or under directions from a third party, it is not an agent in any realistic sense of the word. The applicable principle is that: 21 'The essence of an agency relationship is the exercise of control by the principal over the conduct of the agent as to those matters entrusted to the agent's care.' This accords with the views expressed by commercial sources. One commentator wrote:22 'The overriding characteristic marking a buying agent status is that the intermediate party is acting under the direction and control of the buyer/principal essentially on behalf of the latter.' To similar effect, in another commercial publication,23 it was said: 'Although no single factor is determinative, the primary consideration is the right of the principal to control the transactions vis a vis the agent's conduct with respect to those matters entrusted to the agent. That is, the agent cannot act independently or without the express authorization of the principal with respect to those matters.' Approaching the issue in this way in the present case requires a close examination of both the BAA and the totality of the circumstances, including the manner in which the Levi Strauss group dealt with procurement and the role of Levi APD in relation to purchases of imported apparel by Levi SA. [41] Levi SA's evidence and argument were based on the BAA. Other than saying that Levi APD was based in Singapore, the founding affidavit contained no information about it or its role in the Levi Strauss group. Nor 21 JC Penney Purchasing Corp. v United States op cit, fn 11; New Trends Inc v United States 645 F. Supp. 957 (Ct. Int'l Trade 1966) 22 Mark K Neville Jr Buying Agency (Part 1) available at http://www.itctradelaw.com/articles/buying- agency-part1.html, the website of a firm of trade lawyers. 23 'Buying Commission explanation' posted on 4 March 2016 on https://www.doing-business- international.com/2016/03/buying-commission-explanation/. did it explain how or why it came about that the BAA was concluded between two wholly-owned subsidiaries of LS & Co. A more complete picture emerged in response to the answering affidavit's description of the global sourcing and supply system adopted by the Levi Strauss group. Furthermore, when oral evidence was led before Satchwell J, three transfer pricing reports, for the years ended 30 November 2010, 2011 and 2012, prepared for submission to the appropriate US authorities under certain Treasury Regulations by PricewaterhouseCoopers LLP on behalf of LS & Co, were included in the bundle.24 I have resorted to all these sources in what follows. [42] LS & Co is an international marketer of apparel. It conducts its operations outside the US through foreign subsidiaries, referred to as affiliates, that it owns either directly or indirectly through other subsidiaries. These are managed through its three divisions. LS & Co plays the leading role in designing and developing products and is responsible for the global marketing strategy of the products. It takes advantage of its global infrastructure to implement new designs and developments by licencing trademarks and trade names to its affiliates. It regards its trademarks as its most critical and valuable assets. LS & Co licences its trademarks and trade names to various subsidiaries, on terms that typically grant them a licence to use the marks and names within certain regions. In addition to specifying the scope of the uses to which the licensee may put the marks and names, the agreements cover the consideration payable for the use of the rights, payments, reporting, quality control, intellectual property rights, confidentiality, length of licence and other general 24 These reports were introduced by Levi SA's counsel at an early stage in Mr Ettlin's evidence and relevant passages from the 2011 report were put to and confirmed by him. Counsel for SARS cross- examined Mr Ettlin on this without objection. provisions. The licences may also regulate manufacturing activities. The overall picture is one of extremely strict central control by LS & Co of the use to which the marks and names are put. [43] Consistent with this picture, the procurement process of the Levi Strauss group was and is centrally controlled. Without challenge, SARS summarised it in the following terms in its answering affidavit: 'The global sourcing and supply of Levi's® branded apparel and accessories is carefully and systematically managed, globally planned and co-ordinated by Levi San Francisco25 through an organised system called 'Global Sourcing Organisation (GSO). Levi San Francisco closely controls and monitors the use of the Levi's trademarks on the branded apparel, the design and development of apparel, sourcing and supply of fabric and other materials used to manufacture the apparel, as well as the manufacturing of branded apparel.' SARS went on to say that each division managed the sourcing and supply of goods in its region. In the case of the Asia Pacific division, in which Levi SA fell at all material times, Levi APD was the company responsible for the management of the division. [44] The GSO is described in considerable detail in the transfer pricing reports. It commenced in 2006. Prior to that there had been three regional sourcing zones. The GSO replaced them and sourcing for all divisions was then done centrally. Its headquarters were established in Singapore and, by 2011 at least, Levi APD was performing the GSO function for the entire group. This changed in the second half of 2011 when Levi GTC assumed the GSO function, coinciding with the change from what Mr Ettlin, the Vice President, Global Supply of LS & Co, referred to as the change from a BAA model to a 'buy/sell' model. The latter is not relevant to the buying 25 This is a reference to Levi Strauss International, California, one of the intermediate subsidiaries between LS & Co and Levi SA. commission issue as nothing was paid to Levi GTC as a 'commission', but its role in the procurement of apparel under the GTC regime may, in due course, have a bearing on the royalty issue. [45] The function of the GSO was dealt with in detail in the 2010 transfer pricing report and was largely repeated in the two subsequent reports, save for a minor adaptation in 2012 to allow for the advent of Levi GTC in place of Levi APD. It is helpful to set it out in full: 'The GSO serves as the merchandise sourcing arm for the LCAs.26 The GSO provides the LS & CO Group with a set of procurement capabilities designed to deliver the right product at the right time and at the right cost and quality. The LSAs27 assist the GSO in executing the sourcing strategy devised by the GSO leadership team and work under the GSO's direction and general overview to undertake the gamut of sourcing support functions. The LSAs are located throughout the world and provide sourcing support to the GSO in the nature of production monitoring, logistics, quality control and other support staff.' [46] The report went on to describe the functions performed by the GSO in much greater detail. It said that they: '… broadly include the following categories of functions:  Sourcing strategy and planning.  Pre-production sourcing functions, such as development of samples and prototypes; identification of manufacturers for production; negotiation of pricing and volume terms with manufacturers; product costing; consolidation and placement of product orders, including purchase orders ("PO") issuance; identification of fabrics and selection of raw material suppliers.  Production and post-production sourcing functions, such as production supervision and monitoring; demand and supply planning including inventory management and production scheduling; quality and technical services 26 Local country affiliates such as Levi SA. 27 Local sourcing affiliates, that is, subsidiaries engaged in the sourcing of fabric and garments. including product integrity ("PI"), quality assurance ("QA") technical development and technical services; arrangements for logistics including documentation, shipping, insurance and customs clearance and payment of invoices to vendors.  Other sourcing functions including social and environmental responsibility/Terms of Engagement ("TOE") management; and BPI28.' [47] A distinction was drawn between the Product Management (PM) side of these activities and the Manufacturing Operations (MO). '1 … The key PM functions … include: i. Development of product prototypes and samples; ii. Identification of fabrics and sundries – fabric and finish developers (PM personnel) work with designers to identify ideal fabrics and with MO personnel to locate the right mills; iii. Product costing using the global costing tool; iv. Negotiation of volumes and pricing with manufacturers, through collaboration with MO personnel; v. Final selection of manufacturers; vi. Demand and supply planning including inventory management and production scheduling; and vii. Consolidation and placement of product orders – PO Issuance. … The key GSO MO functions include; i. Identification of third party manufacturers; ii. Negotiation of volumes and pricing with manufacturers, through collaboration with PM personnel; iii. Assistance related to procurement of raw materials and negotiations with mills; iv. Production monitoring and supervision; v. Quality and technical services including PI, QA, technical development, and technical services; vi. Arrangement for logistics … vii Social and environmental responsibility …' 28 Business process improvement. [48] It is important to note that this allocation of functions within the Levi Strauss group arose from decisions by LS & Co (or Levi San Francisco) concerning the management of its business operations as a marketer of apparel under its trademarks and name brands. Levi SA had no responsibility for the decision to establish the GSO and the allocation of functions to it. Nor is there any basis for thinking that as a subsidiary (a local country affiliate), described in the transfer pricing reports as being best categorised as a 'wholesale distributor', it had any ability to conduct its own sourcing activities independently outside the ambit of the GSO. The design and manufacture of apparel for the group was controlled by LS & Co and Levi SA was constrained to act in accordance with the system it ordained. [49] This is reflected in the services to which the BAA related as described in Exhibit B to the BAA. They were set out as follows: ‘SERVICES 1. advise Principal regarding prices and sources of Merchandise available for export to South Africa from the Territory; 2. advise Principal of supply and manufacturing aspects of Principal’s proposed purchases of Merchandise; 3. identify to Principal29 only manufacturers that can meet Principal’s requirements (including, without limitation, LS & CO’s Global Sourcing and Operating Guidelines and manufacturing standards) and have sufficient financial, production, labor and administrative resources; 4. solicit offers from manufacturers to sell Merchandise to Principal, procure samples of Merchandise and develop estimates of the manufacturer’s selling price to Principal; 5. assist Principal when Principal’s representatives visit suppliers to negotiate contracts or review production; 29 This may be an error in that in the amended schedule this is replaced by 'contract'. 6. assist and advise Principal in the preparation and negotiation of purchase contracts which shall remain subject to Principal's final approval; 7. in strict conformity with instruction issued by Principal, place orders with and/or purchase for the account of Principal Merchandise from suppliers and ensure that the invoices prepared in connection with such orders and purchases conform to the provisions of Section 4; 8. inform in writing all suppliers that Principal is the entity for whom Agent is acting; 9. notify Principal of the name of each supplier and the total cost in both foreign market currency and United States dollars of each item and obtain confirmation from Principal; 10. monitor and advise Principal of the status of all orders placed for Merchandise until such Merchandise has been delivered to Principal under Principal’s purchase order; 11. inspect finished goods to ensure that such Merchandise (i) conforms to Principal’s specifications as set forth in the applicable purchase order and is not defective in any respect, (ii) meets the requirements of all United States and South Africa laws and regulations as specified in the purchase order, (iii) is packaged, labeled, priced and invoiced in accordance with the instructions set forth in the applicable purchase order, and (iv) is packaged in a manner which will ensure its safe transportation to Principal’s stores or warehouses, and Agent will advise Principal immediately of any discrepancies; 12. at Principal's request, where appropriate, arrange for and supervise the consolidation of shipments in order to reduce shipping costs; 13. at Principal’s request, arrange on behalf of Principal for the shipment of Merchandise from the delivery point specified in Principal’s purchase order to each South African port of entry Principal shall designate; 14. represent Principal in any claims against [it/Principal] including claims or requests for refunds or allowances from suppliers in the event that defective or non-conforming Merchandise is received in South Africa; 15. use its best efforts, consistent with its appointment as Agent, to ensure that Merchandise which is eligible for duty-free treatment under South Africa law shall qualify for such duty-free treatment; 16. procure and provide to Principal, in conformance with applicable South Africa custom regulations, prior to exportation, all documentation, certificates, forms, statements and information appropriate and/or necessary for exportation to and importation into South Africa including, without limitation, all appropriate documentation, certificates, forms, statements or information for the release and liquidation of entries of Merchandise at the lowest tax and customs duty rates applicable to the Merchandise or for exemption from such tax or customs duty assessments; 17. manage any general and administrative service contracts related to the above Services as may be necessary, including services provided by Agent's contractors through separate arrangements and agreements; 18. at Principal's request, and provided Agent in his sole discretion deems appropriate or acceptable, advance payment for any Merchandise on behalf of Principal for orders placed in connection with approved purchase order; 19. provide such other related Services as Principal may reasonably request from time to time.’ (The insertion in items 14 is in line with changes in the amended schedule to correct obvious errors.) [50] The amendment of the BAA in 2010 contained an even more extensive list of 33 services. The following were added to the existing list: '1. advise Principal of development, sourcing, manufacturing, and supply aspects of Principal’s proposed purchases of Merchandise; 2. advise Principal regarding prices and sources of Merchandise available for export to the Principal’s Territory from Agent’s Territory; 3. provide Merchandise planning, including the identification of burgeoning fashion trends, and developing Merchandise that are expected to be locally relevant and popular, and priced within the contemplated budget of consumers; 4. provide development and implementation of fabric choices; review and edit initial prototypes to ensure that Merchandise can be mass-produced on-budget & within a given time period; work with Global Sourcing Organisation (‘GSO’) teams to re- develop Merchandise when pricing or production-related challenges arise; 5. provide development of Merchandise prototypes & samples (eg, working with designers and third party contract manufacturers to create and review initial Merchandise samples, etc.); 6. oversee the quality testing procedures for Merchandise and acting as a liaison between the product development team and the quality testing lab; 7. manage and provide costing estimates for Merchandise and related analysis; 8. oversee and develop global sourcing strategies (eg from which countries and suppliers to obtain needed fabrics, etc), including the development of regional seasonal, annual, and multi-year sourcing strategies; 9. prepare detailed manufacturing specifications which provide contract manufacturers with specific blue prints to properly and efficiently manufacture Merchandise; 10. publish and distribute a detailed ‘Restricted Substance List’, which represents a comprehensive study of all potential dangerous chemicals commonly used in the manufacturing process; 11. publish and distribute a ‘Master Supply Agreement’ (‘MSA’), which sets the terms of engagement that a suppliers and manufacturers must adhere to in order to produce Merchandise for the Principal; 12. enter directly into a MSA on behalf of Principal relating to the manufacture and supply of products as set forth in the applicable MSA; 13. provide supply chain planning associated with the mass-production of Merchandise orders (eg how best to create economies of scale in the manufacturing process; when to aggregate which orders and with which manufacturers, etc); 14-18 … 19. select the third party suppliers and manufacturers (eg evaluation and selection of contract manufacturers to ensure production processes are of a sufficiently high quality and that production methods and working conditions are consistent with extremely strict internal sourcing guidelines and terms of engagement, etc); 20-23 … 24. ensure that manufacturers with whom orders were placed produces Merchandise that properly adheres to the Agents global sourcing and operating guidelines, the "Restricted Substance List", the MSA terms of engagement, and all other manufacturing standards;' [51] The extended list of services was accompanied by a fee increase from seven to twelve percent. The 2011 transfer pricing report explained the fee change on the basis of an alteration in the manner in which Levi APD's 'pooled costs' were determined. Until November 2010 they included the MO costs, but not the PM costs. With effect from the 2011 year, both MO and PM30 costs were included in the GSO's pooled costs and this resulted in the GSO charging the Local Country Affiliates a 'sourcing commission' of twelve percent of the FOB price of merchandise. The extended list of services reflected this change in the functions performed by Levi APD. [52] A comparison of the schedules to the BAA with the functions of the GSO demonstrates that the BAA reflects the functions of the GSO as services to be provided to Levi SA. Realistically those services would have been provided to Levi SA in any event, because the GSO was established by LS & Co to operate in that manner. Against that background the role and purpose of the BAA is unclear. I turn to examine its terms. [53] Stripped of unnecessary detail, the key terms of the BAA, in which Levi SA is described as 'Principal' and Levi APD as 'Agent', were the following: '1 Appointment of Agent Principal appoints Agent to act as Principal's non-exclusive agent for the procurement of the … "Merchandise" to be imported into South Africa from … [all countries in which the Agent operates] during … the "Term". During or after the Term, Principal may procure Merchandise directly and may appoint other agents for Merchandise and the territory or otherwise, and Agent may act as representative or agent for other purchasers for similar goods in the Territory or otherwise. Services by Agent Agent accepts the appointment described in Section 1 and shall perform the services identified on Exhibit B with due care and in accordance with this Agreement and applicable law. Ordering and Payment 30 Sometimes referred to as PD&S – production, distribution and supply. Principal shall be free to accept or reject proposals made by Agent. If Principal decides to use a manufacturer proposed by Agent, Principal shall directly enter into supply agreements with, and place orders with, the manufacturer, and shall be responsible for paying the manufacturer for the Merchandise.' (The interpolation in square brackets incorporates the definition of Territory from Exhibit A.) [54] A few points need to be made about these terms. While the 'Merchandise' is elsewhere defined as the merchandise determined by Levi SA, there is no suggestion that this could be any merchandise other than Levi Strauss merchandise sold under its various trademarks and brand names. Given the structure of the Levi Strauss group and the operation of the GSO, the appointment 'made' in clause 1 and 'accepted' in clause 2 can hardly have been a voluntary arrangement freely entered into by the two parties. The power reserved in clause 1 to procure merchandise directly and to appoint other agents to undertake the procurement process on its behalf, was entirely inconsistent with the operation of the GSO. The power in clause 3 to accept or reject proposals by Levi APD in regard to the design, source, price and identity of the manufacturers of apparel was likewise inconsistent with the GSO. The notion, in the same clause, that Levi SA had 'complete authority' over all the terms and conditions of purchases, cannot be reconciled with item 11 of the amended schedule under which Levi APD was to publish and distribute a Master Sales Agreement setting the terms of engagement that suppliers and manufacturers had to adhere to. Levi GTC's subsequent imposition of the Master Sales Agreement on Levi SA makes it apparent where the power of decision lay. [55] Some of the clauses introduce an air of unreality into the agreement. Thus, for example, clause 8.4 provided for Levi SA to provide Levi APD with 'manufacturing standards, specifications, know-how and other Principal Confidential Information.' This ignored the fact that Levi APD through the GSO established the manufacturing standards and specifications and was vested with all the know-how relevant to the production of the apparel. Similarly, given its status as the head company in the Asia Pacific division, the provisions of clause 9.1 providing that Levi SA may make available to Levi APD manufacturing standards, designs, specifications, know-how and other proprietary information, including production volumes, production techniques, forecasts, sourcing strategies (that is to source via the GSO) and financial information, are meaningless. This was information that Levi SA was obliged to provide to Levi APD as a matter of course. [56] It would be otiose to trawl through each and every anomaly in the BAA and identify each and every inconsistency with the operations of the GSO. The reality is that Levi SA was in a subordinate position with little scope for independent action. That is illustrated by the provisions of clause 12 dealing with the termination of the BAA. The proposition in clause 12.1 that either party could terminate it at any time flies in the face of reality. Any termination could only occur at the instance of Levi APD or LS & Co. This is contrary to the basic principle that the authority of the agent is always revocable at the instance of the principal.31 [57] Applying the test discussed earlier in this judgment, one asks whether Levi SA exercised control over Levi APD in regard to the matters entrusted to Levi APD under the BAA? Expressed differently, is the overriding characteristic of the BAA that Levi APD is acting under the direction and control of Levi SA in exercising its functions under the BAA? 31 LAWSA Vol 1 (3 ed, 2013) para 149; Bailey and Another v Angove's Pty Ltd [2016] UKSC 47 para 6. Could Levi SA purchase from the manufacturers without using the services of Levi APD? The answer to these questions is 'No'. It follows that Levi APD was not acting as a buying agent on behalf of Levi SA. Levi SA did not discharge the onus of showing that these payments were buying commissions that fell to be excluded from the determination of transaction value. [58] During argument a member of the court asked counsel for SARS whether, if that was the case, the payment to Levi APD was a commission at all within the meaning of s 67(1)(a)(i), since if it were not a ‘commission’ it might not have had to be added to the price of the imported goods to arrive at the transaction value. The postulate was that it might simply be an amount to reimburse Levi APD for undertaking tasks that Levi SA would otherwise have undertaken itself. Interesting though the question was, it is unnecessary to explore this possibility. In entering the goods, Levi SA said the payments to Levi APD were buying commissions. SARS issued its determination on the footing that they were not. The only basis advanced in support of the appeal was that they were buying commissions. The high court agreed and this judgment concludes that the high court erred. There is no basis for considering whether the determination could have been attacked on a different basis. To this may be added that counsel for Levi SA did not, after the question was raised, seek to justify the trial court’s order on this alternative basis, and we did not receive the assistance from counsel on both sides which would have been needed to resolve it. The royalty issue [59] Levi SA pays royalties to LS & Co in terms of the TLA concluded on 1 August 2011. Before that, according to the recitals in the preamble to the TLA, they operated 'under mutual agreement of both parties'. I assume that involved some kind of informal licence. The schedule to the TLA reveals that LS & Co had registered, or was in the course of registering, its trademarks under the Trade Marks Act 194 of 1993. The case was conducted on the basis that the answer to the royalty issue would be the same in the period prior to the conclusion of the TLA as it was thereafter. [60] The dispute is about the ascertainment of the transaction value of the imported goods under both the Levi APD and the Levi GTC regime and whether an amount in respect of royalties is to be included in the transaction value. The answer depends upon whether, in terms of s 67(1)(c) of the Act they became due by Levi SA, directly or indirectly, as a condition of sale of the goods for export to South Africa. There was no dispute that royalties were paid under the TLA on the sale, and in respect, of the imported goods. [61] The expression 'as a condition of sale of the goods for export to South Africa' is not easy to construe. The Glossary of International Customs Terms published by the World Customs Organisation defines 'exportation' as 'the act of taking out or causing to be taken out of any goods from the Customs territory'. The sale for export requirement is satisfied by sales of goods for consignment to South Africa from outside South Africa. The liability for duty must arise as a condition of those sales.32 However, this does not resolve the question of what is meant by a 'condition of sale' or the effect of the qualification 'directly or indirectly'. 32 The Commissioner for the South African Revenue Service v Delta Motor Corporation (Pty) Ltd 2003 (1) JTLR 15 (SCA); [2002] JOL 10207 para 23 (Delta). See also Note 2 to the Notes relating to paragraph 1(c) of Article 8 the Interpretation Agreement. [62] The Supreme Court of Canada33 held that the words 'condition of sale' had a settled legal meaning in the law of sale. It adopted the narrow construction that: 'in its usual meaning a condition is a term which, without being the fundamental obligation imposed by the contract, is still of such vital importance that it goes to the root of the transaction'. Based on that approach it said that unless the vendor was entitled to refuse to sell licenced goods to the purchaser, or could repudiate the contract of sale where the purchaser failed to pay the royalties, the corresponding section of the Canadian legislation was not engaged. Levi SA argued that this court in Delta34 adopted the same approach and submitted that, in any event, it should be followed. I do not agree with either contention. As to the first, there was no discussion in Delta about the interpretation of s 67(1)(c), beyond the statement that all the requirements of the section had to be satisfied for it to be applied. That cryptic, and trite, observation did not address the questions arising in this case of the meaning of 'condition of sale' and the implications of the words 'directly and indirectly'. Nor is it possible to infer any definite conclusion in regard to these issues from the discussion and resolution of the factual issues in that case. [63] As to the second, the Mattel SCC judgment has been followed in Malaysia,35 but the New Zealand courts36 and the European Court of Justice (ECJ)37 have adopted a broader view, as had the Federal Court of Appeal 33 Canada (Deputy Minister of National Revenue) v Mattel Canada Inc 2001 SCC 36; [2001] S.C.R 100 p 125 (Mattel SCC). 34 Op cit, fn 32. 35 Nike Sales Malaysia Sdn Bhd v Jabatan Kastam Diraja Malaysia and two others [2013] MLJ 21 (FC- PJY). A similar conclusion was reached by the Supreme Court, Contentious - Administrative Chamber in Spain in the matter of Adidas España S A Case No 7460/2005. 36 Adidas New Zealand Ltd v Collector of Customs (Northern Region) [1999] 1 NZLR 558 (CA) (Adidas); The Collector of Customs v Avon Cosmetics Ltd [1999] NZCA 256 (Avon Cosmetics); Chief Executive of the New Zealand Customs Service v Nike New Zealand Ltd [2003] NZCA 218; [2004] 1 NZLR 238 (Nike). 37 GE Healthcare [2017] EUECJ C-173/15 (GE Healthcare). in Canada in Mattel FCA.38 The New Zealand decision in Nike dealt expressly with Mattel SCC. The majority held39 that its approach was inappropriately narrow in the context of the interpretation of an international agreement. I agree with this criticism for the reasons discussed in para 36 of this judgment. The point is particularly significant in the context of South African law, where a condition is not the same as a term of the contract. This illustrates the danger of construing an international instrument in accordance with the narrow requirements of any one legal system. [64] With respect, it seems to me that the Canadian approach suffers from three further weaknesses. Firstly, the requirement that there be a condition, in the sense of a term, attaching to the sale of the goods for export, renders the words 'directly or indirectly' redundant, because the obligation to pay royalties would arise directly or not at all.40 Secondly, as Richardson P pointed out in Avon Cosmetics,41 a 'condition of sale of the goods' is neither the same, nor as narrow, as a 'condition of the contract of sale of the goods'. Thirdly, it is inconsistent with the acceptance in Commentary 26.1 on Article 8 of the Implementation Agreement that the obligation to pay the royalties may arise under an agreement between the licensor and the importer, rather than the importer and the vendor, and that the licensor and the vendor may be unrelated parties. [65] As to the first of these, while the words 'directly or indirectly' are adverbial and grammatically linked to the royalty becoming 'due' by the 38 Canada (Minister of National Revenue) v Mattel Canada Inc 1999 CanLii 7405 (FCA) (Mattel FCA). 39 Ibid, paras 57-59. 40 See, for example, Reebok Canada v The Deputy Minister of National Revenue for Customs and Excise 2002 FCA 133 para 12. 41 Avon Cosmetics Ltd op cit, fn 36. See also Mattel FCA op cit, fn 38, para 26. importer, they cannot in my view be severed from the condition of sale that renders them due. Royalties may be due directly as a condition of sale, or due indirectly as a condition of sale. Royalties are due when they become owing and payable under the agreement with the licensor. They will be due directly if the fact of the sale to the importer is what gives rise to the obligation to pay the royalty, as where the contract of sale stipulates for the payment of the royalty, or a separate contract between the licensor and the importer provides that the purchase of the goods gives rise to an obligation to pay the royalty. They will be due indirectly where the fact of the sale is a necessary condition for the obligation to pay the royalty to arise and the sale would not take place in the absence of an obligation to pay the royalty.42 . [66] I am not persuaded by the view expressed in Mattel FCA43 that the purpose of the words 'directly or indirectly' is merely to extend the application of the section to cover indirect payments, such as a price reduction by way of set-off of a debt owed by the vendor to the importer, or the settlement of a debt owed by the vendor to a third party.44 Those are unusual situations that will only rarely arise in practice in implementing agreements for the payment of royalties in return for the right to use or exploit the intellectual property of another. In my view the more plausible construction is that the words 'directly or indirectly' operate to extend the situations in which the obligation to pay the royalty becomes due. 42 Factually, the sale to Mattel Canada by its United States parent company would have taken place irrespective of whether Mattel Canada paid the royalty under its agreement with the independent third party licensor. 43 Mattel FCA op cit, fn 38, para 28. 44 The adjectus solutionis gratia of our law. Stupel & Berman Incorporated v Rodel Financial Services (Pty) Ltd [2015] ZASCA 1; [2015 (3) SA 36 (SCA) para 13. [67] The second and third matters referred to in para 64 can be dealt with together. Section 67(1)(c) refers to a condition of sale, not a condition of the contract of sale. Consistently with the judgment in Mattel SCC the latter would require that there be an express or tacit term for the payment of royalties in the contract under which the goods were imported. Accepting that this is not what is required and avoiding any technical meaning of the words, I prefer the formulation by Létourneau JA in Mattel FCA45 that the royalties must become due as a prerequisite or requirement of the export of the goods, although that may arise under a contract other than the export contract. A convenient practical test is to ask whether the goods would have been exported in the absence of the obligation to pay the royalty.46 [68] This approach is consistent with Commentary 25.1 to the Implementation Agreement on 'Third Party Royalties and Licence Fees – General Commentary'. Paragraph 7 provides that a key consideration in determining whether the buyer must pay the royalty as a condition of sale is whether the buyer is unable to purchase the imported goods without paying the royalty. This calls for an analysis of the contractual documents and all the facts surrounding the sale and importation of the goods. The Commentary recognises that the royalty may be payable to a third party unrelated to the seller, as in the case of the purchases made by Levi SA from independent suppliers under the Levi APD regime.47 Where the licensor is unable to interfere with a sale for export to the importer and prevent it from taking place it is difficult to conclude that payment of the 45 Mattel FCA op cit, fn 38, para 26. 46 This is the approach of the US Customs and Border Service under General Notice, Dutiability of Royalty Payments, Vol. 27, No. 6 Cust. B. & Dec. at 1 (February 10, 1993) ("Hasbro II ruling"), wherein, Customs asks the following questions: Was the imported merchandise manufactured under patent? Was the royalty involved in the production or sale of the imported merchandise? Could the importer buy the product without paying the fee? 47 Once the Levi APD regime was replaced by the Levi ATC regime all the parties were connected. royalty is a condition of the sale. Factually, that was the situation in Mattel, where the licensor was unrelated to the Mattel group of companies. However, where the licensor is in a position vis a vis the importer to exercise control over the process at every stage, the position is different. As Blanchard J said in Nike:48 '… [W]here royalties are payable to a licensor which is a member of the same corporate group as the licensee – and particularly where the buying is in practice conducted through another member of the corporate group – the situation is throughout under the parent company's control exercisable on behalf of the licensor.' [69] The factual situation in GE Healthcare was similar to that under the Levi GTC regime in the present case. The licensor, buyer and seller of the imported goods were all members of the wider GE group of companies and all were controlled by the parent company of the group. The court accepted that the legal position was correctly summarised by the Advocate General in his opinion as being that:49 'the payment of a royalty or a licence fee is a 'condition of sale' of the goods being valued where, in the course of the contractual relations between the buyer, or a person related to him, and the seller, the payment of royalty or of the licence fee is so important to the seller that, without such payment the seller would not have concluded the sales contract …' The question posed to the ECJ was whether the payment of the royalties to the licensor could be a condition of sale of the goods for export, where they were payable to an undertaking related to both the buyer and the seller. It said that it was necessary for the national court to determine whether the licensor had any control over the buyer and seller such as to enable it to ensure that royalties would be paid on the export of the goods.50 48 Nike op cit, fn 36, para 67. This is so in every case where courts have concluded that the royalty is to be included in the transaction value of the goods. In Mattel FCA the court concluded on the facts that it was not to be included. 49 GE Healthcare op cit, fn 37, para 60. 50 GE Healthcare ibid, para 68. [70] The ECJ went on to cite the following commentary on customs valuation issued by the European Commission: '51 '[W]hen goods are purchased from one person and a royalty or licence fee is paid to another person, the payment may nevertheless be regarded as a condition of sale of the goods … when, for example, in a multinational group goods are bought from one member of the group and the royalty is required to be paid to another member of the same group. Likewise, the same would apply where the seller is a licensee of the recipient of the royalty and the latter controls the conditions of the sale. The final conclusion in GE Healthcare was that royalties are a 'condition of sale' of the goods being valued where, within a single group of undertakings, those royalties are required to be paid to an undertaking related to both the seller and the buyer and were paid to that same undertaking. 52 This broader view of the position was also espoused in Advisory Opinion 4.15 issued by the Technical Committee on Customs Valuation53 and is reflected in the outcome of several decisions of the Peruvian Tax Court, dealing with arrangements similar to those in this case and the others to which I have referred.54 [71] I conclude that properly interpreted s 67(1)(c) is concerned with the contract in terms of which the goods are imported into South Africa. It is 51 Compendium of Customs Valuation Texts of the Customs Code Committee: Customs Valuation Section TAXUD/800/2002-EN issued by the European Commission para 13 of Commentary No 3 (September 2008). The same commentary appears in the current (2018) edition of the Compendium in para 9 of Commentary 3. 52 GE Healthcare op cit, fn 37 para 71. 53 In the matter under consideration, the licensor and importer were related to each other but not to the manufacturer. Payment of royalties by the importer to the licensor was not a term of the sales from the manufacturer to the importer. However, the licensor had a supply agreement with the manufacturer to manufacture goods bearing its trademarks and to sell those goods to the importer. The manufacturer had to comply with the licensor's specifications and could sell the branded goods only to persons approved by the licensor. The Technical Committee advised that payment of royalties was a condition of sale of the goods for export to the importer because the latter would not be able to buy the goods if it failed to pay royalties to the licensor. Non-payment of royalties would bring about a termination of the license agreement and the withdrawal of the authority given by the licensor to the manufacturer to sell the goods to the importer. 54 The decisions are referred to in summary form in Lux, Cannistra and Rodriguez Cuadros 'The Customs Treatment of Royalties and License Fees with Regard to Imported Goods' Global Trade and Customs Journal Vol 7, Issue 4, 2012, pp 120-142 at 139-141. not a requirement of the section that the obligation to pay royalties should be embodied, either expressly or tacitly, in that contract by way of a contractual term. The royalty may be payable to a third party other than the seller. It may become due directly, because the terms of the contract, either expressly or tacitly, impose that obligation or where the terms of the royalty contract inextricably link the payment of the royalty to sales for export to the licensee. It may become due indirectly where the nature of the relationships between exporter, importer and licensor when viewed as a whole is such that the sale would not have occurred without an obligation to pay a royalty becoming due. [72] Turning then to the TLA, Article 2 granted to Levi SA exclusive, non-transferable rights in the Trademarks and Trade Names55 identified in schedules to the agreement. They were granted solely for use in the Territory, in connection with the manufacture, advertising, promotion, display of advertising commercials, distribution, sale and retailing of Products; the operation of Levi's® and Dockers® stores; and in connection with sales of Products to authorised Licensees and Sublicensees of LS & Co. The Products were defined as meaning items of apparel and accessories identified in a schedule and bearing one or more of the trademarks. The Territory was defined as the Republic of South Africa and twelve other African states, but excluding Mauritius and Madagascar, from which much of this apparel was being imported. The rights were subject to an express limitation that Levi SA could not, without the consent of LS & Co, authorise any person or entity to affix any of the trademarks to any product or sue them in relation to any product other than the Products or affix any trademarks, trade names or logos other than the defined 55 These and other capitalised words are defined in the TLA. Trademarks to any of the Products. Sub-licensing was only permissible with the written approval of LS & Co and on terms approved by it. [73] Article 3 provided for the payment of royalties. Its material terms read as follows: ‘3.1 Royalties: In consideration of the rights granted to Licensee under Article 2.1 of this Agreement, Licensee shall pay royalties to Licensor as follows: (a) A royalty in an amount equal to nine percent (9%) of the Net Sales Price of all Category "A" Products sold by Licensee; (b) A royalty in an amount equal to nine percent (9%) of the Net Sales Price of all Category "B" Products sold by Licensee; (c) A royalty in an amount equal to fifty percent (50%) of the respective royalty rates in Articles 3.1(a) and 3.1(b) for Category "A" Products and Category ‘B’ Products that are second quality Products. 3.2 . . . 3.3 Time of Accrual of Royalties: (a) Any and all royalties payable to Licensor under Article 3.1 of this Agreement will accrue on the date on which the relevant Products are billed, invoiced, shipped or delivered by Licensee or paid for by Licensee’s customers, whichever event occurs first, and will be deemed to be held in trust for the benefit of Licensor until payment of those royalties is actually received, in accordance with the provisions of Article 3.5 hereof; and (b) Under no circumstances shall the royalties payable to Licensor under Article 3.1 of this Agreement be considered a condition of (1) purchase of any Product by Licensee or Sublicensee; (2) import of any Product by Licensee or Sublicensee; or (3) sale of any product to Licensee or Sublicensee. Products may be procured by Licensee or Sublicensee without regard to the royalty payments under Article 3.1 of the Agreement.’ [74] The Net Sales Price referred to in this provision was defined as meaning the invoice price at which Products were sold by the Licensee to customers, other than LS & Co, its affiliates and specified Licensees and Sublicensees, less deductions. The latter referred to customary discounts and allowances granted by Levi SA in accordance with its standard commercial practices; certain taxes; and credits on returns. In regard to the sourcing and manufacture of products article 4.1 provided that: ‘Licensee shall manufacture Products at its own facilities or may obtain Products as follows: i) by placing orders via the Licensor global sourcing organisation; or (ii) by purchasing directly from Licensor, an Affiliate; or an Authorised LS & CO licensee. The royalty payment requirements set out in Article 3 shall govern all sales of Products regardless of how Licensee procures them.’ [75] Under Article 3 the royalty was payable in consideration of the rights conferred under Article 2.1 Those rights were principally the advertising, promotion, distribution and sale of clothing and accessories bearing the trademarks and trade names. These items were imported by Levi SA in order to be sold in terms of this licence. The sale of the goods for export to South Africa for the purposes of sale therefore involved the exercise of the rights under Article 2.1(b)(i). The imported goods included the Trademarks and Trade Names and used the intellectual property covered by the TLA. While no royalty payment would accrue under Article 3.3(a) of the TLA until the goods were sold, the obligation to pay a royalty when that occurred already existed in terms of Article 3.1 The amount of the royalty and the date for payment still fell to be determined, but that does not detract from the fact that the obligation to pay the royalty had already arisen under the TLA. Adidas, Nike and GE Healthcare held that the fact that the royalty would only become due after the goods had been sold – a customary feature of royalty agreements, as pointed out by Blanchard J in Adidas – did not mean that the obligation to pay the royalty was not a condition of the sale for export. [76] This conclusion is reinforced when examining these provisions in the light of the buying arrangements under which Levi SA procured the imported goods. Although Article 4.1 postulated two procurement options, Levi SA was constrained by the manner in which the GSO functioned to use only the first and place orders via the GSO. Under the earlier regime it was compelled to purchase from manufacturers appointed by Levi APD on the terms negotiated by Levi APD. After the change of regime, it was constrained to order directly from Levi GTC. Under both regimes the process of production and sale between Levi SA and the supplier was entirely managed and controlled by the licensor, LS & Co. That is close to the situation described in para 9(e) of Commentary 25.1 to the Implementation Agreement as being an indication that the royalty is a condition of sale, namely where: 'The royalty or licence agreement contains terms that permit the licensor to manage the production or sale between the manufacturer and importer (sale for export to the country of importation) that go beyond quality control.' In this case there was no need for there to be a provision in the TLA because of the complete control that LS & Co exercised over the entire production and procurement process through the GSO. [77] In each of the New Zealand cases cited earlier the court dealt with a situation where the importer was the New Zealand subsidiary of an international group of companies, and the importer's function was the importation, sale and distribution of the group's products in New Zealand and some nearby territories. In each case the royalties payable to another company in the group were calculated on the value of domestic sales. In Adidas56 the importer could only import goods supplied by manufacturers approved by its holding company. The sole purpose of the imports was 56 Op cit, fn 36, p 563. domestic sales, which would crystallise the obligation to pay royalties. In those circumstances Henry J concluded that it could not import the products without incurring the liability to pay royalty. That made the payment of royalties a condition of the sale to it of the products in accordance with the approach discussed earlier in this judgment. Blanchard J pointed out in his concurring judgment, that it was inconceivable, had the importer been an independent company under separate ownership, that orders would have been placed on its behalf without ensuring that the royalty was and would be paid.' [78] In Nike,57 after recognising that the two views expressed in Adidas might differ, the majority approach was formulated in the following terms: 'It seems to us that … there must be a combination of two features. First, the royalty must be payable to the manufacturer or to another person as a consequence of the export of the goods to New Zealand and, secondly, the party to whom the royalty is payable must have a control of the situation going beyond the ordinary rights of a licensor of intellectual property and giving it the ability to determine whether the export to New Zealand can or cannot occur.' The majority accordingly held that because the goods in question were only exported to New Zealand because of the existence of the licence agreement requiring the payment of the royalty and because of the control that the holding company could exercise over the parties to the sale for export to ensure payment of the royalty, the royalties were payable ‘as a condition of the sale of the goods for export to New Zealand’. [79] There is nothing in the TLA to distinguish those cases and GE Healthcare from the present one. If anything, Article 3 is clearer in linking the export of goods to South Africa directly with the payment of 57 Op cit, fn 36 para 67. the royalty. In my opinion, therefore, SARS was correct in saying that the royalty needed to be included in determining the transaction value of the imported goods. [80] I have considered whether the fact that the exact royalty cannot be quantified until the goods have been sold affects the matter. I think not. All that s 67(1)(c) requires is that the royalty be 'in respect of the imported goods'. I agree with Blanchard J in Adidas58 that: 'It is unrealistic to contend that royalties are not payable 'in respect of the imported goods' merely because they are fixed in relation to the price at which the importer sells them and because nothing is payable [to the licensee] unless they are resold. In practice, royalty payments are almost invariably calculated on sales by the licensee.' The ECJ came to the same conclusion in GE Healthcare59 as did the Federal Court of Australia in another case involving the Mattel group.60 All recognised that the consequence of this was that adjustments to duty already paid might have to be made either by way of further payments or by way of refunds. Section 67(1)(d) of the Act indicates that the transaction value of goods may be affected by later events.61 Section 65(5) empowers the Commissioner to amend a value determination, and this would represent at least one way in which an over- or under-estimate of royalties at the time of importation could be adjusted.62 58 Op cit, fn 36, at 566. 59 Op cit, fn 37 para 54. 60 Mattel FCA, op cit, fn 38. 61 Section 67(1)(d) requires the inclusion in the transaction value of 'the value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues directly or indirectly to the seller'. 62 The issue is discussed in greater detail along the lines suggested here in the article by Lux, Cannistra and Rodriguez Cuadros op cit, fn 54, at 136-137. In an article for clients Bell Gully noted that the practical position in New Zealand is that: ' One practical difficulty that importers face when calculating duty is that typically royalties are calculated by reference to "net sales" and therefore the amount of the royalty for a particular good is not known at the time of importation. Customs' practice has been to require the importer to use the previous year's figures to estimate the amount of royalty that is expected to be payable in relation to imports for the current year. This estimate is expressed as a percentage of the import price which is added to the dutiable value of product imported [81] Levi SA relied heavily on the provisions of Article 3.3(b) and the express statement that the royalties payable should not be considered a condition of purchase or import of any product by Levi SA or the sale of any product to it. I would not go so far as to say that this provision carries no weight as conveying the intention of the parties in concluding the TLA. Clearly the aim was to avoid royalties being included in calculating the transaction values of imported goods in terms of Article 8 of the Implementation Agreement and legislation giving effect to that provision. On the approach set out in this judgment, the obligations under the TLA, seen in the light of the procurement policies of the Levi Strauss group under the GSO, led to the conclusion that payment of the royalty was a condition of the sale for export of the goods. Article 3.3(b) cannot then assist Levi SA. Result [82] In the result the appeal must fail in respect of the origin issue, but succeed in respect of the buying commission and the royalty issues. That requires some amendment to the order of the high court. It read as follows: ‘1 The applicant’s appeal against the Respondent’s determinations made on 25 March 2014 are upheld. 2. The aforesaid determinations made by Respondent on 25 May 2014 are set aside: 2.1 That Levi Strauss Asia Pacific Division (Pty) Limited (‘Levi APD’) is not a buying agent of the applicant and that consequently the buying commissions paid by the applicant on goods sourced by Levi APD should have been included in the value of those goods for duty purposes upon their importation. for the current year. The uplift figure is then usually treated as an interim payment and at the end of each year the position is reviewed to see whether additional duty is payable (or refundable).' See https://www.lexology.com/library/detail.aspx?g=3d20d017-17e5-4c08-b045-89d6f1b39065 accessed 29 March 2021. 2.2 That the royalties/licence fees paid by the applicant to LS & Co are to be included in the value for duty purposes of the goods imported by the Applicant upon their importation. 2.3 That South African Development Community Certificates of Origin were invalidly used in respect of goods imported by the Applicant from SADC manufacturers/suppliers contracted by Levi APD or Levi Strauss Global Trading Company Limited ("Levi GTC") resulting in the applicant incorrectly claiming preferential duty rates. 3. That the said determinations be substituted by determinations to the following effect: 3.1 That Levi APD is a buying agent of the Applicant and that the buying commission paid by the Applicant on goods sourced by Levi APD is not to be included in the value of those goods for duty purposes upon their importation; 3.2 That the royalties/licence fees paid by the Applicant to LS & Co are to be excluded from the value for duty purposes of the goods imported by the Applicant; and 3.3 That Southern African Development Community Certificates of Origin were validly used in respect of goods imported by the Applicant based in South Africa from SADC manufacturers/suppliers contracted by Levi APD or Levi GTC and that preferential duty rates are applicable to the importation of such goods. 4. That the demand accompanying the above determinations be withdrawn. 5. That the respondent shall pay the costs of this application, including the costs of two counsel, such costs to include those attendant upon the interlocutory application heard before Murphy J which resulted in the judgment of Murphy J of 2 May 2017.’ [83] I do not doubt that it is permissible for a court seized with an appeal under either s 49(6) or s 65(7) in appropriate circumstances to substitute the determination by the Commissioner with a fresh determination in accordance with its judgment. That is appropriate where the determination was that a sum of money was due and the court determines that a different sum was due by the importer. However, where the determination of the appeal involves a challenge to the principle upon which the determination was made it may be inappropriate for the court to substitute the determination with another. It is then preferable simply to set aside the determination, or to refer it back to the Commissioner for reconsideration in the light of the judgment. In my view it was inappropriate in the circumstances of this case for the court to have been asked to substitute the suggested determinations for those of the Commissioner. All three potentially affected situations that were not before the high court when it dealt with the appeals. [84] In my view the appropriate order would be to set aside the determination in regard to the invalidity of the Certificates of Origin to the extent consistent with this judgment and to set aside the corresponding demand for payment of duty and VAT of R52 466 124.19 and R87 240 129.71. There is no need to make a substitute determination and if there are any other issues SARS is free to address them in such manner as may be appropriate. As regards the determination in respect of commissions paid to either Levi APD or Levi GTC in terms of the BAA that these were not buying commissions the determination must stand. Likewise, the determination that royalties due to LS & Co on the goods imported, whether under the Levi APD or the Levi GTC regime must be added to the purchase price of those goods must stand. [85] There is a lack of clarity in the determination as to the basis upon which the amounts claimed because of the inclusion of the commissions and royalties were calculated. However, neither appeal was directed at those calculations in the event that Levi SA's primary case failed. Accordingly, the determination does not fall to be disturbed in that respect. As regards the costs order in the high court, Murphy J made the costs of the application before him costs in the cause in the application. There was accordingly no need for any special order in regard to those costs. . [86] I make the following order: 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: '(a) The appeal in terms of s 49(6) of the Customs and Excise Act 91 of 1964 succeeds in relation to the Commissioner's determination dated 25 March 2014 that the Certificates of Origin accompanying the bills of entry for goods imported by Levi SA and consigned from countries within the SADC area during the period from 1 July 2010 to 5 February 2014 were invalid. (b) The determination and the demand for payment in consequence thereof of the sums of R52 466 124.19 and R87 240 129.71 are set aside. (c) The application and appeal in terms of s 65(6) is otherwise dismissed. (d) The respondent is to pay the applicant's costs, such costs to include those consequent upon the employment of two counsel.' _________________ M J D WALLIS JUDGE OF APPEAL Appearances For appellant: C E Puckrin SC (with him N K Nxumalo) Instructed by: Macrobert Attorneys, Pretoria Lovius Block Inc, Bloemfontein For respondent: J P Vorster SC (with him E Muller) Instructed by: Shepstone & Wylie, 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 7 April 2021 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Commissioner: SARS v Levi Strauss SA (Pty) Ltd (509/2019) [2021] ZASCA 32 (7 April 2021) The SCA today upheld in part an appeal by SARS against a decision by the Gauteng Division of the High Court, Pretoria upholding an appeal by Levi Strauss SA (Pty) Ltd against three determinations by SARS in relation to customs duties and VAT payable on the importation of branded clothing for sale in South Africa. The successful appeals related to the determination of the transaction value of the imported clothing in terms of s 65 of the Customs and Excise Act 91 of 1964. Section 67(1)(a)(i) of the Act provides for the inclusion in transaction value of all commissions except buyers' commission. Levi Strauss claimed that commission paid to an associated company in the international Levi Strauss group of companies, Levi Strauss APD, based in Singapore, was buyer's commission paid to an agent for the sourcing and procurement of the imported clothing. The SCA held that as Levi Strauss APD was part of the Group Sourcing Organisation of the Levi Strauss group and the company that headed the Asia Pacific region of the group, of which Levi Strauss SA was a part, its actions in procuring the manufacture of clothing for the group were not those of a buying agent and the commission paid to it was not a buying commission. Accordingly it had to be included in determining the transaction value of the imported goods. Section 67(1)(c) of the Act provides for the inclusion in the transaction value of imported goods of royalties due directly or indirectly as a condition of sale of the goods for export to South Africa. The SCA agreed with and approved the broad approach to the determination of when the obligation to pay royalties becomes due directly or indirectly as a condition of the sale of goods for export that has been applied in a range of jurisdictions around the world. This requires the court to examine all aspects of both the transaction under which the goods were imported and the agreement under which the obligation to pay royalties arises. Under a Trademark License Agreement concluded between Levi Strauss SA and Levi Strauss & Co, the ultimate holding company of the Levi Strauss group royalties were payable for the use of the trademarks and trade names of Levi Strauss & Co, the amount of the royalties to be calculated and to accrue when goods were sold. The court held that the nature of the relationship between Levi Strauss & Co and Levi Strauss SA was such that the obligation to pay royalties was inextricably part of the transaction under which the goods were imported and therefore the royalties had to be included in the transaction value of the imported goods. The SCA dismissed SARS's appeal against the High Court's decision to set aside a determination that goods consigned directly from SADC member states to Levi Strauss SA were not entitled to claim country of origin status under the Protocol on Trade in the Southern African Development Community (SADC) Region. SARS contended that although the goods were sent directly from Madagascar and Mauritius to Levi Strauss SA in South Africa, they did not qualify for country of origin status, because they were purchased from the manufacturers in those countries by a company in the Levi Strauss group based in Hong Kong and sold by them to Levi Strauss SA at a mark-up of twelve percent. The SCA held that the relevant provisions of the Protocol and the Act were concerned only with the factual question of whether the goods had been consigned from one SADC country to another and not with the underlying commercial relationship in terms of which this had occurred. As the goods emanated from two SADC member states and were sent directly from those states to South Africa, another member state, the were entitled to claim country of origin status and were entitled to enter the goods for customs purposes at the favourable rates of duty provided in the Protocol.

3559

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 465/2019 In the matter between: RAJIVEE SONI APPELLANT and THE STATE RESPONDENT Neutral citation: Rajivee Soni v The State (Case no 465/2019) [2021] ZASCA 57 (5 May 2021) Coram: NAVSA ADP, SALDULKER and MBHA JJA and WEINER and UNTERHALTER AJJA Heard: 29 March 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 10h00 on 5 May 2021. Summary: Criminal appeal – appeal against conviction and sentence – whether pattern of evidence proved guilt of the accused beyond a reasonable doubt – distinction drawn between a mandate and the doctrine of common purpose in respect of a charge of murder – test to be applied when a State witness cannot testify and where cross-examination cannot be completed – sentence – whether period of incarceration awaiting appeal ought to be taken into account. ORDER On appeal from: KwaZulu-Natal Division of the High Court, Pietermaritzburg (Henriques J, sitting as the court of first instance): 1. The appeal against convictions and sentences is upheld in part and dismissed in part, as follows: 1.1 The appeal against the conviction and sentence on count 1 is dismissed; 1.2 The appeal against the convictions and sentences on counts 2 and 4 is dismissed; 1.3 The appeal against the convictions and sentences on counts 3 and 5 is upheld; 1.4 The appeal against the conviction on count 6 of conspiracy to murder is upheld, with the conviction substituted with the alternative count, namely, incitement to commit murder; 1.5 The appeal against sentence on count 6 is upheld to the extent reflected in the substituted order that appears hereunder; 1.6 The effective sentence is reduced to the extent reflected in the substituted order. 2. The order of the court below is substituted as follows: ‘(a) In respect of count 1: Murder read with s 51(1) and Part 1 of Schedule 2 of the Criminal Law Amendment Act 105 of 1997, the accused is found guilty; (b) In respect of count 2: Defeating or obstructing the course of justice, the accused is found guilty; (c) In respect of count 3: Defeating or obstructing the course of justice, the accused is acquitted; (d) In respect of count 4: Defeating or obstructing the course of justice, the accused is found guilty; (e) In respect of count 5: Assault with intent to do grievous bodily harm, the accused is acquitted; (f) In respect of count 6: Conspiracy to commit murder, alternatively, incitement to murder, the accused is found guilty of incitement to murder; (g) In respect of count 1, the accused is sentenced to 25 years’ imprisonment; (h) In respect of count 2, the accused is sentenced to 18 months’ imprisonment; (i) In respect of count 4, the accused is sentenced to 2 years’ imprisonment; (j) In respect of count 6, the accused is sentenced to 5 years’ imprisonment; (k) The sentences imposed on counts 2, 4 and 6 are to run concurrently with the sentence on count 1. The accused is sentenced to an effective 23 years’ and 7 months’ imprisonment.’ 3. The sentence of 23 years and 7 months’ imprisonment referred to in (k) above will run from the date of the further imprisonment of the appellant pursuant to this order. 4. The National Commissioner for Correctional Services is directed to ensure that a social worker in the employ of the Department for Correctional Services visits the children of the accused, Mr Soni, regularly during his incarceration, and submits reports to the office of the National Commissioner as to whether the children are in need of care and protection as envisaged in section 150 of the Children’s Act 38 of 2005 and, if so, to take the steps required by that provision. 5. The Department of Correctional Services is to give consideration to the recommendation in the report of Floss Mitchell relating to the manner in which contact visits between the accused and the minor children are to take place, and, where possible, to facilitate the assistance of a social worker during such visits. 6. The accused is declared unfit to be licenced for a firearm in terms of the provisions of the Firearms Control Act 60 of 2000. JUDGMENT Saldulker JA and Unterhalter AJA (Navsa ADP and Mbha JJA and Weiner AJA concurring) Introduction [1] On the night of 13 May 2013, at around 19h00, when Dr Bhavish Sewram (the deceased), a medical doctor, left his surgery in Raisethorpe, Pietermaritzburg little did he know that he was to meet an untimely death at the hands of assassins hired to execute him. Mr Sabelo Dlamini, who fired the shots that killed him, and those who waited in the getaway vehicle to drive him away, were arrested, convicted and sentenced for his murder. One would think that Dr Sewram’s family had closure, in that those responsible for his death were held to account and had paid for their dastardly deed. But this was not to be. [2] This was only the beginning of a saga which led to revelations of corruption, conspiracies, incitement, defeating the course of justice, and the laying of false charges, all of which eventually culminated in the arrest of a businessman, the appellant, Mr Rajivee Soni, for the murder of Dr Sewram. [3] The appellant was arrested and charged with six counts, namely, on count 1, the murder of Dr Sewram; on counts 2, 3, and 4, for defeating or obstructing the course of justice; on count 5, for assault with intent to cause grievous bodily harm; and on count 6, for contravening s 18(2)(a) of the Riotous Assemblies Act 17 of 1956 (conspiracy to commit murder). [4] It was a lengthy trial that lasted in excess of three years. The appellant was convicted on all charges by the KwaZulu-Natal Division of the High Court, Pietermaritzburg (Henriques J) (the high court), and sentenced to imprisonment as follows: 25 years on the murder count; 18 months, on counts 2 and 3, for defeating the course of justice; 2 years on count 4, defeating the course of justice; 18 months for the assault on count 5; and, on count 6, to five years for conspiracy to commit murder. The sentences on counts 2 to 5 were ordered to run concurrently with the sentence on count 1. The appellant was sentenced to an effective 30 years’ imprisonment. This appeal against the conviction and sentence of the appellant is with the leave of the high court. Background [5] Dr Sewram, who was 33 years old at the time of his death, was a doctor who conducted a number of practices, one of which was located at Old Greytown Road, Raisethorpe in Pietermaritzburg, KwaZulu-Natal. The appellant and Dr Sewram enjoyed a friendship for several years and their wives were also friends. However, during January 2012 their friendship soured, after the appellant formed a suspicion that Dr Sewram was engaged in an extra- marital affair with the appellant’s wife. [6] At the commencement of the proceedings in the high court the appellant tendered a plea of not guilty on all 6 counts and a statement in terms of s 115 of the Criminal Procedure Act 51 of 1977 (the CPA) was handed in on his behalf, in which he denied any involvement in the murder or in any of the offences with which he had been charged. The appellant stated that at a family meeting he and the deceased had reconciled and that over time he had made peace with his wife. [7] The State’s principal witness was Mr Sugen Naidoo, who, at the time of the murder, was a policeman serving at the Mountain Rise police station in Pietermaritzburg. He testified that in 2012 the appellant had visited him and in due course recounted that his wife had been having an affair with his friend, Dr Sewram. The appellant wanted to teach Dr Sewram a lesson and was willing to pay for this to be done. Sugen Naidoo, a self-confessed drug addict and corrupt policeman, was willing to assist the appellant and make some money at the appellant’s expense. [8] Sugen Naidoo’s evidence was that he and the appellant planned various actions to be taken against Dr Sewram so as to harm him, and ultimately cause him to leave Pietermaritzburg. Over the course of 2012, Sugen Naidoo lent his efforts, together with the appellant, to this enterprise. First, Sugen Naidoo approached a fellow policeman, Warrant Officer Daryl Gounder, to assist him to plant drugs at Dr Sewram’s surgery and then have the doctor arrested for illegal drug possession. Sugen Naidoo purchased the drugs with money given to him by the appellant from his brother-in-law, Mr Hoosen Shaik-Cassim. Sugen Naidoo however informed the appellant that the plan to plant the drugs had been thwarted by senior officers, and he was nevertheless paid by the appellant. [9] Undeterred, the appellant then conceived of a plan to have Dr Sewram charged with sexual assault and sought Sugen Naidoo’s assistance. Sugen Naidoo, in turn, asked Gounder to arrange that a woman would consult with Dr Sewram and then lay a false charge of sexual assault against the doctor. This, Gounder did by persuading Ms Mariamma Kisten to consult with Dr Sewram and then lay a charge of sexual assault against him. Dr Sewram was arrested and charged. But the charge was later withdrawn. [10] The appellant then sought to escalate the actions against Dr Sewram, and wanted him physically hurt. The appellant asked Sugen Naidoo whether his brother-in-law, Mr Morné Emersleben, would be willing to do so. Sugen Naidoo approached Emersleben and they contrived a plan to plant an unlicensed firearm at Dr Sewram’s surgery, and later, to hire men to assault Dr Sewram. In fact, they intended to carry out neither plan and used the appellant’s connivance in these plans to extract money from him. [11] Next, the appellant came to Sugen Naidoo with a plan to lay a false complaint of assault against Dr Sewram that would be corroborated by a friend of the appellant. The appellant did make the complaint. A docket was opened by Sugen Naidoo, and Dr Sewram was arrested and released on a warning. The appellant paid Sugen Naidoo for his efforts. [12] Sugen Naidoo then made contact with Mr Zaheer Khan, at the instance of the appellant, to have Dr Sewram assaulted against payment of R5 000. The assault did not take place, but a different plan was agreed with Khan. His step- daughter, Ms Sonali Sookraj, would consult with Dr Sewram and then lay a false charge of sexual assault against him. This she did. Dr Sewram was again arrested and charged, but the charge was also withdrawn. [13] Finally, Sugen Naidoo also testified that he had introduced the appellant to two policemen, Mr Ricky Naidoo and Mr Nishal Maharaj. They conceived of a plan to spray-paint ‘sex pest’ and ‘sex doctor’ at Dr Sewram’s surgery. This was then done. Emboldened, the appellant then conspired with the two policemen to have them shoot Dr Sewram with a paintball gun, discharging hard objects. The appellant, Sugen Naidoo, Ricky Naidoo, and Maharaj set off on an expedition to buy a paintball gun. This they eventually procured in Pinetown. Ricky Naidoo and Maharaj carried out the assault upon Dr Sewram, who was injured as a result. And the appellant paid them for their efforts. [14] We have set out this sequence of events, to which Sugen Naidoo testified, because they are central to the case that the State made against the appellant. The State led the following witnesses to corroborate the account given by Sugen Naidoo. First, Emersleben testified that the appellant had asked him to procure assailants to assault Dr Sewram. He had done so, but the assault did not take place, because the hired assailants had taken the money for the task and fled. The appellant also wanted Emersleben to procure an unlicensed firearm. He agreed to do so, but in fact did not. Second, Shaik- Cassim testified that the appellant had paid him to hire men to break Dr Sewram’s arms and legs and had described Dr Sewram’s surgery. Shaik- Cassim testified that he had no intention of carrying out the appellant’s request and appeared to acquiesce only in order to extract money from the appellant. Third, the State called Mariamma Kisten and Sonali Sookraj, the two women who had laid the false complaints of sexual assault. They testified as to how they had come to do so. Sookraj explained that her step-father had asked her to lay the charge and had thereafter climbed into a white double-cab vehicle, in which she identified the appellant seated in the front of the vehicle. It is necessary to pause to record that the appellant owned a white double-cab vehicle. This part of the evidence is explored further, later in this judgment. [15] The State also called two further witnesses of importance. The first was Mr Mlungisi Sithebe. Sithebe testified that the appellant had asked him to scare Dr Sewram by shooting him in the leg. The appellant wanted this done because Dr Sewram had had an affair with the appellant’s wife. The appellant drove Sithebe to show him Dr Sewram’s surgeries. Sithebe entertained the proposal, but ultimately decided that it was against his religious convictions. He then reported the matter to Dr Sewram and the police. [16] The other witness called by the State was Sabelo Dlamini. He, together with Mr Mfaniseni Nxumalo and Mr Brian Treasurer, were convicted of the murder of Dr Sewram. Dlamini testified that Nxumalo had persuaded him to shoot a man who had failed to pay Nxumalo for cutting his grass. Dlamini was driven to Dr Sewram’s surgery by Treasurer and given a firearm. Treasurer explained who was to be murdered. When Dr Sewram came out of his surgery, Dlamini shot and killed him. Treasurer then drove him and Nxumalo away. Treasurer placed a call in the course of the journey and said that the job had been done. [17] These were the principal witnesses called by the State. [18] The appellant testified in his own defence. He explained how he came to suspect that his wife was having an affair with Dr Sewram. This led to a separation from his wife and the initiation of divorce proceedings. There was also a heated exchange between the families of the appellant and Dr Sewram at a meeting held after the appellant had discovered the suspected affair. But, as to the alleged campaign against Dr Sewram, he denied any involvement. Nor was he in any way involved in the murder of Dr Sewram. In February 2012, he reported that an incident had occurred in which Dr Sewram had slapped the appellant. The appellant laid a complaint of assault with the police. But, in the course of 2012, the appellant’s rift with his wife began to heal. In October 2012, there was a meeting of the appellant and Dr Sewram, during which Dr Sewram apologised, the men shook hands and the appellant said that he would withdraw the assault complaint. The appellant’s account as to how the attacks upon Dr Sewram had come about was to suggest that Sugen Naidoo had orchestrated the attacks so as to foster suspicion of the appellant’s complicity and thereby sought to extort money from the appellant. [19] The appellant also called his accountant to testify as to how the appellant’s businesses were conducted and the insufficiency of cash transactions to fund the payments in cash that the State alleged that the appellant had made to procure the actions taken against Dr Sewram. In addition, the defence called witnesses to corroborate aspects of the appellant’s testimony. These included Mr Ricky Ganhes, who testified that he had met the appellant in March 2013 who, together with a security guard, were looking for windows that had gone missing from one of the appellant’s factories. Mr Anesh Premchand gave evidence principally as to being in the company of the appellant at the time of Dr Sewram’s murder. Mr Clarence Jones, a colonel in the SAPS, also testified. He investigated police corruption and explained the investigations of corruption against Warrant Officer Gounder and the allegations made against Colonel Bala Naidoo, that Bala Naidoo had intimidated Sergeants Maharaj and Ricky Naidoo into giving witness statements. [20] Finally, there was expert testimony led by the State and the defence as to the cellular telephone records produced at the trial and what they signified. Mr Dharmesh Kanti, a manager of the law enforcement liaison division of MTN, testified for the State, and Mr Brian Land, the proprietor of Map Centre CC, for the defence. [21] This extensive body of evidence gives rise to the following overarching issue. There can be no doubt that Dr Sewram was assaulted, arrested and charged on the basis of false accusations of sexual assault, and was ultimately murdered by assassins acting for reward. These actions occurred by design, not chance. The overarching issue is whether the appellant orchestrated these actions against Dr Sewram to seek revenge for Dr Sewram’s infidelity, or whether there is an alternative explanation that is reasonably possibly true. [22] The appellant was convicted on six separate counts. There are distinctive questions of law and fact relevant to each count. We consider these questions in what follows. But, it is also relevant to our analysis that the mosaic of events recounted in the evidence was not random. The pattern of events also has to be considered to determine whether the guiding hand of the appellant set in train the actions against Dr Sewram, culminating in his murder, or whether the pattern of events is susceptible of an alternative explanation which, if reasonably possibly true, would entitle the appellant to an acquittal. It is to this task that we now turn. Count 1: murder [23] As stated earlier, on 13 May 2013, Dr Sewram was shot and killed outside his surgery in Raisethorpe, Pietermaritzburg. It was common ground that Messrs Dlamini, Nxumalo and Treasurer were responsible for Dr Sewram’s murder. Also, as indicated above, before the appellant’s trial commenced, they were convicted of Dr Sewram’s murder. In the summary of substantial facts, the State alleged that at all times material to count 1, the appellant acted in concert and in the furtherance of a common purpose with Treasurer, Nxumalo and Dlamini to kill Dr Sewram. Thus, the trial court was called upon to adjudicate whether the appellant had acted in furtherance of a common purpose with Dlamini, Nxumalo and Treasurer, to kill Dr Sewram. The trial court found that the appellant had done so. That finding is appealed to this Court. [24] At the appellant’s trial, the State led the testimony of Dlamini, who shot and killed Dr Sewram, aided and abetted by Nxumalo and Treasurer. Dlamini testified that on 12 May 2013 he had visited Nxumalo, who was repairing a brush cutter for him, at his home. Nxumalo asked Dlamini whether he would be willing to kill a person who had failed to pay Nxumalo for cutting his lawn. Dlamini was told that he would be paid R12 000 if he was willing to do so. A firearm and transport would be provided. Dlamini said he would consider the proposition. [25] The following day, 13 May 2013, Nxumalo called Dlamini. Dlamini returned to Nxumalo’s house, apparently of a mind to carry out Nxumalo’s proposal. There he was invited to get into a motor car with Nxumalo. Treasurer, whom Dlamini knew slightly, was in the driver’s seat. Nxumalo took out a firearm and handed it to Treasurer. Treasurer drove to Dr Sewram’s surgery. Nxumalo indicated that the person to be killed works at that surgery. [26] Treasurer then explained to Dlamini how the killing was to be executed. The person to be killed would, at the end of the working day, switch off the lights and come out of the surgery. He may be accompanied by a woman. Treasurer would park elsewhere. [27] Treasurer then handed Dlamini the firearm and explained its operation. Treasurer identified the vehicle of the person to be killed, parked close to the surgery. Treasurer then instructed Dlamini that he should cross the street as the person to be shot approached his vehicle. Dlamini and Nxumalo got out of Treasurer’s car, and Treasurer went to park the car. [28] Dlamini testified that he shot Dr Sewram, and thereafter he and Nxumalo walked briskly to Treasurer’s parked car. They got into the car and Treasurer drove off. Nxumalo requested the firearm so that he could return it to Treasurer. [29] Dlamini explained that, in the course of the journey, Treasurer took out his cellular telephone. The defence objected to the leading of further evidence as to Treasurer’s call. The trial judge overruled the objection. Dlamini testified that, whilst in the car, Treasurer made a call, and said the job was completed. Dlamini did not know who Treasurer had called. Treasurer dropped off Dlamini and Nxumalo, and returned, sometime later, with a sum of money. Treasurer handed the money to Nxumalo. Nxumalo then paid Dlamini. [30] The initial cross-examination of Dlamini was brief. Dlamini confirmed that he had been convicted of the murder of Dr Sewram. He also accepted that he had acted on the instructions of Nxumalo, and that he knew no more of the relationship between Nxumalo and Treasurer than that they had some sort of a connection. Dlamini was later recalled for further cross-examination. He was asked again about the telephone call. Dlamini’s evidence-in-chief was as follows: ‘And your evidence is that on the way to Mason’s a call was made? – Yes. Right. Who made the call? – It was made by Treasurer. When you say the call was made, what did Mr Treasurer do? – Treasurer phoned, phoning some person . . . telling that person, whoever it was, that the job was completed. When Mr Treasurer made the call, what was he using? – He was using a cell phone. And did Mr Treasurer say anything else during this phone call? – I do not recall anything else.’ [31] Under cross-examination, Dlamini testified that Treasurer made the call as they were passing the Copesville police station. As to the call itself, Dlamini confirmed that apart from Treasurer’s voice, he did not hear any other voice. Dlamini was asked whether there was a conversation. The question put and the answer given were as follows: ‘And did it sound to you like a conversation, where you could only hear one of the speakers? – Yes, I could not hear the other person who was responding.’ [32] It was submitted on behalf of the appellant that the evidence of Dlamini posed a fundamental difficulty that the trial court had failed to recognise. The evidence of Dlamini before the trial court established a common purpose between Nxumalo, Dlamini and Treasurer to kill Dr Sewram, in furtherance of which his murder took place. Neither Nxumalo nor Treasurer were called as witnesses, though the defence indicated that Treasurer was a possible witness made available to the defence by the State. This was also the common purpose that had formed the basis for the convictions of Nxumalo, Dlamini and Treasurer in separate proceedings. How then was it possible for the trial court to convict the appellant for the murder of Dr Sewram, on the basis of an entirely distinct common purpose that was found by the trial court to exist between Nxumalo, Dlamini, Treasurer and the appellant? [33] In relation to count 1, the indictment alleged that the appellant was guilty of murder, in that he intentionally and unlawfully killed Dr Sewram. In the summary of substantial facts the State relied on the appellant having acted in concert with and in the furtherance of a common purpose with Treasurer, Nxumalo and Dlamini to kill the deceased. If, however, the evidence established beyond a reasonable doubt that Treasurer was mandated by the appellant to find persons to murder Dr Sewram, and the murder was then carried out in accordance with that mandate, then reliance on the doctrine of common purpose to convict the appellant on the charge of murder would be superfluous. The appellant would be guilty of the murder of Dr Sewram on the basis that his mandate was discharged. This is so irrespective of whether the identity of the appellant was disclosed to the assassin or the other accomplice, or whether they knew of the appellant’s existence. As we will demonstrate below the same result ensues when the doctrine of common purpose is applied. It is to the latter enquiry that we now turn. [34] It is certainly true that Dlamini had no knowledge of the appellant. Dlamini testified to the agreement between himself, Nxumalo and Treasurer to kill Dr Sewram, pursuant to which they acted to murder Dr Sewram. But does this evidence exclude the possibility that the agreement extended further than Dlamini appreciated? Before addressing that question, it is necessary to reflect that by the time Treasurer was introduced to Dlamini and, if regard is had to Dlamini’s evidence about how this had occurred, including the handing-over of the firearm, it must have been compellingly clear that the motive for the intended killing provided earlier by Nxumalo, namely, that it was for failure of the deceased to pay the latter for cutting his lawn, was facile. This is all the more so given the amount he was to be paid to kill the deceased. [35] In our view, the agreement of which Dlamini had knowledge does not exclude a wider agreement of which he was ignorant. In Thebus,1 the Constitutional Court explained that the doctrine of common purpose permits of the attribution of criminal liability to those persons who jointly undertake the commission of a crime. The conduct of every person who acts pursuant to the common purpose is attributable to all who form part of the common purpose. A common purpose may come about by way of a prior agreement, express or implied, or by way of active association and participation in a common criminal design. In a consequence crime, such as murder, the ordinary requirement that there must be a causal connection between the conduct of the accused and the death of the deceased is dispensed with, provided that the accused actively associated with the conduct of the perpetrators. [36] An agreement between A, B and C to commit a crime does not exclude the possibility that A is acting on the instructions of D. In these circumstances, D is a party to the agreement to carry out the crime, even though his identity is not disclosed to B or C. That may come about because A is acting as the agent 1 Thebus and Another v S 2003 (6) SA 505 (CC). of D. Were it otherwise, the doctrine of common purpose would be constrained in an unacceptable way. D, who initiates the criminal design and instructs his agent A to carry it out, cannot escape responsibility for what he has initiated simply on the basis that those persons his agent has employed to carry out the crime (B and C) are ignorant of the principal’s existence. [37] As we have indicated, the same conclusion as to an accused’s responsibility for murder may be arrived at without recourse to any agreement or active association under the doctrine of common purpose, but rather by the application of the concept of mandate. If D instructs A to take the necessary measures to murder a person, and A does so by recruiting B and C to carry out the murder, D is responsible for the murder carried out at his behest. D’s liability need not depend upon his agreement with A, B and C. It suffices that A acted within the scope of the mandate given to him by D so as to cause B and C to execute the mandate. [38] Where an accused’s agent agrees to the common purpose, there must be evidence of what the principal had sought of his agent and that the scope of the agency is consistent with the agreement concluded by the agent with the other participants. But on such a showing, the non-disclosure of the principal does not exclude the principal from being party to the agreement, and hence to the common purpose. So too, provided the agent acts within the scope of his mandate to effect the murder, the principal cannot avoid liability simply because those recruited to commit the deed are ignorant of the relationship between the agent and his principal. [39] For these reasons, it does not follow that because Dlamini understood that he was to murder Dr Sewram in furtherance of a common purpose with Nxumalo and Treasurer, the common purpose did not, in fact, include the appellant. Provided Treasurer was acting upon the instructions of the appellant, the appellant is party to the agreement to murder Dr Sewram. [40] The alternative way of conceptualising the matter yields the same result. Simply because Dlamini was ignorant of the fact that Treasurer was acting upon the instructions of the appellant does not avoid the appellant’s liability for what was done within the scope of the mandate he gave to Treasurer. [41] It does not matter that Dlamini thought that the reason for killing Dr Sewram was his failure to pay Nxumalo, nor that that reason lacked plausibility. It is the agreement to murder Dr Sewram that matters in order to establish liability. The reason as to why each party enters into the agreement, or, for that matter, their appreciation of the reasons that motivate each of the others to do so, does not determine what has been agreed. In this case, there can be no doubt that Dlamini, Nxumalo and Treasurer agreed to murder Dr Sewram, and in fact did so. The central question is whether there was proof beyond reasonable doubt that the appellant was party to that agreement or issued the instruction to Treasurer to kill Dr Sewram, and set in train the actions that resulted in his murder. [42] The submissions of the appellant placed some stress upon the fact that Dlamini, Nxumalo and Treasurer were convicted on the basis of a common purpose that made no reference to the appellant. Yet, it was argued, the case against the appellant is predicated upon a different common purpose that includes the appellant. In our view, there is no conceptual incongruity that arises, nor is there any injustice to the appellant. Proof of the tripartite agreement sufficed for the conviction of Dlamini, Nxumalo and Treasurer. More is required to implicate the appellant. That was a central issue in the appellant’s trial. But if Treasurer was acting on behalf of the appellant, then there is no contradiction between the agreement relied upon for the conviction of Dlamini, Nxumalo and Treasurer and the participation of the appellant as a party to that agreement, through the agency of Treasurer. [43] We turn to consider whether there was proof beyond reasonable doubt that the appellant issued an instruction to Treasurer to have Dr Sewram murdered, or was party to an agreement with Dlamini, Nxumalo and Treasurer to murder him. [44] Dlamini gave evidence of the call made by Treasurer from his cellular telephone after the murder. Dlamini was not able to identify to whom the call was made. At the trial, the State led the evidence of Kanti, a specialist in the law enforcement division of MTN. Kanti also produced relevant cell phone records. [45] The following was established from Kanti’s evidence. At 7:10:49 pm, on 13 May 2013, Treasurer placed a call to the appellant’s cell phone. The call was routed to voicemail. The call’s duration was 12 seconds. The call was placed shortly after the murder. This is important evidence, taken together with Dlamini’s testimony as to what Treasurer said on the call. Given the immediacy of the call, the reference to the job having been completed, can only have referenced the murder. And if this was said on a call to the appellant, it plainly implicated the appellant in the plan to murder Dr Sewram. Treasurer would only make such a report to the appellant if the job was one given to Treasurer by the appellant. And that would suffice as a significant part of the mosaic of proof that the appellant had commissioned Treasurer to procure the murder of Dr Sewram. It would constitute Treasurer as the appellant’s agent to agree with Dlamini and Nxumalo a plan to carry out the murder. Such a plan was agreed and implemented. Under the doctrine of common purpose, the murder would then be as much attributable to the appellant as it was to Dlamini, Nxumalo and Treasurer. The other construct that would also render the appellant guilty of murder arises if the appellant commissioned Treasurer to procure the murder of Dr Sewram, and Treasurer then did so, recruiting Nxumalo and Dlamini for this purpose. [46] No doubt appreciating the significance of this evidence, the appellant sought to cast doubt on the reliability of the records produced by Kanti. In addition, it was submitted that the records do not establish that it was during the call to the appellant that Treasurer spoke the words reported by Dlamini. [47] The following submissions were made on behalf of the appellant. First, the record of the call placed by Treasurer to the appellant’s cell phone number reflected the suburb in which the call originated and terminated as being Dunveria, and not Copesville. Dlamini had said that the call was made as they were driving past the Copesville police station. The record thus lacks reliability. Second, the duration of the call was 12 seconds. The voice message on appellant’s phone was of longer duration, and hence no message of the kind reported by Dlamini could have been left. Third, the call records reflect that Treasurer made further calls and received one not long after the call placed by him to the appellant. The call received was 59 seconds, and one of the calls placed was 24 seconds, long enough to have spoken the words recalled by Dlamini. Fifth, Dlamini appears to have testified that Treasurer had a conversation, when instead the call record reflected that the call to the appellant went to voicemail. Sixth, the appellant in his testimony denied having received any voicemail from Treasurer. Cumulatively, so it was contended, the State had failed to prove beyond reasonable doubt that the words spoken by Treasurer in the car were addressed to the appellant. [48] Two facts are incontestable on the evidence. First, Treasurer made a call and said the words ‘the job was completed’. This was direct evidence, undisturbed by cross-examination. Second, Treasurer placed a call to the appellant’s cell phone number, which went to voicemail. Does the evidence cast a reasonable doubt upon the likelihood that Treasurer spoke the words reported by Dlamini in the course of his call to the appellant? [49] The evidence of Kanti does not support the proposition that the 12 second duration of the call was insufficient for Treasurer to have left a message containing the words reported by Dlamini. Kanti, under cross- examination, stated that the entry in the records reflecting the duration of the call is a time period after the voice prompt has ended and, to use his word, ‘the ping’ is heard. In other words, the duration of Treasurer’s call to the appellant was 12 seconds after the voice prompt ended. Quite long enough for Treasurer to have left a voice message using the words ‘the job was completed’. It does not matter that Treasurer might have miscalculated or was mistaken that the message would be recorded and left on voicemail. [50] The appellant was extensively cross-examined on his cell phone records. The records showed that the appellant had contact with Treasurer on his cell phone 9 times in the course of 2012, and again on 3 April, 8 May and 13 May of 2013. The appellant’s response was to dispute that he received a call or message from Treasurer on 13 May 2013 at 7:10 pm. This selective denial is adverse to the appellant. That Treasurer placed a call to the appellant on 13 May 2013 at 7:10:49 pm appears in the telephone records of both the appellant and Treasurer. It was not disputed before us by the appellant’s counsel. The appellant’s emphatic denial of the incriminating call from Treasurer on 13 May 2013, without any explanation or proof as to why the records were erroneous, is unconvincing. The denial is consistent with his recognition of the call’s inculpatory relevance. The appellant was also unable to explain the extent of his numerous cell phone calls with Treasurer. [51] Nor does careful attention to the cross-examination of Dlamini establish that he agreed that Treasurer had held a conversation with the person to whom he reported that the job was completed. When it was put to Dlamini in cross- examination whether the call made by Treasurer sounded like a conversation, Dlamini’s answer, as we have observed was, ‘I could not hear the other person who was responding’. If Dlamini could not hear another person, he could not know whether there was a conversation taking place. There was no guile in Dlamini’s testimony. [52] The records of Treasurer’s cell phone do reflect that after he placed the call to the appellant, he received a call at 7:13 pm of a duration of 59 seconds; made a call at 7:28 pm of 5 seconds; and made a further call at 7:40 pm of 24 seconds. However, Dlamini’s evidence was clear that it was Treasurer who made the call when he said the job was completed. This was not dealt with in Dlamini’s cross-examination. This evidence renders the call received at 7:13 pm outside the bounds of consideration as being the call during which Treasurer reported the murder. Nor, as conceded by counsel for the appellant, was the second call of 5 seconds a likely contender. [53] That leaves the last call at 7:40 pm. But this call is also not likely to have been the call when Treasurer spoke the words that Dlamini reported. First, Treasurer was driving Dlamini and Nxumalo back to an informal settlement, Masons, after the murder. Dlamini was specifically asked, under cross- examination, whether Treasurer made any other calls in the course of the journey, other than the one call to which Dlamini had testified. Dlamini’s answer was ‘no’. The phone record reflects that the first call, in the relevant time period, made by Treasurer was the call to the appellant at 7:10 pm. [54] Second, the call Dlamini heard Treasurer making was at a point on the journey when they were passing the Copesville police station. The defence elicited from Dlamini that this police station was not far from the clinic at Masons, where Dlamini and Nxumalo were dropped off. Defence counsel estimated that to drive from the Copesville police station to the clinic at Masons would take 5 minutes. Dlamini could not confirm this, but did not deny it. This sequence of events, given that Dlamini witnessed Treasurer making but one call, and was dropped off shortly thereafter, renders it entirely improbable that a call Treasurer made at 7:40 pm was the call during which Treasurer reported the murder. [55] There was a considerable amount of time and energy taken up during the trial seeking to understand why the record of the call placed by Treasurer to the appellant records Dunveria rather than Copesville as the originating base station from which the call was sent on the network. What is plain from the evidence of Kanti, the expert called by the State, is that the cell tower that relays the call depends upon where the signal is strongest at a particular time to connect to the base station. The density of the base stations within the cell network determines the coverage of each station which may vary from 0-3.5 kilometres. As a result, it was not possible to pinpoint the exact location of the caller. The network admits of too much variability to do so. This however does not cast doubt upon the reliability of the cell phone records that were produced in evidence. If anything, it is supportive, as it indicates proximity. Kanti explained how the cell phone records of Treasurer were extracted. These records were extensively utilised by the State and the appellant, leaving no doubt as to the call made by Treasurer to the appellant, and the other calls made and received by Treasurer during the relevant time period. [56] This analysis of the evidence affords proof, beyond reasonable doubt, that Treasurer phoned the appellant after the murder, en route to his dropping off Dlamini and Nxumalo. Dlamini heard what Treasurer said on the only call that Treasurer made in the course of the journey. On the evidence it was established, beyond reasonable doubt, that Treasurer’s words, ‘the job was completed’, were said on the call Treasurer placed to the appellant’s cell number. [57] Once that is so, as we have explained, Treasurer’s report to the appellant concerning the completion of ‘the job’ implicated the appellant in the murder. There is no way of understanding Treasurer’s report other than to conclude that the appellant had mandated Treasurer to procure the murder of Dr Sewram. And Treasurer had done so. The extensive telephonic interactions between Treasurer and the appellant referred to above supports this. That being so, and if the other evidence adduced on behalf of the State supports that conclusion, then the appellant was guilty of the murder. Additionally, Treasurer’s report to the appellant afforded evidence that Treasurer was the appellant’s agent, and this made the appellant a party to the common purpose, with Dlamini, Nxumalo and Treasurer, to kill Dr Sewram. And under the doctrine of common purpose, the actions of those who carried out the murder are attributable to the appellant. [58] The evidence of Dlamini does not stand alone. The murder of Dr Sewram was considered by the trial court in the light of the other actions that were taken against Dr Sewram before his murder. Certain of these actions form the basis of other crimes of which the appellant was convicted. We consider the evidence and the appeals relating to these counts below. What, however, cannot be disputed is that Dr Sewram was subjected, in the course of 2012, to a range of hostile actions, involving a variety of persons, that were orchestrated, intensified, and culminated in his murder. [59] The chronology is as follows. As alluded to earlier, in December 2011, the appellant discovered what he feared was an adulterous affair that Dr Sewram and the appellant’s wife had been conducting. On 13 February 2012, a charge of sexual assault was laid by Mariamma Kisten against Dr Sewram. Dr Sewram was charged with sexual assault. At his court appearance on 14 February 2012, the charge was withdrawn. On 21 February 2012, the appellant laid a charge of assault against Dr Sewram. The case was withdrawn against Dr Sewram in July 2012. On 21 August 2012, Sonali Sookraj laid a charge of sexual assault against Dr Sewram. Dr Sewram was arrested and charged. On 30 October 2012, the charge was withdrawn. On 24 October 2012, Dr Sewram, on exiting his surgery, was shot several times with a paintball gun, utilising hard objects, and sustained certain injuries. On 13 May 2013, Dr Sewram was murdered outside his surgery. [60] Sugen Naidoo was the State’s principal witness. Sugen Naidoo, the self- confessed drug addict, liar and extortionist, gave evidence that the appellant had, over the course of 2012, sought his assistance to orchestrate a campaign against Dr Sewram to denigrate him and ultimately cause him to leave Pietermaritzburg. These efforts are constituted by the offences with which the appellant was charged. The appellant had become obsessed with taking revenge upon Dr Sewram for the damage he had caused to the appellant’s marriage. We were warned, correctly, by the appellant’s counsel that we should treat the evidence of Sugen Naidoo with caution. And we do so. [61] One further aspect of Sugen Naidoo’s evidence warrants mention. He testified that in 2012 the appellant had asked him whether he knew Treasurer. Sugen Naidoo informed the appellant that Treasurer was an ex-policeman and a known criminal. The appellant informed Sugen Naidoo that he had approached Treasurer to kill Dr Sewram for an amount of R80 000. The appellant sought the assistance of Sugen Naidoo to act as Treasurer’s driver. Sugen Naidoo declined to assist. Given that Treasurer did indeed procure the murder of Dr Sewram, it begs the question as to how Sugen Naidoo would have known in advance of the plan to use Treasurer for this purpose, save from the appellant. He could also not have known of the extensive telephonic contact between the two. Furthermore, Sugen Naidoo did not procure the services of Treasurer, Nxumalo or Dlamini to murder Dr Sewram. How then did Treasurer come to arrange the murder? Sugen Naidoo’s evidence provides an answer to these questions. The appellant’s evidence does not. [62] But there remains the overarching question. How did it come to pass that Dr Sewram, in the course of 2012, suffered the hostile actions catalogued above? It was certainly not a matter of chance or bad luck. These were deliberate actions taken against him. One answer is the account offered by Sugen Naidoo: Dr Sewram was targeted by the appellant. The other answer, given by the appellant, is that Sugen Naidoo orchestrated the sexual assault charges and the paintball attack so as to extort money from the appellant. [63] The answer of the appellant is hard to fathom. True enough Sugen Naidoo knew of the appellant’s marital troubles. The details of these troubles, provided by Sugen Naidoo, were not in contestation, and indeed, were corroborated by the appellant and other defence witnesses. It indicates that Sugen Naidoo was truthful about these being disclosed to him by the appellant, and a closer relationship that subsisted between Sugen Naidoo and the appellant than the appellant was willing to admit. We are constrained to ask how would the targeting of Dr Sewram, unbidden by the appellant, have permitted Sugen Naidoo to extort money from the appellant? Presumably, on the premise that Sugen Naidoo, a policeman assigned to the Mountain Rise police station, would use his position to cast suspicion upon the appellant for the actions taken against Dr Sewram. This premise is entirely implausible. Had Sugen Naidoo sought to take action against Dr Sewram, unbidden by the appellant, as a stratagem to extort money from the appellant, the appellant would simply have reported the matter to the police at Mountain Rise, with whom he was admittedly closely connected. Indeed, on the appellant’s own version, he had a close friendship with Sugen Naidoo’s wife, Chantal Norman, who was a senior police officer at Mountain Rise police station. Any attempt by Sugen Naidoo to extort money from the appellant would have simply been rebuffed by the appellant on the basis that there was absolutely no basis to implicate him in any wrongdoing against Dr Sewram. The usual premise for extortion is either the complicity of the person to be extorted in wrongdoing or the ability of the extortionist to make it appear so. The appellant contended that he was not complicit in the actions taken against Dr Sewram. If that was so, Sugen Naidoo’s efforts at extortion would have been short-lived. If Sugen Naidoo had attempted falsely to implicate the appellant in the actions against Dr Sewram, it would have been an easy matter for the appellant to show that he had no connection to Kisten or Sookraj, an aspect to which we will come. [64] Nor does the appellant’s reliance upon extortion by Sugen Naidoo cover the field of actions taken against Dr Sewram. One of those actions was the appellant’s own complaint of assault against Dr Sewram. How would that place Sugen Naidoo in a position to extort money from the appellant? Nor does the appellant’s incredulous supposition account for the murder of Dr Sewram. It also does not explain the efforts made by the appellant to incite Sithebe to murder Dr Sewram, the basis of count 6. This too, will be dealt with later. [65] In sum, the appellant’s account that the actions taken against Dr Sewram were occasioned by Sugen Naidoo’s efforts to extort money from the appellant do not withstand scrutiny. [66] In our view, once the appellant’s account of the actions taken against Dr Sewram cannot be believed, as we ultimately find, then the only other account as to what befell Dr Sewram is the appellant’s serial efforts, with a clear motive to harm Dr Sewram, and later to procure his murder. [67] Furthermore, for all the caution that Sugen Naidoo’s evidence warrants, there are material respects in which his essential position, that the appellant sought to procure persons to harm the appellant, was materially corroborated by a number of other witnesses and events with whom and with which he was not always or necessarily connected, as well as by objective evidence. [68] First, Sugen Naidoo’s brother-in-law, Morné Emersleben, gave evidence that he met the appellant when Emersleben was staying with Sugen Naidoo. This occurred in May 2012. The appellant explained that Dr Sewram and the appellant’s wife had been ‘messing around’, and Sugen Naidoo then asked whether Emersleben knew of someone who could assault Dr Sewram. The appellant explained that Dr Sewram had two surgeries, and that the surgery in Raisethorpe had no cameras. Although, Emersleben was extensively cross- examined, his attorney accepted that when Sugen Naidoo asked Emersleben about a person to assault Dr Sewram, the appellant was present. The appellant’s presence, in these circumstances, supports the central premise of Sugen Naidoo’s evidence against the appellant. [69] Second, in the course of the cross-examination of Sugen Naidoo, the defence introduced into evidence the statement that had been taken from Warrant Officer Gounder who, in 2012, had served with Sugen Naidoo at the Mountain Rise police station. Sugen Naidoo testified that he had conceived of a plan, with the concurrence of the appellant, to plant drugs in Dr Sewram’s vehicle, and upon refinement of the plan, in Dr Sewram’s surgery, and then to arrest Dr Sewram for the illegal possession of drugs. Sugen Naidoo’s evidence was that he had sought the assistance of Gounder and Warrant Officer G R Naidoo to carry out the plan. Sugen Naidoo did not go through with the plan. But Gounder’s statement confirms that there was such a plan, and that the appellant undertook to pay the sum of R10 000 to have the plan executed as revenge for Dr Sewram having had an affair with the appellant’s wife. Gounder was not called to testify, but the defence placed his statement into evidence, and must accept the consequences of that election. [70] Third, the State called Shaik-Cassim. He too is a brother-in-law of Sugen Naidoo. Shaik-Cassim testified that, in June or July of 2012, the appellant and Sugen Naidoo came to his house. The appellant asked Shaik-Cassim whether he knew of someone who would break the hands and legs of Dr Sewram. Shaik- Cassim testified that he did, but that they were ‘bad guys’ who would end up killing Dr Sewram. To this, the appellant replied, ‘do whatever it takes’. The appellant said that he had money for this purpose. He described the surgery and that it had no cameras. The appellant then left, and returned with R5 000. He gave R1 200 to Shaik-Cassim to use to transport the proposed assailants from Durban, and the balance was given to Sugen Naidoo. [71] Shaik-Cassim was strenuously cross-examined. It was pointed out to him that Sugen Naidoo’s statement indicated that Sugen Naidoo first approached Shaik-Cassim about the proposed assault, at the instance of the appellant, before Sugen Naidoo, Shaik-Cassim and the appellant met at Shaik- Cassim’s home, where the plan was further discussed. That difference is hardly of great moment. The evidence of Sugen Naidoo and Shaik-Cassim are at one that there was a meeting at Shaik-Cassim’s home, where the planned assault upon Dr Sewram was agreed with the appellant. [72] Much was also made of Shaik-Cassim’s criminal history and involvement in dealing drugs. But on the central issue, Shaik-Cassim gave clear evidence. The appellant met with him and Sugen Naidoo to procure the assault of Dr Sewram. Although the appellant denied that this meeting took place, there is nothing to fault the trial court’s assessment that Shaik-Cassim also confirmed the central account of Sugen Naidoo as to who was behind the attacks upon Dr Sewram. For all the attacks on the State’s miscreant witnesses, by counsel on behalf of the appellant, one might rightly ask why they would all unnecessarily implicate themselves in wrongdoing by testifying against him. [73] For these reasons, we find that there is no basis to disturb the conviction of the appellant for the murder of Dr Sewram, and the appeal accordingly fails in respect of count 1. Count 6: conspiracy to commit murder, alternatively incitement to commit murder [74] The State alleged that, in early February 2013, the appellant hired Mlungisi Sithebe to kill Dr Sewram. Sithebe pretended to agree, but then informed Dr Sewram of the plan to kill him. In the alternative, the appellant unlawfully and intentionally incited Sithebe to murder Dr Sewram. The trial court found that the appellant and Sithebe did conspire to kill Dr Sewram. Sithebe’s change of heart occurred after the agreement to murder Dr Sewram had taken place. On this basis, the trial court convicted the appellant on the main count of conspiracy. The appellant appeals his conviction to this Court. [75] At the trial, Sithebe’s evidence was led and cross-examined. That took place in the period 28-30 September 2015. The cross-examination of Sithebe was detailed and lengthy. On 19 October 2015, the prosecution raised with the court a video that Sithebe had taken and that the prosecution wished to have admitted into evidence. Sithebe had referenced the video in his evidence-in- chief, but the State had not sought to admit the video into evidence. In chief, Sithebe stated that the video had been made on the second occasion that the appellant had pointed out Dr Sewram’s surgeries to him. The defence placed in issue the admissibility of the video, in particular its originality and authenticity, and also the requirement that the prosecution prove the identity of the speakers on the video. [76] The trial court decided, perhaps unwisely, that these matters were to be determined in what was styled a trial-within-a-trial. Sithebe was recalled. He testified that he had recorded a video on his cell phone on 20 February 2013, during a journey he had taken with the appellant. The video, he testified, recorded a conversation between Sithebe and the appellant near Dr Sewram’s surgery. The conversation ended with the following statement made by the appellant: ‘take this number’. Sithebe explained that the appellant was referencing the number of Dr Sewram’s surgery, which the appellant had indicated Sithebe should telephone. [77] A lengthy cross-examination followed, in which the defence raised the following issues with Sithebe: when the video was taken; how it was taken; the phone calls made by Sithebe to Dr Sewram and the appellant on 20 February 2013; that Sithebe placed the cell phone, on which the video was recorded, with the pawnbrokers, Cash Crusaders; Sithebe’s prior statements to the police; and what was said on the video. [78] At the conclusion of the trial-within-a-trial, the trial judge explained her understanding of the procedure she had adopted. The trial judge indicated that she would give a ruling as to the admissibility of the video evidence, and depending on the ruling, the veracity of the contents of the video could then be traversed. The trial judge, in due course, made the following rulings. First, the video was admitted into evidence. Second, the evidence produced in the course of the trial-within-a-trial was incorporated as evidence in the main trial. Third, leave was given to the defence to recall Sithebe, Sugen Naidoo and Kisten for further cross-examination. [79] The trial court carefully delineated the issues in respect of which further cross-examination would be permitted. In respect of Sithebe, these were issues not previously canvassed in cross-examination. The entitlement of the defence to cross-examine Sithebe further was circumscribed and confined to the following: the veracity and reliability of the video recording; the context in which the video recording was made; the contents of the video recording as it was relevant to such context; the contents of the video recording in relation to the evidence given by Sithebe at trial and in his two statements, to the extent not already canvassed; the contents of certain further particulars given by the State in respect of the video; and aspects pertaining to the date and time of the recording. [80] Before Sithebe could be further cross-examined, he died. The defence submitted to the trial court that the incomplete cross-examination of Sithebe required that all of Sithebe’s evidence must be excluded from consideration. This, it was argued, was the necessary consequence of the recognition by the trial court of the appellant’s constitutional right to challenge the evidence produced by the State at trial, which right could no longer be fully exercised in respect of the testimony of Sithebe. The trial court, referencing a number of cases that have considered this issue, found that, given the extent of the cross- examination of Sithebe that had already taken place, the inability further to cross-examine Sithebe occasioned no prejudice to the appellant and did not violate his right to a fair trial. Consequently, the evidence of Sithebe and the video evidence were not excluded from consideration by the trial court. Indeed, it provided the basis for the appellant’s conviction in respect of count 6. [81] On behalf of the appellant, it was submitted to this Court that the trial court’s failure to accord the appellant his constitutional rights was an error, and that all the evidence of Sithebe should have been excluded. And with it, the appellant’s conviction in respect of count 6. [82] The appellant enjoyed the right to challenge evidence. This right formed part of the appellant’s overarching right to a fair trial, entrenched in the Bill of Rights in terms of s 35(3)(i) of the Constitution. Under our adversarial system of criminal justice, the right to challenge evidence includes the right of the accused in a criminal trial to cross-examine the witnesses whose evidence is led by the State. This is uncontroversial. [83] Difficulties arise when a witness who has given evidence is no longer available for cross-examination, or, as here, cannot complete their cross- examination. In a number of decisions, the high courts have had occasion to consider these matters.2 Two approaches have found support. First, the exclusion of evidence should depend upon the exercise of a discretion by the trial court. The discretion is responsive to various case-specific considerations. How truncated was the right to cross-examine? What is the nature of the evidence? Is the evidence to be admitted reliable and otherwise confirmed? These considerations are by no means exhaustive. The second approach is that the right to challenge evidence is a fundamental right. It is not a right of degree. If the right is infringed, the better view is that the evidence should be excluded. The adoption of a discretion fails to accord proper recognition to the right as fundamental to the fairness of the trial. A discretion of this kind also gives rise to considerable indeterminacy as to how it is exercised. Better then, simply to exclude the evidence. [84] The correct starting point for the analysis is the recognition that an accused has the right to cross-examine those witnesses whose evidence is relied upon by the prosecution. Where that right cannot be exercised, or cannot be exercised in full, the court has a duty to ensure that the trial remains fair. To 2 S v Motlabane and Others 1995 (8) BCLR 951 (B); S v Khumalo [2012] ZAGPJHC 141 (GP); S v Msimango and Another 2010 (1) SACR 544 (GSJ). do so, the trial court should not engage in conjecture as to what the cross- examination would have been likely to yield. That is speculative. Once a body of evidence cannot be cross-examined or cross-examined fully, the safest course, to ensure the fairness of the trial, is to disregard that evidence, because the right to challenge evidence is so intrinsic to what makes a trial fair. It matters not that the impossibility of cross-examination is not attributable to the fault of any person. It is the fact of impossibility that renders the right nugatory. [85] The clearest case is one in which the witness called by the prosecution gives evidence-in-chief, but then cannot be cross-examined. The accused is deprived of the right to cross-examine. That is the deprivation of a fundamental right. The only question is this: what remedy should the court provide to the accused? In this situation, the remedy will ordinarily be self-evident: the evidence must be excluded from consideration by the trial court. [86] In the present case, a more nuanced issue arises. To what evidence does the right of the appellant have application? As we have observed, Sithebe died after the trial court had made an order that he was to be recalled. However, his recall was to permit of further cross-examination within a specified remit. The defence was permitted to cross-examine Sithebe exclusively with regard to the video evidence that had been admitted into evidence. It will be recalled that Sithebe had already been extensively cross-examined in respect of all his other evidence. And even in respect of the video evidence, the trial court ruled that the evidence yielded from the trial-within-a-trial was admitted as evidence in the main case. Much of that testimony was taken up with the cross- examination of Sithebe, and it was not confined to issues of authenticity and reliability of the video. [87] The appellant does not challenge the order made by the trial court as to the remit within which the cross-examination of Sithebe was to take place, upon his recall. Once that is so, the appellant’s right to cross-examine was circumscribed. The right was only capable of being exercised in respect of the contents of the video: what it depicted, when it was made, what was said, the true import of that speech, and its bearing upon other testimony and statements given by Sithebe. What the order of the trial court did not sanction was a re- visitation of other aspects of Sithebe’s evidence. Put simply, whatever latitude might have been allowed to the appellant or his counsel, the cross-examination had to have relevance to the contents of the video. [88] Once that is so, the right of the appellant went no further than to cross- examine Sithebe, upon his recall, as to the contents of the video. It was the potentially damaging contents of the video, upon its admission into evidence, that led the trial judge to permit of the further cross-examination of Sithebe. The right afforded to the appellant was an opportunity, by way of cross-examination, to negate the contents of the video. That is what the trial court ordered, in fairness, to the appellant. But if the video is excluded from the evidence, then the appellant suffers no infringement of his right, because the right was never of application outside the contents of the video. And since the exclusion of the video evidence eliminates any damaging evidence recorded on the video, nothing more is required to be fair to the appellant. The fullest exercise of his right could never have achieved more than what is secured by the exclusion of the video evidence. [89] The exclusion of all of Sithebe’s evidence as a consequence of the appellant’s inability to cross-examine Sithebe on the contents of the video would constitute a remedy entirely disproportionate to the right that the appellant had foregone. There was a substantial body of evidence given by Sithebe that had been thoroughly cross-examined. There is no reason why this evidence should not be allowed to stand simply because the right to cross- examine Sithebe on the contents of the video could not be exercised. Wholesale exclusion would be a remedy lacking rational justification. It would want for proportionality. And such a remedy would not make the trial any fairer to the appellant in comparison to the remedy we consider appropriate to the right foregone – the exclusion of the video evidence. [90] In sum, our approach recognises that the right to cross-examine is a fundamental right, and, if it cannot be exercised, the court must fashion a remedy that secures the fairness of the trial. What this requires is an appropriate remedy that cures the absence of the right to cross-examine. A remedy is not appropriate if it lacks proportionality or rational justification. The remedy flows from the right, and the recognition of the right as fundamental to our constitutional commitment to a fair trial. [91] So understood, we do not favour the position that would repose a discretion in the trial court to weigh the probative value of the evidence that has not been subjected to cross-examination against the prejudice to the accused that arises from the absence of the right to cross-examine. Such a test, redolent of many common law regimes for deciding whether to exclude evidence, fails, in our view, to recognise the constitutional significance of a right that is intrinsic to a fair trial. The absence of the right to cross-examine is not measured by a cost-benefit analysis as to who gains or loses, and by how much. Rather, if an accused cannot enjoy a right that is fundamental to the fairness of the trial, the court must restore the fairness of the trial. That is not done by attaching weight to the probative value of the evidence and engaging in conjecture as to what difference the cross-examination might have made. [92] The trial court did not follow this approach. Rather, it admitted the video evidence and relied upon it, because the trial court considered the video evidence to have probative value. In particular, the trial court found that the video evidence corroborated Sithebe’s other evidence. And it was not thought to be prejudicial. For the reasons given, this is not the correct way to determine the remedial consequences of the appellant’s inability further to cross-examine Sithebe. [93] Rather, given that the appellant’s right to cross-examine concerned the contents of the video, the loss of this right required that only the video be excluded from the evidence at trial. Such a remedy restores the fairness of the trial, because the appellant does not suffer the detriment of the video evidence that the further cross-examination was intended to test. The remedy is proportionate, because it is bounded by the remit of the order that gave rise to the right. The remedy is also just, because it leaves in place the evidence that was subject to the very fullest cross-examination. We accordingly find that the trial court fell into error in failing to rule that the video evidence must be excluded. [94] Once that is so, our analysis turns to the evidence of Sithebe, shorn only of the video evidence. The trial court found that the appellant and Sithebe conspired to kill Dr Sewram. It was submitted, on behalf of the appellant, that the evidence of Sithebe did not support the appellant’s conviction. The crime of conspiracy required that the appellant and Sithebe reached an agreement to kill Dr Sewram.3 No such agreement, so it was contended, took place. [95] There is merit in this submission. Sithebe’s evidence was that on the first occasion he met with the appellant, the appellant had sought to persuade Sithebe to scare Dr Sewram, for which he would be paid R100 000. On the second occasion, what the appellant wanted of Sithebe went further. He wanted Sithebe to kill Dr Sewram. Sithebe certainly gave consideration to the matter, and was much tempted by the offer of R100 000. But Sithebe’s evidence does not indicate that he, at any point, agreed to the appellant’s proposal. Indeed, on his account, his religious scruples prevailed, and he went to inform Dr Sewram that the appellant had sought to recruit him to kill Dr Sewram. The trial court found that Sithebe had agreed to assist the appellant before his change of heart. But in our view, Sithebe was equivocal as to the appellant’s proposal and never reached a definite agreement with the appellant. That being so, the appellant’s conviction on the charge of conspiracy cannot stand. [96] The appellant was charged, in the alternative, with incitement to commit murder. The question is whether the evidence at trial supports a conviction on this charge? [97] Section 18(2) of the Riotous Assemblies Act 17 of 1956 renders a person who incites, instigates, commands or procures any other person to commit any offence guilty of an offence, liable on conviction to the punishment to which a person convicted of actually committing that offence would be liable. The key 3 S v Sibuyi 1993 1 SACR 235 (A) at 249E. feature of the offence of incitement, for present purposes, is that the person charged with incitement, ‘seeks to influence the mind of another to the commission of a crime’.4 It matters not whether the person sought to be influenced is susceptible to such influence. [98] Sithebe testified that the appellant had in February 2013 collected Sithebe and driven him to point out Dr Sewram’s surgeries. During this journey, the appellant asked of Sithebe whether he would be able to procure a firearm to kill Dr Sewram, who, the appellant had previously explained, had been in a relationship with the appellant’s wife. The appellant pointed out which of the surgeries had no cameras. The appellant promised to pay R100 000, if Sithebe would kill Dr Sewram. According to Sithebe, the appellant withdrew money from an ATM, and gave him R3 000 to procure an unlicensed firearm. Sithebe was not ultimately persuaded to agree with the appellant to kill Dr Sewram. Indeed, troubled by his conscience, he went to Dr Sewram’s surgery and informed him of the appellant’s plan to have him killed. Sithebe telephoned the appellant and claimed to have shot Dr Sewram. The appellant sought to obtain confirmation of this, and ultimately realised that Dr Sewram had not been shot. The appellant nevertheless sought to have Sithebe kill Dr Sewram whilst the appellant was overseas. Sithebe reported the matter to the police. [99] The appellant denied that he had incited Sithebe to murder Dr Sewram. He acknowledged meeting with Sithebe in February 2013. The meeting was, he testified, to arrange for certain guarding services for premises owned by the appellant. He explained that he had encountered problems with the services rendered by the incumbent service provider, Tiger Force, and discussed with Sithebe that Enviro Watch would take over the guarding service. Sithebe worked for Enviro Watch. This was the basis of the appellant’s meeting with Sithebe in February 2013, and also of the calls that passed between the two on 20 February 2013. The call records also showed that the appellant and Sithebe were in contact on 6 occasions on 10 March 2013, and yet further calls were made in the period of 22-23 March 2013. The appellant testified that these calls 4 S v Nkosiyana 1966 (4) SA 655 (A) at 658-9. and the subsequent meetings with Sithebe concerned a break-in and theft that had taken place at the appellant’s premises in Mkondeni. These were the premises that Sithebe had secured a contract to protect. The appellant suspected Sithebe of some complicity in the theft. [100] There can be no doubt that if Sithebe’s evidence is accepted, the appellant is guilty of the incitement of Sithebe to murder Dr Sewram. The appellant, on Sithebe’s evidence, plainly sought to influence Sithebe to murder Dr Sewram. The appellant expressed his wishes plainly. He made provision for Sithebe to purchase a firearm. He pointed out to Sithebe the whereabouts of the two surgeries. And he offered Sithebe a large reward once the murder had taken place. That is incitement beyond reasonable doubt. [101] The trial court found that, quite apart from video evidence, the appellant’s version fell to be rejected. The conflicting versions of Sithebe and the appellant must be considered by recourse to the following evidence. On 20 February 2013, apart from the calls that took place between the appellant and Sithebe, Sithebe’s phone records reflect the fact that Sithebe phoned the two surgeries of Dr Sewram. That is entirely consistent with Sithebe’s evidence that he sought out Dr Sewram, after his journey with the appellant, to warn him of the appellant’s murderous plans. [102] Why, it may be asked, would Sithebe have telephoned the surgeries of Dr Sewram on the very day in February that the appellant admits that he met with Sithebe? Sithebe had no prior connection to Dr Sewram. If the February meeting was simply concerned with a security guarding contract, what would explain Sithebe’s conduct in phoning Dr Sewram. Nor was it ever suggested that Sugen Naidoo knew of or was in any way connected to Sithebe. [103] In the cross-examination of Sithebe it was suggested that Sithebe was in contact with Dr Sewram, because Dr Sewram and Sithebe were conspiring together to kill the appellant. There was simply no basis for this claim. Sithebe did not know of Dr Sewram. Sithebe’s telephone records show no calls to Dr Sewram prior to 20 February 2013. If Dr Sewram wished to conspire to kill the appellant, there is simply no showing as to how he knew Sithebe. Dr Sewram’s conspiracy theory is entirely fanciful and unsubstantiated. [104] Once that is so, as the trial court found, Sithebe’s account is confirmed in a material respect by Sugen Niadoo and the other witnesses referred to above, more particularly in that the appellant wished the deceased harm, on the basis of his wife’s infidelity with Dr Sewram. The appellant’s version cannot explain Sithebe’s call to the surgeries and falls to be rejected. The timing of the appellant’s approach to Sithebe is also significant. It occurred many months after the appellant supposedly made peace with the deceased and their agreement to put their past discord behind them. This was the evidence of the appellant in his statement in terms of s 115(1) of the Criminal Procedure Act and also at the trial. The approach made to Sithebe and the ongoing criminal acts planned and taken against Dr Sewram are indicative of an ongoing vendetta undertaken by the appellant. This lends a lie to the lasting accord that was supposedly concluded. [105] In the result, while the appellant’s conviction on the charge of conspiracy to murder must be set aside, the appellant is guilty of the alternative charge of incitement to murder Dr Sewram. Count 2: defeating or obstructing the course of justice [106] The trial court convicted the appellant of obstructing the course of justice in that, on 13 February 2012, he enlisted the assistance of Mariamma Kisten to lay a false complaint of sexual assault against Dr Sewram, knowing the complaint to be false. [107] It is common ground that Kisten did make a complaint of sexual assault against Dr Sewram; a docket was opened; the complaint was false; and Kisten did so for the payment of money. The trial court, applying the required caution to the evidence of both Kisten and Sugen Naidoo, found their evidence to be truthful, thereby implicating the appellant as the person who knowingly procured the false charge against Dr Sewram. [108] The appellant contended before this Court that the trial court should not have found Kisten and Sugen Naidoo to be truthful witnesses. In addition, the link between Kisten and Sugen Naidoo, and hence the appellant, was Daryl Gounder. Gounder was not called by the State, and hence the State had failed to prove that Gounder had received instructions, ultimately from the appellant, to procure Kisten to lay the false charge. [109] Kisten’s evidence was that Gounder sought her assistance to lay the false charge of sexual assault against Dr Sewram. Gounder indicated that he did so to assist a friend whom he did not identify. Sugen Naidoo’s evidence was that the appellant had come up with the plan to lay a false charge of sexual assault against Dr Sewram. Sugen Naidoo had asked Gounder to find the person to do so. Gounder did so. But Sugen Naidoo confirmed that the appellant and Gounder did not communicate in carrying out the appellant’s plan. It must accordingly be accepted that it is Sugen Naidoo alone who was in a position to identify the appellant as the person at whose instance the false charge came to be laid. [110] The question is whether Sugen Naidoo’s evidence sufficed for this purpose. That Kisten laid a false complaint of sexual assault against Dr Sewram is beyond doubt. That she did so at the instance of another and for reward is also clear. Sugen Naidoo’s testimony was that the appellant initiated the plan to have a false complaint of sexual abuse laid against Dr Sewram, mandated him to execute the plan, and provided the money to do so. This was but one action taken by the appellant in an orchestrated campaign against Dr Sewram. [111] Who then had reason to target Dr Sewram by causing Kisten to act as she did? We have, in considering the murder charge against the appellant, already assessed the two accounts offered at trial as to how it came about that Dr Sewram suffered serial adverse actions, culminating in his murder. Either, as Sugen Naidoo testified, this resulted from the efforts of the appellant to take revenge against Dr Sewram for the infidelity with the appellant’s wife. Or, Sugen Naidoo targeted Dr Sewram to extort money from the appellant. But, for reasons we have already set out above, this latter account is so lacking in evidential support or coherence that it can safely be rejected. Once that is so, it leaves intact the explanation provided by Sugen Naidoo. [112] We were reminded by counsel for the appellant of the caution with which Sugen Naidoo’s evidence should be approached. And we do so. In addition, a number of inconsistencies in the evidence of Kisten were pointed out to us. Kisten gave different accounts of the money she was paid and who persuaded her to accept Gounder’s proposal. Kisten was also asked as to how her complaint could ever have sufficed for the purpose of charging Dr Sewram, given its evident ambiguity. Indeed, the charge was dropped. [113] But, as with the trial court, we do not consider the criticisms of the evidence to be of such moment so as to discredit the central feature of Kisten’s testimony: that she was paid to lay a false complaint of sexual abuse. And in answering the crucial question as to who stood behind what Kisten did, here too there is insufficient reason to deflect from the conclusion that this person was the appellant. The appellant had reason to do so. There is a considerable body of evidence that the false charge laid by Kisten formed part of an orchestrated pattern of action taken by the appellant. And finally, the alternative account of the appellant as to how the false complaint may have come about falls to be rejected. [114] For these reasons, we find no basis to interfere with the conviction of the appellant in respect of count 2. Count 3: defeating or obstructing the course of justice [115] The trial court convicted the appellant of unlawfully and intentionally obstructing the course of justice by laying a false complaint of assault with the police against Dr Sewram, knowing that the complaint was false. [116] Here too, it was common ground that the appellant laid the charge with the police. The central issue was whether the assault had taken place. The appellant gave evidence that he was assaulted by Dr Sewram. Sugen Naidoo contended that it was a fabrication. The trial court found that the probabilities favoured the assault being a fabrication. [117] Two aspects of the evidence warrant careful consideration. First, unlike other aspects of Sugen Naidoo’s testimony, where he remained steadfast as to the appellant’s complicity in pursuing a campaign against Dr Sewram, here he conceded under cross-examination that ‘the possibility exists that the assault could have taken place – it could have’. [118] Second, the witness statement of Mr Roshan Jayinath, a friend of the appellant, admitted into evidence at trial by consent, stated that he was travelling with the appellant in his car on 18 February 2012. The car was stationary in the traffic, when, according to Jayinath, Dr Sewram jumped out of his vehicle, which had drawn up alongside them, and slapped the appellant’s face. [119] In relation to this count, the appellant is entitled to the benefit of the doubt. As a result, the appellant’s conviction cannot stand on count 3. Count 4: defeating or obstructing the course of justice [120] The appellant was charged with obstructing the course of justice, in that he procured Sonali Sookraj to lay a false complaint of sexual assault against Dr Sewram, knowing that the complaint was false. The trial court convicted the appellant on this count. The trial court found that Sookraj’s evidence confirmed Sugen Naidoo’s account that the appellant was behind the plan to target Dr Sewram with a further complaint of sexual assault. The trial court was satisfied that Sookraj had identified the appellant as being present on the day when she agreed to lay the false complaint against Dr Sewram. [121] Before this Court, counsel for the appellant submitted that the conviction was predicated upon several misdirections. First, no evidence was led at trial of Zaheer Khan, Sookraj’s step-father, who was said to have played a central role in persuading Sookraj to lay the complaint. Reliance on the hearsay evidence of Sookraj as to what Khan had said was inadmissible. Such evidence, so it was argued, was not admissible under the exception to the hearsay rule in respect of the executive statements of co-conspirators. Second, the cross-examination of Sookraj established definitively that she was not in a position to identify that the appellant was present, after Khan had persuaded Sookraj to lay the false complaint. Third, the trial court placed too much reliance on the respects in which Sookraj corroborated Sugen Naidoo’s evidence, but discounted the contradictions in their respective testimonies. [122] As with count 2, Sookraj did lay a false complaint against Dr Sewram. The question is whether she did so at the instance of the appellant. Sookraj gave evidence that on 21 August 2012 she was working at her step-father’s tuck shop. Her step-father, Khan, came to her and asked her to lay a false complaint of sexual assault against Dr Sewram. She agreed to do so. During her evidence-in-chief, Sookraj said that her step-father then jumped into a vehicle, a white double-cab, in which two other men were seated, one of whom she identified as being the appellant. Khan returned, explained to Sookraj what she was to do, and drove her to Dr Sewram’s surgery. [123] The cross-examination of Sookraj, understandably, devoted much attention to her identification of the appellant. The defence produced a dossier of photographs, taken by the defence team, of the tuck shop and the area in front of the tuck shop where the double-cab would have been parked. Sookraj was asked to mark on one of the photographs where the double-cab had parked. Defence counsel explored with Sookraj her line of sight from within the tuck shop to the parked vehicle. Although the questioning sought to elicit from Sookraj that her line of sight to the vehicle was compromised, Sookraj was adamant that she had a clear view of the double-cab and its occupants. [124] The appellant submitted before this Court that the photographs shown to Sookraj prove that Sookraj could not have seen the face of the driver of the double-cab. That is not so. Sookraj was asked to consider photographs 1, 4 and 5. Sookraj explained that the large windows at the front of the tuck shop were open and she had an unimpeded view. It was put to Sookraj that there was something of a downward inclination from the tuck shop to the road in which the vehicle was parked, and that distance was 12 meters, as marked on photograph 5. However, Mr Sangham, the appellant’s attorney who conducted the cross-examination, had earlier stated that the distance was 4 meters. Sookraj accepted that the double-cab was parked in the road outside of the tuckshop, with the left side of the vehicle in her line of sight. She stated that the window of the double-cab was rolled down, and that she had a clear view. [125] A careful consideration of the evidence does not establish that Sookraj could not have identified the appellant in the double-cab. There was no inspection in loco to determine in fact what was visible from the tuck shop. The distances depicted on the photographs were not verified. Indeed, the defence’s own estimates of the distance from the tuck shop to the vehicle were at odds. Sookraj was unshaken as to what she saw. She had an unimpeded view from her standing position in the tuck shop to the double-cab, with its window open. We can find no error on the part of the trial court in accepting Sookraj’s identification of the appellant as being seated in the double-cab when Khan got into the vehicle. It was common ground that the appellant owned a white double-cab. [126] This finding has important consequences. First, it entirely undermines the appellant’s evidence that he had nothing to do with the false charge laid against Dr Sewram. Second, it corroborates Sugen Naidoo’s evidence that Khan was hired at the instance of the appellant, in the first place to assault Dr Sewram, but, as the plan evolved, to persuade Sookraj to lay the false complaint of sexual assault. Third, the identification of the appellant at the very place and time when Khan persuaded Sookraj to go along with the false complaint renders the appellant’s account unworthy of belief, both as to his lack of involvement and his explanation that the complaint was initiated by Sugen Naidoo so as to extort money from him. [127] Nor is the appellant’s complaint that no reliance may be placed on what Khan is reported to have said to Sookraj of any moment. There is no dispute that Sookraj agreed to make the complaint upon the request of her step-father. In any event, that Khan made the request is not hearsay evidence. That a statement was made is admissible, it is the truth of the statement that is subject to hearsay objection. And finally, the defence cross-examined Sookraj on what Khan had said to her. The defence can hardly object to evidence as hearsay that it has elicited. [128] The appellant also raised points of contradiction between the evidence of Sugen Naidoo and Sookraj. These contradictions reference when the false complaint was laid and whether a meeting had taken place between the appellant, Sugen Naidoo, Khan, Sookraj and her mother to discuss the making of a false charge. Allowing for these contradictions does not negate the force of what Sookraj’s evidence does corroborate. In particular, that Khan persuaded Sookraj to lay the complaint, and that the appellant was involved in having Khan do so. Why else was the appellant in the double-cab with Sugen Naidoo and Khan on that very day? [129] Nor are the internal inconsistencies in the evidence of Sugen Naidoo of sufficient import to undermine the central account given by him, that is, that the plan to target Dr Sewram with the false complaint of sexual assault was undertaken with the full involvement of the appellant, so as to satisfy his desire for revenge. The issues raised in cross-examination, as to when Sugen Naidoo first met Khan, and how much Khan was paid, do not cast serious doubt on the convergence of evidence that explains how Khan came to recruit his step- daughter in a plan to target Dr Sewram, and with what end in mind. [130] For these reasons, we do not consider that the conviction of the appellant on this count was incorrect, and the appeal must fail. Count 5: assault with intent to do grievous bodily harm [131] The State charged the appellant with assault with intent to do grievous bodily harm. The basis of this charge was that the appellant hired assailants to shoot Dr Sewram with a high-powered paintball gun purchased by the appellant. On 24 October 2012, Dr Sewram was shot several times with this gun, using solid projectiles, and suffered certain injuries. [132] The trial court gave detailed consideration to the evidence of Sugen Naidoo. Sugen Naidoo testified that the plan to shoot Dr Sewram with a paintball gun was conceived with the appellant. Sergeant Ricky Naidoo and Sergeant Maharaj were recruited to carry out the assault. Sugen Naidoo explained how he, the appellant, Ricky Naidoo and Maharaj undertook an expedition to buy the paintball gun and the paintballs. Ricky Naidoo and Maharaj then shot Dr Sewram. Sugen Naidoo was present at the police station, shortly after the assault, when Dr Sewram entered, ‘totally disorientated and dazed and had red marks on his face and neck’. Dr Sewram laid a charge against the appellant. The trial court found that, although Sugen Naidoo was a single witness, upon a conspectus of the evidence, and in the light of the probabilities, the appellant was guilty of having orchestrated the assault. [133] There is no doubt that Dr Sewram was assaulted on 24 October 2012. Sugen Naidoo implicated Ricky Naidoo, Maharaj and the appellant in the assault. There are two pieces of evidence, which the appellant submitted introduced a reasonable doubt, that should have been heeded by the trial court. [134] First, the appellant’s cell phone records reflected that on the day that Sugen Naidoo said that the appellant joined the expedition to buy the paintball gun in Pinetown, the appellant never left Pietermaritzburg. This evidence casts doubt on the testimony of Sugen Naidoo as a single accomplice witness. [135] Second, Ricky Naidoo and Maharaj were not called to give evidence at the trial. Their witness statements were handed in by consent at the trial. These statements not only denied any involvement in the assault upon Dr Sewram, but recanted their earlier statements, which they claimed were obtained under duress. [136] The witness statements of Ricky Naidoo and Maharaj were admitted into evidence at trial. There are many questions that arise from these statements. But their denial of complicity leaves the assault of Dr Sewram without an assailant. The appellant has an alibi for the expedition to purchase the paintball gun. This evidence accordingly introduces a reasonable doubt as to the appellant’s guilt. He is entitled to the benefit of that doubt. [137] In the result, we find that the appellant’s conviction cannot stand in respect of count 5, the appeal succeeds, and we hold that he is acquitted in respect of count 5. Conclusion on the merits [138] Our analysis yields the following result. The appeal succeeds in respect of the appellant’s convictions on counts 3 and 5. The appellant is entitled to an acquittal on these counts. The appeal fails on the remaining counts, that is, counts 1, 2, and 4. On count 6, the appellant’s conviction on the charge of conspiracy is set aside and the appellant is guilty of the alternative charge of incitement to murder. [139] In coming to this conclusion, we return to the overarching question we posed at the outset: was the pattern of events directed against Dr Sewram the result of the appellant’s orchestration, or does some other agency account for these sequential and interconnected outcomes? [140] In our view, the evidence provides overwhelming proof that it was the appellant who sought and, in many instances brought about, the actions against Dr Sewram that culminated in his murder. First, numbers of witnesses independently confirmed the appellant’s obsessive desire to take revenge upon Dr Sewram. Second, apart from the testimony of Sugen Naidoo, which required the application of the cautionary rules, the evidence of Gounder, Emersleben, Shaik-Cassim, and Sithebe and Sookraj directly implicated the appellant in securing that hostile actions be taken against Dr Sewram. Third, the call placed by Treasurer to the appellant and the chilling words ‘the job was completed’ incriminated the appellant in the murder of Dr Sewram. This was the final result of the co-ordinated actions taken by the appellant against Dr Sewram. That Sugen Naidoo testified to the appellant’s discussions with him as to Treasurer’s suitability to murder Dr Sewram, well in advance of the murder, provides further proof of the appellant’s complicity in the murder. Fourth, as we have found, the appellant’s account as to what brought about the serial hostilities against Dr Sewram entirely lacks plausibility. [141] Taken together, the evidence shows beyond reasonable doubt that the overarching question we posed must be answered thus: it was indeed the appellant who was responsible for the pattern of actions taken against Dr Sewram. This answer provides further support for the convictions that have been sustained on appeal. Sentence [142] What remains for consideration are the sentences imposed on the appellant by the trial court. The well-established triad,5 namely the criminal, the crime and the interests of the community, are relevant in determining an appropriate sentence. [143] Section 51(1) of the Criminal Law Amendment Act 105 of 1997 (CLAA) prescribes a minimum sentence on count 1 of life imprisonment. However, s 51(3) of the CLAA provides that a lesser sentence may be imposed if the court is satisfied that substantial and compelling circumstances exist. The trial court referred to S v Vilakazi [2008] ZASCA 87; 2009 (1) SACR 552 (SCA), at para 15, where this Court dealt with the proper approach to determining whether there are substantial and compelling circumstances that warrant a deviation from the minimum sentence prescribed by the CLAA. This Court said that it is incumbent upon a court in every case, before it imposes a prescribed sentence, to assess, upon a consideration of all the circumstances of the particular case, whether the prescribed sentence is proportionate to the particular offence. In addition, in ultimately deciding whether substantial and compelling factors exist, one must look at the mitigating and aggravating factors, and consider the cumulative effect thereof. [144] The trial court found that there were substantial and compelling circumstances and imposed a sentence of 25 years’ imprisonment on count 1. 5 S v Zinn 1969 (2) SA 537 (A) at 537-540G. On counts 2, 3 and 5, the appellant was sentenced to 18 months’ imprisonment; on count 4, the appellant was sentenced to 2 years’ imprisonment; and on count 6, he was sentenced to 5 years’ imprisonment. Counts 2, 3, 4 and 5 were ordered to run concurrently with count 1. The appellant was thus sentenced to an effective 30 years’ imprisonment. [145] As mentioned earlier in the judgment on the merits, this Court has acquitted the appellant on counts 3 (defeating or obstructing the course of justice; and on count 5 (assault with intent to cause grievous bodily harm). On count 6, this Court has set aside the conviction of conspiracy to commit murder and the appellant has been found guilty of the alternative charge of incitement to murder Dr Sewram. It is necessary to consider the sentences imposed by the court a quo on the remainder of the counts, namely counts 1, 2, 4 and 6. [146] In considering sentencing, this Court’s powers are limited. This Court cannot usurp the sentencing discretion of the trial court. In S v Bogaards [2012] ZACC 23; 2012 BCLR 1261 (CC), the Constitutional Court held: ‘Ordinarily, sentencing is within the discretion of the trial court. An appellate court’s power to interfere with sentences imposed by courts below is circumscribed. It can only do so where there has been an irregularity that results in a failure of justice; the court below misdirected itself to such an extent that its decision on sentence is vitiated; or the sentence is so disproportionate or shocking that no reasonable court could have imposed it. A court of appeal can also impose a different sentence when it sets aside a conviction in relation to one charge and convicts the accused of another.’ [147] The main submissions put forward on behalf of the appellant are that the sentence of 25 years’ imprisonment is shockingly inappropriate, and that the period the appellant has served, namely 18 months of that sentence while awaiting this appeal, should be taken into account. [148] The appellant did not testify in mitigation of sentence in the trial court, but through his legal representatives made submissions which the court considered. The trial court considered the personal circumstances of the appellant in great detail, his upbringing, and his family history. To have a complete and balanced picture, the trial court also took into account the reports of expert witnesses, and importantly the impact and effect of the crimes on the deceased’s family, the nature of the crime, the seriousness of the offences, their cumulative effect and the interests of society, including the possibility of rehabilitation. Accordingly, the trial court took the following into account. The appellant was 42 years of age at the time of sentencing and he was a first offender. He was a useful member of society and an accomplished businessman. He had grown up in a staunchly conservative Hindu family. The appellant suffered from poor health, and was diagnosed with hypertension and a non-occlusive coronary disease. He also suffered from depression. He had been married for eleven years until the marriage between him and his wife ended in divorce. Even though, in terms of the divorce agreement of settlement, Mr and Mrs Soni were declared co-holders of parental rights and responsibilities in regard to the two children born of the marriage, the divorce was settled giving recognition to the appellant being the primary caregiver of his daughter. Both minor children were financially depended on him. He was also a community orientated person contributing to charities and feeding schemes. [149] In deciding on an appropriate sentence on count 1, it is important to bear in mind that the appellant persisted on exacting revenge on the deceased and ultimately conspired with and embarked on a campaign to kill the deceased, and which resulted in the cold-blooded murder of the deceased. Never once did he shrink back from a campaign involving a number of schemes, and ultimately procured the murder of the deceased through the hands of hired assassins. He embarked on this conduct over a period of time until he avenged the deceased’s alleged affair with his wife, using corrupt policemen to do his bidding, and using money as a means to an end. [150] After due consideration of all the facts and circumstances relevant to sentencing, in our view the sentence of 25 years’ imprisonment imposed on count 1 by the trial court for the murder of Dr Sewram does not appear to be shockingly inappropriate. It is not disproportionate to the seriousness of the crime committed by the appellant. It is an appropriate and salutary sentence which is balanced and fair, and which also takes into account the moral indignation of the community. Consequently we find no reason to interfere with the sentence on count 1. [151] The sentences imposed on the appellant with respect to counts 2 and 4 (defeating the course of justice) of 18 months’ and 2 years’ imprisonment respectively, in the circumstances of this case, do not appear to be excessive. On both counts a false complaint was laid against Dr Sewram at the instance of the appellant, in order to satisfy the appellant’s desire to exact revenge on Dr Sewram. Thus, the sentence imposed by the court a quo on counts 2 and 4 appear to be appropriate and justified. [152] In regard to count 6, this Court has found that the appellant is not guilty of the crime of conspiracy to kill Dr Sewram, but is guilty of the alternative charge of the incitement to murder Dr Sewram. The trial court imposed a sentence of 5 years’ imprisonment on count 6. In the circumstances of this case, the appellant clearly sought to influence Sithebe to kill Dr Sewram. He offered Sithebe a large reward and pointed out the two surgeries of Dr Sewram. The conviction of the appellant on the alternate charge of incitement to murder Dr Sewram is no less grave than the trial court’s conviction of the appellant on the conspiracy to murder Dr Sewram. Consequently, we consider a sentence of 5 years’ imprisonment to be appropriate in respect of the conviction for the incitement to commit murder. [153] Furthermore, in our view, given the circumstances under which the offences on counts 2, 4 and 6 occurred, they are all closely linked to count 1. All these offences form part of the scheme which the appellant embarked upon, carefully planned, and which ultimately culminated in the commission of the offence on count 1. In the light of the cumulative effect of the sentences imposed, the sentences on counts 2, 4 and 6 are to run concurrently with the sentence on count 1. [154] It has been submitted on behalf of the appellant that this Court should take into account the period of imprisonment served by the appellant after his conviction and sentence by the trial court. The appellant was sentenced by the trial court in October 2018. The relevant records in the Registrar’s office indicate that the appellant was released on bail pending appeal by this court on 19 March 2020. The appellant has thus served approximately 17 months of the sentence imposed on him before his release on bail pending the outcome of the appeal. We are of the view that in such circumstances, it would be just and equitable for the appellant to receive credit for the period already served, and that this be taken into account in determining the effective sentence. In doing so, we are mindful of the loss that the deceased’s family have suffered. [155] The result is that the appellant is sentenced to an effective 23 years and 7 month’s imprisonment, which period will run from the date of the further imprisonment of the appellant pursuant to this order. [156] In the result, the following order is made: The appeal against convictions and sentences is upheld in part and dismissed in part, as follows: 1. The appeal against convictions and sentences is upheld in part and dismissed in part, as follows: 1.1 The appeal against the conviction and sentence on count 1 is dismissed; 1.2 The appeal against the convictions and sentences on counts 2 and 4 is dismissed; 1.3 The appeal against the convictions and sentences on counts 3 and 5 is upheld; 1.4 The appeal against the conviction on count 6 of conspiracy to murder is upheld, with the conviction substituted with the alternative count, namely, incitement to commit murder; 1.5 The appeal against sentence on count 6 is upheld to the extent reflected in the substituted order that appears hereunder; 1.6 The effective sentence is reduced to the extent reflected in the substituted order. 2. The order of the court below is substituted as follows: ‘(a) In respect of count 1: Murder read with s 51(1) and Part 1 of Schedule 2 of the Criminal Law Amendment Act 105 of 1997, the accused is found guilty; (b) In respect of count 2: Defeating or obstructing the course of justice, the accused is found guilty; (c) In respect of count 3: Defeating or obstructing the course of justice, the accused is acquitted; (d) In respect of count 4: Defeating or obstructing the course of justice, the accused is found guilty; (e) In respect of count 5: Assault with intent to do grievous bodily harm, the accused is acquitted; (f) In respect of count 6: Conspiracy to commit murder, alternatively, incitement to murder, the accused is found guilty of incitement to murder; (g) In respect of count 1, the accused is sentenced to 25 years’ imprisonment; (h) In respect of count 2, the accused is sentenced to 18 months’ imprisonment; (i) In respect of count 4, the accused is sentenced to 2 years’ imprisonment; (j) In respect of count 6, the accused is sentenced to 5 years’ imprisonment; (k) The sentences imposed on counts 2, 4 and 6 are to run concurrently with the sentence on count 1. The accused is sentenced to an effective 23 years’ and 7 months’ imprisonment.’ 3. The sentence of 23 years and 7 months’ imprisonment referred to in (k) above will run from the date of the further imprisonment of the appellant pursuant to this order.’ 4. The National Commissioner for Correctional Services is directed to ensure that a social worker in the employ of the Department for Correctional Services visits the children of the accused, Mr Soni, regularly during his incarceration, and submits reports to the office of the National Commissioner as to whether the children are in need of care and protection as envisaged in section 150 of the Children’s Act 38 of 2005 and, if so, to take the steps required by that provision. 5. The Department of Correctional Services is to give consideration to the recommendation in the report of Floss Mitchell relating to the manner in which contact visits between the accused and the minor children are to take place, and, where possible, to facilitate the assistance of a social worker during such visits. 6. The accused is declared unfit to be licenced for a firearm in terms of the provisions of the Firearms Control Act 60 of 2000. ________________________ H SALDULKER JUDGE OF APPEAL ________________________ D UNTERHALTER ACTING JUDGE OF APPEAL Appearances: For appellant: M Hellens SC (with him J E Howse SC) Instructed by: Subash Maikoo & Associates Inc, Pietermaritzburg Honey Attorneys, Bloemfontein For respondent: J du Toit Instructed by: Director of Public Prosecutions, Pietermaritzburg 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: 5 May 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 Rajivee Soni v The State (465/2019) [2021] ZASCA 57 (5 May 2021) Today, the Supreme Court of Appeal (SCA) upheld in part and dismissed in part an appeal against convictions and sentences by the appellant, Mr Rajivee Soni, to the extent reflected in the substituted order of the SCA for that of the KwaZulu-Natal Division of the High Court, Pietermaritzburg (the trail court). On 19 September 2018, Mr Rajivee Soni was convicted on all six counts charged, namely on count 1, the murder of Dr Bhavish Sewram; on counts 2, 3, and 4, for defeating or obstructing the course of justice; on count 5, for assault with intent to cause grievous bodily harm; and on count 6, for contravening s 18(2)(a) of the Riotous Assemblies Act 17 of 1956 (conspiracy to commit murder). On 26 October 2018, Soni was consequently sentenced to an effective 30 years’ imprisonment. On 11 April 2019, the trial court granted Soni leave to appeal to the SCA all the convictions and the sentences imposed. On 19 March 2020, the SCA granted Soni bail pending the outcome of the appeal. The facts of the matter were as follows: On 13 May 2013, Dr Sewram was shot and killed outside his surgery in Raisethorpe, Pietermaritzburg. Brian Treasurer, Sabelo Advocate Dlamini and Mfaniseni Wiseman Nxumalo were convicted of Dr Sewram’s murder before Soni’s trial had commenced. It was common ground that Dr Sewram was assaulted, arrested and charged on the basis of false accusations of sexual assault, and was ultimately murdered by assassins acting for reward. The overarching issue to be determined was whether Soni orchestrated these actions against Dr Sewram to seek revenge for Dr Sewram allegedly having an affair with Soni’s wife, or whether there was an alternative explanation that was reasonably possibly true. The SCA found that the evidence provided overwhelming proof that it was Soni who sought and, in many instances brought about, the actions against Dr Sewram that culminated in his murder. This was on the basis that, firstly, a number of witnesses independently confirmed Soni’s obsessive desire to take revenge upon Dr Sewram; secondly, testimony evidence directly implicated Soni in securing that hostile actions be taken against Dr Sewram; thirdly, the cell phone call placed by Treasurer to Soni and the words ‘the job was completed’ incriminated Soni in the murder of Dr Sewram; and fourthly Soni’s account as to what brought about the serial hostilities against Dr Sewram entirely lacked plausibility, and was not reasonably possibly true. In the result, the SCA held that the appeal failed on counts 1, 2, and 4. Murder and two of the charges for defeating or obstructing the course of justice, respectively. On count 6, Soni’s conviction on the charge of conspiracy was set aside and Soni was instead found guilty of the alternative charge of incitement to murder. The SCA held further that the appeal succeeded in respect of Soni’s convictions on counts 3 and 5. He was thus entitled to an acquittal on these counts. These were in respect of one of the charges for defeating or obstructing the course of justice, and for assault with intent to cause grievous bodily harm. In respect of sentence, the SCA considered the sentences imposed by the trail court on the remainder of the counts for which Soni was not acquitted, namely counts 1, 2, 4 and 6. With regard to count 1, for murder, the SCA found that the sentence of 25 years’ imprisonment imposed by the trial court was not shockingly inappropriate. Soni had persisted on exacting revenge on Dr Sewram and ultimately conspired with and embarked on a campaign to kill him, and which resulted in the cold-blooded murder of Dr Sewram. Thus, the SCA held that 25 years’ imprisonment on count 1 was an appropriate sentence in the totality of the circumstances. The SCA found that the sentences imposed by the trial court on counts 2 and 4 (defeating the course of justice), in the circumstances of this case, were not excessive. On both counts a false complaint was laid against Dr Sewram at the instance of Soni, in order to satisfy Soni’s desire to exact revenge on Dr Sewram. Thus, the sentences of 18 months’ and 2 years’ imprisonment, respectively, were appropriate and justified. In regard to count 6, the SCA found that the conviction of Soni on the alternative charge of incitement to murder Dr Sewram was no less grave than the trial court’s conviction of Soni on the conspiracy to murder Dr Sewram. The trial court imposed a sentence of 5 years’ imprisonment on count 6. Accordingly, the SCA held that a sentence of 5 years’ imprisonment was warranted in respect of the conviction for the incitement to commit murder. The SCA found further that, given the circumstances under which the offences on counts 2, 4 and 6 had occurred, they were all closely linked to count 1. All these offences formed part of the scheme which Soni embarked upon, carefully planned, and which ultimately culminated in the commission of the offence on count 1. Thus, the SCA held that, in the light of the cumulative effect of the sentences imposed, the sentences on counts 2, 4 and 6 were to run concurrently with the sentence on count 1. However, the SCA found that it would be just and equitable for Soni to receive credit for the period of 17 months that he had already served before his release on bail pending the outcome of the appeal. The result was an effective sentence to 23 years and 7 months’ imprisonment. ~~~~ends~~~~

3396

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 765/2018 In the matter between: AFRIFORUM NPC APPELLANT and CHAIRPERSON OF THE COUNCIL OF THE UNIVERSITY OF SOUTH AFRICA FIRST RESPONDENT CHAIRPERSON OF THE SENATE OF THE UNIVERSITY OF SOUTH AFRICA SECOND RESPONDENT THE UNIVERSITY OF SOUTH AFRICA THIRD RESPONDENT Neutral citation: AfriForum NPC v Chairperson of the Council of the University of South Africa & others (765/2018) [2020] ZASCA 79 (30 June 2020) Coram: MAYA P, PETSE DP, LEACH JA AND KOEN AND EKSTEEN AJJA Heard: 27 November 2019 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 18h00 on 30 June 2020. Ukuwiswa: Esi sigwebo sawiswa ngeintanethi, ngokusiwa kubameli- mthethweni bamacala onke ngeimeyili, nangokupapashwa kwisiza sonxibelelwano seNkundla Yezibheno Engentla nangokufakwa kuSAFLII. Umhla nexesha lokuwiswa kwaso uthathwa njengokuba ngulo: 18h00 ngowama 30 kweyeSilimela 2020. [1] Summary: Education – university language policy – whether historically English/Afrikaans university’s decision to replace its dual-medium language policy with English-only policy infringed principle of legality and unlawful – held that the university failed to establish that it was not reasonably practicable to continue offering tuition in Afrikaans under s 29(2) of the Constitution – appeal upheld. Isishwankathelo: Imfundo – umgaqo- nkqubo wolwimi weyunivesithi – ingaba isigqibo seyunivesithi eyayikade ifundisa ngesiNgesi nangeAfrikaans sokuyeka lo mgaqo-nkqubo kalwimi-mbini wayo isebenzise umgaqo-nkqubo othi IsiNgesi- kuphela sacinezela umgqaliselo wobumthethweni saba ke asikho mthethweni – kugqitywe ukuba iyunivesithi yoyisakele ukucacisa ukuba bekungayi kuba nokwenzeka lula ukuqhutywa kufundiswa ngeAfrikaans phantsi kwecandelwana u-s 29(2) woMgaqo-siseko – isibheno savunyelwa. ORDER UMYALELO On appeal from: The Gauteng Division of the High Court, Pretoria (Keightley J sitting as court of first instance): 1 The appeal is upheld with costs, including the costs of two counsel. Kwisibheno esivela: kwiSahlulo saseGauteng seNkunda Ephakamileyo, eTshwane (uKeightley J ehleli njengenkundla yokuqala): 1 Isibheno sivunyiwe, sihamba neendleko eziquka iindleko zabathetheleli bezomthetho ababini. 2 The order of the court a quo is set aside and replaced with the following: ‘(a) the resolutions of the Council and Senate of the University of South Africa to approve a new language policy on 28 April and 30 March 2016, respectively, are set aside; (b) the new language policy adopted by the University of South Africa is declared unconstitutional and unlawful and is set aside to the extent that Afrikaans has been removed as a language of learning and tuition; (c) the University of South Africa shall prominently publish on its website and in three major Afrikaans newspapers in South Africa and transmit by email to all its students a notice: (i) containing a full list of the modules that were on offer in Afrikaans as at 28 April 2016; (ii) offering all prospective students for the next academic year admission in such modules as presented on first year level; (iii) offering all existing students, if they were enrolled in any one of those courses or would have enrolled for the subsequent year 2 Umyalelo wenkundla ebiqalile ubekelwa bucala, ze kubekwe endaweni yawo lo ulandelayo: ‘(a) izigqibo zeBhunga nezeSinethi zeYunivesithi yaseMzantsi Afrika zokuvumela umgaqo-nkqubo wolwimi omtsha ngowama-28 kuTshaziimpuzi nowama-30 kweyoKwindla ngo2016, ngokulandelelana, zibekelwa bucala; (b) kuyabhengezwa ke apha ukuba lo mgaqo- nkqubo mtsha usekwe yiYunivesithi yaseMzantsi Afrika awuhambisani noMgaqo-siseko futhi awukho mthethweni; waye ke ubekelwa bucala ngokubhekisele kumbandela wokuba iAfrikaans iyekisiwe ukuba lulwimi lwayo lokufunda nokufundisa; (c) iYunivesithi yaseMzantsi Afrika iya kupapasha ngokugqamileyo kwisiza sonxibelelwano sayo nakumaphephandaba amakhulu, amathathu eAfrikaans aseMzantsi Afrika ize idlulisele nangeimeyili kubo bonke abafundi bayo isaziso esinje: (i) esinoluhlu olupheleleyo lweemodyuli ezazizezokufundiswa ngeAfrikaans ngomhla wama-28 kuTshaziimpuzi ngo-2016; (ii) esivumela bonke abafundi abafuna ukufunda kulo nyaka-zifundo uzayo ukuba bazibhalisele ezo modyuli zikwinqwanqwa lokuqala; (iii) esithi bonke abafundi abahleli bekho, ukuba babeyibhalisele nokuba yeyiphi kwezo khosì okanye babeza kubhalisela course available in Afrikaans, but had perforce to follow the module in English, a choice to enrol on the basis that they may follow the module in Afrikaans until completion of their studies; (iv) all the modules mentioned above will be presented in full in the following academic years until the language policy has been lawfully amended, if at all. (d) the University of South Africa shall pay the costs of the application.’ ukufunda ikhosì yonyaka olandelayo ukuba yayikho ngeAfrikaans, kodwa banyanzeleka ukuba bayifunde loo modyuli ngesiNgesi, bayavunyelwa ukuba baphinde bazibhalisele ezo modyuli, kuxelwe ukuba baya kuzifunda ezo modyuli ngeAfrikaans bade bazigqibe izifundo zabo; (iv) zonke ezi modyuli zikhankanywe apha ngentla ziya kubakho ngokuzeleyo kwakule minyaka-zifundo izayo ude umgaqo-nkqubo wolwimi ube ulungisiwe ngokwasemthethweni, ukuba iyenzeka ke loo nto. (d) iYunivesithi YaseMzantsi Afrika iza kuhlawula iindleko zesi sicelo.’ JUDGMENT ISIGWEBO Maya P: (Petse DP, Leach JA, Koen and Eksteen AJJA concurring): Maya P: (Petse DP, Leach JA, Koen and Eksteen AJJA bevumelana naye): [1] This case brings into sharp focus remarks which were recently made by Chief Justice Mogoeng in AfriForum and Another v University of the Free State.1 In that matter the appellant similarly challenged the validity of a university’s decision to replace a dual Afrikaans/English policy with an English-only policy. The Chief Justice said:2 [1] Eli tyala liphuhlisa amazwi abesandula ukuthethwa yiJaji Eyongameleyo uMogoeng kwimbambano ebizwa ngokuthi, AfriForum and Another v University of the Free State. Kulaa mbambano, umbheni wenza into efana nale, waphikisana nesigqibo seyunivesithi sokuyekisa umgaqo-nkqubo kalwimi-mbini weAfrikaans/nesiNgesi kumiselwe umgaqo- 1 AfriForum and Another v University of the Free State [2017] ZACC 48; 2018 (2) SA 185 (CC). See also Daniels v Scribante and Another [2017] ZACC 13; 2017 (4) SA 341 (CC) para 154. 2 AfriForum ibid paras 3-4. ‘Issues around language policy are as emotive as the language itself. This would be especially so where plans are afoot to effect changes that would water down the role or usage of language, particularly Afrikaans. For, Afrikaans has for many years been associated with dominion or power. Those whose mother tongue it is once ruled this country. And everything official had to also be in Afrikaans. It was a compulsory subject for all African learners and all law students. In at least five of our universities, Afrikaans was the only medium of instruction for decades. To get to the point where Afrikaans now appears to be driven to virtual extinction as a university medium of instruction, was always going to give rise to disaffection, controversy or a suspicion that a less than innocent agenda was being pursued’’ And he continued:3 ‘Extremely difficult, sensitive and potentially divisive as the language issue in general, and Afrikaans in particular, was and is bound to be for many years to come, the historical role of nkqubo othi IsiNgesi-kuphela. Ijaji Eyongameleyo yathi: ‘Imicimbi emalunga nomgaqo-nkqubo ichukumisa iimvakalelo kanye njengokuba ulwimi nalo lunjalo. Le nto iba njalo ngakumbi apho kukho izicwangciso zokuzisa iinguqu eziya kunciphisa indima okanye ukusebenziseka kolwimi olo, ngakumbi iAfrikaans. Kaloku, iAfrikaans inonxulumano lweminyaka emininzi nokuphatha- ngobungangamsha okanye namadla egunya. Aba bantu ilulwimi lwabo lweenkobe, kaloku, babekhe balawula kweli izwe. Ke yonke into eyeyasemthethweni kwakunyanzeliswa ukuba ibe ngeAfrikaans. Yaye isisifundo esinyanzelekileyo kubo bonke abantwana besikolo abamnyama, nabo bonke abafundi bezomthetho. Ubuncinci, kwakukwiiyunivesithi ezintlanu zalapha apho iAfrikaans kwakukuphela kolwimi lokufunda nokufundisa amashumi ngamashumi eminyaka. Ke ukufikelela kule ndawo yokuba kubonakale ngathi iAfrikaans ityhalelwa ekubeni inyamalale, kungabi safundiswa ngayo eziyunivesithi, kuyinto ebisoloko iya kuvusa ukungevani, neempikiswano, okanye kubekho ukukrokrela ukuba kukho into ekujongwe kuyo engenabunyulu ncam.’ Waqhubeka ke wenjenje: Nakuba umcimbi weelwimi ngokubanzi, ngakumbi olu lweAfrikaans, wawusoloko, nangoku usasoloko uya kuhlala uyinto enzima ngokugqithisileyo, enobuethe-ethe, ekulula 3 Ibid paras 4-5. Afrikaans inescapably has to be confronted whenever possibilities of its use or disuse as a language of instruction are explored. After all, we come from a racially divided past to which Afrikaans was inextricably linked … The use of Afrikaans is thus one of the most likely areas of fierce disputation. “That is part of the challenge of healing, reconciliation, and reparation that our society will continue to face for a considerable time to come”. It is a difficult transformational issue that requires a meticulous and detached handling by all true defenders and ambassadors of our constitutional vision. We all must consciously guard against the possibility of a subliminal and yet effectively prejudicial disposition towards Afrikaans setting in, owing only to its past record as a virtual synonym to “racism and racially based practices”.’ ukuba idale iyantlukwano ngoku nakwiminyaka emininzi esezayo, kuyanyanzeleka, ngokungenakuphepheka, ukuba indima yeAfrikaans kwimbali yeli ixoxwe qho kwakubakho isizathu sokugoca-goca amathuba okusetyenziswa okanye okuyeka ukusetyenziswa kwayo njengolwimi lokufundisa. Kaloku, sivela kwixesha apho sasikade sahlula-hlulwe ngokobuhlanga, ixesha eyayinxulumene nalo iAfrikaans ngokunganamululekiyo … Usetyenziso lweAfrikaans ke ngoko luyenye yemimandla engavusa iminyele nengxoxo- mpikiswano ebukhali. “Ke leyo yinxalenye yobunzima obuhamba nokuphiliseka, noxolelwaniso, nezilungiso; ezi zizinto uluntu esilulo oluseza kuhlala lujamelana nazo, ixesha elide”. Yingxaki esa kwinguqu, kodwa inzima, yaye ifuna ukuba iphathwe ngobuchule nokuzibamba imvakalelo ngabo bonke abavikeli noonozakuzaku bombono womgaqo-siseko wethu. Sonke masenze ngabom ukuzigada singabi nentliziyo engathi iyalungisa kodwa ibe eyona nto iphumelela ukuyenza ikukuphatha kakubi iAfrikaans, ngenxa yesizathu esinye kuphela, esi sokuba yayifaniseka ncam “nobuhlanga kunye nezenzo ezazisekwe kucalulo ngobuhlanga”.’ [2] This caution is particularly relevant in this appeal. The same party, AfriForum NPC, challenges the decision of the Gauteng Division, Pretoria (Keightley J). The high court dismissed AfriForum’s application in which it sought the review and setting aside of the decisions of the Senate and Council of the third respondent, the University of South [2] Esi silumkiso singena kakuhle ngakumbi kwesi sibheno. Kwa eli qela linye, iAfriForum NPC, liyaphikisana nesigqibo seSahlulo SaseGauteng, eTshwane (esika Keightley J). Le Nkundla ePhakamileyo yasichitha isicelo seAfriForum apho yayicela ukuphononongwa-kwakhona okubekwa bucala kwezigqibo zeSinethi neBhunga Africa (UNISA), relating to its adoption of a new language policy. In terms of that policy, which the Senate recommended and was approved by the Council, UNISA adopted English as its sole language of learning and tuition (LOLT) and departed from its previous policy in terms of which both English and Afrikaans were employed as the LOLT. zommangalelwa wesithathu, iYunivesithi YaseMzantsi Afrika (iUNISA), ezazithetha ngokumisela kwayo umgaqo-nkqubo omtsha. Ngokwalaa mgaqo-nkqubo, owakhuthazwayo yiSinethi, waze wavunywa liBhunga, iUNISA yamisela isiNgesi saba kuphela kolwimi lwakhona lokufunda nokufundisa (iLOLT, ngesiNgesi) yaza ke yesuka kumgaqo-nkqubo wayo wangaphambili wona owawuvumela ukuba zombini ezi lwimi, isiNgesi neAfrikaans, zisetyenziswe njengeelwimi zokufunda nokufundisa. [3] The review application was partly based on grounds rooted in the Promotion of Administrative Justice Act 3 of 2000 (PAJA), on the assumption that the impugned decisions constituted administrative action. However, after the institution of the review application, this Court4 and the Constitutional Court5 held that a language policy decision taken by the University of the Free State did not constitute administrative action within the meaning of PAJA. AfriForum then abandoned its reliance on PAJA. But it persisted with its challenge on the principle of legality. It nonetheless failed to persuade the high court, which then granted leave to appeal its decision to this Court. [3] Isicelo sokujongwa-kwakhona sasisekelwe, nganxanye, kwinto ethethwa nguMthetho Wesi-3 ka-2000 Wokuthazo Lobulungisa Kwezolawulo (iPAJA), ngokuqikelela ukuba ezi zizathu ziphikiswayo zazisisenzo solawulo. Kodwa, emva kokuba sifakiwe isicelo sokujongwa- kwakhona, le Nkundla kunye neNkundla YoMgaqo-siseko zathi isigqibo esimayela nomgaqo-nkqubo wolwimi esasithathwe yiYunivesithi YaseFree State sasingesosenzo solawulo ngokwentsingiselo yalo Mthetho, iPAJA. IAfriForum ke ngoko yayeka ukwayama ngePAJA. Kodwa yema nkqi ayajika ekuceleni umngeni ngokomgqaliselo wasemthethweni. Noko kunjalo, yoyisakala ukuyiqondisa iNkundla ePhakamileyo, 4 In University of the Free State v AfriForum and Another [2017] ZASCA 32; 2017 (4) SA 283 (SCA) para 18. 5 AfriForum fn 1 para 35. nkundla leyo eyayinika imvume yokuba ibhenele kule Nkunda malunga nesi sigqibo. [4] UNISA is a distance university with a long and distinguished history. It was born of the University of the Cape of Good Hope, which was established in 1877, and was incorporated into a correspondence university in 1959. In 2004 it merged with two other major distance educational institutions, Technikon Southern Africa and Vista University, and became the sole distance institution of higher learning in South Africa and the largest on the African continent. Through the years of its existence as a correspondence university, it has offered a wide variety of graduate courses, in English and Afrikaans, to a vast number of local and international students. [4] IUNISA yiYunivesithi efundisa umntu ekude, enembali ende ebalaseleyo. Yazalwa yiYunivesithi yaseCape of Good Hope, eyayisekwe ngo-1877, yenziwa yaba yiyunivesithi yokufunda ngembalelwano ngo-1959. Ngo-2004 yadityaniswa namanye amaziko amabini amakhulu ezifundo zamgama, ezizezi: iTekhnikhon YaseMazantsi Afrika neYunivesithi YaseVista, yaza ke yaba kuphela kweziko lamgama lemfundo engentla apha eMzantsi Afrika, elaba lelona likhulu kwilizwekazi leAfrika. Kuyo yonke iminyaka yobukho bayo njengeyunivesithi yemfundo ngembalelwano, iye yafundisa izifundo zezidanga eziziindidi ngeendidi, izifundisa ngesiNgesi nangeAfrikaans, kwintlaninge yabafundi abangabalapha nabangabezizwe ngezizwe. [5] In terms of s 26(2) of the Higher Education Act 101 of 1997, UNISA comprises institutional governance structures which include a Council and a Senate. Section 27(2) of the Higher Education Act empowers it, subject to the policy determined by the Minister of Higher Education and Training, its Council, and with the concurrence of its Senate, to determine its language policy, publish it and make it available upon request. The policy referred to [5] Ngokwesolotyana u-26(2) loMthetho weMfundo ePhakamileyoa u-101 ka-1997, iUNISA inamaqonga olawulo lweziko- mfundo ekukho nala kuwo: iBhunga kunye neSinethi. ISolotya u-27(2) loMthetho weMfundo ePhakamileyo liyayigunyazisa ukuba, phantsi komgaqo-nkqubo oqingqwe nguMphathiswa weMfundo ePhakamileyo Noqeqesho, iBhunga layo, livumelana nayo neSinethi yayo, liqingqe umgaqo-nkqubo wolwimi wayo, liwupapashe liwenze is the framework established by the Ministry of Education in November 2002, the Language Policy for Higher Education (LPHE).6 Its chief aim is ‘to promote multilingualism and to enhance equity and access in higher education through the development, in the medium to long-term, of South African languages as mediums of instruction in higher education, alongside English and Afrikaans; [t]he development of strategies for promoting student proficiency in designated language(s) of tuition; [t]he retention and strengthening of Afrikaans as a language of scholarship and science; [t]he promotion of the study of South African languages and literature through planning and funding incentives; [t]he promotion of the study of foreign languages; and [t]he encouragement of multilingualism in institutional policies and practices’. ufumaneke xa ufunwayo. Lo mgaqo-nkqubo kubhekiswa kuwo sisikhokelo esamiselwa liSebe LezeMfundo ngeyeNkanga ngo-2002, uMgaqo-nkqubo Wolwimi Wemfundo ePhakamileyo (iLPHE ngesiNgesi). Injongo yayo ephambili nantsi: ‘kukukhuthaza iilwimi-zonke nokuqinisela ukulungelwa ngokulinganayo nokufikeleleka kwemfundo engentla ngokuphuhlisa, kwixesha elingekude-kuyaphi ukuya kwelikude, iilwimi zaseMzantsi Afrika ukuze zibe ziilwimi zokufundisa kwimfundo engentla, ndawonye nesiNgesi neAfrikaans; ukwenziwa kwezicwangciso ezinobulumko zokukhulisa ukwazi kwabafundi ukusebenzisa ulwimi olumiselwe, okanye iilwimi ezimiselwe, ukuba kufundwe ngalo/ngazo; ukugcinwa nokomelezwa kweAfrikaans njengolwimi lofundo-nzulu nolwenzululwazi; ukukhuthazwa kokufundwa kweelwimi zaseMzantsi Afrika noncwadi lwalapha, yenziwe loo nto ngokuyiplanela, nangokuyikhuthaza ngemali; ukukhuthazwa kokufundwa kweelwimi zasemzini; kwanokukhuthazwa kobulwimi-ninzi kwimigaqo-nkqubo nakwizenzo zamaziko (emfundo)’. [6] The language policy sought to be replaced was approved by UNISA’s Council in 2006. Its aim was to inform ‘the use of language in all aspects of communication of the University, ie. tuition, public, internal and [6] Lo mgaqo-nkqubo ozungulwa ukususwa wawuvunyiwe liBhunga laseUNISA ngo- 2006. Injongo yawo yayikukunika iingcaciso ‘malunga nokusetyenziswa kolwimi kuzo zonke iindawo zoqhakamshelwano kule 6 ‘The Language Policy for Higher Education, GN R1485, GG 24101, 25 November 2002.’ external communication’. It promised, inter alia, that UNISA would make tuition available in the official languages of South Africa on the basis of functional multilingualism7 and that where English and Afrikaans already had the capacity to operate as higher education-level languages, UNISA would pro-actively support African languages with a view to them becoming the medium of instruction at higher education level.8 Its preamble provided: ‘The University adheres to a policy of functional multilingualism in order to accommodate linguistic diversity. The promotion of the principle of multilingualism is enshrined in the Constitution of South Africa. The University is committed to the promotion of equitable language rights with particular emphasis on uplifting the status and usage of the marginalized indigenous languages. Multilingualism is also acknowledged as a powerful tool to promote social cohesion between diverse groups in our society. The development of the diverse languages of our country will take time and resources and should Yunivesithi, oko kukuthi, ekufundiseni, nakuqhakamshelwano nowonke-wonke, nolwangaphakathi, nolwangaphandle’. Wawuthembisa, phakathi kwezinye izinto, ukuba iUNISA iya kwenza ukuba kufundwe ngeelwimi ezisemthethweni zaseMzantsi Afrika, kulandelwe inkqubo esebenzisekayo kwelwimi-ninzi, kanjalo, apho isiNgesi neAfrikaans sele zinawo amandla okusebenza njengeelwimi zemfundo ekwinqwanqwa elingentla, iUNISA yayiza kukusungula ngokwayo ukuxhasa iilwimi zesiNtu ukuze zide zibe ziilwimi zokufundisa kwinqwanqwa lemfundo engentla. Imbula-mbethe yawo yayisithi: ‘Le Yunivesithi ihambisana nomgaqo-nkqubo wobulwimi-ninzi obusebenzisekayo isenzela ukuba ikhuthaze ubundidi-ninzi ngokweelwimi. Ukukhuthazwa komgqaliselo wobulwimi-ninzi kumiliselwe ngokukhuselekileyo kuMgaqo- siseko WaseMzantsi Afrika. Le Yunivesithi izimisele ukukhuthaza amalungelo akhuthaza ulingano kwiilwimi, ngokugxininisa ekuphakamiseni iwonga kunye nosetyenziso lweelwimi ezicinezelekileyo zakweli lizwe. Ubulwimi-ninzi buyavunywa ukuba busisixhobo esinamandla sokukhuthaza udibano lwabantu phakathi kwamaqela andidi- ninzi kuluntu esilulo. Ukuphuhliswa kweelwimi eziziindidi-ndidi zelizwe lethu kuya kuthatha ixesha, kufune nezinto zokwenza ezininzi; ke kufanele ukuba 7 Clause 4.2.1. 8 Clause 4.2.6. be pursued in a phased way, as resources and developmental opportunities allow.’ kwenziwe ngokwezigaba ngezigaba, kangangokuba izincedi-kwenza kunye namathuba ophuhliso zivuma.’ [7] In 2010, the Council approved the revision of the language policy. According to UNISA, the need for the revision arose from a natural attrition of the demand for Afrikaans, the move for parity between Afrikaans and other African languages as support, rather than as language of learning, and the inclination of students wanting to study in English. Accordingly, in 2012 it introduced the ‘Guidelines for the Discontinuation of Afrikaans in Certain Modules’,9 which operated together with the old policy. In terms of these guidelines, all undergraduate modules were grouped into three categories. These were: (a) Fully Bilingual, English and Afrikaans, for any module that had consistently not had fewer than 100 Afrikaans students in the last three years; (b) Mixed Mode Delivery in terms of which all modules that consistently had, over the last three years, between 15 and 100 Afrikaans students in every registration [7] Ngo-2010, iBhunga lakuvumela ukuhlaziywa komgaqo-nkqubo wolwimi. Ngokutsho kweUNISA, olu hlaziyo lwaba yimfuneko ngokusuke kunciphe abafuna iAfrikaans, nokuzama ukuvala isithuba phakathi kweAfrikaans nezinye iilwimi zesiNtu ngokuthi izixhase, endaweni yokuba lulwimi ekufundwa ngalo, kwanokukekelela kwabafundi ekufuneni ukufunda ngesiNgesi. Ngokwezi meko ke, yathi ngo-2012 yaqingqa iZalathandlela Zokuphelisa iAfrikaans Kwiimodyuli Ezithile, ezaye zasebenza kunye nalaa mgaqo-nkqubo mdala. Ngokwezi zalathandlela ke, zonke iimodyuli zabangekabi nazidanga zahlelwa zaba ngamaqela amathathu. Yayingala loo mahlelo: (a) Abanobulwimi-mbini obupheleleyo, besiNgesi neAfrikaans, babeza kufunda nayiphi na imodyuli eyayithe gqolo ukuba nabafundi ababengekho ngaphantsi kwekhulu (kwe-100) abenza iAfrikaans kwiminyaka emithathu edluleyo, (b) Abafunda Ngendlela Engumxube apho zonke iimodyuli ezazithe gqolo, kwiminyaka emithathu edluleyo, ukuba nabafundi beAfrikaans abaphakathi kwe-15 ne-100 ngawo onke amaxesha obhaliso, zaziza 9 The Guidelines were approved by the Senate on 14 March 2012 and revised and approved by the Senate on 14 June 2014. They would be valid for the period 2013 to 2015 and would be revised after the results of a student preference survey became available in 2014. period, would automatically discontinue formal tuition and printed study material; and (c) English-only. Modules that consistently over the previous three years had less than 15 Afrikaans students in every registration period, could be discontinued, provided the Senate Language Committee (SLC), which was established by the Senate to review UNISA’s language policy and, thereafter, make recommendations to the Senate, was informed accordingly. Departments had the option to continue tuition in Afrikaans in these modules but make study materials available on a digital platform. Examination papers for these modules would be in English, but with an option to have Afrikaans papers. kuvele ziphelise ukufundisa okumiselweyo kwanoshicilelo lwamaxwebhu ezifundo; kunye neli (c) AbesiNgesi-kuphela. Ngokweli lokugqibela ihlelo, iimodyuli ezasoloko zithe gqolo, kwiminyaka emithathu edluleyo, ukuba nabafundi beAfrikaans abangaphantsi kwe-15, ngawo onke amaxesha obhaliso, zazisenokuyekiswa, kuqinisekiswe ukuba yazisiwe ngaloo nto iKomiti Yeelwimi YeSinethi (iSLC, ngesiNgesi). Le Komiti yayiye yamiselwa yiSinethi ukuba ijonge- kwakhona umgaqo-nkqubo wolwimi waseUNISA, ize, emva koko, inike iSinethi iingcebiso ngalo mba. Amasebe ayenemvume yokuzikhethela ukuba aqhubeke nokufundisa ngeAfrikaans kwezi modyuli kodwa izinto zokufunda azenze zifumaneke kwindawo edijithali. Amaphepha eemviwo ezi modyuli ayesenokuba ngesiNgesi sodwa, kodwa kuvumeleke ukuba abekho naweAfrikaans amaphepha. [8] The review process started in 2013 and the various minutes of the Senate’s meetings reflect that the issue was a standing item on its agenda since that time. The process involved the Senate, the Council, the SLC and their constituent members, and UNISA management. The Student Representative Council (SRC), one of the constituent members, is a statutorily recognised and [8] Le nkqubo yokujongwa-kwakhona yaqala ngo-2013; kukho imizuzu ngemizuzu yeentlanganiso zeSinethi; loo mizuzu ibonisa ukuba lo mcimbi wawuhlala ungumba okhoyo kwiajenda yeSinethi ukususela kwelo xesha. Kule nkqubo ke kwakusebenzisana iSinethi, iBhunga, iKomiti yeSinethi (iSLC) kunye namalungu eengingqi-zomelo zazo, kunye nabolawulo democratically elected students’ representative body at UNISA. It expressed its views, which supported the change to an English-only LOLT. As UNISA described it, ‘many disparate views’ were expressed and considered. These included the objection to the adoption of an English only language policy, by the UNISA Forum vir Afrikaans, represented by Professor Elirea Bornman, who deposed to affidavits in support of AfriForum’s case. baseUNISA. IBhunga Labameli Babafundi (iSRC), elinye lamalungu eengingqi-zomelo, liliqumrhu elivunywe ngokomtheto nelihoyiweyo futhi elinyulwa ngabafundi baseUNISA ngokwentando yoninzi. Lazivakalisa izimvo zalo, ezazixhasa inguqu le yokuba ibe sisiNgesi-kuphela ulwimi lokufunda nokufundisa (iLOLT). Njengoko ichaza iUNISA, ‘zaba ninzi iimbono ezahlukileyo’ ezavakaliswayo, futhi zaphononongwa. Phakathi kwazo kwakukho noluyichasayo le nto yokumisela lo mgaqo- nkqubo wolwimi wesiNgesi-kuphela, olwalulolweUNISA Forum vir Afrikaans, yona eyayimelwe nguNjingalwazi uElirea Bornman, owenza amaxwebhu obungqina obufungelweyo exhasa lo mcimbi weAfriForum. [9] In 2014, a draft language policy and its implementation plan, which provided for an English-only LOLT, was formulated. On 22 October 2014, the Senate noted that the SLC had approved the draft document. On 10 March 2015, the Management Committee resolved to recommend the amended language policy and implementation plan to the Senate and the Council for approval. At a Senate meeting of 21 October 2015, a number of concerns were raised by the members, including that they had not been afforded sufficient opportunity to give their inputs, that it was regressive for UNISA to [9] Ngo-2014 kwakhiwa umqaliso womgaqo-nkqubo wolwimi nowesicwangciso sokuwenza usebenze, zombini zithetha ngesiNgesi-kuphela njengolwimi lokufunda nokufundisa (iLOLT). Ngomhla wama-22 kweyeDwarha ngo-2014, Isinethi yaba nenqaku elithi iKomiti iSLC, iyaluvuma olu xwebhu lwaloo mqaliswa. Ngowe-10 kweyoKwindla ka- 2015, iKomiti Yolawulo yenza isigqibo sokuba ikhuthaze ukuba uvunywe lo mgaqo- nkqubo utshintshiweyo nesicwangciso sokuwusebenzisa yiSinethi naliBhunga. Kwintlanganiso yeSinethi yangowama-21 offer its tuition in English only, and that it made no sense for students to be offered tuition in their mother tongue and then write the examinations in English as was proposed. In the event, the Senate resolved to refer the matter back to the SLC to address these concerns. kweyeDwarha ka-2015, kwabakho ukungaqondi kakuhle izinto ezininzi okwavakaliswa ngamalungu ayo, ezaquka ukuba la malungu eSinethi ayengazange anikwe thuba laneleyo ukwenza awawo amagalelo, nokuba yayikukubuya umva le nto yeUNISA yokufundisa ngesiNgesi kuphela, kwanokuthi yayingavakali inantsingiselo ibhadlileyo ncam into yokuba abafundi kuthwe mabafundiswe ngolwimi lwabo lweenkobe, ze kuphinde kuthiwe iimviwo baza kuzibhala ngesiNgesi, njengokuba kwakusitshiwo. Kwathi kwakuba njalo ke, yabona iSinethi ukuba le ndaba mayiphindiswe kwiKomiti iSLC, ukuze yona iphonononge la maxhala. [10] A draft language policy was ultimately presented to the Senate at its meeting held on 26 August 2015. It elicited a number of objections from the members once more and was consequently not adopted. Instead, it was remitted to the SLC for further development that would address the objections. It met the same fate in subsequent Senate meetings convened on 26 August and 21 October 2015. [10] Kwade kwathi ke, ngomhla wama-26 kweyeThupha ka-2015 kwintlanganiso yeSinethi wanikezelwa umqaliso womgaqo- nkqubo wolwimi. Kwaphinda kwabakho iimpikiswano eziliqela ezivela kumalungu eSinethi, waza loo mqaliso waphela ungadange uvunywe. Koko, wabuyiselwa kwakwiKomiti iSLC, ukuba iphinde iwusebenze kude kugqibeke ezi nkcaso. Yaphinda yaba kwayiloo nto ukungavunywa nakwezilandelayo iintlanganiso zeSinethi ezazibizwe ngowama-26 kweyeThupha ka- 2015 nangowama-21 kweyeDwarha ka- 2015. [11] Thereafter, the SLC revised the language policy draft document. On 11 [11] Emva koko, iKomiti iSLC yalihlaziya ixwebhu elingumqaliso womgaqo-nkqubo March 2016 a SLC meeting was convened to consider and finalise the task in anticipation of a Senate meeting which was scheduled for 30 March 2016. The Senate’s minutes of that meeting record that: ‘Prof IOG Moche made a presentation on the Language Policy. The implementation process would be tabled at the meeting scheduled for 19 October 2016. RESOLUTION Senate resolved that the Language Policy to be recommended to Council for approval.’ wolwimi. Ngowe-11 kweyoKwindla ka- 2016 kwabizwa intlanganiso yeKomiti iSLC ukuze kujongisiswe kugqityezelwe lo msebenzi, kulungiselelwa intlanganiso yeSinethi eyayimiselwe ukuba iza kuba ngowama-30 kweyoKwindla ka-2016. Kwimizuzu yeSinethi yaloo ntlanganiso kubhaliwe kwathiwa: ‘UNJing IOG Moche uye wathetha ngawo lo Mgaqo-nkqubo Wolwimi. Inkqubo yokusetyenziswa kwawo iya kubekwa etafileni kwintlanganiso emiselwe owe-19 kweyeDwarha ku-2016. ISIGQIBO ISinethi igqibe kwelokuba lo Mgaqo-nkqubo Wolwimi mawusiwe kwiBhunga, likhuthazwe ukuba liwuvume.’ [12] According to minutes of the Council’s meeting held on 28 April 2016, Prof Moche presented the revised language policy for approval, which was granted. The implementation plan compiled by the task team appointed by the SLC would, accordingly, be recommended to the SLC, Senate and Council for approval. [12] Ngokwemizuzu yentlanganiso yeBhunga eyayikho ngowama-28 kuTshaziimpuzi ngo-2016, uNjing Moche wathetha ngalo mgaqo-nkqubo wolwimi ulungisiweyo wacela ukuba uvunywe; wavunywa ke. Ke isicwangciso sokuwusebenzisa esasisenziwa liqelana laloo msebenzi elalityunjwe yiKomiti iSLC sasiza kuthi naso, ngokwaloo ndlela, sisiwe kwiSLC, nakwiSinethi, nakwiBhunga, ukuze sivunywe. [13] AfriForum took issue with the decisions of the Senate and the Council and launched urgent application proceedings in the Gauteng Division of the High Court, [13] I-AfriForum yavakalisa ukungaxoliswa zizigqibo zeSinethi neBhunga, yaza yafaka enkundleni isicelo esingxamisekileyo kwiSahlulo SaseGauteng seNkundla Johannesburg to challenge them. It sought an order that UNISA suspend ‘the implementation of the new language policy adopted by the Council of the University of South Africa on 28 April 2016 (with the concurrence of the Senate … granted on 30 March 2016)’ pending the final decision of the application for a review and the following relief: ‘1. That the respective resolutions of the Council and the Senate of the University of South Africa to approve a new language policy on 28 April and 30 March 2016 respectively be reviewed and set aside; 2. That the new language policy adopted by [UNISA] be set aside as being unconstitutional and unlawful; 3. That the new language policy be set aside as a whole; alternatively be set aside insofar and to the extent that Afrikaans has been removed as language of learning and tuition at the University of South Africa; 4. That within 10 days from date of judgment, [UNISA] shall prominently publish on (a) its website and (b) in the three major Afrikaans newspapers in the country, (c) as well as by transmitting by email to all students a notice with the following content: 4.1. A full list of the modules that had been on offer in Afrikaans as on 28 April 2016; ePhakamileyo, eJohannesburg, iphikisana nazo ezi zigqibo. Ngaphezu kokufuna ‘ukumiswa kokusebenziseka komgaqo- nkqubo omtsha owawumiselwe liBhunga leYunivesithi YaseMzantsi Afrika ngowama-28 kuTshaziimpunzi ka-2016 livumelene neSinethi … okwavunywayo ngowama-30 kweyoKwindla ngo-2016’ yafuna noku kuphunyezwa kulandelayo: ‘1. Ukuba ezaa zigqibo zeBhunga neziya seSinethi zeYunivesithi YaseMzantsi Afrika zokuvuma umgaqo-nkqubo omtsha ngowama-28 kuTshaziimpuzi nowama-30 kweyoKwindla ngo-2016, ngokulandelelana, zijongwe- kwakhona, zibekwe ecaleni; 2. Ukuba laa mgaqo-nkqubo wolwimi mtsha uye wamiselwa yiyo [iYunivesithi YaseMzantsi Afrika] kubhengezwe ukuba awuhambi ngokoMgaqo-siseko, futhi awukho mthethweni; 3. Ukuba lo mgaqo-nkqubo wolwimi mtsha ubekwe bucala xa uwonke; kungenjalo ubekwe bucala ngokwendlela nangangokuba iAfrikaans iye yayekiswa ukuba ibe lulwimi lokufunda nelokufundisa eYunivesithi YaseMzantsi Afrika; 4. Ukuba maze kuthi kwisithuba seentsuku ezili- ukususela ngomhla wesigwebo, yona [iYunivesithi YaseMzantsi Afrika] ipapashe ngokugqamileyo (a) kwisiza sonxibelelwano sayo (b) kumaphepha amakhulu amathathu eAfrikaans akweli lizwe, (c) kwanangokudlulisela ngeimeyili kubo bonke abafundi isaziso esinesi siqulatho silandelayo: 4.1 Uluhlu olupheleleyo lweemodyuli ezazizezokufundiswa ngeAfrikaans ngomhla wama-28 kuTshaziimpuzi ngo-2016; 4.2 Offering all prospective students for the next academic year admission in such modules as presented on first year level; 4.3 Offering all existing students, if they were enrolled in any one of those courses or would have enrolled for the subsequent year course available in Afrikaans, but had perforce to follow the module in English, to re-enrol on the basis that they may follow the module in Afrikaans until completion of their studies; 4.4 That all those modules will be presented in full in the following academic years until the language policy had been lawfully amended if at all; 4.5 That it shall, within 10 days after compliance with prayers 4, 4.1, 4.2 and 4.3 submit to this court proof that it has complied with the terms of the order.’ 4.2 Bavunyelwe bonke abafundi abafuna ukufunda kulo nyaka-zifundo uzayo ukuba bazibhalisele ezo modyuli zikwinqwanqwa lokuqala; 4.3 Bavunyelwe bonke abafundi abahleli bekho, ukuba babeyibhalisele nokuba yeyiphi kwezo khosì okanye babeza kubhalisela ukufunda ikhosi yonyaka olandelayo ukuba yayikho ngeAfrikaans, kodwa banyanzeleka ukuba bayifunde loo modyuli ngesiNgesi, bayavunyelwa ukuba baphinde bazibhalisele ezo modyuli, kuxelwe ukuba baya kuzifunda ezo modyuli ngeAfrikaans bade bazigqibe izifundo zabo; 4.4 zonke ezi modyuli ziya kubakho ngokuzeleyo kwakule minyaka-zifundo izayo ude umgaqo-nkqubo wolwimi ube ulungisiwe ngokwasemthethweni, ukuba iyenzeka ke loo nto; 4.5 Ukuba iya kuthi, kwisithuba seentsuku ezili- 10 emva kokuba ithobele izikhalo eziku- 4, 4.1, 4.2 naku-4.3, ingenise kule nkundla isibonakaliso sokuba iye yayithobela imiqathango yalo myalelo.’ [14] AfriForum trenchantly criticised the process followed by UNISA in reviewing its language policy. Its core contention, in addition to the abandoned PAJA-based review grounds, was that the impugned decisions violated the rights, by its count, of approximately 30 000 existing and prospective Afrikaans students, which included White, Black and Coloured students from Afrikaans speaking communities, to [14] IAfriForum iyayigxeka kabukhali inkqubo eyalandelwa yiUNISA xa yayjijonga kwakhona umgaqo-nkqubo wolwimi wayo. Ingxam yokungavumelani kwayo, ethi iyidibanise nezaa zizathu zojongo-kwakhona ezisekwe kwiPAJA eyaziyekayo, yayikukuba ezi zizathu ziphikisekayo zanyhasha amalungelo abafundi beAfrikaans ngokubala kwayo ababemalunga nama-30 000 ababekho receive tuition in their mother tongue. This was in breach of s 29(2) of the Constitution as there was no justification for the adoption of an English only LOLT policy when no feasibility study had shown that it was no longer reasonably practicable to use the old dual language policy, so went the contention. The change was slated for breaching the LPHE by not being responsive to the desire of Afrikaans students at UNISA to be educated in the language of their choice when it was reasonably practicable to offer tuition in Afrikaans; denying them their right under s 9 of the Constitution not to be unfairly discriminated against; and impairing their right to human dignity by removing Afrikaans, which was already developed as a language of science and academic learning, as a LOLT. nababesengakho, ekukhokubo abaMhlophe, abaMnyama, nabeBala ababesuka kwiindawo ezinoluntu oluthetha iAfrikaans, baze bona bavaleleka ukuba bafumane ukufundiswa ngolwimi lwabo lweenkobe. Oku, yayikukwaphulwa kwesolotyana u-s 29(2) woMgaqo-siseko, njengoko kwakungekho kuthetheleleka kokusetyenziswa kweiNgesi kuphela njengolwimi lokufunda nokufundisa (iLOLT), ekubeni kwakungazange kubekho luphando lolwenzeko olwaye lubonisile ukuba kwakungasekholula ukwenzeka ukusebenzisa laa mgaqo-nkqubo wolwimi mdala kalwimi-mbini, yayisitsho ke ingxoxo yokungavumelani. Laa nguqu yaxatyelwa kukugxekwa oku, kusithiwa yaphule iLPHE ngokungakhathaleli umnqweno wabafundi beAfrikaans eUNISA wokuba banikwe imfundo ngolwimi lokuzikhethela kwabo ekubeni kwakuyinto enokwenzeka lula ukuba kufundiswe ngeAfrikaans, nto leyo yabahlutha ilungelo labo eliphantsi ku-s 9 woMgaqo-siseko lokuba bangacalu-calulwa ngokungalunganga, ngaloo ndlela kuqhwaleliswa ilungelo labo lokuba nesidima njengabantu ngokususa iAfrikaans, eyayisele iphuhlisekile njengolwimi lwenzululwazi nokufundiseka kwaseyunivesithi njengolwimi lokufunda nokufundiswa (iLOLT). [15] AfriForum further contended that the language review process breached the principle of rationality. This was so because organisations advocating for the promotion and protection of linguistic rights at tertiary institutions did not participate in the review process10 and no research or formal investigation as envisaged by the old policy was conducted to determine the needs, attitudes and preferences of Afrikaans students whose rights would be adversely affected.11 The SLC also failed to table the representations of the Forum for Afrikaans, which were timeously submitted, before the Council. This was despite the fact that the representations were compiled by respective members of the Senate and the SLC, Professors Bornman and Potgieter, who had participated in published research on the subject and sought to advise the Council on the impact its decision would have on the approximately 30 000 Afrikaans UNISA students. [15] IAfriForum yaqhuba yaxoxa ngelithi inkqubo yokujongwa-kwakhona kolwimi yawaphula umgqaliselo wokucingisisa. Le nto yayinjalo kuba amaqumrhu athethelela ukhuthazo nokhuselo lwamalungelo olwimi kumaziko emfundo enqwanqwa lesithathu zange athathe nxaxheba kuloo nkqubo yokujongwa-kwakhona kanti zange kubekho naluphando-nzulu, okanye uxilongo oluqingqiweyo, izinto ezazibonelelwe kulaa mgaqo-nkqubo mdala, zokuqikelela kubonwe iimfuno, neemo-ntliziyo, nazinto kukhethwa zona, zabafundi beAfrikaans abamalungelo abo ayeza kuchaphazeleka kakubi. IKomiti iSLC kanjalo yoyisakala ukuzibeka etafileni phambi kweBhunga izimvo zeQonga LeAfrikaans (iForum for Afrikaans), ezazingeniswe ngexesha kuyo. Le nto yenzeka nakuba ezo zimvo zaziqokelelwe ngamalungu eSinethi nawayo iSLC, ooNjingalwazi uBornman noPotgieter, ngokokulandelelana, abantu ababethathe iinxaxheba kuphando-nzulu olupapashiweyo malunga nomba wolwimi, baze bazama ukucebisa iBhunga malunga neempembelelo esasiza kuba nazo isigqibo salo kubafundi 10 AfriForum referred to various organisations which it claimed support the retention of Afrikaans as a language of tuition and should have been consulted, namely Die Afrikaanse Taalraad, Die ATKV, Dagbreek Trust and Trust for-Afrikaanse Onderwys, Die Afrikanerbond, Die Dameskring, Die Voortrekkers, the FW de Klerk Foundation, The SA Akademie vir Wetenskap en Kuns and Afriforum Youth. 11 The Proposals for amending UNISA’s Language Policy encapsulated in the Presentation of College of Human Sciences titled ‘First UNISA Consultative Indaba on the UNISA Language Policy dated 10 March 2014, envisaged, inter alia, a complete overhaul of the Preamble to ‘reflect a commitment to multilingualism and to the development of African Languages’, ‘decisions by Council and Senate made in a consultative manner, and including research and formal investigations’ and consultation which would ‘include some external stakeholders, eg Convocation’. abamalunga nama-30 beAfrikaans baseUNISA. [16] AfriForum pointed out that the Senate, at its meeting of 21 October 2015, referred the matter back to the SLC. It lamented that the SLC nonetheless failed at its subsequent meeting of 11 March 2016 to address the concerns for which the matter was remitted. Some of those concerns were raised by students, it was argued. But only the SRC, which in AfriForum’s view did not represent the students with an interest in Afrikaans tuition and actually associated itself with the ‘Afrikaans must Fall’ student protests, was given a hearing, to appease protesting students and avoid student revolt, it claimed. Thus, the SRC exerted ‘unauthorised or unwarranted dictates’ on the review process and no attention at all was given to the Senate’s decision that there had been insufficient consultation. [16] IAfriForum yayixela into yokuba iSinethi, kwintlanganiso yayo yowama-21 kweyeDwarha ka-2015, yayiwuphindisile lo mcimbi kwiSLC. Yakhathazeka ke yinto yokuba iSLC nangona kunjalo yoyisakala kwintlanganiso yayo elandelayo yowe-11 kweyoKwindla ngo-2016 ukuwahoya amaxhala owawungeniselwe wona kuloo ntlanganiso. Kwakuxeliwe ukuba amanye aloo maxhala ayevakaliswe ngabafundi. Kodwa kwamanyelwa iSRC kuphela, kanti ngokwembono yeAfriForum, yona yayingabamelanga bona abafundi ababenomdla ekufundeni ngeAfrikaans, futhi yayizinxulumanise nemiqhankqalazo yabafundi eyayisithi ‘iAfrikaans Mayiwe’; loo mkhethe wawusenzelwa ukuze kuthonyalaliswe abafundi abo babeqhankqalaza ukuze kuthintelwe uvukelo lwabafundi, yatsho ke. Ngoko ke iSRC yaba namandla nefuthe lokuphatha ‘okwakungekho gunyeni layo futhi kungafunekanga nganto’ kulaa nkqubo yokujonga-kwakhona, akwabikho luhoyo tu olwanikwa isigqibo seSinethi esasisithi khange kubekho ludliwano-ndlebe lwaneleyo. [17] Regarding the Senate’s meeting of 30 March 2016, it was contended that Prof Moche misled the Senate by holding out that [17] Malunga nentlanganiso yeSinethi yowama-30 kweyoKwinda ku-2016, kwakhalazwa kwathiwa uNjing Moche the issue of the number of modules offered in English and those offered in Afrikaans was debated and taken into consideration by the SLC, when this was, in fact, not done. Thus, it was contended, the Senate resolved to recommend the Council’s adoption of a new LOLT on insufficient information, without considering whether the SLC had addressed any of the concerns that were raised at its previous meeting; and it adopted the new language policy without notice and proper consultation with the persons who would be most directly affected by it. Moreover, neither the Senate nor the Council made any reference at all to the reasonable practicability of their impugned decisions at the relevant meetings, and the reasons for these decisions were compiled after the fact. wayilahlekisa iSinethi ngokuthi ingxaki yenani leemodyuli ezazifundiswa ngesiNgesi nezo zazifundiswa ngeAfrikaans yayiye yaxoxwa, yanikwa umqwalasela yiSLC, ekubeni le nto yayingazange yenzeke phofu. Ngoko, kwakhalazwa kwathiwa, iSinethi yagqiba kwelokuba ikhwezelele ukuba iBhunga limisele ulwimi lokufunda nokufundisa olutsha lingabanga nazinkcukacha zaneleyo, kungakhange kuqwalaselwe nokuba iSLC yayiye yaxoxa na ngawo la maxhala awayevakaliswe kwintlanganiso yayo yangaphambili, yaza ke yawuvuma umgaqo-nkqubo omtsha ingaziswanga futhi ingabanga naludliwano- ndlebe lufanelekileyo kunye naba bantu babeza kuchaphazeleka ngokuthe ngqo kakhulu nguwo. Ngaphezulu, zombini, iSinethi neBhunga zange zibhekise kuko konke ukusebenziseka okulula kwezi zigqibo zabo ziphikiswayo kwezo ntlanganiso zazifanelwe zizo; ke izizathu zezi zigqibo zabhalwa emva kokuba sezenziwe. [18] AfriForum further criticised the Senate’s conduct at its meeting of 30 March, alleging a breach of a number of provisions of the Senate’s own delegated legislation, namely Senate Rules 6.2, 11.1 and 13.1 to 13.6. These rules respectively require: [18] IAfriForum yaqhuba ukugxeka iSinethi ngokuziphatha kwayo kwintlanganiso yayo yowama-30 kweyoKwindla, ityhola ngelithi kubekho ukwaphulwa kweqela lemimiselo yomthetho wayo ngokwayo iSinethi, le Imigaqo YeSinethi engu-6.2, 11.1 no-13.1 ukuya ku-13.6. Ngokulandelelana kwayo le migaqo, ifuna oku: (a) the adoption of Senate resolutions in a meeting at which a quorum is present; (b) the submission of the agenda and related documents to members of the Senate five days before the meeting; (c) resolutions of the Senate and its Committees to be adopted by a majority of the members present and on a show of hands; (d) resolution of a matter by preferential order vote or another procedure agreed upon by those present; (e) the resolution of policy matters by a two- thirds majority of the members present; and (f) a unanimous resolution, which must be properly recorded, to dispense with the procedural provisions prescribed by the rules, if the Senate is satisfied that there is sufficient justification therefor. AfriForum contended that the Senate’s failure to comply with each of these rules invalidated its resolution and that this permeated and tainted the resolution of the Council as well. (a) ukuthathwa kwezigqibo zeSinethi kwintlanganiso ekhoyo kuyo ikhworam; (b) ukunikwa kwamalungu eSinethi iajenda kunye namaxwebhu ahamba nayo iintsuku ezintlanu phambi kwentlanganiso leyo; (c) ukuba izigqibo zeSinethi nezeeKomiti zayo zenziwe luninzi lwamalungu akhoyo kuphakanyiswa izandla; (d) ukugqitywa komcimbi ngevoti evumela ulandelelaniso ngokuzikhethela okanye ngenye indlela- yokwenza ekuvunyelwene ngayo ngabo bakhoyo; (e) ukugqitywa kwemicimbi yemigaqo- nkqubo ngesininzi esisisibini kwisithatu samalungu akhoyo; kunye (f) nesigqibo somntu wonke, ekufuneka sibhalwe ngokufanelekileyo, sokuba ingalandelwa imimiselo yendlela-yokwenza ehambisana nemigaqo ukuba iSinethi yanelisekile kukuba iyathetheleleka ngokwaneleyo loo nto. IAfriForum ixoxa ngelithi ukoyisakala kweSinethi ukuthobela le migaqo ngaminye kwaphelisa ukuba namadla okusebenza kwesigqibo sayo, nangelithi le meko yasityhutyha yaza yasidyobha neso seBhunga isigqibo. [19] UNISA conceded at the outset in its papers that the procedure it followed ‘may not have been perfect in every respect’. However, it contended that the procedure was still ‘sufficiently fair to survive legal scrutiny’. Regarding the question of [19] IUNISA yayivumile ekuqaleni kumaphepha ayo ukuba indlela-yokwenza eyayilandelayo ‘isenokuba yayingagqibelelanga kuyo yonke into.’ Kodwa, yaxoxa ngelithi laa ndlela-yokwenza yayisenako ‘ukuba yelungileyo consultation, it admitted that it did not consult with the public and averred that it was not obliged ‘to separately consult with specific parts of or groupings in the student population in order to obtain their views,’ as demanded by AfriForum. It sufficed, in its view, that it consulted with each of its constituent bodies that took part in the decision-making process. It further highlighted that the SRC, which was engaged in the review process, in its capacity as a statutorily recognised and democratically elected body that is a constituent part of the Senate, represents all UNISA students, including the Afrikaans speaking students. ngokwaneleyo ukuba isinde ekugxekekeni ngokwasemthethweni’. Malunga nendaba yodliwano-ndlebe, yavuma ukuba zange icebisane nowonke-wonke, yatsho isithi yayinganyanzelekanga ‘ukuba ithetha- thethane ngokwahlukeneyo namabutho athile okanye amaqela athile akhoyo kwisihlwele sabafundi ukuze ifumane izimvo zawo’ njengokunyanzelisa kweAfriforum. Ngokokubona kwayo, kwakwanele ukuthetha-thethana kwayo nayo nganye kwiingingqi-zomelo zayo ezathatha inxaxheba kuyo laa nkqubo yolwenziwo lwezigqibo. Yacacisa ngakumbi ukuba iSRC, eyayisebenza kulaa nkqubo yokujongwa- kwakhona ngokwewonga layo lokuba iliqumrhu elivunyiweyo ngokomthetho nelanyulwa ngokwentando yesininzi, eliyinxalenye eyakha iSinethi, limele bonke abafundi baseUNISA, bedibene nabo nabafundi abathetha iAfrikaans. [20] UNISA denied that its decisions were irrational, contending that it did not ‘remove’, ‘abolish’, ‘eradicate’ or ‘abandon’ or ‘do away with’ Afrikaans tuition, as AfriForum claimed. Instead, it said, ‘the new language policy favoured the use of English as the language of learning and tuition at the university, whilst placing Afrikaans on the same footing as the other official languages in the Republic, with tuition in Afrikaans and the other official languages being offered [20] IUNISA yakhanyela ukuba izigqibo zayo bezingacingisiswanga, ixoxa ngelithi, yona zange ‘isuse’, ‘igxothe’, ‘incothule neengcambu’, okanye ‘iyilahle’ okanye ‘iyiphelise’ imfundo yeAfrikaans njengokuba isitsho iAfriForum. Endaweni yoko, yathi, ‘lo mgaqo-nkqubo wolwimi mtsha ubeke phambili ukusetyenziswa kwesiNgesi njengolwinmi lokufunda nokufundisa apha kule yunivesithi, ngeli lixa uyibeke iAfrikaans endaweni efanayo where there is capacity, with learner support, in the student’s language, and with the intent that the development and place [of] Afrikaans as well as the other official languages should be promoted’. neyezinye iilwimi zasemthethweni zeRiphablikhi, apho kuthi kufundiswe ngayo iAfrikaans nangazo ezinye ezi iilwimi zasemthethweni apho kukho umntu onokuyenza loo nto, ekukwakho nenkxaso yabafundi nolwimi lwakhe umfundi, nangokuzimisela ukuba uphuhliso kwanendawo yeAfrikaans kwanazo ezi ezinye iilwimi zasemthethweni, ezo nto zikhuthazwe’. [21] To bolster its contention, UNISA pointed to clause 4.2.3 of the new language policy, which provides that ‘[w]here there is capacity, a selected number of modules and programmes will progressively be offered in more than one official South African language in order to support relevant national policies’. This clause, it stated, ‘takes UNISA’s new language policy into a realm of genuine multilingualism’ because ‘the previous language policy entrenched English and Afrikaans whilst paying lip service to developing other African languages, whereas the new language policy made it possible to offer courses in African languages as well as Afrikaans’. [21] Ukunika ukomelela kwingxoxo- mpikiswano yayo iUNISA yabhekisa kwigatya 4.2.3 lomgaqo-nkqubo wolwimi omntsha, elithi, ‘apho kukho umntu onolwazi, inani elikhethiweyo leemodyuli neeprogramu liya kufundiswa ngokumana kusongezwa, kufundiswe ngeelwimi zasemthethweni ezingaphezu kolunye, zaseMzantsi Afrika ukuze kuxhaswe imigaqo-nkqubo efaneleneyo yesizwe’. Eli gatya, yatsho ke, ‘liwusa umgaqo-nkqubo wolwimi omtsha waseUNISA kummandla wobulwimi-ninzi obunyanisekileyo’ kuba ‘lo wangaphambili umgaqo-nkqubo wawubethelele isiNgesi kunye neAfrikaans wabe uthetha nje ngomlomo kuphela malunga nokuphuhlisa ezinye iilwimi zesiNtu, kanti lo mtsha umgaqo-nkqubo wolwimi wayenza yaba nokwenzeka into yokuba kubekho iikhosi ezifundiswa ngeelwimi zesiNtu nangeAfrikaans.’. [22] UNISA further contended that the consideration of ‘reasonable practicability’ infused the entire language policy review process, even if it was not specifically referenced at every turn, and was pertinently raised at the First Consultative Indaba that was held in the early stages, in April 2014. It pleaded that it did not have the capacity to offer study materials, online tuition and an automatic translation programme, which were being developed, in all the official languages to bring them on par with Afrikaans. Offering a course in both English and Afrikaans, it contended, was not in the interest of the ‘economies of scale’12 because it necessitated doubling the number of courses and splitting the student numbers between the two courses. To illustrate its point, UNISA provided as an example that if a course had only ten Afrikaans students, printing only ten study guides would be more expensive per student than for the same course which had a thousand English students. Thus, it was contended, an Afrikaans student cost UNISA more than an African language student who studied in English. This resulted in disproportionate resources being spent on students studying in Afrikaans as opposed to other students who had to study in English because tuition was not offered in their mother tongue. Mother [22] IUNISA yaqhuba yaxoxa ngelithi ukuqwalaselwa ‘kokwenzeka ngokulula’ kwayizalisa yonke laa nkqubo yokujongwa- kwakhona komgaqo-nkqubo wolwimi, nokuba kwakungasoloko kukhankanywa lonke ixesha; futhi kwakuye kwathethwa ngako ngokubalulekileyo kwiNdibano Yokuqala Yodliwano-ndlebe eyayithe yabakho kwizigaba zasekuqaleni, nngenyanga kaTshaziimpuzi ngo-2014. Yacenga ke yathi ayinabo ngokwaneleyo abantu bokunika amaxwebhu okufunda, ukufundisa kwi-intanethi, kunye neprogramu yoguqulo oluhlala lukho, kodwa olusakhuliswayo kuzo zonke iilwimi zasemthethweni ukuze zikhuliswe zibe mgangathweni mnye neAfrikaans. Ke, ukufundisa ikhosi ethile ngazo zombini ezi lwimi, isiNgesi neAfrikaans kwakungazikhuthazi ‘indlela zolungelelwaniso kwezoqoqosho kuba bekusenza ukuba kufuneke ukuba ikhosi inye ifundiswe kabini, baze nabafundi bahlulahlulwe phakathi kwezo khosi zifanayo. Ukucacisa eli nqaku, iUNISA yenza umzekelo othi ukuba ikhosi ibinabafundi abalishumi kuphela beAfrikaans, ukushicilela izikhokelo- zifundo zabafundi abalishumi kuphela bekusiba duru ngomfundi ngamnye ngaphezu kokuba kunjalo kwakuloo khosi 12 A concept which was described as applying only to the provision of distance education and means that the greater the of students who are registered for a course, the more the cost for each individual student drops. tongue tuition could not be reserved only for Afrikaans students which, it was alleged, would be better supported and have a better chance to survive as a LOLT under the new language policy. Existing UNISA students receiving tuition in Afrikaans would still be able to complete their courses in Afrikaans. inye xa inabafundi abaliwaka besiNgesi. Ngoko, kwaxoxwa kwathiwa, umfundi weAfrikaans uziindleko kwiUNISA ngaphezu komfundi wolwimi lwesiNtu ofunda ngesiNgesi. Le nto yazala ukuba kusetyenziswe izincedi-kwenza ezingalinganiyo nezinye kubafundi abafunda iAfrikaans, kungekho njalo kwabanye abafundi ababenyanzelekile ukuba bona bafunde ngesiNgesi ngenxa yokuba kwakungafundiswa ngolwimi lwabo lweenkobe. Akubanga yinto enokwenzeka ke ukuba kugcinelwe abafundi beAfrikaans bodwa ukufundiswa ngolwimi lwabo lweenkobe, le kubangwa ukuba iya kuxhaseka ibe nethuba elingcono lokungaphelelwa xa isebenza njengolwimi lokufunda nokufundisa (iLOLT) phantsi kwalo mgaqo-nkqubo wolwimi mtsha. Kodwa ke abafundi baseUNISA abakhoyo ngoku ababefundiswa ngeAfrikaans baya kuba nako ukuzigqiba iikhosi zabo ngeAfrikaans. [23] The high court was not persuaded by AfriForum’s submissions. The first leg of its application, in which it sought interim relief in terms of Part A of its notice of motion, was heard by Sutherland J. He dismissed the application on the basis that the element of irreparable harm to the affected persons had not been established. Keightley J, who heard the main application in the high court under [23] INkunda ePhakamileyo zange yaneliswe kukubaluleka kwezimangalo zeAFRIFORUM. Isigaba sokuqala sesicelo sayo, apho yayicela ukumiswa okwethutyana ngokweNdawo A yesaziso sayo sokuthatha inyathelo, wawuchotshelwe nguSutherland J. Yena ke wasichitha esi sicelo esithi, le ndawo yokubeka engozini ngokungenakulungiseka kwabo bantu bachaphazelekayo Part B of AfriForum’s amended notice of motion, was equally unimpressed by its case and dismissed the application in its entirety. ayicaciswanga. UKeightley J, owachophela undoqo wesicelo eNkundleni ePhakamileyo phantsi kweNdawo B yothatho-manyathelo olulungisiweyo lweAfriForum naye zange abone kubaluleka kweso simangalo sayo, waza wawuchitha loo mcimbi. [24] Regarding the contention that the new language policy was unconstitutional, the Judge accepted that UNISA changed its language policy and resolved to offer tuition ‘only in English due to the lack of demand and lack of capacity for Afrikaans tuition’. In her view, language parity and the need to treat students equitably when it came to mother tongue tuition were ‘critical drivers’ in UNISA’s adoption of the new language policy. She found that on the evidence it was not reasonably practicable for UNISA, which is committed to redressing the imbalances that exist in languages, to offer tuition in Afrikaans while not offering tuition in the remaining official languages as the LOLT, as ‘the cost associated with developing all … the languages to that level at this stage would be prohibitive’. She held that ‘[b]oth locally and internationally, English was the accepted and preferred medium for communication, academia and business. The adoption of English as the sole LOLT under the new policy was a matter of simple practicality’. In sum, as she put it, ‘it was plain that the removal of Afrikaans was justified on the basis of considerations of equity, [24] Malunga nembambano yokuba lo mgaqo-nkqubo mtsha awuhambisani nomgaqo-siseko, iJaji yangaphambili yayiqale yayivuma into yokuba iUNISA yawutshintsha umgaqo-nkqubo wayo yaza yagqiba kwelokuba ifundise ‘ngesiNgesi kuphela ngenxa yokuba kungekho bafundi baninzi nabantu baneleyo bokufundisa ngeAfrikaans’. Ngokwembono yayo, ulinganiso ngokweelwimi kunye nemfuneko yokuba abafundi baphatheke ngobulungisa obulungeleleneyo, xa kufikwa ekufundisweni ngolwimi lweenkobe, yayizezona ‘zimeko zibukhali’ ekumiseleni kweUNISA lo mgaqo-nkqubo wolwimi mtsha. Wafumanisa ukuba ngokobo bungqina kwakungekho lula ukwenzeka ukuba iUNISA, ezimisele ukulungisa iimeko zokungalungelelani ezikhoyo kwiilwimi, ikwazi ukufundisa ngeAfrikaans ekubeni ingafundisi ngazo ezinye ezi iilwimi zasemthethweni njengoko ‘iindleko ezinxulumene nokuziphuhlisa zonke … ezi lwimi de kube kwelaa nqwanqwa okwangoku ziya kugqithisa’. Wayithetha into yokuba ‘apha ekhaya kanti nakwizizwe ngezizwe isiNgesi lulwimi olukhethwayo practicability and the need to redress the results of past racially discriminatory laws and practices, as required under section 29(2) and in accordance with the principles laid down by the Constitutional Court’. The court thus concluded that the new language policy did not violate s 29(2). lukhethelwa uqhakamshelwano, nezemfundo, nezamashishini. Ukumiselwa kwesiNgesi sibe kuphela kolwimi lokufunda nokufundisa phantsi kwalo mgaqo-nkqubo mtsha kwakukusebenzisa umgqaliselo ‘wokwenzeka lula’. Ukushwankathela, ngokutsho kwakhe, ‘kwakucace phandle ukuba ukususwa kweAfrikaans kwakuthetheleleka ngenxa yokuqwalasela ukulungiselelwa ngokulinganayo, nokuba nokwenzeka, kunye nemfuneko yokulungisa iziphumo zemithetho yocalucalulo ngokobuhlanga nezenzo zalo zexesha eladlulayo, njengoko kutshiwoyo phantsi kwesolotya lama-29(2) mangokuhambelana nemigqaliselo eyabekwa yiNkundla YoMgaqo-siseko’. Laa nkundla ke ngoko yagqiba kwelokuba laa mgaqo-nkqubo mtsha wawungalinyhasi isolotya u-s 29(2). [25] The high court further dismissed AfriForum’s argument that the adoption of the new language policy was not rational. In its view, the review process conducted by UNISA since 2013, including the language colloquium, research and continuous debate in the SLC, the Senate and in the wider university community, could not be ‘impugned by the alleged paucity of information before the Senate and the Council when the policy was ultimately adopted. The legality complaint based on the alleged failure by the SLC to consult affected [25] INkundla le iPhakamileyo yaqhubeka ukuyichitha ingxoxo yeAfriForum ethi ukumiselwa komgaqo-nkqubo oomtsha kwakungacingisiswanga. Ngokwembono yayo inkqubo yokujongwa-kwakhona eyenziwa yiUNISA ukususela ngo-2013, equka imboniswano malunga nolwimi, uphando, kwaneengxoxo ezingapheziyo kwiSLC, nakwiSinethi, nakuluntu lwaseyunivesithi zizinto ezazingenako ‘ukuphikiswa ngenxa yeenkcukacha ekubangwa ukuba zazingaphelelanga ezaya kwiSinethi nakwiBhunga xa wawude waba persons, and the procedural irregularities relating to the Senate’s meeting of 30 March 2016, namely the breaches of the Senate’s rules,13 was given short shrift. The high court found that there was evidence of extensive consultation with the relevant institutional stakeholders over a number of years before the adoption of the new policy. It also accepted UNISA’s evidence that all members of the Senate were fully acquainted with the content of the draft language policy when it was discussed and adopted at that meeting and that there was substantial compliance with the rules. In any event, held the court, even if the rules were breached, considerations of certainty, finality and practicality would still save the adoption of the new language policy from being set aside. Otherwise, ‘to turn the clock back would have obvious practical resource and costs implications for UNISA for the benefit of an ever-diminishing small number of students’. uyamkelwa umgaqo-nkqubo lowo. Isikhalazo esingobumthethweni esisekwe kwinto ekuthiwa kukoyisakala kweSLC ukudlana indlebe nabantu abachaphazelekayo kunye nezigingqi zendlela-yokwenza malunga nentlanganiso yeSinethi yowama-30 kweyoKwindla ngo- 2016, ukwaphulwa kwemigaqo yeSinethi,14 naso sathiwa qwaka-qwaka nje sajulwa phaya. Inkundla ephakamileyo yafumanisa ukuba babukhona ubungqina bodliwano- ndlebe olubanzi nabantu abaneenxaxheba phaya eyunivesithi ngethuba leminyaka eliqela phambi kokumiselwa kwawo lo mgaqo-nkqubo mtsha. Yabamkela nobungqina beUNISA bokuba onke amalungu eSinethi ayeqhelaniseke ngokupheleleyo nesiqulathi salomgaqo- nkqubo wolwimi lo xa yayixoxwa, yaza yamiselwa kulaa ntlanganiso, futhi kwakukho uthobelo oluninzi lwemithetho. Phofu ke, yatsho inkundla, nokuba imigaqo yayaphulwe, ukuqwalaselwa kwengqiniseko, nokuba sekugqibeleni, nokuba nokwenzeka kwakusaya kukuhlangula ukumiselwa komgaqo-nkqubo lo mtsha wolwimi kuwenze ungabekwa bucala. Kungenjalo ‘ukubuyisa ixesha umva kwakuya kuyingenisa ezingxakini ezininzi zokusebenza nezezincedisi-kwenza iUNISA 13 Proclaimed in terms of s 32 of the ‘Statute of the University of South Africa, GN R 108, GG 28464, 3 February 2006’. 14 Made in terms of s 32 of the ‘Statute of the University of South Africa, GN R 108, GG 28464, 3 February 2006’. kulungelwe kuphela abafundi abanani labo lihleli lisiya lisehla’. [26] On appeal before us, the issues were pared down to whether (a) the impugned decisions contravened s 29(2) of the Constitution; (b) the Senate did not follow its rules, in breach of the principle of legality; and (c) UNISA did not consult the persons most affected by the new language policy, in breach of the principle of procedural rationality. AfriForum contended that UNISA’s review process and the new language policy fell short in respect of each of these aspects. [26] Kwisibheno esasiphambi kwethu, le micimbi yayibekwe ngolu hlobo: Ingaba (a) ezi zigqibo ziphikiswayo zazinxamnye na no s 29(2) woMgaqo-siseko, (b) iSinethi yayingayilandelanga imigaqo yayo, ibe ke njalo yayaphule umgqaliselo wobumthethweni, nokuba (c) iUNISA zange idlane ndlebe nabona bantu babechaphazeleka ngakumbi ngulo mgaqo-nkqubo, olo ilulwaphulo lomgqaliselo wokucingisiswa kwendlela- yokwenza. IAfriForum yaxoxa ngelithi inkqubo yeUNISA yokujongwa-kwakhona kunye nomgaqo-nkqubo lo mtsha wolwimi zazisilela ngazo zombini ezindawo. [27] Regarding issue (a), it was contended for UNISA that the new language policy constituted an attempt at a reasonable measure to make education progressively available and accessible to all, on an equitable basis, taking into account the practicability of a single medium English tuition, the dwindling demand for Afrikaans tuition, the responsibility not to continue entrenching historical privileges accorded to Afrikaans which were no longer justified by student numbers, and the alternative of unqualified multi-medium tuition not yet being reasonably feasible owing to constrained resources. Thus, it accorded with [27] Malunga nomcimbi oku-(a), kwaxoxelwa iUNISA ngelithi, lo mgaqo- nkqubo mtsha wawungumzamo owawunesizathu esivakalayo wokwenza ukuba imfundo iye ibheka phambili ukufumaneka, nokufikeleleka, kuye wonke ubani, ngokolungiselelo okunolingwano, kuqwalaselwa ukuba nokwenzeka kokufundisa nolwimi lokufundisa olunye, olusisiNgesi, njengoko kwakubonakala ukuba iAfrikaans iya iphelelwa kukufunwa ukuba kufundwe ngayo, kuqwalaselwa noxanduva lokuthintela ukuqhubeka ukubethelela ukulungelwa calanye okusezimbalini zeli lizwe okwakunikwe s 29(2). Issue (b) was dismissed on the basis that AfriForum had no standing to complain about any non-compliance with the Senate’s rules, which were in fact observed, but would not have vitiated the impugned decisions in any event. As to issue (c), it was contended once more that considerations of rationality did not oblige UNISA to consult with existing or prospective students who studied in Afrikaans and that its consultations with the institutional bodies sufficed. iAfrikaans, okwakungasenakuthetheleleka ngamanani abafundi bayo, ekubeni ke enye indlela le yokufundisa ngokungathandabuzisiyo ngolwimi-ninzi iseyinto engekabi nakwenzeka ngokuyimbadla ngenxa yokunqaphazeka kweizincedisi-kwenza. Ngaloo ndlela ke kwathiwa iyahambelana no-s 29(2). Umcimbi oku-(b) wachithwa kusithiwa iAfriForum ayinamhlaba wakuma ikhalaze ngako nakuphi na ukungathotyelwa kwemigaqo yeSinethi, eyaye eneneni yenziwe, kodwa nokuba kwakungenjalo laa migaqo yayingasoze iyenze mbi imeko yezaa zizathu ziphikiswayo. Ke wona umcimbi (c) kwathiwa ngawo ukuqwalaselwa kokuba ucingisisiwe na, kwakungayinyanzeli iUNISA ukuba mayidlane iindlebe nabafundi ababekho okanye ababeza kuza ababefunda ngeAfrikaans nokuba ukudlana iindlebe kwayo namaqumrhu angaweziko eliya kwakwanele. [28] I deal first with the question whether UNISA gave effect to the right of its Afrikaans students, enshrined in s 29(2), when it made the impugned decisions. The provisions read: ‘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 [28] Mna ngoku into endiqala ngayo ukuyiqwalasela ngumbuzo othi ingaba iUNISA yalihoya yalisebenzisa na ilungelo labafundi bayo beAfrikaans, lungelo elo limiliselwe ngokukhuselekileyo ku-s 29(2) ngokuya ngokuya yayisenza ezaa zigqibo zayo ziphikisekayo. Imimiselo leyo ifundeka ngolu hlobo: ‘Wonke ubani unalo ilungelo lokufumana imfundo ngolwimi lwasemthethweni okanye ngeelwimi zasemthethweni azikhethele 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.’ ngokwakhe kumaziko karhulumente emfundo apho loo mfundo inako ukwenzeka lula noko. Ukuze kuqinisekiswe ufikeleleko olunembadla kulo eli lungelo, nokusetyenziswa kwalo, urhulumente kufuneka eqwalasele zonke iindawo zemfundo zokukhetha kuzo, eziquka ezo zifundisa ngolwimi olunye, kuhoywe nendaba– (a) yolungiselelo olunolingano; (b) neyokuba nokwenzeka; kunye (c) nemfuneko yokuba kulungiswe iziphumo zemithetho yocalu-calulo yangaphambili nezenzo ezazihamba nezothe.’ [29] It is readily apparent from the wording of its provisions that s 29(2) entails an enforceable right against the State to provide education in the language of choice where this is ‘reasonably practicable’.15 The Constitutional Court described the constitutional test of ‘reasonable practicability’ in determining whether the right in s 29(2) may be invoked in Head of Department: Mpumalanga Department of Education and Another v Hoërskool Ermelo and Another. It said:16 ‘[T]he reasonableness standard built into section 29(2)(a) imposes a context-sensitive understanding of each claim for education in a [29] Kuzicacele kwakwindlela abhalwe ngayo u-s 29(2) ukuba uphethe ilungelo elifanelwe kukusetyenziswa ngokunyanzelwa kukarhulumente ukuba abonelele ngemfundo efunda ngolwimi lokuzikhethela apho le nto ‘inokwenzeka ngokulula’. Inkundla Yomgaqo-Siseko yayichaza indlela yoMgaqo-siseko yokuvavanya ‘ukuba nokwenzeka okulula’ ekuqwalaselenei ukuba elaa lungelo liku-s 29(2) lingenziwa lisebenze, kwityala ekuthiwa ukubizwa kalo: Head of Department: Mpumalanga Department of Education and Another v Hoërskool Ermelo and Another. Kwelo tyala yathi leNkundla: ‘Umgangatho wolwenzeko olulula omiliselwe ku-29(2)(a) unyanzelisa ukuba kufuneka umntu ngamnye ajonge le ndawo aza kuwusebenzisa 15 Gelyke Kanse and Others v Chairperson of the Senate of the University of Stellenbosch and Others [2019] ZACC 38; 2020 (1) SA 368 (CC) para 22. 16 Head of Department: Mpumalanga Department of Education and Another v Hoërskool Ermelo and Another [2009] ZACC 32; 2010 (2) SA 415 (CC); 2010 (3) BCLR 177 (CC) para 52. See also Mazibuko and Others v City of Johannesburg and Others [2009] ZACC 28; 2010 (4) SA 1 (CC) para 47; Jaftha v Schoeman and Others 2005 (2) SA 140 (CC) paras 31-34. language of choice. An important consideration will always be whether the State has taken reasonable and positive measures to make the right to basic education increasingly available and accessible to everyone in a language of choice. It must follow that when a learner already enjoys the benefit of being taught in an official language of choice the State bears the negative duty not to take away or diminish the right without appropriate justification.’ kuyo, aqonde ukuba kuloo ndawo inako na ukwenzeka le nto ayifunayo, le yokufunda ngolwimi oluthile azikhetheleyo. Into eya kuhlala ibalulekile kukuba kuqwalaselwe ukuba uRhulumente kukho mizamo inembadla na nencedayo ayenzayo kuloo ndawo, imizamo yokwenza ilungelo lemfundo esisiseko liye linyuka ukufumaneka nokufikeleleka kuye wonke ubani ngolwimi azikhethela lona. Kufuneka ke into emayilandele ibe kukuba uRhulumente uqinisekisa ukuba xa umfundi sele elifumene eli lungelo lokufundiswa ngolwimi lwasemthethweni azikhethele lona, uRhulumente ngumsebenzi wakhe ukuba agade angalisusi okanye alinciphise elo gunya kuloo mfundi, angayenzi loo nto engabekanga zizathu zivakalayo’. [30] In light of the fact that UNISA students could elect to be taught in Afrikaans in respect of some modules when the new language policy was adopted, UNISA bears the negative obligation of establishing appropriate justification for taking away their right to receive tuition in the language of their choice. And in doing so, it must show that it was not reasonably practicable’ to sustain the dual English/Afrikaans tuition. The enquiry into whether s 29(2) has been complied with is objective. This Court held in University of the Free State v AfriForum,17 that the requirement contains both factual and legal elements – the latter, the legal [30] Ke njengokuba abafundi baseUNISA babenako ukukhetha ukufundiswa ngeAfrikaans iimodyuli ezithile wakuba umiselwe laa mgaqo-nkqubo wolwimi mtsha, iUNISA ke ngumsebenzi wayo ukuba ize nezizathu ezifanelekileyo zokuba ilisuse eli lungelo labo kubo, eli lokuba bafumane imfundo ngolwimi abazikhethele lona. Kunjalo nje, xa isenza le nto, kufuneka ibonise ukuba ‘kwakungenakwenzeka ngokulula’ ukuhlala iyigicinile imfundo kalwimi-mbini engesiNgesi/neAfrikaans. Ukubuzisa ukuba ingaba u-s 29(2) wathotyelwa na kusisenzo esingenachuku. Ke njengokuba le Nkundla yatshoyo kule 17 University of the Free State v AfriForum and Another [2017] ZASCA 32; 2017 (4) SA 283 (SCA) para 26. standard of reasonableness, to be tested against constitutional norms which include equity, redress, desegregation and non- racialism, and the former entails practicability, which is concerned with resource constraints and the feasibility of adopting a particular language policy. indaba: University of the Free State v AfriForum,18 into esiyifunayo iqulethe izinto eziziinyani, nezizezomthetho – ezi zesibini, ezizezomthetho, zezalo mgangatho wokuba lula ngokusemthethweni; zona kufuneka zivavanywe ngokwemimiselo yoMgaqo- siseko equka ulungiselelo ngokolingwano, ukulungiswa, ukupheliswa kocalucalulo, nokungabikho kwempathwano ngobuhlanga; ezi zokuqala zikokwaa kujonga imo yokuba nokwenzeka, yona ke ichaphazeleka zizinto ezinjengokunqongophala kwezincedisi- kwenza nokuba lula kangakanani ukumisela umgaqo-nkqubo wolwimi othile. [31] As mentioned above, AfriForum complained that UNISA failed to provide ‘appropriate justification’ for abrogating its students’ right to be taught in Afrikaans. The principles underlying s 29(2) were not explicitly considered in the final meetings of the SLC, Senate and Council which culminated in the adoption of the new language policy. ‘[R]easonable practicability’ was also not mentioned in UNISA’s reasons for the decision. Without in any way underrating the substance of these submissions, there is, however, a bigger hurdle for UNISA in this regard, even assuming that ‘reasonable practicability’ remained a consideration in the review process as it strenuously contended. [31] Njengokua kukhankanyiweyo apha ngentla, iAfriForum yayikhalazela ukuba iUNISA yoyisakala ukuxela ‘izizathu neenkcazo ezifanelekileyo’ zokwaphula ilungelo labafundi bayo lokuba bafundiswe ngeAfrikaans. Imigqaliselo eseke u-s 29(2) zange iqwalaselwe ngokuphandle kwiintlanganiso zokugqibela zeSLC, nezeSinethi, nezeBhunga, ezi yaba zizo eziphela zikuvuma ukumiselwa kwalo mgaqo-nkqubo wolwimi mtsha; kanjalo ‘imo yokwenzeka ngokulula’ zange ikhankanywe nayo kwizizathu zeUNISA zaso esi sigqibo. Andizithathi ngokungathi azinaxabiso ezi ntetho zeUNISA; kodwa ndithi kukho, nakuba kunjalo, umqobo othe kratya ukuba mkhulu elindwe nguwo iUNISA kulo mba, 18 University of the Free State v AfriForum and Another [2017] ZASCA 32; 2017 (4) SA 283 (SCA) para 26. nditsho naxa sesinokuyicingela into yokuba ‘imo yokwenzeka ngokulula’ yaqwalaselwa ngexesha besenza ukujongwa kwakhona komgaqo-nkqubo wolwimi wabo wangaphambili, njengokuba begxininisa kanobom ukuba bayiqwalasela le mo. [32] Criticism voiced against the SLC and Senate for failing to address s 29(2), especially in view of the guidelines which provided for a methodical discontinuation of Afrikaans module by module, the new policy adopting as a principle and purpose the importance of mother tongue education, and that Afrikaans has developed to an equal status with English as an academic language, fully capable of giving effect to this principle, drew a concerning response from UNISA. In her supplementary answering affidavit, the SLC’s chairperson, Prof Moche, stated that the considerations prescribed by s 29(2) ‘would arguably be relevant to the State when it is required to fulfil its responsibility … to ensure the effective access to and implementation of the right concerned, but are not relevant to UNISA when [it] determines its language policy’. This was so, she went on, because ‘[a]s opposed to the State, UNISA is not liable to ensure the effective access to, and implementation of the right concerned’. [32] Isigxeko esibekwa iSLC neSinethi ngenxa yokoyisakala kwazo ukuhoya u-s 29(2), ngakumbi ngenxa yokubakho kwezalathandlela ezaye zenza kwabakho indlela equlunqekileyo yokupheliswa kweAfrikaans, ngemodyuli emva kwenye, lo mgaqo-nkqubo mtsha, ngokuthatha njengomgqaliselo kunye nenjongo, ukubaluleka kwemfundo ngolwimi lweenkobe, nale nto yokuba iAfrikaans sele yaphuhliseka yafika kwiwonga elilinganayo nelesiNgesi njengolwimi lobumfundimani, olukwazi ngokuzeleyo ukuwenza usebenze lo mgqaliselo, njengoko yatsho iAfriForum, eso sigxeko sahlangana nempendulo exhalabisayo ephuma kwiUNISA. Kuxwebhu lobungqina bakhe obongezelelweyo, usihlalo weSLC, uNjing Moche, waxela ukuba ezaa ngqwalasela ezimiselwe ngu-s 29(2) ‘kungaxoxwa kuthiwe ziya kuba nokungena kuRhulumente xa kufuneka ukuba enze uxanduva lwakhe … ukuqinisekisa ufikeleleko olunomphumela kulo, nokusebenziseka kwalo, eli lungelo sibhekisa kulo, kodwa azingeni ndawo kwiUNISA xa iziqingqela umgaqo-nkqubo wolwimi wayo’. Uhambise wathi, le nto injalo, kuba ‘ngokungafaniyo noRhulumente, iUNISA ayinaxanduva lokuqinisekisa ufikeleleko olunemiphumela kulo, nasekusetyenzisweni kwalo, eli lungelo kubhekiswa kulo’. [33] This interpretation does not, however, conform with the meaning which the Constitutional Court has ascribed to s 29(2) and the ambit of its application. In AfriForum and another v University of the Free State,19 the Court stated unequivocally that ‘[s]ection 29 of the Constitution applies in its totality to the education sector’20 and that ‘no sound legal basis exists for the isolation of parts of s 29(2) in seeking to understand the totality of the requirement of ‘reasonable practicability’ as its different parts are mutually reinforcing.21 The court went to define the meaning of the ‘reasonableness’ envisaged in these provisions as follows: ‘Reasonableness within the context of s 29(2) demands that equity, practicability and the critical need to undo the damage caused by racial [33] Le ndlela yokucacisa ayihambelani ke kodwa nentsingiselo enikwe yiNkundla Yomgaqo-siseko uyinika u-s 29(2) kwanommandla wosebenziseko lwayo. Kwityala elibizwa kanje, AfriForum and another v University of the Free State, iNkunda yatsho ngokuvakala phandle ukuba ‘Isolotya u-29 loMgaqo-siseko lisebenza lonke ngobunjalo balo kwicandelo lezemfundo.’ Nokuba ‘akukho sizathu siphilileyo ngokwasemthethweni sokwahlula mhlaba wasemthethweni uphilileyo sokwahlula ngazine iindawo zika-s 29(2) ekuzameni ukuqonda zonke ziphelele izinto ezihamba nale nto yokuba kufuneka iqwalaselwe ‘imo yokwenzeka ngokulula’ kuba kaloku iindawo zayo ezahlukileyo zinikana amandla. Inkundla yaya kuchaza intsingiselo ‘yokuba lula ngokweemeko ezivumayo’ le exelwa kule mimiselo ngale ndlela ilandelayo: 19 AfriForum and Another v University of the Free State [2017] ZACC 48; 2018 (2) SA 185 (CC) para 50. 20 Ibid para 46. 21 Ibid para 45; Ermelo fn 15 para 52. discrimination, also be the intrinsic features of the decision-making process relating to effective access to education in a language of choice. For they are some of the decisive factors to which regard must be had even where ‘a learner already enjoys the benefit of being taught in an official language of choice’. ‘Ubulula bokwenzeka ngokweemeko ezivumayo’ apha ku-s 29(2) buthetha ukubakho kolungiselelo ngokolingwano, ukuba nokwenzeka, kunye nale mfuno ibaluleke gqitha yokuba kususwe umonakalo owabangelwa lucalulo ngokobuhlanga, kwaneempawu ezendeleyo zenkqubo yokwenza izigqibo ezibhekisa kufikeleleko olunemiphumela emfundweni ngolwimi ozikhetheleyo. Kuba zikhona ezi meko zimele ukusetyenziswa ukwenza izigqibo ezithile, ezo meko zifuna ukujongwa kanye nalapho umfundi sele enayo le nto ilungileyo yokufundiswa ‘ngolwimi lwasemthethweni azikhethele lona.’ [34] Suffice it to say that UNISA’s understanding of its responsibility under s 29(2) was fallacious. It ineluctably suggests that the institution did not properly comprehend the implications of the right to receive education in the official language of one’s choice, the constitutional parameters within which its powers had to be exercised, and the precise ambit of responsibility which s 29(2) imposed upon it, when it reviewed its language policy and adopted a new one. This, of necessity, affects the validity of the decision to adopt the new policy. [34] Kwanele ke apha ukuba sitsho ukuba indlela iUNISA eyayiluqonda ngayo uxanduva lwayo phantsi kuka-s 29(2) yayineziphene. Ikwenza ungabi nakuzinceda ukucinga ukuba eli ziko lalingaziqondi ngokufanelekileyo izinto ezizalwa lilungelo lokuba ufumane imfundo ngolo lwimi lwasemthethweni ozikhetheleyo, abayiqondi nemida yomgaqo-siseko ekufanele ukuba igunya lalo eli lungelo lisetyenziswe kuyo, kanti nobungakanani obuthe ngqo, ncam bomhlaba woxanduva lwalo, ezabekwa ngu- s 29(2) kuyo iUNISA mhla yajonga- kwakhona umgaqo-nkqubo wolwimi wayo yaza yamisela omtsha umgaqo-nkqubo. [35] There is a further chink in UNISA’s armour. The considerations upon which it relied to prove that it was not ‘reasonably practicable’ to continue with dual-medium [35] Kukho esinye isikroba kwisikrweqe seUNISA. Leyo yile miqwalasela yayiqamele ngayo ukuze ikwazi ukubonakalisa ukuba kwakungekho tuition, were the cost-saving that it claimed would be generated by offering tuition in English only which could be used to develop the other official languages and would avoid giving Afrikaans students preferential treatment by offering tuition in their mother tongue, while mother tongue tuition was not available to non-Afrikaans and English speaking students. ‘ukwenzeka ngokulula’ ukuba iqhube ngemfundo kalwimi-mbini, nokuba ukungaqhubi nayo kuyinceda ekuphunguleni iindleko ngokuthi ifundise ngesiNgesi kuphela ize isebenzise loo mali iyigcinileyo ekuphuhliseni ezinye iilwimi zasemthethweni, nokwa kukwazi ukuthintela ukunika abafundi beAfrikaans ukuphatheka okukhethekileyo ngokufundisa ngeAfrikaans ngeli lixa ufundo ngolwimi lweenkobe lungafumaneki kubafundi abangathethi Afrikaans, kwanokwehla kwamanani abafundi abafunda ngeAfrikaans. [36] The first problem is that none of these issues was discussed at the final meeting of the SLC, Senate and Council in which it was resolved to adopt the new policy, as the relevant minutes show. Regarding cost- saving, the only reference is to a document titled ‘Template for Council Documents’, which served before Council in a meeting of 22 April 2016. It reads: ‘3. BUDGET / FINANCIAL IMPACT The financial impact of the amendments will be a reduction in the operational budget for the printing and despatch of study material. The use [36] Ingxaki yokuqala ke yile yokuba ezi zinto akukho nanye yazo ezakhe zaxoxwa kwiintlanganiso zokugqibela yeSLC, neyeSinethi, neyeBhunga apho kwakuye kwagqitywa ekubeni umiselwe lo mgaqo- nkqubo mtsha, njengoko imizuzu yezintlanganiso ibonisa. Malunga nokunciphisa iindleko, imibhalo yakhona ibonakalisa ukuba kwathethwa kwaba kanye kuphela ngale nyewe, kuxwebhu olunetayitile ethi, ‘Template for Council Documents’ Elo xwebhu lalibekwe etafileni phambi kweBhunga kwintlanganiso yowama-22 kuTshaziimpuzi ka-2016. Elo nqaku lifundeka ngolu hlobo: ‘3. ISICWANGCISO-MALI / ISIPHUMO NGAKWEZEMALI Isiphumo sezi zilungiso esiphathelele kwezemali siya kuba kukuncipha kwesicwangciso-mali sokusebenza ebesenzelwe of one language only will reduce these costs when the language policy is implemented.’ The challenge posed by this entry is that it is not explained anywhere in UNISA’s papers and there is no indication at all that it was debated at the relevant meeting. This is despite AfriForum’s pertinent challenge in its supplementary affidavit (in terms of Uniform Rule 53(4)) that ‘there is no costing whatsoever to arrive at a rational comparison of costs with or without the cost of retaining Afrikaans … [no consideration of the fact that] if a student elected to proceed in English and joined a module with more than 100 students, the cost of printing and despatch would increase because such a student would be entitled to receive hard copy study material … [t]here is no costing of the “scaffolding”.’ ukushicilela nokuhanjiswa kwamaxwebhu okufunda. Ukusetyenziswa kolwimi olunye kuphela kuya kuziphungula ezi ndleko wakuba lo mgaqo-nkqubo wolwimi sele usetyenziswa.’ Ingxaki ebekwa leli nqaku yile yokuba alicaciswanga naphina kumaphepha aseUNISA, kwaye akukho nento ebonisayo tu ukuba kwakhe kwaxoxwa ngayo nakuloo ntlanganiso kwimizuzu yayo. Le nto yenzeka nangona iAfriForum sele iyicele umngeni ngokugxininisayo kwixwebhu lobungqina bayo obusisixokomezelo (ngokoMgaqo Wofaniso u- 53(4)) isithi akukho kubala zindleko kwakha kwenziwa nje tu, okwenza ukuba kufikelelwe ekuthelekiseni iindleko ngendlela eqiqisisiweyo, apho zikhoyo, nalapho zingekhoyo iindleko zokuyeka ihlale ikho iAfrikaans … [akukho ngqwalasela yale nyaniso yokuba] ukuba umfundi uye wakhetha ukuqhubela phambili ngesiNgesi, waza wajoyina imodyuli enabafundi abangaphezulu kwe-100, iindleko zokushicilela nokuthumela ziya kwanda kuba loo mfundi uya kuba efanele kakade ukuba afumane amaxwebhu aprintiweyo ezifundo … akukho kubala zindleko kunjalo zalo “olo phahla”.’ [37] Moreover, AfriForum’s undisputed contention that Afrikaans study guides were not printed but were made available and accessible online, so that the cost of printing would be borne by the student instead of UNISA, was not addressed. UNISA merely alleged that economies of scale are lost when course materials have to be printed in many languages. This obviously did not apply when the study guides were made available [37] Ngaphezulu, ukungavumelani nabo kweAfriForum okungenakuphikiswa okuthi izikhokelo-zifundo zeAfrikaans zazingashicilelwanga, kodwa zazenziwe zafumaneka zaza zafikeleleka kwi-intanethi, nto leyo ithetha ukuba ke iindleko zoshicilelo zaziya kuba zezomfundi, endaweni yokuba zibe zezeUNISA, zange kuhoywe. I-UNISA yavele yathetha nje ityhola ukuba iindlela zolungelelwaniso kwezoqoqosho ziyalahleka online. As AfriForum pointed out, UNISA never assessed the commercial viability of the approximately 300 modules offered in Afrikaans in comparison to the average commercial viability of about 2 300 modules offered in English. I agree that an equitable comparison would have been one comparing the commercial viability of the 300 Afrikaans modules to the 300 least profitable modules offered in English, as part of the exercise. This was not done. xa kufuneka ukuba kushicilelwe izinto- kufunda zeekhosi zishicilelwe zibe kwiilwimi ezininzi. Kodwa ke le ingxoxo ngokucacileyo yayingangeni ndawo xa izikhokelo-zifundo zazenziwe zafumaneka ngeintanethi. Njengoko yatshoyo iAfriForum, iUNISA zange ikhe yenze luhlolo lokujonga igalelo kwezemali elenziwa zezi modyuli zimalunga nama-300 ezifundiswa ngeAfrikaans ize ithelekise nelenziwa ziimodyuli ezimalunga nama-2 300 ezifundiswa ngesiNgesi. Ndiyayivuma into yokuba uthelekiso olunolinganiso beluya kuba luthelekiso lokusebenza kweemodyuli ezingama--300 zeAfrikaans kolwemodyuli ezingama-300 lweemodyuli ezinenzuzo eninzi ezifundiswa ngesiNgesi njengenxalenye yolo thelekiso. Lento zange yenziwe. [38] UNISA also did not explain why Afrikaans modules could not be cross- subsidised by English modules in terms of the common feature of university funding. AfriForum stated, without any challenge, that many university courses, such as philosophy, French and their ilk, are not commercially viable, as the cost of presenting them cannot be covered by the revenues they generate because of the low numbers of students who register for these courses. But they are still offered because they are of strategic and national importance, [38] IUNISA kanjalo zange icacise ukuba kwakutheni iimodyuli zeAfrikaans zingenakuhlawulelwa kwimali yezesiNgesi ngokwendlela edibanisayo yoniko-mali yiyunivesithi. IAfriForum yaxela, ayaphikiseka, ukuba iikhosi ezininzi zaseyunivesithi, ezifana nefilosofi, isiFrentshi, nezinye ezilolu didi, azingenisi njengoko iindleko zokuba nazo zingenako ukuhlawulelwa kwiimali ezivela ngazo ngenxa yokuba mbalwa kwabafundi abazibhaliselayo. Kodwa ziyafundiswa kuba ukubaluleka kwazo kokwesizwe enhance the university’s intellectual environment, and are cross-subsidised by the more popular courses which are highly profitable owing to the large student numbers who take them, and the attendant economies of scale. It is well to bear in mind that even if the removal of Afrikaans as a LOLT would result in a cost saving, that it would not necessarily render the decision to adopt the new language policy compliant with the test in s 29(2), which has a normative content that goes beyond the availability of resources. Nevertheless, UNISA failed to support its reliance on resource constraints because the figures it produced were not substantiated: there was no record showing any investigation or research with reference to proper data and the source of such data. It did not establish that it was not ‘reasonably practicable’ from a commercial standpoint to continue to offer tuition in Afrikaans. nokwezicwangciso-ezinobulumko, zinegalelo kudidi oluphezulu lobomi baseyunivesithi kwezobunkcuba-buchopho. Zithi ke zihlawuleleke zezinye iikhosi ezi zithandwa kakhulu zona, ezithi ke zingenise inzuzo enkulu ngenxa yokuba baninzi kwabafundi abazithathayo, kwakunye nezoqoqosho lolungelelwano olusisiphumo soko. Kuya kuba kuhle ukuba kuhlale kukhunjulwa ukuba nokuba ukususwa kweAfrikaans njengolwimi lokufunda nokufundisa bekuya kudala ucutheko- zindleko, loo nto ibingayi kusenze esaa sigqibo sokumisela umgaqo-nkqubo omtsha sibe sesifanelekileyo xa sivavanywa ngo-s 29(2), yena onesiqulatho esinika iimpawu zovavanyo ezidlulayo lee kubukho bezincedisi-kwenza. Nakuba kunjalo, IUNISA yoyisakala ukuxhasa oku kwayama kwayo kunqongophalo lwezincedisi-kwenza, kuba amanani eyawavezayo ayengaxhaswanga njengoko kwakungekho rekhodi libonisa uxilongo okanye uphando- nzulu apho kukho iinkukacha-luphando ezifanelekileyo. Zange ke ngoko ikwazi ukuzoba umfanekiso obonisa ukungabi nako ‘ukwenzeka okulula’ xa kujongwa ngakwezemali, into ke ebiya kwenza ukuba ingabi nako ukuqhuba ifundisa ngeAfrikaans. [39] Concerning UNISA’s reliance on its student demographics, it contended that the percentage of students: (a) who indicated that Afrikaans was their home language, was 8,6 per cent in 2015, that it increased to 8,7 per cent in 2016 and that it would drop to an estimated 7,3 per cent in future; (b) who registered for modules in Afrikaans was 0,6 per cent in 2015, and which decreased to 0,3 in 2016 (although these figures were subsequently changed to 2 per cent in 2015 and 1 per cent in 2016); and (c) who registered for at least one module in Afrikaans was 5,3 per cent in 2015 and 5,1 per cent in 2016. In sum, the number of its Afrikaans students halved between 2015 and 2016 and remained ‘extremely low’. [39] Malunga nokwayama kweUNISA kwiimpawu-buntu zabafundi bayo, yaxoxa ngelithi, ipesenti yabafundi: (a) abaxela ukuba iAfrikaans yayilulwimi lwabo lweenkobe yayingu-8,6 ekhulwini ngo-2015, yanda yaba ngu-8,7 ekhulwini ngo-2016, ke kwakuqikelelwa ukuba iza kuhla kwixesha elizayo iyo kutsho ku-7,3 ekhulwini; (b) ababebhalisele iimodyuli zeAfrikaans babeyi-0,6 ekhulwini ngo-2015, behlela ku- 0,3 ngo-2016, nangona la manani aye aguqulwa emva koko aya kustho ku-2 ekhulwini ngo-2015 no-1 ekhulwini ngo- 2016; kanjalo (c) ababebhalisele imodyuli yanye, ubuncinci, yeAfrikaans babengu-5,3 ekhulwini ngo-2015 no-5,1 ekhulwini ngo- 2016. Ngokufutshane, inani labafundi bayo beAfrikaans lafikelela kwisiqingatha phakathi ko-2015 no-2016, laza lahlala ‘lisezantsi ngokugqithisileyo’. [40] AfriForum disputed these statistics as implausible because UNISA did not disclose their source and they did not tally with the national language demographics when applied to UNISA’s student numbers. For its part, AfriForum relied on statistics extracted from UNISA’s Structured Query Language database system and from which a qualitative analysis was drawn. According to this data, in 2016 out of 1 881 267 module and year [40] IAfriForum yaziphikisa ezinkcukacha- manani yathi azinabunyani, kuba iUNISA zange iyixele indawo ebizithatha kuyo, zaye zingahambelani nazo neempawu-buntu zolwimi zesizwe xa ezi mpawu zifanekiswa namanani abafundi baseUNISA. Kule indawo, iAfriForum yaxhomekeka kwiinkcukacha-manani ezazikhiwe kwezaseUNISA, ezikwi Structured Query Language database system yathi yenza ngazo course registrations, 96 816 were offered in Afrikaans. This number translated to 15 per cent of the total modules offered at UNISA out of which 5,15 per cent were chosen by approximately 25 000 students, each taking an average of four modules. Afriforum contended that removing Afrikaans as a LOLT thus destroyed about 100 000 study opportunities in that language. Importantly, AfriForum highlighted that a single digit percentage was not indicative of a small number of students as, for example, 5 per cent could amount to as many as 600 students. So, whilst 25 000 students may be a negligible number in UNISA, which has massive student numbers, that number generally constituted the total student population in other major residential universities in South Africa and was far from insignificant. uhlahlelo-luphando lophando olukhunyushwa kuthiwe luqualitative. Ngokwe nkcukacha luphando ngo-2016 kwakukho iikhosi neemodyuli ezisisigidi i- 1 881 267 ezabhaliselwayo. Phakathi kwazo ezingama-96 816 zazifundiswa ngeAfrikaans. Eli nani laba yi-15 yeepesenti, ekhulwini, yazo zonke iimodyuli ezazifundiswa eUNISA. Phakathi kwazo i- 5,15 ekhulwini zazikhethwe ngabafundi abamalunga nama-25 000, umfundi ngamnye ethatha umyinge weemodyuli ezine. Ukuyekisa iAfrikaans ukuba lulwimi lokufunda nokufundiswa ke ngoko kwachitha amathuba amalunga ne-100 000 okufunda ngalo olu lwimi, njengoko yayixoxa isitsho iAfriForum. Into ebalulekieyo, iAfriForum yagxininixa ukuxela ukuba ipesent elinani elinye yayingaxeli ukuba inani labafundi ephuma kulo lincinci, njengoko, umzekelo, i-5 pesent isengaba ngabafundi abangama-600. Ngoko ke, ngeli lixa abafundi abangama-25 000 basenokuba linani elincinci gqitha eUNISA, kuba iba namanani amakhulu gqitha abafundi, elaa nani lalilinani elingabafundi abapheleleyo kwezinye iiyunivesithi ezinkulu apho bahlalayo abafundi apha eMzantsi Afrika, laye lingelonani lidelekileyo tu. [41] UNISA had two challenges to overcome under this heading. First, without even taking [41] IUNISA yayineengxaki ezimbini ekwakufuneka izoyisile phantsi kwesi the disputes relating to the actual statistics into account, it was indisputable that despite the decreasing demand for Afrikaans tuition, a number of students still wanted to enrol for tuition in Afrikaans. And what is evident from the record is that the statistics, which UNISA claimed formed the basis of the adoption of the new language policy, were not placed before the Senate and the Council at the critical meetings which resolved to adopt the policy. This was indeed confirmed by its own admission that ‘[i]t was not necessary … for Senate and Council to have the exact figures and percentages before them on 30 March 2016 and 28 April 2016 respectively when UNISA’s new language policy was adopted to know that the demand for Afrikaans tuition has dwindled to the extent that it had’. It is incomprehensible why the SLC would see no need for the Senate and Council to have recourse to the hard numbers of the students who would be affected by its far-reaching decision, in determining whether it was reasonably practicable to retain Afrikaans as a LOLT. Its stance is entirely insupportable. The omission to place the statistics which founded the recommendation to remove Afrikaans as a LOLT before the Senate and Council breached s 29(2) and rendered the decision to adopt the new language policy unlawful. sihloko. Okokuqala, singekahoyi neempikiswano ezimalunga neenkcukacha- manani, kwakuyinto engenakuphikiswa ukuba nangona ayesihla amanani abafundi beAfrikaans, lalikho iqela elivakalayo labafundi ababesafuna ukubhalisela ukufunda ngeAfrikaans. Kunjalonje, into ebonakalayo kwirekhodi kukuba ezi nkcukacha-manani, eyaye iUNISA isithi ziyinxalenye yesizathu sayo sokumisela umgaqo-lwimi omtsha, zazingazange zibekwe phambi kweSinethi naphambi kweBhunga kwiintlanganiso ezazibaluleke gqitha, ezathatha isigqibo sokuba umgaqo- nkqubo wolwimi omtsha mawumiselwe. Le nto yabuya yaqinisekiswa kukuba kwayona iUNISA yavuma yathi, ‘zange kubekho mfuneko … yokuba iSinethi neBhunga zifumane amanani athe ncam kunye neepesenti phambi kwabo ngowama-30 kweyoKwindla ngo-2016 nangowama-28 kuThshaziimpunzi ngo-2016, ngokulandelelana, xa umgaqo-nkqubo omtsha waseUNISA wawumiselwa, ukuze zazi ukuba ukufunwa kweAfrikaans kwakuhlile, kangangale ndlela kwakuhle ngayo.’. Akuqondakali tu ukuba kwakutheni na ukuze iUNISA ingayiboni imfuneko yokuba iSinethi neBhunga zibone amanani acacileyo abafundi ababeza kuchaphazeleka sisigqibo sayo esinabele ezintweni ezininzi kangaka, ekuqikeleleni ukuba kwaye kukho na ‘ukwenzeka okulula’ okanye hayi ukuze bayiyeke iAfrikaans ihlale ilulwimi lokufunda nokufundisa. Indlela eyithatha ngayo le nto ayinakuxhaseka konke-konke, futhi ukulitsiba eli nyathelo lokuzisa iinkcukacha-manani ezasisiseko sokuvuma ukuba mayisuswe iAfrikaans njengolwimi lokufunda nokufundisa kwaba kukwaphula u-s 29(2) kwaza kwasenza esaa sigqibo sokumisela umgaqo-nkqubo wolwimi omtsha saba sesingekho mthethweni. [42] It should be made clear that this matter is distinguished from Gelyke Kanse and AfriForum v University of the Free State, which upheld the language policies, by some critical factors. First, in those two matters the affected universities, Stellenbosch and UFS, which are conventional residential universities, the primacy of Afrikaans as a LOLT, in settings which provided for dual medium classes with interpretation from Afrikaans to English coupled with a significant cost of upscaling in one and separate parallel classes in English and Afrikaans in the other, created a critical problem. It was not in dispute there that the arrangement caused the black students, who were in the majority in the University of the Free State, and were not all conversant in Afrikaans, to feel excluded and marginalised in the classrooms and excluded from other aspects of campus life, including university events conducted in Afrikaans. UNISA is, as [42] Mayicace ke into yokuba lo mcimbi wahlukile kule: Gelyke Kanse and AfriForum v University of the Free State, apho imigaqo- nkqubo yolwimi ephikisekayo kwavunyelwana nayo, ngenxa yeemeko ezithile ezibalulekileyo. Okokuqala, kwezi mbambano zimbini, kwezaa yunivesithi zazichaphazeleka iStellenbosch neUFS, zona eziziiyunivesithi ekuhlaliwa kuzo ngabafundi, ukuba phambili kweAfrikaans njengolwimi lokufunda nokufundisa, kwiindawo ezazifundisa ngolwimi-mbini, ekwakukho notoliko lweAfrikaans itolikelwa kwisiNgesi, kudibene neendleko ezivakalayo zokunyusela umgangatho kwiklasi enye, nakwiiklasi ezaziqhubeka xeshanye kwenye kube ngesiNgesi kwenye kube ngeAfrikaans, kwadala ingxaki eyayinzulu kunene. Yayingaphikiseki ke apho into yokuba abafundi abamnyama, eyayingabo abaninzi phaya eYunivesithi YaseFree State, baye bengayazi ke iAfrikaans, ukuba bazive previously mentioned, a distance university with no conventional, physical classes or any campus life to speak of. There is no risk of racially segregated classes or any danger of a racial barrier to full enjoyment of any of the opportunities offered to its students, that might offend constitutional rights and norms. In the circumstances I fail to see how the exercise of the right of UNISA’s Afrikaans speaking students to tuition in their mother tongue could pose a threat to racial harmony and possibly nurture racial supremacy as happened in Stellenbosch and Free State Universities. bekhutshelwe ngaphandle kwezinye izinto zobomi, ekwakukho kuzo nezinto ezenzeka eYunivesithi, ezaziqhutywa ngeAfrikaans. IUNISA njengokuba sekukhe kwatshiwo, yiyunivesithi efundisela mgama, engenazo iiklasi eziqhelekileyo ezisezindlini, ingenabo nabomi basekhampasini esingathetha ngabo. Akukho ngozi yokuba kungakho iiklasi ezicalucalulwe ngokobuhlanga, okanye nayiphi na ingozi yothinteleko ngokobuhlanga ukuba umfundi angakhululeki ukuba axhamle ngokuzeleyo kuwo onke la mathuba ewanika bonke abafundi nayo, obelungaphula imimiselo yoMgaqo-siseko. Andiboni, kwezi imeko ukuba bekuza kwenzeka njani ukuba bathi abafundi baseUNISA beAfrikaans xa befumana ilungelo labo lokufunda nokufundiswa ngolwimi lwabo lweenkobe babe bayingozi ngokobuhlanga baze futhi baphakamele ezinye iintlanga, ngokwendlela ekwakusenzeka ngayo kwiYunivesithi yaseStellenbosch nakweyaseFree State. [43] Secondly, there was no dispute in the two matters that the universities had executed their mandate in reviewing their language policies meticulously and properly. In Gelyke Kanse, the Court set out the precise manner in which the ‘University determined by careful study that the cost of immediately changing to fully parallel medium tuition would total about R640 million in [43] Okwesibini, kwakungekho mpikiswano malunga nezaa meko zimbini zokuba ezaa yunivesithi zenza umsebenzi wazo ofanelekileyo ngokujonga- kwakhona imigaqo-nkqubo yolwimi yazo ngobunono nangokufanelekileyo. Kwindaba yeGelyke Kanse, iNkundla yayiqingqa kakuhle indlela ethe ngqo yokuba ‘iYunivesithi yayiqiqa ngophando olunenkathalo into yokuba infrastructure (including additional classrooms), plus about R78 million each year thereafter for additional personnel costs … which would entail a 20% increase in fees, an additional R8 100 on top of the approximately R40 000 per year students on average pay now’. There was no dispute on the steps which had been followed in the language policy review process and no procedural objections thereto. The universities had been driven by increasing racial segregation to downgrade Afrikaans in Stellenbosch University and abolish it completely in the University of the Free State which, incidentally, had no resource constraints to continuing with a dual-medium language policy. Here, there is furthermore no risk that the retention of Afrikaans as a LOLT would have the consequence of concentrating Afrikaans-speaking in the institution against which the LPHE cautioned. iindleko zokuthi ngesiquphe itshintshe ingenise ukufundisa ngolwimi-mbini ozeleyo zaziya kufika kuma-R640 ezigidi zeziseko, (eziquka neeklasi ezongezelelweyo) kunye malunga nama-R78 ezigidi unyaka nonyaka emva koko, ukuze kongezwe abasebenzi … nto leyo yayiya kubangela ukwanda kwemali yokufunda nge-20%, ibe ke leyo ngama-R8 100 eyongezelelekayo, phezu kwale sele ihleli imalunga nama-R40 000 ngonyaka kumfundi ngamnye imali ayihlawulayo kungoku’. Kakwungekho mbambano malunga namanyathelo ayethathiwe ukujonga-kwakhona imigaqo-nkqubo leyo. Ezaa yunivesithi zaziqhutywe kukwanda kocalucalulo ngokubuhlanga ukuba uthotywe umgangatho weAfrikaans eYunivesithi yaseStellenbosch, waze wayekwa tu eYunivesithi yaseFree State. Kodwa ke yona yayingenayo ingxaki yokuncitshelwa zizincedi-kwenza ukuba ingaqhubeki nemfundo kalwimi-mbini. Apha akukho ngozi yokuba ukuhlala kweAfrikaans ilulwimi lweLOLT bekungabangela ukuphinda kwande abafundi abathetha iAfrikaans kweli ziko, elalilunyukisiwe ke ngayo yiLPHE. [44] I am not convinced that UNISA has established on the evidence that the practicability test or the considerations of reasonableness – equity, inclusivity and [44] Andikholelwa ukuba iUNISA iye yanabo ubungqina bokuba uvavanyo lokuba nokwenzeka okanye ukuqwalasela ukuba lula kokwenzeka – ulungiselelo access of other students – would be offended by the retention of Afrikaans as one of UNISA’s LOLTs. To find otherwise would, in my view, mean that the mere exercise of one’s right to be taught in their mother tongue would be rendered unconstitutional where it has not been shown that non- Afrikaans students would be deprived of learning and other educational opportunities by the retention of Afrikaans as a LOLT, or that maintaining it as a LOLT was unaffordable, or would result in unlawful racial discrimination in an institution of learning with a proclaimed, ambitious vision to promote multilingualism by developing all the official languages including the San languages. olunolungelelwano, ukudibana-nabanye, nokukwazi kwabanye abafundi ukufikelela – beluya kuphatheka kakubi kukuyekwa kweAfrikaans ikhona njengolunye lweelwimi zeUNISA zokufundisa. Ukufumanisa ngolunye uhlobo kum kungathetha ukuba ukusebenzisa nje komntu ilungelo lakhe lokuba afundiswe ngolwimi lwakhe lweenkobe bekuya kuthiwa kuyahlabana noMgaqo-siseko, ekubeni kungakhange kubonakaliswe ukuba abafundi abangathethi iAfrikaans bebeya kuvimbeka ukufunda namanye amathuba emfundo ngokuhlala kweAfrikaans iyiLOLT, okanye ukuba ukuyiyeka ihlale ibe yiLOLT bekuduru okanye bekuya kukholelela kucalulo ngokobuhlanga olungeluhle, kwiziko lemfundo apho kuthiwa kuzanywa ulwimi-ninzi, kuquka neelwimi zomthonyama zaseMzantsi Afrika. [45] Stripped to its core, UNISA’s case was that it was not reasonably practicable to continue Afrikaans tuition for a minority of its students because the other indigenous official languages were not as developed as academic and science languages as Afrikaans was, and that it would be redeveloped later, alongside the other indigenous languages to bring them all on par. This raises the question how UNISA’s noble and self-admittedly progressive goal to develop all South Africa’s indigenous languages to become [45] Xa sele kususwe ingxam yayo, ikheyisi yeUNISA ibikukuthi kwakungekho kwenzeka ngokulula ukuba kuqhutyekwe nemfundo ngeAfrikaans isenzelwa imbinana yabafundi bayo, kuba ezinye iilwimi zasemthethweni ezizezalapha zazingaphuhlisekanga ukuba zibe ziilwimi zobumfundimani nezenzululwazi, njengokuba yona yayinjalo, nokuthi yayiza kuphinde iphuhliswe kamva, ndawonye nezinye ezi iilwimi zalapha, ukuze nazo zilingane nayo ngomgangatho. Le nto ivusa LOLT’s, to benefit its students and sustain this precious and threatened national resource, will be advanced, and what useful purpose will be served by knocking down a fully developed and functional language of learning and tuition to ‘develop the other official languages to its standard’, when there is apparently no sound reason to do so other than dwindling interest in the language, and avoiding offering mother tongue tuition to a portion of students. To my mind, there is a lot to be said for AfriForum’s argument that there was already a better alternative in place to deal with the challenge of dwindling demand for Afrikaans tuition in the form of the Guidelines for the Discontinuation of Afrikaans in courses or modules. Taking away a constitutional right that is already being enjoyed, in these circumstances hardly satisfies the rationality test and cannot be justified. imibuzo yokuba iyakuphuhla njani le njongo incomekayo yeUNISA, ezitsholo ngokwayo ukuba inohambelo-phambili, yokuphuhlisa zonke iilwimi zalapha eMzantsi Afrika zabantu, ukuze zide zibe ziilwimi zokufundisa nokufunda, ukwenzela ukulungelwa kwabafundi bayo nokuyenza ihlale ikhona le ndyebo yesizwe, iyakwenzeka njani, kona yintoni injongo ebalulekileyo eya kuzalisekiswa kukudodobalisa ulwimi olusele lwaphuhliseka ngokuzeleyo nolusebenzayo lokufunda nokufundisa, ukuze ‘iphuhlise ezinye iilwimi zasemthethweni zifike kumgangatho wayo’ xa nje kubonakala kungekho sizathu sicacayo sokwenjenjalo, ngaphandle komdla onciphayo kulo olu lwimi nokungafuni ukufundisa ngolwimi lweenkobe kwigcuntswana labafundi bayo. Ngokwam ukubona, ininzi into ethethelela izimvo zeAfriForum, ezi zokuba yayisele ikhona into ekwakunokusetyeziswa yona, futhi ingcono, yokujongana nomngeni wokuncipha kwabantu abafuna ukufunda ngeAfrikaans. Iphaya kwiZalathandlela Zokuphelisa IAfrikaans kwiikhosi nakwiimodyuli. Ke ukususa ilungelo lomgaqo-siseko elisele libasebenzela abaninilo kwezi meko aluphumeleli nakancinci kuvavanyo lokuba icingisisiwe na le nto, kungathetheleleki kananjalo. [46] AfriForum v University of the Free State envisaged the possibility of cases where dual-medium language policies could be maintained without causing any harm. The Chief Justice said:22 ‘At a conceptual level, dual medium institutions might well exist without necessarily nurturing or perpetuating unfair advantage or racial discrimination and its exceedingly harmful tendencies. When that is so, then the right to be taught in a language of choice could be effectively accessible and implemented … Where the enjoyment of the right to be instructed in an official language of choice is achievable without undermining any constitutional aspiration or value, then the equity test might well have been met.’ This seems to me to be such a case. [46] Ndisabuyela kule kheyisi ethi, AfriForum v University of the Free State eyaye yabonisa ubukho beemeko apho imigaqo-nkqubo kalwimi-mbini inako ukugcinwa kungabikho mntu uviswa buhlungu. Yathi iJaji eYongameleyo: ‘Xa ucinga ngawo nje, amaziko kalwimi-mbini asengahlala ekho kungekho mfuneko yakukokosa okanye yakuqhubekisa ukulungelwa okucalanye okanye ucalulo ngokobuhlanga kunye nezimbo zalo. Xa injalo loo nto, ilungelo ke lokuba ufundiswe ngolwimi ozikhetheleyo lingaba nako ukufikeleleka lize lenzeke ngokunemiphumela … Apho inako ukwenzeka le nto yokulifumana eli lungelo lokufunda ufundiswe ngolwimi lwasemthethweni ozikhetheleyo, loo nto kungenzekanga ukuba kujongelwe phantsi umnqweno okanye isiko ezingokoMgaqo-siseko, apho ke uvavanyo olumalunga nolungiselelo olunolingwano lubonakala ngathi luya kuba luphumelele.’ Kubonakala ngathi kube njalo apha. [47] To sum up: While the evidence suggests that there may have been a need for a revision of UNISA’s language policy, it has not been established that the adoption of the new policy in 2016 was conducted in a constitutionally compliant manner, ie that the factual and normative ‘reasonably practicable’ requirement in s 29(2) of the Constitution was satisfied. UNISA failed to discharge the burden that it was not [47] Ukushwankathela: Nakuba ubungqina bubonakalisa ingathi kusenokuba ibikho imfuneko yokuba umgaqo-nkqubo wolwimi waseUNISA uhlaziywe, ayikwazanga ukuphuhlisa kakuhle into yokuba ukumiselwa komgaqo-nkqubo omtsha ngo- 2016 kwenziwa ngendlela ehambisanayo na noMgaqo-siseko, oko kukuthi, ingaba laa mmiselo uqulethe izinto ezibambekayo nezinto ezalatha umgangatho, lo wokuba 22 Paras 51 and 52. detracting from the right contained in s 29(2) of the Constitution without appropriate justification. This finding, in my view, is dispositive of and dispenses with the need to determine the other issues raised in the appeal. makuvavanywe imeko yokuba ‘nokwenzeka ngokulula’, uku-29(2) woMgaqo-siseko, wathotyelwa ngokwanelisayo. IUNISA isilele ukuphuhlisa uxanduva lwayo lokuba ingalisusi okanye ilinciphise ilungelo eliku-s 29(2) woMgaqo-siseko kungekho sizathu sivakalayo. Oku kufumanisa ngoluhlobo ngokwendlela endibona ngayo, kwenza kungabi sabakho mfuneko yokuba sacubungula eminye le imiba ekhankanyiweyo phaya kwisibheno. [48] The appeal accordingly succeeds and costs must follow the result. The following order is made: 1 The appeal is upheld with costs, including the costs of two counsel. 2 The order of the court a quo is set aside and replaced with the following: ‘(a) the resolutions of the Council and Senate of the University of South Africa to approve a new language policy on 28 April and 30 March 2016, respectively, are set aside; (b) the new language policy adopted by the University of South Africa is declared unconstitutional and unlawful and is set aside [48] Isibheno, ngokokufanelekileyo, siyaphumelela, ke iindleko kufuneka zilandele iziphumo. Kwenziwa lo myalelo ulandelayo: 1 Isibheno sivunyiwe, sihamba neendleko eziquka iindleko zabathetheleli bezomthetho ababini. Umyalelo wenkundla ephakamileyo ubekelwa bucala, ze kubekwe endaweni yawo lo kulandelayo: ‘(a) izigqibo zeBhunga nezeSinethi zeYunivesithi yaseMzantsi Afrika zokuvumela umgaqo-nkqubo wolwimi omtsha ngowama-28 kuTshaziimpuzi nowama-30 kweyoKwindla ngo2016, ngokulandelelana, zijongwa kutsha, zize zibekelwe bucala; (b) kuyabhengezwa ke apha ukuba lo mgaqo- nkqubo mtsha usekwe yiYunivesithi yaseMzantsi Afrika awuhambisani noMgaqo-siseko futhi awukho mthethweni; to the extent that Afrikaans has been removed as a language of learning and tuition; (c) the University of South Africa shall prominently publish on its website and in three major Afrikaans newspapers in South Africa and transmit by email to all its students a notice: (i) containing a full list of the modules that were on offer in Afrikaans as at 28 April 2016; (ii) offering all prospective students for the next academic year admission in such modules as presented on first year level; (iii) offering all existing students, if they were enrolled in any one of those courses or would have enrolled for the subsequent year course available in Afrikaans, but had perforce to follow the module in English, a choice to enrol on the basis that they may follow the module in Afrikaans until completion of their studies; (iv) all the modules mentioned above will be presented in full in the following academic years until the language policy has been lawfully amended, if at all. waye ke ubekelwa bucala ngokubhekiselele kumbandela wokuba iAfrikaans iyekisiwe ukuba lulwimi lwayo lokufunda nokufundisa; (c) iYunivesithi yaseMzantsi Afrika iya kupapasha ngokugqamileyo kwisiza sonxibelelwano sayo nakumaphephandaba amakhulu, amathathu eAfrikaans aseMzantsi Afrika ize idlulisele nangeimeyili kubo bonke abafundi bayo isaziso esinje: (i) esinoluhlu olupheleleyo lweemodyuli ezazizezokufundiswa ngeAfrikaans ngomhla wama-28 kuTshaziimpuzi ngo-2016; (ii) esivumela bonke abafundi abafuna ukufunda kulo nyaka-zifundo uzayo ukuba bazibhalisele ezo modyuli zîkwinqwanqwa lokuqala; (iii) esithi bonke abafundi abahleli bekho, ukuba babeyibhalisele nokuba yeyiphi kwezo khosì okanye babeza kubhalisela ukufunda ikhosi yonyaka olandelayo ukuba yayikho ngeAfrikaans, kodwa banyanzeleka ukuba bayifunde loo modyuli ngesiNgesi, bayavunyelwa ukuba baphinde bazibhalisele ezo modyuli, kuxelwe ukuba baya kuzifunda ezo modyuli ngeAfrikaans bade bazigqibe izifundo zabo; (iv) zonke ezi modyuli zikhankanywe apha ngentla ziya kubakho ngokuzeleyo kwakule minyaka-zifundo izayo ude umgaqo-nkqubo wolwimi ube ulungisiwe ngokwasemthethweni, ukuba iyeneka ke loo nto. (d) the University of South Africa shall pay the costs of the application.’ (d) iYunivesithi YaseMzantsi Afrika iza kuhlawula iindleko zesi sicelo.’ –––––––––––––––––––––––––––––––––––––– MM MAYA PRESIDENT OF THE SUPREME COURT OF APPEAL UMONGAMELI WENKUNDLA ENGASENTLA YEZIBHENO APPEARANCES: APPELLANT: A Cockrell SC (with A Lamey) Instructed by: Hurter Spies Inc, Pretoria Roussows Attorneys, Bloemfontein RESPONDENTS: M Chaskalson SC (with C P Wesley) Instructed by: Motalane Inc, Pretoria Matsepes 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 30 June 2020 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. AfriForum NPC v Chairperson of the Council of the University of South Africa & others (765/2018) [2020] ZASCA 79 (30 June 2020) 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 18h00 on 30 June 2020. ___________________________________________________________________________ The Supreme Court of Appeal today upheld an appeal against a judgment of the Gauteng Division of the High Court, Pretoria, concerning the legality of decisions taken by the Senate and Council University of South Africa (UNISA) adopting a new language policy, which replaced its dual- medium language English/Afrikaans policy with an English-only language as its language of learning and tuition. The issues on appeal were whether (a) the impugned decisions contravened s 29(2) of the Constitution; (b) the Senate did not follow its rules in the conduct of its meeting, in breach of the principle of legality; and (c) UNISA failed to consult the persons who would be most affected by the new language policy, in breach of procedural rationality. The Supreme Court of Appeal made the following findings. UNISA did not properly comprehend the implications of the constitutional right to receive education in the official language of one’s choice, the constitutional parameters within which its powers had to be exercised, and the precise ambit of responsibility which s 29(2) imposed upon it, when it reviewed its language policy and adopted a new one. The considerations upon which it relied to prove that it was not reasonably practicable to continue with dual medium tuition such as affordability and the cost-saving that could arise from the change, which could free funds for the development of the other official languages as languages of learning and tuition at the university, were not discussed in the meetings at which it was resolved to adopt the new language policy. UNISA further failed to prove the resource constraints it alleged and that it was not reasonably practicable from a commercial standpoint to continue to offer tuition in Afrikaans. Whilst the rationale for the new language policy, namely that the demand for Afrikaans was decreasing, was indisputable, the evidence showed that a significant number of students still wanted it but their actual numbers were not placed before the Senate and Council when these bodies decided to discontinue Afrikaans as one of UNISA’s languages of learning and tuition. UNISA’s position was distinguishable from the other recent language policy cases involving the Universities of Stellenbosch and the Free State in which those policies were set aside for unlawfulness to protect racial harmony and prevent racial supremacy threatened by racially segregated classes and the exclusion of non-Afrikaans speaking students from campus life by the use of Afrikaans. And those universities, unlike UNISA, had conducted thorough and proper investigations and executed their mandate in reviewing their language policies meticulously. The SCA asked how what purpose it would serve UNISA’s noble and self-admittedly progressive goal to develop all South Africa’s indigenous languages, which are a precious and threatened national resource, to become academic languages, to knock down a fully developed and functional language of learning and tuition ie Afrikaans, to develop other languages to its standard when there was no sound reason to do so other than a dwindling interest in the language. The SCA held that to take away a constitutional right that is already enjoyed ie tuition of Afrikaans students in their mother tongue, in these circumstances did not satisfy the rationality test and was not justified. UNISA had failed to establish that it was not ‘reasonably practicable’ to continue to offer tuition in Afrikaans and the new language policy was unconstitutional and unlawful, so declared the SCA . ………….

2309

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 302/08 DEON DU RAND NO First Appellant ANDRÉ DU RAND NO Second Appellant JOHAN DU RAND NO Third Appellant ELIZABETH SUSANNA DU RAND NO Fourth Appellant ELMARIE BOTES NO Fifth Appellant F G J WIID Sixth Appellant and THE FAERIE GLEN RENAISSANCE SCHEME Respondent Neutral citation: Du Rand NO v Faerie Glen Renaissance Scheme (302/08) [2009] ZASCA 122 (28 September 2009) Coram: STREICHER, LEWIS, SNYDERS JJA, LEACH and BOSIELO AJJA Heard: 21 AUGUST 2009 Delivered: 28 SEPTEMBER 2009 Summary: Applicability of Housing Development Schemes for Retired Persons Act 65 of 1988 to a sectional title scheme. ORDER On appeal from: Pretoria High Court (Visser AJ sitting as court of first instance). The following order is made: The appeal is dismissed with costs. JUDGMENT SNYDERS JA: (Lewis JA, Leach and Bosielo AJJA concurring) [1] This case concerns a development scheme in terms of the Sectional Titles Act, namely the Faerie Glen Renaissance Scheme (the scheme).1 The body corporate of the scheme, the respondent, applied to the Pretoria High Court to grant an amendment to some of its management rules. The application took an eventful procedural path - irrelevant for current purposes – and ultimately came before Visser AJ who granted an amendment to rules 1 and 2 in the terms sought at that stage.2 Leave to appeal was granted by Visser AJ to this court. [2] The first five appellants are the trustees of the Ameva Trust. The trust is the owner of one of the 150 units in the scheme and so is the sixth appellant. No other owner opposed any of the relief sought by the respondents. The opposition by the appellants to the amendments sought was long-standing and unrelenting with the result that it was common cause that it would have been impossible for the respondent to effect the amendments by way of a unanimous resolution as required by s 35(2)(a) of the Sectional Titles Act.3 The respondent therefore approached the court in terms of s 1(3A) of the Sectional Titles Act, which authorises a body corporate 1 The Sectional Titles Act 95 of 1986. 2 Substantially more elaborate relief was sought in the notice of motion, but abandoned at the hearing of the matter. 3 Section 35(2)(a): ‘The rules shall provide for the control, management, administration, use and enjoyment of the sections and the common property, and shall comprise – (a) management rules . . . which rules may be substituted, added to, amended or repealed from time to time by unanimous resolution of the body corporate as prescribed by regulation;’ that is unable to obtain a unanimous resolution to ‘approach the court for relief’, subject to the provisions of s 1(3)(c).4 [3] In respect of the respondent’s reliance on s 1(3A) the appellants strenuously argued three points: that the meeting held by the respondent on 22 November 2005 to obtain a unanimous resolution to amend the management rules, was not properly constituted; that the respondent was unable to show that a majority at that meeting authorised the respondent to approach the court in terms of s 1(3A); and that the respondent required the written consent of the appellants, as owners whose rights would be adversely affected by the amendments, before the court could be approached in terms of s 1(3A). [4] In support of their first point the appellants submitted that, before the respondent could approach the court in terms of s 1(3A), it had to show that it attempted to obtain a unanimous resolution at a meeting where 80 per cent of all members of the body corporate (reckoned in number) and 80 per cent of all members (reckoned in value) - the percentages necessary for a unanimous decision in terms of s 1 - was present.5 [5] It is unnecessary to indulge in the detailed head and value count of attendees that the appellants embarked on. It is sufficient to state that the point arose because the counting was complicated by belated proxies to vote 4 Section 1(3A): ‘If a body corporate is unable to obtain a unanimous resolution, it may, subject to the provisions of subsection (3)(c), approach the court for relief.’ Section 1(3)(c):‘(3) For the purposes of the definition of ‘unanimous resolution’ in subsection (1) – . . . ; (c) where the resolution in question adversely affects the proprietary rights or powers of any member as owner, the resolution shall not be regarded as having been passed unless such member consents in writing thereto.’ 5 In s 1 ‘Unanimous resolution’ is defined as ‘a resolution – (a) passed unanimously by all the members of a body corporate who are present or represented by proxy or by a representative recognized by law at a general meeting of the body corporate of which at least 30 days’ written notice, specifying the proposed unanimous resolution, has been given, and at which meeting at least 80% of all the members of a body corporate (reckoned in number) and at least 80% of all the members (reckoned in value) are present or so represented: Provided that in circumstances determined in the rules, a meeting of the body corporate may be convened for a date 30 days or less after notice of the proposed resolution has been given to all the members of the body corporate. . . .’ in cases where trusts were owners of units and by the attendance of couples of whom one voted without a proxy from the other. A head and value count is unnecessary as the Sectional Titles Act does not require a vote at a formally constituted meeting as a pre-condition to an approach to court for relief in terms of s 1(3A). The only requirement apparent from s 1(3A) read with s 35(2)(a) – ignoring the proviso in s 1(3)(c) for the moment – is a purely factual one, namely that the body corporate must have been unable to obtain a unanimous decision. Any variety of facts may be sufficient to persuade a court, at the hearing, of that. In this case the history of the attempts to amend the rules and the animosity between the appellants and the respondent overwhelmingly indicate that a unanimous decision was impossible. What is more, the parties were agreed on this. Therefore the factual requirement of s 1(3A) was satisfied and the court below was entitled to hear the matter on that basis. [6] On the second point raised by the appellants a minor correction to the appellants’ calculations of the number of attendees and votes at the meeting of 22 November 2005, to take account of couples that attended the meeting and one of them voted without a written proxy from the other, shows that a majority of owners attended and voted in favour of an application in terms of s 1(3A). In addition, the appellants have been the only two of 150 unit owners who have opposed the amendments. Since the litigation started during February 2006 nobody else has joined their cause. As in Unlawful Occupiers, School Site v City of Johannesburg 2005 (4) SA 199 (SCA) at 207H-I the question can be asked whether it is conceivable that the application would have been launched with the knowledge, but against the wishes, of the majority of the owners in the scheme. As in that case the question can be answered only in the negative. Furthermore, if the appellants seriously doubted whether the respondent had the authority to instruct an attorney to institute and conduct the proceedings on behalf of the respondent, the procedure in Rule 7(1) should have been invoked.6 The reasons furnished in 6 Unlawful Occupiers, School Site paras 24 to 29. this judgment further illustrate that the trustees acted in the best interests of the body corporate by pursuing the amendments to rules 1 and 2. [7] The third point, the reliance on the absence of written consent in terms of s 1(3)(c) of the Sectional Titles Act, brings us to the merits of the appeal. The appellants’ case is that the amendments to rules 1 and 2 seek to apply the Housing Development Schemes for Retired Persons Act (the Retirement Housing Act)7 to the scheme for the first time with the result that their proprietary rights would be adversely affected. [8] Rule 1 of the respondent’s management rules, in its un-amended form, is rule 1 of the standard rules of any newly established sectional title scheme contained in annexure 8 to the regulations in terms of the Sectional Titles Act.8 The amendment granted replaced the standard rule 1 with the following: ‘Die Regspersoon Faerie Glen Renaissance is op 18 Augustus 2000 vir Deeltitelskema no. SS416/2000 ingestel volgens artikel 36(1) van die Wet Op Deeltitels Wet 95 van 1986. Die skema is geleë te Erf 3781, Faerie Glen, Uitbreiding 45, Pretoria, en is in 18 fases, elk met ‘n eie deeltitelnommer, ontwikkel ooreenkomstig die bepalings van Wysigingskema 8270 van die Pretoria- dorpsbeplanningskema, 1974, wat onder andere bepaal dat wooneenhede opgerig sal word vir ‘n afree-oord vir bejaardes. (a) Vanweë die aard van die ontwikkeling as aftree-oord, is die Wet op Behuisingsontwikkelingskemas vir Afgetrede Persone, Wet 65 van 1988, ook van toepassing. (b) Die Bestuursreëls van die Regspersoon van die Faerie Glen Renaissance Skema No SS 416/2000 is eenvormig van toepassing op alle eienaars en okkupeerders van die wooneenhede in die 18 fases van die ontwikkelingskema.’9 7 65 of 1988. 8 ‘1. The Rules contained in this Annexure shall not be added to, amended or repealed except in accordance with section 35(2)(a) of this Act, and subject to the provisions of section 35(3) and (5) of the Act.’ 9 My translation: ‘The body corporate of the Faerie Glen Renaissance Scheme was established on 18 August 2000 in respect of sectional title scheme no SS416/2000 in terms of s 36(1) of the Sectional Titles Act 95 of 1986. The scheme is situated at erf 3781, Faerie Glen, Extension 45, Pretoria and was developed in 18 phases, each with its own sectional title number, in accordance with the provisions of Amendment Scheme 8270 to the Pretoria Town-Planning Scheme 1974, which provides, inter alia, for the development of dwelling units for a retirement centre for the aged. [9] In this court the appellants confined their objection to paragraph (a) of the amendment. The fact that they did does not affect the outcome of the appeal. [10] Rule 2 of the respondent’s management rules contains the definitions that assist in the interpretation of the rules. The amendment that was granted inserted an additional definition, as para 2(d): ‘beteken “aftree-oord” ‘n behuisingsontwikkelingskema vir afgetrede persone vir die huisvesting van inwoners met ‘n minimum ouderdom van 50 jaar elk of in geval van ‘n egpaar as inwoners moet een van die gades ten tye van okkupasie minstens 50 jaar oud wees;’.10 [11] The answer to the question whether the Retirement Housing Act is applicable to the Faerie Glen Renaissance Scheme even before the amendments to rules 1 and 2 resolves all of the remaining issues in this appeal. [12] Agricultural land was proclaimed as part of the Pretoria Town-Planning Scheme 1974 for the development of the scheme.11 Two erven, 3773 (previously Erf 1) and 3774 (previously Erf 2), were consolidated into Erf 3781. In terms of Amendment Scheme 8270 the area constituting the former Erf 3773 was zoned for ‘group housing’ with the explicit provision that ‘dwelling-units for a retirement centre for the aged be erected’.12 The area constituting the former Erf 3774 was zoned for ‘special use’ with the explicit provision that it be used for ‘communal and related facilities which in the opinion of the City Council can be associated with a security retirement centre (a) Due to the nature of the development as a retirement centre, the Housing Development Schemes for Retired Persons Act 65 of 1988 is also applicable. (b) The management rules of the Faerie Glen Renaissance Scheme No SS416/2000 are uniformly applicable to all owners and occupants of the units in the 18 phases of the development scheme.’ 10 My translation: ‘“retirement village” means a housing development scheme for retired persons for the accommodation of occupants of at least 50 years of age or in the case of occupation by a married couple, one of them shall, at the time of occupation, be at least 50 years old.’ 11 Amendment Scheme 8270 to the Pretoria Town-Planning Scheme 1974, Administrator’s Notice 2027, 20 November 1974, promulgated on 28 June 2000. 12 Annexure B5969 to the Pretoria Town-Planning Scheme 1974. for the aged’.13 The conditions of proclamation and the zoning requirements of the land on which the scheme was established therefore restricted the developer as to the nature of the development on that land. [13] It is not surprising then that a sectional title scheme was developed on the relevant land and that ownership of the units were acquired from the developer in terms of the Sectional Titles Act. The developer, in the agreements of sale of units of the scheme, complied with the newly established township planning provisions and zoning requirements. As the Retirement Housing Act has as its purpose the regulation of ‘[t]he alienation of certain interests in housing development schemes for retired persons; and to provide for matters connected therewith’, it is also not surprising that the agreements of sale complied with the Retirement Housing Act. [14] In clause 1 of the agreement between the developer and the purchasers of units in the scheme, which contains several definitions, ‘wetgewing’ is defined as the Retirement Housing Act and the Sectional Titles Act. Clause 3.5 of the agreement provides for ss 4(3) and 8 of the Retirement Housing Act to be applicable. These sections deal with instances where the purchaser is entitled to cancel the agreement as a result of the developer’s failure to deliver to the purchaser a certificate of completion prior to occupation of the unit sold. In compliance with the zoning requirements the agreement provides for the creation of basic security, community and nursing services related to a retirement village for the elderly. It specifically provides that a unit is sold subject to not only the conditions of title, but the applicable township planning provisions. Clause 14.3 of the agreement reads: ‘In die geval van ‘n enkel Okkupeerder, of twee afsonderlike Okkupeerders, is die minimum ouderdom vir Okkupeerders 50 jaar. In geval van ‘n egpaar as Okkupeerders, moet een van die twee gades minstens 50 jaar oud wees. Die Koper bevestig voldoening aan hierdie ouderdomsbepaling.’14 13 Annexure B5970 to the Pretoria Town-Planning Scheme 1974. 14 My translation: ‘In the event of a single occupant, or two independent occupants, the minimum age for occupants is 50 years. In the event of a married couple, one of the spouses has to be at least 50 years old. The purchaser confirms compliance with this age requirement.’ [15] In the same explicit terms the agreement restricts, in clause 14.6, the right of any purchaser of a unit or successive purchaser to sell, lease or transfer the rights acquired in the agreement of sale if such sale, lease or alienation has the consequence that the unit is occupied by persons in contravention of the provisions pertaining to age.15 The agreement contains all the essential provisions prescribed in s 4 of the Retirement Housing Act for an agreement in terms whereof a developer alienates a housing interest in terms of the Act. [16] Two provisions in the agreement motivated the appellants to argue that the agreement does not comply with the Retirement Housing Act and that the Act is therefore not applicable. First the agreement, in clause 2.2, specifies that the title deed has not been endorsed in accordance with the provisions of s 4C of the Retirement Housing Act.16 Second the developer, in clause 14.5 of the agreement, reserved the right to sell up to 20 per cent of the units to persons under the age of 50 years.17 [17] Section 4C of the Retirement Housing Act is not applicable to the alienation of a right of ownership in a development scheme, as in this case, but only a right of occupation. Clause 2.2 of the agreement does no more than state exactly that. This clause indicates an attempt to comply with the Retirement Housing Act, by explaining why there is no need to comply with s 15 Clause 14.6: ‘Die koper sal nie geregtig wees om sy regte in terme van hierdie Ooreenkoms te vervreem, te verhuur of oor te maak aan ‘n derde party indien sodanige vervreemding of verhuring meebring dat die Eenheid geokkupeer word deur persone wat nie aan die ouderdomsbepaling hierbo genoem, of aan enige ander bepaling van hierdie Ooreenkoms, voldoen nie. Opvolgers in Titel van die Koper sal onderworpe wees aan die verpligtinge van die Koper soos vervat in hierdie Ooreenkoms en die Reëls van die Bestuursvereniging.’ 16 Clause 2.2: ‘Die Titelakte van die grond is nie geëndosseer soos in Artikel 4C van die Wet bedoel nie, aangesien die regsgrondslag van die vervreemding van Deeltiteleiendomsreg in terme van die Deeltitelwet is.’ 17 Clause 14.5: ‘Dit is die verklaarde voorneme van die Maatskappy om te verkry dat Eiendomsreg op Eenhede van die Ontwikkeling oorwegend toegeken sal word aan Kopers bo die ouderdom van 50 jaar. Die Maatskappy behou egter uitdruklik die reg voor om huidiglik en in die toekoms tot 20% van die Eenhede van die Ontwikkeling te vervreem aan persone onder die ouderdom van 50 jaar en die Koper stem onherroeplik toe tot sodanige vervreemding.’ 4C of the Act. In any event non-compliance with s 4C could not render the Act inapplicable. [18] The reservation, in clause 14.5 of the agreement, of the right to sell up to 20 per cent of the units to persons under the age of 50 years in clause 14.5 of the agreement does not violate the provisions of the Retirement Housing Act which prescribes the age of occupants as opposed to the age of owners. Only the right to sell ownership in a unit to a person under the age of 50 years is reserved in the agreement. Clause 14.6, discussed above, would remain equally applicable to the 20 per cent owners younger than 50 years in relation to the restriction of the age of occupancy to persons 50 years or older. [19] This distinction between the age of the owner and the age of the occupier that the developer respected in clause 14.5 originates from s 7(1), read with the definition of ‘retired person’, of the Retirement Housing Act: ‘After a housing interest has been transferred to or has otherwise been vested in a person by virtue of a contract, no person other than a retired person or the spouse of a retired person may occupy the land to which that housing interest relates, except with the written consent of all the holders of housing interests in the housing development scheme concerned.’ Section 1 defines ‘retired person’ as ‘a person who is 50 years of age or older’.18 [20] A ‘housing interest’ is defined in the Retirement Housing Act and includes the ‘right to claim transfer of the land to which the scheme relates’.19 If that leaves any doubt whatsoever as to whether the Retirement Housing Act is, by its own terms, applicable to this particular sectional title scheme, the definition of ‘housing development scheme’ removes any doubt: ‘“Housing development scheme” means any scheme, arrangement or undertaking – (a) in terms of which housing interests are alienated for occupation contemplated in 18 In so far as ‘contract’ is defined as meaning ‘a document in terms of which a housing interest is alienated to a retired person. . .’ it does not change this meaning of s 7(1) for the reasons stated in para 33 of the judgment of Streicher JA. Maybe for those reasons the point was not argued before us. 19 Section 1: ‘“housing interest”, in relation to a housing development scheme, means any right to claim transfer of the land to which the scheme relates, or to use or occupy that land.’ section 7, whether the scheme, arrangement or undertaking is operated pursuant to or in connection with a development scheme or a share block scheme or membership of or participation in any club, association, organization or other body, or the issuing of shares, or otherwise, but excluding a property time-sharing scheme;’ A ‘development scheme’ is defined as having the meaning as it does in the Sectional Titles Act and includes a sectional title scheme such as is currently under consideration. [21] When the provisions of the Retirement Housing Act are applied to the facts it is clear that the developer sold and transferred a ‘housing interest’ – ownership of a unit – in a ‘housing development scheme’ – a sectional title scheme – for occupation by ‘retired persons or the spouse of a retired person’ – a person who is 50 years of age or older or the spouse of such a person – as contemplated in s 7. In these circumstances s 7 applies. [22] The conclusion is inevitable: the Faerie Glen Retirement Scheme was developed in compliance with the provisions of the Pretoria Town-Planning Scheme 1974; the agreement of sale in terms of which the developer sold the units complies with the provisions of the Retirement Housing Act; and the Retirement Housing Act has been applicable to the Faerie Glen Renaissance Scheme since its inception. The amendment of rules 1 and 2 of the management rules to reflect the existing state of affairs serves only to clarify and explicitly protect the interests of existing and prospective owners of units in the scheme. It certainly does not adversely affect the rights of the appellants. [23] The court a quo awarded some of the costs of the application to the appellants, largely as a result of the abandonment by the respondent of the greater part of the relief sought in the notice of motion at the commencement of the hearing in the court below. The appellants urged interference with that costs order to include the costs of two counsel. There is no basis on which to interfere with the discretion exercised by the court a quo. [24] The appeal is dismissed with costs. ______________________ S SNYDERS Judge of Appeal STREICHER JA (LEWIS JA, LEACH and BOSIELO AJJA concurring) [25] I agree that the appeal should be dismissed with costs. In regard to my colleague Snyders’ dismissal of the first two points argued by the appellant and referred to in paragraph 3 of her judgment I have nothing to add. I do however wish to state my reasons for dismissing the third point argued by the appellant. [26] The Faerie Glen Renaissance Scheme (the FGR Scheme) is a development scheme in terms of the Sectional Titles Act 95 of 1986. In terms of s 35(1) of that Act a development scheme shall, as from the date of establishment of a body corporate, be controlled and managed, subject to the provisions of the Act, by means of rules. Section 35(2)(a) provides that the rules should comprise, amongst other things, management rules which may be amended from time to time by unanimous resolution of the body corporate. A unanimous resolution is defined in s 1 of the Sectional Titles Act but the definition is qualified in s 1(3)(c) to the effect that where the resolution ‘adversely affects the proprietary rights or powers of any member as owner, the resolution shall not be regarded as having been passed unless such member consents in writing thereto’. [27] The appellants contended that the proposed amendments of the management rules quoted in paragraphs 8 and 10 of my colleague’s judgment, by providing that the Housing Development Schemes for Retired Persons Act 65 of 1988 (the Retired Persons Act) is applicable to the FGR Scheme adversely affects their proprietary rights as owners and that these amendments therefore required their consent in writing. The respondent, on the other hand, contended that the Retired Persons Act applied to the FGR Scheme and that the statement in the amended rule merely stated what the existing position was. The issue to be decided is therefore whether or not the Retired Persons Act applied to the FGR Scheme. [28] The purpose of the Retired Persons Act is stated in the long title to be ‘to regulate the alienation of certain interests in housing development schemes for retired persons; and to provide for matters connected therewith’. The Act prescribes formalities in respect of contracts for the alienation of housing interests to a retired person (s 2); it prescribes in what language a contract should be drawn up (s 3) and what the contents of the contracts should be if the seller concerned is a developer (s 4); it deals with rights of occupation as defined in the Act (s 4A, B and C), which are not of relevance in respect of the FGR Scheme; it provides that if a facility is to be maintained for the care of debilitated persons the facility would be deemed to be a home for the aged as defined in s 1 of the Aged Persons Act 81 of 1967 (s 5); it contains restrictions against the receipt of consideration by developers (s 6); it contains a limitation of occupation of land to which housing interests as defined in the Act relate (s 7); it prescribes what the consequences of contracts which are void or are cancelled would be (s 8) and what relief a court may grant in respect of contracts (s 9); it provides for the granting of exemptions from the operation of the Act by the Minister concerned (s 10); and it prescribes what regulations may be made by the Minister (s 11). [29] The only provisions of the Retired Persons Act which are relevant in respect of the management of the FGR Scheme as opposed to the contracts for the alienation of a housing interest in respect of the scheme and the receipt of consideration by a developer are therefore the provisions in respect of a facility for the care of debilitated persons, the provision containing a limitation to the occupation of land to which housing interests relate and the provision relating to the granting of exemptions. In the case of the FGR Scheme no facility is to be maintained for the care of debilitated persons. It follows that the statement in the amended rule 1 that the Retired Persons Act is applicable means no more than that sections 7 and 10 of that Act are applicable to the scheme. If s 7 is applicable it follows that s 10, which authorises the Minister to grant an exemption from the operation of any provision of the Act, is applicable. In the result it remains to determine only whether s 7 of the Act is applicable to the FGR Scheme. [30] Section 7 reads as follows: ‘7(1) After a housing interest has been transferred to or has otherwise been vested in a person by virtue of a contract, no person other than a retired person or the spouse of a retired person may occupy the land to which that housing interest relates, except with the written consent of all the holders of housing interests in the housing development scheme concerned.’ [31] A retired person is defined as a person who is 50 years of age or older. It is the applicability of the injunction in s 7 that ‘no person other than a retired person or the spouse of a retired person may occupy the land to which that housing interest relates’ which is the real bone of contention between the parties, hence the appellants’ objection to the definition of aftree-oord in the amended rule 2(d) namely: ‘`n behuisingsontwikkelingskema vir afgetrede persone vir die huisvesting van inwoners met `n minimum ouderdom van 50 jaar elk of in geval van `n egpaar as inwoners moet een van die gades ten tye van okkupasie minstens 50 jaar oud wees’. [32] The injunction in s 7 is applicable after a housing interest in a housing development scheme has been transferred to or has otherwise been vested in a person by virtue of a contract. In terms of s 1 a housing interest in respect of a housing development scheme means, amongst other things, any right to claim transfer of the land to which the scheme relates. A housing development scheme is defined as meaning, amongst other things, a scheme in terms of which housing interests ie the right to claim transfer of land, are alienated for occupation contemplated in section 7 pursuant to or in connection with a development scheme; a development scheme means a development scheme as defined in section 1(1) of the Sectional Titles Act 95 of 1986; and occupation contemplated in s 7 means occupation by retired persons or the spouses of retired persons. [33] ‘Contract’ is defined in s 1 as meaning ‘a document in terms of which a housing interest is alienated to a retired person . . .’. Like all the other definitions in s 1 the definition is qualified by the introductory phrase ‘unless the context indicates otherwise’. In the case of s 7 the context does indicate otherwise. If the contract referred to in the section was intended to be a contract with a retired person the section would not have read ‘after a housing interest has been transferred to . . . a person by virtue of a contract’ it would have read ‘after a housing interest has been transferred to . . . a retired person’. More so in the light of the fact that in the very same section reference is made to a ‘retired person’. Compare in this regard s 2(1) which provides that ‘no alienation of a housing interest to a retired person shall . . . be of any force or effect, unless it is contained in a contract . . .’. Moreover, if ‘contract’ in s 7 were to be interpreted to mean a document in terms of which a housing interest is alienated to a retired person it would mean that in the case of an alienation of a housing interest to a company or a trust for occupation contemplated in s 7 in connection with a sectional title development scheme ie a housing development scheme, the section would not apply. That could in my view not have been the intention of the legislature. [34] The members of the respondent obtained ownership of units in the FGR Scheme ie in a development scheme in terms of contracts subject to the same terms and conditions. One of the terms of the contracts was that in the case of a single occupier the minimum age of the occupier had to be 50 years and in the case of married occupiers one of the spouses had to be a minimum of 50 years of age. The FGR Scheme is therefore a housing development scheme as defined in the Retired Persons Act and the transfer of the units in the scheme constituted the transfer of housing interests by virtue of a contract. It follows that in terms of s 7 ‘no person other than a retired person or the spouse of a retired person may occupy the land to which the transferred housing interests relate’. [35] For these reasons I conclude that the Retired Persons Act is applicable to the FGR Scheme as stated in the amended rule 1 and that the appellants’ property rights or powers as members were not adversely affected by the amendment. _________________ P E STREICHER JUDGE OF APPEAL APPEARANCES: For Appellant: J G Naudé Instructed by: E Y Stuart Attorneys Incorporated, Pretoria McIntyre & van Der Post, Bloemfontein For Respondent: M Helberg SC Instructed by: Bertus Roux Attorneys Incorporated, Pretoria Du Toit 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. * * * According to a decision of the Supreme Court of Appeal a bitter dispute amongst the members of a sectional title development in Faerie Glen, Pretoria, turned out to be no dispute at all. Two of 150 unit owners in the Faerie Glen Renaissance Scheme opposed the body corporate in an application to court to amend the management rules of the scheme. The amendment granted to the body corporate by the Pretoria High Court and appealed by the two owners was to expressly include in the management rules a statement that the Housing Development Schemes for Retired Persons Act 65 of 1988 is applicable to the sectional title development called the Faerie Glen Renaissance Scheme. The contention of the two appealing owners was that the said Act was not applicable and to enforce it by inclusion in the management rules would adversely affect the proprietary rights of the owners of units in the scheme as it restricts occupation of the units to persons 50 years of age and older. The Supreme Court of Appeal found that the Housing Development Schemes for Retired Persons Act undoubtedly applies to the Faerie Glen Renaissance Scheme since its inception and that an amendment to the management rules to reflect that state of affairs would serve the interests of existing and prospective owners of units in the scheme.

1244

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case : 270/2007 REPORTABLE In the appeal between: THE MINISTER OF AGRICULTURE First Appellant THE DIRECTOR: ANIMAL HEALTH, DEPARTMENT OF AGRICULTURE Second Appellant and BLUELILLIESBUSH DAIRY FARMING (PTY) LTD First Respondent GRASSLANDS AGRICULTURE (PTY) LTD Second Respondent Before: Cameron JA, Nugent JA, Cloete JA, Maya JA, and Cachalia JA Heard: Tuesday 20 May 2008 Judgment: Thursday 29 May 2008 Animal Diseases Act 35 of 1984 – compensation under s 19(2) read with regulation 30 – animals slaughtered because of infection or reasonably suspected infection with bovine tuberculosis – dairy herd – ‘fair market value’ connotes value of animals free of infection Neutral citation: Minister of Agriculture v Bluelilliesbush Dairy Farming (270/07) [2008] ZASCA 60 (29 May 2008) CAMERON JA: [1] This is an appeal by the Minister of Agriculture (the minister), the director of animal health in the department (the director) and the Member of the Executive Council for agriculture in the Eastern Cape against a judgment of Jansen J sitting in the High Court in Port Elizabeth. The judgment reviewed and set aside a decision of the minister confirming a recommendation of the director about the basis on which compensation was to be calculated for animals slaughtered under the Animal Diseases Act 35 of 1984 (the Act).1 The judgment upheld the basis for which the respondent companies contended, and ordered payment to them of R14 395 537 (plus interest).2 The appeal, brought with leave granted by Jansen J, requires us to resolve the parties’ contesting approaches to the question of compensation. [2] In May 2004, an outbreak of bovine tuberculosis (TB) occurred on the farms on which the two respondents (the claimants) conduct dairy farming. The disease is extremely contagious and though it can be treated the animals affected remain infectious: hence policy is to cull those found or suspected to have the disease. 1 The Act has been repealed by the Animal Health Act 7 of 2002, which has not yet been brought The claimants form part of a group of companies that runs the largest dairy farming operation in the Eastern Cape, and one of the largest in the country. The first claimant owns the dairy cattle, while the second is the trading entity that leases assets from other companies within the group. The outbreak affected all eight farms on which the group farms. More than 7 000 cows, heifers, heifer calves, bull calves and bulls had to be slaughtered. A director of both claimants, Mr Elliott (who was the claimants’ chief voice in the litigation), described the outbreak in the months immediately after it occurred as ‘a catastrophic disaster’. [3] The appeal concerns the extent to which public funds may mitigate the disaster. The Act provides that the owner of an animal destroyed under its provisions may claim compensation for the loss.3 The basis on which compensation may be awarded is set out in s 19(2) (subsections (3) and (4) are not germane to the appeal): into operation. 2 Bluelilliesbush Dairy Farming (Pty) Ltd v Minister of Agriculture [2007] 3 All SA 35 (SE). 3 Animal Diseases Act 35 of 1984, s 19(1): ‘The owner of any animal or other thing which has been destroyed or otherwise disposed of pursuant to any control measure, or any provision of section 17(3) or (5), or any other provision of this Act, by the director or on his authority, may submit an application for compensation for the loss of the animal or thing to the director.’ Section 1 read with s 2(1) defines ‘director’ as the director of animal health of the department of agriculture, ‘who shall be a veterinarian’. ‘The director may, taking into consideration – (a) the applicable compensation, based on a fair market value of the animal or thing, which has been prescribed for purposes of this section or, where no compensation has been so prescribed, any amount fixed by him in accordance with any criterion deemed applicable by him; (b) the value of any thing which has in connection with the animal or thing been returned to the owner; (c) any amount which is due by the owner pursuant to any provision of this Act in respect of the animal or thing to the State; and (d) any amount which may accrue to the owner from any insurance thereof, fix a fair amount of compensation.’4 [4] The statute provides that a person who feels aggrieved by any decision of or steps by the director may lodge an objection with the Minister (s 23(1)).5 The objection must be lodged with the director-general of agriculture, ‘who shall submit it together with his recommendation to the Minister for a final decision’ (s 23(2)).6 In this case, the Minister, after considering a written report submitted to her in terms of s 23(3)(a),7 upheld the director’s decision. 4 The provisions of s 21 of the repealing 2002 statute appear to be substantially identical to s 19 of the Act. 5 Section 23(1): ‘Any person who feels aggrieved by any decision of or steps taken by the director, or by any other person or body referred to in section 10(7)(a) [that is, a person or body empowered by the Minister to exercise powers and duties under an animal health scheme established in terms of s 10], or by any employee or other person under the control or direction of any such person or body, in terms of this Act, may within the prescribed time and on payment of the amount which is prescribed, lodge in accordance with the provisions of this section an objection against the decision or steps with the Minister.’ 6 Section 23(2): ‘An objection shall be submitted in the prescribed manner to the Director-General, who shall submit it together with his recommendation to the Minister for a final decision.’ 7 Section 23(3)(a): ‘For the purposes of his recommendation contemplated in subsection (2), the Director-General may, if he deems it necessary, designate one or more senior officers in the department to institute an investigation regarding the reasons for the objection and the circumstances which gave rise to the complaint, and to submit to him a written report concerning it.’ [5] In a letter recording her decision dated 19 January 2006, the Minister indicated that she had decided to uphold the director’s decision: ‘The reasons for my decision are that the Director was correct in determining the fair amount of compensation and did not act contrary to the provision[s] of section 19 of the Animal Diseases Act … The Director has fixed the price at slaughter price as the animals infected with TB cannot recover from the disease and will certainly die.’ [6] The appellants insisted that the decision to be targeted in the review was not that of the Minister (who merely considers an objection to the director’s decision), but that of the director himself. Though nothing turns on this, since both Minister and director are before the court, in my view the claimants rightly targeted the decision of the Minister, since in case of objection the statute subjects the decision of the director to overruling by her, while making hers the ‘final decision’8. [7] It was common cause that the determination of the basis on which compensation should be calculated constituted administrative (Sub-paragraph (b) disqualifies the director and any other officer who has been involved in the decision or steps from being designated to investigate.) 8 Section 23 (2), read with 23(4)(a): ‘The Minister may, after consideration of the objection and the recommendation of the Director- General, confirm, vary or set aside the relevant decision or steps …’ action under the Promotion of Administrative Justice Act 3 of 2000 (PAJA),9 which was liable to review under that statute. [8] Section 19(2) of the Act makes clear that – (i) the power to fix compensation is vested in the director; (ii) the compensation must be ‘a fair amount’; (iii) in addition to the factors set out in subparagraphs (b)-(d), the director is obliged to take into consideration in terms of (a) the applicable compensation prescribed for purposes of s 19, where such compensation is prescribed; and (iv) when compensation is prescribed, it must be ‘based on a fair market value of the animal’. [9] The power to make regulations conferred by s 31 of the Act was indeed exercised,10 and reg 30 provides: ‘Compensation When compensation is payable to a responsible person [defined as a manager or owner of land or an owner of animals] in terms of section 19 of the Act, the applicable compensation shall – (a) in the case of an infected animal, be 80 per cent of the fair market value thereof; (b) in the case of an animal killed for any controlled veterinary act or for the prevention of the spreading of a controlled animal disease, be 100 per cent of the fair market value thereof; 9 Section 1 of Act 3 of 2000 defines ‘administrative action’ as ‘any decision taken … by (a) an organ of state when – … (ii) exercising a public power or performing a public function in terms of any legislation; … which adversely affects the rights of any person and which has a direct, external legal effect …’. On the interpretation of this definition, see Grey’s Marine Hout Bay (Pty) Ltd v Minister of Public Works 2005 (6) SA 313 (SCA) paras 21- 24. 10 Animal Disease Regulations, Government Notice R2026, published in Government Gazette 10469 of 26 September 1986. (c) in the case of an infectious thing, excluding an animal, and a contaminated thing, be 50 per cent of the fair market value thereof.’ [10] The parties’ dispute centres on the meaning to be given to ‘fair market value’ in reg 30(a). Although the dispute was presented as requiring interpretation of the concept of ‘fair market value’, this is not quite correct. The meaning of that phrase by itself is clear – it means the price that a willing buyer would pay a willing seller in the open market. The real question is this: what is to be the subject of the valuation? Is it to be the animal in its infected state (as the Minister and director contended) – in which case its value is that of a slaughter animal (being the value of the usable parts of the slaughtered carcass)? Or is it to be the animal in its uninfected condition (as the claimants contended) – in which case the fair market value is that of a productive dairy animal, which is about five times its value for slaughter? [11] To value the animals as if they were fit only for slaughter would, the claimants point out, reduce their compensation to a fraction of the animals as a dairy herd. But the director – supported by the departmental officers who conducted the statutory investigation, and confirmed by the Minister – contends that compensation under reg 30(a) is limited to slaughter value. This is because once an animal is infected its value is irredeemably diminished. Such an animal cannot be used for breeding or milking, it will never recover from the disease, and it is anyhow infectious. It can therefore never be sold for any purpose other than slaughter. This, the director says, is definitive of its statutory value. [12] Were subparagraph (a) to be taken on its own, the subject of the valuation (that is, the ‘infected animal’ before or after it became infected) may be opaque. But it does not stand on its own. It must be read with subparagraph (b), from which the subject of the valuation emerges limpidly. This prescribes compensation at ‘100 per cent of the fair market value’ of an animal killed ‘for any controlled veterinary act or for the prevention of the spreading of a controlled disease’. The Act’s definition of ‘controlled veterinary act’,11 read with its definition of ‘controlled 11 Animal Diseases Act, s 1, definitions: ‘”controlled veterinary act”, in relation to any animal or thing, means – (a) the isolation, detention, inspection, testing, immunization, observation, sampling, marking, treatment, care, destruction or any other disposal of; (b) the carrying out of any operation or of any post-mortem examination on; or (c) the rendering of any service pertaining specially to the veterinary profession referred to in the rules made under section 30 (1) (a) of the Veterinary and Para-Veterinary Professions Act, 1982 (Act 19 of 1982), in respect of, any such animal or thing for any controlled purpose’. purpose’,12 reveals that subparagraph (b) killings are for prevention only. The animals are in other words uninfected. [13] It was common cause that the animals in this appeal were slaughtered under (a), not (b). (The claimants’ founding affidavit asserts that because of a certain number of ‘false positive’ responses to the tests for bovine TB, and because all animals suspected of being infected were slaughtered, the animals slaughtered necessarily included some uninfected animals.13 In his answering affidavit, the director, Dr Botlhe Michael Modisane, disputes this, though he concedes that ‘once there is an outbreak of a disease such as bovine TB, most animals [testing positive] are normally condemned for slaughter as a control measure’ – impliedly conceding that at least some of the animals slaughtered may not have had the disease.) [14] Nevertheless, the compensatory scheme contemplated by (b) illuminates that in (a). The compensation to be paid under (b) is clearly the full fair market value of a healthy animal (in the case of 12 Animal Diseases Act, s 1, definitions: ‘”controlled purpose” means the prevention of the bringing into the Republic, or the prevention or combating of or control over an outbreak or the spreading, or the eradication, of any animal disease or, where applicable, of any parasite’. 13 Regulation 1 defines ‘infected animal’ as including an ‘animal that is infected, or is on reasonable grounds suspected to be infected’. a dairy cow, its value as a productive animal, and not merely its value for slaughter). The same compensatory scheme is plainly contemplated in (a), which envisages that same value being reduced by one-fifth for compensation purposes when the animal is (or is reasonably suspected of being) infected. Indeed, that (a) allows for compensation at only a portion (four-fifths) of the ‘fair market value’ of the animal seems to me to indicate conclusively that the regulation envisages the value of the animal as if it was not infected. For if it was a reference to the value of the animal in its infected condition there is no apparent reason why compensation should be set at only 80%. It would if that were so serve the owner better to send the animal to slaughter him- or herself, and thereby receive the full value of its carcass on slaughter. The regulation’s compensatory scheme retains coherence only if the value to which it refers is the value to be placed on the animal as if it is not infected. [15] The Minister and the director have not attacked the validity of the regulations – indeed, they relied on them as correctly guiding the director in determining a fair amount as compensation under s 19. And counsel for the Minister did not suggest in argument that the basis of valuation in (b) could be anything other than disease- free value; nor that the basis of valuation in (a) could be any different that in (b). [16] It follows that the contentions of the claimants are correct and that the review was rightly granted, for substantially the reasons set out by Jansen J. [17] It should be added, however, that reasons of policy and good sense appear to underscore the meaning in the regulations. The history that led to the dispute is partly chronicled in departmental memoranda and records released to the claimants in response to the application. It appears that a voluntary animal health scheme was introduced in 1969 to eradicate bovine TB. All animals testing positive were sent for slaughter: the compensation paid to farmers was based on 80% of the full market value (not slaughter value) of the animal. In 1992, after farmers and stock-owners from the former homelands joined the department’s control scheme, the department reduced compensation to R200 per animal slaughtered, irrespective of value, because of lack of funds. Unsurprisingly, this proved unpopular with farmers, according to an account set out in a departmental memorandum, and very few presented their herds for testing. This led the department to recommend in September 1999 that a new system of compensation be introduced to take account of the slaughter value of the animals – which was an improvement on the previous system, but ignored the productive value of dairy herds. [18] As the claimants pointed out, the departmental policy inadequately takes account of the Act’s objectives, which are designed to elicit the voluntary cooperation of farmers. (The bovine TB control scheme is itself voluntary.) To give infected or suspect dairy cows their slaughter value for compensation purposes offers no incentive to farmers, small-scale or large- scale, to participate in disease control measures. [19] By corollary, as the claimants also pointed out, if fair market value were assessed on the basis that the animals destroyed were infected, the state would not be required to pay any compensation at all – since the farmer could simply sell the infected cattle out of hand for whatever could be achieved on the open market (that is, the animal’s hide and whatever meat could be salvaged from it). The meaning in the regulations, by contrast, ensures the cooperation of farmers and their continued ability to farm. It also eliminates the prejudicial disadvantage dairy farmers would have suffered in comparison with beef farmers had the director’s basis prevailed. [20] Jansen J granted the claimants the full amount of compensation they claimed in their notice of motion, declining over the Minister’s initial opposition to refer the matter back to the director for reconsideration, as PAJA requires bar in exceptional cases.14 In doing so, he took account of a detailed schedule the claimants attached to the application, setting out extensive details of the cattle destroyed, the meat and hide value recovered, and the dairy value as indicated by sworn valuations. The answering affidavit’s disputation of these details was oblique, and no controverting facts of bases for valuation were put forward. [21] However, in argument before this court, the claimants conceded that the figure awarded should be reduced to 80% of the market values they set out in the schedule, since their claim had been made under reg 30(a), and not (b), as seems to have been assumed in the court below. In the result, the claimants conceded that the amount awarded in the court below fell to be 14 PAJA s 8(1)(c)(ii), Remedies in proceedings for judicial review, provides that a court that sets reduced. After an adjournment to enable Mr Buchanan on behalf of the claimants to consult, the agreed figure that is reflected in the order below was proffered to the court, and accepted by the Minister and the director. [22] In the light of this, Mr Nthai on behalf of the Minister and the director, after the same adjournment, indicated that he conceded, were the claimants’ contentions on fair market value to prevail, that there would be no need to remit the matter. [23] Although the reduction of the amount of compensation represents a measure of success for the appellants in monetary terms, the main and indeed overriding focus of the proceedings all along has been the correct method of calculating the compensation payable under the regulations. It was the Minister’s and director’s approach to this issue that obliged the claimants to go to court and to defend the judgment on appeal. It would therefore be unjust to deprive them of any portion of their costs. [24] The following order is issued: 1. The appeal succeeds to the extent that the amount of compensation the first and second appellants are ordered to pay is reduced from the sum of R14 395 537 to R10 853 777. aside administrative action may ‘in exceptional cases’ substitute or vary the action or correct a defect itself without remitting the matter. 2. Save in this respect, the appeal is dismissed with costs. E CAMERON JUDGE OF APPEAL CONCUR: NUGENT JA CLOETE JA MAYA JA CACHALIA JA

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 29 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 Minister of Agriculture v Bluelilliesbush Dairy Farming (270/07) [2008] ZASCA 60 (29 May 2008) In a judgment delivered today, the Supreme Court of Appeal has held that when compensation is paid to a dairy farmer under the Animal Diseases Act 35 of 1984 (read with the 1986 regulations) for dairy cattle slaughtered because of bovine tuberculosis (TB), the full productive value of the cattle, and not only their slaughter value, must be paid. The claim was brought by the Grasslands group of companies, which runs the largest dairy farming operation in the Eastern Cape, and one of the largest in the country. In a bovine TB outbreak in May 2004, the farming group lost more than 7 000 cows, heifers, heifer calves, bull calves and bulls which had to be slaughtered to contain the outbreak. The director of animal health in the department of agriculture, whom the statute requires to determine ‘a fair amount of compensation’, decided that only the slaughter value of the animals would be paid, because they were infected with TB and could never be used productively in dairy farming again. The farming group objected to this method of calculation, because it gave only one-fifth of the productive value of dairy cattle. The farming group relied on the wording of the Act and regulations, and the fact that the statutory scheme sought to create incentives for farmers to join bovine TB control schemes – which compensating on the basis of slaughter value would not do. The High Court in Port Elizabeth (Jansen J) upheld the farming group’s challenge to the director’s method of compensation, and the SCA has confirmed the judgment of the High Court. The Minister was ordered to pay the farming group R10 853 777 in compensation, plus costs.

2626

non-electoral

2014

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No.: 577/2013 In the matter between: NEWCITY GROUP (PTY) LIMITED APPELLANT and ALLAN DAVID PELLOW N.O. FIRST RESPONDENT GONASGREE GOVENDER N.O. SECOND RESPONDENT LEBOGANG MICHAEL MOLOTO N.O. THIRD RESPONDENT LEBOGANG MORAKE N.O. FOURTH RESPONDENT CHINA CONSTRUCTION BANK CORPORATION (JOHANNESBURG BRANCH) FIFTH RESPONDENT ABSA BANK LIMITED SIXTH RESPONDENT HENRY MAYO N.O. SEVENTH RESPONDENT REZIDOR HOTEL GROUP SOUTH AFRICA (PTY) LIMITED FIRST AFFECTED PARTY NON-UNIONISED EMPLOYEES SECOND AFFECTED PARTY Neutral citation: Newcity Group v Allan David Pellow NO (577/2013) [2014] ZASCA 162 (1 October 2014) Coram: Maya, Cachalia, Willis, Zondi JJA and Gorven AJA Heard: 26 August 2014 Delivered: 1 October 2014 Summary: Companies Act 71 of 2008 – business rescue proceedings – whether company has a reasonable prospect of rescue as contemplated in s 131(4)(a) of the Act. __________________________________________________________ ORDER ___________________________________________________________ On appeal from: South Gauteng High Court, Johannesburg (Van Eeden AJ sitting as a court of first instance) The appeal is dismissed with costs, including the costs of two counsel where employed. __________________________________________________________ JUDGMENT __________________________________________________________ Maya JA: (Cachalia, Willis, Zondi JJA and Gorven AJA concurring) [1] This is an appeal against the judgment of the South Gauteng High Court, Johannesburg (Van Eeden AJ). The high court dismissed the appellant‟s application to place Crystal Lagoon Investments 53 (Pty) Limited (in provisional liquidation), (Crystal Lagoon), under supervision and business rescue in terms of s 131 of the Companies Act 71 of 2008 (the Act)1 and granted an order placing it under final liquidation. The appeal is with its leave. 1 Section 128(1)(b) of the Act defines „business rescue‟ as the 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.‟ [2] The appellant, Newcity Group (Pty) Limited (Newcity), is the sole shareholder of Crystal Lagoon. Mr Chaim Cohen, who deposed to Newcity‟s affidavits in the application, is its sole shareholder and director. Crystal Lagoon is the owner of a mid-market 273 room hotel and conference facility trading as „Park Inn by Radisson‟ (the hotel). The hotel is operated by the Rezidor Hotel Group (Rezidor) in terms of a written management agreement (the management agreement) concluded between Crystal Lagoon and Rezidor. [3] On 9 September 2009 the fifth respondent, China Construction Bank Corporation (Johannesburg Branch) (CCBC), and Crystal Lagoon concluded a property development loan facility agreement (the facility agreement). In terms of this agreement CCBC advanced a sum of R200 million to Crystal Lagoon for the purposes of building and developing the hotel. One of the material terms of the facility agreement was that on completion of the development, the facility would be converted into a ten year term loan on the basis that Crystal Lagoon would pay the interest capitalised monthly during the first year after the hotel opened so that the balance on the facility would not exceed the amount of R200 million. Thereafter, interest and capital would be repaid over the next 120 months on an amortised basis. As security for the loan CCBC took various securities, including a first deed of suretyship from Cohen, limited to an amount of R200 million, and a first mortgage bond registered over the hotel in the capital sum of R200 million. [4] Between January 2010 and April 2011, Crystal Lagoon drew down on the loan facility. On 29 June 2010 the hotel was opened and on 29 November 2010 the development was completed. But trouble soon arose. As at 1 April 2011 the balance on the facility exceeded the sum of R200 million – the precise amount is in dispute – and Crystal Lagoon failed to pay the monthly interest on the due date and reduce the facility despite CCBC‟s repeated demands. It was therefore in breach of the facility agreement. [5] On 27 January 2012 Cohen passed resolutions in terms of s 129 of the Act2 to (a) voluntarily place the latter under supervision and commence business rescue proceedings and (b) have Mr Cornelius Fourie Myburgh appointed as its business rescue practitioner. On 3 February 2012, CCBC withdrew the loan facility and demanded immediate repayment of all the amounts due in the sum of R 215 973 902,23 together with interest thereon at the rate of 12 per cent per annum. [6] On 22 February 2012, Myburgh was formally appointed as Crystal Lagoon‟s business rescue practitioner.3 He promptly set the process in motion and called the first meeting of affected persons4 in terms of s 2 Section 129 reads in relevant part: „(1) Subject to subsection (2)(a), the board of a company may resolve that the company voluntarily begin business rescue proceedings and place the company under supervision, if the board has reasonable grounds to believe that– (a) The company is financially distressed; and (b) There appears to be a reasonable prospect of rescuing the company. (2) A resolution contemplated in subsection (1)– (a) may not be adopted if liquidation proceedings have been initiated by or against the company; and (b) has no force or effect until it has been filed.‟ 3 In terms of s 128(1)(d) „business rescue practitioner‟ means a person appointed, or two or more persons appointed jointly, in terms of [Chapter 6] to oversee a company during business rescue proceedings and „practitioner‟ has a corresponding meaning; 4 According to s 128(1)(a) “„affected person”, in relation to a company, means – (i) a shareholder or creditor of the company; (ii) any registered trade union representing employees of the company; and (iii) if any of the employees of the company are not represented by a registered trade union, each of those employees or their respective representatives‟. 147(1) of the Act5 on 29 February 2012. He was optimistic that Crystal Lagoon could be rescued. He reported that five entities, which he did not specify, had expressed an interest in investing in the hotel and that he expected a formal proposal from one of them in the near future. He was expected to deliver a business rescue plan by 26 March 2012 but sought an extension from Crystal Lagoon‟s creditors until 13 April 2012. On 12 April 2012 Myburgh informed Cohen and the creditors that he had received a written proposal from Rezidor which would allow Crystal Lagoon‟s creditors not to write off any portions of the amounts owed to them, ensure that the bond repayment was maintained and all the creditors paid in full. Myburgh sought a further extension to file the business rescue plan on 4 May 2012. [7] After protracted negotiations which dragged until late November 2012, the proposed offers6 came to naught. Notably, they were substantially less than R200 million, required CCBC to forfeit recourse to the securities furnished by Crystal Lagoon and Cohen and were payable over extended periods of time. Significant developments had occurred in the interim. CCBC had launched an application, in which Absa intervened, to set aside Cohen‟s resolution placing Crystal Lagoon under supervision and have it placed under final liquidation. And on 23 October 2012 the parties had taken a consent order in terms of which Crystal Lagoon‟s business rescue application was set aside and an order placing it under provisional winding up was granted. Interestingly, a month later 5 The section provides: „Within 10 business days after being appointed, the practitioner must convene, and preside over, a first meeting of creditors, at which– (a) The practitioner– (i) must inform the creditors whether the practitioner believes that there is a reasonable prospect of rescuing the company; and (ii) may receive proof of claims by creditors‟. 6 Various offers from Rezidor and other entities such as Mvelaphanda Group Limited, Curatio Capital Africa (Pty) Ltd, Zephan Properties (Pty) Limited and Extrabold Hotel Management (Pty) Limited were explored during this period. Myburgh, who was no longer Crystal Lagoon‟s business rescue practitioner, participated in investment negotiations with CCBC in relation to Crystal Lagoon in his capacity as a director of Orthotouch Limited, a public company. [8] It is against this background that Newcity brought application proceedings to have Crystal Lagoon placed under supervision and business rescue in December 2012. The application was supported by 140 members of its staff in terms of s 144(3)(b) of the Act.7 In his founding affidavit, Cohen alleged that he anticipated an imminent capital injection from potential investors, Rezidor, Zephan and Curatio Capital. This would enable Crystal Lagoon to discharge its indebtedness to Absa and release Newcity from its obligations to Absa under the suretyship signed by it. And Extrabold would replace Rezidor as hotel operator. In the replying affidavit mention was made, for the first time, of other entities, whose details were specified,8 from which it was alleged Newcity had received firm „expressions of interest‟. Reference was also made to Crystal Lagoon‟s daily revenue reports and the monthly operational reports for the period January to December 2012 to show that there had „been a consistent improvement in the performance of the hotel‟ after the institution of the application. [9] CCBC (and Absa) opposed the application. (Three other companies, Quantum Property Group Limited, A Million Up Investment 105 (Pty) Limited and GLM Investments (Pty) Limited subsequently launched applications to be heard as affected parties in these proceedings, 7 Section 144(3)(b) of the Act reads: „During a company‟s business rescue process, every registered trade union representing any employees of the company, and any employee who is not so represented, is entitled to … participate in any court proceedings arising during the business rescue proceedings.‟ 8 Peermont Global (Pty) Limited, Zamcamp Investments (Pty) Limited, EAH Executive Apartments and Hotels, Hospitality Property Fund Limited, Joe Holdt and Wideopen Platform (Pty) Limited. which they opposed, accusing Cohen and Newcity of unlawful conduct and fraud.) It contended that it would not be just and equitable to place Crystal Lagoon under business rescue as there was no reasonable prospect of rescuing it. It also contended that in the entire period of two years Newcity had failed to proffer a feasible business plan which would give Crystal Lagoon reasonable prospects of being rescued and continuing trading on a solvent basis. It pointed out that although Newcity alleged that during the time in which Crystal Lagoon was under business rescue it was able to meet all its operational expenditure. It was, however, undisputed that Crystal Lagoon was unable to pay the interest on CCBC‟s loan facility which formed part of its day-to-day expenses. CCBC further stated that it would not vote in favour of the proposed business plan9 even if the business rescue application succeeded as to do so would result in increasing Crystal Lagoon‟s indebtedness which had already ballooned to over R230 million without a single payment either towards the interest (in the monthly sum of approximately R2,35 million) or capital since December 2011. CCBC also objected to the appointment of Myburgh whose impartiality and integrity it questioned after his involvement in the quest for the hotel. It alleged that Myburgh failed to perform certain material duties in that capacity, showed a lack of independence and had a conflict of interest. It then sought an order placing Crystal Lagoon under final winding up, in the event that the 9 Section 145(2) gives creditors, inter alia: „(a) the right to vote to amend, approve or reject a proposed business rescue plan, in the manner contemplated in section 152; and (b) if the proposed business rescue plan is rejected, a further right to- (i) propose the development of an alternative plan, in the manner contemplated in section 153; or (ii) present an offer to acquire the interests of any or all of the other creditors in the manner contemplated in section 153.‟ business rescue application was unsuccessful, which the court below granted. [10] The court below accepted that Crystal Lagoon was financially distressed. Regarding whether there was a reasonable prospect for its rescue as envisaged in s 129 of the Act, the court found that it was unnecessary for a business rescue applicant to attach a business rescue plan to its founding affidavit. In the court‟s view it merely had to „advance facts that could be developed into a plan that, if approved, would maximise the likelihood of the company continuing in existence on a solvent basis or … result in a better return for the company‟s creditors or shareholders than would result from the immediate liquidation of the company‟ as contemplated in s 128(1)(b) of the Act. The court further held that if there was a reasonable possibility of the occurrence of either of these two events the jurisdictional requirements would have been satisfied for a court to exercise its discretion to grant the relief sought. The court below thus held that on the facts before it neither the proposed replacement of Rezidor with a different manager, which would likely result in litigation, nor the touted third party funding offers, of which none had proven viable in over a year, created a reasonable prospect that rescue the company would be rescued. The court concluded that as things stood, the company could be sold as a going concern and a balancing of the parties‟ rights and interests favoured finality and a grant of a final winding up order. [11] It is common cause that Newcity and CCBC are both affected persons as envisaged in s 128(a)(i) of the Act. And it is not in dispute that Crystal Lagoon is financially distressed within the contemplation of s 131(4)(a)(i) as it is commercially and factually insolvent: it is unable to pay CCBC‟s debt, which is due and payable, and its liabilities exceed its assets. (There was some contestation between the parties regarding the computation of the value of Crystal Lagoon‟s assets but it falls short of its liabilities on any version.) The main issue on appeal before us, therefore, is simply whether Newcity has shown a reasonable prospect of rescuing Crystal Lagoon. [12] It was argued on Newcity‟s behalf that (a) the facility agreement contemplated a repayment period in excess of ten years thereby allowing Crystal Lagoon to accumulate capital through the conduct of the business in order to repay the loan; (b) CCBC impermissibly withdrew the loan facility as it did so not on the basis of non-payment but rather as a result of the company having exceeded the facility, which specifically contemplated an increase in excess of R200 million against which the interest payable would be increased; (c) it had demonstrated that there was a reasonable prospect for rescuing the company which, on the undisputed version of the hotel operator Rezidor, was improving and making profit notwithstanding that it was in the challenging start-up phase, the so-called „ramp-up phase‟ which lasts about four years, during which a newly opened hotel attempts to penetrate the market and establish its fair market share against its competitors; (d) Crystal Lagoon had received binding expressions of interest from third parties keen to invest capital in the hotel which would facilitate a repayment of the debt to CCBC and (e) liquidating Crystal Lagoon, which would cost far more than business rescue, would destroy the business and its 140 employees‟ jobs. Newcity also challenged Absa‟s standing in the appeal on the basis that Crystal Lagoon‟s indebtedness to it was disputed and the subject of pending proceedings in the high court. But nothing turns on this. [13] CCBC‟s case, on the other hand, was that the appeal should fail simply by reason of Newcity‟s failure to establish in its papers that there was a reasonable prospect to rescue Crystal Lagoon. This court consequently had no cause to exercise its discretion, continued the argument, and even if it did the appeal must nevertheless fail if proper regard was had to the competing interests of the creditors, shareholders, employees and the public interest. [14] Section 131of the Act provides for a „court order to begin business rescue proceedings‟ and reads in relevant part: „(4) After considering an application in terms of subsection (1), the court may– (a) make an order placing the company under supervision and commencing business rescue proceedings, if the court is satisfied that– (i) the company is financially distressed; (ii) the company has failed to pay over any amount in terms of an obligation under or in terms of a … contract …; or (iii) it is otherwise just and equitable to do so for financial reasons, and there is a reasonable prospect for rescuing a company; or (b) dismissing the application, together with any further necessary and appropriate order, including an order placing the company under liquidation.‟ [15] It is plain from the wording of these provisions that a court may not grant an application for business rescue unless there is a reasonable prospect for rescuing the company ie facilitating its rehabilitation so that it continues on a solvent basis or, if that is not possible, yields a better return for its creditors and shareholders than what they would receive through liquidation.10 In deciding that question the court exercises a discretion in the wide sense – it makes a value judgment – and if a court of appeal should disagree with the conclusion, it is bound to interfere.11 [16] As to what „reasonable prospect‟ means, Brand JA, in Oakdene Square Properties (Pty) Ltd,12 properly described it as a yardstick higher than „a mere prima facie case or an arguable possibility‟ but lesser than a „reasonable probability‟ – a prospect based on reasonable grounds to be established by a business rescue applicant in accordance with the rules of motion proceedings. He elaborated as follows:13 „Self-evidently it will be neither practical nor prudent to be prescriptive about the way in which the [applicant] must show a reasonable prospect in every case. Some reported decisions laid down, however, that the applicant must provide a substantial measure of detail about the proposed plan to satisfy this requirement … But in considering these decisions Van der Merwe J commented as follows in Propspec Investments (Pty) Ltd v Pacific Coast Investments 97 Ltd and another 2013 (1) SA 542 (FB) para 11: “I agree that vague averments and mere speculative suggestions will not suffice in this regard. There can be no doubt that, in order to succeed in an application for business rescue, the applicant must place before the court a factual foundation for the existence of a reasonable prospect that the desired object can be achieved. But with respect to my learned colleagues, I believe that they place the bar too high.” And in para 15: “In my judgment it is not appropriate to attempt to set out general minimum particulars of what would constitute a reasonable prospect in this regard. It also seems to me that to require, as a minimum, concrete and objectively ascertainable details of the likely costs of rendering the company able to commence or resume its business, and the likely availability of the 10 Section 128(b) and (h) of the Act. 11 Oakdene Square Properties (Pty) Ltd and others v Farm Bothasfontein (Kyalami) (Pty) Ltd and others 2013 (4) SA 539 (SCA) para 21. 12 Ibid para 29. 13 At paras 30-31. necessary cash resource in order to enable the company to meet its day-to-day expenditure, or concrete factual details of the source, nature and extent of the resources that are likely to be available to the company , as well as the basis and terms on which such resources will be available, is tantamount to requiring proof of a probability, and unjustifiably limits the availability of business rescue proceedings.” … I agree with these comments in every respect … [Thus] the applicant is not required to set out a detailed plan … but must establish grounds for the reasonable prospect of achieving one or two goals in s 128(1)(b).‟ [17] This leads to the crisp question whether Newcity established grounds for the reasonable prospect of restoring Crystal Lagoon to solvency or, if that was not possible, to provide a return for its creditors and shareholders better than what they would receive through liquidation. [18] A close look at each of the „third party offers‟ mentioned in Newcity‟s founding affidavit – in which its case ought to have been made out – readily shows that they were not commercially viable, would not have resulted in the temporary supervision envisaged in the Act14 and were, in any event, probably no longer available. They all amounted to a mere substitution of Crystal Lagoon with another debtor over prolonged periods. As mentioned above, they required CCBC to write off substantial portions of the loan facility in excess of R70 million, provide funding and forfeit the securities put up by Crystal Lagoon to which CCBC was understandably not prepared to accede. 14 For example, in s 128(1)(b)(i) and (ii) which respectively refer to „temporary supervision of the company‟ and „a temporary moratorium on the rights of claimants against the company‟ and s 132(3) which contemplates completion of the business rescue proceedings within three months or, upon application by the business rescue practitioner, such longer time as the court may allow. [19] For example, the Rezidor agreement, touted as a firm agreement, was upon scrutiny merely a „statement of the parties intentions‟ and subject to the conclusion of „Formal Agreements‟, Rezidor‟s board would approve the transactions and its funders would agree to advance a sum not less than R160 million within 21 days failing which the agreement would lapse. As it turned out, none of these conditions came to fruition and the agreement failed because Rezidor itself was unwilling to confirm that it had raised the necessary funds or that its board had approved the proposed transaction. As already stated, the offers also contemplated that another entity, Extrabold, would replace Rezidor and manage the hotel, a plan which Rezidor said it would fiercely resist in light of the existing management agreement. It bears mentioning that in addition to a number of problems besetting the Extrabold offer, the projected fixed rental which would have been received from it under the 25-year lease agreement it proposed to conclude with Crystal Lagoon, which would provide a source of income to service the debt owed to CCBC, would have yielded an amount to no more than R1,3 million a month. This would not have even covered the monthly interest of about R2,35 million. [20] The so-called „expressions of interest‟ from other entities mentioned for the first time in the replying affidavit were also not capable of yielding any concrete funding. The simple fact is that Crystal Lagoon remained unable to service the debt due to CCBC or even pay its manager, Rezidor in over three years. There is no reasonable prospect of returning Crystal Lagoon to solvency in these circumstances. [21] As to whether there is a reasonable prospect that business rescue would yield a better return for Crystal Lagoon‟s creditors and shareholders, all that is alleged in Newcity‟s affidavits is that the costs of liquidation would exceed those incurred in business rescue. But, as was pointed out in Oakdene Square Properties,15 the „mere savings on the costs of the winding-up process in accordance with the existing liquidation provisions [can] hardly justify the separate institution of business rescue‟. And that apart, Newcity does not even show that such a saving would result. It was correctly contended on CCBC‟s behalf that Newcity‟s calculations in its replying affidavit overlooked the litigation costs that would be incurred in relation to the termination of the management agreement. In addition, other costs such as the interest that had already accrued in excess of R30 million, the costs to be paid in terms of the envisaged Extrabold lease agreement in excess of R10 million, attorneys‟ and directors‟ fees in addition to the business practitioner‟s costs and transactional fees would be incurred by Crystal Lagoon should agreements be concluded or the loan refinanced. [22] But there is a more fundamental hurdle for Newcity to overcome. On its version, the hotel property is worth R297 million. Assuming that this is the true value of the property that will be realised on liquidation, CCBC as a secured creditor would then receive the capital sum of the R200 million and have a concurrent claim for the balance of R30 million constituted by undisputed interest. As was correctly contended for CCBC, to meet the minimum threshold to qualify as a business rescue mechanism in this scenario, any business rescue plan would have to provide a return for CCBC of at least R200 million. As indicated, none of the proposed offers came anywhere close to providing a payment to CCBC over and above of what it could expect to receive in liquidation as they involved payments substantially less than R200 million over protracted periods of time and required CCBC to forfeit the securities it 15 Ibid, para 33. held. This starkly shows that business rescue on the proposed offers would not result in a better return for CCBC than what it would otherwise receive in liquidation proceedings. [23] In the premises, Newcity has failed to establish a prospect based on reasonable grounds that business rescue would return Crystal Lagoon to solvency or provide a better deal for its creditors (bearing in mind that CCBC is its majority creditor holding in excess of 75 per cent of its independent creditor‟s voting interests, envisaged in ss 128(1)(j) and 145(4), (5) and (6) of the Act) and sole shareholder (Newcity) than what they would receive through liquidation. As I see it, the matter ends here and the enquiry does not progress to issues regarding the exercise of this court‟s discretion and balancing the interests of the creditors, shareholders, employees and the public interest that was urged upon us. Suffice it to say, however, that all indications are that the liquidator would be able to sell the hotel as a going concern and thereby yield a better result for all concerned than placing it under business rescue. [24] In the result, the appeal is dismissed with costs, including the costs of two counsel where employed. ________________________ MML MAYA JUDGE OF APPEAL APPEARANCES: For Appellant: JJ Brett SC (D Mahon) Instructed by: Terry Mahon Attorneys, Sandton Webbers, Bloemfontein For Fifth Respondent: AJ Eyles (JM Hoffman) Instructed by: Bowman Gilfillan, Sandton 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: 1 September 2014 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. NEWCITY GROUP (PTY) LIMITED v ALLAN DAVID PELLOW N.O. AND OTHERS (577/2013)[2014] The Supreme Court of Appeal (SCA) today, dismissed an appeal, with costs. This appeal is against the judgment of the South Gauteng High Court, Johannesburg. Where the court below dismissed the appellant’s application to place Crystal Lagoon Investments 53 (Pty) Limited (in provisional liquidation), under supervision and business rescue in terms of s 131 of the Companies Act 71 of 2008 (the Act) and granted an order placing it under final liquidation. The appellant, Newcity Group (Pty) Limited (Newcity), is the sole shareholder of Crystal Lagoon which brought application proceedings to have Crystal Lagoon placed under supervision and business rescue in December 2012. The basis of the application was that (a) Crystal Lagoon was financially distressed; (b) it was just and equitable to place it under business rescue; and (c) there was a reasonable prospect of rescuing it as placing it under business rescue would provide temporary supervision and management of its affairs, business and property, a temporary moratorium on the rights of claims against it or in respect of property in its possession and the development and implementation of a plan to rescue it, which would result in a better return for its creditors and shareholders than would result from liquidation as envisaged in s 128(1)(b) of the Companies Act. The court below accepted that Crystal Lagoon was financially distressed. However, regarding whether there was a reasonable prospect for its rescue as envisaged in s 129 of the Act, the court found that it was unnecessary for a business rescue applicant to attach a business rescue plan to its founding affidavit. In the court’s view it merely has to ‘advance facts that can be developed into a plan that, if approved, will maximise the likelihood of the company continuing in existence on a solvent basis or … results in a better return for the company’s creditors or shareholders than would result from the immediate liquidation of the company’ as contemplated in s 128(1)(b) of the Act. The court below further held that if there is reasonable possibility of either of these two events the jurisdictional requirements have been satisfied and a court may exercise its discretion to grant the relief sought. The court below then held that on the facts before it neither the proposed plans created a reasonable prospect that the company could be rescued. The court concluded that as things stood, the company could be sold as a going concern and a balancing of the parties’ rights and interests favoured finality and the granting of a final winding up order. The main issue on appeal before this court, therefore, was simply whether Newcity had shown a reasonable prospect of rescuing Crystal Lagoon. It was found to be plain from the wording of the provisions of the Act, that a court may not grant an application for business rescue unless there is a reasonable prospect for rescuing the company. In deciding that question, it was held that the court exercises a discretion in the wide sense – it makes a value judgment – and if a court of appeal should disagree with the conclusion, it is bound to interfere. As to what ‘reasonable prospect’ means, this court found that it was properly described as a yardstick higher than ‘a mere prima facie case or an arguable possibility’ but lesser than a ‘reasonable probability’ – a prospect based on reasonable grounds to be established by a business rescue applicant in accordance with the rules of motion proceedings Based on all the facts before the court, that Newcity had failed to establish a prospect based on reasonable grounds that business rescue would return Crystal Lagoon to solvency or provide a better deal for its creditors. In the result, the appeal was dismissed with costs.

4034

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 611/2021 In the matter between: JOHN HENRY STEENHUISEN FIRST APPLICANT KEVIN MILEHAM SECOND APPLICANT and DAVID DOUGLAS DES VAN ROOYEN FIRST RESPONDENT THE OFFICE OF THE PUBLIC PROTECTOR SECOND RESPONDENT THE PUBLIC PROTECTOR THIRD RESPONDENT PRESIDENT OF THE REPUBLIC OF SOUTH AFRICA FOURTH RESPONDENT Neutral citation: Steenhuisen and Another v Van Rooyen and Others (Case no 611/2021) [2023] ZASCA 78 (29 MAY 2023) Coram: DAMBUZA ADP, ZONDI, PLASKET and GORVEN JJA and SALIE AJA Heard: 08 November 2022 Delivered: 29 May 2023 Summary: Administrative law – review of Public Protector’s decision on whether in responding to a written parliamentary question the first respondent wilfully misled parliament – Public Protector’s investigation and decision not rationally related to the question posed. ORDER On appeal from: Gauteng Division of the High Court, Pretoria (Hughes J, sitting as court of first instance): The application for leave to appeal is dismissed. JUDGMENT Dambuza ADP (Zondi, Plasket and Gorven JJA and Salie AJA concurring) [1] In this application the first applicant, Mr John Henry Steenhuisen (Mr Steenhuisen) seeks leave to appeal against the judgment of the Gauteng Division of the High Court, Pretoria (the high court) in terms of which the Public Protector’s report, including the remedial action directed pursuant to a complaint lodged with her by the second applicant, Mr Kevin Mileham (Mr Mileham), was declared unlawful and set aside. In her report, the Public Protector upheld a complaint that the first respondent, Mr David Douglas Des Van Rooyen (Mr Van Rooyen) made a misleading statement in response to a question asked of him during a National Assembly (Parliament) sitting, thereby violating the provisions of ss 96(1) and (2)(b) of the Constitution, together with paragraph 2.3(a) of the Executives Ethics Code (the Code).1 Leave to appeal was refused by the high court. This application was referred 1 The Executive Ethics Code published in terms of s 2(1) of the Executive Members’ Ethics Act 82 of 1998. for oral argument in an open court in terms of s 17(2)(d) of the Superior Courts Act 10 of 2013. [2] At the time of the complaint, Mr Van Rooyen was a member of Parliament. On 9 December 2015, the former President, Mr Jacob Gedleyihlekisa Zuma (Mr Zuma) appointed him as Minister of Finance. Four days thereafter, on 13 December 2015, Mr Zuma removed Mr Van Rooyen from the position of Minister of Finance and appointed him as Minister of Cooperative Governance and Traditional Affairs. [3] Whilst Mr Van Rooyen was serving in the latter office, on 11 April 2016 at a Parliamentary sitting, Mr. Steenhuisen, in his capacity as a member of Parliament for the Democratic Alliance political party (DA), posed the following written question to him: ‘Has (a) [Mr Van Rooyen] and/or (b) his Deputy Ministers ever (i) met with any (aa) member, (bb) employee and/or (cc) close associate of the Gupta family and/or (ii) attended any meeting with the specified persons (aa) at the Gupta’s Saxonworld Estate in Johannesburg or (bb) anywhere else since taking office; if not, what is the position in this regard; if so, in each specified case, (aaa) what are the names of the persons who were present at each meeting, (bbb) (aaaa) when and (bbbb) where did each such meeting take place and (ccc) what was the purpose of each specified meeting?’2 [4] Mr Van Rooyen responded to the question as follows: ‘(a) (aa) (cc) (b) The Minister and his Deputy Ministers have never met with the members, employees and/or close associates of the Gupta family in their official capacities. (aa)(bb)(aaa)(bbb)(aaaa)(bbbb)(ccc) Not applicable’. 2 Question No 927 in 2016. [5] This exchange resulted in Mr Mileham, also a member of Parliament for the DA, lodging with the Public Protector the complaint against Mr Van Rooyen for violation of the Code. In the complaint Mr Mileham stated that: ‘It has recently been reported in several news outlets that Minister Des van Rooyen visited the Gupta family residence in Saxonworld several times in the run up to his short lived tenure as Finance Minister. The reports claim that the Minister visited the Gupta family home on consecutive days between 2 December and 8 December 2015. In contrast, (sic) in reply to a Democratic Alliance Parliamentary question the Minister had denied ever visiting the residence of the Gupta family. It is thus clear that the Minister lied and intentionally misled parliament; in so doing he has contravened the Executive Ethics Code to which all Cabinet members are bound.’ (Emphasis added.) [6] In response to the complaint, Mr. Van Rooyen replied that during the period 4 to 11 December 2015 he was in Durban with his family. On 7 December, he travelled from Durban to Johannesburg for a meeting of the Mkhonto Wesizwe Military Veterans Association (MKMVA) where ‘they’ also met with the Gupta family. His conduct, he explained, was in his capacity as a Treasurer General of the MKMVA and in discharge of the responsibility of that organisation to enlist the support of business for its members’ programs. In later correspondence with the Public Protector Mr. Van Rooyen added that: ‘If the question [had been] phrased to include whether I visited the said family in my official capacity as a Minister OR in any other capacity, the answer would have been YES.’ [7] To reach her conclusion, the Public Protector reasoned that Mr Steenhuisen’s question was related to allegations that had surfaced in the public domain and was aimed at ascertaining whether Mr Van Rooyen’s visits to the Gupta residence were linked to his appointment as Minister of Finance. She found that there was never any reference, in the question, to Mr Van Rooyen meeting the Guptas in his capacity as a Minister. Mr Van Rooyen had deliberately distorted the meaning of the words ‘since taking office’, in the question, and attributed thereto a meaning that would align with his intention of misleading the members of Parliament. The nub of the question, she concluded, concerned when he had met the Guptas and had nothing to do with the capacity in which he met them. [8] She referred to cell phone records which, according to her, revealed that Mr Van Rooyen’s phone was in Saxonwold, in the vicinity of the Gupta family home, on 8 December 2015, the day prior to his appointment as Minister of Finance. She also identified more phone calls which were made from Mr Van Rooyen’s cellphone ‘within the Saxonwold area’ in the weeks following his appointment as Minister of Finance. She, however, disavowed reliance on the cell phone records for her findings. She ultimately found that: ‘…Mr Van Rooyen conveniently structured his answer to favour a distorted interpretation of the phrase “since taking office” to mean only in his official capacity. The Minister tailored his response in order to evade answering a question that was clear and straightforward.’ [9] In reviewing and setting aside the Public Protector’s decision, the high court found that the starting point of her investigation was misguided. Whereas the words ‘since taking office’ referred to the period following Mr Van Rooyen’s assumption of office as a Minister, the investigation incorrectly related to the period preceding his appointment as such. The high court found that Mr Van Rooyen’s response was not evasive or misleading and was relevant to the question asked. Furthermore, the complaint was not related to the parliamentary question that had been posed. In addition, the Public Protector relied on irrelevant evidence in reaching her decision. Consequently, the decision of the Public Protector was set aside as irrational. [10] In this Court, the applicants insisted that the parliamentary question was not limited in time or capacity, it was simply an inquiry into whether Mr. Van Rooyen had ever met with the Gupta family or their associates. Instead of giving an honest answer, Mr Van Rooyen designed a response intended to conceal his interactions with the Guptas. The applicants maintained that the evidence showed that Mr Van Rooyen met the Guptas first, before his appointment. [11] To succeed in this application the applicants must show that another court would reasonably find that the Public Protector’s decision was a result of a properly conducted investigation into the complaint that Mr. Van Rooyen wilfully3 misled parliament in replying to the question. The starting point is the Public Protector’s interpretation of the question, as it is fundamental to the manner in which the investigation was conducted, and the conclusion reached. [12] Mr. Steenhuisen’s question is no model of clarity. It is long and convoluted. The Public Protector interpreted it as inquiring into: 3 The Public Protector used the words ‘deliberately and inadvertently misled’. Clause 2.3(a) of the Code provides that: ‘Members of the Executive may not wilfully mislead the legislature to which they are accountable.’ As such she applied the wrong test. ‘5.1.2.1 Whether [Mr. Van Rooyen], since taking office ever met with any member, employee or close associate of the Gupta family; and/or, 5.1.2.2 Whether [Mr Van Rooyen] since taking office, ever attended any meeting with any member, employee or close associate of the Gupta family at the Gupta’s Saxonwold Estate or anywhere else.’ [13] On the Public Protector’s interpretation, the words ‘since taking office’ are an integral part of both parts of the question. They directed both parts of the inquiry to the period subsequent to Mr Van Rooyen taking office as a Minister. Mr Van Rooyen’s response was consistent with the Public Protector’s interpretation of the question. It accounted for all the words used in the question, including the reference to his Deputy Ministers. However, the Public Protector’s investigation and conclusion, did not account for her own interpretation of the question. She ignored the words ‘since taking office’. [14] In insisting that the Public Protector’s conclusion should be upheld the applicants interpreted the question as a two part inquiry into whether: ‘Mr. Van Rooyen and/or his deputy ministers had ever: (i) met with any member (aa), employee (bb) and/or close association(c) of the Gupta family; and or (ii) attended any meeting with the specified business persons (aa) at the Gupta’s Saxonworld Estate in Johannesburg….” [15] Notably, the applicants’ interpretation of the question differed from that of the Public Protector. On the applicants’ interpretation the emphasis was on the word ‘ever’, and the words ‘since taking office’ were ignored. Such disregard of words used in a text is impermissible, except where their inclusion leads to an absurdity. The inclusion of the words ‘since taking office’ does not lead to an absurdity in this case. Even if the applicants’ interpretation is plausible it is not the only credible one, as demonstrated in the Public Protector’s interpretation. But more importantly, for the Public Protector to reach her conclusion that there was willful misleading, she had to abandon her interpretation of the question. Her interpretation was the same as Mr Van Rooyen’s and accounted for the text, context and purpose of the question. [16] I agree with the submission on behalf of Mr Van Rooyen that the reference, in both the complaint and the Public Protector’s report to the media reports, compounded the misdirection on the part of the Public Protector by directing the investigation to a period that was not included in the question. [17] Much was made on behalf of the applicants, of the importance of the parliamentary question and answer procedure in promoting accountability by members of the executive. It was submitted on their behalf that the application raises a discrete issue of public importance in relation to the extent to which members of cabinet may avoid accountability by distorting parliamentary questions in order to avoid answering the substance thereof. [18] The importance of the Parliamentary question and answer procedure cannot be overemphasised. As this Court held in Minister of Home Affairs v Somali Association of South Africa,4 the procedure, which is designed to ensure accountability, responsiveness and openness, is one of the pillars on 4 Minister of Home Affairs and Others v Somali Association of South Africa Eastern Cape (SASA EC) and Another [2015] ZASCA 35; 2015 (3) SA 545 (SCA); [2015] 2 All SA 294 (SCA) para 22. which our multi-party system of democratic government is anchored.5 However, vague and ambiguous questions can only detract from the efficiency of the process, and any inquiry into the veracity of the answers given must accord with the relevant legality prescripts. The Speaker would be well advised to heed the Public Protector’s advice, as expressed in the report, that care should be taken to ensure that parliamentary questions are clear before members are called upon to respond. [19] The applicants contended that if the report is to be set aside, the matter should be remitted to the Public Protector. No purpose would be served by doing so. The complaint was founded on media reports which had not been included in the question and which related to a different period from that specified in the question. Any investigation conducted on the complaint would yield a negative result on the issue of wilful misleading of Parliament. The irregularities pertaining to the question, the complaint and the investigation thereof are irremediable. [20] For the reasons I have given above, the application for leave to appeal must fail. But given the importance of the system of parliamentary questions for open, accountable and responsive governance, I would, on the basis of the Biowatch principle, make no order as to costs. [21] Consequently, I make the following order: 5 Section 1(d) of the Constitution states as follows: ‘1. The Republic of South Africa is one, sovereign, democratic state, founded on the following values: ... (d) Universal adult suffrage, a national common voters roll, regular elections and a multi-party system of democratic government, to ensure accountability, responsiveness and openness.’ The application for leave to appeal is dismissed. _________________________ N DAMBUZA JUDGE OF APPEAL Appearances: For applicants: M Bishop, with M De Beer Instructed by: Minde Schapiro Smith Inc, Bellville Symington De Kok Attorneys, Bloemfontein For first respondent: T Masuku SC, with M Mathipa Instructed by: Lucky Thekiso Inc, Pretoria McIntyre Van der Post, Bloemfontein.

THE SUPREME COURT OF APPEAL OFSOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED FROM The Registrar, Supreme Court of Appeal DATE 29 May 2023 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Steenhuisen and Another v Van Rooyen and Others (case no 611/2021) [2023] ZASCA 78 (29 May 2023) MEDIA STATEMENT Today the Supreme Court of Appeal (SCA) dismissed an application brought by Mr John Steenhuisen, a member of the Democratic Alliance in which he sought to appeal an order reviewing and setting aside a report and remedial action ordered by the Public Protector. In her report the Public Protector found that Mr Des Van Rooyen wilfully misled parliament when answering a parliamentary question posed to him as Minister of a Government Department. The report was set aside by the Gauteng Division of the High Court, Pretoria. The Public Protector’s report emanated from her investigation of a complaint lodged by Mr Kevin Mileham, also a member of the DA, against Mr Van Rooyen. The complaint was that during 2015, when Mr Van Rooyen was a Minister of the Department of Co-operative Governance and Traditional Affairs, he lied and intentionally made a misleading statement during a National Assembly sitting. The statement, made in response to a written question posed to Mr Van Rooyen by Mr Steenhuisen, was expressed as follows: ‘Has (a) [Mr Van Rooyen] and/or (b) his Deputy Ministers ever (i) met with any (aa) member, (bb) employee and/or (cc) close associate of the Gupta family and/or (ii) attended any meeting with the specified persons (aa) at the Gupta’s Saxonworld Estate in Johannesburg or (bb) anywhere else since taking office; if not, what is the position in this regard; if so, in each specified case, (aaa) what are the names of the persons who were present at each meeting, (bbb) (aaaa) when and (bbbb) where did each such meeting take place and (ccc) what was the purpose of each specified meeting? Mr Van Rooyen responded that: ‘(a) (aa) (cc) (b) The Minister and his Deputy Ministers have never met with the members, employees and/or close associates of the Gupta family in their official capacities. (aa)(bb)(aaa)(bbb)(aaaa)(bbbb)(ccc) Not applicable’. Following this response Mr Mileham lodged the complaint with the Public Protector, referring to reports by several news outlets that Mr Van Rooyen had visited the home of the Gupta family on several occasions during the period between 2 and 8 December 2015, in the run up to her appointment as Minister of Finance. He went on to allege that, contrary to these reports, in reply to the parliamentary question Mr Van Rooyen lied and intentionally misled parliament by denying that he had ever visited the Gupta family. In finding that Mr Van Rooyen wilfully misled parliament, the Public Protector reasoned that the question related to the media reports, and that there was no reference in the question to Mr Van Rooyen meeting the Guptas in his capacity as a Minister. According to the Public Protector Mr Van Rooyen distorted the meaning of the words ‘since taking office’ in the question so that he could give the misleading response. The Supreme Court of Appeal found that the Public Protector’s own interpretation of the question accounted for the words ‘since taking office’. She interpreted the question as an inquiry into whether, since taking office, Mr Van Rooyen, had ever met with any member or close associate of the Gupta family and/or whether, since taking office, he had ever attended any meeting with any member or close associate of that family. Her conclusion that Mr Van Rooyen used the words ‘since taking office’ to distort the meaning of the question, was inconsistent with her own interpretation and was not rationally connected to the question. Furthermore, her investigation was based on the media reports rather than the question that had been posed to Mr Van Rooyen. Her report and remedial action had to be set aside and no purpose would be served by referring the matter back to her. --- ends --

1220

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Reportable Case Number : 83 / 07 In the matter between ISAAC SWARTZBERG APPELLANT and THE LAW SOCIETY OF THE NORTHERN PROVINCES RESPONDENT Coram : MPATI DP, MTHIYANE, NUGENT, CLOETE et PONNAN JJA Date of hearing : 21 FEBRUARY 2008 Date of delivery : 28 MARCH 2008 SUMMARY Attorney – re-admission of – s 15 (3)(a) of Attorneys Act 53 of 1979. NEUTRAL CITATION This judgment may be referred to as: Swartzberg v Law Society, Northern Provinces (83/2007) [2008] ZASCA 36 (March 2008) ________________________________________________________________ PONNAN JA: [1] In his book Confessions of an Uncommon Attorney, Reginald L Hine observes somewhat wryly: ‘The law, precisely because it is not an exact science, is a most exacting profession, and you will find its practitioners driven to do other things - preferably illegal - to preserve their health of mind.’ One instinctively recoils, I am sure, at the breadth and harshness of that indictment and yet, albeit infrequently, one encounters conduct, as here, that is wholly incongruous with the calling of an honourable profession – conduct that may well serve to support that charge. [2] The appellant, Mr Isaac Swartzberg, applied to the Pretoria High Court for his readmission and enrolment as an attorney. The application was opposed by the respondent, the Law Society of the Northern Provinces (‘the Law Society’). Bosielo J (Pretorius J concurring) dismissed the application with costs, but granted leave to the appellant to appeal to this Court. The appellant, who is presently 77 years old, was originally admitted as an attorney on 18 October 1955 and practised as such in Pretoria for some 44 years. On 13 August 1999 and on the application of the Law Society, the appellant’s name was struck from the roll of attorneys by Mynardt J. [3] In brief, the gist of the complaints against the appellant were that he had failed to keep proper books of account both in general and as to trust monies over a protracted period resulting in deficiencies in his trust account of approximately R249 000. Moreover, he had devised a stratagem to conceal those shortages which remained undetected from at least 1996 until August 1998. He thus successfully hoodwinked his auditor into certifying that his books of accounts were being properly maintained and on the strength of that secured a fidelity certificate from the Law Society. [4] For a fuller appreciation of the appellant’s wrongdoing, however, it is nonetheless necessary to refer in greater detail to the allegations levelled by the Law Society against him in its application for his striking-off. First, the appellant had been instructed to prosecute a third party claim on behalf of a certain Mr Uys. The claim was settled during 1994 and after payment of disbursements and deductions for fees a balance fell due for payment to his widow, Mr Uys since having died. By the time that payment was ultimately effected by means of a trust cheque to Ms Uys there were no longer any funds standing to her credit in the appellant’s trust account. It followed therefore that the appellant had utilised trust monies standing to the credit of one of his other clients to effect the payment in question to Ms Uys. [5] Second, one of the appellant’s clients, a Mr Jacobs, alleged that he had been overcharged by the appellant, who had allegedly also not properly accounted to him. A disciplinary enquiry was held by the Law Society, before which the appellant declined to testify. The disciplinary committee concluded that the appellant had accepted money from a client for professional work for which he did not properly account and in the light of the fact that he had charged a seemingly exorbitant fee, he was guilty of overreaching. [6] Third, one of the appellant’s clients, Ms van der Linde, had lent and advanced the sum of R100 000 to the appellant. The appellant failed to effect repayment in accordance with his loan agreement with Ms van der Linde. Ultimately summons had to be issued on her behalf by new attorneys who had been instructed by her to recover the moneys. Before doing so however, her new attorneys encountered considerable difficulty in persuading the appellant to release her file to them. [7] Fourth, Mr Bambise was employed for a period in excess of 20 years as a messenger by the appellant. During 1995 Mr Bambise’s wife died and he was appointed the executor of her deceased estate. He turned to the appellant for assistance. On 31 January 1996 an amount of R198 356.35 was paid into the appellant’s trust account in favour of that estate. It was withdrawn that very day by the appellant and a fee for the full amount was debited to that account. Mr Bambise was forced to consult another firm of attorneys to recover those moneys. The appellant eventually acknowledged his indebtedness to Mr Bambise by signing an acknowledgment of debt in his favour. He did not however comply with his obligations under the acknowledgement and in due course summons had to be issued against him. Although the appellant denied all of the essential allegations in his plea and sought to delay finalisation of the matter by seeking a postponement, ostensibly on the basis that the matter was the subject of a disciplinary enquiry, he eventually settled the matter on the day of the trial. Notwithstanding the written settlement agreement and a consent to judgment, subsequent payment of the agreed instalments in reduction of his indebtedness to Mr Bambise was neither timeous nor in full. As at 13 August 1999 the total repaid by the appellant to Mr Bambise was a paltry R21 000. It thus fell to the fidelity fund of the Law Society to thereafter make good the shortfall. [8] Although the appellant initially sought to oppose the application for his striking- off, he did not persist with his opposition. Nor did he file an answering affidavit in response to the allegations levelled against him by the Law Society. [9] Flowing from those allegations the appellant was arraigned in the Pretoria Regional Court during 2000 on a charge of theft of R220 000 from his trust account. He was convicted on his plea of guilty and sentenced to a fine of R100 000 or three years’ imprisonment. He elected to pay the fine. A further term of two years’ imprisonment was conditionally suspended for a period of four years. One such condition was that he repay the amount of R220 000 to the Fidelity Fund of the Law Society within seven days of sentence. That condition, he duly complied with. [10] During August 2002 the appellant brought an application – which was subsequently withdrawn – for his readmission. Of that application the appellant states in his present founding affidavit: ‘Prior to the launching of the application I appeared before a committee of the Law Society in an attempt to persuade the Law Society that I qualified for readmission. Despite the fact that the Law Society was not so satisfied I brought the application. However, in due course I was advised by those representing me that the application would probably not succeed, and I proceeded to withdraw the application.’ [11] Eighteen months later, as the appellant puts it, he renewed the application for his readmission as an attorney. That application was dismissed with costs on the attorney- and-client scale by Daniels J (Makhafola AJ concurring) on 29 November 2004. In dismissing the application, Daniels J stated: ‘[w]hen one reads the applicant’s version of events it is difficult to understand why and on what basis he was ever charged. His explanation is exculpatory and he displays … a disregard of the facts. The applicant clearly does not understand the gravity of his errant ways. If he does not understand he cannot be heard to say he has remorse.’ [12] On 19 December 2005 the appellant deposed to his founding affidavit in support of the application which is the subject of this appeal. He there states: ‘I have studied all the papers in the two aforesaid applications, as well as the judgment of His Lordship Mr Justice Daniels. I am ashamed by the realisation that I never actually came to terms with the fact that my acts of dishonesty demonstrated a material defect of character. On re-reading my own papers, it became clear to me that I continued to consider myself as an honest man who had succumbed to an isolated act of dishonesty, as to which I offered various excuses.’ [13] On 6 February 2006, the appellant appeared before the council of the Law Society. He thereafter filed a supplementary affidavit. The purpose, so he contends, was two-fold: first, he had been informed by the council of the Law Society that he ‘... had not made sufficient disclosure of the reasons for his demise as an attorney ...’; and, second, he had been requested to deal ‘... specifically with those persons who had been reimbursed by the attorneys’ fidelity fund’. In his supplementary affidavit, the appellant describes his conduct thus: ‘To hide what I was doing I used a mechanism of reversing fees’ debits from time to time to balance the books. This is subterfuge because the reversal of debits was not accompanied with any payment. In this way the actual trust deficit continued to grow.’ He further states: ‘I recognise that my conduct was reprehensible and unbecoming and I have overcome the trait of dishonesty displayed by me completely.’ [14] Where a person who has previously been struck off the roll of attorneys on the ground that he was not a fit and proper person to continue to practise as an attorney applies for his readmission, ‘[t]he onus is on him to convince the Court on a balance of probabilities that there has been a genuine, complete and permanent reformation on his part; that the defect of character or attitude which led to his being adjudged not fit and proper no longer exists; and that, if he is re-admitted he will in future conduct himself as an honourable member of the profession and will be someone who can be trusted to carry out the duties of an attorney in a satisfactory way as far as members of the public are concerned.’ (Per Corbett JA in Law Society, Transvaal v Behrman 1981 (4) SA 538 (A) at 557B-C.) [15] In considering whether the onus has been discharged the court must: ‘...have regard to the nature and degree of the conduct which occasioned applicant’s removal from the roll, to the explanation, if any, afforded by him for such conduct which might, inter alia, mitigate or perhaps even aggravate the heinousness of his offence, to his actions in regard to an enquiry into his conduct and proceedings consequent thereon to secure his removal, to the lapse of time between his removal and his application for reinstatement, to his activities subsequent to removal, to the expression of contrition by him and its genuineness, and to his efforts at repairing the harm which his conduct may have occasioned to others.’ (Kudo v The Cape Law Society 1972 (4) SA 342 (C) at 345H-346, as quoted with approval in Behrman at 557E.) [16] Section 15(3) of the Attorney’s Act 53 of 1979, which makes express provision for the readmission and the re-enrolment of a person as an attorney, provides: ‘A court may, on application made in accordance with this Act, readmit and re-enrol any person who was previously admitted and enrolled as an attorney and has been removed from or struck off the roll, as an attorney, if - (a) such person, in the discretion of the court, is a fit and proper person to be so readmitted and re- enrolled; . . .’ Section 15(3)(b) is not relevant for present purposes. [17] Section 15, according to Ackermann J, unquestionably confers ‘… a discretion on the Court in deciding whether an applicant, whether for admission or re-admission as an attorney, is a “fit and proper person”. Section 15(1), dealing with an admission, expressly provides that the Court has a discretion to decide whether the person applying “is a fit and proper person to be so re-admitted and re-enrolled”. Section 15(3) deals specifically with re-admissions. A discretion in deciding whether an applicant is a ”fit and proper person to be so re-admitted and re-enrolled” is now expressly conferred on the Court. It is also significant that, whereas s 15(1) provides that a Court “shall” admit and enrol a person as an attorney if the preconditions of ss (a) and (b) are fulfilled, ss (3) provides that a Court “may” “re-admit and re-enrol any person who was previously admitted and enrolled as an attorney and has been removed from or struck off the roll, as an attorney” if the preconditions of ss (a) and (b) are fulfilled. The fact that the word “may” is used in s 15(3), whereas “shall” is used in ss (1) is, …significant. It shows … that the Legislature wanted to differentiate between the Court’s functions under ss 15(1) and 15(3), and wished to confer a further discretion on the Court in regard to re-admissions under s 15(3). It seems that, even where the Court is satisfied that s 15(3)(b) has been complied with and that the person applying is, in terms of s 15(3)(a), “in the discretion of the Court” a “fit and proper person” the Court still has a residual discretion to refuse re-admission.’ (Ex parte Aarons (Law Society Transvaal, Intervening) 1985 (3) SA 286 (T) at 290C-G.) [18] A factor of importance in any such application is the attitude adopted by the Law Society concerned. Any person who applies for readmission and enrolment as an attorney is required in terms of s 16 of the Act to satisfy the Law Society of the province where he or she applies that he or she is a fit and proper person to be readmitted and enrolled. Although it is not a condition precedent to readmitting a person to practice that the Law Society should first be satisfied as to his or her fitness, considerable weight must be given to the attitude adopted by the Law Society (Behrman at 557H). [19] It was contended on behalf of the Law Society that the appellant did not make a sufficiently full disclosure of the details of the various activities engaged in by him since his striking-off. The appellant does state that he is ‘unable to present a work record in proof of his complete rehabilitation’. The Law Society had granted the appellant permission to obtain employment with the firm Van der Walt and Hugo. His employment with that firm, as is to be expected, was subject to conditions imposed by the Law Society. For reasons that remain unexplained, however, he did not take up that employment. On this aspect the appellant states: ‘In the past four years I have been approached on numerous occasions to assist people in legal matters. After consultations and the preparation of their brief, matters which require legal action are referred to the firm of attorneys Bloch, Gross and Partners. I then become a client of the firm. The firm debits me with its disbursements and fees, which I recover from the consultant, and I also receive a small remuneration from the consultant. In each case I specifically inform the consultant that I am not a practising attorney, as I have been struck from the roll of attorneys. In each case I explain the procedure to the consultant, and I obtain the consultant’s consent to Bloch, Gross and Partners being briefed in the matter. In each case Bloch, Gross and Partners opens a file in my name with reference to the particular consultant.’ [20] Of the appellant’s arrangement with Bloch, Gross and Partners Inc, Mr Ernst William Serfontein, a senior director of that firm, states: ‘After the applicant was struck off the roll of practising attorneys he approached me and requested me if I would accept referrals from him of clients who are in need of legal assistance. I accepted his proposal and since then several clients have been referred to me by him. The clients paid our firm directly and Mr Swarztberg had no involvement in the financial aspects relating to these clients. In many instances, however, he would assist us in the matter and we made use of his expertise without remuneration to him. In many matters he would brief Counsel and drew up documents and once we had drawn our bill he would see to it that our legal fees and disbursements were promptly settled by the client upon presentation of the bill.’ [21] That there are material discrepancies in the two versions is patent. Moreover, that arrangement in either guise had not been disclosed in the earlier application that came before Daniels J during 2005. That much is clear when one has regard to the following excerpt of the judgment of Daniels J: ‘As to the applicant’s activities subsequent to his striking off very little if anything that he did was related to the practise of the law. He was employed as a legal advisor, (according to the applicant at “a totally inadequate salary”), by Sure Benefit. For how long we do not know. We were not informed what his employment involved. He obviously did not have access to or control over finances of the organization. Upon perusing the present application one finds a single reference to attorney’s work. I prefer to quote fully: “2.1(2) With the permission of the director of the Law Society of the Northern Provinces I have briefed attorneys and shepherded my clients’ interests when I was given permission by the Society to work for Van der Walt & Hugo. I was admonished not to let or allow any person to get the impression that I was an admitted lawyer. I was not to accompany clients to court nor consult at the chambers of counsel.” The impression is created that this occurred whilst he was employed by Van der Walt & Hugo with the consent of the society. It is, however, common cause that the applicant did not take up employment with the firm mentioned, or any other firm.’ There is thus much to be said for the argument not only that the founding affidavit is misleading in its brevity but also that the appellant failed to make full and frank disclosure of the true position either in the current application or in the previous one that came before Daniels J. This from an applicant who ought to have been fully aware of the need to disclose all the facts. [22] The fundamental question to be answered in an application of this kind is whether there has been a genuine, complete and permanent reformation on the appellant’s part. This involves an enquiry as to whether the defect of character or attitude which led to him being adjudged not fit and proper no longer exists. (Aarons at 294H.) Allied to that is an assessment of the appellant’s character reformation and the chances of his successful conformation in the future to the exacting demands of the profession that he seeks to re-enter. It is thus crucial for a court confronted with an application of this kind to determine what the particular defect of character or attitude was. More importantly, it is for the appellant himself to first properly and correctly identify the defect of character or attitude involved and thereafter to act in accordance with that appreciation. For, until and unless there is such a cognitive appreciation on the part of the appellant, it is difficult to see how the defect can be cured or corrected. It seems to me that any true and lasting reformation of necessity depends upon such appreciation. [23] Amongst the matters to which a court must have regard are the nature and gravity of the conduct which occasioned the appellant’s removal from the roll and the explanation given by him for such conduct (Behrman at 558G). The moral reprehensibility involved in the appellant’s conduct is self-evident. The nature of the appellant’s conduct involves very serious dishonesty and deception. He did not succumb to a sudden temptation and his fall from grace was not in consequence of an isolated act. His was deliberate and persistent dishonesty for personal financial gain over a protracted period. [24] In his supplementary founding affidavit, the appellant explains why he persisted in keeping his practice open when the writing was clearly on the wall. He states: ‘I found it difficult to meet office expenses… and I fell into the trap of forward debiting fees against trust funds. Most of my staff had been with me in excess of 20 years and I honestly did not want to injure them in any way. I regarded it as my duty to retain their employment. I realise that I should have pruned my expenditures severely at the time, but I did not wish to injure my employees, and my vanity prevented me from accepting the fact that I had to scale down.’ That suggests that he was motivated by a misguided sense of paternalism towards his staff. Not only does that assertion reflect a serious lack of insight into a defect of his character and attitude, but it is far too glib and rings hollow when, objectively viewed, the most morally reprehensible act perpetrated by the appellant in a series of rather serious transgressions stretching over a period in excess of two years was the theft from his long-standing employee, Mr Bambise. Given the relationship that existed between them it is hard to imagine a more scandalous breach of trust. That abuse of confidence was exacerbated by his dilatoriness in repaying what had been stolen from Mr Bambise. Furthermore, after cynically stringing Mr Bambise along for more than three years with false promises of repayment, the appellant was able when his personal liberty was threatened, not only to pay a fine of R100 000 but also to effect payment of R220 000 within seven days of being ordered to do so by the regional court, to escape incarceration. [25] To his credit the appellant has expressed contrition and repentance. And whilst those expressions appear to be genuine and are usually a sound indicator of reformation or rehabilitation, they do not without more prove or establish such reformation or rehabilitation in this case. It is indeed so that the appellant’s name was struck from the roll on 13 August 1999 and from his perspective eight long years have since passed. That ordinarily would have weighed heavily with a court confronted by an application of this kind. In this case, however, on the appellant’s own version it was only after the judgment of Daniels J that he realised that his acts of dishonesty demonstrated a material defect of character. It thus took almost six years for the appellant to come to terms with the fact that he had behaved in a scandalous and dishonest fashion. Even then it was only after scathing criticism by a judge who refused his application for readmission that the scales finally fell from his eyes. And yet, only some 13 months were to pass before he deposed to the founding affidavit in this matter. Given the seriousness of his misdeeds and his obduracy in coming to terms with them, this can hardly be regarded as sufficient time for the kind of critical introspection and reflection that must obviously precede an application of this kind. [26] In the light of the extent of the moral reprehensibility involved, the absence of introspective evaluation and the haste with which the application was launched, I entertain substantial reservations as to whether the appellant has, even as yet, properly and correctly identified the defects of character and attitude involved in his misdeeds. [27] The question that now confronts a court is not whether the appellant has been sufficiently punished for his misdeeds. I have little doubt that, if that were the issue, a court may well have been satisfied that he has suffered enough. The issue is rather whether the appellant is a person who can safely be trusted to faithfully discharge all of the duties and obligations relating to the profession of an attorney. After all, because of the trust and confidence reposed by the public and the courts in practitioners, a court must be astute to ensure that the re-admission of a particular individual will not harm the prestige and dignity of the profession. For, by granting an application for re-admission, a court pronounces to the world at large that the individual concerned is a fit and proper person. [28] The appellant had a heavy onus to discharge. He had to prove to the satisfaction of the court that, by reason of his complete and permanent reformation, he is in no way likely to fail in the future to discharge all of the obligations appertaining to his profession. In the case of a serious defect of character, reformation is known to be difficult and, therefore, to establish reformation as sufficiently probable, might require more cogent evidence than in respect of a less serious fault. (Kudo v Cape Law Society 1977 (4) SA at 659 (A) at 676D-E). Little, if anything, is put forward by the appellant that might mitigate the heinousness of his conduct. Moreover, it must count against the appellant that his misdeeds were committed when he was no longer a young man. For, even at that mature age, the appellant was lacking in the most basic standards of his profession. He displayed a contempt for the law, the courts and for honest dealings with his clients, at least one of whom occupied a position of particular vulnerability in relation to him. Simply put, the appellant was everything that an attorney ought not to be. [29] To the extent that the appellant suggests that he has atoned for his wrongdoing, the atonement, in my view, was neither spontaneous nor voluntary, but rather contrived and induced by a desire for self-preservation. Thus, for example, the appellant has never, in the many years that have since passed, contacted either Mr Bambise or any of the other victims of his misdeeds to ascertain whether the fidelity fund of the Law Society has made good the financial loss suffered at his hands. [30] Where the professional misconduct consists, as here, of theft, one would imagine that it would be relatively easy to establish that the person has undergone complete and permanent reformation. That could be done by placing evidence before a court that the individual concerned has for some length of time handled money without supervision and has proved his honesty. Obviously in the light of his somewhat chequered work history since the striking-off, no such evidence could have been adduced. [31] It would be no exaggeration to say that, on such evidence as there is, the appellant has demonstrated a propensity toward inherent dishonesty. It may, in those circumstances, perhaps be postulated that the nature of the appellant's original lapse speaks of a defect of character incapable of reformation. But, to go so far as accepting such immutability of character may well be unnecessary. For in a case such as this, where proof of complete and permanent reformation is difficult because of the moral turpitude of the misdeeds committed by the appellant, the evidence tendered by the appellant falls far short of that proof. [32] Where a person is struck-off the roll for the kind of conduct encountered here, he must realise that his prospects of being re-admitted to what after all is an honourable profession, will be very slim indeed. Only in the most exceptional of circumstances, where he has worked to expiate the results of his conduct and to satisfy the court that he has changed completely, will a court consider readmission at all (Visser v Cape Law Society 1930 CPD 159 at 160). [33] It follows, on the view that I take of the matter, that the appellant failed to discharge the onus of convincing the court that he is a fit and proper person to be readmitted as an attorney. [34] In the result the appeal is dismissed with costs. _________________ V M PONNAN JUDGE OF APPEAL CONCUR: MPATI DP MTHIYANE JA NUGENT JA CLOETE JA: [35] I have had the advantage of reading the judgment of my colleague Ponnan JA. I regret that I am constrained to come to a different conclusion. [36] My learned colleague has catalogued the offences for which the appellant was struck off the roll as an attorney by Mynhardt J and Motata AJ some eight and a half years ago. They are undeniably serious. I remind myself, however, that the application which resulted in this appeal was not for an order striking the appellant off the roll, but for his readmission. Readmission is governed by s 15(3) of the Act, which provides (to the extent relevant) as follows: ‘A court may, on application made in accordance with this Act, readmit and re-enrol any person who was previously admitted and enrolled as an attorney and has been removed from or struck off the roll, as an attorney, if ─ (a) such person, in the discretion of the court, is a fit and proper person to be so readmitted and re- enrolled . . .’. [37] The onus which the appellant had to discharge was in essence to satisfy the court a quo that he could be trusted in the future should he be readmitted. That is the effect of the following passage in the judgment of Corbett JA in Law Society, Transvaal v Behrman:1 ‘Where a person whose name has previously been struck off the roll of attorneys on the ground that he was not a fit and proper person to continue to practise as an attorney applies for his re-admission, the onus is on him to convince the Court on a balance of probabilities that there has been a genuine, complete and permanent reformation on his part; that the defect of character or attitude which led to his being adjudged not fit and proper no longer exists; and that, if he is re-admitted, he will in future conduct himself as an honourable member of the profession and will be someone who can be trusted to carry out the duties of an attorney in a satisfactory way as far as members of the public are concerned . . .’. The discretion conferred by s 15(3)(a), as in the case of s 22(1)(d)2 (which deals with an application for the striking off of an attorney), involves in reality a weighing up of all relevant facts and, to this extent, a value judgment.3 The relevant facts are set out in Kudo v The Cape Law Society.4 If an applicant clears that hurdle, and only if he does so, the court has a residual discretion to refuse admission, because of the use of the word ‘may’ in s 15(3) (in contradistinction to the use of the word ‘shall’ in s 15(1)5 which deals with admissions): Ex parte Aarons (Law Society Transvaal, Intervening)6 (quoted with approval by my colleague Ponnan JA in para 16 of his judgment). The parameters of the discretion are nowhere circumscribed. An important factor relevant to the exercise of the discretion, bearing in mind that the court has ex hypothesi found the applicant to 1 1981 (4) SA 538A at 557A-C. 2 ‘Any person who has been admitted and enrolled as an attorney may on application by the society concerned be struck off the roll or suspended from practice by the court within the jurisdiction of which he practices ─ . . . (d) if he, in the discretion of the court, is not a fit and proper person to continue to practice as an attorney.’ 3 cf Jasat v Natal Law Society 2000 (3) SA 44 (SCA) at 51E-F; Law Society of the Cape of Good Hope v Budricks 2003 (2) SA 11 (SCA) at 14A and Summerley v Law Society, Northern Provinces 2006 (5) SA 613 (SCA) at 615C-E. 4 1972 (4) SA 342 (C) approved in Behrman at 557E, and quoted in para 15 of the judgment of my colleague Ponnan JA. 5 ‘Unless cause to the contrary to its satisfaction is shown, the court shall on application in accordance with this Act, admit and enrol any person as an attorney if . . . ‘. 6 1985 (3) SA 286 (T) at 290E-G. be a fit and proper person to be readmitted, would in my view be whether the applicant has been sufficiently punished for what he did. Rehabilitation is essential for readmission, because otherwise the applicant would not discharge the onus of proving that he/she is a fit and proper person to be readmitted; but that may not be sufficient if the court in the exercise of its residual discretion is not satisfied that the applicant should be readmitted yet. [38] I shall first consider whether the appellant has discharged the onus. There has been a fundamental change in the attitude of the appellant as it was when he applied for readmission to the Pretoria High Court compared to the attitude he evinces now. The appellant’s attitude when he brought his previous application is encapsulated in the following passage in the judgment of Daniels J (which, whilst it deals with the Uys matter, is equally apposite to all of the charges of misconduct): ‘When one reads the applicant’s version of events it is difficult to understand why and on what basis he was ever charged. His explanation is exculpatory and he displays as has been said a disregard of the facts. The applicant clearly does not understand the gravity of his errant ways. If he does not understand he cannot be heard to say that he has remorse.’ The appellant’s attitude now is: ‘I have studied all the papers in the two aforesaid applications7 as well as the judgment of His Lordship Mr Justice Daniels. I am ashamed by the realisation that I never actually came to terms with the fact that my acts of dishonesty demonstrated a material defect of character. On re-reading my own papers, it became clear to me that I continued to consider myself an honest man who had succumbed to an isolated act of dishonesty, as to which I offered various excuses.’ The appellant went on to say: ‘I am firmly convinced that I have become fully rehabilitated. The devastating consequences of my actions are also the severest taskmasters. It is inconceivable that I will ever commit an act of dishonesty again.’ [39] The appellant also filed a supplementary affidavit after he had been interviewed by the Council of the Law Society of the Northern Provinces. In that affidavit he said: ‘I am a devout Christian and at the time I was a leading member of the Church of Jesus Christ of Latter- day Saints. In 1995 I held the office of Lay Bishop, and I also acted extensively as legal adviser to the Church. These duties took me all over South Africa and abroad. Because I was so deeply involved in the 7 The aborted application for readmission and the previous application before Daniels J and Motata AJ. affairs of the Church, I neglected my practice, but I failed to recognise that I was on a path of destruction. I wanted to maintain my position in the Church, but I also wanted to maintain my position as a senior practising attorney. I have come to recognise that I was driven by self-serving vanity, and nothing else. My neglect of my legal practice soon translated into reality. I found it difficult to meet office expenses (salaries, rental of office space and the like), and I fell into the trap of forward debiting fees against trust funds. Most of my staff had been with me in excess of 20 years and I honestly did not wish to injure them in any way. I regarded it as my duty to retain their employment. I realise that I should have pruned my expenditure severely at the time, but I did not wish to injure my employees, and my vanity prevented me from accepting the fact that I had to scale down. Although I didn’t realise it at the time, there is no escape from this treadmill. It leads inexorably to destruction. Nevertheless, I managed to convince myself that matters would take a turn for the better and that I would be able to surmount my problems. To hide what I was doing, I used a mechanism of reversing fees debits from time to time so as to balance the books. This was a subterfuge because the reversal of debits was not accompanied with any payment at all. In this way the actual trust deficit continued to grow.’ In regard to Mr Bambise, the appellant said: ‘My conduct was part of a survival strategy, in which I was sadly remiss. I recognise that my conduct was reprehensible and unbecoming. I am deeply ashamed of the entire event. I have overcome the trait of dishonesty displayed by me completely.’ In regard to Messrs Uys and Van der Linde, the appellant said: ‘I have full appreciation of the fact that I shirked my duties as an attorney. My conduct was part of a pattern during a time when I had damaged my practice through neglect. I dishonestly attempted to save myself from disgrace, and in so doing I only managed to disgrace myself and the attorneys profession. My disgraceful conduct as a whole demonstrates a defect of character. It has taken me a long time to appreciate the extent of the defect which I displayed. As I have sought to demonstrate, I have overcome the defect completely.’ [40] The appellant also said in his supplementary affidavit: ‘I have overcome the trait of dishonesty in my character in a number of ways, which have all operated together. I have done so by a process of deep introspection and prayer since my demise. I am a deeply committed Christian. I have recommitted myself to my faith and I have been cleansed of all inclination to dishonesty. This did not occur haphazardly. I confided in several members of my church and we actively discussed and prayed in order to establish my unreserved commitment to honesty and integrity. My wife and I followed the same honest and open process. The harsh consequences of my dishonesty have served as a severe taskmaster. I was filled with disgust at my own frailty. Since my demise I have been meticulously honest in everything that I have done and I have developed an incorruptible culture of honesty. I have come to the full realization that I disgraced the profession I served all my life at an advanced age, which left my life empty, forlorn and purposeless. I have come to realize the full import and validity of the justified observations as to my inadequacy described in the judgments of Their Lordships Mr. Justices Mynhardt and Daniels. I have a deep desire to serve as an attorney again and to make amends for my inexcusable conduct. I humbly pray that I be granted such opportunity.’ [41] In support of his application, the appellant annexed affidavits by Dr Irma Labuschagne, a forensic criminologist who had testified in mitigation of sentence at his criminal trial, and Mr Groenewald, the incumbent Temple President of the appellant’s church. Dr Labuschagne said there whereas the appellant had previously not expressed true remorse, he: ‘now voices true insight into his criminal behaviour at the time and therefore, for the first time, shows deep remorse. He is not simply voicing regret. . . He has made full restitution and made, in different ways and by truly applying himself, good the losses he had caused. He no longer creates the feeling that he simply repaid to get rid of the problem. His desire was born out of his insight with regard to injuries caused to others. It is my opinion that this is bound up with deep remorse. When a person is merely sorry for himself because he is in trouble, there will be signs of • attempts to blame others for the crime; • own interests above all else, and • attempts to find excuses for own behaviour. Mr Swartzberg is no longer guilty of any of the above.’ The legal representative of the Law Society submitted that this evidence was ‘of value’. I would put it far higher than that. [42] Mr Groenewald said that he had been closely involved with the appellant for the past 33 years, both as a friend and as a member of the church. He said this: ‘As a Church leader over the past 30 years I have come into daily contact with a great number of people from every sphere of society. Because of my vast experience I regard myself as an astute judge of character. I was severely disappointed by the Applicant for his criminal conduct which led to his conviction of theft and his striking from the roll of attorneys. I have scrutinized the Applicant closely and I have engaged him in many intensive discussions. I am completely satisfied that his remorse and full repentance are genuine. I am also satisfied that the Applicant had rehabilitated himself completely and that there is no danger that the Appellant will commit an act of dishonesty again.’ [43] The court a quo simply brushed this evidence aside and in so doing, committed a fundamental misdirection of fact. The court said: ‘In my view, there is no sufficient and cogent evidence to demonstrate that the applicant has become completely and genuinely reformed. I regret to state that the affidavits by Dr Labuschagne and Mr Groenewald are of little value in this respect.’ No reasons for this conclusion were advanced and I find it inexplicable. [44] The court a quo also had no regard to the affidavit of Mr Serfontein, the senior director of attorneys Bloch Gross & Associates Inc, which it had itself elicited. Serfontein said that he had come to know the appellant well during the appellant’s association with the firm (which is described in paragraphs 19 and 20 of my learned colleague’s judgment) and went on to say the following about the applicant: ‘In fact, he has become a good friend and I can honestly say that he has openly discussed the reasons for his being struck off the roll with me and that he never attempted to justify the mistakes he had made in the past, except to show remorse and regret. There can be no doubt that he deeply regrets what he has done and the fact that he has not been able to practise the profession that he loves so dearly and which he has for most of his life practised with so much enthusiasm and commitment, has had a profound effect on his life. I can honestly say that Mr Swartzberg has learned from his mistakes in the past and that it is extremely unlikely that he would ever make himself guilty of the same misconduct. . . . I would without hesitation consider employing him if re-enrolled. He has much to contribute to the profession in the future and is still highly respected by his colleagues.’ [45] I wish to deal in passing with the appellant’s relationship with Bloch Gross & Associates Inc which the court a quo categorised as one which ‘seriously raises eye- brows’. The arrangement was disclosed by the appellant in his founding affidavit and he was asked a few questions about it by the members of the Council of the Law Society ─ 12 in all, including the President and Vice-President, assisted by the Director, and the Heads of Members Affairs, Professional Affairs and Disciplinary Matters ─ who interviewed him. There was not the slightest suggestion at that meeting, or in the affidavit subsequently deposed to by the President of the Law Society opposing the application, that there was anything untoward about the relationship. [46] I am mindful of the fact that a relatively short period elapsed between the date on which Daniels J gave judgment in the previous application (the judgment was delivered on 29 November 2004 and the copy in the record was apparently revised on 17 May 2005) and the date on which the appellant deposed to his founding affidavit (19 December 2005). I am also mindful of two other factors. The first is that the appellant is now 77 years old and the other is that the appellant narrowly escaped a custodial sentence for his previous acts of dishonesty ─ he will not be entitled to expect leniency should he again offend. These factors, together with the evidence of the appellant ─ supported as it is by an independent expert and two other persons who know the appellant well, one of whom is a senior attorney ─ lead me to conclude that the appellant discharged the onus. Indeed, I have difficulty in appreciating what more can be required of him in this regard. I would merely add that it was common cause that the appellant had repaid the amount which, according to the Law Society, was missing from his trust account and there is no reason to assume either that this amount was not sufficient to make good the loss suffered by the victims of his misdeeds, or that it was not paid over to them. [47] That brings me to the exercise of the residual discretion. I emphasise that this question only arises because I have found that the court a quo misdirected itself in not finding that the appellant had discharged the onus. The court a quo did not get that far as it held that the onus had not been discharged. In my view, serious though the appellant’s offences were, the period he has been off the roll ─ now some eight and a half years ─ is sufficient punishment, bearing in mind that he has repaid the monies stolen and is paying off the costs incurred by the Law Society in the previous proceedings. The consequences of the appellant’s previous actions were dire. In his own words: ‘At the age of 70 I had managed to reduce a reasonably successful life to one of utter desolation. I have no assets and no income and my wife and I survived on her meagre income from an inheritance.’ I see no reason to exercise the residual discretion against readmitting the appellant. [48] The court a quo ordered the appellant to pay the costs of the Law Society. I would leave that order undisturbed as the Law Society is not an ordinary litigant and its opposition was not unreasonable. I do consider, however, that the Law Society should pay the costs of the appeal. [49] I would accordingly allow the appeal, with costs, to the extent of replacing the order dismissing the application with an order granting it. _________________ T D CLOETE 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 28 March 2008 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. I Swartzberg v The Law Society of the Northern Provinces (Case No 83 / 07) Media Statement Today the Supreme Court of Appeal (‘SCA’) split on whether or not 77 year old Mr Isaac Swartzberg, who was originally admitted as an attorney on 18 October 1995 and practised as such in Pretoria, should be readmitted and enrolled as an attorney. On 13 August 1999, Mr Swartzberg’s name was struck from the Roll of Attorneys by the Pretoria High Court. The gist of the complaints against him were that he had failed to keep proper books of account over a protracted period resulting in deficiencies in his trust account of approximately R249 000. He had furthermore devised a stratagem to conceal those shortages and thus hoodwinked his auditor into certifying that his books of account were properly maintained and on the strength of that secured a Fidelity Certificate from the Law Society. Flowing from those allegations the appellant was arraigned in the Pretoria Regional Court during 2000 on a charge of theft. He was convicted on his plea of guilty and sentenced to a fine of R100 000 or three years’ imprisonment. He elected to pay the fine. A further term of two years’ imprisonment was conditionally suspended for a period of four years. One such condition was that he repay the amount of R220 000 to the Fidelity Fund of the Law Society within seven days of sentence. That condition, he duly complied with. During August 2002 the appellant brought an application for his readmission. That application was withdrawn but subsequently renewed by him some 18 months later. The application was dismissed by the High Court on 17 May 2005. Approximately one year later the appellant deposed to an affidavit in support of a fresh application for his readmission. That application which was dismissed by the Pretoria High Court on 29 September 2006, forms the subject of the present appeal. According to the SCA, the fundamental question to be answered in an application of this kind is whether there has been a genuine, complete and permanent reformation on the part of the individual seeking readmission as an attorney and that the defect of character or attitude which led to him being adjudged not fit and proper to practise as an attorney no longer exists. Four of the Judges of Appeal held that the appellant had failed to discharge the onus of convincing the court that he is a fit and proper person to be readmitted as an attorney. The fifth Judge of Appeal concluded that the appellant had discharged the onus resting upon him. The appeal was accordingly dismissed with costs. --- ends ---

2920

non-electoral

2015

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT REPORTABLE Case No: 197/2014 In the matter between: MEDIRITE (PTY) LIMITED Appellant and SOUTH AFRICAN PHARMACY COUNCIL First Respondent THE MINISTER OF HEALTH Second Respondent Neutral citation: Medirite v South African Pharmacy Council (197/2014) [2015] ZASCA 27 (20 March 2015) Coram: Mpati P, Maya, Leach, Pillay and Zondi JJA Heard: 16 February 2015 Delivered: 20 March 2015 Summary: Administrative law – amendment to general rules of pharmaceutical practice neither rational nor reasonable – amendment set aside on review. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: Gauteng Division, Pretoria (Mabuse J 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 court a quo is set aside and is substituted with the following: „(a) The first respondent‟s amendment of s 1.2.2 of Annexure A to the Rules Relating to Good Pharmacy Practice, published in Government Gazette No 35095 on 2 March 2012 under Board Notice 35/2012, insofar as it introduced subsecs (b), (c) and (d) to s 1.2.2.1, is set aside. (b) The first respondent is to pay the applicant‟s costs, including the costs of two counsel.‟ ________________________________________________________________ JUDGMENT ________________________________________________________________ Leach JA (Mpati P, Maya, Pillay and Zondi JJA concurring) [1] For obvious reasons of public interest, the pharmaceutical industry is heavily regulated. Amongst other controls the first respondent, the South African Pharmacy Council, a juristic person established under s 2 of the Pharmacy Act 53 of 1974 (the Act), is empowered under s 35A(b)(ii) of that Act to make rules relating to „good pharmacy practice‟ that are binding upon all persons licensed to provide pharmacy services.1 On 17 December 2004, the first 1 Regulation 20(1) of the „Regulations Relating to the Practice of Pharmacy, GN R1158, GG 21754, 20 November 2000; regulation 7(1) of the „Ownership and Licensing of Pharmacies, GN R553, GG 24770, 25 April 2003; regulation 18(8)(b) of the „Regulations Relating to the Period and Manner of Appeal Against Decisions of the Medicine Control Council, GN R906, GG 14826, 28 May 1993‟. respondent published rules relating to good pharmacy practice (the GPP Rules).2 An amendment to those rules, published by the first respondent on 2 March 2012,3 lies at the heart of the present dispute. As more fully set out below, the appellant was aggrieved by certain provisions introduced by the amendment and sought to have them reviewed and set aside by the high court, citing the first appellant and the Minister of Health as respondents in its application. No relief was sought against the Minister who was joined solely as a potentially interested party but who has played no part in the proceedings, either in the high court or in this appeal. In any event, the appellant‟s application was dismissed on 20 December 2013. The appeal to this court is with leave of the court a quo. [2] Pharmacies situated within the precincts of other business premises such as supermarkets and hospitals, but run as separate businesses, have become fairly commonplace in this country as they are elsewhere in the modern world. Since 2003 the appellant, a wholly owned subsidiary of Shoprite Checkers (Pty) Ltd, operating under the brand name of Medirite, has conducted separate pharmacy businesses within Shoprite, Checkers and Checkers Hyper supermarkets. Capitalising on the free flow of foot traffic between the supermarket in which it is situated and the pharmacy itself, its business model proved so successful that when the present proceedings were instituted in the court a quo, the appellant was operating 129 licensed pharmacies in this way and planned to expand that number considerably within a few years. [3] Typically, the appellant‟s pharmacies are organised as follows: (a) The pharmacy itself consists of a dispensary in which scheduled medicines are kept and stored out of public reach, an office or consultation room, a waiting area for patients or customers, and a service counter between the dispensary and the shop floor. 2 Rules Relating to Good Pharmacy Practice, GN R129, GG 27112, 17 December 2004. 3 Rules Relating to Good Pharmacy Practice, GN R35, GG 35095, 2 March 2012. (b) Members of the public deal with the pharmacist across the service counter, with the patient being provided with the necessary degree of privacy and confidentiality by partitioning that create a booth-like structure. The counter is directly accessible from the supermarket floor but the dispensary behind it may be accessed solely through a door between it and the office or a private consultation room. (c) The space between the counter and the dispensary is fitted with a retractable and lockable vertical shutter that is closed and locked whenever the pharmacy is not open for business. In this way no-one other than the responsible pharmacist, who retains the keys, has access to the scheduled medicines stored in the pharmacy. (d) Situated immediately adjacent to, but in front of the service counter, are both the waiting area (usually near the door that leads to the office and dispensary, and furnished with chairs) and the so-called „front shop‟ which is not part of the licensed pharmacy premises. (I should mention that the owner of a pharmacy is obliged to hold a license issued by the Director-General of the Department of Health for the premises where the pharmacy business is conducted.)4 The front shop is stocked with health and beauty products, experience having shown that there are valuable synergies to be exploited between the provision of pharmacy services and the sale of these products. (e) The stock offered for sale in the front shop also includes certain so-called „schedule 0‟ medicines, such as headache tablets. Unlike other scheduled medicines, these may be sold by any retailer, including supermarkets, spaza shops (tuckshops) or liquor stores, and therefore do not have to be processed and paid for at the pharmacy counter. However, as certain schedule 0 medicines are often included in doctors‟ prescriptions, a range of these are also stocked within the dispensary for convenience in order to be dispensed together with other prescription medicines. 4 Reg 8 of the Regulations Relating to the Ownership and Licensing of Pharmacies, supra, fn 1. [4] As at May 2011, s 1.2.2(b) of Annexure A to the GPP Rules provided that „the pharmacy premises must be clearly demarcated and identified from the premises of any other business or practice‟. However, on 27 May 2011 the first respondent published for comment a draft amendment thereto that envisaged not only revising the wording of that rule (but not its import) but the introduction of additional requirements as to the method of demarcation of pharmacy premises, including the construction of a wall. Alarmed by this, the appellant submitted detailed written representations to the first respondent on 25 July 2011 in an attempt to persuade it not to effect the proposed amendment. The appellant also met with the registrar of the first respondent on 29 September 2011 to voice its concerns. These representations had no effect and, on 2 March 2012, the first respondent published the amendment. [5] The amendment introduced a new s 1.2.2.1 that in its entirety reads as follows: „(a) The pharmacy premises must be clearly identified and demarcated from the premises of any other business or practice. (b) The demarcation must be permanent, solid and closed-off at all times, which demarcation may be inter alia brick and mortar, aluminium, steel, glass, dry wall or wood partition. (c) The demarcation must be from floor to the ceiling height and must enclose all areas attached to the pharmacy viz: the waiting area, the clinic, the semi-private area and the private area. (d) The pharmacy must have a single point of entry and a single point of exit in compliance with the Occupation Health and Safety Act 85 of 1993 (OHSA). (e) In order to comply with the requirement of accessibility to pharmaceutical services, a pharmacist must have an unfettered 24 hour access to the pharmacy.‟ [6] The appellant has calculated that in order for members of the public not to feel physically restricted and to enjoy a sense of confidentiality when consulting with the pharmacist, the proposed wall should be about four metres from the service counter. As the length of a pharmacy is typically about eight metres, the wall will create a „box‟ jutting out and enclosing an area in excess of 30 square metres of floor space in front of the counter. Not only will this entail substantial construction expenditure (the appellant estimates the cost of building a wall meeting these requirements at approximately R200 000) but the presence of such a wall will in all likelihood have a profound negative impact on the supermarket business model, interfering as it must with the free flow of customers between the host supermarket and the pharmacy. The further requirement that the wall must extend from floor to ceiling is in itself problematic, not only as many of the host supermarkets are in buildings that have either extremely high ceilings or, in many cases, no ceilings at all, but the erection of a wall of this nature may adversely impact on the lighting and ventilation design of the buildings in which the pharmacies are situated. [7] Consequently, on 22 March 2012, relying upon s 5 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA), the appellant asked the first respondent to provide its reasons for passing the amendment. In its reply of 26 April 2012, the first respondent stressed the need to ensure that the profession provides excellence for the benefit of those they serve, and went on to say: „(I)t is imperative to ensure that the premises defined as a “pharmacy” is clearly demarcated which demarcation needs to be clearly identified and permanent. This has proved to be problematic where a pharmacy is situated within another business, and has in practice given rise to the colloquial, yet arbitrary, “white line” concept to demarcate the area registered as the pharmacy. This is evident in pharmacies situated within healthcare facilities or group practices, institutional pharmacies which have a section directly accessible by members of the public and pharmacies situated within an ordinary retail environment eg “supermarket model”. The absence of a permanent demarcation of the pharmacy premises has led to a lack of definitive jurisdiction for the Council and in some circumstances definitive jurisdiction vis a vis other statutory health councils in the application of Ethical Rules. In addition the “white line” can be moved without notice and may at the extreme even vary from day to day. It is common cause that owners/responsible pharmacists and the Office of the Registrar are aware of the demarcation of the pharmacy premises due to the fact that floor plans have to be provided for purposes of pharmacy licenses and the recording of such pharmacies. However, when a pharmacy is situated within another business and in the absence of a permanent demarcation these premises lines/boundaries/borders are unknown to 3rd parties, in particular the members of the public, other healthcare professionals and Council‟s inspectors (should they not have access to or be in possession of floor plans). At the highest level, the lack of a permanent, visible, therefore known demarcation brings into question where does the pharmacy begin and end and thus where do the rules and laws begin and end in terms of pharmacies and pharmaceutical services. In addition the Council identified specific areas of concern in regulating the pharmacy in the absence of a permanent business demarcation: (a) Confidentiality issues, in terms of record keeping and potential access to patient records; (b) Access to scheduled substances; (c) Stock control; (d) Access to the pharmacy but unregistered/unauthorized; and (e) In contrast to point (d) above, the lack of access to the pharmacy when the main business is closed or inaccessible. Based on the abovementioned details the Council identified the need to simplify the minimum standards pertaining to the demarcation, accessibility of a pharmacy situated within construction of a permanent “structure” must incorporate the entire pharmacy.‟ [8] On receiving these reasons, the appellant attempted to persuade the first respondent to withdraw the amendment. When its efforts were unsuccessful, the appellant decided to challenge the amendment and launched review proceedings in the court a quo. As appears from its reasons of 26 April 2012, and repetitively repeated in its answering affidavits, the first respondent‟s primary concern in effecting the amendment appears to have been to ensure that pharmacy premises are clearly identifiable and demarcated from the host businesses in which they are situated. Certain of its expressed reasons for that view are somewhat difficult to appreciate, but nothing turns on this as the appellant accepted that it is necessary for pharmacies to be both identifiable and clearly demarcated from the supermarkets in which they are to be found. The appellant‟s challenge on review related solely to the provisions of subsecs (b), (c) and (d) of s 1.2.2.1 introduced by the amendment ie the requirements relating to a permanent wall extending from floor to ceiling with restricted points of entry and exit. As already mentioned, its challenge was dismissed by the court a quo and is now before this court on appeal. [9] It is necessary to record at the outset that both sides were agreed, correctly, that the first respondent‟s amendment of the GPP Rules constituted administrative action taken by an administrator as envisaged by PAJA. Section 33(1) of the Constitution requires such administrative action to be „lawful, reasonable and procedurally fair‟ and PAJA is designed to ensure the achievement of that end. It provides that administrative action may be set aside, inter alia, if irrelevant considerations were taken into account or relevant considerations were not considered,5 if it was not rationally connected to either the information before the administrator6 or the reasons given for it by the administrator,7 or if it was an action that no reasonable decision-maker could take.8 The requirement of rationality is to ensure that the action is not arbitrary or capricious and that there is a rational connection to the facts and the information available to the administrator taking the decision and the decision itself.9 [10] Whether an action may be impugned on any of these grounds involves a fact driven inquiry having regard, inter alia, to the information available to the administrator, the considerations relied on, the ends that were sought to be 5 Section 6(2)(e)(iii). 6 Section 6(2)(f)(cc). 7 Section 6(2)(f)(ii)(dd). 8 Section 6(2)(h). See further Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs 2004 (4) SA 490 (CC) para 44. 9 SA Predator Breeders Association v Minister of Environmental Affairs and Tourism [2011] 2 All SA 529 (SCA) para 28. achieved and the effect the proposed action would have upon interested parties. But in considering the lawfulness of the action sought to be impugned, it is important for a court to remember that it is engaged in a review and not an appeal, and that it is not for it to usurp the administrator‟s function. Accordingly, as long as the administrative action is rational or reasonable it cannot be impugned, even if it is not an action the court would have taken. But of course questions such as reasonableness and rationality involve the making of a value judgment that cannot be tested in isolation, so to speak, without considering the so-called „merits‟ of the action and why it was taken.10 [11] A consideration of the merits of the decision in the present case is bedevilled by a singular lack of information as to why the first respondent decided that a wall meeting the prescribed requirements was necessary. As already mentioned, the GPP Rules prior to the introduction of the amendment also required pharmacy premises to be „clearly demarcated and identified from the premises of any other business or practice‟, and the first respondent had never complained that any of the appellant‟s pharmacies breached this rule despite having regularly inspected them. The inference is that the appellant‟s premises were in fact clearly demarcated and identifiable. Nor for that matter is there any suggestion that any complaint, of any nature whatsoever, had been made arising out of the adoption of any similar business model by other pharmacy owners. Significantly, when the draft amendments were published for purposes of comment, it was done without any motivation as to why the existing rule had been inadequate or why it had been felt necessary to effect changes thereto. [12] Nor does the first respondent‟s motivation in effecting changes to the existing rule appear from the documents it furnished under Uniform rule 53 in response to the institution of review proceedings. What does appear from those 10 See eg, C Hoexter Administrative Law in South Africa (2ed) (2012) at 351-352. documents is that, in April 2008, the first respondent had established a task team to develop a discussion paper in regard to various aspects of pharmaceutical practice. Thereafter the first respondent‟s registrar wrote to various foreign pharmaceutical regulators, inquiring about their respective requirements relating to pharmacies in supermarkets. The first respondent‟s records show no response to any of these enquiries. All one knows is that in the minutes of a teleconference of the task team conducted on 25 June 2009 it was noted that corporate pharmacies should be advised to have „a white line demarcation separating the pharmacy from the rest of the business‟(the „white line model‟ is a system which uses markings on the floor of the premises to indicate the boundary between the pharmacy and the host business), and that members of the task team were to „engage with a few corporate pharmacies regarding the white line model‟. These minutes must be construed as an indication that the task team favoured the introduction of such a method of demarcation. Significantly, they make no mention of a permanent enclosure. [13] The first respondent alleged in its answering affidavits that during the teleconference there had in fact been a vigorous debate about the efficacy of the „white line model‟ as it was regarded as being problematic. It also alleged that the white line model „has rarely been properly observed‟ and suggested that the line might be moved on a daily basis, something that with its limited resources it could not police. However, not only did the first respondent give no details of this ever having happened, but even if one accepts that there was a perception that this could occur, there is no mention in the minutes of any discussion concerning the necessity of providing a box-like enclosure of the nature of that ultimately prescribed by the amendment. [14] So why did the first respondent introduce subsecs (b), (c) and (d) requiring a permanent wall extending from floor to ceiling, with restricted access, in order to demarcate and identify a pharmacy‟s premises? The answer to this question is shrouded in mystery. As already mentioned, the main issue the first respondent addressed in resisting the review was the necessity to adequately demarcate and identify the premises of a pharmacy, but nowhere in the papers did it explicitly set out its reason why it felt that it was necessary to build a wall of this nature in order to achieve this end. The closest it has ever come to an explanation is the suggestion in its reasons of 26 April 2012 that it had identified the need „to simplify the minimum standards pertaining to the demarcation‟ of a pharmacy. This is quite simply no reason at all. Whilst there can be no doubt that the prescribed wall would certainly achieve the end of demarcating and identifying the premises of a pharmacy, it can hardly be suggested that it is the simplest solution to achieve that end. [15] The fundamental difficulty facing the first respondent is, thus, that it has neither explained what considerations it took into account nor provided any motivation for its introduction of a rule requiring a wall envisaged in the introduced subsecs, the building of which is likely to impinge heavily upon the appellant‟s business model. Had it had any facts justifying the need for such a wall, it can be presumed they would have been forthcoming. As they were not, the matter must be decided on the basis that there were none. [16] In these circumstances, accepting that there was no information before the first respondent or factual foundation that demonstrated any existing mischief that needed to be addressed by way of a wall of the nature specified, the decision to oblige pharmacy owners to build such a wall was arbitrary and irrational in the sense that it lacked any logical justification. [17] Faced with this difficulty, counsel for the first respondent argued that once it was accepted that it was rational and reasonable to require a demarcation of the pharmacy premises, it was not for a court to question the means by which it decided to achieve this end – namely, by erecting the wall in compliance with the subsecs. However, although the first respondent was empowered by s 4 of the Act to generally „do all such things as the council deems necessary or expedient to achieve the objects of this Act‟, it does not have carte blanche to do just as it likes. Instead its discretion is fettered by the obligation to exercise its administrative powers lawfully. Sub-sections (b), (c) and (d) relating to the nature and extent of the envisaged wall were made by it in purporting to exercise those powers, and it is its action in doing so that may be challenged on review. Accordingly, even if a demarcation is justifiable, the administrative action amending the GPP Rules to introduce the requirement of a wall of the nature envisaged is liable to be set aside under PAJA if it was not properly taken. And as that decision lacked rationality for the reasons already given, it does not withstand scrutiny under PAJA. [18] Of further importance is the first respondent‟s failure to indicate why it felt that a less onerous demarcation would not have sufficed. Although it is not for a court to determine on these papers what would have been an adequate albeit less restrictive method of demarcation, it takes little imagination to envisage various ways in which the premises of a pharmacy in a supermarket or other business premises could easily be clearly identified and demarcated at little cost and without causing significant interference with the free flow of customer traffic between the two businesses. [19] The first respondent argued that the onerous practical implications the appellant would bear in giving effect to the amendment were irrelevant as the amendment was not specifically targeted at the appellant but at all pharmacies located in other businesses, and that persons who do business in a highly regulated field must proceed on the basis that, from time to time, the regulatory landscape will change. It further argued that although the appellant had made much of the adverse implications of the floor-to-ceiling model, it would have been amenable to considering a workable alternative that was less invasive. [20] Of course persons doing business in a regulated profession cannot expect that the regulations under which they operate will remain static. But that is no reason for the consequences of any proposed changes in the regulations upon those affected to be regarded as irrelevant and not to be taken into account before they are implemented. As already mentioned, s 6(2)(h) of PAJA requires an administrative decision to be reasonable in the light of the circumstances of each particular case. As O‟Regan J stressed in her seminal judgment in Bato Star Fishing,11 factors relevant to the determination of whether a decision is reasonable or not will include the reasons given for the decision (which as I have stressed are singularly lacking in this case) as well as „the nature of the competing interests involved and the impact of the decision on the lives and well-being of those affected‟.12 It has been stated that „proportionality is a constitutional watchword‟13 and as was observed by Plasket J in Ehrlich,14 quoting with approval the views of Prof Jowell, unreasonable administrative action includes „those that are oppressive in the sense that they “have an unnecessarily onerous impact on affected persons or where the means employed (albeit for lawful ends) are excessive or disproportionate in their result”‟.15 [21] Accordingly, in seeking to achieve a clear demarcation between pharmacy and supermarket, the first respondent was obliged to weigh up the effect of its rules on those affected thereby, particularly as the implementation of the new subsecs was likely to have a substantial adverse effect on the basic business model being used not only by the appellant but by other pharmacy owners using the supermarket model countrywide. 11 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs 2004 (4) SA 490 (CC). 12 Paragraph 45. 13 City of Johannesburg Metropolitan Municipality v Blue Moonlight Properties 39 (Pty) Ltd 2011 (4) SA 337 (SCA). 14 Ehrlich v Minister of Correctional Services 2009 (2) SA 373 (E). 15 Para 42 quoting, J Jowell „Judicial Review of the Substance of Official Decisions‟ (1993) 13 Acta Juridica 117 at 120. [22] Moreover, implicit in the recognition that the first respondent was amenable to a less invasive alternative than the wall it had prescribed, is an acknowledgement that the floor-to-ceiling wall was not necessary in order to achieve the objective to ensure a clear demarcation between the pharmacy and the host business. This is a telling concession. By seemingly ignoring any other option the first respondent failed to consider less drastic but surely available means to accomplish the desired result of a clear demarcation. A floor-to-ceiling wall would indeed be an absolute demarcation, but without the first respondent providing any reason for requiring such a wall, the adverse consequences to the supermarket business model and the costs flowing therefrom appear to have been wholly disproportional to the end it sought to achieve. Instead it used „a sledgehammer to . . . crack a nut‟.16 As the first respondent has failed to attempt to justify the use of a sledgehammer, its action must be regarded as unreasonable. [23] Consequently, the first respondent‟s administrative action in making the subsecs in question ought to have been set aside as having been both irrational and unreasonable. For these reasons alone the court a quo erred in concluding otherwise, and its order cannot stand. This renders it unnecessary to consider the various further issues debated in this court. [24] The following order will therefore be made: 1 The appeal succeeds with costs, such costs to include the costs of two counsel. 2 The order of the court a quo is set aside and is substituted with the following: „(a) The first respondent‟s amendment of s 1.2.2 of Annexure A to the Rules Relating to Good Pharmacy Practice, published in Government Gazette No 35095 on 2 March 2012 under Board Notice 35/2012, insofar as it introduced subsecs (b), (c) and (d) to s 1.2.2.1, is set aside. 16 A somewhat hackneyed but graphic idiom used, inter alia, in S v Manamela 2000 (3) SA 1 (CC) para 34. (b) The first respondent is to pay the applicant‟s costs, including the costs of two counsel.‟ _______________________ L E Leach Judge of Appeal Appearances: For the Appellant: J J Gauntlett SC (with him M W Janisch) Instructed by: Werksmans C/o Van der Merwe Du Toit Inc, Pretoria Phatshoane Henney, Bloemfontein For the Respondent: A P H Cockrell SC (with him A B Friedman) Instructed by: Potgieter-Marais Attorneys, Pretoria J L Jordaan Attorneys, 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: 20 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 Neutral citation: Medirite v South African Pharmacy Council (197/2014) [2015] ZASCA 27 (20 March 2015) Pharmacies situated within the precincts of other business premises but run as separate businesses have become commonplace in this country. Since 2002, the appellant, operating under the brand name of Medirite, has conducted separate pharmacy businesses within Shoprite, Checkers and Checkers Hyper supermarkets. The pharmaceutical industry is heavily regulated and all persons that are licensed to provide pharmacy services are obliged to conduct themselves in accordance with rules relating to good pharmacy practice prescribed by the first respondent, the South African Pharmacy Council. On 2 March 2012, the Council published an amendment to the good pharmacy practice rules which required pharmacies conducted in other businesses to clearly identify and demarcate their premises from any other business or practice by building a permanent, solid and closed-off wall extending from floor to ceiling, enclosing all areas of the pharmacy, and having a single point of entry and a single point of exit. Aggrieved by this amendment, the appellant applied to the high court for an order reviewing and setting aside the amendment. Its application was dismissed and the appellant duly appealed to the Supreme Court of Appeal. It was common cause that the publication of the amendment had constituted an administrative action under the provisions of the Promotion of Administrative Justice Act 3 of 2000 and that the Council’s decision in that regard was thus reviewable under that Act. The Council in opposing the review had failed to show that there was any information before it that demonstrated any existing mischief that needed to be addressed by way of a wall of the nature specified in the amendment or what considerations it took into account and why it had been felt necessary to introduce such a wall. The Council had also failed to indicate why it felt that a less onerous demarcation would not have sufficed in order for the pharmacy premises to be clearly identified. The Supreme Court of Appeal today held that the first respondent’s action in publishing the amendment containing the requirements for such a wall had been both irrational and unreasonable, and that it had used a sledgehammer to crack a nut. It therefore allowed the appeal and set aside the offending provisions of the amendment of its rules relating to good pharmacy practice published on 2 March 2012. ---ends---

3565

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 209/2020 In the matter between: ENGEN PETROLEUM LIMITED Appellant and RISSIK STREET ONE STOP CC First Respondent t/a RISSIK STREET ENGEN KNOESEN, WILLEM JOHANNES Second Respondent Neutral citation: Engen Petroleum Limited v Rissik Street One Stop CC and Another (Case no 209/2020) [2021] ZASCA 63 (26 May 2021) Coram: ZONDI, MOCUMIE and DLODLO JJA and KGOELE and UNTERHALTER AJJA Heard: 16 March 2021 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 10h00 on 26 May 2021. Summary: Appeal against order staying eviction proceedings pending finalisation of arbitration requested by fuel retailer in terms of s 12B of the Petroleum Products Act 120 of 1977 in order to challenge refusal to consider and consent to an offer to purchase filling station business ─ lease agreement expired by effluxion of time ─ referral of dispute to arbitration does not give retailer a right to continue occupying premises pending a sale of fuel retail business ─ appeal upheld. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Limpopo Division of the High Court, Polokwane (Kganyago J sitting as court of first instance): The appeal succeeds with costs. The orders of the court a quo are set aside and substituted by the following orders: ‘(a) The counter-application is dismissed. (b) The first and second respondents and all those occupying the property through or under the first respondent, alternatively, the second respondent are ordered to vacate within 30 (thirty) days from the date of this order, the immovable property comprised of: 1.1. Portion 1 of Erf 324, Pietersburg Township, Registration Division LS, Province of Limpopo, in extent 714 square meters held under Deed of Transfer T 3390/2016; 1.2. Portion 3 of Erf 324, Pietersburg Township, Registration Division LS, Province of Limpopo, in extent 699 square meters held under Deed of Transfer T 3390/2016; and 1.3. Remainder of Erf 324, Pietersburg Township, Registration Division LS, Province of Limpopo, in extent 729 square meters held under Deed of Transfer T 3390/2016, with street address at 48 Rissik Street, Polokwane. (c) The Sheriff of Court is authorised and directed to take such steps as are necessary in order to give effect to para (b) above. (d) The first and second respondents are ordered to pay the applicant’s taxed costs of this application, on the attorney and client scale.’ ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Zondi JA (Mocumie and Dlodlo JJA and Kgoele and Unterhalter AJJA concurring) [1] This is an appeal against the judgment and order of the Limpopo Division of the High Court, Polokwane (per Kganyago J) in terms of which it granted the stay of the eviction proceedings against the respondents and an order interdicting the appellant from taking any steps that would affect the operations of the service station business pending the outcome of the arbitration processes in terms of s 12B of the Petroleum Products Act 120 of 1977 (the Act). The appeal is with the leave of the court a quo. [2] The issue is whether it was competent for the court a quo to order the stay of the eviction proceedings instituted against the respondents and grant an interim interdict against the appellant on the basis that the respondents had submitted a request to the Controller of Petroleum Products (the Controller) to refer the dispute to arbitration in terms of s 12B of the Act. The relevant provisions of the section read as follows: ‘(1) The Controller of Petroleum Products may on request by a licensed retailer alleging an unfair or unreasonable contractual practice by a licensed wholesaler, or vice versa, require, by notice in writing to the parties concerned, that the parties submit the matter to arbitration. . . . (4) An arbitrator contemplated in subsection (2) or (3) ─ (a) shall determine whether the alleged contractual practices concerned are unfair or unreasonable and, if so, shall make such award as he or she deems necessary to correct such practice; and (b) shall determine whether the allegations giving rise to the arbitration were frivolous or capricious and, if so, shall make such award as he or she deems necessary to compensate any party affected by such allegations; (5) Any award made by an arbitrator contemplated in this section shall be final and binding upon the parties concerned and may, at the arbitrator’s discretion, include any order as to costs to be borne by one or more of the parties concerned.’ [3] The facts which gave rise to the proceedings are largely common cause. The appellant, Engen Petroleum Limited (Engen) carries on business as a manufacturer, marketer and bulk distributor of petroleum, diesel and chemical products. It is a lessee of Portions 1, 3 and Remainder of Erf 324, Pietersburg Township, Limpopo Province (the premises) in terms of a notarial deed of lease it concluded with the owner of the premises. In terms of the notarial deed of lease, Engen has the right to sublease the premises. [4] The first respondent is Rissik Street One Stop CC t/a Rissik Street Engen. It conducts a fuel retail business from the premises in terms of the agreement of lease and operation of service station (lease agreement) it concluded with Engen. Mr Knoesen, the sole member of Rissik Street Engen, is the second respondent. [5] Rissik Street Engen has occupied the premises since 1998 in terms of the lease agreement which has been renewed from time to time. The lease that was in place at the time of the dispute was concluded by the parties on 30 March 2015, commencing on 1 April 2015 and ending on 30 June 2018. There are eight Schedules attached to the lease agreement and these Schedules form part of the agreement. [6] Clause 22 of Schedule 2 recognises Mr Knoesen’s right as a dealer to sell the service station business at any time during the currency of the lease agreement and the procedure for the sale is regulated by Schedule 3. Clause 1.3 of Schedule 3 provides the following: ‘Should the Dealer wish to sell the Business, he/she/it may suggest a proposed purchaser/successor to the Company, and the Company will generally consider that proposed successor as a candidate for a new operating lease of the Premises, subject to the provisions of this Schedule 3. If the prospective successor proposed by the Dealer meets all of the Company’s selection criteria for a Dealer at the Premises, then in the absence of any reason to the contrary, the Company will generally be willing to prefer that prospective successor above others wishing to operate the Business at the Premises.’ [7] In terms of clause 1.4 of Schedule 3 the dealer wishing to sell the business, is not constrained to determine the selling price. But such sale is subject to Engen being able to conclude an operating lease with the purchaser or successor. [8] The dealer’s rights to sell the business on termination of the lease is regulated by clause 44 of Schedule 2, which provides the following: ‘44.1. Subject to any provisions of the contrary, where the Dealer’s tenure is prematurely terminated by the Company in terms of this Agreement, for whatever reason, the Dealer shall not have the right to any compensation in respect of his loss of the Business. The Company shall have the right to appoint a new Dealer, and the Dealer shall be entitled to negotiate with such new Dealer the terms of any take-over of stock and/or equipment belonging to the Dealer on the Premises; alternatively, the Dealer shall have the right to remove such stock or equipment owned by itself. 44.2. If the Company intends or elects for any reason not offering the Dealer a further opportunity to lease the Premises from the Termination Date of this Agreement, the Company shall endeavour to advise the Dealer in writing at least twelve months prior to the Termination Date of this Agreement. If such advice is not provided at least twelve months prior to the Termination Date of this Agreement, the Company may still provide such advice at any time prior to the Termination Date of this Agreement provided that the Dealer’s tenure at the Premises will then be extended for a period beyond the Termination Date of this Agreement to ensure that the Dealer will have received at least twelve months’ notice that the Company intends or has elected not offering the Dealer a further opportunity to lease the Premises from the Termination Date of this Agreement extended as aforesaid. Any extension as aforesaid will be on the terms and conditions of the Company’s operating leases at such time. Should the Company advise the Dealer that it does not intend renewing the lease between the parties, the Dealer shall be entitled to attempt to sell the Business during the remaining period of the lease, and the Company shall not unreasonably withhold its consent to such sale. Should the Dealer not have sold the Business prior to the expiry of the lease, the provisions of sub-clause 44.1 of this Schedule 2 shall apply and the Dealer shall not have the right to any compensation in respect of his loss of the Business. 44.3 Should the Company terminate this Agreement pursuant to sub-clauses 5.4 or 8.3 of the First part, the Dealer shall be entitled to attempt to sell the Business during the remaining nine month period of the lease, and the Company shall not unreasonably withhold its consent to such sale. Should the Dealer not have sold the Business prior to the end of that nine month period, the provisions of sub-clause 44.1 of this Schedule 2 shall apply and the Dealer shall not have the right to any compensation in respect of his loss of the Business. 44.4. Should the Company terminate this Agreement pursuant to paragraphs 24.1(a) or 24.1(b) of this Schedule 2, the Dealer (or his/her/its successors in title) shall be entitled to attempt to sell the Business during the nine month period referred to in paragraphs 24.1(a) and 24.1(b) of this Schedule 2 (whichever may be applicable), and the Company shall not unreasonably withhold its consent to such sale. Should the Dealer not have sold the Business prior to the end of that nine month period, the provisions of sub-clause 44.1 of this Schedule 2 shall apply and the Dealer shall not have the right to any compensation in respect of his loss of the Business.’ [9] When the lease period was about to expire, the parties endeavoured to negotiate its extension, but those endeavours failed, as they could not agree on the new terms. In particular, Engen demanded an upfront payment of R3 million from Rissik Street Engen as a condition for the renewal of the lease agreement. Rissik Street Engen refused to pay it, because it could not afford to do so and it was something that had never been demanded in the past. [10] It would appear that Engen had paid R3 million to the property owner to secure the renewal of the notarial deed of lease in respect of the premises, which was due to expire in June 2018. In turn, Engen sought to recoup this amount from Rissik Street Engen. [11] In terms of clause 44.2 of Schedule 2 Engen was obliged to give Rissik Street Engen at least twelve months’ notice if it intended not to renew the lease. When Mr Knoesen failed to pay the sum of R3 million, on 2 October 2017, Engen informed him that it would not renew the lease. In reply, Rissik Street Engen’s attorneys addressed a letter dated 8 January 2018 to Engen stating the following: ‘4. Your notice of non-renewal letter dated 2 October 2017 does not indicate that negotiations between the parties have failed and does not indicate the reason for non-renewal. 5. Our instructions are that a representative of Engen, Nico De Wet, had on 26 June 2017, advised our client in writing that the “Sales department” was prepared to renew the Operating Lease with our client on the same terms and conditions as is usually agreed upon, but that the renewal would be subject to a payment of R3m “goodwill”. When the payment of R3m for goodwill for its own site was questioned by our client, no further explanation was provided by Engen. 6. We have obtained a copy of the Notarial Deed of Lease for the Premises registered in favour of the Landlord and have noted that in terms of clause 3.1 thereof, Engen is to pay the Landlord a rental sum of R3m upon registration of the lease, being 22 January 2016. It is therefore apparent that the R3m goodwill that our client has been requested to pay is in fact not for “goodwill”, but a payment to be made to Engen in order to recoup what it has had to pay to the Landlord for registration of the lease for the Premises. 7. We further refer to paragraph 6 and 7 of your letter dated 2 October 2017, in which our client is reminded that should it wish to sell its business, the sale will be prohibited unless Engen agrees to the sale in writing. Same is seen as a reminder to our client that any potential purchaser will not be guaranteed tenure and it is our submission that Engen’s implementation of these clauses in our client’s situation is unjust and unreasonable and stands to be challenged. 8. It would be unjust to expect that our client, who has run the site successfully for the past 20 years, is not to be compensated for the business value upon termination of the agreement with Engen. We also remind you that our client is the lawful holder of the Site Licence, which licence is transferrable and constitutes a merchantable merx. 9. Our aim is to achieve a “win-win” result for all parties and our client’s instructions are that should he not receive a renewal which is not conditional to a payment for “goodwill” or compensation upon termination, we shall submit a 12B referral to the Controller of Petroleum Products with regards to Engen’s unfair and unreasonable contractual practice.’ [12] On 22 January 2018, in response to Mr Knoesen’s letter of 8 January 2018, Engen addressed a letter to Rissik Street Engen in which the following was recorded at paras 13 and 14: ‘In addition, in view of the fact that your client is legally obliged to vacate the premises on expiration of the lease, it follows that your client would no longer be in a position to lawfully operate a service station business from the premises, which in turn means that the business is no longer a going concern, under which circumstances the retail license would de facto lapse, rendering the site license invalid. Should your client however persist with its misguided intention to submit a request in terms of Section 12B to the Controller of Petroleum Products, it goes without saying that Engen will accordingly deliver a counter-application for a determination that your client’s allegations are frivolous and/or capricious, and seek appropriate compensation in lieu thereof.’ [13] Engen’s decision not to grant Rissik Street Engen a further extension of the operating lease went unchallenged and instead Rissik Street Engen elected to exercise its right to sell the business. It introduced a potential purchaser to Engen on 25 May 2018 for its consideration and to provide its consent to the proposed sale. According to Engen the prospective purchaser failed to meet Engen’s selection criteria, and, as a consequence it refused to provide its consent. [14] On 17 January 2019 Rissik Street Engen introduced another prospective purchaser to Engen for its consideration. Engen did not consent to the proposed sale and refused to provide reasons for its decision. It claimed that in terms of the lease, it was expressly provided that it was under no obligation to provide any reasons. [15] It is common cause that on 25 July 2018, some three months before the expiry of the lease, Mr Knoesen submitted to the Controller a request for referral to arbitration in terms of s 12B of the Act. In his request for referral, Mr Knoesen made it clear that the relationship between him and Engen had irretrievably broken down with no prospect of it being salvaged. It is implicit in this statement that Mr Knoesen did not wish to have the lease with Engen extended. He sought to be afforded the opportunity to sell the business without being frustrated by Engen. [16] Mr Knoesen’s contention that Engen had committed an unfair and/or unreasonable contractual practice entitling him to seek a remedy under s 12B of the Act, was based on the following: Engen’s demand for the payment of R3 million, as a condition to renew the lease; Engine’s refusal to afford him sufficient time to sell the business, as required by clause 44.2 of Schedule 2; its failure to consider the offers to purchase the business made by the two prospective purchasers; and finally, its failure to provide reasons for its refusal to authorise the sale. [17] Mr Knoesen in his request for referral to arbitration pleaded the following contractual practices: ‘2.14 It is submitted that irrespective of the interpretation afforded to the respective clause, I am left in a position where I am unable to exercise my rights in terms of clause 44.2, the underlined section in particular. 2.15 If I do not know the reason(s) why a particular buyer(s) has not been authorised by Engen, then I will be unable to remedy that defect when sourcing further interested buyers. This wastes not only my time but also that of interested parties. Furthermore, if no reason is provided then their own actions render it impossible for me to assess whether their consent has been unreasonably withheld in terms of clause 44.2. 2.16 Given Engen’s behaviour to date I have no reason to believe that if I located a third interested buyer, that Engen would do anything other than refuse the offer to purchase, without offering any reasons for such refusal. 2.17 After further investigation, I determined that a new, notarial deed of lease had been signed by Engen with the landlord of the site occupied by Rissik Street Engen, which notarial deed of lease (“notarial lease”) was signed on 18 November 2015 and duly registered on 22 January 2016. 2.18 In addition to payment of a monthly rental amount of R80 000,00, excluding VAT and subject to yearly increases, clause 3.1 states that Engen, as the lessee shall pay the sum of R3 million to the lessor. Clause 3.2 describes this sum as a “lease premium”. 2.19 It is not at all clear what the payment of a “lease premium” is for, nor is it clear how payment of such sum will benefit Engen or the Applicant. 2.20 Given Engen’s behaviour as described above, I strongly believe that Engen is attempting to recoup its R3 million “lease premium” from myself under a poorly disguised demand for “goodwill”. Once Engen realised that I wanted a renewal but was unwilling to pay this sum, they exercised their right to not renew the Operating Lease and have sought to punish me by depriving me of my contractual right to sell the business. Once the franchise has ended Engen will be contractually entitled to sell the business and to the proceeds thereof. I will be left with nothing. Their repeated refusal to consent to the sale or provide reasons for their refusal can at best be described as obstructive. No other reasonable conclusion is possible on the facts that I have at my disposal.’ [18] On 5 July 2019, after the commencement of the eviction proceedings, the Controller issued a notice referring the dispute to arbitration. The notice identified the following allegations as constituting the dispute to be referred to arbitration: ‘5.1 By requesting an amount of R3 million for “goodwill” in order to renew their lease agreement. The Requester had never been required to pay such an amount previously when renewing the lease, as the Franchisee of the Rissik Street Engen for the past twenty years, the goodwill generated towards the Franchise would have been due to the action of the requester and its employees not Engen. 5.2 By not engaging with the Requester in trying to resolve the matter and serving the Requester with a notice of non-renewal in terms of 44.2 Schedule 2 of the Operation Lease no reasons [were] provided. 5.3 By refusing to authorise sale to either potential purchaser provided by the Requester with no reasons thereof. As reasons for refusal where not provided the Requester is unable to remedy that defect or sourcing further interested buyers.’ [19] When the lease expired, Rissik Street Engen did not vacate the premises and it has since then, continued to operate the service station and when it was given notice to vacate, it refused. It claimed it had a right to remain in occupation of the premises until such time that it was able to sell the business. [20] In consequence Engen, on 14 March 2019 brought an application in the court a quo, in which it sought to evict Rissik Street Engen and Mr Knoesen from the premises. The basis of Engen’s claim was that Rissik Street Engen and Mr Knoesen’s occupation of the premises had become unlawful by virtue of the fact that the lease agreement had expired by effluxion of time. Rissik Street Engen opposed the application and filed a counter-application. In the counter-application it sought a stay of the proceedings, pending a decision by the Controller in terms of s 12B, and/or a stay of the proceedings in terms of s 6 of the Arbitration Act 42 of 1965 and an interdict preventing Engen from taking any steps that would adversely affect the operations of Rissik Street Engen, pending the final outcome of the arbitration processes. [21] In his answering affidavit, Mr Knoesen denied that Engen was entitled to evict Rissik Street Engen. In amplification of his denial Mr Knoesen alleged the following: ‘30.2 [Engen] has sought to cancel the [operating lease] OL on the premise that the agreement has terminated by an effluxion of time. 30.3 The premise is nothing more than a contrived abuse of the agreement to disguise the fact that I refused to pay it R3 million for the renewal of the OL. 30.4 The Applicant’s own actions defeat the bona fides of its cause of action in that it afforded the First Respondent 12 months’ notice to find a purchaser, which I did, simply to ignore the existence of same. 30.5 From what has been stated above, the Applicant has acted mala fides in cancelling the agreement by manipulating the terms thereof and has unreasonably withheld and/or refused its consideration of suitable buyers.’ [22] Engen opposed the counter-application. It contended that Mr Knoesen’s insistence on remaining in occupation of the premises until he had sold the business was misconceived to the extent that there was no intrinsic value to the business without there being a valid and binding lease in place. Engen argued that the right to sell the business lapsed when the lease expired on 31 October 2018. It contended further that, in any event, the sale of business was not dependent on Mr Knoesen’s continued occupation of the premises. [23] As I have already stated, the matter came before Kganyago J, who, on 12 February 2020, granted an order staying the proceedings and interdicting Engen from taking any steps that would adversely affect the operation of the service station business, pending the outcome of the arbitration process referred to the Controller in terms of s 12B. [24] The court a quo rejected Engen’s contention that the referral of the dispute to the Controller by Mr Knoesen did not bar it from proceeding with the eviction application after the expiry of the lease by effluxion of time. It held that the fact that the lease had expired by effluxion of time and that Rissik Street Engen and Mr Knoesen had been served with a notice to vacate the premises, provided no bar to its grant of the stay of the eviction proceedings. The court a quo, relying on the Constitutional Court judgment in Business Zone, reasoned as follows:1 ‘[20] I do not agree with the applicant’s contention. Firstly this will defeat the purpose and spirit of section 12B which introduces arbitrations. Arbitration[s] are much quicker and . . . cost effective. Secondly in terms of section 12B (2) the parties determine the rules of arbitration and they are at liberty to include any dispute which in the case at hand may include eviction. Thirdly, once the respondents are evicted their sources of income will be diminished which will place them in a weaker position to finance the pending litigation. Fourthly as held in The Business Zone 1010 CC arbitration procedures suspend the institution of court litigation. [21] In terms of section 12B (4) (a) an arbitrator has the powers to make such award as he or she deems necessary to correct such practice. The terms of reference of the arbitration has not yet been determined. The respondents are still at liberty to seek reinstatement of the operating licence and the arbitrator will be empowered to order that. In The Business Zone 1010 CC supra, it was held that regardless of the second cancellation, the arbitrator may have 1 Business Zone 1010 CC t/a Emmarentia Convenience Centre v Engen Petroleum Limited and Others [2017] ZACC 2; 2017 (6) BCLR 773 (CC) (Business Zone). power to grant relief for the intervening period. In the case at hand even though the notice period has expired on the 31st October 2018, that does not preclude the arbitrator to make an award as he/she deems necessary to correct such alleged unfair and/or unreasonable contractual practice, which may include reinstatement of the operating lease agreement.’ [25] In its grounds of appeal Engen challenged the findings and the conclusions of the court a quo on various grounds. It contended, first, that the court a quo erred in finding that Rissik Street Engen would still be at liberty to seek reinstatement of the operating lease at the intended arbitration, as an appropriate remedy, and as such, that an eviction of Rissik Street Engen, prior to the conclusion of the intended arbitration, would interfere with the powers of the arbitrator at such arbitration. This was because, so it was contended, Rissik Street Engen did not complain to the Controller in terms of s 12B of the Act about the termination and/or cancellation of the lease as having constituted an unfair and/or unreasonable contractual practice. [26] Secondly, Engen contended that the court a quo erred in holding that Rissik Street Engen had raised in issue and established that its eviction would diminish its resources to finance the present litigation when the potential financial consequences of an eviction order were not raised by Rissik Street Engen in support of the stay application. [27] Thirdly, Engen contended that the court a quo incorrectly interpreted the Constitutional Court’s judgment in Business Zone as authority for the proposition that a referral to arbitration in terms of s 12B automatically suspended the eviction proceedings. [28] The correctness of Engen’s contention depends on the interpretation of s 12B and its application to the facts of this case. The section has caused considerable difficulty and is the source of conflicting judgments in the high courts.2 The provisions of s 12B were extensively considered by the Constitutional Court in Business Zone, which concerned the review of a decision by the Controller and the Minister of Minerals 2 Future Phambili Petroleum (Pty) Ltd v Chamdor Service Station CC [2017] ZAGPPHC 1206; Engen Petroleum Limited v Eagle Investors (Pty) Ltd t/a Meyerspark Convenience Centre and Another (Gauteng Division Pretoria case no 54736/2018); Bright Idea Projects 66 (Pty) Ltd t/a All Fuels v Former Way Trade and Invest (Pty) Ltd t/a Premier Service Station 2018(6) SA 86 (KZP). and Energy not to refer an alleged unfair or unreasonable contractual practice by Engen to arbitration in terms of s 12B of the Act. After a comprehensive analysis of the provisions of the section, the Constitutional Court had this to say:3 ‘The purpose of the Act is not only to transform the petroleum industry but “to provide for appeals and arbitrations”. Section 12B introduces an equitable standard in the framework of the statutory arbitration mechanism under section 12B. If the same adjudicative standard can be relied on in section 12B arbitration proceedings and court litigation alike, would that detract from the purpose of the Act to provide for arbitrations? I think not. Section 12B arbitration presents an additional route for licensed retailers and wholesalers alike to have their disputes adjudicated quicker within rules and processes of their own design. Section 12B offers a statutory guarantee of a mechanism that has become ubiquitous in contract, which may otherwise not exist possibly due to the unequal bargaining position retailers vis a vis wholesalers find themselves in. Reliance on the section 12B arbitration procedure can more accurately be understood as arbitration is ordinarily in contract: it suspends the institution of court litigation. In turn the section 12B arbitral mechanism is insulated from becoming a mere preliminary, strategic step to court litigation in that section 12B (5) speaks to the finality of such an award. The purpose of the Amendment Act “to provide for appeals and arbitrations” through section 12B cannot be overlooked. The inherent value of section 12B enabling a party to resolve a dispute through arbitration rather than court proceedings must be recognised. Arbitration offers an expedient, specialised and procedurally flexible forum to resolve disputes. It is no wonder that Business Zone would want to benefit from its statutory right under section 12B to access such a forum. A purposive interpretation of section 12B must give effect to this right.’ (Footnotes omitted.) [29] Section 12B(2) allows the parties to a s 12B arbitration to determine the rules in accordance with which the arbitration will be conducted, as well as the arbitrator before whom the arbitration will proceed. As regards the remedial action which the arbitrator appointed under s 12B can impose, the Constitutional Court made it clear at para 92 of the judgment that ‘the arbitrator’s remedial powers can go no further than correcting the contractual practice in question’. 3 Business Zone paras 57 to 59. [30] It is common cause that the lease agreement in terms of which Rissik Street Engen and Mr Knoesen occupied the premises, expired by effluxion of time on 30 June 2018, and was extended by agreement to 31 October 2018. A notice of an intention not to renew the lease was given to Rissik Street Engen and Mr Knoesen as required by clause 44.2 of Schedule 2 to the lease. Ordinarily, Engen was entitled to seek the eviction of Rissik Street Engen and Mr Knoesen from the premises, if they continued to occupy the premises after the expiry of a notice period. [31] Rissik Street Engen and Mr Knoesen refused to vacate the premises when the lease expired on 31 October 2018. They challenged Engen’s right to evict them on the ground that Engen had acted ‘mala fide in cancelling the agreement . . . and unreasonably withheld and/or refused its consideration of suitable buyers’. Mr Knoesen, as I have explained, in turn, requested the Controller to refer certain disputes between him and Engen to arbitration. It is this request for referral which formed the basis of Mr Knoesen and Rissik Street Engen’s counter-application for the stay of the eviction proceedings. They contended that, in terms of the lease agreement, they had a right to sell the business, once Engen had given a notice that it would not renew the lease. They argued that, despite the termination of the lease agreement, they were entitled to remain in occupation of the premises and to continue to trade thereon until they sold the business as a going concern. [32] There is a fundamental problem with this contention and it must be rejected. In Mr Knoesen’s request for a referral to arbitration, he did not contend that the non- extension of the lease agreement constituted an unfair contractual practice. It is for this reason that, when the Controller issued a notice of referral, he did not include the non-extension of the agreement as one of the issues to be determined by the arbitrator to be appointed. This means that the arbitrator to be appointed, cannot decide what has not been referred to him or her.4 This is so, because the scope of the arbitrator’s jurisdiction is fixed by his or her terms of reference and he or she has no power to alter its scope by his or her own decision.5 Section 12B(4)(a) requires the arbitrator to make a factual determination whether the alleged contractual practices 4 P Ramsden The Law of Arbitration: South African and International Arbitration 2 ed (2018) at 203. 5 Radon Projects (Pty) Ltd v N V Properties (Pty) Ltd and Another [2013] ZASCA 83; 2013 (6) SA 345 (SCA) para 28. are unfair or unreasonable and, if so, make such award as he or she deems necessary to correct such practice. [33] The contractual practice complained of by Mr Knoesen, and which he requested to be referred, was Engen’s failure to consider offers to purchase the business he submitted to Engen for approval in terms of clause 44.2 of the lease and its refusal to furnish reasons for their rejection or Engen’s failure to consider them. He contended that Engen’s failure to furnish reasons made it impossible for him to assess the reasonableness of its withholding of consent. These complaints, upon referral to the arbitrator, vest no remedial power in the arbitrator to permit Rissik Street Engen or Mr Knoesen to remain in occupation, pending the sale of the business. [34] Whilst it is correct that s 12B(4) imposes the equitable standard and that the arbitrator may, acting under such standard, override the terms of the contract of the parties to ensure that fairness and reasonableness prevail, the arbitrator may not in the exercise of his or her powers, impose a remedial award, which may amount to reinstatement of the lease agreement for the simple reason that such remedy is not prescribed under the Act. The lease in this matter expired by effluxion of time, which meant that the parties had to negotiate and agree on the new terms. They failed to agree and as a result the lease agreement ended. [35] Engen’s contention that it was not obliged in terms of the agreement to give reasons for rejecting the offers to purchase the business, must be rejected. Clause 44.2 imposed an obligation on Engen to notify Mr Knoesen and Rissik Street Engen a year before the expiry of the term of the lease if it did not intend to renew the lease. This was necessary because in terms of the agreement Mr Knoesen had a right to sell the service station business (subject to Engen giving consent which it could not unreasonably withhold) within the remaining period. It follows therefore that Engen was obliged in terms of clause 44.2 to furnish Mr Knoesen and Rissik Street Engen with its reasons as to why it rejected the offer to purchase of the first prospective purchaser which it received before the expiry of the lease. Mr Knoesen was entitled to know why the sale was rejected to enable him to submit offers, which would have met Engen’s requirements and to determine whether Engen’s rejection was based on valid grounds. [36] The reasons to which Mr Knoesen was entitled were therefore necessary for the purpose of his exercise of his right arising from clause 44.2. But that said, there is no reason why Engen’s failure to consider and consent to the sale would give rise to a right that would allow Rissik Street Engen and Mr Knoesen to continue to occupy the premises when such right was not sought in the request for referral to arbitration. [37] In my view, in the circumstances of this case it is not open to Mr Knoesen to rely on the right to sell the business as a form of security against eviction. It is implicit in the provisions of clause 44.2 of Schedule 2 that the right to sell the business should be exercised during the currency of the lease and should Mr Knoesen not have sold the business before the expiry of the lease, the provisions of clause 44.1 of the same Schedule, apply. In terms of this sub-clause Engen has a right to appoint a new dealer and Mr Knoesen will be entitled to negotiate with such new dealer the terms of any take-over of stock and/or equipment, belonging to him on the premises, alternatively, he can keep same. [38] The court a quo granted the stay of the eviction on the basis of the proposition that the arbitration procedure suspends the institution of court litigation and relied on Business Zone for this proposition. The court a quo misdirected itself. Business Zone does not provide support for this proposition. The Constitutional Court’s statement in para 58 of the judgment that the arbitration suspends the institution of court litigation is qualified in footnote 33 in which it is stated that the suspension will depend on the terms of the contract. Where the contract has ended and no complaint is referred to arbitration to seek its extension, the effect of the stay granted by the court a quo is to grant a remedy in the interim that cannot be obtained by way of final relief in the arbitration. A stay granted on this basis is not a competent exercise of the court’s power. [39] From what has been set out in the preceding paragraphs, it is clear that the court a quo’s exercise of its discretion to grant the stay and the interdict was influenced by wrong principles. The court a quo improperly exercised its discretion and this Court is entitled to interfere.6 In the circumstances, its order must be set aside. [40] In the result, I make the order in the following terms: The appeal succeeds with costs. The orders of the court a quo are set aside and substituted by the following orders: ‘(a) The counter-application is dismissed. (b) The first and second respondents and all those occupying the property through or under the first respondent, alternatively, the second respondent are ordered to vacate within 30 (thirty) days from the date of this order, the immovable property comprised of: 1.1. Portion 1 of Erf 324, Pietersburg Township, Registration Division LS, Province of Limpopo, in extent 714 square meters held under Deed of Transfer T 3390/2016; 1.2. Portion 3 of Erf 324, Pietersburg Township, Registration Division LS, Province of Limpopo, in extent 699 square meters held under Deed of Transfer T 3390/2016; and 1.3. Remainder of Erf 324, Pietersburg Township, Registration Division LS, Province of Limpopo, in extent 729 square meters held under Deed of Transfer T 3390/2016, with street address at 48 Rissik Street, Polokwane. (c) The Sheriff of Court is authorised and directed to take such steps as are necessary in order to give effect to para (b) above. (d) The first and second respondents are ordered to pay the applicant’s taxed costs of this application, on the attorney and client scale.’ _________________ ZONDI JA JUDGE OF APPEAL 6 Trencon Construction (Pty) Ltd v Industrial Development of South Africa Ltd and Another [2015] ZACC 22; 2015 (5) SA 245 (CC) para 88. Appearances: For appellant: S Aucamp Instructed by: Mathopo Moshimane Mulangaphuma Inc. t/a DM5 Incorporated, Johannesburg McIntyre van der Post, Bloemfontein For respondents: G Quixley Instructed by: Seton Smith & Associates, Cape Town Honey Inc. 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: 26 May 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 Engen Petroleum Limited v Rissik Street One Stop CC and Another (Case no 209/2020) [2021] ZASCA 63 (26 May 2021) Today the Supreme Court of Appeal (SCA) upheld the appellant’s appeal. The appeal was against the judgment and order of the Limpopo Division of the High Court, Polokwane (the high court) in terms of which it granted the stay of the eviction proceedings against the respondents and an order interdicting the appellant from taking any steps that would affect the operations of the service station business pending the outcome of the arbitration processes in terms of s 12B of the Petroleum Products Act 120 of 1977 (the Act). The appeal was with the leave of the high court. The issue was whether it was competent for the high court to order the stay of the eviction proceedings instituted against the respondents and grant an interim interdict against the appellant on the basis that the respondents had submitted a request to the Controller of Petroleum Products (the Controller) to refer the dispute to arbitration in terms of s 12B of the Act. The appellant, Engen Petroleum Limited (Engen) was a lessee of a premises in terms of a notarial deed of lease it concluded with the owner of the premises. In terms of the notarial deed of lease, Engen had the right to sublease the premises. The first respondent, Rissik Street Engen conducted a fuel retail business from the premises in terms of the agreement of lease and operation of service station (lease agreement) it concluded with Engen. Mr Knoesen, the sole member of Rissik Street Engen, was the second respondent. Engen brought an application in the high court in which it sought to evict Rissik Street Engen and Mr Knoesen from the premises. The basis of Engen’s claim was that Rissik Street Engen and Mr Knoesen’s occupation of the premises had become unlawful by virtue of the fact that the lease agreement had expired by effluxion of time. Rissik Street Engen opposed the application and filed a counter-application wherein it sought a stay of the proceedings, pending a decision by the Controller. Engen opposed the counter-application contending that Mr Knoesen’s insistence on remaining in occupation of the premises until he had sold the business was misconceived to the extent that there was no intrinsic value to the business without there being a valid and binding lease in place. The high court granted an order staying the proceedings and interdicting Engen from taking any steps that would adversely affect the operation of the service station business, pending the outcome of the arbitration process referred to the Controller In its grounds of appeal Engen challenged the findings and the conclusions of the high court on various grounds. The SCA held that ordinarily, Engen was entitled to seek the eviction of Rissik Street Engen and Mr Knoesen from the premises, if they continued to occupy the premises after the expiry of a notice period. It rejected Rissik Street Engine and Mr Knoesen’s contention that, despite the termination of the lease agreement, they were entitled to remain in occupation of the premises and to continue to trade thereon until they sold the business as a going concern. This was because they did not contend that the non-extension of the lease agreement constituted an unfair contractual practice which meant that the arbitrator to be appointed, could not decide what had not been referred to him or her. The SCA held that in the circumstances of this case it was not open to Mr Knoesen to rely on the right to sell the business as a form of security against eviction. Further, the SCA was of the view that where the contract had ended and no complaint was referred to arbitration to seek its extension, the effect of the stay granted by the high court was to grant a remedy in the interim that could not be obtained by way of final relief in the arbitration. A stay granted on this basis was not a competent exercise of the court’s power. The SCA held that the high court improperly exercised its discretion and that for that reason it was entitled to interfere. In the circumstances, the SCA upheld the appeal with costs and set aside the orders of the high court. The eviction order against Rissik Street Engine and Mr Knoesen was granted. --------oOo--------

3508

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 1356/2019 In the matter between: THE HEALTH PROFESSIONS COUNCIL OF SOUTH AFRICA First Appellant T MAFAFO N.O Second Appellant S RAMASALA N.O Third Appellant and DR DAVID STEPHEN GRIEVE Respondent Neutral citation: The Health Professions Council of South Africa and Others v Grieve (1356/2019) [2021] ZASCA 06 (15 January 2021) Coram: DAMBUZA, PLASKET, NICHOLLS JJA, WEINER and SUTHERLAND AJJA Heard: 12 November 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 10H00 on 15 January 2021 Summary: Administrative Law: Review of decision of the Health Professions Council of South Africa: allegations that doctor persuaded patients to invest in a financially distressed company of which he was a director and misappropriated moneys invested by patients: Council the primary custos morum of the health professions: decision in line with the Council’s supervisory duties over the health profession: no proper basis for review. ORDER On appeal from: Gauteng High Court, Pretoria (Khumalo J sitting as court of first instance): 1 The appeal succeeds with costs. 2 The order of the high court is set aside and replaced with the following order: ‘1 The point in limine is dismissed with costs The matter is remitted to the Professional Conduct Committee’. JUDGMENT Dambuza JA (Plasket, Nicholls JJA, Weiner and Sutherland AJJA concurring) Introduction [1] On 25 November 2014 the respondent, Dr David Grieve, appeared before the professional conduct committee (the committee) of the first appellant, the Health Professions Council of South African (the Council). He was charged with unprofessional conduct, it being alleged, amongst other things, that during the period 2004 to 2009 he improperly persuaded a number of his patients to invest in a financially distressed company of which he was a director, and that he transferred funds invested in that company to his private bank account. On the two days that the matter served before the committee the second and third appellants acted as chairpersons thereof. [2] A point in limine raised by Dr Grieves, that the Council lacked jurisdiction in relation to the subject matter of the charge, was dismissed by the committee. After his attempt at lodging an internal appeal with the Council’s Appeal Committee failed, Dr Grieves launched an application, in the Gauteng High Court, Pretoria (high court, Khumalo J), for review of the Council decision to institute disciplinary proceedings against him. The high court granted an order setting aside the decision of the committee and upholding Dr Grieve’s point in limine. This appeal against the judgment of the high court is with the leave of this court. Background [3] Dr Grieve is a general medical practitioner from Centurion, Gauteng. On 4 August 2014 he received a notice from the Council, inviting him to attend a disciplinary inquiry scheduled for the period 24 to 26 November 2014 in relation to unprofessional conduct charges preferred against him. He was charged with contravening the norms and standards of his profession, alternatively, bringing the good name of his profession into disrepute by: (a) persuading some of his patients and former patients to invest in a company of which he was a director when he knew that the company was in financial distress; and/or (b) transferring funds invested in his company into his private bank account; and/or (c) causing financial prejudice to the persons concerned who were persuaded to deposit large sums of money into bank accounts of companies that were subsequently liquidated. [4] Dr Grieve objected to the committee instituting disciplinary proceedings against him, asserting, in limine, that the factual allegations that formed the basis of the charges did not constitute unprofessional conduct as envisaged in the Health Professions Act 56 of 1974 (the Act) in that they did not relate to the ‘health profession’. The committee was therefore acting beyond the powers conferred on it in terms of s 49 and did not have the jurisdiction to prosecute him, so he contended. The point in limine was dismissed by the committee. Dr Grieves attempted to appeal against the dismissal of his point in limine. However the Council refused to afford him an appeal hearing, saying that such procedure was not provided for in the Act. Dr Grieve then approached the high court for review of the decision by the Council, through its committee, to charge him. [5] In the high court Dr Grieve persisted in his contention that the Council had no authority to institute the disciplinary proceedings as the conduct complained of did not relate to the health profession. He also contended that in assuming jurisdiction over him the Council concluded, incorrectly, that because in 2010 it had considered charges similar to his, it had jurisdiction in respect of the allegations against him. Similarly irrelevant, according to Dr Grieve was the premise that because a report had been made about his conduct at Lyttleton Police Station, and the matter had become public knowledge, a public interest duty arose for the Council to proceed with the inquiry. In essence the basis for the review was that the decision to institute disciplinary proceedings against him and to dismiss the special plea was not rationally connected to the empowering provision in the Act. [6] The Council opposed the review application on the basis that it was premature, having been launched before the finalization of the merits of the disciplinary hearing. It was contended on its behalf that both the internal appeal that Dr Grieve attempted to lodge against the dismissal of his point in limine and the review proceedings constituted impermissible piecemeal litigation tactics. [7] In upholding the point in limine the high court drew a distinction between Dr Grieve being accused of having abused the doctor patient relationship with his patients, which, according to the court, ‘would undoubtedly have put the health profession into disrepute’ and the allegations that he ‘persuaded his patients to invest in the companies when he knew or ought to have known that [they] were in financial distress’, which, on the court’s reasoning, was not unprofessional conduct. It found that the doctor’s conduct did not relate to ‘treatment’ of his patients, or to the health profession. It relied on the regulations which define the Scope and Profession of Medicine1 and found that the doctor’s conduct did not accord with the acts relating to the health profession as listed or defined therein. The high court then concluded that in the circumstances the Council could only determine whether the doctor’s engagements with his patients constituted unprofessional conduct if or when he was convicted of criminal conduct as provided in s 45 of the Act. On appeal [8] Although in his Heads of Argument on appeal Dr Grieve insisted that the Council did not have the requisite jurisdiction, this stance was abandoned at the hearing of the appeal. Instead it was submitted on his behalf that the charges lacked the necessary particularity, such as the names of the investor patients and the companies in which they invested. However, that is not the 1 Issued under Government Notice R237 published on 6 March 2009 in Government Gazette 31958 in terms of s 33(1) read with s 61(2) of the Act. case that was brought before the high court. Furthermore, as submitted on behalf of the Council, the doctor never sought any further particulars to the charges. [9] Be that as it may, the concession was correctly made. Dr Grieve’s counsel accepted that the conduct complained of fell within the jurisdiction of the Council. Section 41(1) of the Act confers power on the Professional Boards of Council to ‘institute an inquiry into any complaint, charge or allegation of unprofessional conduct against any person registered under the Act’. It was common cause that Dr Grieve was a registered health practitioner with the Council in terms of the Act. The committee is a Professional Board appointed by the Council in terms of s 15 of the Act. The only issue was whether the conduct complained of, if proved, would constitute unprofessional conduct. [10] Unprofessional conduct is defined in the Act as ‘improper or disgraceful or dishonourable or unworthy conduct or conduct which, when regard is had to the profession of a person who is registered in terms of this Act is improper or dishonourable or unworthy’.2 This definition is broad, and nothing in it supports the contention that the Council’s jurisdiction is confined to the conduct of rendering of health services. [11] Contrary to the limited disciplinary powers which Dr Grieve contended for, in terms of the Act the Council bears extensive supervisory functions which include: protection of the public from conduct arising during the 2 Section 1 of the Act. rendering of health services3; maintenance of professional and ethical standards within the profession4; ensuring that investigation of complaints concerning persons registered in terms of the Act are done and that appropriate disciplinary action is taken against such persons in accordance with the Act in order to protect the interests of the public5; and ensuring that persons registered in terms of the Act behave towards users of health services in a manner that respects their constitutional rights to human dignity, bodily and psychological integrity and equality, and that disciplinary action is taken against persons who fail to act accordingly.6 In addition, the functions of the Professional Bodies include the maintenance and enhancement of the health profession and the integrity of persons practising such profession, guiding the relevant health professions, and protection of members of the public.7 [12] The Council is therefore not merely a medical malpractice watchdog; it is also the primary guardian of morals of the health profession.8 As this court held in Preddy and Another v Health Professions Council of South Africa9: ‘It has been said of the various predecessors of the council that each was the repository of power to make findings about what is ethical and unethical in the medical practice and the body par excellence to set the standard of honour to which its members should conform’. [13] In Preddy the appellants, both specialist medical practitioners registered with the Council in terms of the Act, had been found guilty of unprofessional conduct arising from receiving kickbacks in return for 3 Section 3(j) of the Act. 4 Section 3(m) of the Act. 5 Section 3(n) of the Act. 6 Section 3(o) of the Act. 7 Subsections 15A (g) and (h). 8 De Beer v Health Professions Council of South Africa 2007(2) SA 502 (SCA); Veriava and Others v President SA Medical and Dental Council and Others 1985 (2) SA 293 (T). 9 Preddy and Another v Health Professions Council of South Africa 2008 (4) SA 434 (SCA) para [6]. referring patients to a particular radiology firm. The Disciplinary Committee of Council found the receipt of the ‘perverse incentives’ by the doctors to be disgraceful conduct. The condemned conduct in Preddy did not relate to the practice of medicine. It was also not a listed prohibited form of conduct under the regulations. But it was found to be morally and ethically reprehensible because the medical practitioners concerned had used their access to the relevant patient to make undue financial gains (in addition to the professional fees due to them for their services). In the appeal before us the allegations are, in essence, that Dr Grieve used his access to his patients to benefit himself and his companies unduly, to the prejudice of the patients. If the allegations are proved, the misconduct in this case could be more serious than in Preddy. [14] Should the Council have awaited the results of criminal prosecution? Indeed a criminal conviction may trigger disciplinary proceedings by the Council or Professional Board as provided in s 45 of the Act. However the Council’s disciplinary functions are not limited to instances where there has been criminal conviction. It is the Council’s duty to act against conduct that is improper, unethical, dishonourable, disgraceful and unworthy. Conduct may be unethical without being criminal. And criminal prosecution may result in an acquittal for reasons other than the innocence of the respondent or accused. The Council remains obliged to discharge its duties as the moral compass of the health profession. For example, in De Beer10 this court confirmed the increase, by the Council, of a penalty that had been recommended by the disciplinary committee, against a doctor who had sexually abused his patient.11 The Council’s decision in De Beer was not 10 Fn 8 supra. 11 Ibid premised on a criminal conviction. It was an incidence of the Council’s initiative in fulfilment of its custos morum responsibility. [15] In this case the allegations were that unprofessional conduct occurred within a doctor-patient relationship. The Council as the administrative body charged with the function of defining the norms and standards, and monitoring adherence to the ethical prescripts of the medical profession, was the primary repository of disciplinary power in relation to unethical conduct by its registered members. [16] The fact that the conduct complained of was not defined or listed in the regulations did not detract from the Council’s administrative powers in respect of other conduct that it reasonably considered to be unprofessional. Indeed s 49 of the Act provides for specification of acts or omissions in respect of which the Council may take disciplinary action. However, the matter does not end there because the section also provides that the powers of the Council shall not be limited to the specified acts. It reads as follows: ‘The Council shall, in consultation with the Professional Board, from time to time, make rules specifying the acts or omissions in respect of which the Professional Board may take disciplinary steps under this Chapter; provided that the powers of the Professional Board to inquire into and deal with any complaint, charge or allegation relating to a health profession under this Chapter, shall not be limited to the acts or omission so specified’. (emphasis supplied) [17] In the end, the two jurisdictional bases for the exercise of the Council’s disciplinary authority are registration, by the health professional concerned, with the Council and allegations which, if proved, would constitute improper, or disgraceful or dishonourable or unworthy conduct. In some instances, such as this case, a doctor-patient relationship will be a feature of the alleged conduct. However, such a relationship is not a prerequisite for the council’s jurisdiction. [18] In this case it was submitted on behalf of the Council that the allegations made against Dr Grieve, if proved, would constitute unprofessional conduct; hence the decision to institute disciplinary proceedings. I agree that the decision to institute disciplinary proceedings was rational and within the powers of Council. [19] Consequently: The appeal is upheld with costs including the costs of two counsel. The order of the high court is set aside and replaced with the following: ‘1 The point in limine is dismissed with costs. The matter is remitted to the Professional Conduct Committee’. ________________________ N DAMBUZA JUDGE OF APPEAL Appearances For Appellant: J G Rautenbach SC (with him B Maphosa) Instructed by: Mkhonto Ngwenya Incorporated, Pretoria Phalatsi & Partners, Bloemfontein For the Respondent: H F Jacobs SC (with him D E Hugo) Instructed by: Hills Incorporated, Pretoria Kramer Weighmann and Joubert Inc., Bloemfontein.

THE SUPREME COURT OF APPEAL OFSOUTH AFRICA MEDIA SUMMARY OF JUDGMENT DELIVERED FROM The Registrar, Supreme Court of Appeal DATE 15 January 2021 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. The Health Professions Council of South Africa and Others v Grieve (1356/2019) [2021] ZASCA 06 (15 January 2021). MEDIA STATEMENT Today the Supreme Court of Appeal upheld an appeal against a court order of the Gauteng High court, Pretoria which set aside a decision of the Health Professions Council of South Africa (HPCSA) to charge Dr David Grieve of Pretoria for unprofessional conduct. On 25 November 2014 the Dr Grieve appeared before the professional conduct committee of the HPCSA on charges of unprofessional conduct. The charges emanated from allegations that during the period 2004 to 2009 Dr Grieve persuaded his patients and former patients to invest in a financially distressed company of which he was a director. It was also alleged that he the misappropriated the funds invested by his patients. Dr Grieve objected to the disciplinary process, challenging the authority of the committee (and the Council) to charge him on the subject of the charges fell outside the Council’s jurisdiction as envisaged in s 49 of the Health Professions Act 56 of 1974 (the Act). According to him the subject which formed the basis of the charges did not relate to the health profession. The committee dismissed the objection. After Dr Grieve had tried, unsuccessfully, to lodge an internal appeal against the withdrawal of his objection, he approached the high court for a review of the committee’s decision to prosecute him. The high court upheld the objection and granted an order setting aside the decision to prosecute Dr Grieve. The Council the appealed to the Supreme Court of Appeal against the high court decision. In upholding the appeal the SCA held that the correct approach was to ask whether the conduct complained of, if proved, would indeed constitute unprofessional conduct. It held that the Act’s definition of unprofessional conduct is sufficiently wide to support the exercise of the Council’s supervisory functions over conduct that is not directly related to the rendering of health services. It emphasized that the Council is not only a medical malpractice watchdog; it is also the primary guardian of morals in the health profession. It found further that the Council’s supervisory functions are not limited to instances where there has been a criminal conviction, as some unethical conduct may not be criminal. In this case, if the charges were proved, Dr Grieve would have used his access to his patients to benefit himself and his company unduly to the prejudice of the patients, conduct which would fall under the Council’s supervisory powers. The matter was referred back to the Council for further proceedings. --- ends ---

3120

non-electoral

2007

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Reportable Case no: 536/05 In the matter between: D H S SMITH APPELLANT and G P PORRITT 1st RESPONDENT SYNERGY MANAGEMENT (PTY) LTD 2nd RESPONDENT L F PERREIRA, NO; B PIETERSEN, NO 3rd RESPONDENT The Liquidators in EBN Trading (Pty) Ltd (In Liquidation) L F PERREIRA, NO; B PIETERSEN NO 4th RESPONDENT The Trustees in the Awethu Trust (In sequestration) THE MASTER OF THE HIGH COURT PIETERMARITZBURG 5th RESPONDENT ______________________________________________________________________________________ CORAM: SCOTT, STREICHER, BRAND, PONNAN et COMBRINCK JJA DATE OF HEARING: 8 MARCH 2007 DATE OF DELIVERY: 23 MARCH 2007 Summary : Insolvency – application to set aside subpoena to attend creditors meeting – defence of res judicata not available to sequestrating creditor whose claim is challenged by the trustee. Neutral citation: This judgment may be referred to as Smith v Porritt and others [2007] SCA 19 (RSA) SCOTT JA/….. SCOTT JA: [1] The appellant, a superintendent in the SAPS, was subpoenaed to attend a meeting of creditors in EBN Trading (Pty) Ltd (in liquidation) and, on a different day, a meeting of creditors in Awethu Trust (in sequestration). The subpoena to attend the former was issued by the Master in terms of the provisions of s 414 (2) read with s 415 (2) of the Companies Act 61 of 1973. The subpoena to attend the latter was issued by the Master by virtue of his powers in terms of s 64 of the Insolvency Act 24 of 1936. (The subpoena refers incorrectly to s 414(2) of the Companies Act but no issue was made of this.) The appellant applied to the High Court, Pietermaritzburg, for an order setting aside the subpoenas. The application was heard by Msimang J who dismissed it with costs but granted the appellant leave to appeal. [2] The first respondent is Mr Gary Porritt. I shall refer to him by name. The second respondent is Synergy Management (Pty) Ltd (‘Synergy’). Porritt is one of its directors. The third and fourth respondents are the liquidators and trustees respectively of EBN Trading (Pty) Ltd (in liquidation) and Awethu Trust (in sequestration). I shall refer to the former as EBN and to the latter as Awethu. The fifth respondent is the Master. No relief was sought against the third, fourth and fifth respondents in the court below. [3] Final orders of liquidation and sequestration were granted by Theron J against EBN and Awethu respectively on 4 February 2004. The applicant in those proceedings was PSC Guaranteed Growth Ltd (in liquidation). I shall refer to it as PSC. The applications were strenuously opposed by both EBN and Awethu. Both denied indebtedness to PSC. After hearing oral evidence the court found that the respondents were indebted to PSC and that the latter accordingly had locus standi to seek the orders in question. Porritt is a former director of EBN and a former trustee of Awethu. [4] Porritt is a creditor of EBN. Synergy is a creditor of Awethu. The subpoena in the EBN matter was issued at the instance of Porritt and the subpoena in the Awethu matter at the instance of Synergy. In terms of the former the appellant was required to produce at the meeting ‘the books, records and documents’ or copies thereof, relating to the claim proved by PSC in his possession or under his control. They were further identified by reference to the persons or entities from whom the appellant would have received them. The subpoena in the Awethu matter was in similar but not identical form. The documents sought were those ‘relating to Awethu and the claim proved by PSC against Awethu’. Both subpoenas required the presence of the appellant ‘in order that [he] may be examined’. [5] In his founding papers the appellant sought to have the subpoenas set aside essentially on two grounds. The one was that the documents were privileged. The other was that the issuing of the subpoenas amounted to an abuse of the process in that they were issued with the ulterior motive of prematurely obtaining information relevant to ongoing criminal investigations involving Porritt and others. Porritt, it appeared, had been arrested but released on bail as long ago as 14 December 2002. [6] The appellant in his founding affidavit referred at some length to the allegations of criminal conduct involving Porritt and others which he was in the process of investigating. Much of this evidence was irrelevant. What was relevant related to Porritt’s alleged conduct in relation to PSC. Shortly stated, it was this. In April 2000 Porritt and others established PSC, an investment company, which was to compete in the unit trust industry. Contrary to representations contained in the prospectus, funds received by it from investors were channelled to entities controlled by Porritt, including EBN and Awethu. The claims subsequently relied upon by PSC (then under provisional liquidation) in its application for the liquidation and sequestration of EBN and Awethu respectively, were for the repayment of the amounts so paid to EBN and Awethu which were said to have been loans. The claim against EBN was for some R104m and against Awethu for R51m. [7] In his answering affidavit, Porritt denied that the documents sought were privileged and that the subpoenas amounted to an abuse of the process. He said that by virtue of his involvement in the transactions he knew that the true position was that PSC’s debtor was Synergy, not EBN and Awethu, and that Synergy had subsequently ‘settled its debt to PSC by the acquisition of shares for and on behalf of PSC’. He said that the books and records of PSC that would establish the truth of his assertion had been removed by the appellant from the custody of the provisional liquidators (who were not the same as the liquidators who were finally appointed) and their attorney, Mr Alec Brooks, as well as from PSC’s auditors and its former chairman, Mr Jack Milne. Porritt contended that these books and records included monthly loan statements sent by Synergy to PSC as well as the auditors’ working papers and other documents, all of which reflected that Synergy, not EBN and Awethu, was PSC’s true debtor. He said he needed the documents to persuade the third, fourth and fifth respondents to reject PSC’s claim against EBN and Awethu or, failing that, to substantiate an objection in due course to third and fourth respondents’ distribution accounts. In letters dated 3 March and 10 March 2005 (copies of which were annexed) Porritt requested the Master to issue the subpoenas in question to enable PSC’s claim to be properly examined. In the same letter he recorded that the head liquidator of PSC, Mr Ivor Van Diggelen, had similarly been unable to obtain the records and books of PSC and accordingly unable to proceed with the business of winding-up the affairs of PSC. Van Diggelen, himself had earlier written a letter to the Master (a copy of which was similarly annexed to Porritt’s affidavit) in which he had expressed doubts as to the validity of PSC’s claim against EBN and Awethu and indicated that there was evidence to suggest that the assets of PSC may be elsewhere. [8] Whether Porritt’s contentions regarding PSC’s claims will ultimately prevail need not and cannot be decided on the papers. He does, however, present an obvious case for the production of the documents specified in the subpoenas. Counsel for the appellant, nonetheless, argued that Porritt’s true motive was to obtain information relating to the criminal investigation against him prematurely. The reason for this inference, he said, was that the documents could not assist Porritt in his contention that PSC’s claims against EBN and Awethu were invalid because this issue had already been decided by Theron J in the liquidation and sequestration proceedings and in the absence of an appeal the judgment was binding on the third and fourth respondents. [9] In Swadif (Pty) Ltd v Dyke NO 1978 (1) SA 928 (AD) at 945B Trengove AJA said: ‘A trustee or liquidator is not privy to the insolvent or the company in liquidation. He is not bound by any judgment against the insolvent or the company to which he was not a party, and a plea of res judicata cannot be raised against him in respect of such a judgment because he does not derive his authority from the insolvent or the company; he has an independent right of action under the Act.’ Relying on a passage in Meskin Insolvency Law para 4.20 in which the learned author comments on the above statement, counsel for the appellant submitted that a trustee or liquidator was privy to the insolvent or company in liquidation (and hence bound by any judgment) save only in relation to rights afforded to the trustee or liquidator by virtue of his or her office whether under the Insolvency Act or the common law. This understanding of the learned judge’s statement, I think, is undoubtedly correct. An example of a right under the Act would be the right to attack a transaction as being an undue preference; an example of a right at common law would be the right to attack a judgment procured collusively and in fraud of creditors. (See eg Shokkos v Lampert NO 1963 (3) SA 421 (W).) Counsel argued that the third and fourth respondents had no such rights in the present case and accordingly could not set aside PSC’s claim. But the judgment which it is contemplated would be binding on the trustee or liquidator is a judgment in respect of which a plea of res judicata could be raised. What must be decided is whether the judgment of Theron J is such a judgment in relation to PSC’s claims against EBN and Awethu. [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 commonplace 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 case 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. As pointed out by De Villiers CJ as long ago as 1893 in Bertram v Wood 10 SC 177 at 180, ‘unless carefully circumscribed, [the defence of res judicata] is capable of producing great hardship and even positive injustice to individuals’. [11] In seeking a final order of liquidation and sequestration against EBN and Awethu respectively, PSC was obliged to establish on a balance of probabilities that it had the necessary locus standi. That in turn involved establishing that it was a creditor of both. (In the case of the Awethu application, it would have had to establish no more than that it had a liquidated claim of not less than ‘fifty pounds’.) Theron J found in favour of PSC on this issue and granted final orders. But the determination of this issue, ie the issue of locus standi, did not require a final determination of the extent of PSC’s claims. To this extent, at least, it did not, therefore, amount to a final determination of PSC’s claims as would have been the case had the judgment been one in pursuance of claims sounding in money. But there is, in my view, another sound reason for not holding a liquidator or trustee bound by the court’s acceptance of the applicant creditor’s claims in liquidation or sequestration proceedings for the purpose of establishing locus standi. Were the liquidator or trustee to be so bound he would be precluded from challenging the claim regardless of any information that may come to light in the course of winding-up the affairs of the company or estate. He could not appeal the judgment, nor could he seek to have it set aside; his locus standi is dependent on it. He could, as a consequence, be compelled to prepare a distribution account which he knew wrongly favoured the applicant creditor and prejudiced the other creditors. The undesirability of such a result need hardly be stressed. In practice so-called ‘friendly’ sequestrations and liquidations are common place. The motive of the creditor instituting proceedings in such cases is more often than not simply to assist the insolvent or company. To preclude a liquidator or trustee from reassessing the claim of a creditor who had obtained the liquidation or sequestration order would inevitably result in unfair distributions and prejudice to the other creditors. Such a result would clearly be contrary to the interests of justice. While it is undoubtedly so that the requirements of eadem res and eadem petendi causa are not immutable requirements of the exceptio rei judicata and may be relaxed in appropriate circumstances, no such relaxation would be appropriate in circumstances such as the present. In other words, a creditor such as PSC, in my judgment, is not entitled to rely on the defence of res judicata based on a judgment granting a final order of liquidation or sequestration in the event of the liquidator or trustee subsequently challenging the validity or extent of the creditor’s claim. [12] It follows that if the third and fourth respondents were to be persuaded that PSC’s claims are without merit they would not be precluded from seeking to have them rejected. I should add that even if they were not so persuaded, Porritt and Synergy would still be free to object to their final distribution accounts in terms of s 111 of the Insolvency Act. Porritt and Synergy were not parties to the liquidation and sequestration proceedings in their capacity as creditors. Should they object to the accounts in that capacity the defence of res judicata could a fortiori not be successfully raised against them. [13] As previously indicated, Porritt succeeded in making out a case on the papers that the documents which the appellant is required to produce in terms of the subpoenas could assist him in showing that PSC’s claims are ill-founded. There is accordingly no basis for setting aside the subpoenas on the grounds that the documents would serve no purpose; nor is there anything in the papers to justify the inference that Porritt’s true motive was to obtain access to the documents prematurely. [14] A further ground advanced in support of the contention that the subpoenas should be set aside as constituting an abuse of the process of the court was that they required the personal attendance of the appellant at the meetings ‘in order that [he] may be examined in terms of the provisions of s 415(1) of the [Companies] Act’. (In the Awethu matter the reference should have been to s 65 of the Insolvency Act.) The appellant’s case was that he had no knowledge that could have assisted Porritt and Synergy in persuading the third and fourth respondents to take steps to have the claims of PSC expunged and that the real object of having him examined was to obtain information regarding the police investigation. Once again, I do not think the inference the appellant seeks to draw can be justified. The appellant could presumably be of assistance regarding such matters, for example, as the completeness of the books and records in his possession and the possible whereabouts of other relevant documents. In any event, should questions be put to him relevant only to the criminal investigation he would be free to object on the grounds of privilege or irrelevancy and seek a ruling of the presiding officer to that effect. It follows that in my judgment the appellant failed to establish that the issuing of the subpoena’s constituted an abuse of the process. [15] With regard to the objection based on privilege, it will be re- called that the documents in question were limited to ‘books, records and documents’ relating to PSC’s claims against EBN and Awethu. The reference in the subpoenas to their origin made it clear that they were either the books and records of PSC or the working documents of PSC’s auditors. The only ground upon which it was suggested that they were privileged was that the appellant had taken possession of them in the course of his investigation into Porritt’s alleged criminal conduct and that they therefore ‘formed part of the police docket’. Having regard to the nature of the documents, that fact alone cannot, in my view, render them privileged. Indeed, counsel was constrained to concede that they could not be withheld from the liquidators of PSC and EBN or the trustees of Awethu who required them to complete their task of winding-up the affairs of those entities. In my view the concession was well made and the reliance on privilege must fail. The position would have been otherwise had the documents comprised witnesses’ statements or other documents directly concerned with the criminal investigation. [16] The appeal is accordingly dismissed with costs. __________ D G SCOTT JUDGE OF APPEAL CONCUR: STREICHER JA BRAND JA PONNAN JA COMBRINCK JA

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL D H S SMITH v G P PORRITT AND OTHERS CASE NO 536/05 From : The Registrar, Supreme Court of Appeal Date: 23 March 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 appellant, a superintendent in the SAPS, sought an order in the High Court, Pietermaritzburg, setting aside two subpoenas calling on him to appear at a meeting of creditors in EBN Trading (Pty) Ltd (in liquidation) and, on a different day, a meeting of creditors in Awethu trust (in sequestration). In terms of the subpoenas he was to produce the documents in his possession relating to claims proved against EBN and Awethu by PSC Guaranteed Growth Ltd (in liquidation). The application was refused by Mr Justice Msimang and the matter came on appeal to the Supreme Court of Appeal. Mr Gary Porritt, at some stage, had an interest in all three entities. He is presently the subject of a criminal investigation involving allegations of fraud and various contraventions of the Companies Act and Exchange Control Regulations. Some of these relate to PSC Guaranteed Growth. The subpoenas were issued by the Master at the request of Porritt. The appellant sought to have them set aside on the basis that Porritt’s true motive was to obtain insight into the criminal investigation and to obtain the documents at an earlier stage than he would otherwise have been entitled. In response, Porrit contended that PSC’s claims are without substance and that he needed the documents to show that EBN and Awethu trust are not indebted to PSC and that the latter’s true debtor is Synergy Management (Pty) Ltd. This contention, it appeared, was supported to some extent by the head liquidator of PSC who in a letter to the Master had expressed doubts regarding the validity of PSC’s claims against EBN and Awethu. On behalf of the appellant it was argued in the SCA that it would serve no purpose for the documents to be produced at the creditors’ meetings because the claims of PSC had already been decided by the Pietermaritzburg High Court when granting final orders of liquidation and sequestration against EBN and Awethu respectively. Those orders were granted at the instance of PSC which was obliged to show that it had valid claims against EBN and Awethu in order to establish that it had standing to seek the orders. The effect of the orders, so argued the appellant, was to finally decide the indebtedness of EBN and Awethu to PSC and that this issue could not be revisited even if the liquidators and trustees of EBN and Awethu were to be persuaded that PSC’s claims were invalid. On this basis it was argued that Porritt’s real motive must have been to gain access to the documents prematurely. The SCA held that the effect of the liquidation and sequestration orders was not to preclude the liquidators and trustees from rejecting PSC’s claim should they be of the view they were invalid. The appellant had accordingly failed to establish that Porritt had an ulterior motive in requesting the subpoenas to be issued. The appeal was accordingly dismissed with costs. --- ends ---

1260

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 430/07 REPORTABLE In the matter between: DIRECTOR OF PUBLIC PROSECUTIONS: TRANSVAAL APPELLANT v PHILLIPUS JACOBUS VENTER RESPONDENT Coram: Nugent, Cloete et Mlambo JJA Heard: 7 May 2008 Delivered: 30 May 2008 Summary: Murder and attempted murder – family members – amnesia and temporary non pathological diminished criminal responsibility – effect on sentence – effect of minimum sentencing legislation – need for standardised and consistently severe sentences for violent crime – retributive and deterrent elements outweigh personal considerations – sentence of 18 years appropriate. Order in para [34]. Neutral citation: This judgment may be referred to as Director of Public Prosecutions: Transvaal v Venter (430/2007) [2008] ZASCA 76 (30 May 2008). JUDGMENT (Dissenting Judgment pages 18 - 38 and Concurring Judgment pages 39 - 41) MLAMBO JA [1] This is an appeal against sentence in terms of s 316B of the Criminal Procedure Act 51 of 1977, as amended, by the Director of Public Prosecutions of the Transvaal (the state). Leave was granted by the court a quo (Coetzee J sitting in Nelspruit in the Circuit local division of the Eastern Region). [2] The respondent, then 34 years old, was convicted in the court a quo on one count of attempted murder and two counts of murder. (He was also convicted of other related offences but they are not material to this appeal). He was sentenced to 8 years imprisonment for the attempted murder. On one count of murder he was sentenced to 10 years’ imprisonment, and on the other 15 years’ imprisonment, of which five years was suspended on various conditions. The effect of an order of concurrency of the sentences was that the respondent’s effective sentence is ten years. The state now appeals against those three sentences, submitting that they were shockingly light. [3] In the court below the respondent pleaded guilty to the charges, but the plea was not acceptable to the state due to his statement, in the written plea, that he could not remember the incident in which he committed the offences. This, in turn, led the court a quo to change his plea to one of not guilty as the court felt that his alleged loss of memory appeared to be a defence of temporary non-pathological diminished criminal responsibility. However, after hearing evidence tendered by the state the court a quo concluded that the defence could not succeed and convicted the respondent. [4] The complainant in the attempted murder count was the respondent’s wife Millie and the deceased in the murder counts were Millize, the respondent’s five year old daughter and Janco, his four year old son. The incident took place on 26 April 2006 in the family home in the suburb of Drakensig in Hoedspruit, Limpopo. At that time the respondent was a member of the South African National Defence Force and stationed at Hoedspruit. His wife, though a civilian, was also employed in the army as a secretary to one of the colonels. In what follows I set out the undisputed and chilling account by the respondent’s wife of the events of that fateful day when the respondent committed the offences. [5] On the day of the incident the respondent had attended a function with members of his unit at O’Hagans, where he drank about three beers. He later accompanied his wife to another function involving members of her unit where he, amongst other things, drank three more beers. Thereafter they returned to their home in the late afternoon. On their arrival at home the respondent confronted his wife about his discomfort at her having danced with her boss, at the latter function. He told her that he did not like always seeing her dance with that colonel. This started an argument between them during which the respondent’s wife apparently told him that should he be convicted, regarding certain charges he was facing, arising from the rape and murder of a 14 year old woman in Burundi, she would divorce him and take their children with her. The argument degenerated into a shouting match which unsettled the children and his wife, after failing to calm him down, decided to leave the house with the children. She asked him for the car keys telling him she was leaving to allow him to calm down but he refused to give her the keys. She then tried to use the landline telephone to phone her niece but he pulled it from the wall. The respondent, apparently in a further attempt to prevent her from leaving the house also locked the front door but she ran out through the back entrance with the children. [6] The respondent followed them into the street pleading with her to return and when she refused he picked up Janco who was at that stage holding on to her legs crying. He took Janco back to the house but she did not return to the house immediately and was apparently moved to doing so by Millize’s pleas not to leave her ‘boetie’. On their return to the house they encountered the respondent in the courtyard just outside the house talking on the phone to her mother with Janco crying. He gave his wife the phone when she demanded to talk to her mother and went inside the house. His wife told her mother amongst others, that she was through with the respondent. [7] The respondent returned shortly thereafter having just finished smoking and said to her ‘my bolla, dankie vir alles wat julle vir my beteken het’ (. . . thank you for everything you have all meant to me). He again entered the house followed by Janco and the next moment she heard Janco scream and then a shot went off. She and Millize ran into the house and as they entered the kitchen the respondent emerged from the corridor carrying an R4 rifle and pointing it at her midriff. She tried to wrestle the rifle from him but he pulled the trigger hitting her in the stomach. On seeing this Millize screamed and ran away through the back entrance. The respondent, seeing her run away, took calculated aim through the wire mesh covering the door and though his wife tried to wrestle the rifle from his arms he shot the child. [8] She ran towards the bedrooms where Janco lay next to her bedroom door curled up with blood all over the mat he was lying on. As she knelt to take a closer look at the bleeding child, the respondent pulled her upright pressing her against the wall with the rifle. She told him that he had shot their children and looking at Janco, he told her that he would kill her and then himself. As she still had the cell phone in her hand she began dialling some numbers and managed to push herself away from him, falling forward in the process. He demanded the cell phone but she refused and he pinned her hand with his foot, took the cell phone and threw it against the wall. He again pulled her upright and she used the opportunity to bite him on his neck which enabled her to run outside. As she emerged she saw Millize lying on the ground, mumbling as if asleep. [9] She ran up the street screaming for help and one of the neighbours, Skallie, responded. She screamed at him and her other neighbours, who had started to gather there, to rush the children to hospital which they did. She was also rushed to the Hoedspruit Hospital but was transferred to 1 Military Hospital in Pretoria where she underwent an emergency operation. She was discharged a week later to attend the funeral of her children. [10] Testifying in mitigation of sentence the respondent related his unhappy childhood due to his parents being alcoholics. He related how due to their alcoholism, he and his sister were removed from their care on several occasions and that at some stage he lived in an orphanage for two years. He also testified that he never had a stable family life as his father, a driller working for the Department of Water Affairs, was always moving from place to place resulting in him constantly changing schools. Upon becoming a young adult he served his national service where after he held down a number of jobs culminating in his enlistment in the South African National Defence Force in the Air Force wing. He was, at some stage, posted to Burundi and on his second posting there he was arrested on charges of rape and murder involving a 14 year old woman. He was held, as an awaiting trial prisoner, in a shipping container, by the military police and was released on bail six months later with his wife’s assistance. [11] The Burundi episode and its aftermath featured prominently in his testimony. He testified that as a result thereof he was transformed in that he had weakened physically, lost some 16 kg, and that sometime after his return to South Africa, he started attending clinical psychology sessions on his wife’s insistence after she had gone for help herself. The emphasis of the treatment, he testified, was aimed at helping him cope with the pressure brought about by the Burundi case. He was apparently told during these sessions that he displayed suicidal tendencies. He testified that his marriage was never the same upon his return and that he thought his wife was ashamed of being associated with him as she had started using a different bus to and from work from the one he used. He also testified that after his return from Burundi their circle of friends had changed and that he always received strange stares from other people, most of whom knew him well but who had become somewhat distanced from him. [12] He testified that he was very emotional on the day of the incident and at some stage he had felt like crying even though his wife’s niece had assured him that his wife loved him and would not leave him. He testified that he had felt bad when his wife danced with her boss, on the day of the incident, which, he said, was a regular occurrence every time waltz music was played. He said this hurt him deeply as he had heard some unpleasant rumours about what this colonel got up to with women irrespective of their marital status. He stated that even though he did not suspect that something was going on between the colonel and his wife he did not trust him. All he could remember, he stated, about what happened further is that at some stage the argument between him and his wife had ended and he had gone to sit on a sofa as he felt tired. He remembers waking up in hospital with neck wounds but was unaware of what had happened. He was informed by the policeman guarding him that his children had died. He also had cuts on his wrists consistent with an attempted suicide. He however could not remember anything about the incident, learning about it from newspapers later. [13] In imposing the effective sentence of 10 years the court a quo reasoned that it was clear from the respondent’s testimony that the Burundi episode had an overwhelming negative influence on his emotional state. The court further seemed to find that the marriage of the Venters was no longer the same after Burundi. The court, however, found that it could not be disputed that the respondent had acted wilfully and with knowledge when he shot his children and his wife and that he was suppressing the memory of the incident by stating that he could not remember it. The court a quo further found that it was clear that the respondent was not just remorseful but was very sorry at what he had done. The court found that the effects of alcohol, his emotional instability arising from the Burundi episode, his show of remorse, that he was gainfully employed, was a mere 33 years old when he committed the offences and was a first offender, impelled it to find that there were substantial and compelling circumstances which called for a sentence lesser than the prescribed minimum of 15 years. [14] The state, as stated, contends that the sentences imposed in respect of each of the three offences were inordinately light. The sentence of eight years imposed for the attempted murder can be disposed of immediately. Counsel for the state submitted that an appropriate sentence would have been ten years. That submission might well be correct but I do not think that in those circumstances the sentence that was imposed can be said to be shockingly disparate, and I do not think there are proper grounds to interfere with that sentence on appeal. Most of the argument was directed instead to the sentences imposed for murder and I now turn to them. [15] It was submitted that the court a quo was misdirected as it over- emphasized the respondent’s personal circumstances particularly the respondent’s Burundi experience and his alcohol intake on the day of the incident despite his wife’s undisputed testimony that he had sobered up when the incident took place. It was also submitted that the trial court had misdirected itself by under-playing the seriousness of the offences as well as the interest of society in the imposition of appropriately deterrent sentences. [16] As an appeal court we can interfere with the sentence imposed by the court a quo if we find that the court misdirected itself materially particularly in over-emphasizing some factors and underplaying others. We can also interfere even where there is no apparent misdirection but where we find that the sentence is so light that it induces a sense of shock. [17] It is correct, as the court a quo found, that the so-called minimum sentencing legislation is applicable in this matter.1 Fifteen years is the prescribed minimum sentence on each of the murder counts, on which the respondent was convicted, as he was a first offender2 though that may be reduced if substantial and compelling circumstances exist to do so. This court in S v Malgas 2001 (1) SACR 469 (SCA) spelt out how courts should approach the imposition of sentence where the legislation applies. The essence of this approach is that courts retain the discretion to determine appropriate sentences in view of the obvious injustice implicit in an obligation to impose only the prescribed sentences in any given circumstance. However, courts are required to approach sentencing conscious that the legislature has ordained that particular sentences should ordinarily be imposed regarding crimes covered by the legislation. The court reasoned that the aim of the legislature was to achieve a ‘severe, standardised and consistent’ response from courts in imposing sentence unless there were ‘truly convincing reasons for a different response’; that when considering what sentence to impose ‘emphasis was to be shifted to the objective gravity’ of the crime and society’s need for effective sanctions against it. [18] As to what factors amount to ‘substantial and compelling’ circumstances within the contemplation of the legislation the court stated that all factors traditionally taken into account by courts were still relevant and that the ‘cumulative impact of those circumstances may 1 Criminal Law Amendment Act 105 of 1997, as amended. 2 Section 51(2)(a)(i): ‘Notwithstanding any other law but subject to ss (3) and (6), a regional court or a High Court shall – (a) if it has convicted a person of an offence referred to in Part II of Schedule 2, sentence the person in the case of– (i) a first offender, to imprisonment for a period not less than 15 years; . . ..’ justify a departure’. The Constitutional Court in S v Dodo 2001 (1) SACR 594 (CC), embraced the interpretation of the legislation and the approach crafted in Malgas on how courts should approach sentencing. [19] It needs to be borne in mind that the sentences provided for in the Act are minimum sentences for the prescribed offences and Malgas was directed to whether a lower sentence might be called for in a particular case. But an evaluation of the cumulative effect of all the circumstances, in accordance with the approach in that case, might well indicate that a higher sentence is called for. I think that is applicable in this case. For had there not been the strong mitigating circumstances that I will presently come to, I think a court might well have been justified in imposing a sentence far in excess of the minimum. It is only by applying those mitigating circumstances that I have come to the conclusion that a proper sentence would be something less. [20] I now consider whether there is any basis justifying us, on appeal to interfere with the sentences imposed by the court a quo. In doing so regard must be had to all the evidence presented. The court a quo found that the Burundi episode had an overwhelming effect on the respondent’s actions as well as feelings of jealousy and the fact that he had been drinking that day. These factors clearly influenced the court a quo to impose the sentence it did. Clearly the court a quo was of the view that the respondent had acted with temporary diminished criminal responsibility as a result of stress emanating from the Burundi episode, and to some extent, the role of alcohol. [21] Temporary non pathological diminished criminal responsibility is recognised in our law particularly its relevance to sentence. Properly understood, this state of mind can be stated to be the diminished capacity to appreciate the wrongfulness of one’s actions and/or to act in accordance with an appreciation of that wrongfulness. [22] In a number of cases, whilst this state of mind was rejected as a defence, it was found that it had an overwhelming effect on the conduct of the accused to such an extent that very lenient sentences were imposed. In S v Laubscher 1988 (1) SA 163 (A) a sentence of six years for murder was reduced by suspending half of it where the appellant had been found to have acted with diminished criminal responsibility. The appellant had discharged a total of 21 rounds from his pistol in his parents-in-law’s house after he was denied access to his child. One of the shots killed his father in law. A criminal psychologist and a psychiatrist had testified in the trial on behalf of the appellant supporting his claim that he had been undergoing severe stress as a result of his rejection by his parents-in-law as well as his inability to have access to his child. [23] In S v Smith 1990 (1) SACR 130 (A) a sentence of six years was reduced to three years on the basis that the appellant had shot and killed the deceased as result of a prolonged period of sustained and mounting mental strain caused by the deceased. A clinical psychologist had testified at the trial supporting the overwhelming effect of psychological distress on the appellant’s conduct. In S v Kalogoropoulos 1993 (1) SACR 12 (A) an effective eight year sentence was confirmed on appeal where a jealous husband who suspected his wife of having an affair with his business partner, had embarked on a heavy drinking spree before shooting and killing his partner and domestic employee as well as the attempted murder of his wife and his partner’s wife. He had called a psychiatrist to back his defence of temporary non-pathological diminished criminal responsibility. In that case it was also found that the appellant had suffered from genuine amnesia induced by his excessive intake of alcohol just before he embarked on the shooting spree. In S v Shapiro 1994 (1) SACR 112 (A) the respondent had fired six shots at point blank range at the deceased, a drug addict, who had threatened his fiancé with violence. He went outside, reloaded and returned to fire a seventh shot at the deceased. A sentence of seven years, four of which were suspended, survived on appeal. Psychiatric evidence had also featured in that case supporting a claim of diminished criminal responsibility induced by severe stress cause by the deceased. [24] In S v Di Blasi 1996 (1) SACR 1 (A) the state had appealed against a four year sentence imposed on a husband who had hunted down his ex- wife and murdered her in a cold-blooded manner, simply because he had regarded her conduct of leaving and divorcing him as an affront. In that case the defence’s case was that the respondent had acted with diminished criminal responsibility due to a partial emotional and psychological disintegration, amounting to non-pathological causes of a temporary nature. The respondent was on appeal found to be a self- centred man with an ‘exaggerated sense of self importance and pride’ who had considered it a personal insult for his wife to divorce him which he considered justified him murdering her. Vivier JA further found that the respondent’s obsession was not so overwhelming that he had lost control ‘of his logical and decision making facilities’. The sentence of four years imposed by the trial court was set aside and in its stead a sentence of 15 years was substituted. [25] It must be borne in mind in considering the aforementioned cases that they were all decided at a time when it was ‘business as usual’ and the sentencing discretion of the courts was as yet unfettered by the minimum sentencing legislation as is the case currently. In casu it is correct that the respondent had started taking alcohol as early as 11 am on the day of the incident. It is also correct that clinical psychological assessments had diagnosed him as displaying suicidal tendencies before the incident. Furthermore a forensic psychiatric report compiled four months after the commission of the offences records that the respondent was experiencing ongoing stress after the Burundi incident, which was aggravated by ‘alleged advances of a fellow officer to his wife and alcohol consumption prior to the time of the alleged offence’. The report further records that he had probably committed the offences due to impulsiveness brought about by disinhibition due to alcohol intake and that ‘the seriousness of his actions at the time of the alleged offence including the attempted suicide indicate that the distress he experienced on account of events in his life was deeper than he showed and that provocation or disinhibition would break down his defences’. [26] Clearly, the Burundi episode had continued to plague the respondent. The references to ‘events in his life’ and ‘ongoing stress after the Burundi incident’ bear testimony to the fact that the Burundi episode had affected him personally as well as his marriage relationship. That this is so is illustrated by the fact that he mentions this extensively in his testimony in mitigation, particularly the fact that he had became a pariah in his community upon his return from Burundi. What was constantly on his mind was that his wife had told him that should he be convicted regarding the Burundi matter she would divorce him and leave with the children. This, it appears, was a thought he could not bear. It is quite possible that he had become consumed by the threatened break up of his marriage and separation from his wife and children that he had lost some sense of objectivity. [27] That he may have lost some objectivity should not, however, be viewed in isolation. We have uncontested testimony from his wife that she had stood by him throughout his incarceration in Burundi until he was released on bail. It was she who had raised a loan to access the funds that were employed to pay his bail. She had constantly re-assured him of her support throughout the period up to the day of the incident. She stood by him and also underwent psychological clinical help after his return, with him. A period of 18 months had elapsed from his return from Burundi when he committed the offences. In my view his loss of objectivity arising from his wife’s intentions were clearly misplaced. The Burundi verdict had not materialised when the incident happened and his wife and children still lived with him. There is also undisputed evidence that he had sobered up when he committed the offences. Clearly alcohol intake played a minimal role if any on his conduct. The aforegoing analysis of the matter leads me to the conclusion that the ongoing stress about the Burundi incident cannot be viewed as wholly mitigatory. His wife had stood by him throughout and had not left him when he was charged with committing the offences. He behaved in a manner that shows a state of mind suggesting that everything revolved around him and any action by his wife and children interpreted by him to amount to them leaving him justified him murdering them. [28] Regarding his amnesia claim it is correct that the psychiatric report filed on his behalf recorded that he was suppressing the memory of the incident because he could not come to terms with what he had done. One cannot, also, ignore his sister’s evidence, called on his behalf in mitigation, that he had telephoned her shortly after he had committed the offences, telling her what he had done. In my view, the court a quo clearly over-emphasized the effects of the Burundi episode on the respondent’s conduct. The court a quo failed to consider all the facts surrounding the Burundi incident as well as the respondent’s circumstances upon his return. The evidence is also clear that he was calm when he shot Janco and his wife as well as when he took careful aim at the fleeing Millize. His statement to his wife after he shot Janco, that he intended to wipe them all out and then commit suicide, shows a man who was in touch with reality and who was aware of what he was doing. That he was in control of his faculties is also illustrated by his demand for his wife’s cell phone when she tried to call for help amidst the shooting. He clearly wanted to stop her calling for help as he wanted to finish them off. [29] It is also clear from the court a quo’s judgment that insufficient weight was given to the seriousness of the offences involving as they did the murder of two young and unsuspecting children. No doubt murder is a serious offence involving, as it does, the loss of life. In casu we have a father who shot and killed his four and five year old son and daughter respectively. He perpetrated these dastardly deeds within the confines of their home where they should be at their safest. The respondent abdicated his role as protector and provider to his wife and children and became a predator and turned their safe sanctuary into a killing field. It chills ones blood when one learns how the tearful Janco had clung to his mother in the street before the respondent picked him up and returned to the house with him and that the little boy had followed the respondent into one of the bedrooms not knowing that he was walking to his death. His wife’s testimony about this aspect is undisputed and telling: the little boy screamed in the other room as if frightened by something, followed by a rifle gunshot. He then calculatedly took careful aim at his fleeing daughter and shot her. In my view the court a quo underplayed the seriousness of the offences viewed within the context of the respondent as a husband and father. [30] Clearly society views the respondent’s conduct in a very serious light. The court a quo’s judgment is glaring in its omission to deal with the interests of society and the need for deterrent sentences. It is in society’s interests that persons who commit these offences in the circumstances described are appropriately sentenced. Within the context of this case the injunction to protect children from violent crime assumes a prominent role. In my view, the sentences imposed are indeed shockingly light when viewed within the context of the seriousness of the offences. Contrast the sentence imposed by the court a quo with a similar sentence preferred by this court in S v Nel 2007 (2) SACR 481 (SCA) where the appellant who was driven by a compulsive gambling habit had robbed a casino without harming any of his victims. Clearly the court a quo committed a misdirection in over-emphasizing the respondent’s personal circumstances and underplaying in the process the seriousness of the offences he committed and society’s interest in deterrent sentences. [31] In my view this matter calls for a sentence cognisant of his personal circumstances, but which takes account of the seriousness of the offences and the need for appropriate severity and deterrence. This latter element is at the core of the community interest in how courts should deal with violent crime. [32] This is a matter in which the respondent’s personal circumstances are outweighed by society’s need for a retributive and deterrent sentence. In Van Heerden v State (unreported judgment of this court – case no 274/2002) this court confirmed a sentence of 25 years on a woman who was diagnosed as suffering from adjustment disorder with depression arising from overwhelming but misplaced anger, which diminished her ability to appreciate the wrongfulness of her conduct. See also S v Martin 1996 (1) SACR 172 (W) a full bench decision where a life sentence was reversed on a man who had been convicted, upon a guilty plea, on four counts of murder and two counts of attempted murder involving members of his family after he was denied access to his children. A cumulative sentence of 21 years was imposed instead. See also Dikana v S [2008] 2 All SA 182 (E) where a full bench of the Eastern Cape Division of the High Court confirmed two life sentences on a man who had murdered his ex-girlfriend and her lover, by burning them inside a shack simply because he did not accept that their relationship had ended. [33] I have already pointed out that an evaluation of the cumulative effect of all the circumstances might in particular cases call for a sentence in excess of the minimum sentence provided for in the Act. In my view, but for the mitigating circumstances, I think that the crimes would have justified a sentence far in excess of that minimum. The mitigating circumstances I have referred to must clearly reduce the sentence that would otherwise have been appropriate, but in my view they are capable of reducing it to nothing less than eighteen years’ imprisonment on each count, to be served concurrently. That is so disparate from the sentence that was imposed that I think we are justified in interfering. The two offences were committed in an ongoing course of conduct and should be taken together for purposes of sentencing. [34] The following orders are made: (i) The appeal against the sentences imposed on charges 3 and 4 (the charges of murder) succeeds. (ii) The sentences imposed on those charges are set aside. On those charges taken together a sentence of eighteen (18) years’ imprisonment is substituted. (iii) The remaining sentences and directions given by the court below remain in place with the result that the effective period of imprisonment on all charges is eighteen years’ imprisonment. _____________ D MLAMBO JUDGE OF APPEAL CLOETE JA: [35] I have had the advantage of reading the judgment of my colleague Mlambo. I agree with his conclusion in regard to the attempted murder charge. I am, however, with respect, unable to agree either with the reasoning or the conclusion reached in regard to the sentence he considers should be imposed for the murder charges. As I shall endeavour to demonstrate, my colleague's judgment both constitutes a radical departure from sentences hitherto considered appropriate by the courts, including this court, for murder committed with diminished responsibility, and also emphasises aspects of sentencing which this court has ─ repeatedly ─ held do not require emphasis in such cases. [36] In order to appreciate the respondent's state of mind when he killed his two children and attempted to kill his wife on 26 April 2006, three facts require emphasis. The first is the effect that the events in Burundi had had, and were continuing to have, on him. He had been arrested on 1 October 2005 for the rape and murder of a 14 year old girl whilst deployed with the South African Air Force in that country and the prosecution was not complete even at the time of his trial in the court a quo two years later. In his own words: '[T]oe ons terugkom van Burundi af, het my vrou die nuusberigte in die koerante gesien wat haar ouma vir ons gehou het, en dit het vandat ek aangekla is tot voor die insident [on 26 April 2006] het dit my huwelik met my vrou, ons verhouding verwoes . . . ek kon aanvoel my vrou het vertroue verloor in my . . . die koerantberigte het my vrou negatief gemaak, en dit het heeltemal ons verhouding, kommunikasie, ons huwelik, alles geaffekteer. Die manier waar ons die verantwoordelikhede hanteer het verander. Dit het my werksomstandighede verander. Dit het ons vriendekring verander. Ek kon aanvoel as ek in die eenheid is, as ons wag vir die busse om ons na ons afdelings te ry, mense kyk snaaks na 'n mens, of daar is mense wat onder af skinder, of goed, en daar was op 'n stadium wat ek en my vrou nie eers meer in dieselfde bus gery het nie, omrede ek kon gevoel het, of ek het geweet sy voel beskaaf [sic; sc "skaam"]om saam met my gesien te word.' The other two facts relevant to understanding what happened on 26 April 2006 are that the respondent had consumed alcohol; and that he considered that a colonel for whom his wife worked as a secretary had (again) made improper advances to her. I shall deal first with the events of 26 April 2006 and then return to the significance of the three facts which I have highlighted. [37] According to the respondent, he woke up on that morning feeling exhausted, withdrawn and depressed. At about 10h00 he was transported to a social function at O'Hagans by a female friend who, again according to him, noticed that there was something wrong with him and pressed him to discuss the problem, but he did not want to talk about it. At O'Hagans he drank three beers. By the time his wife collected him at 14h00 he was, according to her, drunk. They went to another function at about 14h30. The respondent drank a further two or three beers at that function. At one stage he felt tired and went to lie down on a cement seat. After half an hour or so he got up but did not mix with the other guests. He went to speak to his wife's niece or cousin ('niggie'). He cried during the conversation with her and said that he felt as though he was losing his wife and children and she attempted to comfort him. At a later stage music was played and when a particular tune came up, the colonel, as he had in the past, danced with his wife. That upset the respondent considerably, as usual, because the colonel had a reputation for being a ladies' man on the base where he and the respondent were stationed, and the respondent was of the view that he was continuing to make advances to his wife. The respondent's evidence on this point was as follows: '[E]k het op 'n stadium net agtergekom nee, die man is ook besig om vlerk te sleep by my vrou. Op die spesifieke dag toe hy dans met my vrou, het dit my baie omgekrap . . .'. [38] The respondent and his wife arrived at their home with the children at about 17h00. At that stage, according to his wife, the respondent appeared sober. Her evidence was: 'Hy was nugter. Hy het vir my nugter voorgekom.' That is the 'undisputed evidence that he had sobered up when he committed the offences' referred to by my colleague.3 Counsel representing the State on appeal conceded in argument in response to questions put by me that the respondent must still have been affected to some extent by the alcohol he had consumed. My contemporaneous note reads that counsel 'gee toe dat alkohol rol gespeel by vermindering van toerekeningsvatbaarheid'. That concession was in my view fairly and correctly made in view of the fact that the three beers consumed by the respondent at O'Hagans had made him drunk and he had consumed a further two or three beers that afternoon in a lesser period of time and before recovering from his previous alcohol intake that morning. I therefore cannot agree with my colleague Mlambo that 'clearly alcohol intake played a minimal role if any on his conduct'.4 The significance of the fact that the respondent had drunk alcohol on the day in question appears from the psychiatric report from which I shall quote later in this judgment. [39] After the respondent and his wife had returned home, he started an argument with her. According to the respondent's wife, the argument was prompted by his remark 'en daar gebeur dit alweer', her question 'daar gebeur wat alweer', his response 'jy en 'n sekere kolonel, wat op 'n sekere liedjie elke keer moet dans, al staan ek langs jou' and his refusal to accept her explanation by replying 'maar die kolonel neuk so rond op hierdie basis, nou neuk hy seker met jou ook rond'. According to his wife, the respondent then began talking more and more loudly and said that he did not know whether she still had feelings for him and whether she would continue to support him in the Burundi case. She attempted to reassure 3 Para 26. 4 Ibid. him by saying that she had stood by him for the last eighteen months. He then asked what would happen if he were to be locked up, and her reply was: 'As hulle nie fisiese bewyse kan gee nie, sal ek jou bystaan en jy weet dit, so het ek gesê van die begin af, maar as hulle fisiese bewyse kan gee dat jy skuldig is, dan weet jy sal ons nie meer getroud kan wees nie.' According to her, he was at this stage almost screaming at her despite her repeated entreaties that he speak more softly and calm down. She then left the room because he would not talk quietly or see reason. On her return to the room he refused her request to hand over the keys to their vehicle and wanted to know where she was going. She said she did not know but wanted to leave so he could calm down. She attempted to use the telephone but he pulled it out of the wall. She indicated that she was leaving with the children and he jumped up and locked the front door. She ran out of the back door with the children. He pursued her into the street and stood directly in front of her. Then, according to her, 'Hy het vir my geskree, gaan net terug in daardie huis in'. She refused and said "As jy so gaan aanhou, gaan ek polisie toe gaan'. With that he lifted up their son Janco and ran home. She followed shortly with their daughter Millize. [40] When the respondent's wife arrived back at their home, the respondent was talking on her cellular telephone to her mother. She took the telephone and told her mother that she could not take it any more. She typed 'help' into the telephone and sent the message to a friend of the respondent's, her cousin/niece and to a female friend. The respondent finished smoking and said 'my bolla, dankie vir alles wat julle vir my beteken het'. The respondent then went into the house and Janco followed. She heard Janco shout in fright and then she heard a shot. She ran into the house with Millize. The respondent came into the passage with a rifle at hip height aimed at her. She attempted to seize the rifle, he then pulled the trigger and she felt her stomach grow warm. Millize shouted 'nee' and ran out of the back door. The wife's evidence was then: 'Hy het aangelê na haar toe, wat sy uitgehardloop het. Hy het bietjie gekorrel met die loop tussen die kosyn en die gaasdeur. Ek het nog steeds aan die geweer probeer wegruk dat hy nie my kind moet skiet nie, maar daar het een skoot afgegaan.' I pause to remark that the weapon was a combat rifle which had been issued by the Air Force to the respondent to enable him to participate in a competition on behalf of his unit, and that he had in the past participated in the South African combat rifle championships and other competitions. He was therefore well used to firing such a weapon. [41] The respondent's wife ran and knelt next to Janco. The respondent pulled her upright from behind. Her evidence continued: 'Hy het my teen die gangmuur vasgedruk met die R4, en ek het vir hom gesê, besef jy dat jy ons kinders doodgeskiet het? Hy het vir Janco gekyk en gesê, dit is reg. Hy het vir my gekyk en gesê, ek gaan jou nou doodmaak, en ek gaan myself ook doodmaak . . . ek het vir hom gevra asseblief, los my net, laat ek vir hulle kan hulp kry, maar hy wou nie los nie, en ek het besef ek het nog steeds die selfoon in my hand, en net knoppies begin druk. Ek het losgeruk, en vooroor geval, halflyf in Millize se kamer in, en aanhou die knoppies druk op die selfoon. Hy het baie koel en kalm vir my gesê, "Gee vir my daardie selfoon", maar ek het nie. Toe trap hy my hand, my arm vas, en hy vat hom uit my hand uit, en gooi hom teen die muur . . . Hy het my weer regop gepluk en al wat ek op daardie stadium kon doen is byt hom in sy nek, want hy wou my nie los nie. Hy het losgeruk en my gelos, en ek het begin hardloop. Ek is by die agterdeur uit, en ek het gesien Millize lê daar.' The respondent then attempted to commit suicide. [42] The respondent said that he had no recollection of what had happened after the argument about the colonel had started and that his first recollection thereafter was when he came to in hospital. This evidence was not challenged by the State and is in any event irrelevant for present purposes. The reason I mention it is to explain that the respondent was unable to dispute the evidence of his wife as to what had transpired after the argument had begun. [43] There is evidence aliunde which supports the evidence of the respondent as to his state of mind on the day in question. The State formally admitted during argument before the court a quo that a psychiatrist had found that the respondent was depressed after his return from Burundi; that he showed tendencies to commit suicide; and that he used alcohol as an escape mechanism. Furthermore the State did not seek to attack his evidence as to the conversation he had had with the female friend who had conveyed him to O'Hagans, or the conversation he had had with his wife's cousin/niece that afternoon, either by cross-examining him on these aspects or by calling those persons to refute his evidence. [44] The explanation for the respondent's behaviour in shooting his wife and children is to be found in the unanimous report of the panel of three psychiatrists appointed in terms of ss 78 and 79 of the Criminal Procedure Act to evaluate his capacity to stand trial. The factual basis for the psychiatrists' opinion as expressed in the report and in particular, the three facts I emphasised at the beginning of this judgment, namely, the effect of the Burundi incident; the respondent's consumption of alcohol; and the effect the conduct of the colonel had had on him, was confirmed in the evidence before the court a quo. The contents of the report are admissible in terms of the provisions of s 79(6) of the Criminal Procedure Act. The relevant part of the report reads: 'He has been experiencing ongoing stress after the Burundi incident. This was aggravated by alleged advances of a fellow officer to his wife, and alcohol consumption prior to the time of the alleged offence. The nature of the alleged offence indicates impulsiveness, which was probably due to disinhibition on account of the alcohol consumption. However, the seriousness of his actions at the time of the alleged offence including the attempted suicide indicate that the distress he experienced on account of events in his life was deeper than he showed, and that provocation or disinhibition would break down his defences. The alleged amnesia is in keeping with the psychogenic suppression of events which a person's mind cannot accept and which are out of character with his personality. The accused has shown signs of depression during his time of observation and he has received treatment. It is likely that the depression was present but hidden at the time of the alleged offence, and that it became clinically significant after the alleged offence. He is deeply distressed by his actions and about the loss of his family. The accused will have to be considered a suicide risk for a long time to come, and will need regular psychological and medical attention.' (Emphasis supplied.) The significance of the report may be summarised as follows. There was 'provocation' consisting in the perceived advances made by the colonel to the respondent's wife, and his alcohol intake would have caused 'disinhibition'. Both of these factors aggravated his ongoing stress after the Burundi incident and would 'break down his defences' ─ resulting in diminished responsibility and the commission of a crime which 'indicates impulsiveness'. The Burundi incident is relevant to an understanding of the respondent's state of mind when he committed the offences on the day in question and in my respectful view my colleague's conclusion5 that 'the ongoing stress about the Burundi incident cannot be viewed as wholly mitigatory' loses sight of this fact. [45] In view of what I have set out above, there can to my mind be no doubt whatever that the respondent was acting with substantial 5 Para 26. diminished responsibility when he committed the offences which are the subject matter of this appeal and not merely, as my colleague says,6 'that he may have lost some objectivity'. If I had any doubt, I would propose that the sentences be set aside and the matter be remitted to the court a quo for expert evidence to be led on this issue, for to do otherwise could result in the imposition of a sentence not in accordance with justice: S v Rasengani.7 [46] I cannot, with respect, agree with the emphasis placed8 by my colleague on the following evidence: 'The evidence is also clear that he was cool and calm when he shot Janco and his wife as well as when he took careful aim at the fleeing Millize. His statement to his wife after he shot Janco, that he intended to wipe them all out and then commit suicide, shows a man who was in touch with reality and who was aware of what he was doing. That he was in control of his faculties is also illustrated by his demand of his wife's cell phone when she tried to call for help amidst the shooting. He clearly wanted to stop her calling for help as he wanted to finish them off.' These findings in my respectful view accord no weight to the fact that the respondent was acting with diminished responsibility, which probably continued at least until the time when he attempted to commit suicide. I would add that the mere fact that the respondent shot his wife and children on the spur of the moment to my mind raises at least a reasonable possibility that he was not acting completely rationally; and the onus was on the State to negative this possibility which, it cannot be gainsaid, it did not do. [47] It is important to distinguish between temporary non-pathological criminal incapacity, which is a defence because it excludes culpability, 6 Paras 25 and 26. 7 2006 (2) SACR 431 (SCA) paras 21 and 22. 8 Para 27. and diminished responsibility, which is not a defence but is relevant to sentence because it reduces culpability. The distinction is explained by Prof Snyman9 in comparing s 78(1) of the Criminal Procedure Act, which excludes criminal responsibility caused by mental illness or mental defect, with s 78(7), which allows a court to take into account diminished responsibility resulting from either cause in sentencing the accused. The learned author, with reference to s 78(7), says: 'This subsection confirms that the borderline between criminal responsibility and criminal non-responsibility is not an absolute one, but a question of degree. A person may suffer from a mental illness yet nevertheless be able to appreciate the wrongfulness of his conduct and act in accordance with that appreciation. He will then, of course, not succeed in a defence of mental illness in terms of section 78(1). If it appears that, despite his criminal responsibility, he finds it more difficult than a normal person to act in accordance with his appreciation of right and wrong, because his ability to resist temptation is less than that of a normal person, he must be convicted of the crime (assuming that the other requirements for liability are also met), but these psychological factors may be taken into account and may then warrant the imposition of a less severe punishment.' The same distinction applies where (as here) mental illness is not present, as appears from a number of judgments of this court. I shall refer to three. These cases also serve as illustrations of the approach taken by this court where criminal responsibility is not negatived but diminished responsibility is established. [48] In S v Smith10 this court said: 'Dr Berman was at the time the principal psychiatrist at Sterkfontein Mental Hospital and had since 1979 been involved in numerous Court cases of this nature. He has a wealth of experience in the field of mental illness and instability. He advanced a 9 Criminal Law, 4th ed para 12 p 174. 10 1990 (1) SACR 130 (A) at 135b-e. number of persuasive reasons for his opinion that the appellant was criminally responsible. It suffices to refer to the main ones. Her comments before the occurrence were rightly taken into account. I refer to her statement that if she could not have the deceased nobody would, and, on the day before the shooting, that she had previously contemplated dispatching him in the very manner in which she subsequently did. In the circumstances it is reasonable to infer that such actions were contemplated by her at times when she was frustrated and distraught at his behaviour. Dr Berman pointed out that the shooting involved unzipping her handbag, aiming the revolver at him and firing the three shots, one of which found its mark. These were deliberate acts, and according to Dr Berman, could not have been executed in a state of automatism or unconsciousness, particularly since she had never before used a firearm. Though she was obviously under great emotional stress, Dr Berman also considered that there were no grounds for concluding that she was unable to appreciate the wrongfulness of her conduct or to exercise self-control. These views are confirmed by what took place after the shooting. According to the two eye-witnesses, she appeared calm. After the shooting she did not realise that the deceased had been injured. Her instruction to Mrs Van der Merwe at that stage to "go and fetch him etc" indicates determination and persistence on her part to carry out a settled intention. In the light of this evidence it cannot be said that at the critical time the appellant was bereft of her senses or was not on any other ground criminally responsible for her actions. Having said this, it is nevertheless clear that her shooting of the deceased was the final result of a prolonged period of sustained and mounting mental strain, of which the deceased was the cause. Whether it was the result of anger, frustration or humiliation, or more than one of these emotions, is immaterial. What is plain is that they must have substantially reduced her power of restraint and self-control. This fact, though highly relevant to the question of sentence, cannot affect her criminal liability.' [49] In view of the approach taken by my colleague I would emphasise the following passage in S v Shapiro11 (the facts of which are set out below in para 53): 11 1994 (1) SACR 112 (A) at 123C-F. '[Counsel for the State's] main argument was that although he did not dispute [the psychologist called for the defence's] opinion, this Court should not lose sight of the unchallenged evidence of independent by-standers, that Shapiro's actions appeared to be cool, calm and calculated. Outwardly he gave no sign of emotional confusion. Moreover, the provocation he experienced was limited. He brutally executed a man who was helpless and dying. He acted without compunction, and thereafter showed a callous indifference to what he had done. The assumption underlying this argument is that the conduct of a person who has been found to have diminished criminal responsibility is to be measured by the same yardstick as the conduct of a person with undiminished criminal responsibility. Such an assumption is fallacious, for a person who has diminished criminal responsibility is by definition a person with a diminished capacity to appreciate the wrongfulness of his act, or to act in accordance with an appreciation of its wrongfulness.' [50] In S v Ingram12 (the facts of which are set out in para 56 below) this court said: 'The learned trial Judge correctly held that the appellant had acted under circumstances of diminished responsibility. He appreciated the need to give full effect thereto in arriving at a proper sentence. He sought guidance in relation to the vexed question of sentence in certain past decisions of this Court. He no doubt bore in mind that a sentence must be individualised and each matter dealt with according to its own peculiar facts. He then went on to say: "What distinguishes this case from the cases quoted is the behaviour of the accused after the shooting. His conduct, his emotions indicated an awareness of his acts. In my view there was a refusal to come to the assistance of this woman whose suffering at the time must have been extreme. This is an important factor that [must] be borne in mind." There would appear to be implicit in this statement a finding that the appellant acted in callous and wilful disregard of the plight of the deceased. The evidence does not, in my view, justify such finding beyond all reasonable doubt. From what the appellant said and did immediately after the shooting it may be inferred that he genuinely believed at the time that the deceased was dead. True, later events must have made 12 1995 (1) SACR 1 (A) at 8d-i. him realise that she was not. But he may well still have thought that she was beyond human assistance. When he stopped Dagny from going to the deceased he was probably acting in Dagny's interests by preventing her from being exposed to the traumatic sight of her dying mother rather than restraining her from going to the deceased's assistance. His state of intoxication and emotional stress at the time was not conducive to totally rational thought and behaviour. His primary concern at that stage appears to have been the immediate welfare of the children. In the circumstances it is not the only reasonable inference that he callously refused to go to her assistance, or deliberately stopped anyone else from doing so. There was accordingly a material misdirection by the trial Judge which leaves this Court at large to consider the question of sentence afresh.' (Emphasis supplied.) [51] The law is clear: the fact that the defence of temporary non- pathological criminal incapacity fails, or is not raised, does not have the consequence that the accused must be sentenced if he/she was acting normally. The contrary is the case. A person who acted with diminished responsibility is guilty, but his/her conduct is morally less reprehensible for the very reason that the criminal act was performed when the accused was not fully in control and therefore acting with impaired judgment. [52] There is accordingly in my view a choice in this matter: either one should accept that the respondent acted with substantial diminished responsibility and accord proper weight to that fact; or the matter should be sent back to the court a quo to enable expert evidence to be led on the extent to which the respondent acted with diminished responsibility, based on the evidence led at the trial. That evidence was not available to the panel of psychiatrists who gave the report and it seems improbable that they would have known the details of how the crimes were committed as the respondent was suffering from amnesia. I would follow the former course. I do not consider that sentencing the respondent on the basis that there was no, or little, diminished responsibility is an option in the absence of such evidence. [53] The representative of the State on appeal was unable to produce a single case where an accused acting with diminished responsibility when committing murder was sentenced to more than ten years' imprisonment. I have found none and nor, apparently, has my colleague. Of course every case depends on its own facts, but the sentence considered appropriate by my colleague in this case would in my respectful view be so out of step with the decisions of this court to which I am about to refer, even making allowance for the factual differences with this case, as to be unjustifiable. Nor do I consider that the effect of the minimum sentence legislation13 requires the imposition of the sentence he considers appropriate on the murder charges. That legislation does not require a 'severe, standardised and consistent'14 response from courts, in the imposition of sentences for crimes it specifies, where substantial and compelling circumstances are present. And although the sentence to be imposed in lieu of the prescribed sentence must be assessed paying due regard to the bench mark which the Legislature has provided,15 the bar has not in my judgment been raised to the extent that 18 years' imprisonment can be justified when not more than 10 years was previously imposed, especially when the prescribed sentence for murder, which is not premeditated, is 15 years' imprisonment. [54] I turn to consider the cases. The facts in S v Shapiro16 are adequately set out in the headnote, which reads as follows: 13 Criminal Law Amendment Act 105 of 1977. 14 S v Malgas 2001 (2) SA 1222 (SCA); 2001 (1) SACR 469 (SCA); [2001] 3 All SA 220 (A); para 8. 15 Ibid para 25J. 16 Above, n 11. 'The respondent, who was 27 years of age and a partner in a restaurant business, had shot the deceased, who was a drug addict and a drug dealer, in cold blood in the foyer of a hotel. The evidence revealed that the respondent and the deceased had become friends through the respondent's fiancé. From time to time the deceased provided the respondent and his fiancé with cocaine free of charge and regularly visited the couple and stayed over with them. The deceased's abuse of drugs escalated seriously during the few months prior to his death and his behaviour deteriorated accordingly ─ he became aggressive and made threats against a number of people. He became unpredictable and paranoic. At a certain stage he began accusing the respondent's fiancé of stealing his cocaine and thereafter assaulted her and made a number of threats to kill her. The respondent took these threats seriously and arranged for her to go to Israel until the dust had settled. On the day of the murder the deceased arrived at the respondent's flat, threatened his fiancé and attacked her. The respondent arrived 10 minutes later and after having ascertained what had happened, went to a nearby hotel where he found the deceased. He drew his firearm, aimed and fired six shots at him. He turned to walk out of the hotel but then reloaded the firearm, walked back into the foyer and fired a seventh shot.' The sentence imposed was seven years' imprisonment of which four years was conditionally suspended. The Attorney-General appealed against the sentence on the basis that it was shockingly inappropriate. This court pointed out17 that 'central to the judgment [of the court a quo] on sentence is the finding that however brutal and callous Shapiro's actions may seem, he acted with substantial diminished criminal responsibility'. After considering the arguments for the State, this court concluded18 that although the sentence might be considered to be lenient, it did not satisfy that test. 17 At 120c-d. 18 At 124d-e. [55] A more recent case in which the State cross-appealed against the sentence imposed is S v Kok.19 The facts are set out in the headnote as follows: 'The appellant was a superintendent in the South African Police Service at the time of the alleged offence. It appeared that a dispute had arisen between the appellant's wife and one of the deceased (Mrs B, who was a colleague of the appellant) over the return of two table cloths. Mrs B had instituted proceedings in the small claims court against the appellant's wife for the return of the table cloths and was awarded R600 in damages. After work one afternoon whilst the appellant was discussing angling club matters with two colleagues over a few drinks, he got a call from his wife to the effect that the sheriff was at their house making an inventory. The appellant returned home and found his wife and disabled son in a very distressed state. He collected his pistol and then proceeded to the police station where he removed an R1 rifle, ammunition, hand grenade and a combat jacket from a safe and loaded the[m] into the boot of his car where there was already a shotgun with a pistol grip. The appellant then proceeded to the home of Mr and Mrs B, entered their house and shot them both. Their son emerged from the bathroom and the appellant pointed the shotgun at him but he ran into his bedroom and escaped through a window after breaking the window pane. The appellant fired the shotgun through the bedroom door but the deceaseds' son escaped unscathed.' The appellant was sentenced to ten years' imprisonment on each of the murder counts and to five years' imprisonment on the attempted murder charge, and the sentences were ordered to run concurrently so that the effective period of imprisonment imposed was ten years. This court refused to interfere either at the suit of the appellant or the State.20 [56] There are also several cases in this court where the accused was found to have acted with diminished responsibility and appealed against 19 2001 (2) SACR 106 (SCA). 20 Para 27. the sentence imposed for murder.21 In S v Laubscher22 the facts as summarised in the English version of the headnote were the following: 'The appellant was a 23-year-old medical student whose intelligence, according to the evidence, was that of a genius, he was courteous, an introvert and emotionally very sensitive with a very low threshold for enduring tension. He embarked on a relationship with one C who later became pregnant, whereafter they married. Appellant's parents-in-law did not accept him and were cold and aloof towards him. After the birth of their child, C's parents came and fetched C and took her and the child back to their farm. C thereupon instituted a divorce action against the appellant. On a certain weekend the appellant arranged with C that he would collect her and the child and take them to his parents for the weekend. When he went to fetch C, however, C had changed her mind and no longer wished to accompany him. On the subsequent Monday the appellant again arranged with C that he would fetch her and the child and when he kept the appointment he was told by C in the presence of her parents that she was not willing to go with him and he was told by C's father to leave the house. The appellant then left but returned later, demanding that he be given the child. He began to shoot into various rooms of the house with his pistol and altogether discharged 21 rounds, one of which hit and killed C's father.' The appellant was sentenced to six years' imprisonment for the murder. Joubert JA said at the conclusion of his judgment:23 'Wat vonnisoplegging betref, is een van die uitstaande faktore dat die appellant gewis aan geweldige stres blootgestel is, wat hoofsaaklik aan die optrede van sy skoonouers en sy vrou Cecilia toe te skryf is, toe hy die misdade gepleeg het. Wat die kumulatiewe effek van die opgelegde vonnisse betref, is ek oortuig dat 'n gepaste vonnis op aanklag 1 ses jaar gevangenisstraf is waarvan die helfte voorwaardelik vir vyf jaar opgeskort word terwyl die vonnisse van een jaar gevangenisstraf elk op aanklagte 2, 3 en 4 daarmee saamlopend is. Sodanige vonnis verskil aanmerklik van die opgelegde vonnisse sodat hierdie Hof bevoeg en verplig is om in te gryp.' 21 In addition to those which I shall deal with in some detail, they include S v Calitz 1990 (1) SACR 119 (A), S v Kalogoropoulos 1993 (1) SACR 12 (A), S v Potgieter 1994 (1) SACR 61 (A) and S v Kensley 1995 (1) SACR 646 (A). 22 1988 (1) SA 163 (A). 23 173F-G. [57] In the earlier case of S v Ingram24 the appellant shot and fatally wounded his wife at their home. The headnote summarises the facts as follows: 'The evidence showed that the appellant and the deceased were married in 1972 and that they had two teenage children. They were in the throes of protracted divorce proceedings, and it was shown that their marriage was "unhappy and tempestuous". The deceased had an alcohol problem and had relationships with other men. She was frequently abusive towards the appellant and the children. On the day of the shooting both appellant and deceased were intoxicated and became involved in a heated argument. Later that evening the children helped their mother to her bedroom; the appellant followed them to the room and shot the deceased, causing her death.' The appellant was sentenced to eight years' imprisonment. This court held that the trial court had misdirected itself on sentence,25 set the sentence aside and remitted the matter to the trial court to consider correctional supervision in terms of s 276 (1)(h) of the Criminal Procedure Act which, as the court pointed out,26 could not be imposed for a period exceeding three years. [58] My colleague has referred to a number of other cases, namely S v Di Blasi,27 S v Nel, 28 S v Martin,29 Dikana v S30 and the unreported case Van Heerden v S. In none of those cases was the accused found to have acted with diminished responsibility ─ indeed, in some the accused was expressly found not to have so acted31 ─ and there is in my respectful view no justification whatever in any of them to increase the sentence in the present case. I should perhaps deal in particular with Van Heerden v 24 Above, n 12. 25 The misdirection is quoted in para 49 above. 26 At 9F. 27 1996 (1) SACR 1 (A), see pp 7g to 8c. 28 2007 (2) SACR 481 (SCA). 29 1996 (1) SACR 172 (W), see p 178g. 30 2008 [2] All SA 182 (E), see para 7. 31 See the passages referred to in footnotes 27, 29 and 30 above. S. This court commented that the trial court had found that the first appellant's 'mental and emotional condition was a mitigating factor', but pointed out that 'the murders were carefully planned and viciously executed. They were not carried out on the spur of the moment. Nor were they the product of an unstoppable rage'. [59] It was submitted by the representative of the State on appeal that the respondent had shown regret, not remorse. I cannot agree. The following passage in the respondent's evidence is particularly poignant: 'Ek voel baie seer, en ek soek my vrou en my kinders terug, en ek wil by skoonfamilie wees, daar met my vrou, en net huil tot daar niks meer oor is in my nie. Ek wil by my kinders se graf staan en met hulle gesels, en vir hulle sê ek is jammer wat ek gedoen het, maar ek weet nie wat ek gedoen het nie.' The trial court had the opportunity of observing the respondent whilst he testified and, as appears from the remarks made by the court during argument and in the judgment, it had no hesitation in concluding when sentencing the respondent that: 'Dit is dus duidelik dat hy nie net bloot berou het oor sy optrede nie, maar dat hy bitter, bitter spyt is oor wat hy gedoen het.' [60] There are undoubtedly aggravating features present in this case. The respondent's wife has been left bereft of her children ─ as she said: 'Hy het altwee my kinders weggeneem. Nie net een nie. Ek is nie meer 'n ma nie.' At the time of the trial she was receiving psychiatric treatment, medication to enable her to sleep and antidepressants. She said: 'Elke dag is hel'. Yet no matter how successful the treatment might be, her life can never be the same again. Nor can her parents', with whom she lives. They have been deprived of their grandchildren and her father was not able to attend the trial because his heart condition had noticeably weakened in consequence of the murders. In addition murder of one's children has through the centuries been regarded by society with particular abhorrence. Yet I do not consider that these facts, nor the advent of the minimum sentence legislation, renders the sentences imposed by the court a quo shockingly (and I emphasise the word 'shockingly') inappropriate, much less that they justify almost doubling the highest sentence previously considered appropriate by this court where the accused acted with diminished responsibility. To my mind substantial and compelling circumstances are clearly present in this matter and the State's representative conceded as much in argument before this court. [61] My colleague emphasises the elements of retribution and deterrence in his judgment as justification for increasing the sentences imposed by the court a quo. So far as retribution is concerned, I respectfully agree with the following views expressed by this court in S v Shapiro:32 '[T]here can be no doubt that the community must view this crime with abhorrence. I do not believe, however, that right-thinking men would demand condign punishment in a case where the accused acted with substantially diminished criminal responsibility . . . I do not think that in the light of the finding of diminished responsibility this case is one which is clamant for retribution.' So far as the deterrence is concerned, the respondent is a first offender; there is no suggestion that he is a violent person ─ indeed the panel of psychiatrists found that his amnesia was in keeping with a suppression of events which were 'out of character with his personality'; and it does not seem that the respondent is a danger to society at large, so his removal from the community for a long time is not necessary for that reason. In such circumstances, this court has repeatedly held that deterrence of a person who commits murder acting with diminished responsibility, is not 32 Above, n 11, at 123i-j and 124b-c. an important factor when it comes to punishment: see for example S v Campher,33 S v Smith,34 S v Ingram 35 and S v Shapiro.36 Deterrence of others is also not important in a case such as the present. This court held in S v Shapiro:37 'In regard to the deterrence of others, it does not seem to me that in the present case a long prison sentence is called for. The concatenation of circumstances was highly unusual and is unlikely to occur again.' The same applies here. I would merely add that to my mind there would seem to be little purpose in attempting to deter a person not in full control of his or her faculties. [62] I therefore conclude that although the sentences imposed by the trial court may have been less than the sentences I might have imposed, they are not shockingly inappropriate in view of the fact that the respondent acted with substantial diminished responsibility; and that there is no justification, bearing in mind previous sentences imposed by the courts, and despite the minimum sentence legislation, almost to double the effective period of imprisonment imposed by the trial court ─ and particularly not for the reasons suggested by my colleague. I would therefore dismiss the appeals by the State against the sentences imposed on the murder charges. ________________ T D CLOETE JUDGE OF APPEAL 33 1987 (1) SA 940 (A) at 964C-H and 967D-E. 34 Above, n 10, at 136b. 35 Above, n 12, at 9b. 36 Above, n 11, at 124c-d. 37 Ibid. NUGENT JA [63] I have read the judgments of my colleagues and agree with the order that is proposed by Mlambo JA but regrettably I have found it necessary to add some observations of my own. [64] I do not understand Mlambo JA to suggest that the criminal responsibility of the respondent was undiminished at the time he committed the crimes. I think it is perfectly clear that the respondent was in a state of distress that contributed to his conduct. Had that not been the case I would have sentenced him to life imprisonment. [65] The difference between my colleagues seems to me to lie rather in the degree to which each considers the respondent’s powers of restraint and self-control to have been diminished. For what has come to be referred to as diminished criminal responsibility is not a definite condition. It is a state of mind varying in degree that might be brought about by a variety of circumstances. The circumstances that produce that state of mind – the effects of alcohol, jealousy, distress, provocation, and the like – have always been matters to be taken account of in mitigation and I do not think anything is altered when they are brought together under a label. My colleague Cloete views those circumstances in this case as having substantially reduced the respondent’s powers of restraint and self-control – my colleague Mlambo views them as being considerably less than substantial – and it seems to me that that is where the difference between them lies. [66] My colleague Cloete is of the view that we have a choice of only two courses in this case. Either we must accept his view of the matter or the matter must be referred back to the court below for further evidence. But of course my colleague is not correct. There is a third option that is always available to a court, which is for members of the court to each proceed in the ordinary way to reach their independent conclusions notwithstanding that they differ, and in that way the process of justice will take its ordinary course. [67] My colleague Cloete finds the evidence sufficient to enable him to reach a proper conclusion and I find myself in the same fortunate position. We are not dealing in this case with a pathological condition that requires expert medical opinion to guide a court in reaching its conclusion. We are dealing with the weight to be attached to a set of factors that might have operated on the respondent’s mind to diminish his culpability. While the insights of psychiatrists or psychologists might at times be helpful they are not indispensable in that enquiry. For ultimately a court must reach its own conclusion on that issue on an assessment of all the evidence.38 The problem in this case is not the sufficiency of the evidence but rather the divergent views that we take of its meaning. [68] With his customary lucidity and clarity my colleague Cloete has set out everything that might be said for the respondent. But like my colleague Mlambo I regret that I do not attach the weight that he does to the mitigatory effect of the evidence. [69] There is no doubt that the respondent’s capacity for sound judgment and rational thought were diminished at the time he committed the crimes – the very nature of the crimes are testimony to that. But this was not a man who committed his crimes in an uncontrollable rage – his 38 S v Laubscher 1988 (1) SA 163 (A) 172A-G. distress manifested itself rather in a morbid resignation to suicide but determined that he should be accompanied by his unwilling family. After snatching Janco from his wife and returning to the house the respondent was quite able to telephone her mother and conduct a conversation, telling her that ‘nee ma, alles is oraait, Millie is net ‘n bietjie ontsteld’. He was quite calm enough to then smoke a cigarette. He was calm enough to thank his wife affectionately for what she had meant to him. He walked into the house exhibiting no sign that anything was to occur. After shooting Janco he exhibited no rage as he then shot his wife. He was sufficiently in control to calculatedly aim the rifle at his fleeing daughter and shoot her as well. No doubt he was brought to the morbid state that enabled him to commit those acts by severe distress but they did not occur in a spurt of uncontrollable rage. [70] It is tragic whenever a man reaches a state of despair that resigns him to suicide but the law would fail if it did not make it absolutely clear that his wife and children are not his property to take with him to eternity. I said earlier that but for the respondent’s considerable despair the proper sentence would have been life imprisonment. It seems to me that a reduction of that sentence to eighteen years’ imprisonment as proposed by my colleague Mlambo takes full account of his diminished responsibility. _______________ R W NUGENT 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 DIRECTOR OF PUBLIC PROSECUTIONS: TRANSVAAL V PHILLIPUS JACOBUS VENTER The Supreme Court of Appeal (SCA) today upheld an appeal by the Director of Public Prosecutions against an effective sentence of 10 years’ imprisonment imposed on the respondent by the Nelspruit Circuit Court (the trial court). The respondent had been convicted amongst others of the attempted murder of his wife and the murders of his five and four year daughter and son respectively. He had also attempted to commit suicide after committing the offences by cutting his wrists. The trial court had, in imposing the 10 year sentence, found that the respondent was undergoing severe stress, relating to rape and murder charges he was facing in Burundi, aggravated by alcohol intake and advances made on his wife by a fellow officer. The Supreme Court of Appeal found that the trial court had, in sentencing the respondent as it did, over emphasized his personal circumstances. The Supreme Court of Appeal found that this was the type of matter where the respondent’s personal circumstances were outweighed by society’s need for retribution and deterrence. In this regard the Supreme Court reasoned that properly considered the offences committed by the respondent warranted a life sentence but taking into account the nature of his personal situation it would be unjust to impose that sentence. The court consequently set aside the 10 year sentence imposed by the trial court and substituted a sentence of 18 years in its stead.

55

non-electoral

2017

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 799/2016 In the matter between: MORAITIS INVESTMENTS (PTY) LTD FIRST APPELLANT APOSTOLOS MORAITIS NO (as trustee of the Moraitis Trust) SECOND APPELLANT ANTHANASIOS MORAITIS NO (as trustee of the Moraitis Trust) THIRD APPELLANT CHRISTOS MORAITIS NO (as trustee of the Moraitis Trust) FOURTH APPELLANT APOSTOLOS MORAITIS FIFTH APPELLANT and MONTIC DAIRY (PTY) LTD FIRST RESPONDENT MONTIC TRANSPORT (PTY) LTD SECOND RESPONDENT EMONTIC INVESTMENTS (PTY) LTD THIRD RESPONDENT MONTIC ASSETS (PTY) LTD FOURTH RESPONDENT HUNTERS PROPERTIES (PTY) LTD FIFTH RESPONDENT TROPICA FOODS (PTY) LTD SIXTH RESPONDENT TROPICA INVESTMENTS (PTY) LTD SEVENTH RESPONDENT KARL KEBERT NO (as trustee of the Karl Kebert Trust) EIGHTH RESPONDENT MICHAEL SEGAL NO (as trustee of the Karl Kebert Trust) NINTH RESPONDENT SOLLY GROSS NO (as trustee of the Karl Kebert Trust) TENTH RESPONDENT APOSTOLOS MORAITIS NO (as trustee of the Karl Kebert Trust) ELEVENTH RESPONDENT KARL KEBERT NO (as executor of the late Julie Lamer) TWELFTH RESPONDENT KARL KEBERT THIRTEENTH RESPONDENT THE SHERIFF, JOHANNESBURG FOURTEENTH RESPONDENT Neutral citation: Moraitis Investments (Pty) Ltd v Montic Dairy (Pty) Ltd (799/2016) [2017] ZASCA 54 (18 May 2017) Coram: LEACH, TSHIQI, WALLIS and SALDULKER JJA and FOURIE AJA Heard: 8 May 2017 Delivered: 18 May 2017 Summary: Settlement agreement – order of court – grounds for rescinding order – lack of authority to conclude settlement agreement – failure to prove lack of authority – ss 75, 112 and 115 of the Companies Act 71 of 2008 – principle of unanimous assent ORDER On appeal from: Gauteng Division, Johannesburg of the High Court (Matojane J, Hawyes AJ concurring, Moshidi J dissenting): The appeal is dismissed with costs. JUDGMENT Wallis JA (Leach, Tshiqi and Saldulker JJA and Fourie AJA concurring) [1] An agreement of settlement, especially one made an order of court, is usually a sign that the hostilities between the litigants have ended. In this case it led to a new front being opened in the conflict between the parties. The fresh bone of contention was the authority to conclude the settlement agreement. The appellants contended that the fifth appellant, Mr Apostolos Moraitis (Mr Moraitis), was not authorised to conclude the settlement agreement by either the first appellant, Moraitis Investments (Pty) Ltd (Moraitis Investments), or the Moraitis Trust. The trust is represented in the present litigation by Mr Moraitis and his two brothers, the trustees of the trust and in that capacity the second to fourth appellants. They accordingly brought proceedings against all the other parties to the settlement agreement seeking to have it, and the order making it an order of court, set aside. The application succeeded at first instance, but an appeal to the full court of the Gauteng Division, Johannesburg of the High Court (Matojane J, with Hawyes AJ concurring and Moshidi J dissenting) overturned that decision and dismissed the application. This further appeal is with the special leave of this court. The background [2] The principal actors in this drama were Mr Moraitis and the thirteenth respondent, Mr Karl Kebert. For many years they were engaged in business together. The main business was a dairy business conducted through a company, Montic Dairy (Pty) Ltd (Montic), the first respondent. Other companies were formed to hold properties and engage in other activities related to the dairy business. These are the second to sixth respondents. As is customary, Mr Moraitis and Mr Kebert held their respective interests indirectly. In Mr Moraitis‟ case, the vehicle was the Moraitis Trust of which he and his daughters were the capital beneficiaries. The Moraitis Trust was the sole shareholder of Moraitis Investments, which held a 20 percent stake in each of the first, second, fourth, fifth and sixth respondents and a 25 per cent stake in the third respondent. [3] Mr Kebert held his interests in the companies through the Karl Kebert Trust (the Kebert Trust),1 which is represented in this appeal by the eighth to eleventh respondents. The Kebert Trust owned 100 per cent of the shares in Tropica Investments (Pty) Limited (Tropica Investments) the seventh respondent, which in turn was the owner of the balance of the shares in the first, second, third, fourth, fifth and sixth respondents. [4] In 2006 Mr Moraitis and Mr Kebert fell out. Litigation ensued before what was then the North Gauteng High Court. Moraitis Investments and the Moraitis Trust sought the liquidation of the six companies in which Moraitis Investments held shares, alternatively an 1 In some places in the papers this is referred to as the Karl Kebert Family Trust but it is unnecessary to resolve this discrepancy. order that the shares owned by Moraitis Investments be purchased by the respondents. They alleged that winding up the companies would be just and equitable, or that a purchase order would put an end to the deadlock between Mr Moraitis and Mr Kebert. On 19 October 2007, Sapire AJ made an order, pursuant to an agreement between the parties to that litigation, that Tropica Investments and the Kebert Trust, to which he referred compendiously as the Kebert Group, would purchase the shares owned by Moraitis Investments in the various companies. The parties agreed, and Sapire AJ ordered, that an independent third party, acting as a valuer, would determine the purchase price of the shares and loan accounts. Ernst & Young Advisory Services Limited (Ernst & Young) was appointed to undertake the valuation. Its valuation, which would have involved the payment of a little over R5 million to Moraitis Investments, satisfied no-one. The companies whose shares were to be valued, together with Tropica Investments and the Kebert Trust, commenced proceedings to set aside the valuation and have a far lower valuation substituted for it. Moraitis Investments and the Moraitis Trust opposed those proceedings and it was suggested that in truth there had been an under-valuation. [5] While these latter proceedings were ongoing, Mr Kebert, in his capacity as the executor in his late mother‟s estate, commenced an action in the then South Gauteng High Court against Mr Moraitis personally. He sought payment of a substantial sum in respect of the purchase price of his late mother‟s interest in the company owning the Exotica Hotel on the island of Zakynthos. He alleged that his mother and Mr Moraitis had jointly developed the hotel, which was being run by the latter‟s children, and that prior to her death she had agreed to transfer her interest to Mr Moraitis for €500 000. The overall picture is of litigious hostilities extending over a broad front involving all of the parties to the present proceedings and being conducted simultaneously in the Pretoria and Johannesburg courts. [6] When the dispute regarding the hotel was set down for hearing the parties engaged in intensive negotiation, instigated by Mr Moraitis‟ attorney, leading to the drafting and signature of the settlement agreement. The agreement recorded that it was in settlement of case number 2009/52206, being the litigation over the hotel, and also of the two cases in the North Gauteng High Court, namely case number 41065/2006 (the liquidation application) and case number 23631/2010 (the valuation dispute). It reflected all of the parties to the current litigation as parties to the settlement, but there were only two signatories, namely Mr Moraitis and Mr Kebert. Each signed on behalf of all the various entities falling on their own side of the fence. Of importance for present purposes is that Mr Moraitis signed on behalf of Moraitis Investments and the Moraitis Trust. Both he and Mr Kebert warranted that they were duly authorised to sign on behalf of the trusts and companies whom they purported to represent. The settlement agreement was then made an order of court by Mojapelo DJP. [7] The settlement provided for the shares held by Moraitis Investments in the first to sixth respondents to be transferred to Mr Kebert or his nominee against payment to Mr Moraitis of R600 000. On behalf of his mother‟s estate and himself Mr Kebert abandoned any claims in relation to the hotel. The agreement was partially implemented in the sense that a payment of R600 000 due to Mr Moraitis was made. Problems surfaced when transfer was demanded of the shares held by Moraitis Investments in the six companies. [8] On 30 September 2013 the present proceedings were launched in the South Gauteng High Court2 with a view to having both the settlement agreement and the order of court set aside. The principal contention in regard to the invalidity of the settlement agreement was that Mr Moraitis had not been authorised by the Moraitis Trust and Moraitis Investments to conclude it on their behalves and that it was therefore invalid and unenforceable against them. The relevant allegations were made by Mr Moraitis on behalf of both Moraitis Investments and the Moraitis Trust, without a trace of embarrassment or an explanation of the basis on which he had originally warranted his authority to act on their behalves. Alternative arguments that he advanced were that the agreement involved the disposal of the whole of the business of Moraitis Investments and that he and Mr Kebert had personal interests in the transaction. As such he invoked ss 75, 112 and 115 of the Companies Act 71 of 2008 (the Companies Act) to contend that the agreement was unlawful and void. In regard to the order making the agreement an order of court, he contended that once it was shown that the agreement was invalid or unenforceable for any of these reasons the court order fell to be set aside. The law [9] The focus of the original judgment by Windell J and those delivered in the full court fell on the issue of Mr Moraitis‟ authority to execute the settlement agreement on behalf of the Moraitis Trust and Moraitis Investments. That was not surprising, because the application and the argument was premised on the proposition that by virtue of the claimed lack of authority the settlement agreement itself was void and 2 This was a misnomer as by then the court had become the Gauteng, Johannesburg Division of the High Court. unenforceable. Building on that it was contended that it followed a fortiori that the consent order had to be set aside. The points raised in terms of the Companies Act were hardly addressed. [10] In my view that was not the correct starting point for the enquiry, because it ignored the existence of the order making the agreement an order of court. Whilst terse the order was clear. It read: „The Agreement of Settlement signed and dated 05 September 2013 is made an order of court.‟ For so long as that order stood it could not be disregarded. The fact that it was a consent order is neither here nor there. Such an order has exactly the same standing and qualities as any other court order. It is res judicata as between the parties in regard to the matters covered thereby.3 The Constitutional Court has repeatedly said that court orders may not be ignored. To do so is inconsistent with s 165(5) of the Constitution, which provides that an order issued by a court binds all people to whom it applies.4 The necessary starting point in this case was therefore whether the grounds advanced by the applicants justified the rescission of the consent judgment. If they did not then it had to stand and questions of the enforceability of the settlement agreement became academic. [11] The heads of argument did not address the grounds for the rescission of a judgment in any detail, so the parties were afforded an 3 Eke v Parsons 2016 (3) SA 37 (CC) paras 29-31; Provincial Government North West and Another v Tsoga Developers CC and Others [2016] ZACC 9; 2016 (5) BCLR 687 (CC) para 47. 4 Department of Transport and Others v Tasima (Pty) Ltd [2016] ZACC 39; 2017 (2) SA 622 (CC) paras 177-183. There is a narrow exception where a court makes an order that is on its face beyond its powers, as with the order to appoint a specific individual as a provisional liquidator that was in issue in Master of the High Court (North Gauteng High Court, Pretoria) v Motala NO and Others [2011] ZASCA 238; 2012 (3) SA 325 (SCA). That order was invalid as the power to appoint a provisional liquidator was exclusively vested in the Master and accordingly the Master could not be held to be in contempt by declining to make the appointment. See Tasima para 197 and Provincial Government North West v Tsoga Developers CC and Others [2016] ZACC 9; 2016 (5) BCLR 687 (CC) para 50. opportunity to deliver supplementary heads. Those delivered on behalf of the appellants were dismissive of the court‟s concerns in this regard, describing them as not germane to the appeal, beyond raising the possibility that Mr Moraitis may have perpetrated a fraud. This was a surprising contention, coming as it did, from counsel representing him. It is unusual for a lawyer to charge their client with fraud. In this case the even more surprising implication was that in bringing the application Mr Moraitis was seeking to rely on his own fraud. The supplementary heads delivered on behalf of the respondents submitted that absence of authority did not fall within the narrow grounds that our courts recognise as justifying the setting aside of an order of court. [12] The issue is far more nuanced than the arguments suggest. The approach differs depending on whether the judgment is a default judgment or one given in the course of contested proceedings. In the former case it may be rescinded in terms of either rule 31(2)(b) or rule 42 of the Uniform Rules, or under the common law on good cause shown.5 In contested proceedings the test is more stringent.6 A judgment can be rescinded at the instance of an innocent party if it was induced by fraud on the part of the successful litigant, or fraud to which the successful litigant was party.7 As the cases show, it is only where the fraud – usually in the form of perjured evidence or concealed documents – can be brought home to the successful party that restitutio in integrum is granted and the judgment is set aside. The mere fact that a wrong judgment has been given on the basis of perjured evidence is not a sufficient basis for setting aside the judgment. That is a clear indication that once a judgment 5 De Wet and Others v Western Bank Ltd 1979 (2) SA 1031 (A). 6 Ibid at 1041B-E. 7 Makings v Makings 1958 (1) SA 338 (A); Rowe v Rowe 1997 (4) SA 160 (SCA) at 166G-J. has been given it is not lightly set aside, and De Villiers JA said as much in Schierhout.8 [13] Apart from fraud the only other basis recognised in our case law as empowering a court to set aside its own order is justus error.9 In Childerley, where this was discussed in detail, De Villiers JP said that „non-fraudulent misrepresentation is not a ground for setting aside a judgment‟ and that its only relevance might be to explain how an alleged error came about. Although a non-fraudulent misrepresentation, if material, might provide a ground for avoiding a contract,10 it does not provide a ground for rescission of a judgment. The scope for error as a ground for vitiating a contract is narrow and the position is the same in regard to setting aside a court order.11 Cases of justus error were said to be „relatively rare and exceptional‟.12 Childerley was considered and discussed by this court in De Wet13 without any suggestion that the principles it laid down were incorrect. [14] The same issue arose indirectly before this court in Gollach and Gomperts.14 I say indirectly because the case was not concerned with a judgment, but with the avoidance of an agreement of compromise (a transactio) on the basis of non-disclosure. The judgment repays careful consideration. The general principles were stated as follows:15 8 Schierhout v Minister of Justice 1927 AD 94 at 98. 9 Childerley Estate Stores v Standard Bank of South Africa Ltd 1924 OPD 163 (Childerley). 10 GB Bradfield Christie’s Law of Contract in South Africa 7 ed (2016) para 7.1, p 315-6. 11 Childerley at 165 and 168. 12 Childerley at 166. 13 De Wet fn 5 ante. 14 Gollach & Gomperts (1967)(Pty) Ltd v Universal Mills & Produce Co (Pty) Ltd 1978 (1) SA 914 (A) at 922F-H (Gollach and Gomperts). 15 Gollach and Gomperts at 922B-E. „A transactio, whether extra-judicial or embodied in an order of Court,16 has the effect of res judicata. …It is obvious that, like any other contract (and like any order of Court), a transactio may be set aside on the ground that it was fraudulently obtained. There is authority to the effect that it may also be set aside on the ground of mistake, where the error is justus.‟ The judgment then referred to Childerley and the refusal to accept that a judgment could be set aside on the grounds of justus error induced by a non-fraudulent misrepresentation. It continued as follows: „The matter then before the Court was an action to set aside a judgment delivered in a defended case. Concerning judgments entered by consent, the learned JUDGE- PRESIDENT accepted that they could, “under certain circumstances”, be set aside “on the ground of just error”. It appears to me that a transactio is most closely equivalent to a consent judgment. Such a judgment could be successfully attacked on the very grounds which would justify rescission of the agreement to consent to judgment. I am not aware of any reason why justus error should not be a good ground for setting aside such a consent judgment, and therefore also an agreement of compromise, provided that such error vitiated true consent and did not merely relate to motive or to the merits of a dispute which it was the very purpose of the parties to compromise.‟ (Emphasis added.) [15] The appellants seized upon the passage highlighted in the above quotation to contend that it provided authority for the broad proposition that any ground justifying the avoidance of a contract would also provide grounds for setting aside a consent judgment granted pursuant to an agreement of compromise. In my view that inverts what Miller JA was saying, by reading that sentence without regard to what preceded it. Miller JA had dealt with the grounds on which a court could set aside a judgment, and identified fraud and, in limited circumstances, justus error 16 An extra-judicial transactio is an agreement of compromise between the parties that is not made an order of court. It is said to have the effect of res judicata because, like a judgment, it finally disposes of the disputes that are the subject of the compromise. They may not be resuscitated, in the same way as a court order precludes the parties from resuscitating their dispute. as providing such grounds. He then drew an analogy between a consent judgment and a transactio and said that the grounds upon which a judgment could be attacked were the very grounds justifying rescission of the agreement to consent to judgment. As he had just dealt in detail with the grounds for setting aside a consent judgment, it can hardly be thought that he was intending to say that there were other unspecified grounds, or that any grounds existing at common law for avoiding an agreement would also provide a basis for rescinding a consent judgment granted pursuant to that agreement. That would have involved over-ruling what had been said in Childerley in the passage he had cited without criticism. His judgment cannot be taken to say anything more than that fraud and justus error, where sufficient to set aside a judgment, would also be sufficient to set aside a compromise that gave rise to that judgment. [16] Counsel for the respondents, Mr Symon SC, very properly drew our attention to the judgment of Van Zyl J in Kruisenga,17 where he said that: „The principle is that when a judgment is not passed on the merits of a dispute … but rather derives its existence from an agreement, its continued existence is subject to the validity of the agreement.‟ There are two difficulties with this statement. First, the distinction it draws, between judgments „not passed on the merits of a dispute‟ and other judgments, lacks any foundation in our jurisprudence. There is no difference in law between an order granted in the case of a default judgment; an order pursuant to a settlement prior to the conclusion of opposed proceedings; or the order in a judgment pronounced at the end of a trial or opposed application. As the Constitutional Court has said it is an 17 MEC for Economic Affairs, Environment and Tourism v Kruisenga and Another 2008 (6) SA 264 (Ck) para 53 (Kruisenga). order „like any other‟.18 Second, the proposition is over-broad and inconsistent with the authorities discussed above. Were it correct a material, but non-fraudulent, misrepresentation justifying rescission of the agreement of compromise would also justify the rescission of the judgment granted pursuant to that compromise, but that is not the case. Its defect lies in approaching the question from the direction of the agreement instead of from the direction of the judgment. The latter is the correct approach, because the judgment operates as res judicata and precludes a claim based on the agreement.19 Unless and until the judgment has been set aside, there can be no question of attacking the compromise agreement. It follows that the necessary starting point for the enquiry must be whether there are grounds upon which to seek rescission of the court order. Only then can there be any issue regarding the rescission of the compromise. [17] Insofar as the appellants rely upon the provisions of ss 75, 112 and 115 of the Companies Act they must therefore bring their case within the scope of the principles set out above. In regard to their contentions based on Mr Moraitis‟ alleged lack of authority to conclude the settlement agreement on behalf of Moraitis Investments and the Moraitis Trust another principle comes into play. This is that the court can only grant a consent judgment if the parties to the litigation consented to the court granting it. If they did not do so, but the court is misled into thinking that they did, the judgment must be set aside.20 This is something different from avoiding a contract on the grounds of fraud, duress, misrepresentation or the like. In those cases the injured party has an 18 Eke v Parsons supra fn 3, para 29. 19 Eke v Parsons and Tsoga Developers CC supra, fn 3. 20 Kruisenga, supra, para 54. election to abide by the agreement. When one is concerned with an absence of authority to conclude the agreement in the first place, that is not a matter of avoiding the agreement, but of advancing a contention that no agreement came into existence. [18] There are several cases that make this point, but I need only refer to two. In De Vos v Calitz and De Villiers21 Ms de Vos was sued in the magistrates‟ court. She was urged by her legal adviser to settle, but was adamant that she would not do so. Her attorney, after a conversation with her brother, whom he bona fide believed was authorised to give instructions on her behalf, accepted a settlement proffered by the other side that provided for judgment to be granted against Ms De Vos by consent. Before the magistrate could be approached, Ms de Vos learned of the agreement and repudiated it on the grounds of her attorney‟s lack of authority. Although this was conveyed to the magistrate, judgment was nonetheless entered against her. The judgment was set aside on appeal, on the grounds of the attorney‟s lack of authority, but the court made it clear that it could have been rescinded on the same grounds. [19] The other case, Washaya v Washaya,22 also involved a legal practitioner agreeing to a consent order without any authority from his client to do so. The legal practitioner said that he had settled the case on his own initiative in the belief that his client would thereafter ratify what he had done. After referring to earlier decisions, commencing with De Vos, the court held that the order had to be rescinded, saying that: „To my mind that ends the matter. … It is clear, in terms of these precedents, common sense and justice that once a Court is not satisfied that a party consented to judgment 21 De Vos v Calitz and De Villiers 1916 CPD 465. 22 Washaya v Washaya 1990 (4) SA 41 (ZH) at 45E-G. then that party is entitled to restitutio in integrum. Put differently, had the Court granting the judgment been aware that the party had not consented it would not have acceded to the request that it enter judgment. The judgment must therefore be set aside.‟ [20] A gloss has subsequently been placed upon this proposition that, while lack of authority is the preponderant factor, on its own it may not suffice unless there is a reasonable explanation for the circumstances in which the consent judgment came to be entered.23 There is merit in this because the court is being asked to set aside its decision in circumstances where it is functus officio. However, in the light of my conclusion on the facts it is unnecessary to express a final view on this. The case can be disposed of in relation to Mr Moraitis‟ authority to represent the Moraitis Trust and Moraitis Investments on the basis that the central proposition that a court may not grant an order making a settlement agreement an order of court, unless the parties to the agreement consent thereto, is correct.24 Authority [21] The appellants‟ primary case was that Mr Moraitis had no authority to enter into the compromise on behalf of Moraitis Investments and the Moraitis Trust and no authority to agree to that compromise agreement being made an order of court. Counsel for the appellants correctly accepted that the onus rested on his clients to establish the lack of authority on which they relied. He rested his argument principally on a 23 Georgias and Another v Standard Chartered Finance Zimbabwe Ltd 2000 (1) SA 126 (ZS) at 132B- D; Ntlabezo and Others v MEC for Education, Culture and Sport, Eastern Cape 2001 (2) SA 1073 (Tk H) at 1081B-E. 24 The judgment on appeal in Kruisenga, whilst not directly in point, is consistent with this conclusion. MEC for Economic Afffairs, Environment and Tourism, Eastern Cape v Kruizenga an Another [2010] ZASCA 58; 2010 (4) SA 122 (SCA) para 7. lack of authority to represent the Moraitis Trust and, accordingly, I will deal with that first and with the position of Moraitis Investments thereafter. [22] In the founding affidavit Mr Moraitis canvassed the terms of the trust deed under which the Moraitis Trust was constituted. The trust was established in 1997 and the original trustees were Mr Moraitis and his brothers. Clause 6.1 prohibited the conclusion of any agreement or transaction to which a trustee or their spouse was a party, or in which they had an interest, unless there was at least one disinterested trustee in office and that trustee, or the majority of disinterested trustees, voted in favour of entering into the transaction or agreement. The trustees were authorised to conduct their business as they thought fit (Clause 6.3.2) and were entitled to delegate any of their powers to committees consisting of one or more trustees (Clause 6.5). [23] The legal principles on which the appellants rely are trite. Unless the trust deed otherwise provides the trustees must act jointly. They may however authorise a third party, including one of their number, to act on their behalf and conclude agreements that bind the trust.25 In reliance on those principles Mr Moraitis dealt with the issue of authority, so far as it concerned the Moraitis Trust, in the following terms: „At the time that I signed the settlement agreement, neither the third nor the fourth applicants in their capacities as the trustees of the Moraitis Trust, had authorised me to conclude the settlement agreement on their behalf, in their capacities as trustees of the Moraitis Trust. Nor had we had a meeting of trustees to discuss settlement of all the pending litigation by any one trustee on behalf of the Trust. … 25 Nieuwoudt and Another v Vrystaat Mielies (Edms) Bpk 2004 (3) SA 486 (SCA) paras 20 and 23; Thorpe and Others v Trittenwein and Another 2007 (2) SA 172 (SCA) para 9. I am advised that in order for the settlement agreement to be valid and enforceable as against the Moraitis Trust, it was necessary for all three trustees to sign the settlement agreement jointly, in their capacity as trustees, alternatively it was necessary for the third and fourth applicants to have authorised me to conclude the agreement on behalf of the trustees representing the Trust.‟ The third and fourth appellants deposed to brief confirmatory affidavits, saying only that they had read the affidavit of Mr Moraitis and each of them confirmed „the contents thereof applicable to me, and to me in my capacity as trustee of the Moraitis Trust and to the Moraitis Trust‟. [24] In the heads of argument it was submitted that this was not disputed. That submission was incorrect. In his answering affidavit, Mr Kebert drew attention to the warranty contained in the settlement agreement, which stated that: „Moraitis warrants that he is authorised to enter into this settlement agreement on behalf of his Trust (as Trustee) and Moraitis Investments (Pty) Ltd and that Moraitis Investments (Pty) Ltd and his Trust have authorised Moraitis to enter into this settlement agreement on their behalf.‟ He said that Mr Moraitis should be held to this warranty and that „his denial of authority (such as it is) must be rejected‟. Earlier he said that the assertion that Mr Moraitis was not authorised to represent the Moraitis Trust was „false and unsubstantiated and should be rejected‟. In the light of that unequivocal statement it is hard to see on what basis it could be contended that it was undisputed that Mr Moraitis lacked authority to represent the Moraitis Trust. The real question was whether there was a bona fide dispute about his authority. If there were, in the absence of a reference to oral evidence, which was not sought, the appellants would have failed to discharge the onus. This was because the application of the Plascon-Evans rule meant that the case had to be determined on the version of the respondents. [25] The respondents were not party to the internal workings of the Moraitis Trust. In order to avoid the conclusion that Mr Kebert‟s denials were bare denials that could be disregarded they had to make their case in the third category of a dispute of facts referred to in the well-known passage from the Room Hire case,26 namely where the respondent has no direct knowledge of the facts stated by the applicant, but denies them and gives evidence to show that the version of the applicant is untruthful or unreliable. And in that situation less evidence will suffice to raise a dispute of fact.27 That is what Mr Kebert set out to do. [26] Mr Kebert explained in his original answering affidavit that the Moraitis Trust was a vehicle created by Mr Moraitis to hold the shares in Moraitis Investments and that Mr Moraitis was the governing mind behind the trust and decided all matters on its behalf. He said that throughout their lengthy business association Mr Moraitis had never required the permission of the remaining trustees in regard to any business decision. All of these allegations attracted bare denials from Mr Moraitis in his replying affidavit, who brushed them off by saying that he had already dealt with them. He had not done so and as statements of fact they stood unrebutted. [27] Mr Kebert went further in a supplementary answering affidavit by providing information regarding the manner in which Mr Moraitis dealt with the various cases in which they were involved. Starting with the liquidation application, he pointed out that the attorney representing 26 Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 1163. 27 Gericke v Sack 1978 (1) SA 821 (A) at 827D-G. Moratis Investments and the Moraitis Trust was a Mr Ioullanou. He was also the attorney representing those entities in the litigation concerning the valuation by Ernst & Young, and Mr Moraitis in the litigation over the hotel. As such he had presumably been responsible for preparing affidavits and was involved in the settlement negotiations and the drafting of the settlement agreement, including the warranty of authority. [28] Turning to the founding affidavit in the liquidation proceedings, Mr Moraitis deposed to it in his capacity as a director of Moraitis Investments and as a trustee of the Moraitis Trust. He attached resolutions to this effect executed on the same day as the affidavit was sworn, and reflecting decisions by Moraitis Investments and the Moraitis Trust taken in Johannesburg. Both resolutions were signed by Mr Moraitis. Accepting, as we must, that these statements by Mr Moraitis correctly reflected his authority, there needed to be an explanation of the manner in which that authority was conferred upon him. There was none. [29] On the merits, in the founding affidavit in the liquidation application, Mr Moraitis explained the background to his business relationship with Mr Kebert and the nature of that relationship. He described it as being akin to a partnership. Its business was conducted „as a group‟. Their relationship extended beyond a commercial one to one as friends. The emphasis throughout was that the businesses were in truth those of Mr Moraitis and Mr Kebert and the companies and trusts merely vehicles through which they were pursuing their own interests. The manner in which they were conducted indicated to any observer that Mr Moraitis and Mr Kebert had been vested with the relevant authority to represent the trusts and companies in business dealings. Although Mr Moraitis delivered a supplementary replying affidavit in regard to this material he did not deal with the substance of the factual allegations. [30] The liquidation proceedings eventually came before Sapire AJ and the parties agreed on an order in terms of which the interest of Moraitis Investments in the various companies would be purchased by either Tropica or the Kebert Trust. This was the alternative relief that had been sought in the application. Far from disavowing this settlement and the resultant order by Sapire AJ, the appellants all wish to pursue it, because the relief they seek in these proceedings would revive the litigation over the Ernst & Young valuation and the implementation of Sapire AJ‟s order. Accordingly the conclusion of the settlement and the agreement to have it made an order of court were authorised by the Moraitis Trust and Moraitis Investments. They were represented by Mr Moraitis and their attorney was Mr Ioullanou, who were also responsible for the conclusion of the settlement agreement that is in issue here. Yet there is not a jot or tittle of evidence to indicate on what basis the conclusion of the earlier settlement agreement and the consent to Sapire AJ‟s order was any different from the settlement agreement and order in issue in this case. If the earlier settlement agreement was authorised, valid and binding that must hold true for the latter one, in the absence of evidence showing that the circumstances in which they were concluded were different. [31] Coming to the circumstances in which the settlement was concluded, the evidence shows that the initiative came from Mr Moraitis‟ legal representative in the hotel dispute. This was Mr Ioullanou, who was the attorney for both Moraitis Investments and the Moraitis Trust, in the liquidation application and the dispute over the Ernst & Young valuation. He was the person who, on their behalf, concluded the agreement with Ernst & Young. As the attorney he was aware that the settlement agreement was intended to be comprehensive and cover all the disputes between the parties in all the existing litigation. He must have been aware of the terms of the settlement agreement signed by Mr Moraitis and the warranty of authority that it contained on behalf of his clients. Yet there is no affidavit from him explaining on what basis he permitted his one client, Mr Moraitis, to say that he had authority to represent his other clients, Moraitis Investments and the Moraitis Trust, if that was not in fact true. All that we have is a letter addressed to Mr Moraitis‟ current attorney saying that his office and counsel did not at any stage contact the third and fourth appellants to discuss the settlement negotiations and settlement agreement. Like the affidavits the letter is a carefully worded statement that avoids dealing with the facts. It is entirely consistent with there being no need for any such discussion, because he was aware that Mr Moraitis was already authorised to enter into settlement negotiations and a settlement agreement on behalf of the Moraitis Trust. [32] This is a substantial body of evidence that casts doubt on the claim that Mr Moraitis was not authorised by his co-trustees to negotiate a settlement of the disputes in which they and he were embroiled, and to cause the resultant agreement to be made an order of court. It is plain that he was the driving force behind all the litigation and acted on behalf of the Moraitis Trust and Moraitis Investments in instituting, conducting and, in the case of the liquidation application, settling the litigation. He is equally the driving force behind the present litigation. Accepting that his actions in all these matters were duly authorised by his co-trustees the inevitable question is how that authority was conferred in those instances and what difference there was between them and the present one. There is nothing to indicate that there was any difference. [33] The issue can be summed up in a single stark question. In executing the settlement agreement Mr Moraitis said expressly that he was authorised to represent „his‟ trust. In his affidavit he said that he was not so authorised. Why should we believe that he was lying when he signed the settlement agreement, but telling the truth in his affidavit? Counsel was unable to provide an answer to that question. That brings us back to the point at which this analysis commenced, namely that the onus rested on the Moraitis Trust to prove that Mr Moraitis lacked the authority to conclude the settlement agreement on its behalf and to agree to its being made an order of court. In the absence of any attempt to explain the workings of the trust or how issues of authorisation had been dealt with in the past, or any of the matters highlighted by Mr Kebert, that onus was not discharged. [34] At the risk of being accused of heaping Pelion upon Ossa, there is merit in the criticism that the statements by Mr Moraitis are, in the absence of a full explanation of precisely how the trust operated and how the relevant decisions were taken, assertions of a legal conclusion rather than factual evidence in regard to authority. The question whether a person was authorised to act on behalf of another is ordinarily a question of fact involving the drawing of inferences or conclusions from primary facts in the context of legal principle. Lord Wright said in his speech in Caswell v Powell Duffryn Associated Collieries Ltd:28 „Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish … But if there are no positive proved facts from which 28 Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 (HL); ([1939] 3 All ER 722) at 733E – F. the inference can be made, the method of inference fails and what is left is mere speculation or conjecture.‟ The absence of any information concerning the process followed when these different pieces of litigation were instituted and conducted and the extent of the knowledge of the trustees concerning them, as well as the general manner of conducting the business of the trust, leads to the conclusion that there is an absence of facts from which to draw the inference that the claims by Mr Moraitis to have lacked authority in this specific instance are correct. [35] The situation of Moraitis Investments can be dealt with fairly simply. Authority to represent it could emanate from two sources. There could be a decision by its sole shareholder, the Moraitis Trust, that it should conclude the agreement, or there could be a decision taken by its two directors, Mr Moraitis and Mr Kebert. In order to succeed in establishing its case Moraitis Investments had to prove that neither source of authority was present when the settlement agreement was concluded. It did not discharge that onus on either ground. The same evidence that indicated that Mr Moraitis had authority to represent the Moraitis Trust served to indicate that he had authority to represent the trust in its capacity as sole shareholder of Moraitis Investments in concluding the settlement agreement. In addition he and Mr Kebert were the two directors of Moraitis Investments. The suggestion that, because he did not say, when signing the agreement, that he was doing so in that capacity, Mr Kebert‟s manifest agreement to the settlement agreement can be disregarded, is without merit. The agreement did not need to be signed by both directors in order to bind the company. It sufficed if it was signed by one of them with the authority of the other. If Mr Moraitis lacked authority Mr Kebert would have known and intervened. The only inference from his not doing so was that he confirmed that Mr Moraitis had the authority that he warranted he had, to represent Moraitis Investments in concluding the settlement agreement. The objection of lack of authority in this regard must be rejected. Sections 112 and 115 of the Companies Act [36] These provisions govern the disposal by a company of the whole or greater part of its assets or the undertaking of the business. The appellants contend that the settlement agreement, involving as it did, the transfer to Mr Kebert of the interests of Moraitis Investments in the first to sixth respondents, fell within the ambit of the sections and accordingly could only be validly effected by way of a special resolution in terms of s 115(2)(a) of the Companies Act. As no such resolution was taken they submitted that the transaction was void. [37] The purpose underpinning the requirements of ss 112 and 115 is to ensure that the interests and views of all shareholders are taken into account before the company disposes of the whole or the greater part of its assets or the undertaking itself. In the case of a special resolution ss 65(9) and (10) stipulate the majority that must be achieved for such a resolution to be passed. Where the company only has a single shareholder these requirements become a mere formality. In those circumstances it seems to me that the principle of unanimous consent can be invoked in answer to the appellants‟ contention. That principle, long recognised in English company law, from which our courts have received much guidance,29 was accepted as part of our law relating to companies, under 29 R C Beuthin „The Principle of Unanimous Consent‟ (1974) 91 SALJ 2. both the 1926 and the 1973 Companies Acts.30 I can see nothing in the current Act to suggest that the principle no longer finds application. The problems that this court identified in Quadrangle Investments31 and those identified by Professor Beuthin in his article on the topic32 do not arise here to preclude the invocation of the principle. [38] In the present case the Moraitis Trust was itself a party to the settlement agreement and, for the reasons already given, the appellants have failed to prove that this was not authorised by the trustees. It cannot then be said that it did not, by its own agreement to the settlement, agree to Moraitis Investments becoming a party to the settlement agreement. Section 75 of the Companies Act [39] The appellants‟ contention under this head was that both Mr Moraitis and Mr Kebert had a personal interest in the subject matter of the settlement agreement and that they had not disclosed those interests at a meeting of the board of directors in accordance with s 75(6) of the Companies Act. As I understand the contention it goes further than mere non-disclosure. Section 75(6)(d) requires a director who has such a personal interest to withdraw from the meeting and play no role in the deliberations of the board. It seems to follow that the appellants were contending that neither Mr Moraitis nor Mr Kebert could be party to a decision by the board of Moraitis Investments to conclude the settlement agreement and that it could only be authorised by a members‟ meeting or the court under s 75(10). 30 Sugden and Others v Beaconhurst Dairies (Pty) Ltd and Others 1962 (3) SA 174 (ECD) at 179H- 181A; Gohlke & Schneider and Another v Westies Minerale (Edms) Bpk and Another 1970 (2) SA 685 (A) at 693E-694E. 31 Quadrangle Investments (Pty) Ltd v Witind Holdings Ltd 1975 (1) 572 (A). 32 Fn 29 ante. [40] The argument must fail for the same reason as the earlier arguments about ss 112 and 115 of the Companies Act. It recognised that the agreement could have been concluded with the authority of the Moraitis Trust and the appellants have failed to prove that the trust did not authorise the conclusion of the settlement agreement. Rule 42 and the common law [41] In the heads of argument (although it had not been mentioned in the founding affidavit) there was a suggestion that Rule 42(1) might avail the appellants on the basis that the only parties to the litigation in which the order was made were Mr Moraitis and Mr Kebert in his capacity as the executor of his mother‟s estate. Accordingly it was suggested that both Moraitis Investments and the Moraitis Trust were absent when the order was made. I do not agree. Once it is accepted that it has not been shown that the Moraitis Trust and Moraitis Investments were not parties to the settlement agreement, they were bound by the provision in clause 15 thereof that they consented and agreed to it being made an order of court. Accordingly, when the agreement was submitted to the judge for that purpose, counsel was acting for all the parties to the settlement agreement. The rule cannot be invoked in those circumstances. Result [42] The appeal is dismissed with costs. M J D WALLIS JUSTICE OF APPEAL Appearances For appellant: L W De Koning SC Instructed by: Mills & Groenewald, Vereeniging; Phatshoane Henney Attorneys, Bloemfontein. For respondent: S Symon SC (initial heads of argument by C M Eloff SC) Instructed by: Ramsay Webber Inc, Illovo; Lovius Block 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 May 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. Moraitis Investments (Pty) Ltd v Montic Dairy (Pty) Ltd Moraitis Investments and the Moraitis Trust entered into a settlement agreement relating to widespread litigation in Gauteng involving a number of companies and a business relationship between Mr Apostolos Moraitis and Mr Karl Kebert spanning some thirty years. After the agreement had been concluded it was made an order of court. When it came to the implementation of the agreement both Moraitis Investments and the Moraitis Trust contended that Mr Moraitis had not been authorised by them to conclude the agreement and they sought an order setting aside both the agreement and the court order. The SCA held that a judgment may only be set aside in limited circumstances, but that if it had been granted in the mistaken belief that one of the parties had consented to it that was a ground for setting it aside. However, it was for Moraitis Investments and the Moraitis Trust to prove that Mr Moraitis lacked the necessary authority and they failed to do so. Accordingly the appeal was dismissed.

2704

non-electoral

2012

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 188/2011 In the matter between: ELWYN DALE HARLECH-JONES Appellant and SHIRLEY MARGARET HARLECH-JONES Respondent Neutral citation: Harlech-Jones v Harlech-Jones (188/2011) [2012] ZASCA 19 (22 March 2012) Coram: Mthiyane DP, Cloete, Mhlantla and Leach JJA and Boruchowitz AJA Heard: 6 March 2012 Delivered: 22 March 2012 Summary: Divorce ─ maintenance ─ wife cohabiting with and being fully maintained by another man ─ this state of affairs lasting for years before the divorce and intended to be permanent ─ wife failing to show she was entitled to maintenance from her husband on divorce. ___________________________________________________________________ O R D E R ___________________________________________________________________ On appeal from: Eastern Cape High Court, Port Elizabeth (Schoeman J sitting as court of first instance): The appeal succeeds and the order of the high court is amended to read as follows: ‘The marriage between the parties is dissolved by decree of divorce.’ ___________________________________________________________________ J U D G M E N T __________________________________________________________________ LEACH JA (MTHIYANE DP, CLOETE AND MHLANTLA JJA AND BORUCHOWITZ AJA concurring.) [1] The appellant appeals against an order obliging him to pay R2 000 per month to the respondent, his wife of almost 29 years, upon dissolution of their marriage. His principal objection against the order lies in the fact that for some eight years prior to the divorce the respondent had been cohabiting with another man. This, the appellant contends, disentitles her from receiving maintenance from him. In the alternative, the appellant suggested the sum of R2 000 per month is in any event too high given his straitened finances. [2] The parties were married out of community of property in December 1972. Two sons, both now majors and self-supporting, were born from their union. In December 2000, after 28 years of marriage, the appellant left the matrimonial home in Port Elizabeth as he had formed a relationship with another woman and had decided on a new life. He purchased another residence in the city, but his new relationship also failed and within six months he had formed an intimate relationship with another man with whom he has since been cohabiting. They left Port Elizabeth and at the time of the trial in the high court were living in Steytlerville, a small town in the rural areas of the Eastern Cape. [3] The respondent was friendly with a married couple, Tim and Diana Smith, whom she had come to know some years previously when their sons attended the same school. In April 2001, shortly after the appellant had moved out of the common home, Diana Smith passed away. In September 2001 (by which time the appellant was already cohabiting with his male partner) a relationship began to blossom between the respondent and Tim Smith. With the passage of time the relationship became more intimate and, in April 2003, the respondent moved into both Mr Smith’s home and bedroom, and they thereafter cohabited as man and wife. During the first two years that they had lived together the respondent’s youngest son, Mark, who was at university at the time, lived with them as well. [4] In the meantime, in February 2003, the respondent issued a divorce summons out of the Port Elizabeth High Court in which, as ancillary relief, she claimed payments of maintenance for both Mark and herself, and payment of a sum equivalent to one half of the value of the appellant’s estate. The parties thereafter entered into settlement negotiations and, in September 2003, some six months after the appellant had commenced to live with Mr Smith, a deed of settlement was concluded in which the appellant undertook to pay the respondent R3 000 per month as maintenance until her death or remarriage and to retain her as a beneficiary on his medical aid scheme. In addition the appellant also agreed to make various payments in respect of Mark’s upkeep and to pay various monetary amounts. [5] Unfortunately for all concerned, the appellant had run into financial difficulties and was sequestrated the day before the divorce hearing. As a result, the judge hearing the matter indicated that he would not be prepared to make the terms of the settlement an order of court, apparently being of the view that certain of its provisions could not be enforced by reason of the appellant’s sequestration. As a result the divorce did not proceed and remained unresolved. The appellant continued living with his partner and the respondent cohabiting with Mr Smith. Moreover, pursuant to the sequestration the respondent’s assets were frozen in terms of the Insolvency Act 24 of 1936. This led to litigation between the appellant’s trustee on the one hand and the respondent on the other, which only ended late in 2007 when a settlement agreement was concluded which led to her assets being released. Despite this, the divorce proceedings were held in abeyance for several years. However, by the time the parties eventually took the matter to court (in February 2010) they had settled all proprietary claims and the only outstanding issue the high court was asked to decide was the question of the respondent’s claim for maintenance. [6] After they separated, the appellant initially retained the respondent as a beneficiary on his medical aid scheme. He undertook to continue to do so in the settlement agreement which was not implemented due to his sequestration. Unfortunately, he removed her as a beneficiary of the scheme in 2006 and, when the respondent was diagnosed with cancer of the jaw in April 2009, she was personally obliged to pay for the urgent surgery she required. By the time of the trial in February 2010, the respondent had spent almost R180 000 on treating her cancer and was due to undergo further surgery in the near future to cover a gaping hole in her cheek, an unfortunate consequence of the treatment. The anticipated surgery was to be carried out at a state hospital, rather than at a private institution, but the future cost of treating her condition was not known. [7] When the respondent first moved in with Mr Smith, she insisted upon, as she put it, ‘paying her own way’, and did in fact pay him a total of R25 000 in respect of accommodation between May and November 2003. However, after her assets were frozen she had to rely on Mr Smith’s generosity, and he supported and maintained her (and Mark for the two years he lived with them) although the appellant did make some contributions towards Mark’s education expenses. That continued after the respondent’s assets were restored in late 2007, but she does not appear thereafter to have made any regular or substantial contribution towards the expenses of the joint household she shared with Mr Smith. She seems in the main to have used her assets to pay for certain personal items of expenditure, such as entertainment, her hairdresser, her cell phone account and an amount she pays one of her sons to reimburse him for having her as a dependant on his medical aid. She also made odd contributions by purchasing household items such as a hi-fi and a washing machine. [8] Although the evidence establishes that when the respondent initially moved in with Mr Smith it was regarded as a temporary arrangement, the relationship between them matured over the almost eight years that they had lived together before the trial. By then they both regarded their relationship as permanent and neither had any intention of terminating it. Mr Smith supported the respondent unconditionally and was prepared to continue to do so indefinitely. By the same token, not only was the respondent being maintained by him but she, reciprocally, assisted him in his business, for which he paid her a small gratuity. [9] Importantly, the first time the respondent sought to recover any maintenance from the appellant after the divorce proceedings were instituted, was in February 2010 when she brought proceedings under Uniform rule 43 seeking maintenance pendente lite (an application which failed when Hartle AJ refused the order sought as she concluded that there was no reasonable prospect of the respondent recovering maintenance when the matter came to trial). And it is not without significance that when the opportunity to settle the divorce action arose in early 2008 (after her assets had been restored to her), the respondent refused to sign a settlement agreement; not on the basis that it contained no maintenance for her, but because it made no provision for the appellant to reimburse Mr Smith in any way for the support he had provided Mark. This all indicates the relationship she had with Mr Smith was of such a nature that she neither required nor sought maintenance from the appellant. [10] From this it is clear, as was indeed common cause at the trial, that the respondent and Mr Smith had, for almost eight years, lived together ‘as man and wife’ in that, although they were not formally married, they had lived together in the same home, had a common household which they maintained and to which they contributed, and maintained an intimate relationship.1 Put differently, they lived together in a fixed and stable relationship in which they mutually regarded each other as a permanent partner. [11] Relying upon judgments such as Dodo v Dodo 1990 (2) SA 77 (W) at 89G; Carstens v Carstens 1985 (2) SA 351 (SE) at 353F; SP v HP 2009 (5) SA 223 (O) para10 it was argued, both in the high court and in the appellant’s heads of 1 Cf Drummond v Drummond 1979 (1) SA 161 (A) at 167A-C. argument, that it would be against public policy for a woman to be supported by two men at the same time. While there are no doubt members of society who would endorse that view, it rather speaks of values from times past and I do not think in the modern, more liberal (some may say more ‘enlightened’) age in which we live, public policy demands that a person who cohabits with another should for that reason alone be barred from claiming maintenance from his or her spouse. Each case must be determined by its own facts,2 and counsel for the appellant (whom I must hasten to add had not been responsible for the preparation of the appellant’s heads of argument) did not seek to persuade us to accept that the mere fact that the respondent was living with Mr Smith operated as an automatic bar to her recovering maintenance from the appellant. Instead he argued that the respondent had failed to prove that she was entitled to a maintenance order in her favour. It is to that issue that I now turn. [12] Under the common law, the reciprocal duty of support existing between spouses, of which the provision of maintenance is an integral part, terminates upon divorce. This might well cause great hardship and inequity particularly where one spouse, during the subsistence of the marriage, has been unable to build up an estate and has reached an age where he or she is unable to realistically earn an adequate income ─ the classical case being that of a woman who has spent what would otherwise have been her active economic years caring for children and running the joint household. This potentially iniquitous situation is alleviated by s 7 of the Divorce Act 70 of 1979. Section 7(1) which provides for a court on granting a decree of divorce to make a written agreement between the parties in regard to the payment of maintenance by one party to another an order of court ─ while in other cases s 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 2 In this regard the various English cases to which we were referred, such as Grey v Grey [2009] EWCA Civ 1424 and K v K (2006) 2 FLR 468 (FD); [2005] EWHC 2886 (Fam) were of no meaningful assistance, set as they are in a statutory matrix which differs from that of this country. relevant to the break-down 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.’ [13] It is trite that the person claiming maintenance must establish a need to be supported. If no such need is established, it would not be ‘just’ as required by this section for a maintenance order to be issued. It is on this issue that the respondent’s claim must fail. Both she and the appellant had moved on with their respective lives and had formed intimate and lasting relationships with others. As I have stressed, for almost eight years prior to the divorce hearing the respondent had lived as another man’s wife: a man who provided for her needs, put a roof over her head and in all factual respects treated her as his partner in life. This was a situation which both she and Mr Smith regarded as permanent and which they intended would remain so. [14] The respondent was therefore being fully maintained by her new partner in life, and had no need for that maintenance to be supplemented in any way. This is borne out not only by the financial figures she produced indicating the amount of maintenance Mr Smith was spending on their joint household but also by her failure to claim maintenance from the appellant until, almost as an afterthought, rule 43 proceedings were launched in February 2010. As already mentioned, it is also shown by her attitude in refusing to sign the proposed settlement agreement earlier offered to her solely as it made no provision for Mr Smith to be reimbursed for supporting, not her, but her son Mark. Accordingly, the respondent’s claim simply fails at the first hurdle as she failed to show that she actually required maintenance from the appellant. [15] It is apparent from the above that, the high court erred in concluding that the respondent had in fact established a claim for maintenance against the appellant. The appeal against the maintenance order must therefore succeed. [16] Turning to the question of costs, although the appellant has succeeded in this appeal, counsel for the appellant informed us that the appellant did not seek to have the respondent pay the costs of the appeal. Nor did he seek to rely upon a relevant open tender made under Uniform rule of court 34 on 29 July 2009 to argue that the respondent should pay the costs below from that date. Instead he suggested that no order should be made in respect of the high court proceedings. This was a commendable attitude given the length and history of the marriage and one which I understood the respondent’s attorney accepted would be appropriate if the appeal was to succeed. In regard to the order of the high court, this can be brought about by merely deleting paragraphs 2 and 3 of the order it made, leaving only the divorce decree extent. [17] In the result the following order will issue. The appeal succeeds and the order of the high court is amended to read as follows: ‘The marriage between the parties is dissolved by decree of divorce.’ ______________________ L E Leach Judge of Appeal APPEARANCES: For Appellant: A Beyleveld SC Instructed by: Spilkins Inc, Port Elizabeth Symington & De Kok, Bloemfontein For Respondent: G J Friedman (Attorney) Instructed by: Friedman Scheckter, Johannesburg Matsepe Inc, 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: 22 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: Harlech-Jones v Harlech-Jones (188/2011) [2012] ZASCA 19 (22 March 2012) The parties, who were married to each other in December 1972, were divorced in January 2011. In terms of the divorce order, the appellant (the former husband) was ordered to pay the respondent the sum of R2 000 per month as maintenance with effect from 1 February 2011. With leave of the high court, the appellant then appealed to the Supreme Court of Appeal solely against the maintenance order. By the time the divorce was granted, both parties had formed relationships with other partners, and the respondent had been living for some eight years with another man who fully and unconditionally maintained her. The Supreme Court of Appeal rejected the contention that it would be against public policy for a woman to receive support from two men at the same time, and concluded that public policy did not demand that a person who cohabits with another should for that reason alone be barred from claiming maintenance from his or her spouse. However, in the light of the facts of the present case, where the respondent was being fully maintained by the man with whom she had been living for years in a permanent relationship in which each regarded the other as his or her partner in life, the respondent had failed to show that she was entitled to receive maintenance from her former husband. The appeal therefore succeeded, and the maintenance order was set aside. ---ends---

2326

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 550/2008 In the matter between: AFRICAN NATIONAL CONGRESS Appellant and THE MUNICIPAL MANAGER, GEORGE LOCAL MUNICIPALITY First Respondent GEORGE LOCAL MUNICIPALITY Second Respondent HENRY JOHANNES JONES Third Respondent THE DEMOCRATIC ALLIANCE Fourth Respondent THE INDEPENDENT ELECTORAL COMMISSION Fifth Respondent THE MINISTER FOR LOCAL GOVERNMENT AND HOUSING, WESTERN CAPE Sixth Respondent Neutral citation: African National Congress v The Municipal Manager, George Local Municipality (550/08) [2009] ZASCA 139 (17 November 2009) Coram: MPATI P, BRAND, MLAMBO, MAYA JJA, and BOSIELO AJA Heard: 10 SEPTEMBER 2009 Delivered: 17 NOVEMBER 2009 Summary: Whether a municipal ward councillor’s letter of resignation from a municipal council duly delivered to a municipal manager but subsequently withdrawn by its author and returned to him unread constitutes a valid resignation under Section 27(a) of the Local Government: Municipal Structures Act 117 of 1998. ORDER On appeal from: Cape High Court (Irish AJ sitting as court of first instance). The appeal is dismissed with costs. JUDGMENT MAYA JA: (MPATI P, BRAND, MLAMBO JJA, BOSIELO AJA concurring) [1] This appeal turns on whether a municipal councillor’s resignation letter, which is delivered to a municipal manager but is subsequently withdrawn by its author and returned to him unread, constitutes a valid resignation for the purposes of s 27(a) of the Local Government: Municipal Structures Act 117 of 1998 (‘the Act’). [2] The appellant challenges a refusal by the Cape High Court (Irish AJ) of its application for various forms of relief based on its contention that the seat occupied by the third respondent, Mr Jones, as a ward councillor of the fourth respondent, the Democratic Alliance political party (‘the DA’), in the council of the second respondent, George Local Municipality (‘the municipality’) became vacant consequent to his resignation from the municipality and as a member of the DA. The appeal is with the leave of the court below. [3] Despite the substantial conflict which mired the background facts of the matter especially in relation to Jones’ motives for resigning and the events surrounding such resignation, those relevant to the central dispute were not in real contention. On an application of the principles set out in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd1 these facts may be summarised as follows. The case arose in the aftermath of the last parliamentary floor crossing2 window-period in September 2007. At the time, the DA controlled the municipality, in alliance with various smaller political parties, by a slim majority of 18 seats, one which was held by Jones, whilst the appellant held the remaining 17 seats. It appears that there were tensions within the DA which resulted in some of its members resigning and others being suspended or expelled from the party. [4] Jones was one of the disenchanted DA members because promises previously made to him on behalf of the party to advance his political career had not materialized. He intended leaving the DA to join the appellant and had submitted the requisite notice to the appellant for filing with the Electoral Commission.3 His imminent departure from the DA would obviously upset the 1 1984 (3) 623 (A) 634E-635C. 2 The Constitution of the Republic of South Africa Fourth Amendment Act 18 of 2002, which was later repealed by the Constitution Fourteenth Amendment Act and Constitution Fifteenth Amendment Acts of 2008, created the controversial floor crossing system which allowed members of parliament and provincial legislatures and local government councillors during certain periods, subject to specific conditions, to switch their allegiance and take their seats with them from one political party to another. 3 Established by s 181 of the Constitution of the Republic of South Africa, 1996 and the Electoral Commission Act 51 of 1996. balance of control in the municipality and was, seemingly, a matter of great concern to the relevant parties. [5] On 26 March 2008, the municipal manager, Mr Africa, found a sealed letter on his desk which his receptionist said she had been told, presumably by its courier, was Jones’ resignation as the DA’s ward councillor from the municipality’s council. According to the municipal manager, he did not read the letter because he had to attend an imminent council budget meeting. He further believed, admittedly erroneously, that the Act entitled him to a seven-day period within which to process the resignation and that the matter was therefore not urgent. Thus, the letter remained unattended until noon on the following day when he received a telephone call from another DA ward councillor, Mr Londt, informing him that Jones had changed his mind about the resignation and would fetch his resignation letter shortly. Indeed, Jones arrived at his office soon thereafter, in Londt’s company. He then gave Jones his letter, unopened and unread, in the belief that he was entitled to withdraw his resignation as the resignation had not yet been declared to the Electoral Commission in terms of the relevant law. Jones opened the envelope in his and Londt’s presence, identified its contents as his resignation letter and left with it without showing it to him. [6] At a DA meeting held later that day which the municipal manager attended, Jones produced the letter and informed those present that he had resigned impulsively, actuated by emotional pressure, and regretted the act. In the letter, which according to Jones was prepared for him by Pastor Smart and Inspector Ryk but was signed by him, he resigned from both the DA as its member and as a municipal council member with immediate effect.4 The letter indicated that its copies would be sent to a Mr de Swart, the municipality’s executive mayor and the Electoral Commission but, as it turned out, no such copies were sent. [7] In view of Jones’ explanation and express wish to remain a member of the DA, the party meeting resolved not to take the matter further. The manner in which the municipal manager had dealt with the issue drew the ire of the appellant’s Southern Cape branch and the provincial minister for Local Government and Housing. On 31 March 2008 Jones wrote another letter to the municipal manager, formally withdrawing his resignation from the municipal council. [8] In the court below and before us, the appellant contended, principally, that in terms of s 27(a) of the Act Jones’ seat became vacant as a matter of law once his letter of resignation was delivered to the municipal manager who was, in any event, aware of the letter’s content. It was argued that to deny a resignation by reason of the municipal manager’s failure, whether deliberate5 or negligent, to read the resignation letter would jeopardise certainty of practice in municipalities. Further, this could expose municipal managers to the risk of political interference to protect an 4 The original text was in Afrikaans and read: ‘Geagte Heer Re: BEDANKING AS RAADSLID Hiermee dien ek my bedanking in as raadslid van die George Stadsraad en Demokratiese Alliansie met onmiddelike effek.’ 5 The bona fides of the municipal manager, a high-ranking DA member, in failing to read the letter, allowing Jones to retrieve it and subsequently joining forces with Jones in defending the application, was a matter of great contention for the appellant. So was Jones’ sudden appointment to the mayoral committee on 31 March 2008. incumbent majority which might have appointed them to the position as in the present case, so the argument went. Another contention advanced on the appellant’s behalf was that Jones’ membership of the DA simultaneously ceased with the delivery of the resignation letter by virtue of clause 3.5.1.3 of its federal constitution which proclaims cessation of membership when ‘a member declares his or her resignation or intention to resign from the party or intention to join another party’.6 [9] The relief sought by the appellant was thus aimed at compelling the municipal manager to acknowledge that Jones had resigned from the municipal council and to declare a by-election to fill the council seat supposedly left vacant by such resignation in accordance with s 25(1)(d) and (3) of the Act.7 Its basis was that the municipal manager’s acquiescence in Jones’ withdrawal of his resignation by returning his resignation letter to him and his failure to declare a vacancy so that a by-election to fill Jones’ seat could be called, conduct which the appellant contended was unlawful, constituted administrative actions reviewable under s 33 of the Constitution and the Promotion of Administrative Justice Act 3 of 2000. [10] The court below dismissed the application on the finding that the resignation letter would have to be read by its intended 6 The appellant’s initial reliance on clause 3.5.1.1 of the DA’s Constitution, which provides for the termination of membership when the member submits his or her written resignation from the party, was abandoned in view of the DA’s denial of receiving Jones’ resignation. 7 These provisions of s 25 respectively provide: ‘(1)(d) A by-election must be held if a vacancy in a ward occurs. … (3)(d) The municipal manager of the municipality concerned, after consulting the Electoral Commission, must, by notice in a local newspaper, call and set a date for the by-election, which must be held within 90 days of the date on which the vacancy occurred.’ recipient to become effective, which did not occur. The appellant’s reliance on the provisions of the DA’s federal constitution also did not find favour with the court. In its view, Jones had not declared his resignation as contemplated by such provisions. Nor could the appellant seek declaratory relief regarding Jones’ membership of the DA as it was a private, contractual issue between Jones and that party. [11] Section 27 governs a councillor’s vacation of office and, in subsec (a), decrees that ‘[a] councillor vacates office during a term of office if that councillor resigns in writing’. A resignation must be effective immediately or from a specified date. Being a unilateral legal act, it does not need to be accepted by the intended recipient to be so effective.8 But, it must be unequivocally communicated to the other party to be effective, unless there is a contrary stipulation.9 The provisions of s 27(a) require more: that the notice of resignation should be communicated in writing. The reason for that, in my view, is not far to seek and it is to provide certainty. [12] As observed by the court below, a ward councillor’s vacation of office from a municipal council has serious implications of public significance for a local authority as it impacts various statutory provisions relating to quora and composition and requisition of meetings. For example, s 160(3) of the Constitution (and s 30(1) and (2) of the Act) requires a majority of municipal council members to be present at a council meeting before a vote can be 8 Stewart Wrightson (Pty) Ltd v Thorpe 1977 (2) SA 943 (A) 954A-B. 9 Schuurman v Davey 1908 TS 664; Jaffer v Falante 1959 (4) SA 360 (C) at 362F-363E; Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd 2001 (2) SA 284 (SCA) paras 28 and 29. taken on any matter and a determination of questions before such council by majority vote. In terms of s 160(4), the council may not pass a by-law without notice to all councillors. Furthermore, a municipality is bound by strict statutory imperatives when a vacancy does occur. As indicated above, s 25 of the Act prescribes that a by-election be held, within strict time frames, and enjoins the municipal manager, after consultation with the Electoral Commission, to set that process in motion. Thus, a set composition of a municipal council’s membership is critical for its effective and orderly functioning and such composition must be readily ascertainable at all times. [13] The questions which then arise in this matter are whether Jones resigned as a municipal councillor and, if he did, whether the municipality was advised of such resignation. That he expressed the intention to resign was not disputed, correctly so in my view. What was contested was whether or not such intention was communicated or conveyed to the mind of the municipality. It was argued for the appellant that mere delivery of the resignation letter at the municipal manager’s office sufficed and that in this case the municipal manager was, moreover, aware of the contents of the letter. On the other hand, the respondents contended that the appellant’s first hurdle was that the proper party upon whom the notice should have been served was the Speaker of the council as its chairperson, not the municipal manager. It was argued further that even if the municipal manager was the proper recipient, he had to read the notice to be informed of the resignation for purposes of s 27(a). [14] Regarding the question of a proper recipient, the legislature has not identified the party within the municipal council upon whom the resignation notice must be served to be effective. It seems to me that there may well be a strong case for the submission that the municipal manager is such a party considering the functions and powers of this functionary who is the administrative and accounting head of a municipality.10 These duties include managing communications between the municipality’s administration and its political structures and political office bearers. It is the municipal manager who is statutorily tasked to attend the immediate consequences of a councillor’s vacancy. In addition, notification of a councillor’s resignation has historically been given to the municipal manager’s counterpart, the town clerk, under the Act’s predecessor, the Municipal Ordinance 20 of 1974 (the Ordinance),11 which previously regulated municipalities. According to the affidavits, this practice seems to have carried over to the Act’s tenure, to resignations recently preceding Jones’. But, regardless of these strong indicators, I will assume without deciding that here the municipal manager upon whom notice of the resignation was served was indeed the proper recipient of such notice. [15] What meaning to ascribe to the term ‘communicate’ in the present context? The Shorter Oxford English Dictionary defines it to mean ‘the imparting, conveying or exchange of ideas, knowledge, etc. (whether by speech, writing, or signs)’. Dealing with a matter involving a legal act analogous to a resignation, a 10 Section 82 of the Act and s 55(1) of the Local Government: Municipal Systems Act 32 of 2000. 11 Section 26(1)(b). cancellation of a lease agreement, in Swart v Vosloo,12 this court held that absent an agreement to the contrary, a party to a contract who exercises his right to cancel must convey his decision to the mind of the other party to bring such cancellation into effect.13 I see no reason why this principle should not apply with equal force to a resignation which is also a cancellation of a contract. [16] That said, a written communication can, in my opinion, effectively be conveyed to its recipient’s mind only by its reading. Here, the municipal manager did not read the resignation letter. The fact that he may have been told what it purportedly contained is completely irrelevant. Furthermore, it must, in my view, be considered that the Ordinance similarly made provision for the vacation of a councillor’s office and provided for a vacancy in the office of a councillor when, inter alia, ‘his written resignation [was] received in the office of the town clerk’.14 Mere receipt of the resignation notice therefore sufficed for purposes of these provisions. Notably, s 27(a) is worded differently and says nothing at all about receipt. I find this a significant departure which must have been deliberate on the part of the legislature. In my view, the legislature would have stated expressly as it did in the Ordinance that receipt of a resignation notice by a municipal council suffices for a councillor’s resignation to take effect if that was its intention. [17] I conclude, therefore, that it was imperative for the municipal manager to read Jones’s letter for his resignation to come into 12 1965 (1) SA 100 (A) at 105G. 13 See also Miller and Miller v Dickinson 1971 (3) SA 581(A) at 581H-588A; Noble v Laubscher 1905 TS 125 at 126. 14 Section 26(1)(b). effect. Whilst one may have some sympathy with the appellant’s fears of possible manipulation of such official in the manner suggested above, there is no indication at all in the papers that the municipal manager refused or failed to read the letter for any reason other that the plausible ones he proffered ie that he had other pressing municipal business to attend and thought he had ample time within which to process it. This finding, in my opinion, dispenses with the need to consider whether or not the municipal manager had the authority to allow the withdrawal of the resignation letter (as there was no actual resignation from the municipal council) and whether Jones resigned from the DA. The appeal must accordingly fail. [18] In the result the appeal is dismissed with costs. ______________________ MML MAYA Judge of Appeal APPEARANCES: For appellant: D Borgström Instructed by: Erleigh & Associates, Cape Town Van der Merwe & Sorour, Bloemfontein For 1st, 2nd and 3rd respondents: SP Rosenberg SC Instructed by: Nico Smit Attorneys, Cape Town Honey Attorneys, Bloemfontein For 6th respondent: State Attorney, Cape Town 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: 17 November 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 dismissed an appeal against the judgment of the Cape High Court. The SCA held that a resignation letter tendered to a municipal manager of the George Local Municipality by a Democratic Alliance party ward councillor did not constitute a valid resignation for the purposes of s 27(a) of the Local Government: Municipal Structures Act 117 of 1998 because it had been returned to its author, at his request, before the municipal manager read it and had thus not been communicated to the municipality.

1854

non-electoral

2011

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No 386/2010 In the matter between ABSA BANK LIMITED APPELLANT and KERNSIG 17 (PTY) LTD RESPONDENT Neutral citation: Absa Bank v Kernsig 17 (386/2010) [2011] ZASCA 97 (31 May 2011) Coram: CLOETE, CACHALIA, SHONGWE, MAJIEDT and SERITI JJA Heard: 4 MAY 2011 Delivered: 31 MAY 2011 Summary: Company Law ─ Section 38 ─ Allegation that the loan agreement contravenes s 38 of the Companies Act 61/1973 – Section 38 enquiry is fact based ─ Generally allegation must be pleaded or all facts must be before court for the court to make a determination. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: Western Cape High Court (Cape Town), (Traverso AJP, Fourie and Yekiso JJ, sitting as a full court): (a) The appeal succeeds with costs which will include the costs consequent upon the employment of two counsel. (b) The order of the court a quo is set aside and replaced with the following: 'The appeal is dismissed with costs, which costs will include the costs consequent upon the employment of two counsel.' ______________________________________________________________ JUDGMENT _____________________________________________________________ SERITI JA (CLOETE, CACHALIA, SHONGWE, MAJIEDT JJA concurring): [1] The respondent (Kernsig) approached the Western Cape High Court, Cape Town, by way of motion proceedings seeking an order cancelling six covering mortgage bonds registered against the title deed of its immovable property (Karoovlakte farm) in favour of the appellant (Absa). The court of first instance (Meer J) dismissed the application with costs. With leave of the court of first instance, Kernsig appealed to the full bench of the Western Cape High Court (the court a quo). [2] The court a quo (Fourie J; Traverso AJP and Yekiso J concurring) reversed the decision of the court of first instance and granted the order sought by Kernsig. The matter is before this court after this court granted Absa special leave to appeal. [3] Messrs P J Greyling and J A Greyling are the sole directors and shareholders of Kernsig. Kernsig owns an immovable property known as Karoovlakte farm situated in the district of Klawer, Western Cape. P J Greyling and J A Greyling formed a partnership known as Karoovlakte Boerdery (the partnership) and the partnership conducted farming activities on Karoovlakte farm which they leased from Kernsig. [4] Absa, through its Vredendal branch, was the banker of the partnership. Absa granted the partnership an overdraft facility on the partnership's cheque account and short-term loans. As security for the facilities granted to the partnership, six covering mortgage bonds were registered against the title deed of Karoovlakte farm in favour of Absa. The total amount secured by the mortgage bonds was R1.11 million. As I have said, the bonds were covering bonds and each provided: 'Voortdurende Dekkingsverband Hierdie verband sal van krag bly as 'n voortdurende dekkende sekuriteit vir die hoofsom – die rente daarop en die bykomende bedrag, ondanks enige tussentydse skuldvereffening en, ondanks enige tussentydse skuldvereffening, sal hierdie verband van volle krag en effek bly as 'n voortdurende sekureits- en dekkingsverband vir enige en elke bedrag wat die Verbandgewer nou of hierna aan die Bank verskuldig mag wees voortspruitend uit welke oorsaak ookal tot die bedrag van die hoofsom, die rente daarop en die bykomende bedrag.' [5] Mr Johan Brand (Brand), the relationship manager of the Vredendal branch, was not happy about the manner in which the Greylings were conducting the two accounts. The limit of the overdraft facility was frequently exceeded and the loan repayments were not made timeously. [6] Attorney Visser (Visser), Kernsig's attorney of record, and a sister of P J Greyling, was known to Brand as her law practice operated an account at the Vredendal branch of Absa. Visser and P J Greyling discussed the possible sale of Karoovlakte farm with Brand over several months. [7] On 6 September 2005 the Greylings entered into a written sale agreement of Karoovlakte farm with Mr Lionel Patrick Barnard and his wife Christine Barnard (the Barnards). The transaction was structured in such a manner that the Barnards would buy the Greylings' entire shareholding in Kernsig and as part payment of the purchase price, take over the partnership's financial obligations towards Absa. [8] Brand, as a result of his discussions with Visser and the Greylings, was aware of the fact that it was a term of the sale agreement that the Barnards would, in the name of Kernsig, take over the financial obligations of the partnership towards Absa. That entailed that the debts of the partnership would be consolidated and be paid by Kernsig with the proceeds of a loan that Kernsig would obtain from Absa. The Barnards, in their own names, would not have qualified for a loan. [9] The 6 September 2005 agreement of the sale of Kernsig was replaced by an almost identical sales agreement dated 30 November 2005. Clause 3 thereof reads as follows: '3. Koopprys Die koopsom is die bedrag van R2 000 000.00 (twee miljoen rand) betaalbaar deur die koper aan die verkoper as volg: 3.1 'n Bedrag van R150 000.00 (een honderd en vyftig duisend rand) reeds betaal; 3.2 Die oorname van alle skulde van die maatskappy insluitend die Landbou kredietlening ten bedrae van R57 750.00, asook die verbande wat oor die eiendom van die maatskappy geregistreer is in naam van Karoovlakte Boerdery. In totaliteit die bedrag van R1 137 750.00. 3.3 Die balans van die koopsom naamlik R712 250.00 word in 12 jaarlikse paaiemente afbetaal waarvan die eerste betaling op 1 Augustus 2006 sal geskied en daarna jaarliks voor of op die einde van Julie . . .'. [10] The shares of Kernsig were not transferred into the name of the Barnards and in order for Kernsig to apply for a loan, Brand required the Greylings to give authority to Barnard to apply for the loan in the name of Kernsig. Barnard applied on behalf of Kernsig for a loan of R1.1 million and same was approved or granted on 8 December 2005. The covering mortgage bonds already registered against the title deed of Karoovlakte farm referred to earlier, served as security for the loan granted to Kernsig. [11] On the day that the loan was approved, Visser telephoned Brand enquiring about the progress of Kernsig's loan application. The proceeds of the loan were paid to Kernsig and they were utilised to pay off the loan and overdraft facility of the partnership on 25 January 2006, and Kernsig remained with a debt of R1.1 million. [12] The Barnards, who had taken possession and occupation of the farm during September 2005, vacated the farm in February 2008 and returned the keys of the farm to the Greylings. The Greylings accepted the Barnards' repudiation of the sale agreement, and cancelled it. [13] In May 2008, after Kernsig sold Karoovlakte farm to another buyer, Visser wrote a letter to Absa wherein she demanded that Absa cancel the mortgage bonds registered against the title deed of Karoovlakte as, according to her, the partnership's debts for which the mortgage bonds served as security, had been liquidated. Absa refused to do so, alleging that the mortgage bonds served as security for the loan granted to Kernsig. Absa required payment of R1.25 million before it would cancel the mortgage bonds. [14] In the founding affidavit, the deponent (P J Greyling) stated that he together with his co-director and co-shareholder were not aware of any further loan given to Kernsig and referred to a letter written to Absa requesting details of the authority of the applicant for any such loan. Their case was that the debt of the partnership had been extinguished and consequently the mortgage bonds should be cancelled. In the answering affidavit Absa alleged that the loan agreement had been entered into by Absa and Kernsig with the full knowledge and authorisation of the directors and shareholders of Kernsig, and that consequently, the mortgage bonds served as security for the new loan granted to Kernsig. This was disputed in the replying affidavit. Before the court of first instance Kernsig elected, despite the dispute of fact, to have the matter adjudicated upon on the papers without a referral for oral evidence. [15] The court of first instance found that the loan agreement had been concluded between Absa and Kernsig and dismissed the application. It is unlikely that the court of first instance was invited to determine whether the loan agreement contravened the provisions of s 38 of the Companies Act 61 of 1973 as the judgment makes no mention of such an argument. It was only mentioned as part of the court's recordal of allegations made on behalf of the respondent which are set out below. [16] The case that the loan agreement contravened s 38 was not raised in the founding affidavit in any shape or form. In the replying affidavit the section was referred to in three passages. (a) In the first, the deponent said: 'Ek ontken dat Applikant op 22 September 2005 deur bemiddeling van die Vredendal tak van Respondent, aansoek gedoen het vir 'n termynlening en dra geen kennis van sodanige aansoek nie. . . . Applikant voer respekvol aan en grond sy aansoek hierop, naamlik dat  L P & C Barnard op geen stadium direkteure van Applikant was nie.  Hul op geen stadium deur die bestaande direkteure van Applikant van 'n volmag, hetsy skriftelik of mondeling of by implikasie, voorsien is om in die naam van Applikant op te tree nie.  Daar op geen stadium 'n resolusie deur die direkteure van Applikant geneem is om 'n termynlening van R1.1 miljoen met Respondent aan te gaan nie of wat Barnard magtig om in naam van Applikant so 'n termynlening aan te gaan nie.  Daar op geen stadium toestemming deur die direkteure van Applikant verleen is dat die bates van Applikant as sekuriteit vir 'n termynlening van R1.1 miloen gebruik kon word nie.  Die aandele nooit op enige stadium aan Barnard oorgedra is nie.  Die doel van die koopooreenkoms was dat Barnard uit persoonlike finansies die koopsom aan Applikant moes vereffen en as deel daarvan, die skulde van Applikant en/of Karoovlakte Boerdery moes oorneem. Daarna moes sekuriteitsverbande geregistreer word oor Wildernis Eiendomme waarna die aandele van Applikant aan Barnard oorgedra word.  Applikant is nie regtens toelgelaat om eie bates te beswaar ten einde behulpsaam te wees om die verkoop van aandele te finansier nie.' (b) In the second, the deponent said: 'Applikant ontken ten sterkste dat dit 'n term van die transaksie was dat Barnard in die naam van Applikant bestaande verpligtinge van Karoovlakte Boerdery teenoor Respondent moes oorneem deurdat die oortrokke tjekrekening en die termynlening- skuld gekonsolideer word en deur die Applikant betaal sou word deur middel van 'n nuwe fassiliteit wat aan die Applikant toestaan sou word. Applikant verwys met respek na die aanhef van die vermelde koopkontrak (aanhangsel PJG 2 tot Kennisgewing van Mosie) waaruit dit duidelik blyk dat die ooreenkoms tussen Applikant en L P & C Barnard was en dat lg die aandele van Applikant gekoop het. Verder wys Applikant die Respondent ook respekvol na die bepalings van Art 38 van die Wet op Maatskappye wat impliseer dat Barnard nie Applikant se bates kon beswaar ter verkryging/bekomming van die aandele nie. Dit was dus deurentyd die bedoeling tussen die partye dat Barnard in sy persoonlike hoedanigheid finansiering sou bekom ten einde die koopsom te delg. Soos die Respondent tereg opmerk, is beide Visser en ekself regsgeleerdes. Nie een van voormelde twee persone sou ooit toestem dat die koper die bates van die Applikant kon beswaar ten einde die aandele van Applikant te bekom nie. In elk geval is die aandele nooit aan Barnard oorgedra nie.' (c) In the third, the deponent said: 'Hierdie beweringe van Respondent word onomwonde ontken. Daar was nooit enige sprake dat 'n termynlening aan die Applikant toegestaan moes word ten einde Karoovlakte Boerdery se skuld af te los nie. Dit sou sinneloos wees aangesien dieselfde vennote in Karoovlakte Boerdery ook die direkteure en aandeelhouers Applikant was en sou dit slegs 'n verskuiwing van skuldverpligtinge wees. Verder sou so 'n transaksie ook nie regtens toelaatbaar wees nie. Die direkteure van Applikant is ook nooit sedert September 2005 gekontak rakende betalings en/of die gebrek aan betalings van die premies van 'n termynlening nie.’ [17] In the first passage, the section is not mentioned specifically and the allegation at the end would not have served to alert Absa that its provisions were being relied upon as an independent cause of action for the cancellation of the bonds. In the second passage, the section was not relied upon for an argument that the loan of 8 December 2005 was void and that the bonds should be cancelled for that reason. Rather, the section was relied upon to support Kernsig's version that the Barnards were not authorised to act on behalf of Kernsig to apply for the loan or to agree that the existing bonds would remain to secure it. The same applies to the third passage. The alleged invalidity of the loan is there put forward to support an argument that the Barnards were not authorised to represent Kernsig in obtaining the loan, not an argument that if such a loan had been granted, Kernsig would contend that it was invalid because of the provisions of s 38. [18] The allegation that the loan agreement contravened s 38 was apparently raised squarely for the first time in the application for leave to appeal which served before the court of first instance. When granting leave to appeal, the court of first instance stated, inter alia: 'I am of the view that another Court could well come to a different decision as to whether Respondent disclosed a defence, and as to whether the loan was improper in the light of section 38 of the Companies Act 1993. This being so, I must find there to be a reasonable prospect of success on appeal.' [19] The court a quo found that the loan agreement contravened s 38(1) of the Companies Act. The court reasoned that it cannot be said that the direct object of the loan agreement of 8 December 2005 was to enable Kernsig as mortgagor to take over the partnership's debt. [20] The sole question raised by Kernsig in the appeal before this court was whether the loan agreement contravened s 38. That section reads as follows: 'No financial assistance to purchase shares of company or holding company ─ (1) No company shall give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares of the company, or where the company is a subsidiary company, of its holding company.' [21] The main purpose of s 38 is to protect the creditors and minority shareholders of a company. A person who purchases shares in a company must do so out of his or her own funds, because using the company's resources to buy shares of that particular company may prejudice the creditors and minority shareholders of that company. As Nicholas AJA said in Lewis v Oneanate (Pty) Ltd & Another 1992 (4) SA 811 (A) at 818A-B: 'The object of a provision such as s 38(1) is the protection of creditors of a company, who have a right to look to its paid-up capital as the fund out of which their debts are to be discharged . . . The purpose of the Legislature was to avoid that fund being employed or depleted or exposed to possible risk in consequence of transactions concluded for the purpose of or in connection with the purchase of its shares.' See also Gardner & Another v Margo 2006 (6) SA 33 (SCA) at para 45. [22] The section is drawn in very wide terms. It prohibits a company from giving financial assistance to any person for the purpose of or in connection with the purchase of its shares, or in the case of a subsidiary company for the purchase of shares of its holding company. There has therefore been a tendency to give the section a narrow interpretation. In Gardner & Another v Margo supra at para 47 Van Heerden JA said: 'In Lipschitz NO v UDC Bank Ltd this Court appears to have accepted the distinction drawn by Schreiner JA in Gradwell (Pty) Ltd v Rostra Printers Ltd between the "ultimate goal" of the transaction in question and its "direct object", and to accept that it is only the direct object of the transaction that is relevant. If the direct object is not the provision of financial assistance by the company for the purpose of or in connection with a purchase of its shares, then it is irrelevant that the ultimate goal of the transaction was to enable a person to purchase such shares. Moreover, financial assistance within the meaning of s 38(1) is given only when the direct object of the transaction is to assist another financially – the s 38 prohibition is not contravened when the direct object of the transaction is merely to give another that to which he or she is already entitled.' Furthermore, In Gradwell (Pty) Ltd v Rostra Printers Ltd and Another 1959 (4) SA 419 (A) at 425E Schreiner JA said: 'The question whether it was to give financial assistance would depend not on how it obtained the money – by loan, secured or not, by realising assets or otherwise – but on what it was to do with the money when available.' [23] It is clear from the above that s 38 is fact-based and that without the necessary facts a court cannot make a finding on whether s 38 was contravened or not. In Transnet Ltd v Rubenstein 2006 (1) SA 591 (SCA) at para 28 Cloete JA said: 'In motion proceedings the affidavits constitute not only the evidence, but also the pleadings.' See also Minister of Land Affairs & Agriculture v D & F Wevell Trust 2008 (2) SA 184 (SCA) at 200D-E and Eskom Holdings Ltd v New Reclamation Group (Pty) Ltd 2009 (4) SA 628 (SCA) at 638C-F. In Yannakou v Apollo Club 1974 (1) SA 614 (A) at 623G-H Trollip JA said: 'And if his defence is illegality, which does not appear ex facie the transaction sued on but arises from its surrounding circumstances, such illegality and the circumstances founding it must be pleaded. It is true that it is the duty of the court to take the point of illegality mero motu, even if the defendant does not plead or raise it; but it can and will only do so if the illegality appears ex facie the transaction or from the evidence before it, and in the latter event, if it is also satisfied that all the necessary and relevant facts are before it.' See also F & I Advisors (Edms) Bpk v Eerste Nasionale Bank van SA Bpk 1999 (1) SA 515 (A) at 525H-526A and 526D-E, and Middleton v Carr 1949 (2) SA 374 (A) at 385-386. [24] In this matter, it is plain that all the facts are not before court to enable the court to determine whether or not s 38 has been contravened. The court a quo, for example, itself said: 'Die betrokke verbandaktes, gelees met die res van die stukke voor die hof, toon ook nie dat enige bedrag daarkragtens opeisbaar en betaalbaar was deur appellant aan respondent nie. Klousule 6 van die verbandaktes bepaal voorts dat die terugbetaling van enige bedrag wat deur appellant aan respondent verskuldig is uit hoofde van die betrokke verbande, moet geskied ooreenkomstig sodanige skriftelike ooreenkoms(te) as wat van tyd tot tyd deur appellant en respondent aangegaan mag word. Respondent steun egter nie op enige sodanige ooreenkoms(te) om te toon dat appellant enige bedrag uit hoofde van die dekkingsverbande aan respondent verskuldig is nie. Dit volg dus dat appellant, as verbandgewer, geen skuld teenoor respondent gehad het om te vereffen nie. In die omstandighede kan dit nie bevind word dat die direkte doel (of minstens die mede-direkte doel) van die termynleningsooreenkoms van 8 Desember 2005, was om appellant se skuld as verbandgewer teenoor respondent te vereffen nie.' Without having the relevant facts before it, it was incorrect for the court a quo to find that the loan agreement contravenes s 38; nor could it have been expected of Absa to produce documents relevant to the question whether there had been such a contravention, as this was not the case Absa was called upon to meet. [25] My view is that the order of the court of first instance was correct and Absa's appeal should succeed. [26] In the court a quo, Absa was represented by two counsel and I believe that they are entitled to the costs of the two counsel. [27] The following order is made: (a) The appeal succeeds with costs which will include costs consequent upon the employment of two counsel. (b) The order of the court a quo is set aside and replaced with the following: 'The appeal is dismissed with costs, which costs will include the costs consequent upon the employment of two counsel.' __________ W L SERITI JUDGE EOF APPEAL APPEARANCES: Counsel for Appellant: R S van Riet SC P de B Vivier Instructed by: Heyns & Partners Inc, Goodwood Symington & de Kok, Bloemfontein Counsel for Respondent N J Treurnicht SC Instructed by: Hanlie Visser Attorneys, Somerset West Webbers, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL IA SUMMARY – JUDGMENT DELIVERED IN COURT OF APPEAL 31 May 2011 STATUS: Immediate ABSA BANK LIMITED AND KERNSIG 18 (PTY) LTD (386/2010) 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 Supreme Court of Appeal today upheld an appeal against a judgment of the full court of the Western Cape High Court, Cape Town in terms of which the full court of the Western Cape ruled that the six covering mortgage bonds registered in favour of Absa over the immovable property of Kernsig, namely Karoovlakte farm should be cancelled as the loan agreement underlying the covering mortgage bonds are invalid and of no force and effect as it contravened s 38 of the Companies Act 61 of 1973. On appeal the SCA held that the argument that the loan agreement between Kernsig and Absa contravened section 38 of the Companies Act was raised for the first time on appeal before the full court which was incorrect. It was never raised before the court of first instance. That was not the case that Absa was called upon to meet. The SCA further held that the court of first instance, after holding that the loan agreement was entered into between Kernsig and Absa, was correct to hold that there are no basis to cancel the six covering bonds registered over Karoovlakte farm in favour of Absa. --- ends ---

2550

non-electoral

2014

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 419/13 In the matter between: ANDREW KINLOCH BUTTERS Appellant and NOMSA VIRGINIA MNCORA Respondent Neutral citation: Butters v Mncora (419/13) [2014] ZASCA 86 (30 May 2014) Coram: Shongwe, Wallis, Willis JJA, Mathopo and Mocumie AJJA Heard: 23 May 2014 Delivered: 30 May 2014 Summary: Civil Procedure – interpretation of Rule 42(1)(b) and (c) – circumstances in which court can alter or amend judgment or order – universal partnership – relevance of commencement date – not relevant. ORDER ________________________________________________________________ On appeal from: Eastern Cape High Court, Port Elizabeth (Chetty J sitting as court of first instance): 1 The order of the high court is varied to read: „paragraph 1 of the order granted in case no. 881/08 is amended as follows: “It is declared that a universal partnership existed between the plaintiff and the defendant in respect of all assets acquired by them up to 15 November 2007.”‟ 2 Save for the above variation, the appeal is otherwise dismissed. 3 The appellant is to pay the respondent‟s costs in this appeal, including costs of two counsel, where employed. JUDGMENT ______________________________________________________________ Shongwe JA (Wallis, Willis JJA, Mathopo and Mocumie AJJA concurring) [1] On 7 December 2010 (in case no. 881/08) the Eastern Cape High Court, Port Elizabeth (Chetty J) made an order against the appellant, inter alia, that „It is declared that a universal partnership existed between the plaintiff [respondent] and the defendant [appellant] of all assets acquired by them during the period 1998 to 15 November 2007‟. The appellant unsuccessfully appealed to this Court and his application for leave to appeal to the Constitutional Court suffered the same fate. Subsequently, the respondent applied to the high court in terms of Rule 42(1)(b) of the Uniform Rules of Court, alternatively the common law, to have the aforesaid order varied by replacing the year 1998 with the year 1988. The application was granted. This appeal is with the leave of the high court. [2] The facts are largely common cause. The undisputed evidence shows that the appellant and the respondent met each other for the first time at a party in Grahamstown in 1988 and fell in love. Two children were born of the relationship. In or about 1993 they lived together in Port Elizabeth as husband and wife. In the meantime, the appellant had started a business, which flourished and, as a result, the appellant accumulated substantial assets. Cracks in the relationship appeared and the final break came when the appellant married another woman on 15 November 2007 without the respondent‟s knowledge. The relationship came to an end. (For a detailed account of the facts see reported case Butters v Mncora 2012 (4) SA 1 (SCA)). [3] As has already been mentioned, the respondent successfully applied to the high court for a declaration that a universal partnership existed in respect of all their assets, which were principally in the nominal ownership of the respondent. In granting the application, the high court also ordered that the universal partnership be dissolved with effect from 15 November 2007 and that the respondent was entitled to be paid 30 per cent of the nett proceeds of the assets. [4] After the appellant unsuccessfully applied for leave to appeal to the Constitutional Court, negotiations commenced between the parties to have the matter resolved finally in accordance with the court order. On 22 May 2012 the appellant‟s attorneys wrote to the respondent‟s attorneys advising them that there may not be a need to appoint a receiver and liquidator to realise the assets of the universal partnership. They were prepared to submit an audited statement of the assets acquired by both parties between 1998 and 15 November 2007. The appellant also indicated that if the audited statement was acceptable to the respondent‟s auditors, the parties could agree to a distribution of 30 per cent payable to the respondent, without the necessity of appointing a receiver and liquidator. The basis for this proposal was the reference in the order to assets acquired by the parties from 1998. The appellant‟s aim was to exclude from the distribution the bulk of the assets and in particular the source of his wealth, being the successful business he had established. [5] Thereupon, the respondent indicated that the year 1998 in the order of the high court was a typographical error and it should have read 1988 because it was common cause, so respondent argued, that 1988 was the year in which the parties first met and commenced their relationship. As a result, a dispute arose. The respondent brought an application in terms of Rule 42(1)(b), alternatively the common law, to correct what was alleged to be a patent error. In a supplementary affidavit, the respondent introduced a further alternative claim based on Rule 42(1)(c) that the reference to 1998 in the order was the result of a mistake common to the parties. The appellant opposed this application. Hence the judgment of Chetty J handed down on 23 April 2013 which is the subject of this appeal. [6] It is instructive to note what the respondent had requested the high court to order. The respondent asked the high court to vary paragraph A1 of the order of Chetty J, dated 7 December 2010, to read 1988 instead of 1998 in terms of Rule 42(1)(b). In addition, „irrespective of the outcome of Prayer 1 above, paragraph A1 of the said order be interpreted to include all assets acquired by the parties of whatever nature and whenever acquired which they possessed as at 15 December 2007‟. [7] The high court found in favour of the respondent. It concluded that „the year date 1998, in the order, was a patent typographical error. Its substitution, by the year date 1988, does not change the sense or substance of the judgment – it merely preserves its tenor. The patent error must accordingly be corrected‟ [8] The issues for determination before this Court are whether the high court had the authority to vary its own judgment or order and whether the alleged patent error was attributable to the high court itself rather than to the respondent‟s legal representative. Uniform Rule 42(1) reads as follows: „(1) The court may, in addition to any other powers it may have, mero motu or upon the application of any party affected, rescind or vary: (a) An order or judgment erroneously sought or erroneously granted in the absence of any party affected thereby; (b) an order or judgment in which there is an ambiguity, or a patent error or omission, but only to the extent of such ambiguity, error or omission; (c) an order or judgment granted as the result of a mistake common to the parties.‟ [9] The appellant submitted that the factual foundation for the year date 1998 was because it was the year in which the parties agreed to marry. Therefore, so the reasoning went, the high court ought not to have varied the order to 1988. Counsel for the appellant argued that the year date 1998 was not a patent error because the respondent pleaded her case in the particulars of claim as such. Therefore, he argued further that the court order was simply a regurgitation of what was pleaded. He submitted that the initial judgment of Chetty J was correct and that this Court cannot at this late stage interfere with that order in the absence of an amendment of the particulars of claim. This submission is flawed because it misunderstands the purpose of pleadings. De Villiers JA in Shill v Milner 1937 AD 101 at 105 quoted Innes CJ as saying that: „The object of pleading is to define the issues; and parties will be kept strictly to their pleas where any departure would cause prejudice or would prevent full inquiry. But within those limits the Court has wide discretion. For pleadings are made for the Court, not the Court for pleadings. Where a party has had every facility to place all the facts before the trial Court and the investigation into all the circumstances has been as thorough and as patient as in this instance, there is no justification for interference by an appellate tribunal merely because the pleading of the opponent has not been as explicit as it might have been.‟ (See Robinson v Randfontein Estates G M Co Ltd 1925 AD 173). [10] In this case, the date upon which the universal partnership was alleged to have commenced was part of the narrative of events, rather than a vital element of the scope and ambit of the partnership. The high court observed that – „[24] …. Although the plaintiff worked for short periods during the couples‟ cohabitation, there is no evidence to suggest that she applied her earnings for herself. In the formative years of the business, the plaintiff lived frugally and was content with the R1000, 00 weekly contributions made by the defendant. She devoted all her time and energy in caring for the children, and, during weekends, for the defendant himself. As the children grew up, her care for them was akin to full time employment. She not only ferried them to and from school but transported them to their extra-curricular activities. [25] It must be recalled that during the subsistence of her cohabitation the children, whom she was required to care for and look after, increased in number. Her contribution in that sphere was immeasurable and the clear impression gained from her testimony is that she applied herself fully, not only to the children‟s well being, but the defendant‟s, as well. Her evidence that she implemented a dietary regime for the defendant for health reasons, given his weight gain, was never challenged and provides clear proof that her overriding concern was the well being of the family unit. Some point was made during the plaintiff‟s cross-examination that many, if not all, the household chores were performed by the domestic help. The fact that the plaintiff had full time, weekday help is, in my view, entirely irrelevant. Given her circumstances, in effect, a full time single mother to four children, she needed all the help she could get.‟ [11] These findings were confirmed and supplemented by this Court where Brand JA observed that – „[18] In this light our courts appear to be supported by good authority when they held, either expressly or by clear implication that: (a) Universal partnerships of all property which extend beyond commercial undertakings were part of Roman Dutch law and still form part of our law. (b) A universal partnership of all property does not require an express agreement. Like any other contract it can also come into existence by tacit agreement, that is by an agreement derived from the conduct of the parties. (c) The requirements for a universal partnership of all property, including universal partnerships between cohabitees, are the same as those formulated by Pothier for partnerships in general. (d) Where the conduct of the parties is capable of more than one inference, the test for when a tacit universal partnership can be held to exist is whether it is more probable than not that a tacit agreement had been reached. (See eg Ally v Dinath 1984 (2) SA 451 (T) at 453F-455A; Mühlmann v Mühlmann 1981 (4) SA 632 (W) at 634A-B; Mühlmann v Mühlmann 1984 (3) SA 102 (A) at 109C-E; Kritzinger v Kritzinger 1989 (1) SA 67 (A) at 77A; Sepheri v Scanlan 2008 (1) SA 322 (C) at 338A-F; Volks NO v Robinson 2005 (5) BCLR 44 (CC) para 125; Ponelat v Schrepfer 2012 (1) SA 206 (SCA) paras 19-22; J J Henning Law of Partnership (2010) 20-29; 19 Lawsa 2 ed para 257.) [19] Once it is accepted that a partnership enterprise may extend beyond commercial undertakings, logic dictates, in my view, that the contribution of both parties need not be confined to a profit making entity. The point is well illustrated, I think, by the very facts of this case. It can be accepted that the plaintiff‟s contribution to the commercial undertaking conducted by the defendant was insignificant. Yet she spent all her time, effort and energy in promoting the interests of both parties in their communal enterprise by maintaining their common home and raising their children. On the premise that the partnership enterprise between them could notionally include both the commercial undertaking and the non-profit making part of their family life, for which the plaintiff took responsibility, her contribution to that notional partnership enterprise can hardly be denied. … [23] The plaintiff‟s case is not that she and the defendant had entered into a commercial partnership which was confined to the Hitech business. Her case is that they had entered into a partnership which encompassed both their family life and the business conducted by the defendant. In view of what I have said earlier, I have no conceptual difficulty with a partnership agreement in those terms. The validity of the plaintiff‟s proposition that they tacitly agreed to share everything, including the income of the business conducted by the defendant, must therefore be approached from that vantage point.‟ [12] It is clear that the appellant‟s case was not, in truth, concerned with when the universal partnership began. Rather it has been about him denying the existence of a universal partnership all together and his refusing to share anything with the respondent. The essence of the dispute was the sharing of the assets of the parties and not the date of commencement of the universal partnership. [13] Once the high court and this Court found that a universal partnership existed, the commencement date of such partnership was irrelevant. However the date of termination was relevant. The question whether or not a universal partnership came into existence was decided by the high court and confirmed by this Court on appeal. This appeal before us is not about redefining a universal partnership but about determining the correctness of the variation. [14] The general rule, now well established in our law, is that once a court has duly pronounced a final judgment it has no authority to correct, alter or supplement it. The reason is that its jurisdiction in the case having been finally exercised has ceased. (See Firestone South Africa (Pty) Ltd v Genticuro AG 1977 (4) SA 298 (A) at 306 F-H; West Rand Estates Ltd v New Zealand Insurance Co Ltd 1926 AD 173 at 176, 178, 186 – 7 and 192.) [15] However there are exceptions to this rule. The principle that a court may clarify its judgment or order if, on a proper interpretation, the meaning remains uncertain and it seeks to give effect to its true intention is trite. The sense and substance of the order ought not to be altered. (See Mostert NO v Old Mutual Life Assurance Co (SA) Ltd 2002 (1) SA 82 (SCA) para 5.) [16] The high court reasoned that the year date 1998 was a typographical error in the particulars of claim of the respondent in the trial action. I agree that its inclusion was clearly a patent error in the first place, inasmuch as it was irrelevant and unnecessary but the substitution and variation thereof was incorrect. It was incorrect because it went against the evidence adduced during the trial and also against the body of the ratio decidendi of the high court as well as this Court‟s reasons for dismissing the appeal. The order must therefore be varied to give effect to the conclusions of the trial court as endorsed by this Court. [17] Brand JA elegantly summed up the conclusion by this Court as follows- „[31] To complete the picture: the defendant did not argue – and I believe rightly so – that the third element of a partnership in terms of Pothier‟s formulation had not been satisfied. On all the evidence it is clear that the all-embracing venture pursued by the parties, which included both their home life and the business conducted by the defendant, was aimed at a profit; a profit which, in my view, they tacitly agreed to share. On the only issue before us, I therefore agree with the finding of the court a quo, that the plaintiff had succeeded in establishing a tacit universal partnership between her and the defendant.‟ [18] In the result the following order is made:- 1 The order of the high court is varied to read: „paragraph 1 of the order granted in case no. 881/08 is amended as follows: “It is declared that a universal partnership existed between the plaintiff and the defendant of all assets acquired by them up to 15 November 2007.”‟ 2 Save for the above variation, the appeal is otherwise dismissed. 3 The appellant is to pay the respondent‟s costs in this appeal, including costs of two counsel, where employed. _______________________ J B Z SHONGWE JUDGE OF APPEAL Appearances For the Appellant: R G Buchanan SC Instructed by: Spilkins Inc, Port Elizabeth; Symington & De Kok, Bloemfontein. For the Respondent: A Beyleveld SC with him O H Ronaasen Instructed by: Lulama Prince & Associates, Port Elizabeth; Honey 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 May 2014 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. * * * ANDREW KINLOCH BUTTERS v NOMSA VIRGINIA MNCORA The SCA today dismissed with costs an appeal by Mr Butters who was resisting an order to varying another order made by the Eastern Cape High Court (Port Elizabeth). The high court declared that a universal partnership existed between Mr Butters and Ms Mncora and that all assets acquired by them during the period 1998 to 15 November 2007 be shared, with Ms Mncora getting 30 per cent of the nett proceeds of the assets. This Court, on appeal confirmed this order. Ms Mncora, subsequently approached the high court requesting that the year date 1998 be substituted with 1988. The application was granted, albeit opposed. The varied order was the subject of this appeal. The appeal was dismissed because the date upon which the universal partnership was alleged to have commenced was of the narrative of events, rather than a vital element of the partnership. It was therefore held that the year date of commencement of the partnership was irrelevant, only the termination was germane. It was further held that the general rule is that once a court has duly pronounced a final judgment it has no authority to correct, alter or supplement it because its jurisdiction in the case has ceased. The exception being that, if needs be, provided the sense and substance is not altered. Alternatively, in terms of Rule 42(1) of the Uniform Rules of Court, a court may, out of its own, or upon an application by any affected party vary or rescind an order or judgment erroneously granted or a patent error or omission or as a result of a mistake common to all the parties.

3232

non-electoral

2007

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 470/06 NOT REPORTABLE In the matter between: KWAZULU CMS MONITORING SYSTEMS (PTY) LTD APPELLANT v KWAZULU-NATAL GAMBLING BOARD FIRST RESPONDENT PROFESSOR S V NZIMANDE SECOND RESPONDENT THE PREMIER OF KWAZULU-NATAL THIRD RESPONDENT THE NATIONAL GAMBLING BOARD OF SOUTH AFRICA FOURTH RESPONDENT THE MINISTER OF TRADE AND INDUSTRY FIFTH RESPONDENT Coram: Navsa, Jafta, Cachalia JJA, Malan et Mhlantla AJJA Heard: 20 September 2007 Delivered: 28 September 2007 Summary: Regulation 156(8), PN 1087 PG, 7 November 2003, promulgated under s 87 of the Kwazulu-Natal Gambling Act 10 of 1996 provides for a single central electronic monitoring system for the Province ─ the Provincial Gambling Board had authority to contract for the procurement of the system. Neutral citation: This judgment may be referred to as KwaZulu CMS Monitoring Systems v KZN Gambling Board [2007] SCA 131 (RSA). CACHALIA JA [1] Pursuant to a public tender process the appellant concluded a contract with the first respondent, hereafter referred to as the Board, for the provision of a central electronic monitoring system (CEMS) designed to receive and send data to and from gaming machines. Its function was to monitor the operation of some 5 000 gaming machines that were to be located at sites throughout the KwaZulu-Natal Province. Shortly after the contract’s conclusion in March 2004 the Board allegedly repudiated it. This caused the appellant to institute a damages claim against the Board and the second respondent in the Pietermaritzburg High Court. When the matter came before Levinsohn DJP he separated one issue for determination in terms of rule 33(4) of the Uniform Rules of Court. This was whether the Board had the statutory authority to conclude the contract. He decided not, but granted leave to this court. [2] The dispute concerns the proper interpretation of reg 156(8), PN 1087, 2003 of the regulations promulgated under s 87 of the Kwazulu-Natal Gambling Act 10 of 1996 (the Act). At the time of the contract’s conclusion it read as follows: ‘The electronic monitoring system referred to in this regulation shall be a single one operated by the Province or entity contracted by the Province which shall have no other interest in respect of gaming in the Province.’ The crisp question is whether the regulation’s reference to the words ‘the Province or entity contracted by the Province’ denotes the Province’s executive, as the respondents contend, or a significant entity within the ‘Province of Kwazulu-Natal’, which is the appellant’s case. If the former interpretation is correct, it means that only the provincial executive was authorised to contract for the provision of a CEMS. If, however, the latter interpretation prevails it would accord with the appellant’s contention that the authority to conclude the contract vested in the Board. To better understand the parties’ contentions it is necessary to examine reg 156(8) in its statutory context and against the background of its promulgation. [3] The Act’s long title states its purpose as inter alia ‘to provide for restrictions on gambling, the establishment of a Provincial Gambling Board, the licensing of persons conducting casinos and bingo games and of gaming machine operators . . . .’ The Board has two objects. First, to ‘ensure that all gambling authorised under this Act is conducted in a manner which promotes the integrity of the gambling industry and does not cause harm to the public interest (s 6(1)(a)). The second object is to promote the Board’s objectives in relation to the Province’s gambling industry. In order to give effect to this object the Board must within six months of its first meeting refer to the Premier a macro-plan for the licensing of route and site operators, which inter alia, will specify the number of gaming machines to be operated in the Province, the types of premises on which they should be permitted and any other matter which the Premier directs the Board to take into account (s 6(2)).1 [4] The ‘Minister’, defined in s 1 of the Act as the Member of the Executive Council or the Premier, is responsible for the administration of the gambling portfolio in the Province. It will be convenient hereafter to refer only to ‘the Premier’. Section 5 of the Act establishes the Board whose members the Premier appoints, in consultation with the cabinet and after consulting the Provincial Legislature’s Portfolio Committee (see s 8). To be eligible for appointment to the Board, persons must comply with strict 1 Brand H The Gambling Laws of South Africa p 5-7. criteria (s 8). Board members hold positions of public trust and the Board’s ‘independence and integrity’ is of paramount importance (s 17(1)). The Act disqualifies from appointment public servants, political office bearers and persons who have a financial interest in any gambling activity (s 9(1)). The Board’s powers and functions derive from s 7 of the Act. They are extensive and include licensing, regulating and controlling gambling activities in the Province (s 7(1)(bA)). It also has the responsibility ‘to determine norms and standards for . . . gaming machines’ whenever there are no national norms and standards (s 7(1)(o). The Board exercises its powers and performs its functions independently. [5] Chapter 5 of the Act deals with gaming machines. It provides that no person is entitled to maintain premises where gaming machines are operated unless in possession of a licence. There are three categories of licences appropriate to gaming machines. First, gaming machines in casinos, second, those in bingo halls and third, those which ‘route operators’ supply and maintain on premises outside casinos and bingo halls operated by ‘site operators’ (s 51).2 This matter concerns gaming machines, in the third category, which are referred to as limited payout machines (LPM’s). [6] Section 54 requires that ‘every gaming machine that is authorised by the Board for use on licensed premises shall be connected to the prescribed electronic monitoring system’. This includes the LPM’s we are concerned with. The Act does not specify who or which entity is responsible for the CEMS’s establishment. But s 87(1)(k) gives the Premier the power to make regulations regarding ‘any matter applicable to the electronic monitoring 2 Section 1 defines a ‘route operator’ as ‘a person who is licensed in terms of this Act to provide gaming machines to site operators and to conduct any other prescribed activities’; a ‘site operator’ is defined as ‘a person who is authorised to keep gaming machines on his or her premises in terms of a licence issued in accordance with this Act’. system’. [7] The regulations prescribing the operation of the CEMS were initially promulgated as part of the ‘gambling regulations’, PN 274, 1998, PG 5301, 23 September 1998. Casinos, bingo halls and site operated LPM’s were dealt with respectively in regs 58, 210 and 156. The three regulations were, with the necessary changes as the context requires, exactly the same in their terms. Regulation 156(1) provided that the CEMS that s 54 contemplates shall be any monitoring and control system which – ‘(a) communicates directly, without using hard wires, with the motherboard of every limited payout machine connected to such system; (b) is able to communicate with the Board’s monitoring and control system through a protocol determined by the Board; and (c) is certified by the South African Bureau of Standards as complying with the standard referred to as South African Bureau of Standards 1718-3: 1996 Gaming Equipment Part 3: Monitoring and Control systems for gaming equipment and which the Board approves for use in the Province’ (My emphasis). [8] Regulations 156(2) and (3) prescribed, in detail, the nature of the data and information that the CEMS was required to provide to the Board, including information on certain revenue transactions, ‘significant events’ and any other information that the Board may have required.3 Regulation 156(4) imposed an obligation on route operators to store the information specified in sub-regulation (3) for a period of five years in addition to other information which the Board may have required. Regulation 156(5) imposed upon the Board an obligation to ‘prescribe a common protocol to facilitate communication between the Board and the route operator’s monitoring and control system . . . .’ The route operator was required, in terms of reg 156(6), to connect all LPM’s to his or her monitoring and control system (which the Board had approved). Regulation 156(7) made it an offence for any person to ‘modify or alter’ the CEMS without the Board’s approval. [9] In promulgating the regulations dealing with the licensing of route and site operators, including reg 156, the Premier gave effect to the Board’s ‘Macro-Plan for the Licensing of Route and Site Operators’, mentioned earlier, which he had published in PN 33, PG 5227, on 15 September 1997. Clause 36 of the plan envisaged that operators would be permitted a system 3 ‘156 (2) The monitoring and control system contemplated in subregulation (1) of this regulation shall provide either – (a) on-line, real-time monitoring and data acquisition capability in the format and media approved by the Board; (b) dial-up monitoring and data acquisition capability in the format and media approved by the Board; or (c) such other monitoring and data acquisition capability as the Board may determine in the conditions of licence. (3) The monitoring system referred to in subregulation (1) of this regulation shall be designed and operated to perform and report functions relating to gaming machine meters and other functions in such a manner that it – (a) records the number and total value of tokens or coins placed in each gaming machine for the purpose of activating play; (b) records the number and total value of tokens or coins deposited in the drop box of each gaming machine; (c) records the number and total value of tokens or coins automatically paid out by each gaming machine; (d) records the number and total value of tokens or coins to be paid manually; (e) identifies any machine taken off-line or placed on-line of the computer monitor system, including the date, time and machine identification number; (f) is capable of reporting any revenue transactions not directly monitored by token or coin meter, such as but not limited to tokens and coins placed in the machine as a result of a hopper fill; (g) identifies any significant events, which the Board may require from time to time, and as may be defined in the South African Bureau of Standards standard referred to in subregulation (1) of this regulation; and (h) records any other information as the Board may, from time to time, require.’ of their choice subject to its ability to communicate with the Board’s ‘monitoring and control system’, which could only have meant the CEMS. The system was to have operated as a single integrated one which, according to Mr Mafayela who testified for the appellant in the High Court, would have been able to transmit information from each LPM to a central site, linked to the Board. [10] In its analysis of reg 156 the court below observed that ‘Regulation 156(1)(b) speaks of the electronic monitoring system contemplated by section 54 of the Act being able to “communicate with the Board’s monitoring control system through a protocol determined by the Board”. That connotes in my view a relationship between the first-mentioned system and the (Board’s)’. The court then made reference to sub-regulations 2, 3 and 6, and accepted that there were two systems, the CEMS and the Board’s, and that the Board’s role was confined to determining ‘standards and criteria’ for the CEMS; it was not authorised to contract for the CEMS. [11] As I have mentioned, the CEMS was envisaged as a single, integrated system, which had to comply with the standards and criteria that the Board determined. The Board’s role was clearly not limited only to setting standards and criteria for the CEMS. It is apparent that reg 156, at least before its amendment by the addition of reg 156(8), envisaged that the CEMS would provide a wide range of data and information to the Board to enable it to monitor each LPM. There is no suggestion in regs 156(1) to 156(7) that the Premier had any such function. Thus, as the recipient of the data and information from the CEMS, it was the Board’s responsibility, not the Premier’s, to approve the operation of the CEMS (s 156(1)(c)). The Premier’s responsibility was limited to prescribing by regulation its operation. Furthermore, if the Premier was responsible for establishing and operating the CEMS, reg 156(7) would have made alteration or modification of the system without the Premier’s approval (not ‘the Board’s’ as the regulation read) an offence. It is therefore, at the very least, implicit in the Act, read with regs 156(1) to 156(7) that the Board was authorised to procure the CEMS. [12] Before I deal with reg 156(8), which the respondents contend conferred on the provincial executive the authority to procure the CEMS, it is necessary to examine reg 58(8), which amended reg 58. This will place the interpretation of reg 156(8) in its proper historical context. [13] Regulation 58 (which dealt with gaming machines in casinos) was amended in PN 38, 11 February 2000, by the addition of reg 58(8). The amendment was introduced in the context of a jurisdictional dispute over whether the Board had the power to establish its own provincial CEMS, or whether the National Gambling Board should establish a single national CEMS to which all provincial monitoring and control systems would be linked. The dispute reached the Constitutional Court4 where the National Board sought a declaration that there may only be a single national CEMS. It also sought an interdict to restrain the Premier and the Board from establishing a provincial CEMS. The Minister of Trade and Industry, who is responsible for the administration of the National Gambling Act, was also cited as a respondent, but he filed an affidavit supporting the relief claimed. The court dismissed the application, without considering the merits of the 4 National Gambling Board v Premier, KwaZulu-Natal 2002 (2) SA 715 (CC) paras 5-10. dispute. [14] Regulation 58(8) asserted emphatically that the Province had the authority to establish the CEMS.5 It did not deal with who or which provincial entity was authorised to contract for the CEMS, and was not intended to. The reason is obvious; the Premier assumed that the Board had the authority. It is clear from the Constitutional Court judgment that he acknowledged this, and the matter was argued on this basis.6 Likewise it must be accepted that by amending reg 156 with the addition of reg 156(8) on 7 November 2003,7 when the jurisdictional dispute had as yet not been resolved, the Premier intended to assert, as he had done when he amended reg 58(8), that there would be a single CEMS for site operated LPM’s in the Province.8 [15] The fact that the April 2004 elections changed the provincial executive’s political composition is, I think, also germane to understanding reg 156(8)’s genesis. The provincial executive now fell under the political control of the same party that controlled the national government. Shortly after the elections the Board repudiated the contract. Later, the newly elected Premier amended the regulations yet again, to achieve the opposite result his predecessor had; he made unequivocal provision for a national CEMS to be established by the National Board. Regulation 156 was substituted with a 5 Id para 34. 6 Id para 25. 7 PN 1087, 2003. 8 When first promulgated on 23 September 1998 reg 58 dealt with the CEMS in casinos, reg 209 with bingo equipment, reg 210 with LPM’s inside bingo halls and reg 156 with LPM’s outside bingo halls and casinos. Regulation 58(8) was then amended on 11 February 2000, but not regs 209, 210 and 156. This was apparently an oversight because it left the other LPM’s out of the loop. On 7 November 2003 reg 58(8) was amended to read as follows: ‘(8) The electronic monitoring system referred to in this regulation and regulations 209 and 210 shall be a single one operated by the Province or entity contracted by the Province which shall have no other interest in respect of gaming in the Province’. Regulation 156 was similarly amended by the addition of reg 156 (8). new regulation and now reads as follows: ‘The electronic monitoring system for limited payout machines contemplated by section 54 of the Act shall be the national central electronic monitoring system established and monitored by the National Gambling Board in terms of section 27 of the National Gambling Act 7 of 2004’.9 Regulation 210 (which deals with gaming machines in bingo halls) was similarly amended. What is significant about the latest amendment is that the Premier again accepted, albeit more explicitly, that the authority to establish a CEMS lay with an independent board, not with a political authority. [16] It is in this context and against this background that reg 156(8) must be interpreted. The court below concluded that the regulation conferred on the provincial executive the power to operate the CEMS. In arriving at this conclusion he reasoned that ‘. . . (t)he Minister . . . expressly legislates that the electronic monitoring system which is referred to in regulation 156(1) to 156(7) inclusive will be operated by “the province” or “entity” contracted by the province. In my view the intention was clear. Throughout regulation 156 “the Board” is referred to. Now by amendment it is the province alternatively an entity contracted by it which operates the electronic monitoring system. The Minister, if he intended to could quite easily have used the word “Board” instead of “province”.’ [17] I respectfully disagree with the learned judge’s interpretation. The word ‘Province’ is defined in s 1 of the Act to mean the ‘Province of Kwazulu-Natal’. There is, in my view, no cogent reason to depart from this meaning when interpreting the regulation. On the contrary, there is every 9 PN 1241, 2005. reason not to. Indeed if it was intended to depart from this meaning, words indicating this departure would specifically have been used. In any event the learned judge’s interpretation is, with respect, inconsistent with the scheme of the Act, which, for good reason, places the responsibility for gambling in the hands of an independent board, not a politician. [18] Properly construed, I think, reg 156(8) meant that the Province of KwaZulu-Natal would have had its own CEMS, operated by the Board or any significant entity in the Province contracted by the Board. The reference to the word ‘single’ in the regulation indicates, as I have mentioned, that the regulation was concerned with having a single CEMS for the Province, not two (national and provincial). This is the mischief that the regulation sought to address. It did not, and indeed could not, confer any power on the provincial executive which the Act did not give it. It follows that the appeal must succeed. The following order is made. The appeal is upheld with costs including the costs consequent on the employment of two counsel. The order of the court below is replaced with the following order: ‘It is declared that the Board was authorised to conclude the contract.’ ______________ A CACHALIA JUDGE OF APPEAL CONCUR: NAVSA JA JAFTA JA MALAN AJA MHLANTLA 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: 28 September 2007 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 KWAZULU CMS MONITORING SYSTEMS v KWAZULU-NATAL GAMBLING BOARD AND OTHERS The Supreme Court of Appeal today upheld an appeal by Kwazulu CMS Monitoring Systems (PTY) Ltd (‘CMS Monitoring’) against a decision of the Pietermaritzburg High Court declaring that the Kwazulu-Natal Gambling Board did not have the authority to enter into a contract with CMS Monitoring for the provision of a central electronic monitoring system (CEMS). The SCA held that the board did have the authority. The facts were these: Pursuant to a public tender process CMS Monitoring concluded a contract with the board for the provision of a CMS in March 2004. The function of the CMS was to assist the board to monitor the functioning of some 5000 gambling machines, known as limited payout machines. The machines were to be located at sites outside casinos and bingo halls and each would be connected to and would transmit information to the CEMS. Shortly after the conclusion of the contract, the board allegedly repudiated it. This resulted in CMS Monitoring suing the board for damages. One of the disputes which arose is whether the board had had the authority to enter into the contract. The dispute was over the interpretation of regulation 156(8) of the regulations promulgated under the Kwazulu-Natal Gambling Act 10 of 1996. It has now been replaced. At the time of the contract’s conclusion it read as follows: ‘The electronic monitoring system referred to in this regulation shall be a single one operated by the Province or entity contracted by the Province which shall have no other interest in respect of gaming in the Province.’ The High Court interpreted the words ‘operated by the Province or entity contracted by the Province’ to mean that the provincial executive, not the board, had the authority to enter into the contract. The SCA, however, interpreted it differently. It found that the regulation did not take away the board’s authority to enter into the contract, which was implicit in the preceding regulations, reg 156(1) to 156(7). It also held that the word ‘Province’ was defined in the Act to mean the ‘Province of Kwazulu-Natal’ and did not mean the provincial executive. Furthermore it held that to confer the authority on the provincial executive as a political entity, as the High Court’s interpretation had, is inconsistent with the purpose of the Act which is to place the responsibility for gambling in the hands of an independent board. The interpretation of reg 156(8) was the only issue that the High Court and SCA considered. The remaining issues are pending in the High Court.

157

non-electoral

2017

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 882/2016 In the matter between ROAD ACCIDENT FUND APPELLANT and REBECCA MOHOHLO RESPONDENT Neutral citation: Road Accident Fund v Mohohlo (882/16) [2017] ZASCA 155 (24 November 2017) Coram: Leach JA, Meyer, Mokgohloa, Makgoka and Rogers AJJA Heard: 13 November 2017 Delivered: 24 November 2017 Summary: Delict – dependant’s action – claim by deceased’s aunt – de facto adoption – deceased owed her duty of support – claimant sufficiently indigent to enforce duty. _________________________________________________________ ORDER ___________________________________________________________________ On appeal from: The Gauteng Division of the High Court, Pretoria (Hughes J sitting as court of first instance). The appeal is dismissed with costs. JUDGMENT ___________________________________________________________________ Rogers AJA (Leach JA, Meyer, Mokgohloa and Makgoka AJJA concurring): [1] The question in this appeal is whether the respondent, who was the plaintiff in the court a quo, is entitled to claim damages for loss of support arising from the death of her nephew, Otshepeng Letshufi, who died on 27 October 2011 as a result of injuries sustained in a motor collision on 2 July 2011. The appellant, the defendant in the court a quo (RAF), conceded the issue of negligence but disputed the respondent’s right to damages. For convenience I refer to the respondent as the plaintiff. [2] The parties asked the court a quo to determine whether Otsepeng owed the plaintiff a legal duty of support and whether she had the degree of indigence entitling her to enforce the duty. The quantification of her claim, if these questions were answered in her favour, stood over for later determination. Unfortunately, and despite repeated admonishments from this court, the matter proceeded without a formal separation order, without a clear identification of the issues and without proper consideration as to whether separation was convenient.1 The result was that the court a quo, which found for the plaintiff, made an order that the RAF was ‘liable to compensate the plaintiff… (for) the amount of damages the plaintiff is able to prove’. This was not in terms a determination of the issues which the parties apparently wanted the judge to decide. 1 See eg Denel (Edms) Bpk v Vorster [2004] ZASCA 4; 2004 (4) SA 481 (SCA) para 3; Absa Bank Ltd v Bernert [2010] ZASCA 36; 2011 (3) SA 74 (SCA) para 21. [3] It is doubtful whether a separation of issues was convenient. The quantification would not have required extensive evidence. More importantly, there is a connection between indigence and quantification, since the quantum of support, if any, to which the plaintiff is entitled would be the amount required to eliminate the indigence. [4] However, it would not be fair to the plaintiff if we were to refuse to determine the appeal at this stage. We thus proceed on the basis that the court a quo’s decision should be understood as a determination that Otsepeng owed the plaintiff a legal duty of support and that she was sufficiently indigent to enforce the duty. Since quantification has been deferred for later decision, even a slight deficit in her resources would suffice to sustain the court a quo’s decision. [5] It is not the plaintiff’s case that Otsepeng owed her a duty of support merely by virtue of their blood relationship. According to our common law, blood relationship per se only gives rise to a duty of support to the second degree of consanguinity so that, while there is a duty of support between grandchild and grandparent, and between siblings inter se, there is no duty of support between uncle/aunt on the one hand and nephew/niece on the other. See Voet Commentary on the Pandects 25.3.10 (Gane’s translation); Van Leeuwen Roman-Dutch Law 1.13.7 (Kotze’s translation, 2 ed); Van Leeuwen Censura Forensis 1.10.4 (WP Schreiner’s translation); Sande Frisian Decisions 2.8; Huber Jurisprudence of My Time 1.23.30 (Gane’s translation); Ford v Allen & others 1925 TPD 5, which contains a full discussion of the old authorities; United Building Society v Matiwane 1933 EDL 280 at 284; Vaughan NO v SA National Trust and Assurance Co Ltd 1954 (3) SA 667 (C) at 670D-671B. See also Van Heerden et al Boberg’s Law of Persons and the Family 2 ed at 253. [6] In Vaughan NO Herbstein J, with whom Van Wyk AJ concurred, referred to Grotius 3.33.2 where the writer speaks of ‘the widow and children and any others, if such there be, who were maintained by the dead man’s labour’, observing that insofar as Grotius related the duty of support to the factual provision of support by the deceased at the time of his death, the writer did not appear to state our law (at 671A). He also pointed out that, in the light of Voet’s unequivocal statement at 25.3.10, the same writer’s reference at 9.2.11 to a duty of support owed to the wife and children and ‘other near relations’ could not be a reference to the relationship between an uncle/aunt and nephew/niece. [7] In the present case, the plaintiff relies on circumstances additional to the blood relationship. She was the only person to testify (which she did through an interpreter) and her evidence must be accepted unless it was plainly unsatisfactory, which I do not think it was. Her evidence disclosed the following. She is the oldest of her siblings, of whom only two sisters survive. She was 64 when she testified in August 2015. Otsepeng is the child of one of her surviving sisters, Lenah. The latter was an unmarried woman of 19 when she gave birth to Otsepeng in March 1983. She was still at school. Otsepeng’s alleged father is deceased and disputed paternity while he was alive. Lenah subsequently married another man with whom she has four children and a grandchild. [8] The plaintiff testified that in her culture, when a woman who has a child marries another man, the man’s family will not accept the child as their own. In such circumstances there is family consultation to decide who will take care of the child. In the present case the plaintiff, who had no children of her own, agreed to take Otsepeng into her home. He was about three months old. She treated him as her son and he viewed her as his mother. Lenah and her husband never provided financial support for him. She was asked why she did not formally adopt Otsepeng. Her answer was that ‘in our culture we do not have these things of adopting’. [9] The plaintiff was a domestic worker until 2004 when she was forced by ill- health to give up permanent employment. She testified that she suffers from diabetes, high blood pressure, heart troubles and arthritis. She has subsequently done occasional jobs as a babysitter and selling vegetables and vetkoek. She evidently cared well for Otsepeng because he was able to enter the formal job market in 2007 at the age of about 24. At the time of the collision he was earning R6 690 per month as a financial consultant with Old Mutual. He continued to live with her. She testified that he supported her by giving her cash and buying her groceries and clothes. [10] This court has on several occasions in recent years considered the extension of claims for loss of support to persons who do not fall within categories recognised by the common law, in particular partners who are not married according to civil law. Most recently, in Paixão & another v Road Accident Fund 2012 (6) SA 377 (SCA), which dealt with a claim for loss of support by an unmarried life partner and her daughter, Cachalia JA said the following (para 13, citation of authority omitted): ‘The existence of a dependant’s right to claim support which is worthy of the law’s protection, and the breadwinner’s correlative duty of support, is determined by the boni mores criterion or, as Rumpff CJ in another context put it in Minister van Polisie v Ewels, the legal convictions of the community. This is essentially a judicial determination that a court must make after considering the interplay of several factors: “the hand of history, our ideas of morals and justice, the convenience of administering the rule and our social ideas of where the loss should fall”. In this regard considerations of “equity and decency” have always been important. Underpinning all of this are constitutional norms and values. So the court is required to make a policy decision based on the recognition that social changes must be accompanied by legal norms to encourage social responsibility. By making the boni mores the decisive factor in this determination, the dependants’ action has had the flexibility to adapt to social changes and to modern conditions.’ [11] Cachalia JA went on to refer to a passage from Mahomed CJ’s judgment in Amod v Multilateral Motor Vehicle Accidents Fund (Commission for Gender Equality Intervening) 1999 (4) SA 1319 (SCA) para 7 where the Chief Justice said that the precise scope of the dependant’s action was unclear from the writings of the Roman-Dutch jurists and that there were passages in Grotius and Voet perhaps suggesting that the action might be extended to any dependant within the deceased’s ‘broad family whom he in fact supported whether he was obliged to do so or not’ or to any dependant enjoying a ‘de facto close familial relationship with the breadwinner’. As I have said, Voet and others were quite clear that there was no legal duty of support beyond the second degree of consanguinity. [12] However, the legal convictions of the community are not static. It may well be that a legal duty of support which depends on nothing more than the happenstance of a blood relationship should be kept within the limits indicated in our old authorities. Our ideas of morals and justice may not, in general, insist on support between more distant relatives. It by no means follows that the same approach should be followed where the blood relationship has been fortified by additional circumstances. And in answering the latter question, one must have regard to the values underlying our Constitution. One of these is ubuntu: ‘The spirit of ubuntu, part of the deep cultural heritage of the majority of the population, suffuses the whole constitutional order. It combines individual rights with a communitarian philosophy. It is a unifying motif of the Bill of Rights, which is nothing if not a structured, institutionalised and operational declaration in our evolving new society of the need for human interdependence, respect and concern.’ See Port Elizabeth Municipality v Various Occupiers 2005 (1) SA 217 (CC) para 37; see also City of Johannesburg Metropolitan Municipality v Blue Moonlight Properties 39 (Pty) Ltd & another 2012 (2) SA 104 (CC) para 38. [13] Another relevant consideration is that in terms of s 211(3) of the Constitution the court must apply customary law when that law is applicable, subject to the Constitution and any legislation that specifically deals with customary law. In United Building Society v Matiwane, cited earlier, the plaintiff, who claimed inter alia on behalf of the daughters of the deceased’s sister, alleged that the deceased had been duty bound to support his nieces ‘by native law and custom’ and that the plaintiff was entitled to bring the claim on their behalf as the head of the kraal according to such law and custom. The court held that customary law could not govern the defendant’s liability and that our common law did not recognise a duty of support owed by an uncle to his nieces. By virtue of s 211(3) of the Constitution, the answer would be different now. What needs to be ascertained is whether in law the one family member owed the other a duty of support. If that duty existed by virtue of a customary law applicable to the family, the duty should be recognised, even though – in a dependant’s claim – the defendant is not itself a party bound by customary law. [14] In the present case there was no expert evidence as to customary law. However, the plaintiff testified as to what was required by her culture and her evidence was not put in issue. It may well be that, once she agreed to care for Otsepeng following family consultation, she had by customary law a legal duty to support him but it is unnecessary to go so far. On her evidence, she at least felt under a duty to do so. She started caring for him when he was still an infant and continued to maintain him until he became self-supporting. Her behaviour, and the way Otsepeng reciprocated when he became an adult, gave expression to ubuntu. For all practical purposes the plaintiff adopted him, even though according to her there was no formal process of adoption in her culture. The de facto relationship between them was that of mother and child. This de facto relationship was every bit as real as the de facto life partnerships which our courts have accepted as giving rise to reciprocal duties of support. [15] In Fosi v Road Accident Fund & another 2008 (3) SA 560 (C) Dlodlo J provided an African law perspective of the duty of support. Although in that case the deceased was the biological child of the mother, the following passage almost certainly would have been recognised by the plaintiff and Otsepeng as applicable to their de facto relationship of mother and child (para 16): ‘When an African (black) provides support and education to his/hers son/daughter, he/she is not only under a duty to do so on the strength of the South African legal system, but custom also obliges such a parent. In fact, in African tradition to bring up a child is to make for oneself an investment in that when the child becomes a grown-up and is able to participate in the labour market, that child will never simply forget about where he came from. That child, without being told to do so, will make a determination (taking into account the amount he/she earns, her travelling to and from work, food to sustain himself and personal clothing, etc) of how much he must send home to the parents on a monthly basis. This duty is inborn and the African child does not have to be told by anybody to honour that obligation. . . It is for this reason that the plaintiff was puzzled on being asked in cross-examination why the deceased sent her money. Her answer was rather telling: “Because the deceased knew where he was coming from”. The duty of a child to support a needy and deserving parent is well known in indigenous/customary law. It is observed by such children. There is always an expectation on the part of a parent that his child will honour this duty.’ [16] In Metiso v Padongelukfonds 2001 (3) SA 1142 (T) the court recognised a duty of support where an uncle had accepted custody of two minor children upon the death of their father, his brother, even though the process of adoption was not complete according to tribal rules because of the absence of consultation with the mother’s family. With reference to this and other cases, Sutherland J in JT v Road Accident Fund 2015 (1) SA 609 (GJ) said the following (para 26): ‘It seems to me that these cases demonstrate that the common law has been developed to recognise that a duty of support can arise, in a given case, from the fact-specific circumstances of a proven relationship from which it is shown that a binding duty of support was assumed by one person in favour of another. Moreover, a culturally embedded notion of “family”, constituted as being a network of relationships of reciprocal nurture and support, informs the common-law’s appetite to embrace, as worthy of protection, the assumption of duties of support and the reciprocal right to claim support, by persons who are in relationships akin to that of family. This norm is not parochial but rather is likely to be universal, it certainly is consonant both with norms derived from the Roman-Dutch tradition . . . and, no less, from norms derived from African tradition, not least of al as exemplified by the spirit of Ubuntu, as mentioned by Dlodlo J in Fosi v RAF supra.’ [17] In my view it would be consistent with the legal convictions of the community to recognise a reciprocal duty of support between the plaintiff and Otsepeng. Indeed, to deny it would revolt one’s ideas of ‘morals and justice’ and considerations of ‘equity and decency’ (see Paixão supra). [18] The defendant’s counsel submitted that such a finding would open the floodgates to similar claims and that the RAF would be at an evidential disadvantage in determining whether the de facto relationship existed. I do not think the recognition of the duty of support can depend on the particular position of the RAF. The question is whether, as between the de facto mother and child, a duty of support exists. The fact that the breadwinner may die in a motor accident as a result of another driver’s negligence, leading to potential liability on the part of the RAF, cannot affect the answer to the question. If, for example, Otsepeng had fallen out with his de facto mother and stopped supporting her, her right to claim support from him could obviously not have been affected by the notional possibility that he might at some stage die in a motor accident because of another driver’s negligence. [19] Furthermore, there is nothing before us to show that claims of the present kind would be very numerous. We will not be deciding that there is, without more, a duty of support between an aunt and her nephew; or that such exists once it could be shown that the nephew has assisted his aunt financially. We are only deciding that a duty of support exists where, in accordance with the family’s cultural practices, an aunt has de facto adopted an infant and brought him up as her own child. I doubt whether such cases are likely to be more common than the life partnerships which have already been recognised by the courts as giving rise to a duty of support. [20] In any event, the ‘evidential disadvantage’ should not be overstated. There are many aspects of claims against the RAF which depend on information of which the RAF in the nature of things can have no knowledge. Where loss of support is claimed, para 18 of the prescribed RAF 1 form requires all necessary particulars to be furnished, including the reason for dependence. Where the duty of support rests on a de facto relationship rather than a blood or marital relationship recognised by law, the proper answering of this component of the form would require adequate particularity to be given. The RAF could ask the claimant to provide corroborating information under oath, with the warning that if the claimant fails to do so but eventually succeeds at trial, the RAF will ask for an adverse costs order. By signing the prescribed form, the claimant expressly gives the RAF consent to obtain information and documents from any persons who are able to provide it. After the institution of proceedings the RAF could file a request for further particulars for purposes of trial. It could consult with other family members. [21] The other question we must decide is whether the plaintiff’s financial circumstances are such that she is entitled to enforce the duty of support. In Oosthuizen v Stanley 1938 AD 322 it was said that a child has a duty to support his parents if they are ‘indigent’. Tindall JA referred to support in the form of food, clothing, lodging and medical care ‘in accordance with the quality and condition of the persons to be supported’. Whether a parent is in such a state of ‘comparative indigency or destitution’ was said to be a question of fact depending on the circumstances of each case (p 328). The word ‘comparative’ was presumably used by the learned judge to emphasise that the exercise should be undertaken with reference to the ‘quality and condition of the persons to be supported’ so that what might constitute indigence with reference to one person would not necessarily constitute indigence with reference to a more humble person (see Van Vuuren v Sam 1972 (2) SA 633 (A) at 642E-F and 643E-F). Even so, support is limited to the dependant’s basic needs – food, clothes, board and medical care (at 642F). [22] Just as the existence of a duty of support is affected by considerations of public policy, so in my view is the content of the duty. With the advent of democracy and abolition of apartheid, people disadvantaged under the previous regime have the opportunity of improving their economic lot. One of the ways of doing so is by providing children with opportunities denied to their parents. I do not think it would be consistent with our constitutional values to hold that an indigent woman, who has been able to raise and educate a child despite her straitened circumstances, can expect no more support from the child than is necessary to keep her in the same deprived circumstances as she was forced to endure for most of her life. [23] The plaintiff testified that while Otsepeng was alive they lived in Hillbrow where her accommodation cost R1 000 per month. Since Otsepeng’s death she has had to move back to her rural roots (she called it her homeland) where she now pays R600 for accommodation. She estimated her monthly grocery and transport expenses at R1 000 and R350 respectively. She also pays (or used to pay) a monthly amount to a burial society. In cross-examination she was asked to confirm that these were her expenses. She replied: ‘I have highlighted those things before court although they themselves are accommodated to the grant that I receive and again what will it help me if I highlight to this court much more things, there is quite a lot of things to life. There is quite a lot of things to spend in the life of today that are in need to a person to survive.’ [24] The grant mentioned in this passage is an old age pension which she has been receiving since she turned 60 (which would have been in 2011). This amounted to R1 350 as at August 2015. She testified that while Otsepeng was alive he would pay her between R1 200 and R1 300 per month in cash, which she spent on rent, medication and her burial society contributions. In addition he would buy groceries. From time to time he would also buy her clothes. She was asked about her lifestyle before his death. She replied: ‘I was leading a very nice lifestyle your ladyship even in clothing. [Otsepeng] sometimes said to me Mama let’s go out, let me go and buy you something that will make you look nice. And now ma’am what is your lifestyle now like? --- Even now in clothing your ladyship it is a disaster with me. I do not have nice clothes any more. I do not live a lifestyle which I used to live.’ [25] The defendant’s counsel submitted that this demonstrated that the plaintiff was wanting support for luxuries. I disagree. Otsepeng’s income was not large. He no doubt wanted the plaintiff to be able to dress in a way which lent her dignity and gave her a certain basic pleasure. I do not think that that goes beyond her basic needs. [26] In regard to her selling of vetkoek, the plaintiff said that the income was sporadic. She required assistance to sell as she could not stand for a long time. When she ran out of money she looked to other relatives for help. As noted, she has moved back to the countryside to reduce the cost of her accommodation. Her household consists of herself and an unemployed daughter of her deceased brother, for whom it seems she is caring on much the same basis as she took Otsepeng into her home. The daughter has a child whom the plaintiff described as her grandchild. [27] It is clear, in my view, that R1 350 per month, plus modest sporadic income from selling vetkoek, is not enough to cover the plaintiff’s basic necessaries of life, such as are reasonably appropriate to her station in life following Otsepeng’s successful entry into the job market in 2007. At that time she was living in Hillbrow and she should not be denied the opportunity of returning there, particularly since she is likely to have increasing need of medical care as she ages. Even if one confines her accommodation expenditure to the current amount of R600, that leaves only R750 for groceries, clothing, transport, burial society contributions and other incidental expenses. That is not enough to save her from indigence, even if it be assumed that all medical expenses are provided free of charge by State facilities. [28] In the circumstances, it is unnecessary to decide whether the plaintiff’s ability to obtain free medical services from the State should be taken into account when it comes to quantifying her claim for loss of support. When that question comes to be answered, the parties will need to have regard to the recent judgment of the Constitutional Court in Member of the Executive Council for Health and Social Development, Gauteng v DZ obo WZ [2017] ZACC 37 (31 October 2017). In para 23 of the majority judgment, Froneman J said the following with reference to this court’s decision in Ngubane v South African Transport Services [1990] ZASCA 148; 1991 (1) SA 756 (A): ‘Ngubane is authority for allowing a defendant to produce evidence that medical services of the same or higher standard, at no or lesser cost than private medical care, will be available to a plaintiff in future. If that evidence is of a sufficiently cogent nature to disturb the presumption that private future healthcare is reasonable, the plaintiff will not succeed in the claim for the higher future medical expenses. This approach is in accordance with general principles in relation to the proving of damages.’ Froneman J disapproved the contrary conclusion in the more recent decision of this court in The Premier, Western Cape N.O. v Kiewitz [2017] ZASCA 41; 2017 (4) SA 202 (SCA). If this approach were extended to claims for loss of support incorporating future medical treatment, the passage I have quoted suggests that the evidential burden would rest on the RAF to show that the plaintiff does not reasonably require private medical treatment as part of her support. [29] I thus make the following order: The appeal is dismissed with costs. ____________________ O L Rogers Acting Judge of Appeal APPEARANCES For Appellant R Strydom (with him CPJ Strydom) Instructed by FourieFismer, Pretoria c/o Maduba Attorneys, Bloemfontein For Respondent P Lourens Instructed by Spruyt Inc, Pretoria c/o Webbers 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 24 November 2017 STATUS Immediate Road Accident Fund v Mohohlo (882/16) [2017] ZASCA 155 (24 November 2017) 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 the Road Accident Fund (‘RAF’) against a judgment of the Gauteng Division of the High Court, Pretoria, in which that court held that the respondent was entitled to claim damages from the RAF for loss of support. The respondent was the biological aunt of the deceased breadwinner. She had de facto adopted him when he was an infant and he had grown up regarding her as his mother. This de facto adoption occurred in accordance with the respondent’s culture and following a family meeting. Although our common law does not ordinarily recognise a duty of support between an aunt and nephew, the additional circumstances present in this case, and particularly the de facto adoption, justified the conclusion that there was a reciprocal duty of support between the respondent and the deceased. ~~ ends~~

3778

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 1159/2020 In the matter between: MUNICIPAL EMPLOYEES’ PENSION FUND FIRST APPELLANT AKANI RETIREMENT FUND ADMINISTRATORS (PTY) LTD SECOND APPELLANT and PANDELANI MIDAS MUDAU FIRST RESPONDENT VHEMBE DISTRICT MUNICIPALITY SECOND RESPONDENT Neutral citation: Municipal Employees’ Pension Fund and Another v Pandelani Midas Mudau and Another (Case no 1159/2020) [2022] ZASCA 46 (8 April 2022) Coram: DAMBUZA, VAN DER MERWE and CARELSE JJA and SMITH and WEINER AJJA Heard: 25 February 2022 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 8 April 2022. Summary: Pension Funds – amendment of pension fund rules to reduce members’ withdrawal benefits with retroactive effect – such rule valid and enforceable provided that it is adopted in terms of the fund rules and the applicable statutory regime. ORDER On appeal from: Gauteng Division of the High Court, Pretoria (Avvakoumides AJ and Kubushi J concurring, with Leathern AJ dissenting): The appeal is upheld with costs. The order of the full court is set aside and substituted with the following: ‘2.1 The appeal is upheld with costs. 2.2 The order of the Pension Fund Adjudicator is set aside and substituted with the following order: ‘The complaint is dismissed with costs.’ JUDGMENT Smith AJA (Dambuza, Van der Merwe and Carelse JJA and Weiner AJA concurring) [1] This is an appeal against the judgment of the full court of the Gauteng Division, Pretoria, upholding a determination by the Pension Fund Adjudicator (the Adjudicator) by majority decision. The appeal is with the leave of this Court. [2] The first appellant (the Fund) is a pension fund established in terms of the provisions of the Pension Funds Act 24 of 1956 (the Act). The Fund’s members are previously disadvantaged persons employed by local government authorities. The second appellant is the administrator of the Fund. [3] The first respondent, Mr Mudau, was employed by the second respondent, the Vhembe District Municipality, and in that capacity also became a member of the Fund during 2003. Mr Mudau resigned from his position with effect from 31 May 2013 and his membership of the Fund also terminated on that date. [4] At the time, s 37(1)(b)(ii) of the Fund rules provided that a member who joined the Fund after June 1998 would upon resignation be entitled to withdrawal benefits calculated as follows: the member’s contributions, plus interest, multiplied by three (the original rule). Having been warned by its actuaries that the rule provided for unsustainably high returns, which could operate to the financial detriment of the Fund, it resolved on 21 June 2013 to amend the rule, with effect from 1 April 2013, by providing for membership withdrawal benefits to be: member’s contribution, plus interest, multiplied by 1,5. [5] The stated rationale for the amendment was to reduce the risk of the Fund not meeting its liabilities in the future. By making the amendment retroactive it sought to prevent a ‘run’ on the Fund, that is, to avoid the danger that members may resign in their numbers if they were aware of the impending reduction of withdrawal benefits. [6] The Fund duly applied for the registration of the new rule on 22 July 2013, and the Registrar approved and registered it on 1 April 2014, with the effective date being 1 April 2013. In the meantime, Mr Mudau had applied for his withdrawal benefits, which were paid to him on 18 October 2013, in terms of the amended rule. [7] Aggrieved by the reduced pay-out, Mr Mudau lodged a complaint with the Adjudicator, contending that his benefits should have been calculated in terms of the original rule, since, in terms of s 12(4) of the Act, the proposed amendment would only take effect after it had been duly registered. [8] The Adjudicator ultimately upheld the complaint, determining that the amended rule could not be applied to Mr Mudau’s withdrawal benefits since it had not yet been approved by the Registrar when the benefits became due, and furthermore, that the amended rule could not be applied to benefits which accrued before the amendment became effective. Although the parties made submissions to the Adjudicator before the amended rule was approved and registered, she made her determination during July 2014, a few months after the amendment had taken effect. [9] The Fund, being of the view that the Adjudicator’s ruling was ultra vires her powers and incorrect on the merits, launched an application in the Gauteng High Court, challenging the ruling. It sought an order setting aside the Adjudicator’s decision and replacing it with an order dismissing the complaint. [10] Section 30P of the Act allows a party who is aggrieved by the Adjudicator’s determination, to approach the division of the high court having jurisdiction for appropriate relief. That section effectively provides for a hearing de novo, with or without additional evidence, and the court may make any order it deems fit. [11] The matter initially came before Raulinga J, who, apparently treating it as a review of the Adjudicator’s decision, upheld her determination. He found that the Adjudicator did not commit a reviewable irregularity, and consequently dismissed the application, with costs. [12] The Fund’s appeal to the full bench was also dismissed in terms of the majority judgment of Avvakoumides AJ, (Kubushi J concurring and Leathern AJ dissenting). The full court upheld the Adjudicator’s ruling that the amended rule could not be applied to withdrawal benefits that accrued prior to its approval by the Registrar. [13] In this Court the Fund assailed the full bench decision on two grounds, namely that: (a) the complaint fell outside the scope of the Adjudicator’s powers set out in ss 30H and 30M, read with the definition of a ‘complaint’ in s 1 of the Act; and (b) the Adjudicator erred as a matter of law in finding that the amended rule could not be applied to withdrawal benefits which accrued before it came into effect on 1 April 2014, despite its retroactive operation. [14] Counsel for the appellants argued that the complaint pertained to the validity of the amended rule and hence fell outside the purview of the Adjudicator’s powers. I disagree. It is common cause that the complaint was lodged, and the submissions made to the Adjudicator, before the amended rule was registered. Section 1 of the Act defines ‘a complaint’ as one relating to the administration of the fund, the investment of its funds, or the interpretation and application of its rules. The Adjudicator is empowered to investigate and make a determination in respect of a complaint lodged by an aggrieved member.1 [15] To my mind it is evident from the Adjudicator’s reasoning that she did not purport to rule on the validity of the amended rule, but rather its interpretation and application to benefits which accrued before its approval by the Registrar. And leaving aside for the moment the issue relating to the soundness of her reasoning, it is manifest that her ruling that Mr Mudau was entitled to pension benefits calculated in terms of the original rule, was predicated on her finding that the amended rules could not be applied before they were approved and registered by the Registrar. The complaint before the Adjudicator thus related to the interpretation and application of the Fund rules, and accordingly fell within the scope of the powers vested in her in terms of the Act. The facts of this case can therefore be distinguished from those in Joint Municipal Pension Fund and Another v Grobler and Others,2 where the complaint before the Adjudicator required her to rule on the validity of the fund rules.3 This appeal ground was accordingly correctly dismissed by the full court. [16] I now turn to consider the issue relating to the retroactive application of the amended rule. In my view, the appellants’ contentions regarding this issue are legally sound and compelling. 1 Sections 30H and 30M of the Pension Funds Act 24 of 1956. 2 Joint Municipal Pension Fund and Another v Grobler and Others [2007] ZASCA 49; 2007 (5) SA 629 (SCA). 3 Ibid para. 25. [17] Rule 48(1) of the Fund Rules authorises the Fund to amend its rules, subject to the provisions of s 12 of the Act. In terms of s 12 of the Act, a pension fund may alter or rescind any rule, or make any additional rule, provided that it does not affect any right of a creditor (other than a member or shareholder of the fund), and it has been approved and duly registered by the Registrar. In terms of s 12(4) of the Act, the Registrar shall register the amended rule if he or she is satisfied that the proposed amendment is not inconsistent with the Act and is financially sound. The amended rule would then take effect from a date determined by the fund concerned, and if the fund has not determined a date, the rule becomes effective on the date of registration. [18] It is, in my view, manifest that these provisions unequivocally authorise the Fund to amend its rules and to determine the effective application date thereof. In National Tertiary Retirement Fund v Registrar of Pension Funds,4 this Court held that a pension fund may adopt a rule reducing a member’s pension benefits, provided that is it done in accordance with the fund rules and the applicable statutory regime. [19] While there is a strong presumption in our law against legislation operating retroactively, if the wording of the statute is unambiguous and the intention of the legislature (or in this case the pension fund) is clearly to interfere with vested rights retroactively, the provisions of the retroactive instrument must be given effect to.5 This Court held in Euromarine International of Mauren v The Ship Berg and Others6 that the enquiry, in every case where the issue of retroactivity arises, must be into the language of the statute and the intention of the legislature emerging therefrom. 4 National Tertiary Retirement Fund v Registrar of Pension Fund [2009] ZASCA 41; [2009] 3 All SA 254 (SCA). 5 National Director of Public Prosecutions v Carolus [1999] ZASCA 101; [2000] 1 All SA 302 (A) para 31. 6 Euromarine International of Mauren v The Ship Berg and Others 1986 (2) SA 700 (A) at 709E-710E. [20] There can be little doubt that, properly construed in accordance with established canons of legal interpretation – namely, the language used in the context of the amended rule as a whole; the circumstances in which it was adopted by the Fund; the clear purpose to which it is directed and the factors considered by the Fund at the time of its formulation7 - the amended rule was intended to operate retroactively and to reduce members’ benefits with effect from 1 April 2013. The respondent’s counsel also did not take issue with this assertion, but argued that because Mr Mudau’s benefits became due, and were in fact paid before the rule was registered, the amended rule cannot apply to his withdrawal benefits. He was accordingly entitled to be paid in accordance with the rules which were in existence on 18 October 2013, or so the argument went. [21] To my mind, the plain and unambiguous language of the amended rule simply does not brook this contended construction. The amended rule explicitly states that it operates retroactively and thus reduces pension benefits due to members with effect from 1 April 2013. In my view, there can hardly be a clearer indication of an intention to interfere with existing rights with effect from that date. As I have mentioned earlier, there were no statutory impediments to the Registrar approving and registering a rule which sought to impair rights that accrued before its registration. [22] I consequently conclude that the amended rule retroactively applied to all pension withdrawal benefits which had accrued to the Fund’s members after 1 April 2013. However unfortunate this finding may be for Mr Mudau, the amended rule thus also applied to his withdrawal benefits. The appeal must accordingly 7 See, for example, Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593 (SCA). succeed with costs. In my view the matter was straightforward and it was not reasonably necessary for the appellants to employ two counsel. [23] In the result I make the following order: The appeal is upheld with costs. The order of the full court is set aside and substituted with the following: ‘2.1 The appeal is upheld with costs. 2.2 The order of the Pension Fund Adjudicator is set aside and substituted with the following order: ‘The complaint is dismissed with costs.’ ______________________ JE SMITH ACTING JUDGE OF APPEAL Appearances: For appellants: A R Bhana SC (with I A Goodman) Instructed by: Webber Wentzel Attorneys, Sandton Symington De Kok Attorneys, Bloemfontein. For first respondent: M I Thabede (with L T Leballo) Instructed by: Mafuyeka & Associates Inc, Pretoria Mhlokonya 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: 8 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 Municipal Employees’ Pension Fund and Another v Pandelani Midas Mudau and Another (Case no 1159/2020) [2022] ZASCA 46 (8 April 2022) Today the Supreme Court of Appeal upheld an appeal from the Gauteng Division of the High Court (high court) and substituted the order with one upholding the appeal and setting aside the order made by the Pension Fund Adjudicator (the Adjudicator) with one dismissing the complaint. The first appellant was a pension fund (the Fund) whose members were previously disadvantaged persons employed by local government authorities. The second appellant was the Fund’s administrator. The first respondent was employed by the second respondent, being the Vhembe District Municipality and, as such, qualified to become a member of the Fund. At the time, the Fund’s rules indicated that a member who joined the fund after June 1998 would be entitled to withdraw benefits to a certain specified extent. The Fund was cautioned about the unsustainability of this arrangement, and the rules were altered retroactively in order to protect the Fund from members who sought to capitalise on the old rule. An application to have the rule altered was submitted on 22 July 2013 and approved on 1 April 2014. In the meantime, the first respondent had applied for his withdrawal benefits, which he discovered had been substantially reduced. Aggrieved, the first respondent approached the Adjudicator, contending that the benefits ought to be calculated in terms of the original rule. The Adjudicator upheld the appeal, who held that the first respondent’s withdrawals should not be affected because the amended rule was not yet in place at the time of the withdrawal. The high court and the full bench dismissed the respective appeals as the high court was of the view that the Adjudicator did not commit a reviewable irregularity and the full bench was of the view that an amended rule could not be applied before it came into effect. The SCA, however, found that rule 48(1) of the Fund’s rules authorised the Fund to amend its rules, subject to s 12 of the Pension Funds Act 24 of 1956. The effect hereof would be that the amended rule would take effect on a date determined by the Fund and if no date has been determined, on the date that the rule is registered. The SCA found that this unequivocally authorised the Fund to amend its rules and to determine the effective date thereof. The SCA cautiously bore in mind the presumption against retroactive legislation but maintained that if the wording of a statute is unambiguous and the intention of the legislature, which was equated to the Fund in this instance, was to interfere with vested rights retroactively, then such intention must be given effect to. The SCA was satisfied that the amended rule was intended to operate retroactively. In the result, the SCA upheld the appeal and substituted the order of the high court with one upholding the appeal and substituting the order of the Adjudicator with one dismissing the complaint. --------oOo--------

4147

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 1072/2022 In the matter between: BG BOJOSINYANE & ASSOCIATES APPELLANT and SHERIFF: MICHAEL SMITH FIRST RESPONDENT SOUTH AFRICAN BOARD FOR SHERIFFS SECOND RESPONDENT Neutral citation: BG Bojosinyane & Associates v Sheriff: Smith and Another (1072/22) [2023] ZASCA 174 (8 December 2023) Coram: MAKGOKA, MATOJANE AND WEINER JJA AND KOEN AND CHETTY AJJA Heard: 9 November 2023 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 by release to SAFLII. The date and time for hand-down is deemed to be 11H00 on 8 December 2023. Summary: Civil procedure – Magistrates’ Court Act 32 of 1944 and Rules – sheriffs’ fees and charges – whether sheriff entitled to demand payment of fees and charges before services rendered. ORDER On appeal from: North-West Division of the High Court, Mahikeng (Leeuw JP sitting as court of first instance): 1. The appeal is upheld; 2. The first and second respondents are directed to pay the costs of the appeal jointly and severally, the one paying the other to be absolved; 3. The order of the high court is set aside, and replaced with the following order: ‘(a) Unless authorised by a magistrate in terms of section 14(7) of the Magistrates’ Court Act 32 of 1944, the first respondent is directed to effect service and to execute any court process emanating from the office of the applicant without any unreasonable delay; (b) The first respondent is interdicted from requiring payment of any part of his fees or charges in respect of the service or execution of a court process in paragraph (a) above before serving and executing such process; (c) After the service or execution of any court process referred to in paragraph (a) above, the first respondent is directed, without delay and without first requiring prior payment of any part of his fees and charges relating thereto, to return to the applicant and to the court concerned whatever he has done by virtue of such process, specifying his fees and charges on the original and all copies of the returns of service; (d) The first and second respondents are directed to pay the costs of the application jointly and severally, the one paying the other to be absolved.’ JUDGMENT Koen AJA (Matojane and Weiner JJA and Chetty AJA concurring): [1] This appeal raises the following issues for decision: (a) whether the relief claimed before the North-West Division of the High Court, Mahikeng (the high court) included a determination of the issues in paragraph (b) below; if so (b) whether, unless excused by an authorisation granted by a magistrate in terms of s14(7) of the Magistrates’ Court Act 32 of 1944 (the Act), a sheriff is entitled to refuse to serve or execute a court process unless a deposit in respect of the sheriff’s fees and charges relating thereto is paid upfront, allied to which is whether once the process is served or executed, a sheriff is entitled to withhold the return of service until payment of his fees and charges specified therein have been paid; and (c) whether a mandatory interdict to give effect to the determination of the issues in (b) above should have been granted. [2] The appellant, BG Bojosinyane and Associates, a firm of attorneys, launched an urgent1 application in the high court against the first respondent, the sheriff of the magistrate’s court, Vryburg, claiming the following relief in its notice of application: ‘THAT [the first respondent] is compelled and directed to effect service and/or execute the process of the court, emanating from the office of [the appellant] upon the mentioned or cited party or person stated therein without any avoidable or unreasonable delay and accordingly notify the [appellant] and return to court whatever he has done by virtue thereof [specifying] the total amount of his or her charges on the original and the copies of the return of service.’ The relief claimed was opposed by the first respondent and the second respondent, the South African Board for Sheriffs.2 1 The first respondent raised the lack of urgency as a first point in limine in the application. The application was struck off the roll at the first appearance on 19 September 2019 for lack of urgency. The matter thereafter proceeded in accordance with the provisions of the Uniform Rules of Court. 2 The second respondent is a statutory body established in terms of section 7 of the Sheriff’s Act 90 of 1986. It was not initially a party to the application before the high court but was joined as the second [3] As the basis for the relief claimed, the deponent to the founding affidavit, Mr Boemo Granch Bojosinyane (Mr Bojosinyane), explained that the first respondent demanded and continued to demand exorbitant fees from the appellant ‘before he [would] effect service of any civil process sued out by [the appellant], which conduct is contrary to the procedure laid down by the Magistrates’ Courts Rules of Court, Magistrates’ Courts Act, Uniform Rules of the above Honourable Court and the Sheriff’s Act.’ He complained that this resulted in ‘unnecessary and uncalled for arguments and disputes (which) inevitably lead to excessive delay to serve [the appellant’s] documents or process, or at times such documents are not being served at all as in the present case.’ (Emphasis added.) [4] Mr Bojosinyane illustrated the appellant’s complaint with reference to the following matters where the appellant had required the first respondent’s services: (a) In OA Phora v MM Phora, a summons was sent to the first respondent on 1 July 2019. On 9 July 2019 the first respondent demanded payment of the sum of R354.25 before he would effect service of the summons on the defendant. An enquiry as to how that amount was arrived at resulted in a revised estimate of R441.31 being provided on 11 July 2019. The appellant then adjusted the estimate to R208.80 which it determined was a reasonable fee, which was deposited into the first respondent’s bank account. The summons was served on 19 July 2019. On 25 July the first respondent rendered an account for R399.68, leaving a shortfall of R190.88. The first respondent withheld the return of service until payment was made; (b) In BG Bojosinyane v Isang Nakale Inc a warrant of execution was sent to the first respondent on receipt of which he ‘as usual demanded prior payment’ of the sum of R1 000 from the appellant on 22 June 2018. The appellant in a letter dated 26 June 2018 claimed that this amount was excessive. The return of service eventually rendered reflects that an attempt was made to execute the warrant on 20 August 2018, but that it could not be executed. The fees charged per the return totalled R1 266.27. The first respondent’s charges were paid directly by the execution debtor. respondent on 3 December 2020 well before judgment was delivered on 15 April 2021. The second respondent applied for condonation for the late filing of its heads of argument in the appeal, which was granted unopposed. (c) In BG Bojosinyane v K Letsapa, the first respondent on 16 May 2018 and 17 August 2018 respectively demanded payment of the sum of R230.81 each for service of a summons and a notice to show cause, in each instance on the basis that prior payment ‘will be required to attend to your request’. This was followed by a further request on 11 March 2019 for payment of the sum of R323.16 for service of a summons before the first respondent would attend thereto. The appellant on 13 March 2019 queried the amounts demanded but subsequently, in the words of Mr Bojosinyane ‘reluctantly and under protest but solely made in order to facilitate service of the process and the finalization of the matters’ paid the sum of R323.16 to the first respondent on 18 March 2019. The return of service dated 25 March 2019 reflects that service was effected on 19 March 2019. The first respondent’s return of service raised a fee of R271.98. Notwithstanding written demand on 17 July 2019 the credit between what was paid as a deposit and the fees raised, is alleged not to have been refunded to the appellant; (d) In Fire Cash Loans v Department of Education: NL Tong3 the first respondent on 15 April 2014 demanded payment of the sum of R174.15 ‘which includes this letter and faxes etc’ before execution of an emoluments attachment order would take place. After an unsuccessful attempt at execution on 7 July 2014, the order was served on 9 July 2014. The first respondent then rendered an account for R174.15, which included an amount of R36.50 for an unsuccessful ‘attempted execution.’ The amount claimed is the same amount the respondent had required the appellant to pay before he would serve the process. The appellant questions how the initial demand could be for the same amount as the final fee, when the unsuccessful attempt at execution could not have been known at the time the demand for payment was made. [5] The relevant provisions of the Act, the Magistrates’ Courts Rules of Court (the rules), and the Sheriff’s Act, which provide the legislative framework within which a sheriff is to discharge his or her functions and obligations, alluded to by Mr Bojosinyane when setting out the basis for the appellant’s claim, are set out below. [6] Rules 8(1) and (2) of the rules provide that: 3 The facts appear from the ruling of the magistrate Mr BE Chulu. ‘(1) Except as otherwise provided in these Rules, the process of the court shall be served or executed, as the case may be, through the sheriff. (2) Service or execution of process of the court shall be effected without any unreasonable delay, and the sheriff shall, in any case where resistance to the due service or execution of the process of the court has been met with or is reasonably anticipated, have power to call upon any member of the South African Police Force, as established by the South African Police Service Act, 1995 (Act 68 of 1995), to render him or her aid.’ (Emphasis added.) [7] Rules 8(3) and (4) provide: ‘(3) The sheriff to whom process other than summonses is entrusted for service or execution shall in writing notify- (a) the registrar or clerk of the court and the party who sued out the process that service or execution has been duly effected, stating the date and manner of service or the result of execution and return the said process to the registrar or clerk of the court; or (b) the party who sued out the process that he or she has been unable to effect service or execution and of the reason for such inability, and return the said process to such party, and keep a record of any process so returned. (4) When a summons is entrusted to the sheriff for service, subrule (3) shall mutatis mutandis be applicable: Provided that the registrar or clerk of the court shall not be notified of the service and that the summons shall be returned to the party who sued out the summons.’ [8] Rule 8(6) provides: ‘(6) After service or attempted service of any process, notice or document, the sheriff, other than a sheriff who is an officer of the Public Service,4 shall specify the total amount of his or her charges on the original and all copies thereof and the amount of each of his or her charges separately on the return of service.’5 (Emphasis added.) [9] In respect of returns of service, rule 9(17A)(a)6 provides: 4 Rule 8(7) provides that: ‘[t]he Director-General of Justice shall by notice in the Gazette publish the name of every court for which a sheriff who is an officer of the Public Service has been appointed’. 5 There is no provision for such charges to be specified prior to the service of any process. 6 Rule 4(6A)(a) of the Uniform Rules of Court similarly provides that: ‘The document which serves as proof of service shall, together with the served process of court or document, without delay be furnished to the person at whose request service was effected.’ (Emphasis added.) ‘The document which serves as proof of service shall, together with the served process of court or document, without delay be furnished to the person at whose request service was effected.’ (Emphasis added.) [10] The sheriff’s fees and charges are regulated by rule 34, which provides that: ‘(1) The fees and charges to be taken by a sheriff who is an officer of the Public Service shall be those prescribed in Part I of Table C of Annexure 2 and in the case of any other sheriff those prescribed in Part II of the said Table and Annexure. (2)(a) Every account of fees or charges furnished by a sheriff shall contain the following note: “You may require this account to be taxed and vouched before payment.” (b) Where any dispute arises as to the validity or amount of any fees or charges, or where necessary work is done and necessary expenditure incurred for which no provision is made, the matter shall be determined by the taxing officer of the court whose process is in question. (3)(a) Any party having an interest may by notice in writing require the fees and charges claimed by or paid7 to the sheriff to be taxed by the registrar or clerk of the court, and may attend on such taxation. (b) Upon a taxation referred to in paragraph (a) the sheriff shall vouch to the satisfaction of the registrar or clerk of the court all charges claimed by him or her. (c) A fee for the attending of the taxation shall be allowed- (i) to the sheriff if the sheriff's fees or charges are taxed and passed in full, as allowed for in Table C; and (ii) to the interested party concerned if the sheriff's fees or charges are taxed but not passed in full, on the same basis as the fee allowed to the sheriff under subparagraph (i).’ (Emphasis added.) [11] Sections 14(7) and (8) of the Act provide: ‘(7) A messenger receiving any process for service or execution from a practitioner or plaintiff by whom there is due and payable to the messenger any sum of money in respect of services 7 It was argued that this reference to ‘or paid to the sheriff’ meant that the reasonableness of a deposit claimed by a sheriff, and paid, could also be determined by taxation in the event of a dispute as to the reasonableness thereof. I disagree. The scheme provided in the legislative framework resulting in payment being made to a sheriff is payment of charges reflected on a return of service after the services have been rendered. The legislative scheme does not countenance a series of taxations: one to determine the reasonableness of a deposit required to be paid before the sheriff will serve or execute a court process, and another once the actual services have been rendered and the actual charges are levied in the return of service. This will place an undue burden on taxing masters. performed more than three months previously in the execution of any duty of his office, and which notwithstanding request has not been paid, may refer such process to the magistrate of the court out of which the process was issued with particulars of the sum due and payable by the practitioner or plaintiff; and the magistrate may, if he is satisfied that a sum is due and payable by the practitioner or plaintiff to the messenger as aforesaid which notwithstanding request has not been paid, by writing under his hand authorize the messenger to refuse to serve or execute such process until the sum due and payable to the messenger has been paid. (8) A magistrate granting any such authority shall forthwith transmit a copy thereof to the practitioner or plaintiff concerned and a messenger receiving any such authority shall forthwith return to the practitioner or plaintiff the process to which such authority refers with an intimation of his refusal to serve or execute the same and of the grounds for such refusal.’ [12] Section 16(k) of the Sheriffs Act assigns to the second respondent the responsibility, with the approval of the Minister, to ‘frame a code of conduct which shall be complied with by the sheriff’.8 Clause 2 of the Code of the Conduct for Sheriffs (the Code) provides that: ‘A sheriff entrusted with the service or execution of a process shall act without avoidable delay in accordance with the provisions of rule 8(4) of the Magistrates’ Court Rules or rule 4(6)(a) of the Supreme Court Rules: Provided that any process, requiring urgent attention shall be dealt with forthwith.’ (Emphasis added.) In terms of the Code sheriffs undertake to comply with the precepts of the Act and clause 8.1 prescribes that a sheriff shall ensure that his or her charges are in accordance with the applicable tariff. [13] Section 43 of the Sheriffs Act defines improper conduct by a sheriff. Sections 44 to 52 deal with the procedures to be followed in lodging a complaint and the disciplinary procedures and sanctions that may be imposed on a sheriff.9 8 Such a code was published in GN 954, GG 12840,16 November 1990. 9 These provisions are not quoted in this judgment, as it is only the fact that they are available that is relevant to this judgment, and not the detail thereof. [14] The high court found10 that the appellant had a clear right to have processes of court served without any avoidable or unreasonable delay. It however dismissed the application for a mandatory interdict on the basis that the appellant had not established an imminent threat of irreparable harm, and that it had not established that it had no satisfactory alternative remedy. During the course of the judgment the high court commented that: ‘Having made a finding that the [appellant] should be non-suited in an application for an interdict against the sheriff, I deem it unnecessary to deal with the question whether or not the Sheriff is entitled to demand payment prior to rendering his duty to serve or execute process. There is no issue pending in this court in that regard.’ (Emphasis added.) Did the issues before the high court include whether a sheriff may require payment of fees and charges before processes would be served or executed? [15] In application proceedings the notice of motion and affidavits contain both the pleadings and the evidence in support thereof.11 [16] The brief synopsis of the facts in the four cases relied upon by the appellant in support of its application demonstrates that the demands for upfront payment in each instance resulted in delays, to varying degrees, before the court process was served or executed. The appellant complained that these delays were contrary to the requirement that processes must be served or executed without unreasonable delay. That was the thrust of its complaint and the reason for the application. The major part of the founding affidavit was devoted to setting out the factual circumstances of the four cases referred to as events which reflect a practice by the first respondent to demand payment from the appellant, before court processes emanating from its offices are served or executed. This 10 The first respondent also raised points in limine: that the appellant had alternative remedies available to it; that the magistrates’ court was competent to deal with the issue; and non-compliance with the full court judgment in AECI v Laufs [2016] ZANWHC 63), in opposition to the relief claimed. The second point in limine will be considered as part of the merits in this judgment. The third and fourth points in limine were not dealt with in the judgment of the high court. There is no cross appeal in respect thereof. They are accordingly not considered in this judgment. 11 Fischer and Another v Ramahlele and Others [2014] ZASCA 88; 2014 (4) SA 614 (SCA) para 13; Public Protector v South African Reserve Bank [2019] ZACC 29; 2019 (6) SA 253 (CC) para 234. practice would furthermore continue into the future as the first respondent confirmed that he had taken ‘a decision that the [appellant] needs to pay in advance’.12 [17] The high court was therefore required to address this factual premise on which the appellant approached the court for relief and to determine whether the appellant had a clear right to restrain the sheriff from requiring payment of fees and charges before serving or executing the appellant’s court processes. It erred in not doing so. May the sheriff refuse to serve and/or execute a court process unless the fees and charges relating thereto have first been paid? [18] It is trite law that where final relief is sought in application proceedings on the affidavits, the facts on which the relief is adjudicated are those stated by the respondent together with the admitted facts in the founding affidavit, or if not formally admitted, are facts that cannot be denied and are therefore regarded as admitted.13 [19] The material facts necessary for the adjudication of the issue under discussion have been summarised above in relation to the four cases where the first respondent’s services were required by the appellant. They are largely common cause. The only possible further facts of relevance are that the first respondent in his answering affidavit added that the appellant, since 2014, was not an account holder at his office because the appellant had not paid him for some services rendered, and that the appellant is a ‘bad’ payer. He further contended that he has a discretion to determine which ‘customers’ should pay upfront and which will be granted a credit facility, that he has suspended the appellant’s account due to non-payment, and that he will continue to demand payments in advance before serving or executing any court processes at the request of the appellant. 12 The learned judge in the high court concluded that the order sought was, in her view, academic. As the threat of demanding security for the payment of fees before processes of court would be served or executed was expressly stated to apply into the future, the relief was, with respect neither academic, nor moot. 13 Stellenbosch Farmer’s Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA 234 (C) at 235E-G; Plascon Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634F. [20] Both the Magistrates’ Court and the Office of the Sheriff, are creatures of statute.14 The Magistrates’ Court is established by the Act and its administration is governed by the Act and the rules.15 The rules provide for court processes to be served or executed by a sheriff, and for other matters incidental to the work of sheriffs. Sheriffs are appointed in terms of the Sheriffs Act.16 Being creatures of statute means that they have no inherent powers, but only such powers as are expressly, or by necessary implication, conferred upon them.17 [21] The legislative framework does not provide that a sheriff may demand payment of a deposit upfront in anticipation of fees and charges to be incurred for services still to be rendered. [22] What is furthermore clear from the legislative framework, viewed against the fundamental right of all persons to have access to courts and to have disputes adjudicated in an expeditious manner, is that all court processes must be served without delay. The service and execution of court processes has indeed been described as ‘the cornerstone of our legal system’.18 It is in the interests of the administration of justice that our courts operate efficiently and without unreasonable or avoidable delays. 14 National Credit Regulator v National Consumer Tribunal and Others [2023] ZASCA 133 para 51; Tshoga v S [2016] ZASCA 205; 2017 (1) SACR 420 (SCA) para 53. 15 The rules are made by the Rules Board for Courts of Law, which has the power to make, amend or repeal rules for the High Court and the Magistrates’ Courts in terms of the Rules Board for Courts of Law Act 107 of 1983. The purpose of these rules is to promote access to the courts. 16 Section 2 of the Sheriffs Act provides for the appointment of a sheriff who performs his or her duties within the area of jurisdiction of the lower and superior courts for which he or she has been appointed. 17 In Ndamase v Functions 4 All 2004 (5) SA 602 (SCA) para 5 it was said that ‘It is well-established that the magistrates’ court has no jurisdiction and powers beyond those granted by the Act. . .’ Specifically regarding sheriffs, in City of Johannesburg v Changing Tides 74 (Pty) Ltd and others [2012] ZASCA 116; 2012 (6) SA 294 (SCA) the high court had ordered the sheriff to compile a list of occupants to be evicted from a building. This court declared that part of the order to be a nullity as the `Sheriffs Act did not confer such a power on the sheriff – a creature of statute.’ See also South African Board of Sheriffs v Cibe and Others [2022] ZAGPJHC 153 para 37; Bonsai Investments Eighty Three (Pty) Ltd v Kögl and others [2011] NAHC 189 para 13. 18 D Harms Civil Procedure in Magistrates' Courts Volume 2 (Service Issue 57, August 2023) para B8.3. Sheriffs also execute processes required to give effect orders of various courts. Section 42(1) of the Superior Courts Act 10 of 2013 provides that: ‘(1) The process of the Constitutional Court and the Supreme Court of Appeal runs throughout the Republic, and their judgments and orders must, subject to any applicable rules of court, be executed in any area in like manner as if they were judgments or orders of the Division or the Magistrates’ Court having jurisdiction in such area.’ (Emphasis added.) [23] If payment may be insisted upon before a process is served or executed, then delays will be inevitable from when the process to be served is received by the first respondent: while the first respondent prepares an estimate of the amount of his fees and charges he requires to be paid; that estimate is conveyed to the appellant; the appellant assesses the reasonableness or otherwise of the amount demanded; correspondence is exchanged where the reasonableness of the estimate is debated; payment is made; payment is received by the first respondent; and the process is finally served or executed. These delays are demonstrated by the facts of the four cases relied upon by the appellant. [24] The reasonableness of fees and charges charged by a sheriff may be challenged by way of taxation, but only after the court process has been served or executed and the actual fees and charges have been specified in the return of service. Taxation at that stage provides for an expeditious and inexpensive resolution of any fee disputes. But there is no provision for anticipated fees demanded in the form of a payment up front, to be challenged to determine the reasonableness or otherwise of the amount demanded. Disputes about the reasonableness of the amount demanded up front will result in court processes not being served or executed with no mechanism to resolve such disputes, and hence even further delays. [25] The issue is not whether these delays are unreasonable from the financial perspective of a sheriff, but that they are unreasonable and avoidable in the greater interest of the administration of justice, and inconsistent with the legislative framework. [26] Not allowing demands for payment of anticipated fees up front would not leave the first respondent without a remedy in respect of practitioners who are slow or bad payers. He can obviously always institute action for payment of unpaid taxed fees. But that apart, s 14(7) of the Act, quoted above, provides a remedy whereby he may withhold services, once authorised by a magistrate, in regard to the service or execution of a particular process until all previous fees outstanding in respect of services rendered more than three months previously, to that particular practitioner or person who required his services, have been paid in full. Obtaining such authority from a magistrate might occasion some delay, but it is the only delay sanctioned by the legislative framework within which sheriffs, who accept appointment as sheriffs, have to operate. The three-month period is obviously a reasonable time for any disputes regarding the quantum of previous fees charged, to have been resolved, either by agreement or taxation.19 [27] As regards returns of service, rule 9(17A)(a) requires that a sheriff’s return of service must be provided without delay. The return of service is part and parcel of the service and execution process. The retention of a return of service by a sheriff will not delay the service or execution of the court process, but it can and will cause a delay in the administration of justice. The return of service is an important document. Not only does it serve as prima facie proof of the service or execution of the court process, a necessary fact in the judicial process, but as required by rule 8(6) it also records and is the method contemplated by the rules to convey details of the fees charged by a sheriff to a practitioner. In the light of the express requirement in rule 9(17A)(a) that it must be provided ‘without delay’, the return too cannot be withheld pending payment. To do so would be inconsistent with the legislative framework. [28] In summary, the first respondent is not entitled to demand payment up front for fees and charges contemplated, but yet to be incurred, for the service and execution of court processes. Similarly, returns of service may not be withheld by him pending payment being made of the fees and charges reflected therein for the service and execution of court processes. The interdictory relief [29] The relief which should follow in the light of the conclusions reached above can be expressed as declaratory relief, or it can be couched as a mandatory interdict. The high 19 There is no similar provision in the high court, but that does not detract from the above interpretation of the legislative framework. Unlike the magistrates’ court which is a creature of statute, the high court has inherent jurisdiction and power, confirmed by section 173 of the Constitution, to regulate its own process and to develop the common law taking into account the interest of justice. Section 43(1) of the Superior Courts Act 10 of 2013 provides that ‘a refusal by the sheriff or a deputy to do any act which he or she is by law required to do, is subject to review by the court concerned on application ex parte or on notice as the circumstances may require.’ court treated the application as one for an interdict. That was how the appellant’s case was presented. The appellant also argued the appeal on the basis that it sought an interdict. [30] The requirements for a final interdict are trite. The applicant for such an interdict must demonstrate a clear right, establish an imminent threat of harm, and show that it has no satisfactory alternative remedy. [31] In the light of the conclusions reached above, the appellant has established a clear right, subject to the provisions of s14(7) of the Act, to have court processes served or executed without unreasonable delay. It is entitled to restrain the first respondent from requiring payment of a deposit in respect of anticipated fees and charges before serving or executing a court process, or rendering the return of service relating thereto. [32] As regards the requirement of imminent harm or injury, the first respondent’s stated intention to continue insisting on payment from the appellant before rendering any service or executing court processes emanating from the appellant, confirms not only an injury in law which the appellant has suffered in the past, but also an ongoing injury which is reasonably apprehended and feared20 to occur again in the future.21 [33] Finally, as regards the third requirement, the appellant established that it has no satisfactory alternative remedy but to apply to court for appropriate relief. Taxation of the fees and charges demanded in advance is not a remedy because such taxation is not available within the legislative framework. Disciplinary proceedings before a committee of the Sheriff’s Board do not present a satisfactory remedy to the appellant who would still be required first to pay whatever is demanded as a deposit up front before the court process is served or executed. The disciplinary process will take time, and even if the eventual finding is one of some form of unprofessional conduct and a sanction, it will be 20 V & A Waterfront Properties (Pty) Ltd and Another v Helicopter & Marine Services (Pty) Ltd and Others 2006 (1) SA 252 (SCA) paras 20-21. It is not an injury that has occurred and is not likely to be repeated. 21 I respectfully disagree with the conclusion of the high court that this threat would not entitle the appellant to approach the court to obtain an interdict. No reason was stated for that conclusion. no remedy to the appellant who in the interim required service and execution of a court process without unreasonable delay. Instituting disciplinary proceedings is therefore not an alternative satisfactory remedy ‘with the same result’,22 nor will it provide adequate redress.23 [34] The requirements for an interdict all being satisfied, the appellant was entitled to be granted interdictory relief. Conclusion [35] The appeal accordingly succeeds. The order granted should however address the specific conduct of the first respondent which the appellant sought to restrain. Such an order is set out below. [36] The costs of the appeal and the costs of the application in the high court should follow the result. The second respondent joined in the application and appeal and opposed the relief claimed. It should be directed to pay the appellant’s costs jointly and severally with the first respondent. [37] The following order is granted: 1. The appeal is upheld; 2. The first and second respondents are directed to pay the costs of the appeal jointly and severally, the one paying the other to be absolved; 3. The order of the high court is set aside, and substituted with the following order: ‘(a) Unless authorised by a magistrate in terms of section 14(7) of the Magistrates’ Court Act 32 of 1944, the first respondent is directed to effect service and to execute any court process emanating from the office of the applicant without any unreasonable delay; 22 D E van Loggerenberg Jones and Buckle: Civil Practice of the Magistrates' Courts in South Africa Volume 1 (Revision Service 27, May 2023) at Act-p180; Reserve Bank of Rhodesia v Rhodesia Railways 1966 (3) SA 656 (SR). 23 Peri-Urban Areas Health Board v Sandhurst Gardens (Pty) Ltd 1965 (1) SA 683 (T). (b) The first respondent is interdicted from requiring payment of any part of his fees or charges in respect of the service or execution of a court process in paragraph (a) above before serving and executing such process; (c) After the service or execution of any court process referred to in paragraph (a) above, the first respondent is directed, without delay and without first requiring prior payment of any part of his fees and charges relating thereto, to return to the applicant and to the court concerned whatever he has done by virtue of such process, specifying his fees and charges on the original and all copies of the returns of service; (d) The first and second respondents are directed to pay the costs of the application jointly and severally, the one paying the other to be absolved.’ _______________________ P A KOEN ACTING JUDGE OF APPEAL Makgoka JA [38] I have read the judgment of my Colleague Koen AJA. I agree with the order he proposes. However, I prefer a more linear route. [39] The principal issue in this appeal is whether a Sheriff is entitled to demand upfront payment for their fees and charges before they serve a court process. The appellant, Bojosinyane and Associates (Bojosinyane) had sought a mandatory interdict in the North- West Division of the High Court, Mahikeng (the high court), against the first respondent, the Sheriff of Vryburg (the Sheriff). He sought relief that the Sheriff be ordered to serve court process emanating from its office without insisting on upfront payment for his fees. The high court dismissed that application with costs on an attorney and client scale. The appeal is with the leave of this Court. Factual background [40] The background is briefly this. Bojosinyane is a firm of attorneys situated in Hartswater, Northern Cape Province. It has a branch office in Vryburg, North West Province. The Sheriff has been appointed for the district of Vryburg. Bojosinyane had an account with the Sheriff. Over time, a dispute arose between Bojosinyane and the Sheriff about the reasonableness of the fees charged by the Sheriff against Bojosinyane. As a result, in some instances, the latter withdrew payment of charges demanded by the Sheriff. In response, the Sheriff took the stance that henceforth, he would serve process from Bojosinyane only upon receipt of upfront payment for his estimated fees. [41] Because of the dispute, the Sheriff approached the local Magistrate for authorisation to refuse to serve process from Bojosinyane, pursuant to s 14(7) of the Magistrate Court’s Act 32 of 1944. The section reads as follows: ‘A messenger receiving any process for service or execution from a practitioner or plaintiff by whom there is due and payable to the messenger any sum of money in respect of services performed more than three months previously in the execution of any duty of his office, and which notwithstanding request has not been paid, may refer such process to the magistrate of the court out of which the process was issued with particulars of the sum due and payable by the practitioner or plaintiff; and the magistrate may if he is satisfied that a sum is due and payable by the practitioner or plaintiff to the messenger as aforesaid which notwithstanding request has not been paid, by writing under his hand authorise the messenger to refuse to serve or execute such process until the sum due and payable to the messenger has been paid.’ [42] The application was unsuccessful, as the Magistrate on 8 August 2014, found that the Sheriff had ‘failed to show compliance with the requisite provisions of the section …’ The reasons for that conclusion are not germane to the appeal. Upon such refusal, the Sheriff closed Bojosinyane’s account and informed it that going forward, he would serve process from it only upon upfront payment for any process. In the high court [43] Consequently, Bojosinyane launched an urgent application in the high court for a declaratory interdict that the Sheriff is obliged to serve process emanating from it without ‘any avoidable or unreasonable delay’ Bojosinyane complained that since April 2014, the Sheriff was ‘demanding and continuing to demand, exorbitant fees’ from it before would effect service of any process from its office. Bojosinyane said that this led to excessive delays in having the documents served, as the parties would be arguing about the reasonableness or otherwise of the Sheriff’s upfront charges. In most instances, Bojosinyane paid the deposit under protest in order to facilitate the service of process. Bojosinyane averred that the Sheriff’s conduct was in contravention of rule 8 of the Magistrate’s court rules and amounted to self-help. By the time the application was launched in the high court, there was no process that the Sheriff had not served, mainly because Bojosinyane had paid the demanded upfront payment. [44] In answer, the Sheriff stated that it was practice in his office that once an account is closed, payments should be made in advance when the erstwhile account holder would be obliged to pay upfront for his fees. Since Bojosinyane’s account had been closed since April 2014, he ‘properly exercised [his] discretion to seek upfront payment from Bojosinyane. He found support for this stance in a newsletter of the South African Board for Sheriffs (the Board) issued in August 2009. There, it is recommended that where Sheriffs are owed money by an attorney or a member of the public, in order to protect themselves against prescription, they should serve the process and withhold the return of service until the fees are paid. The Board supported the Sheriff’s stance. [45] The urgent application was struck off the roll for lack of urgency. Subsequently, in the normal course, the matter served before Leeuw JP in the high court. By that time, the South African Board for Sheriffs had been admitted as a second respondent in the application. The high court found that Bojosinyane had satisfied only one of the three requisites for a final interdict,24 , namely a clear right. As to the injury or reasonable apprehension thereof, the high court reasoned: 24 An applicant for such an order must show a clear right; an injury actually committed or reasonably apprehended; and the absence of similar protection by any other ordinary remedy. Setlogelo v Setlogelo 1914 AD 221 at 227. These requisites have been restated by this Court in a plethora of cases, most recently in Hotz and Others v University of Cape Town [2016] ZASCA 159; [2016] 4 All SA 723 (SCA); 2017 (2) SA 485 (SCA) para 29; Van Deventer v Ivory Sun Trading 77 (Pty) Ltd 2015 (3) SA 532 (SCA) [2014] ZASCA ‘. . .[T]here is no real dispute pending between [Bojosinyane] and the Sheriff. The fact that the Sheriff threatened to continue with his conduct of demanding payment upfront from [Bojosinyane] does not necessarily entitle [it] to approach this court to obtain an interdict against the Sheriff.’ [46] With regard to the absence of an alternate remedy, the high court held that Bojosinyane has the right to submit the sheriff’s accounts for taxation in terms of rule 34(3). Also, the high court found that Bojosinyane could lodge a complaint against the Sheriff with the Board if it is of the view that the Sheriff overcharged it. These measures, said the high court, offered Bojosinyane adequate alternative remedies. For these reasons, the high court was of the view that the order sought by Bojosinyane was academic. Consequently, it concluded that it was ‘unnecessary to deal with the question whether or not the Sheriff is entitled to demand payment prior to rendering his duty to serve or execute process.’ Accordingly, the high court dismissed Bojosinyane’s application with costs of both the Sheriff and the Board, such costs to be paid on an attorney and client scale. Analysis of the high court judgment [47] I propose to immediately deal with how the high court dealt with the application for an interdict. The finding that the matter was academic is difficult to understand. In no uncertain terms, the Sheriff had expressly stated his intention to continue refusing to serve process from Bojosinyane unless a deposit was paid on a case-by-case basis. An interdict is appropriate not only for present infringement of rights but also and when future injury is feared.25 Where a wrongful act giving rise to the injury has already occurred, it must be of a continuing nature or there must be a reasonable apprehension that it will be repeated.26 In the present case there was an express intention to continue the injury. 169 para 26; and Red Dunes of Africa v Masingita Property Investment Holdings [2015] ZASCA 99 para 19. They were affirmed by the Constitutional Court in Pilane and Another v Pilane and Another [2013] ZACC 3; 2013 (4) BCLR 431 (CC) para 38. 25 Phillip Morris Inc v Marlboro Trust Co SA 1991 (2) SA 720 (A) at 735B. 26 NCSPCA v Openshaw 2008 (5) SA 339 (SCA); [2008] 4 All SA 225 (SCA); para 20. [48] As to the alternate remedy, it is now settled that for a remedy to be a bar to an interdict, the remedy must be effective. In Hotz v University of Cape Town this Court explained: ‘An alternative remedy must be a legal remedy, that is, a remedy that a court may grant and, if need be, enforce, either by the process of execution or by way of proceedings for contempt of court. The fact that one of the parties, or even the judge, may think that the problem would be better resolved, or can ultimately only be resolved, by extra-curial means, is not a justification for refusing to grant an interdict.’ It is clear that taxation and disciplinary proceedings against the Sheriff, are not legal, and therefore, not effective, remedies. [49] With regard to the punitive costs order against Bojosinyane, it is not clear from the judgment of the high court as to why it was made. The Judge President said the following: ‘I have already alluded above that the applicant27 who is an attorney, should be [au fait] with the Rules and relevant statutes prescribed by the law, and should have reflected on this issue prior to approaching this court for an interdict.’ [50] A costs order on an attorney and client scale is an extra-ordinary one which should not be easily resorted to, and only when by reason of special considerations, arising either from the circumstances which gave rise to the action or from the conduct of a party, should a court in a particular case deem it just, to ensure that the other party is not out of pocket in respect of the expense caused to it by the litigation.28 Costs on an attorney and client scale are awarded when a court wishes to mark its disapproval of the conduct of a litigant.29 As such, the order should not be granted lightly, as courts look upon such orders with disfavour and are loath to penalise a person who has exercised a right to obtain a judicial decision on any complaint such party may have. Nothing in this case even remotely resembles any of the considerations referred to above. Even if Bojosinyane was 27 The Judge President failed to make a distinction between BG Bojosinyane and Associates as a firm of attorneys, and its principal, Mr Boemo Granch Bojosinyane, the deponent to the founding affidavit. 28 See Nel v Waterberg Landbouwers Ko-operatieve Vereeneging 1946 AD 597 at 607. 29 Public Protector v South African Reserve Bank [2019] ZACC 29; 2019 (9) BCLR 1113 (CC); 2019 (6) SA 253 (CC) para 223. ill-advised (it was not) in bringing the application, that hardly constitutes a factor to warrant a punitive costs order. [51] Thus, the learned Judge President was plainly wrong on how she approached the application. In this Court What was the issue before the high court? [52] In this Court, Bojosinyane contended that the issue is that which the high court declined to consider: whether a Sheriff, absent an authorisation envisaged in s 14(7) as outlined earlier, is entitled to demand upfront payment for their charges before serving a court process. The Sheriff contended that the case it had to meet in the high court was different from what was being asserted on appeal. The Board supported this submission. It was contended that the issue in the high court was the reasonableness of the Sheriff’s upfront fees rather than whether he was entitled to demand upfront payment. [53] The notice of motion did not mention the Sheriff’s refusal to serve process unless upfront payment was made, and for that conduct to be interdicted. However, in the founding affidavit, the issue was squarely raised. In paragraph 32 of its founding affidavit, Bojosinyane made the following averments: ‘The [Sheriff’s] conduct [of demanding upfront payment] is. . . wrongful and unlawful in view of the fact [he] can utilise the remedy set out in section 14 of the Magistrate’s Court for an authorisation by [a] magistrate to refuse to serve the process emanating from [Bojosinyane’s office.’ In paragraph 33 Bojosinyane averred that the Sheriff’s conduct amounted to self-help, and in paragraph 34, it averred that the Sheriff’s conduct was ‘in contravention of rule 8 of the Magistrate’s Court Rules. The Sheriff denied these averments and insisted that he was perfectly entitled to do so. [54] This is also how the high court understood the issue before it. In para 8 of its judgment, the high court identified the issues as being whether Bojosinyane had made out a case for an interdict, and if so, ‘whether this court may grant an order restraining the Sheriff from demanding payment prior to service or execution of process emanating from the office of [Bojosinyane].’ [55] I therefore conclude that the issue of whether, absent authorisation in terms of s 14(7), a Sheriff is entitled to refuse to serve court process unless payment for their fees and charges is made up-front was squarely before the high court. But even if it was not raised in the pleadings, this is a point of law. It is now settled that the mere fact that a point of law is raised for the first time on appeal is not in itself sufficient reason for refusing to consider it. The proviso is that a party will not be permitted to raise a point that was not covered in the pleadings if its consideration will result in unfairness to the other party.30 In the present case the Sheriff and the Board do not allege any, and I find none. In all the circumstances, there is no merit in the Sheriff’s and the Board’s contention. The issue for determination [56] With that out of the way, I turn to the issue on appeal, which is this. Outside the purview of s 14(7), does a Sheriff have a right to refuse to serve court process unless payment for their fees and charges is made up-front? The question must be answered with reference to the legislative provisions that regulate Sheriffs. Rule 8(2) of the Magistrate Court rules provides, among other things, that ‘[s]ervice or execution of process of the court shall be effected without any unreasonable delay.’ Rule 8(3) enjoins the sheriff, upon service of a process other than summons, to notify the registrar or clerk of the court and the party who sued out the process, that service or execution has been duly effected, stating the date and manner of service or the result of execution and return the said process to the registrar or clerk of the court. [57] Rules 8(6) and 34 are particularly relevant to the present case, both of which refer to the Sheriff’s charges. Rule 8(6) reads as follows: ‘After service or attempted service of any process, notice or document, the sheriff, . . . shall specify the total amount of his or her charges on the original and all copies thereof and the amount of each of his or her charges separately on the return of service.’ 30 Barkhuizen v Napier [2007] ZACC 5; 2007 (5) SA 323 (CC); 2007 (7) BCLR 691 (CC) para 39. Rule 34(2)(b) deals with disputes about the Sheriff’s charges and how they are to be resolved. It provides: ‘Where any dispute arises as to the validity or amount of any fees or charges, or where necessary work is done and necessary expenditure incurred for which no provision is made, the matter shall be determined by the taxing officer of the court whose process is in question. [58] The upshot of these legislative provisions is clear. None of them remotely entitles a Sheriff, for any reason whatsoever, to refuse to serve court process unless upfront payment for her or his fees and charges is made by an account holder. If anything, they are obliged to serve process entrusted to their office ‘without any unreasonable delay’, as rule 8(2) commands, and thereafter render an account setting out her or his charges, pursuant to rule 8(6). The only basis upon which she or can do so, is within the circumscribed circumstances of s 14(7) and upon authorisation by a magistrate. Thus, absent a s 14(7) authorisation, a Sheriff must serve the process, render their account and the return of service. The disputes about the Sheriff’s fees referred to in rule 34(2), can only arise after the process had been served, and such disputes would be determined by the Taxing Master. [59] The Sheriff had another string to his bow. He submitted that he could in certain circumstances, to avoid prescription for example, serve court process but withhold the return of service and only release it upon payment of his charges. The Board supported this. This submission is mentioned merely to be rejected. The simple answer is provided in rule 9(17A)(a), which, consistent with rule 8(2), requires a Sheriff to render her or his return of service ‘without delay’ to ‘the person at whose request service was effected.’ [60] In sum, a Sheriff does not have a lawful basis to insist upon upfront payment for her or his charges or to refuse to serve process until such payment is made. They can only do so when authorised in terms of s 14(7). Similarly, they do not have any lawful basis to withhold a return of service until payment is made. The objective in both rules 8(2) and 9(17A)(a), ie avoidance of undue delay in serving court process, would be defeated if the Sheriff’s contentions were to be accepted. The delay is inherent in the refusal to serve court process until payment is made up-front. What is more, the Sheriff’s conduct in this case amounts to self-help. As the Constitutional Court held in Lesapo v North West Agricultural Bank,31 ‘[t]aking the law into one’s own hands is . . . inconsistent with the fundamental principles of our law.’32 Conclusion [61] In all the circumstances, the appeal must succeed. Costs must follow the result. The Board must pay the costs jointly and severally with the Sheriff. It aligned with the Sheriff’s cause, both in the high court and in this Court. _______________ T MAKGOKA JUDGE OF APPEAL 31 Lesapo v North West Agricultural Bank and Another [1999] ZACC 16; 2000 (1) SA 409; 1999 (12) BCLR 1420 (CC). 32 Ibid para 11. Appearances: For the appellant: J H F Pistor SC Instructed by: Bojosinyane & Associates, Hartswater Phatshoane Henney Attorneys, Bloemfontein. For the first respondent: N Jagga Instructed by: Kotze Louw Swanepoel Attorneys, Vryburg Pieter Skein, Bloemfontein. For the second respondent: N Riley Instructed by: Herman Scholtz Attorneys, Mahikeng. c/o Snaid & Morris Attorneys, Sandton. Honey Attorneys, 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: 8 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 judgment of the Supreme Court of Appeal. BG Bojosinyane & Associates v The Sheriff, Vryburg and Another (1072/2022) [2023] ZASCA 174 (8 December 2023) __________________________________________________________________ Today the Supreme Court of Appeal handed down two judgments, one by Koen AJA with Matojane and Weiner JJA and Chetty AJA concurring, and a separate concurring judgment by Makgoka JA, upholding an appeal against a judgment of the North-West Division of the High Court, Mahikeng. The appellant in the appeal, BG Bojosinyane & Associates, a legal practice, had required the first respondent, the Sheriff of the magistrates’ court in Vryburg, to serve and execute certain court processes. The first respondent refused to do so until a deposit on account of his anticipated fees and charges relating to such service or execution was first paid. The appellant objected to that practice and sought interdictory relief directing the first respondent to serve and execute processes without unreasonable delay. The relief claimed by the appellant was opposed by the first respondent and the South African Board of Sheriffs, which intervened as the second respondent. The appellant was unsuccessful before the North-West Division of the High Court. The SCA held that the practice followed by the first respondent in respect of court processes required by the appellant to be served resulted in unreasonable delay that can be avoided, and that it was not permitted by and is inconsistent with the legislative framework, specifically the magistrates’ court rules, which require court processes to be served and executed expeditiously and without delay. It according upheld the appeal and directed that the costs relating thereto be paid by both respondents jointly and severally. It set aside the order of the high court, and replaced it with an order that unless authorised by a magistrate in terms of section 14(7) of the Magistrates’ Court Act 32 of 1944, the first respondent was directed to effect service and to execute any court processes emanating from the appellant’s practice without delay, and without requiring payment of the first respondent’s fees and charges before any such process is served or executed, or before the return of service relating thereto is released. The first and second respondents were also directed to pay the costs of the proceedings before the high court jointly and severally.

2978

non-electoral

2015

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 20265/14 In the matter between: MERAFONG CITY LOCAL MUNICIPALITY APPELLANT and ANGLOGOLD ASHANTI LIMITED RESPONDENT Neutral citation: Merafong City Local Municipality v AngloGold Ashanti Ltd (20265/2014) [2015] ZASCA 85 (28 May 2015) Coram: Maya, Majiedt and Mbha JJA, Schoeman and Van der Merwe AJJA Heard: 19 May 2015 Delivered: 28 May 2015 Summary: Review – invalidity of administrative action – Minister’s ruling made in terms of s 8(9) of the Water Services Act 108 of 1997 overturning municipality’s decision to levy a surcharge on water for industrial use by mines, even if invalid, exists and has legal consequences which municipality cannot simply disregard until it is set aside by court in proceedings for judicial review. __________________________________________________________________ ORDER __________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Kubushi J sitting as a court of first instance): The appeal is dismissed with costs, including the costs of two counsel. __________________________________________________________________ JUDGMENT __________________________________________________________________ MAYA JA (Majiedt, Mbha JJA, Schoeman and Van der Merwe AJJA concurring): [1] At issue in this appeal is whether the appellant municipality (Merafong) is entitled to ignore a ruling made by the Minister of Water Affairs and Forestry (the Minister) in terms of powers vested in her by s 8(9) of the Water Services Act 108 of 1997 (the Act). The effect of the ruling was to prevent Merafong from levying incremental surcharges on water for industrial use supplied to mines owned by the respondent (AngloGold), which are situated in Merafong’s jurisdictional area. The ruling further required Merafong, AngloGold Ashanti and Rand Water (formerly the Rand Water Board)1 to negotiate a reasonable tariff for water supplied to the mines for domestic use by the latter. [2] AngloGold, a public company, has conducted gold mining operations at its mines Tautona, Mponeng and Savuka situate near Carletonville, since the mid 1940’s. Its operations require water which it uses mainly for two purposes. It uses it for industrial purposes which include dust allaying during drilling and rock handling, as a 1 Established under the Rand Water Board Incorporation Ordinance 32 of 1903, as consolidated in the Rand Water Board Statutes (Private Act) 17 of 1950, deemed to be a water board established in terms of the Water Services Act 108 of 1997. cooling medium, as a transport medium and as a solvent in the metallurgical process. It also uses water for domestic consumption by its employees housed in hostels on the mine properties. AngloGold has its own water reticulation infrastructure. Water saved during the mining activities is stored in reservoirs for treatment and recycling. Waste water from domestic use is treated in its sewage plants operated on the mine premises. Anglogold therefore purchases water for industrial use (ie use of water for mining, manufacturing, generating electricity, land-based transport or any related purpose)2 and domestic use only to recoup the loss incurred during the mining operations. [3] The additional water has, since 1958, been directly supplied to it by Rand Water. The latter body is a water board and organ of State, whose primary activity is to provide water services to other water service institutions, including municipalities in their capacity as water service authorities. With the municipalities’ approval, it also supplies water directly to users for industrial use and acts as a water service provider directly to consumers3 in terms of written water supply agreements. AngloGold’s water supply has, at all times, been provided through Rand Water’s system of reservoirs, pipelines and other apparatus which are maintained by Rand Water. AngloGold therefore does not and has never used Merafong’s water and sanitation services. [4] In December 1997, Parliament promulgated the Act, a major piece of national legislation providing, inter alia, for the rights of access to the supply of water and sanitation envisaged in the Constitution,4 the setting of national standards and norms 2 As defined in s 1 of the Act. 3 In terms of ss 1 and 30(2)(d) of the Act, respectively. 4 The Constitution of the Republic of South Africa Act 108 of 1996. and standards for tariffs in respect of water services,5 the establishment and disestablishment of water boards and water services committees and their duties and powers, the monitoring of water services and intervention by the Minister or by the relevant province, the accountability of water service providers,6 and the promotion of effective water resource management and conservation.7 The Act further recognises local government’s constitutional authority to administer water and sanitation services8 and designates municipalities as water services authorities responsible for progressively ensuring access to water services by consumers9 in their areas of jurisdiction. [5] In terms of s 6(1) of the Act, ‘no person may use water services from a source other than a water services provider nominated by the water services authority having jurisdiction in the area in question, without the approval of that water services authority’. Section 7(1) of the Act provides that ‘no person may obtain water for industrial use from any source other than the distribution system of a water services provider nominated by the water services authority having jurisdiction in the area in question, without the approval of that water services authority’. Section 8 of the Act governs the process employed by a water services authority in respect of applications for approval made in terms of ss 6 and 7, which may not be unreasonably withheld and may be granted subject to reasonable conditions.10 In terms of s 8(4), such an 5 Defined in s 1of the Act as water supply services ie the abstraction, conveyance, treatment and distribution of potable water, water intended to be converted to potable water or water for commercial use but not water for industrial use, and sanitation services ie the collection, removal, disposal or purification of human excreta, domestic waste-water, sewage and effluent resulting from the use of water for commercial purposes. 6 Defined in s 1 of the Act as ‘any person who provides water services to consumers or to another water services institution [ie a water services authority, a water service provider, a water board and a water services committee] but does not include a water services intermediary [ie any person who is obliged to water services to another in terms of a contract where the obligation to provide water services is incidental to the main object of that contract]’. 7 As provided in the Act’s Preamble and s 2. 8 In terms of para 5 of the Act’s Preamble and Part B of Schedule 4 read with s 156(1)(a) of the Constitution. 9 Defined in s 1 of the Act as any end user who receives water services from a water services authority including an end user in an informal settlement. 10 Section 8(1)(a) and (b) of the Act. applicant may appeal to the Minister ‘against any decision, including any condition imposed, by that water services authority in respect of the application’. Subsection (9) empowers the Minister when adjudicating the appeal to ‘confirm, vary or overturn any decision of the water services authority concerned’. In addition to these appeal powers, the Minister has supervisory and control powers under s 10. She or he may from time to time, with the concurrence of the Minister of Finance, prescribe norms and standards in respect of tariffs for water services. [6] Municipalities assumed the status of water service authorities only in July 2003 following the adoption of the Strategic Framework document by the Department of Water Affairs and Forestry. On 11 February 2004, Merafong sent a written notice to all the mines in its area of jurisdiction, including AngloGold. It informed the mines that it had, with effect from 1 July 2003, been accorded the powers and functions of a water services authority. It further requested the mines to apply for approval for the supply of water for industrial use in terms of s 7 of the Act. This letter was followed by meetings at which Merafong explained the implications of the Act and its role as a water services authority. [7] Anglogold replied on 8 April 2004 and requested Merafong’s approval ‘to continue obtaining water from Rand Water for its mining operations and associated domestic applications at the tariff set by, and under the conditions imposed by Rand Water’. Merafong responded by way of a letter dated 31 May 2004 headed ‘APPROVAL TO BE SUPPLIED WITH WATER’. It stated that it appointed Rand Water as its water service provider which would supply water to the mines directly, bill and collect water sales revenue and assume responsibility for water quality and other technical aspects of water supply as Merafong’s agent. It also set out proposed tariffs for water to be supplied to the mines which were significantly higher than Rand Water’s prices and included a higher tariff for operational use compared to domestic use. [8] On 11 June 2014 AngloGold appealed to the Minister in terms of s 8(4) of the Act. Its main complaints were that (a) the tariff proposed by Merafong was ‘excessively higher than the equivalent Rand Water tariff while [Merafong] is not adding any value to, or assuming any responsibility for any aspect of the water supply’ (the difference would amount to R498 599 per month) and (b) Merafong failed to recognise AngloGold’s role as a water service provider or make any attempt, other than to request information on the mine’s consumption, to understand its economic situation. As indicated above, the Minister upheld the appeal. In her opinion the tariff increase of 62 per cent was unreasonable because Merafong would add no value to the services provided to AngloGold by Rand Water. She ruled that a surcharge could be levied only on the portion of water that the mines were using for domestic purposes and not for industrial use ‘[s]ince water for industrial use is not defined as a municipal service in terms of section 1(xxv) of the [Act]’. The Minister then directed Merafong, Anglogold and Rand Water to negotiate a reasonable tariff on the portion of water used by Anglogold for domestic purposes. [9] Negotiations were initiated as ordered by the Minister. In July 2006 the parties concluded a draft interim agreement in terms of which the mines would be charged Merafong’s tariff for water for domestic use and Rand Water’s industrial tariff for the mine hostels and operational water use. The negotiation process then stalled. From July 2007 Merafong took over from Rand Water and started invoicing AngloGold for water supplied to it by Rand Water. It informed AngloGold that it would levy a flat rate on all water consumed on the mines with effect from June 2006 although it did not do so until 2008. Since July 2007 Merafong has charged AngloGold on a tariff far exceeding what it paid Rand Water despite the Minister’s ruling. (AngloGold was informed by the Chamber of Mines that Merafong regarded the ruling as invalid on constitutional grounds and that it would ignore it.) [10] It appears from a legal opinion obtained by Merafong that its lawyers advised it to convince the Minister to withdraw her decision overturning its decision to impose tariffs on the mines. However, its attempts at engaging the Minister (who was likely functus officio in respect of her powers under s 8(9) in any event) towards this end failed. The formal dispute it consequently declared against her also does not seem to have achieved the desired result.11 And it continued imposing and implementing the tariffs adopted by its council on the mines on the basis that the Minister’s ruling, which it did nothing to challenge, was not applicable. [11] Over an extended period, AngloGold sought to ascertain the legal basis for the tariffs and surcharges imposed by Merafong. When its enquiries went unattended Anglogold withheld payment of the disputed portion of the levies. In September 2007 Merafong demanded payment of the arrears on the threat that it would otherwise take ‘appropriate steps … to limit water supply’ to AngloGold’s mines. AngloGold yielded to the demand, but informed Merafong that it did so, under protest and without prejudice to its rights, to obviate the drastic consequences and irreparable harm to its operations if its water supply was cut. It still asked Merafong to indicate the legal basis for the disputed tariffs and surcharges. In response, Merafong did not address the Minister’s ruling and only listed various constitutional and statutory provisions which it claimed entitled it to do so. 11 In terms of s 42 of the Intergovernmental Relations Framework Act 13 of 2005. Section 40 of this Act enjoins all organs of State to make every reasonable effort to avoid intergovernmental disputes when exercising their statutory powers or performing their statutory duties and to settle such disputes without resorting to litigation. [12] The impasse lasted until Anglogold launched application proceedings to enforce the Minister’s ruling. To that end it sought a declarator that Merafong may not levy a surcharge on water for industrial and domestic use supplied to AngloGold by Rand Water and various ancillary relief and an alternative order reviewing and setting aside Merafong’s imposition of a surcharge on water for both industrial and domestic use in terms of s 6(2)(e)(i) and/or (ii) of the Promotion of Administrative Justice Act 3 of 2000 (PAJA). Merafong opposed the application and launched a counter-application. It sought a declarator that it has exclusive authority to set tariffs relating to the provision of water. In the event that the court below found that s 8(9) empowered the Minister to interfere with its powers relating to the setting of water services tariffs, it sought an order declaring the provisions unconstitutional to that extent. [13] The court below granted the relief sought by Anglogold and dismissed the counter-application. Its approach was that prior to 1 July 2003 Merafong had not yet appointed a water service provider for purposes of ss 6 and 7 of the Act. Thus, the court found, when AngloGold sought Merafong’s approval to continue obtaining water from Rand Water it did so, properly, in terms of those provisions. The court acknowledged Merafong’s executive and legislative powers as a water services authority. But it held that such powers were subject to national legislation, ie the Act which expressly entitles the Minister, in s 8(1), to intervene where a municipality unreasonably withheld its approval or imposed unreasonable conditions in respect of applications made under ss 6 and 7. The court concluded that the Minister’s ruling was therefore lawful and bound Merafong, alternatively that it was valid until set aside by a court of law. [14] On appeal before us it was argued on Merafong’s behalf that AngloGold’s appeal to the Minister was ill-conceived and the judgment of the court below wrong. This was so because ss 6 and 7 of the Act were not applicable to this case as the water supplied by Rand Water was not from ‘a source other than the distribution system of a water services provider’ ie a third party that was neither a water service authority (in this case Merafong) or a water service provider (in this case Rand Water) within the contemplation of these provisions. The appeal therefore had no basis, continued the argument, and the Minister exceeded her powers by making the disputed ruling, which was a nullity and did not bind Merafong. [15] It seems to me that Merafong’s failure to challenge the Minister’s ruling in judicial review proceedings, rather than the constitutional attack it launched against the empowering statutory provisions, poses an insuperable difficulty for its case. I will assume without deciding that the Minister’s decision was ultra vires as was argued on its behalf. But even if unlawful, the Minister’s ruling existed in fact and had legal consequences. Merafong could, therefore, not simply treat it as though it did not exist and act in the very manner that it sought to prevent.12 As the Constitutional Court pointed out in MEC for Health, Eastern Cape & another v Kirland Investments (Pty) Ltd t/a Eye and Lazer Institute:13 ‘Even where the decision [by a state official] is defective … government should generally not be exempt from the forms and processes of review. It should be held to the pain and duty of proper process. It must apply formally for a court to set aside the defective decision, so that the court can properly consider its effects on those subject to it … Government should not be allowed to take shortcuts … Once the subject has relied on a decision, government cannot, barring specific statutory authority, simply ignore what it has done. The decision, despite being defective, may have consequences that make it undesirable or even impossible to set it aside. That demands a proper 12 Oudekraal Estates (Pty) Ltd v City of Cape Town & others 2004 (6) SA 222 (SCA) para 40. 13 MEC for Health, Eastern Cape & another v Kirland Investments (Pty) Ltd t/a Eye and Lazer Institute 2014 (3) SA 481 (CC) paras 64, 65 and 88. process, in which all factors for and against are properly weighed … [T]he Constitution … does not require [public officials] to act without erring. On the contrary, it anticipates imperfection, but makes it subject to the corrections and constraints of the law.’ [16] It was contended for Merafong that it was not required to seek judicial review of the Minister’s ruling in the circumstances of this case because the Minister improperly exercised her powers where the very preconditions for their invocation had not been met. This argument has no merit. It is clear from the Constitutional Court’s comments in Kirland that it matters not if the Minister’s decision did not meet the preconditions set out in ss 6 and 7 for the exercise of her appeal powers under s 8(9). There the Court said:14 ‘In our post-constitutional administrative law, there is no need to find that an administrator lacks jurisdiction whenever she fails to comply with the preconditions for lawfully exercising her powers. She acts, but she acts wrongly, and her decision is capable of being set aside by proper process of law. So the absence of a jurisdictional fact does not make the action a nullity. It means only that the action is reviewable, usually on the grounds of lawfulness (but sometimes also on the grounds of reasonableness). Our courts have consistently treated the absence of a jurisdictional fact as a reason to set the decision aside, rather than as rendering the action non-existent from the outset.’ [17] It is clear from these dicta that Merafong was obliged to approach the court to set the Minister’s ruling aside and that it breached the principle of legality by simply disregarding it. And the collateral challenge it sought to mount against the ruling does not avail it because it is an organ of State. It is established in our law that a collateral challenge to the validity of an administrative action is a remedy available to a person threatened by a public authority with coercive action precisely because the legal force of the coercive action will most often depend upon the legal validity of the administrative action in question.15 The notion that an organ of State can use this 14 At paragraphs 98-99. 15 Ibid para 35; City of Tshwane Metropolitan Municipality v Cable City (Pty) Ltd 2010 (3) SA 589 (SCA) para 15. shield against another organ of State is simply untenable. These findings dispense with the need to deal with the substantive issues raised in the matter. The appeal must fail. [18] In the result the following order is made: The appeal is dismissed with costs, including the costs of two counsel. ____________________ MML MAYA Judge of Appeal APPEARANCES: For Appellants: MSM Brassey SC (ESJ Van Graan SC) Instructed by: De Swardt Vögel Myambo Attorneys, Pretoria Symington & De Kok, Bloemfontein For Respondent: NJ Graves SC (IB Currie) Instructed by: Knowles Husain Lindsay Inc, 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 28 May 2015 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Merafong City Local Municipality v AngloGold Ashanti Ltd (20265/14) [2015] ZASCA 85 (28 May 2015) MEDIA STATEMENT Today the Supreme Court of Appeal (SCA) dismissed an appeal brought by the Merafong City Local Municipality. At issue in this appeal was whether the appellant municipality was entitled to ignore a ruling made by the Minister of Water Affairs and Forestry (the Minister) in terms of powers vested in her by s 8(9) of the Water Services Act 108 of 1997 (the Act). The ruling overturned the municipality’s levying of surcharges on water supplied to the AngloGold mines by Rand Water for industrial and domestic use. Municipalities assumed the status of water service authorities in July 2003. In 2004, the municipality sent written notice to all the mines in the area of jurisdiction including AngloGold, informing them that it had been accorded the powers and functions of a water services authority, and further requested the mines to apply for approval for the supply of water for industrial use in terms of s 7 of the Act. AngloGold requested the municipality’s appellant’s approval to continue receiving water from Rand Water. In response the municipality informed the respondent that it had appointed Rand Water as its water service provider which would supply water to the mines directly. It also set out proposed tariffs for water supply which were significantly higher than Rand Water’s prices. This prompted AngloGold to appeal to the Minister in terms of s 8(4) of the Act. The effect of the Minister’s ruling prevented the municipality from levying incremental surcharges on water for industrial use supplied to AngloGold’s mines. It also directed the municipality, Rand Water and AngloGold to negotiate a reasonable tariff for the supply of water for domestic use. The municipality ignored the Minister’s ruling and continued to invoice AngloGold at the increased rate as it considered itself entitled to do on constitutional grounds. AngloGold then launched application proceedings to enforce the Minister’s ruling; the municipality opposed the application and launched a counter- application. The court below granted the relief sought by the respondent and dismissed the counter- application to have the Minister’s ruling set aside or s 8(9) declared unconstitutional. The court below acknowledged the municipality’s executive and legislative powers as a water services authority but held that such power was subject to national legislation, ie the Act, which expressly entitled the Minister to intervene where a municipality conducted itself in an unreasonable manner. On appeal, the SCA held that the Minister’s ruling existed in fact, had legal consequences which the municipality could not simply disregard until the ruling was set aside by a court of law in judicial proceedings. The municipality had breached the principle of legality by disregarding it and its attempt to raise a collateral challenge to the ruling could not succeed because the remedy does not avail a state organ. The SCA concluded that the municipality was obliged to approach the court to set the Minister’s ruling aside. --- ends ---

1275

non-electoral

2008

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Saaknommer: 557/2007 GEEN GESAGSWAARDE In die saak tussen: ALBERT JACOB VAN EEDEN APPELLANT en DIE PROKUREURSORDE VAN DIE NOORDELIKE PROVINSIES EERSTE RESPONDENT DIE GETROUHEIDSFONDS VIR PROKUREURS TWEEDE RESPONDENT Neutral citation: Van Eeden v Die Prokureursorde van Noordelike Provinsies (556/2007) [2008] ZASCA 91 (12 September 2008) CORAM: SCOTT, FARLAM, PONNAN, COMBRINCK ARR et LEACH Wnd AR DATUM VERHOOR: 22 AUGUSTUS 2008 DATUM GELEWER: 12 SEPTEMBER 2008 GEKORRIGEER: OPSOMMING: Appèl teen weiering van aansoek ingevolge art 15(3) van Wet op Prokureurs 53 van 1979 vir hertoelating – bevinding dat appellant rekeningkundige boeke verberg het ten einde 'n ondersoek na trusttekort te dwarsboom – onbevoeg om hertoegelaat te word. SUMMARY: Appeal against refusal of an application in terms of s 15(3) of the Attorneys Act 55 of 1979 for re-admission – finding that appellant concealed books of account in order to thwart an enquiry into a trust shortage – unfit to be re-admitted (judgment in Afrikaans). BEVEL Op appèl vanaf: Hooggeregshof: Pretoria 1. Die appèl word van die hand gewys en appellant word gelas om die eerste respondent se koste op die skaal soos tussen prokureur en kliënt te betaal. UITSPRAAK COMBRINCK AR (Scott AR, Farlam AR, Ponnan AR, Leach Wnd AR stem saam) [1] Die appellant in hierdie saak is gedurende 1986 in die Pretoria se Hooggeregshof as prokureur toegelaat. Dieselfde hof het hom tien jaar later op 4 Maart 1996 van die rol van prokureurs geskrap. In Junie 2003 loods hy 'n aansoek ingevolge artikel 15(3) van die Wet op Prokureurs 53 van 19791 by dieselfde hof vir hertoelating. Die aansoek is deur die eerste respondent (‘die Orde’) teengestaan. Behalwe om 'n beëdigde verklaring te liasseer het die tweede respondent (die ‘Getrouheidsfonds’) nie tot die geding toegetree nie. Die aansoek is deur die hof geweier (die uitspraak is deur Du Plessis R geskryf en Ebersohn WR het saamgestem). Met verlof van die hof a quo kom die appellant nou in hoër beroep na hierdie hof. [2] Die feite onderliggend aan die destydse skrapping van die rol van prokureurs asook dié ter stawing van die aansoek om hertoelating word volledig uiteengesit in die uitspraak van Du Plessis R en dit is onnodig om enigsins breedvoerig daarmee te handel. Vir doeleindes van hierdie uitspraak sal 'n bondige opsomming voldoen. [3] Vanaf 1989 het die appellant met sy vader in Pretoria onder die naam Van Eedens gepraktiseer. Appellant het die litigasie behartig en sy vader die akte-afdeling. Sentraal tot die uiteindelike skrapping van die appellant en sy 1 ‘'n Hof kan, op aansoek ooreenkomstig hierdie wet gedoen, iemand wat voorheen as prokureur toegelaat en ingeskryf was en van die rol verwyder of geskrap is, as prokureur hertoelaat en herinskryf, indien – (a) hy, na goedvinde van die hof, 'n geskikte en gepaste persoon is om aldus hertoegelaat en heringeskryf te word; en (b) die hof oortuig is dat hy voldoen aan die bepalings van subartikel (1)(b)(ii).’ vader was 'n vername kliënt van die firma, 'n eiendomsontwikkelings- maatskappy met die naam van Deelgroei Eiendomme (Edms) Bpk (‘Deelgroei’) wat nou saamgewerk het met die finansierder van die ontwikkelings, Permprop, later 'n afdeling van Nedcor Property Development (Edms) Bpk (‘Nedcor’). Die firma het oor 'n aansienlike tydperk oordragte van grond en ander regswerk vir die instansies gedoen. Gedurende Augustus 1995 beëindig die maatskappye Van Eedens se mandaat weens 'n versuim aan die kant van die firma om gelde deur kopers betaal na registrasie van oordrag van eiendomme aan Deelgroei oor te betaal. Op 28 Augustus 1995 verkry Deelgroei en Nedcor 'n dringende hofbevel teen Van Eedens dat hulle vir gelde ontvang van kopers moet verreken en die verskuldigde bedrae oorbetaal. Die bevel is gevolg deur 'n verdere bevel wat op 30 Augustus verkry is om die bevel van 28 Augustus af te dwing. Daarbenewens verkry Deelgroei en Nedcor op 2 September 1995 'n dringende voorlopige sekwestrasiebevel teen Van Eedens en die individuele vennote. As gevolg van die ontvangs van verskeie klagtes van ander kliënte van Van Eedens, gee die Orde 'n mnr Van Rooyen, (voorheen 'n rekeningkundige beampte in diens van die Orde), opdrag om Van Eedens se boeke na te gaan en verslag te doen. Van Rooyen reik op 7 September 1995 'n skriftelike verslag uit waarin hy aantoon dat met die karige rekeningkundige dokumente en bankstate tot sy beskikking hy voorlopig vasgestel het dat daar 'n tekort van R2,218m in die trustrekening van die firma is. Op sterkte van hierdie verslag loods die Orde op 22 September 1995 'n dringende aansoek by die hof vir die skorsing van die appellant en sy vader as prokureurs, notarisse en aktebesorgers hangende 'n aansoek om hulle van die rol te skrap. Die bevel is toe ook toegestaan. Intussen en wel op 12 September 1995 is die voorlopige sekwestrasiebevel by ooreenkoms opgehef nadat Van Eedens 'n bedrag van R1,137m aan Deelgroei en Nedcor se nuwe prokureurs oorbetaal het. Die appellant se solvensie was egter van korte duur want op 4 Oktober 1995 verkry 'n ander kliënt van Van Eedens, 'n mnr Joubert, 'n dringende voorlopige sekwestrasiebevel teen die firma en die individuele vennote op grond van die versuim om trustgelde wat hom toegekom het oor te betaal. 'n Finale bevel is op 13 Desember 1995, ten spyte van teenstand van Van Eedens, deur die Pretoria se Hooggeregshof toegestaan. Op 4 Maart 1996 is appellant en sy vader deur dieselfde hof van die rol geskrap. Die gronde vir die skrapping was dat daar deur die Orde bewys is dat daar 'n wesenlike tekort was in die firma se trustrekening tesame met die feit dat die appellant gesekwestreer was. [4] Die grondslag van appellant se aansoek om hertoelating is dat daar inderdaad nooit 'n trusttekort was nie. Hy het gevolglik ten einde die bewyslas te kwyt om aan te toon dat hy 'n geskikte en gepaste persoon is om hertoegelaat te word nie sy vorige oortredinge beken en aangevoer dat hy hervorm het nie. Wat sy saak op neerkom is dat hy die hof nader op die basis dat daar 'n herondersoek en heroorweging moet wees van die destydse skrappingsaansoek en dat 'n bevinding dat hy verkeerdelik van die rol geskrap is, gemaak moet word. Wat die sekwestrasie betref voer hy aan dat hy deur die hof rehabiliteer is en dat dit nie langer in die weg moet staan van sy hertoelating nie. Die vraag of die bevinding van ‘n tekort in die firma se trustrekening nie res iudicata is, is nóg in hierdie hof, nóg in die hof benede geopper en ek laat dit dus daar – soos die hof benede ook gedoen het. [5] Ten einde aan te toon dat daar nie 'n tekort in die trustrekening was nie, het die appellant in sy talle verklarings in die huidige aansoek, (hy het 'n funderende verklaring, drie aanvullende verklarings, ‘n repliserende verklaring van 307 bladsye en 'n verdere aanvullingsverklaring geliasseer), breedvoerig en op herhalende trant gepoog om met die individuele bedrae wat die trusttekort opgemaak het te handel. Die tweede respondent, die Getrouheidsfonds, het 'n bedrag van R624 935.11 aan voormalige kliënte van Van Eedens uitbetaal. Dit het geskied op grond van die feit dat die fonds van oordeel was dat diefstal gepleeg is. Die individuele eise is insgelyks deur appellant analiseer en behandel ten einde te bewys dat die gelde nie verskuldig was nie en dat die Getrouheidsfonds verkeerdelik die bedrae uitbetaal het. Enkele rekeningkundige state en ander dokumentêre bewyse is aangeheg en na verwys. Appellant beweer in sy stukke dat hy geen brondokumente of afskrifte van die firma se rekeningkundige boeke kon voorlê nie aangesien dit tesame met alle rekenkundige state en rekords vir die agt jaar wat September 1995 voorafgegaan het, uit die firma se kantore gesteel is. [6] Die Orde het nadat Van Eedens die skorsingsaansoek teengestaan het op die basis dat daar nie 'n trusttekort was nie, 'n ouditeur, mnr Faris, aangestel om 'n soortgelyke ondersoek as Van Rooyen na die boeke van Van Eedens te onderneem. Faris het 'n verslag, gedateer 18 Desember 1995, uitgebring waarin hy bevind het dat daar wel 'n trusttekort was, maar nie in die bedrag deur Van Rooyen bevind nie. Hy was van mening dat die tekort R1,062m was. Appellant en sy advokaat het 'n onderhoud met Faris gevoer en gepoog om hom te oortuig dat daar inderdaad geen tekort was nie. Die appellant het toe ook 'n beëdigde verklaring van Faris geliasseer waarin Faris toegegee het dat indien die verduidelikings deur die appellant verskaf korrek is, dit wel so mag wees dat daar nie 'n trusttekort was nie. Hy het dit so bewoord: ‘Given the circumstances of this matter, certain of the applicant’s explanations are compelling which suggest that if it was possible to establish the true trust position a trust deficit may not have existed at the time.’ Die appellant het in die hof benede asook in hierdie hof sterk gesteun op hierdie uitlating. Wat hy egter oor die hoof gesien het is die kwalifikasie wat Faris hierop gestel het naamlik: ‘During my consultations with the applicant and Adv Ellis, I sought to make it perfectly clear that before I could positively state that there were no trust deficits, I would need to have access to all accounting and supporting source records to be able to examine each and every trust debit balance. . . . Unfortunately it is not possible to now have access to all the records and documents necessary and I now need to rely on the information and explanations being furnished to me by the applicant, as set out in the papers and in consultation with him.’ [7] In die uitspraak van die hof benede handel die geleerde regter met die appellant se saak ten aansien van die algemene trusttekort. Hy bespreek die onderliggende feite en kom dan tot die volgende slotsom: ‘Na my oordeel som Faris in sy tweede verklaring die posisie korrek op: Sonder behoorlike rekenkundige state en rekords is niemand in staat om te oordeel of die applikant se verduideliking korrek is nie. Dit is nie eens moontlik om die egtheid en korrektheid van stawende dokumente wat die applikant aanheg te bepaal nie. Kortom, die applikant se verduideliking is slegs bewerings. In betoog het die applikant hierdie probleem aangespreek deur aan die hand te doen dat hy, vanweë die verlies van die firma se rekenkundige aaantekeninge, nie in staat is om beter bewyse voor te lê dat daar geen trusttekort was nie.’ Die regter handel dan met die kwessie van die verdwyning van die boeke en ondersoek die vraag of daar meriete steek in appellant se betoog dat hy gekortwiek is in sy poging om te bewys dat daar geen trusttekort was deur die afwesigheid van die boeke. Die hof bevind dat die diefstal van die boeke onwaarskynlik is en dat op die beste vir appellant die verlies van die boeke in onsekerheid gehul is. Die slotsom is dan: ‘Kortom, die applikant het nie op 'n oorwig van waarskynlikhede bewys dat hy in die voer van hierdie aansoek deur die diefstal of verlies van die rekenkundige aantekeninge en rekords gekortwiek is nie.’ [8] Die partye asook die hof benede het hulle toegespits op die vraag of daar wel 'n trusttekort bestaan het of nie ten einde tot 'n bevinding te raak of die appellant 'n geskikte en gepaste persoon is om hertoegelaat te word. Ek kan geen fout vind met die benadering van die hof ten opsigte van die bewyslas wat op appellant gerus het of met die uiteindelike bevinding dat appellant nie daarin geslaag het om te bewys dat daar geen trusttekort was nie. Na my mening is daar egter 'n meer voor-die-hand-liggende rede waarom die appellant nie 'n geskikte persoon is om as prokureur te praktiseer nie. Dit is dat by behoorlike analise van die omstandighede van die sogenaamde verdwyning van die boeke dit blyk dat die waarskynlikhede oorweldigend aantoon dat die appellant of sy vader met sy medewete en bystand, verantwoordelik was vir die verdwyning van die boeke. [9] Volgens appellant het die boeke gedurende die tydperk 2 September 1995 tot 14 September 1995, (die tydperk toe Van Eedens en die vennote onder voorlopige sekwestrasie was), uit die kantore van Van Eedens verdwyn. Die kantoor en die bates van die firma was toe in die besit en onder die beheer die voorlopige kurator, 'n mnr Wilsenach, 'n praktiserende prokureur in Pretoria. Op 18 September 1995 skryf appellant onder andere as volg aan Wilsenach: ‘Ons versoek dat u aan ons 'n volledige uiteensetting verskaf van alle dokumente, lêers, rekeningkundige aantekeninge of enige ander items wat uit ons kantore verwyder is vanaf die datum waarop u as voorlopige kurator aangestel is op Saterdag 2 September 1995 tot 16h00 13 September 1995. Ons stel u hiermee in kennis dat die kontant bedrae van R250,00 en R1 500,00 uit ons kantore tydens bovermelde tydperk verwyder is. Alle rekeningkundige aantekeninge, tjekboeke, deposito boeke, kwitansie boeke van die afgelope 5 jaar is ook verwyder en word die vermelde dokumente en items op 'n dringende basis benodig deur onsself. Dit blyk dat die binnedeur oop forseer is en in die lig hiervan versoek ons 'n lys van name van alle persone wat tydens bovermelde tydperk in ons kantore teenwoordig was.’ [10] In sy beantwoordende verklaring ter opponering van die destydse skorsingbevel stel die appellant dit so: ‘Nadat ons die kantore weer beset het (op 13 September), het ons vasgestel dat honderde lêers weg was, alle rekeningkundige aantekeninge van die afgelope 6 jaar, kontant in die bedrag van R1 500 is gesteel, kos uit die yskas is gesteel, rekenaar diskette is gesteel en daar is 'n klag by die polisie aanhangig gemaak. Dit was duidelik dat iemand by die kantore ingebreek het terwyl die Orde en mnr Wilsenach in beheer daarvan was.’ Aan Van Rooyen, (aldus sy verslag), het appellant en sy vader gesê die volgende is gesteel: ‘Kasboek, bankstate, fooiejoernale, kwitansieboeke, depositoboeke, rekenaaruitdrukke.’ [11] In antwoord op hierdie bewerings het die Orde 'n beëdigde verklaring van Wilsenach liasseer. Daarin sê hy onomwonde dat dit nie moontlik was dat daar diefstal van die boeke of enigiets anders kon gewees het gedurende die tydperk wat hy in besit van die kantore was nie. Hy staaf die bewering met die volgende: (i) Op die dag wat die voorlopige sekwestrasie bevel toegestaan is, is hy as voorlopige kurator aangestel. Hy het dieselfde dag nog besit van Van Eedens se kantore geneem en met die hulp van 'n slotmaker, kettings en slotte aan die deure aangebring ten einde te verseker dat niemand toegang tot die kantore kon verkry nie; (ii) Op 4 September 1995 het hy as gevolg van 'n berig na die kantore gegaan en die appellant en sy vader en ander personeel gevind waar hulle besig was om lêers uit die kantoor te verwyder. Hulle het toegang verkry deur die ketting aan die buitedeur te knip. Hy het hulle oorreed om die lêers terug te sit en die perseel te verlaat; (iii) As gevolg van hierdie gebeure het hy sekuriteitswagte op 'n 24-uur basis aangestel om die persele op te pas. Hulle is eers onttrek om 16h00 op 13 September toe hy die sleutels van die kantore aan die appellant oorhandig het. Geen persoon het toegang verkry tot die persele terwyl die wagte daar was en daar is ook geen tekens van enige inbraak of oopforsering van die binnedeur nie. (iv) Die enigste dag wat iemand gedurende die tydperk die kantore binnegegaan het, was op 6 September toe drie prokureurs wat opdrag gekry het om sake oor te neem van die Van Eedens, deur Wilsenach toegelaat is om die lêers te verwyder. Wilsenach was deurentyd teenwoordig van die tyd wat die persone opgedaag het tot hulle die persele verlaat het. Hy het gesorg dat slegs die lêers verwyder word en niks anders nie. [12] Hierdie bewerings van Wilsenach is nooit deur die appellant betwis nie – nòg in die aansoek om skrapping, nòg in die aansoek om hertoelating. Die appellant se vader het die repliserende verklaring in die skorsingsaansoek namens hom en appellant afgelê. Omtrent Wilsenach se verklaring sê hy absoluut niks. Hy volstaan met die stelling dat ‘dit gemenesaak is dat die brondokumente weg is’. In die huidige aansoek is Wilsenach se destydse verklaring aangeheg tot die beëdigde verklaring van mnr Johnston, 'n vennoot in die firma Weavind & Weavind van Pretoria wat die Deelgroei lêers by Van Eedens oorgeneem het. Hy verwys in sy verklaring pertinent na Wilsenach se verklaring ten einde die bewerings van ongemagtigde verwydering van die boeke en rekeningkundige dokumente te weerlê. Weereens word daar geensins in die ellelange repliserende verklarings wat appellant liaseer het, gehandel met Wilsenach se bewerings nie. Dit is ook opmerklik dat in sy funderende verklaring in die huidige aansoek appellant geen melding maak van die sogenaamde diefstal van die boeke nie. Dit is eers in repliek wat hy aanvoer dat hy gekortwiek is in sy pogings om te bewys dat daar nie 'n trusttekort was weens die diefstal van die boeke nie. Hy beskuldig dan ook nie net vir Wilsenach nie, maar wel vir Van Rooyen en veral die Orde dat hulle toegelaat het dat die boeke verdwyn het. Hy sien oor die hoof die feit dat die Orde eers op 22 September 'n skorsingsbevel verkry en beheer geneem het oor die praktyk – lank na, op sy eie weergawe, die boeke verdwyn het. [13] Daar is 'n verdere belangrike stukkie getuienis wat betref die boeke. Volgens Van Rooyen het hy, nadat hy opdrag ontvang het om Van Eedens se boeke te ondersoek, op 4 September 1995 'n onderhoud met appellant by Van Eedens se kantore gevoer. Hy het hom gevra vir die rekenkundige aantekeninge van die firma. Appellant het geantwoord dat dit alles in die besit van die firma se ouditeur, ene mnr Bemont, was. Van Rooyen het Bemont gekontak en uitgevind dat hy slegs 'n klein hoeveelheid dokumente en geen boeke gehad het nie. Die belangrikheid van hierdie getuienis – wat weer eens nie deur appellant betwis is nie – is dat hy voorgegee het dat al die boeke en rekenkundige aantekeninge by Bemont was en nie in die kantoor nie. Dit volg dat dit onmoontlik was dat hulle uit die kantoor gesteel kon gewees het. In ieder geval was sy bewering dat die boeke en rekeningkundige aantekeninge by Bemont was, vals. Om sake te vererger, op 15 September 1995 besoek Van Rooyen weer die kantore van Van Eedens en in 'n tweede verslag berig hy as volg: ’Op my vraag waar die rekeningkundige aantekenige gehou was, neem mnr Albert van Eeden my na sy kantoor en maak hy 'n kas aan die regterkant van sy lessenar oop, wat leeg is. Ek het onmiddellik gereageer en mnr Albert van Eeden gevra waarom hy nie tydens my vorige besoek in die kas gekyk het toe ek hom gevra het of daar enige rekeningkundige aantekening in die kantoor is nie. Mnr van Eeden antwoord eers dat hy wel in die kas gekyk het maar nadat ek hom verseker dat hy dit nie gedoen het nie, antwoord hy dat hy maar seker die kas vir die kurator gewys het.’ [14] Afgesien van Wilsenach se onbetwiste getuienis dat daar geen diefstal kon gewees het nie, vra mens jou af wie anders as die appellant en sy vader enigsins belang sou gehad het in die firma se rekenkundige boeke en aantekeninge vir die vyf of ses jaar wat 1995 voorafgegaan het. In sy hoofde van betoog in hierdie hof voer appellant se advokaat aan dat afgesien van die rekeningboeke wat weg is, is daar ook 'n stel wette, hofverslae, rekenaars, fotostaatmasjiene en drukkers gesteel is. Daar is geen getuienis in die rekord tot die effek nie en appellant het nêrens in sy stukke aangevoer dat die goed weg is – (sien veral sy brief van 18 September wat hierbo in para [9] aangehaal word). Dit opper egter die vraag – as daar al die waardevolle goedere in die kantore was, waarom het die vermeende dief of diewe hulle nie gesteel nie? [15] Die hele kwessie van verdwyning van die boeke moet gesien word teen die agtergrond van die situasie wat die vennote van Van Eedens hulle destyds in bevind het. Deelgroei en Nedcor het hulle mandaat beëindig en twee hofbevele verkry om Van Eedens te verplig om meer as 'n miljoen rand aan hulle te betaal. ‘n Dringende sekwestrasiebevel is teen hulle uitgereik. Die Orde het in die vorm van Van Rooyen begin navraag doen en ondersoek instel na moontlike trusttekorte. In die lig hiervan was daar net twee persone wat kon baat uit die verdwyning van die boeke en dit was die appellant en sy vader. Dit is ook betekenisvol dat appellant die aanbod van die hof benede om die vraag van die verdwyning van die boeke na mondelingse getuienis te verwys nie wou opneem nie. [16] 'n Prokureur wat doelbewus sy boeke verwyder en verberg om te keer dat die Orde insae daartoe het en 'n valse verduideliking gee van waar die boeke is en in 'n aansoek om hertoelating daarin volhard, is nie 'n geskikte persoon om te praktiseer as prokureur nie. Daarbenewens is daar nog die appellant se gedrag op 4 September 1995. Volgens die onbetwiste getuienis, terwyl die kantore en bates van die praktyk van Van Eedens in die hande van die kurator was, het appellant en sy vader ingebreek by die kantore deur die kettings te knip en gepoog om lêers te verwyder. Sodanige wederregtelike optrede is 'n verdere rede waarom appellant nie hertoegelaat kan word nie. [17] Laastens is daar op die stukke 'n vraagteken oor die versekering wat die appellant aan die hof bied oor sy toekomstige gedrag indien hy hertoegelaat word. In sy funderende eedsverklaring sê hy dat hy die boekhouding van die firma aan sy vader oorgelaat het en dat hy die litigasie en strafpraktyke behartig het. Hy stel dit so: ‘Toe ek by die praktyk betrokke was, het ek die litigasiepraktyk behartig en veral ondervinding opgedoen in die strafpraktyk. Ongelukkig het ek in daardie tyd die kantoor administrasie, en meer bepaald rekenkundige administrasie van die firma verwaarloos. Vanweë die gemoedsrus wat ek ervaar het uit hoofde van my vader se ervaring, het ek alles as vanselfsprekend aanvaar en nie te alle tye nougesette aandag gegee aan my praktyk nie.’ In sy repliserende eedsverklaring sê hy die volgende: ‘Daar was geen verkeerde oorplasings of ongemagtigde of onverskuldigde betalings uit trustfondse nie en nog minder was daar trusstekorte. Ek was op hoogte van die daaglikse metodes waarop die boekhouding van die fima gehou is en ek kan die Agbare Hof die versekering gee dat my kontrole sodanig was dat ek onmiddellik sou geweet het indien daar enige ongemagtigde of onverskuldigde betalings uit trustfondse gemaak is. . . . Ek weet my boekhouding was op datum en my boekhouding was in orde.’ Hy gaan dan voort en gee die hof die versekering dat as hy hertoegelaat word, hy sal sorg dat behoorlik boekgehou word. Uit die mond van 'n persoon wat eers beweer dat hy niks te doene gehad het met die boekhouding en daarna dat hy noukeurig gesorg het dat die boeke in orde was, is sodanige versekering vals en onaanvaarbaar. Dit is myns insiens 'n verdere bewys van appellant se onbevoegdheid om as prokureur te praktiseer. [18] Om bogemelde redes kan die appèl nie slaag nie. Dit is gebruiklik dat in hierdie tipe saak waar die appellant nie slaag nie, hy gelas word om die koste op die skaal soos tussen prokureur en kliënt te betaal. [19] Die appèl word van die hand gewys en appellant word gelas om die eerste respondent se koste op die skaal soos tussen prokureur en kliënt te betaal. ……………………. P C COMBRINCK APPÈLREGTER VERSKYNINGS: NAMENS APPELLANT: G H SWANEPOEL NAMENS RESPONDENT: A T LAMEY PROKUREURS: NAMENS APPELLANT: BICCARI BOLLO MARIANO INC PRETORIA NAMENS RESPONDENT: ROOTH WESSELS MALULEKE PRETORIA KORRESPONDENTE: NAMENS APPELLANT: LOVIUS-BLOCK BLOEMFONTEIN NAMENS RESPONDENT NAUDES BLOEMFONTEIN

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL In die Hoogste Hof van Appèl MEDIA OPSOMMING – SAAKNOMMER: In die saak tussen: Van:: Die Griffier, Hoogste Hof van Appèl Datum: 2008-09- Status: Onmiddellik Mnr van Eeden is in 1996 in Pretoria van die rol van prokureurs geskrap weens 'n tekort in sy firma se trustrekening. Hy het in 2003 aansoek gedoen om hertoelating en aangevoer dat daar inderdaad nooit 'n trusttekort was nie. Sy aansoek is deur die Hooggeregshof, Pretoria, geweier. Die Hoogste Hof van Appèl het bevind dat die waarskynlikhede daarop gedui het dat die appellant die firma se rekeningkundige boeke verberg het ten einde 'n ondersoek van die Prokureursorde te dwarsboom. Daar is dus bevind dat hy onbevoeg is om hertoegelaat te word as prokureur.

4022

non-electoral

2023

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 400/2022 In the matter between: TOP LAY EGG CO-OP LIMITED First Appellant GEORGE SHWARTZEL BOERDERY (PTY) LTD Second Appellant and MINISTER OF AGRICULTURE, FORESTRY AND FISHERIES First Respondent EXECUTIVE OFFICER: AGRICULTURAL PRODUCT STANDARDS, DEPARTMENT OF AGRICULTURE: FOOD SAFETY AND QUALITY ASSURANCE Second Respondent FOOD SAFETY AGENCY (PTY) LTD Third Respondent (REG:2013/130308/07) AGENCY FOR FOOD SAFETY AND QUALITY (PTY) LTD Fourth Respondent (REG:2016/258115/07) AGENCY FOR FOOD SAFETY Fifth Respondent Neutral Citation: Top Lay Egg Co-op Ltd & Another v Minister of Agriculture, Forestry and Fisheries & Others (400/2022) [2023] ZASCA 67 (16 May 2023) Coram: SALDULKER, MOTHLE AND MATOJANE JJA AND NHLANGULELA AND UNTERHALTER AJJA Heard: 16 March 2023 Delivered: 16 May 2023 Summary: Administrative Law – delayed review – Agricultural Product Standards Act 119 of 1990 – designated assignees – whether the third respondent is the designated assignee – whether the assignee had the power to inspect products and charge the producers’ fees – whether the provisions relating to the determination of fees are reviewable on various grounds in terms of the Promotion of Administrative Justice Act 2 of 2000. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Bokako AJ with Tlhapi J and Phahlamohlaka AJ sitting as Full Court of appeal): The appeal is dismissed. The appellant is ordered to pay the respondents’ costs of appeal, including the costs of two counsel where applicable. ______________________________________________________________ JUDGMENT ______________________________________________________________ Mothle JA (Saldulker and Matojane JJA and Nhlangulela and Unterhalter AJJA concurring) [1] The central issue in this appeal is the interpretation of a letter written by the first respondent, the Minister of Agriculture, Forestry and Fisheries (the Minister), in which he designated Agency for Food Safety (the fifth respondent) as the assignee. The designation as assignee was made in terms of s 2(3) of the Agricultural Product Standards Act 119 of 1990 (the Act). Before dealing with the grounds of appeal, it is apposite to deal briefly with the scheme of the Act, the background facts and the trajectory of the litigation which led to this appeal. [2] The purpose of the Act is to ensure that products sold to the public are in accordance with the prescribed class or grade, comply with the prescribed standards, and are packed, marked and labelled accordingly, do not contain prescribed prohibited substances or contain a prescribed substance. These requirements are for the benefit of both consumers and the producers or stakeholders involved. To give effect to this legitimate purpose, s 2 of the Act empowers the Minister to designate an official in the Department of Agriculture, Forestry and Fisheries (the Department) as an executive officer and designate a person, undertaking, body, institution association or board as an assignee. [3] The scheme of the Act was succinctly stated by this Court in Bertie van Zyl (Pty) Ltd t/a ZZ2 and Others v Minister of Agriculture, Forestry and Fisheries And Others1 (Bertie van Zyl) as follows: 'The Act controls the sale, export and import of certain agricultural products. The first respondent (the Minister) may prohibit the sale of prescribed product unless it complies with prescribed classifications and standards. In terms of s 2(1) of the Act, the Minister may designate a person in the employ of the Department of Agriculture (the Department) as the executive officer to exercise the powers and perform the duties conferred under the Act. The minister may also, in terms of s 2(3)(a), designate a person,2 with regards to a particular product, for the purposes of the Act. A person so designated is styled an 'assignee' in respect of that particular product. The Act permits the executive officer and an assignee to conduct inspections aimed at ensuring that certain agricultural products meet the prescribed classifications and standards. They charge fees to do so. In the case of the executive officer the fee is prescribed. In the case of the assignee, the Act stipulates in s 3(1A)(b)(ii), that ‘the fee determined by such assignee shall be payable . . .’ (Footnote added.) [4] The following are the background facts and trajectory of the litigation that led to this appeal. On 15 July 2018, the Minister issued a public invitation for submission of bids regarding the appointment of assignees in respect of agricultural products. Eleven bids from prospective assignees were received. On 18 July 2018, the prospective assignees were invited to attend an information session concerning the minimum requirements necessary for the selection of assignees. Among the eleven bids was that of the Food Safety Agency (Pty) Ltd (third respondent). When the third respondent, as one of the prospective assignees, made its presentation for the bid in a public session, it mentioned that it is a registered company trading as Agency for Food Safety. I will return to this aspect in detail as it constitutes the first ground of appeal. [5] In a letter dated 9 December 2016, addressed to Dr Nel of the third respondent, the Minister designated the third respondent, which had submitted the bid, as assignee, by referring to it by its trade name. The litigation 1 Bertie Van Zyl (Pty) Ltd and Others v Minister of Agriculture, Forestry and Fisheries and Others [2021] ZASCA 101; [2021] 4 All SA 1 (SCA) at para 2. 2 Person includes a legal person, undertaking, body, institution, association or board. between the parties and the grounds of this appeal arose from the Minister’s letter designating the third respondent as assignee. The letter reads thus: ‘Dear Dr. Hein Nel DESIGNATION AS AN ASSIGNEE IN TERMS OF THE AGRICULTURAL PRODUCT STANDARDS ACT, 1990 (ACT NO. 119 1990) I, Senzeni Zokwana, Minister of Agriculture, Forestry and Fisheries hereby in terms of section 2(3)(a) of the Agricultural Product Standards Act, 1990 (Act 119 1990), designate Agency for Food Safety for the application of section 3(1) and 4A with respect to the inspection of regulated animal products (poultry meat and eggs, as well as any other meat and meat products for which regulations maybe promulgated). The minister reserves the right to revoke the assignment should circumstances dictate otherwise. I trust that you will execute your duties to the best of your abilities. Yours Respectfully MR S ZOKWANA, MP Minister of Agriculture, Forestry and Fisheries DATE: 9-12-2016’. (Own emphasis.) [6] Consequent upon the receipt of the letter of designation, the third respondent mandated its wholly-owned subsidiary company, Agency for Food Safety and Quality (Pty) Ltd (the fourth respondent), to conduct inspections and exercise the powers of assignee in respect of poultry products, on its behalf. Top Lay Egg Co-Op Limited (the first appellant), is a primary co-operative which markets and sells agricultural products on behalf of its 51 members, who conduct business as egg producers. The first appellant markets and supplies its members’ eggs and other poultry-related agricultural products to major retailers such as Massmart Group, Shoprite Holdings, Pick ‘n Pay and the Spar Group. George Schwartzel Boerdery (Pty) Limited (the second appellant), also conducts business in the production and sale of eggs. The control, sampling, packaging and quality assurance over the sale of poultry is regulated under the Act. [7] On 19 March 2018, the first and second appellant, including two companies also conducting business in poultry products, namely, Eggbert Eggs (Pty) Limited (Eggbert) and WW Bartlet Poultry Farm (Pty) Limited (Bartlet), launched an application in the Gauteng Division of the High Court, Pretoria (the high court), against the Minister and four respondents. In essence, the appellants sought relief before the high court in the following terms: first, whether the Minister designated the third respondent or the fourth respondent as assignee; second, whether the powers in terms of ss 3A, 7 and 8 of the Act were also conferred upon the assignee; third, whether the determination of fees by the assignee was reviewable in terms of PAJA on the grounds that they were, allegedly, arbitrary; capricious or irrational. [8] All five respondents opposed the application. The Minister was the first respondent and Mr BM Makhafola, a director in the Department who the Minister had designated as Executive Officer, was the second respondent. The second respondent deposed to the answering affidavit on behalf of the Minister and the Department (the government respondents). The three other respondents opposing the application were the third, fourth and fifth respondents (the assignee respondents). In their answering affidavit to the appellant’s application, the government respondents, in addition, raised three points in limine, namely; that the first appellant lacked locus standi; that there was a delay in instituting the review proceedings and that the appellants had failed to exhaust internal remedies. [9] Apart from the order to invalidate the invoices submitted for payment by the fourth respondent to the second applicant, the application was dismissed with costs by Davis J, who also refused to grant the applicants leave to appeal the order of the high court. The applicants petitioned this Court and on 26 August 2020 were granted leave to appeal to the Full Court of the Gauteng Division of the High Court (the full court), by Ponnan JA and Unterhalter AJA. The full court similarly dismissed the appeal with costs, except the order invalidating the invoices. Aggrieved by the decision of the full court on appeal, the first two appellants3 again approached this Court with a request for special leave to appeal. On 11 April 2022, Plasket JA and Phatsoane AJA granted the appellants special leave to appeal. It is thus with special leave to appeal that this matter comes before us. [10] In their first ground of appeal, the appellants contend that the identity of the designated assignee letter caused confusion. The Minister’s letter of designation refers to ‘Agency for Food Safety', which the appellants contend, is a non-existent person or entity. On inquiry, so the appellants contend, they could not find an entity registered as ‘Agency for Food Safety’. In addition, the fourth respondent exercised the powers to conduct the inspection at their premises, which also issued monthly invoices for the service, even though they were not designated as an assignee. In addition, the Executive Officer in the Government Gazette No 40545 dated 13 January 2017, and subsequent Government Gazettes 40621 of February 2017 and 40847 of 19 May 2017, referred to an entity known as ‘Agency for Food Safety (Pty) Ltd’, a company that was non-existent. Consequently, so continues the contention by the appellant, there was disparity and confusion as to the identity of the actual designated assignee. [11] The Executive Officer appended the suffix ‘(Pty) Ltd’ to the trade name. This connotes a different entity that resulted in confusion, particularly as published in the Government Gazettes. It conveyed that the trade name ‘Agency for Food Service’ is a registered company, separate and independent from the third respondent. In this regard, there is some merit in the appellants’ contention. However, this occurred in 2017, just after the designation of the assignee. The institution of proceedings in the high court in March 2018, was preceded by the exchange of correspondence one year earlier during 2017, between the appellants’ attorneys Moolman & Pienaar Ing, and the second and fourth respondents. The issue of the designated assignee’s identity featured in the correspondence exchanged. In a letter dated 2 January 2018 and in reply 3 Eggbert and Bartlet, the third and fourth applicants in the high court, were not participants in the appeal in this Court. to a letter of demand by the appellants’ attorneys, VFV attorneys acting for the third and fourth respondents, wrote thus: ‘1. We confirm that we act on behalf of both Agency for Food Safety and Quality (Pty) Ltd (AFSQ) [fourth respondent], a wholly owned subsidiary of Food Safety Agency (Pty) Ltd t/a Agency for Food Safety (AFS) [third respondent] (“our clients”) whom has approached us for advice and assistance herein. 2. Kindly take note that AFS has been appointed as an assignee by the Department of Agriculture, Forestry and Fisheries in terms of the Agricultural Product Standards Act 119 of 1990 (“the Act”). . . 3. Although AFS is the appointed assignee as mentioned above, they render quality- check services through their wholly owned subsidiary being AFSQ. This was done in order for poultry inspections to be kept separate from abattoir (red meat) inspections.’ [12] The letter makes clear the issue of identity and the relationship between the assignee respondents. Therefore, before instituting the proceedings in the high court, the appellants were made aware that the designated ‘Agency for Food Safety’ is a trading name of the company Food Safety Agency (Pty) Limited, the third respondent. Further, any misunderstanding concerning the involvement of the fourth respondent was explained and reasons given. It is also evident from the appellants’ founding affidavit, by their own admission, that they were aware that Agency for Food Safety is a trade name of Food Safety Agency (Pty) Ltd. The appellants’ founding affidavit deposed to by Mr Petrus Jacobus Pienaar, stated as follows: 'The Fifth Respondent is AGENCY FOR FOOD SAFETY, an entity, the correct citation which is unknown, with offices at 296 The Hillside Street, Lynnwood, Pretoria, Gauteng. Alternative at 4A Garsfontein Office Park, 645 Jaqueline Drive, Garsfontein, Gauteng. Reference is also made in documentation at the disposal of the applicants, to Food Safety Agency (Pty) Ltd trading as Agency for Food Safety.' (Own emphasis.) [13] The appellants’ deponent pleaded the same address of the fifth respondent as being also the address of the third and fourth respondents respectively. In the same affidavit, the appellants provide a list of documents they relied upon to support the contention that there was a disparity and confusion about the identity of the entity. The list of these documents, notably, excluded the 2 January 2018 letter from VFV attorneys. The relationship between the third respondent and both the fourth and fifth respondents was again explained in the answering affidavit of the government respondents, deposed to by the Executive Officer. The identity of the assignee respondents is clarified with reference to the copy of the public presentation made by the fourth respondent and other documents attached thereto, consistent with the letter from VFV attorneys. [14] Further, in the answering affidavit deposed to by Mr Louis Visagie on behalf of the assignee respondents, the identity of the third respondent, with the fifth respondent as its trade name, is explicitly stated, with reference to the third respondent’s business plan, which had been submitted in response to the bid. The business plan is attached as an annexure to the assignee respondents’ answering affidavit, again, consistent with, and as proof of the January 2018 letter of VFV attorneys. Similarly, the identity of the fourth respondent in relation to the third respondent is explained in detail in the same answering affidavit. In essence, the fourth respondent is a wholly owned subsidiary of the third respondent, dedicated to executing the duties of the assignee. The third respondent is in fact the designated assignee. [15] In reply, the appellants provided no evidence to contradict the proof of the identity and relationship of the assignee respondents as presented by both the government respondents and the assignee respondents in their answering affidavits. Having been provided with incontrovertible documentary evidence of the identity and relationship of the assignee respondents, there is no explanation for why the appellants persisted with this ground of appeal. Thus, the claim on appeal that the designation of the assignee caused disparity and confusion is contrived. Whatever confusion may initially have been caused was dispelled. This ground of appeal has no merit and stands to be dismissed. [16] The second ground of appeal, also emanating from the Minister’s letter, dealt with the powers conferred and those not conferred on the assignee. In the letter of designation of the assignee, the Minister, in pronouncing the designation of the third respondent by its trade name as assignee, wrote: ‘I . . . designate Agency for Food Safety for the application of sections 3(1) and 4A with respect to the inspection of regulated animal products . . .’ The appellants contend that the Minister only delegated or assigned the assignee the power in terms of s 3(1) and s 4A of the Act. These powers, it is further contended, exclude the power to: conduct inspections, grade and sample for quality control in terms of s 3A; determine and charge fees in terms of s 3(1A)(b)(ii); enter premises, investigate and sample in terms of s 7; and seize a product, material or books in terms of s 8 of the Act. The appellants’ approach to the interpretation of the letter is based on a presumption that what is specifically included, excludes what is not mentioned.4 [17] This presumption is not applicable in this case for the following reasons. First, the powers conferred upon the Executive Officer by the Minister, includes s 3A, s 3(1A), s 7 and s 8 of the Act. By law these powers are designated to the assignee, unless expressly (as opposed to impliedly) provided otherwise. This comes about for the following reason. The Minister did not expressly provide in the letter of designation that s 3A, s 3(1A), s 7 and s 8 of the Act are excluded. In the first sentence of the letter, the designation as assignee is made in terms of s 2(3)(a) of the Act, for the purposes of the application of this Act. Section 2(3)(b) of the Act provides: ‘(b) An assignee thus designated shall– (i) unless expressly provided otherwise and subject to the directions of the executive officer, exercise the powers and perform the duties that are conferred upon or assigned to the executive officer by or under this Act, with regard to the product referred to in (a); (ii) in the case of a juristic person, notwithstanding anything to the contrary contained in any other law or in the absence of any express provision to that effect, be competent to exercise the powers and perform the duties referred to in subparagraph (i); and (iii) unless the Minister in a particular case otherwise directs, have no recourse against the State in respect of expenses incurred in connection with the exercising of such powers or performance of such duties.’ (Own emphasis.) 4 The presumption arises from the maxim ‘Expressio unius est exclusio alterious rule, applied by this Court’ in Faure en ‘n Ander v Joubert en ‘n Ander NO 1974 (4) SA 939 (AA). [18] Second, s 3(1), s 4 and s 4A of the Act deal with control over the sale of the products of different classes. Section 3(1) deals with the locally produced class sold locally, s 4 deals with exported products, sold abroad, while s 4A deals with imported products sold locally. Therefore, the common feature in reference to s 3(1) and s 4A of the Act, is that both classes of products are being sold and consumed locally, in the Republic of South Africa. In all three classes of products, the Minister is authorised to exercise discretion to prohibit the sale of a product, subject to conditions applicable to each class of product. In order for the Minister to exercise such discretion, an inspection, grading, sampling, investigation or seizure of the product will first have to be made by either the executive officer or the assignee. The operative sections of the Act, namely ss 3A, 3(1A), 7 and 8, which the appellants contend have been excluded, are indispensable for, and cannot be logically severed from, the exercise of the power in s 3(1) and s 4A of the Act. [19] Third, the Minister in designating the third respondent by its trade name as assignee, conveyed a clear intent and purpose for the application of s 3(1) and s 4A of the Act. He unequivocally declared in the letter that the application of the two sections of the Act referred to, was ‘with respect to the inspection of regulated animal products . . .’ The assignee is thus expected to exercise the inspection powers in regard to regulated animal products, mainly poultry. This necessitates invoking the powers and duties in s 3A, which, logically as a consequence, triggers s 3(1A)(b)(ii) to charge fees, s 7 to enter into the premises to investigate and sample as well as s 8 to seize a product, materials or books. Therefore, by interpreting the reference to s 3(1) and 4A of the Act in isolation from the rest of the text in the relevant paragraph of the Minister’s letter, the appellants failed to ascribe a proper meaning and context to what the letter sought to convey. This Court in Natal Joint Municipal Pension Fund v Endumeni Municipality5 underscored the importance of the context in the interpretation of statutes and other legal instruments. This Court stated thus: 5 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593 (SCA) para 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.6 . . . 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.’ (Own emphasis.) [20] The purpose of appointing an assignee is to enable the Minister to control agricultural products that are being sold locally and those exported. The control of these products is to ensure that safe and healthy products are sold to the consumer. The assignee is appointed for the purposes of exercising the powers to inspect, grade and sample the products for purposes of quality control. To fulfil this task, assignees must exercise the relevant powers in the Act. Therefore, the appellants’ contention that the Minister, in designating the assignee, excluded the power to inspect the product and to determine and charge a fee for the service, is wrong in law. The assignee derived these powers not only from the text of the letter by the Minister, but also ex- lege, in terms of s 2(3) of the Act. Therefore, this ground of appeal has no merit and falls to be rejected. [21] The third ground of appeal is premised on the preceding two grounds. The appellants contend that only the fifth respondent, which is non-existent, was appointed assignee, but it was not designated with the power to carry out inspections and to determine and charge fees. Therefore, so continues the 6 Ibid at fn 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 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 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.’ appellants’ contention, the high court and the full court erred in holding that fees may be levied as ‘inspection fees’ per month per egg produced or packaged, ‘whether actual inspections had taken place.’ There is no method of determination of the fees for inspection duties, and therefore the fees charged for the inspections conducted, stands to be reviewed and set aside in terms of s 6(2)(e)(ii) and (f) of the Promotion of Administrative Justice Act 2 of 2000 (PAJA), on the grounds of the assignee having acted arbitrarily, capriciously or irrationally. [22] The second appellant alleged that it received two invoices from the fourth respondent, dated 11 December 2017 and the other on 29 January 2018, each payable at the end of that month. The invoices referred to precisely the same number of eggs. It further alleges that there was an invoice in November 2017 that it received from the fourth respondent, although, as it alleged, no inspection took place. The second appellant sought to have these invoices reviewed and set aside. [23] In their answering affidavit, the assignee respondents deny that the determination of the fees was arbitrary, capricious and irrational. Their version, which was accepted by the high court and the full court, is that two consultative workshops were held on 20 April 2017 and 4 May 2017, with the role players in the industry. Significantly, Mr Gawie Rossouw, a director of the third applicant, Eggbert, attended the meetings and made proposals which led to the reduction of fees. [24] There were two main proposals which came out of the workshops. First, because of the risk profile of eggs, the initial communication dated 21 February 2017, referring to holding monthly inspections, was substituted with a proposal that quarterly inspections be conducted. Second, a proposal that the relevant fee for inspections as published by the Minister at that time, was R 0, 0015 per egg, be reduced to R 0,005 per egg. After considering its budget, the assignee respondents adjusted the fee to R 0, 0006 per egg. The charge remained per egg, in that it was approved and supported by the role players because it catered for producers that do not package as well as those that package. It is a fee based on the costs of providing the service across the industry, which were budgeted for, including inspection of packaging and labelling. [25] Section 3(1A)(b)(ii) of the Act provides that an assignee is empowered to determine and charge fees for the performance of the duties in terms of the Act. The fees determined by such assignee shall be payable. Section 3(4) provides that the fees are recoverable from the owner of the product. As it stands, there are no Regulations published as to the procedures and a prescribed method of determining fees. The appellants’ attack on these shortcomings or lacunae in the legal framework is misplaced, as no order is sought against the Minister or the Department. The absence of a proper legal framework cannot be attributed to the assignee respondents. The attempt by the Executive Officer to initiate such Regulations for consideration by the Minister, came under attack as soon as the initial draft was published in the Government Gazette, and the initiative was sadly aborted. [26] There is no doubt, as expressed by this Court in Bertie Van Zyl7 that the powers conferred upon assignees in terms of the Act, including to determine and charge fees, are public powers. The exercise of the powers to determine fees is an administrative decision and consequently it must comply with the provisions of s 4 of PAJA. It is not disputed that the assignee respondents went through a consultative process to determine fees, which the appellants did not attend, though other role players such as Eggbert did. In the absence of a legal framework that determines the procedure and method of calculation of the fee payable, the participation and contribution made by the role players at the meeting, met the requirement of procedural fairness. The proposals made by Mr Rossouw led to the reduction of the fee applicable at that stage, R 0,0015 per egg, to less than half of it, R 0,0006. The consultative process enabled the assignee, who bears the ultimate power to decide, to determine a fee based on a budget, the expected service and costs considerations. Therefore, the allegation that the determination of the fee was arbitrary, capricious and 7 Footnote 1 para 35. irrational cannot be sustained and was correctly rejected by the high court and the full court. This ground of appeal is also unmeritorious and stands to be rejected. [27] The high court ruled in favour of the respondents on the points in limine, but only after the court had adjudicated the matter on the merits. The high court’s ruling on these procedural objections was confirmed by the full court. For the purposes of this appeal, it will thus be superfluous to deal with the procedural objections, in view of the considerations and the findings made on the merits in this judgment. Thus, the points in limine need not detain us further. [28] There was an attempt by the appellants in this Court, seemingly inspired by the decision of this Court in Bertie van Zyl, belatedly to raise a new ground of appeal on procedural unfairness in terms of s 6(2)(c) of PAJA. Apart from the fact that the facts in this appeal are distinguishable from those in Bertie van Zyl, this new ground was not raised as part of the relief sought in the notice of motion and affidavits before the high court. In addition, the appellants did not seek and obtain leave from this Court to introduce a new ground of appeal. The respondents objected thereto, and correctly so. Therefore nothing further need be said of it. [29] The appeal stands to be dismissed with costs and there is no reason why the costs should not follow the result. [30] In the result, I make the following order: The appeal is dismissed. The appellant is ordered to pay the respondents’ costs of appeal, including the costs of two counsel where applicable. _______________________ SP MOTHLE JUDGE OF APPEAL APPEARANCES: For the appellants: M G Roberts SC with E Roberts Instructed by: Moolman Pienaar Inc, Pietermarizburg C/O Pieter Skein Attorneys, Bloemfontein For 1st and 2nd respondents: C E Puckrin SC with KD Magano Instructed by: State Attorney, Pretoria C/O State Attorney, Bloemfontein. For 3rd, 4th, 5th respondents: G Naude SC with A Thompson Instructed by: VFV Attorneys, Ashlea Gardens C/O 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: 16 May 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 Top Lay Egg Co-op Ltd & Another v Minister of Agriculture, Forestry and Fisheries & Others (400/2022) [2023] ZASCA 67 (16 May 2023) Today, the Supreme Court of Appeal (SCA) dismissed an appeal from the Full Court of the Gauteng Division of the High Court, Pretoria (full court). The appeal concerned the interpretation of a letter issued by the Minister of Agriculture, Forestry and Fisheries (the Minister) by which he designated ‘Agency for Food Safety’ as an assignee in terms of the Agricultural Product Standards Act 119 of 1990 (the Act). After the designation, the Food Safety Agency (Pty) Ltd (the third respondent), mandated its wholly- owned subsidiary company, Agency for Food Safety and Quality (Pty) Ltd (fourth respondent) to conduct inspections and exercise its attendant powers as assignee, in respect of poultry products. The appellants were companies conducting business in poultry products, approached the high court for a declarator and review order, first, whether the Minister in the letter, designated the third or fourth respondents as the assignee (the identity of the assignee); second, what was the scope of powers which were conferred to the assignee in terms of the letter; and third, whether the attended powers of the assignee to determine fees were not arbitrary, capricious and irrational. The high court found the contentions untenable and dismissed the application, as did the full court on appeal. On further appeal to the SCA, the appellants raised the same three grounds of appeal. First, the appellants contended that the Minister’s letter designated ‘Agency for Food Safety' (fifth respondent) as the assignee. It turned out that the Minister in fact referred to ‘Food Security Agency (Pty) Ltd’ (the third respondent) by using its trade name in the letter. This had been clarified by correspondence exchanged between the parties well before the institution of proceeding in the high court. Second, the appellants contended that the Minister only assigned limited powers in terms of ss 3(1) and 4 of the Act and the respondents were therefore precluded from performing any powers not expressly mentioned, such as those in ss 3A, 3(1A), 7 and 8. The SCA rejected that contention and found that s 2 of the Act provided that once designated by the Minister as an executive officer and as assignee, they are directly empowered to exercise the powers listed in that section, unless expressly provided otherwise. Sections 3(1) and 4 were inseparably connected ss 3A, 3(1A), 7 and 8 of the Act. The power to conduct inspections was expressly stated in the letter. Section 2 of the Act authorised the executive officer or the assignee to conduct inspections and exercise the attendant powers in respect of the quality of poultry products. Third, the appellants contended that the determination of inspection fees were arbitrary, capricious and irrational. Similar to the findings by both the high and full court, the SCA held that the determination of fees was an administrative action, arising out of an exercise of public power. In the absence of a regulated legal framework as to how the power should be exercised, s 4 of the Promotion of Administrative Justice Act 3 of 2000 is applicable. The determination of fees must be made in consultation with entities whose interests would be affected by the outcome of such determination. The role-players and stakeholders must be provided with an opportunity to participate, where necessary to raise their concerns in so far as their interests are affected, and allow the decision-maker to deal with their concerns. It must be a public participation process. The assignee had met with these requirements, as a result, the existing fee payable was reduced to less than half. In the result, the SCA saw no merit in the contentions raised by the appellants and subsequently dismissed the appeal with costs including costs of two counsel where employed. ~~~~ends~~~~

2636

non-electoral

2014

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT REPORTABLE Case No: 572/2013 In the matter between: MOGALE CITY MUNICIPALITY Appellant and FIDELITY SECURITY SERVICES (PTY) LTD First Respondent MAFOKO SECURITY SERVICES (PTY) LTD Second Respondent BOSASA SECURITY SERVICES (PTY) LTD Third Respondent RED ANT SECURITY SERVICES (PTY) LTD Fourth Respondent NATIONWIDE SECURITY CC Fifth Respondent CHANGING TIDES 208 (PTY) LTD Sixth Respondent Neutral citation: Mogale City Municipality v Fidelity Security Services (Pty) Ltd (572/2013)[2014] ZASCA (19 November 2014) Coram: NAVSA ADP, WALLIS, SALDULKER, MBHA and ZONDI JJA. Heard: 7 November 2014 Delivered: 19 November 2014 Summary: Tender –review – irregular procedure – Uniform Rule 30 – discussion of effect of blacklisting by National Treasury – bids not properly considered – tender process defective – just and equitable remedy – warning to errant officials. ORDER On appeal from: South Gauteng High Court (Meyer J sitting as court of first instance): The following order is made: Paragraph 3 of the order of the court below is amended to replace the period of four weeks with a period of two weeks. An additional paragraph to be numbered 5 is added to the order of the court below reading as follows: ‘The order of invalidity in paragraph 2 hereof is suspended for a period of three weeks from the date of this order, whereafter it will take effect.’ The references in paragraphs 3 and 5 of the order of the court below to ‘the date of this order’ are to be construed as meaning the date on which this judgment is delivered. The appeal is otherwise dismissed with costs, such costs to include those consequent upon the employment of two counsel. JUDGMENT Wallis JA (Navsa DP, Saldulker, Mbha and Zondi JJA concurring) [1] On 4 July 2011 the appellant, the Mogale City Municipality (the Municipality) published a tender, SS(T&S) 01/2012, for the provision of security services to the Municipality for a period of three years. The first respondent, Fidelity Security Services Proprietary Limited (Fidelity), which was already providing those services in terms of an existing contract with the Municipality, submitted a tender. Its tender, and that of the fourth respondent, Red Ant Security Services (Pty) Ltd (Red Ant), scored highest in the bid evaluation process, but for different reasons both were ultimately excluded from consideration by the Bid Adjudication Committee (BAC), acting on the recommendation of the Bid Evaluation Committee (BEC). Instead the contract was offered to and accepted by Mafoko Security Services (Pty) Ltd (Mafoko), which has been performing it since 2012. As has become virtually the norm in relation to high value tenders, that outcome was challenged, initially by Red Ant and finally by Fidelity. The latter’s challenge was upheld by Meyer J in the South Gauteng High Court and an order was granted setting aside the award of the tender and ordering the Municipality to re-evaluate the bids within a period of four weeks. Meyer J then gave leave to appeal to this Court. [2] At the commencement of the appeal we dealt with an application by Fidelity to lead further evidence on appeal. It was dismissed with costs, including the costs of two counsel. The proposed evidence was, in substance, already before the court, and in any event there were no circumstances warranting the admission of further evidence at this stage in accordance with the test that this Court applies in such cases.1 [3] The Municipality advanced two arguments in its heads of argument. First, it contended that the proceedings were irregular and that on that ground alone the appeal should be upheld. If that argument was 1 De Aguiar v Real People Housing (Pty) Ltd 2011 (1) SA 16 (SCA) para 12. rejected, it argued secondly that the BAC was correct to exclude Fidelity’s tender from consideration and that as a result Fidelity lacked the necessary locus standi to pursue any other objections to the tender process. The latter contentions on the merits were not persisted with in oral argument. In the result oral argument was confined to the procedural objection and the terms of the order granted by the court below. The procedural argument will be addressed first. That requires an outline of the course that the litigation took in the high court. [4] When the outcome of the tender process became known, Red Ant challenged it in review proceedings before the South Gauteng High Court. Fidelity was cited as the fourth respondent in those proceedings. It delivered an affidavit supporting Red Ant’s contention that the tender process was legally flawed and complained of the fact that its tender had not been considered. It opposed the request for an order that the Municipality be directed to award the tender to Red Ant. Instead, Fidelity argued that the tender process should be re-evaluated. [5] After the record of the deliberations of the BEC and the BAC had been delivered and all parties had also delivered their affidavits, the litigation took an unexpected turn when, on 6 December 2012, Red Ant’s attorneys delivered a notice of withdrawal of the proceedings. Apparently this was because Red Ant and Mafoko had negotiated a compromise in terms of which they would share the benefits of the contract. There is some indication that this had the tacit approval of the Municipality. This prompted Fidelity to launch what it described as a counter-application, seeking an order reviewing and setting aside the decision of the Municipality to award the tender to Mafoko and ordering that the tender process be re-evaluated. In the ‘founding’ affidavit delivered in support of the counter-application Fidelity contended that its disqualification from the tender process was unlawful and invalidated the entire process. It also contended that the process was invalid on certain other grounds. The Municipality filed further answering and replying affidavits in response to the counter-application and the matter was then argued before Meyer J. [6] Although Meyer J held that this procedure was irregular, he said that the issues in dispute between the parties had been fully canvassed without objection by the Municipality and accordingly refused to dismiss the application on this ground. In my view that was plainly correct. There are three approaches any of which justify that conclusion. The first is that the review application commenced by Red Ant was still in existence, if only because the notice of withdrawal had not contained a tender to pay the costs of the other parties. It was therefore still open to the other parties, including Fidelity, to set the matter down for argument on costs or take other steps, such as delivering the counter-application. The second is that Fidelity was in any event a party to the existing lis with a distinct interest in its outcome. It was already engaged in seeking to set aside the tender and was entitled to continue to do so as against the Municipality, notwithstanding Red Ant’s withdrawal. The third is to accept that the original proceedings had terminated and to treat the ‘counter application’ as a procedurally defective application for review, which is what Meyer J did in the court below. Accepting that all of these may possibly have involved a procedural irregularity, if the Municipality wished to object to it they should have done so by way of an application in terms of rule 30 of the Uniform Rules of Court. They did not do so when the irregular step was taken and thereafter took a further step in the proceedings, with knowledge of the irregularity. In terms of the rule that disqualified them from pursuing any objection. This is clear and the only surprising feature is that neither the court below nor the parties referred to the provisions of rule 30. [7] Even if an application had been brought in terms of the rule, the court would have had a discretion in terms of sub-rule 3 whether or not to set the counter-application aside. It is plain that Meyer J would have exercised his discretion against the Municipality, not least because the objection was not initially raised but was made at a late stage of the proceedings. As Schreiner JA put the matter in Trans-African Insurance Co Ltd v Maluleka:2 ‘. . . technical objections to less than perfect procedural steps should not be permitted, in the absence of prejudice, to interfere with the expeditious and, if possible, inexpensive decision of cases on their real merits.’ [8] Appellant’s counsel sought to argue that this was not in reality a point about irregular procedure, but a point about jurisdiction. He contended that if Fidelity had instituted fresh review proceedings they could have been met by an objection that the review had been instituted outside the period of 180 days provided in s 7 of PAJA.3 But that is a procedural objection, not a question of jurisdiction, and, if the point had been raised in the court below it had a discretion to condone the late application. Bearing in mind the circumstances in which the issue arose and the manner in which the court below dealt with the procedural objection once it was raised, it seems inevitable that it would have condoned the delay. But it is unnecessary to speculate, as the point was not raised in the court below and it is not open to the Municipality to raise it at this late stage. Fidelity has not had an opportunity to respond to it by 2 Trans-African Insurance Co Ltd v Maluleka 1956 (2) SA 273 (A) at 278F-G. This approach has been accepted on many other occasions. 3 The Promotion of Administrative Justice Act 3 of 2000. evidence or to seek condonation for the delay. The procedural objection is therefore rejected. [9] Turning to the merits, Fidelity’s tender was rejected by the BAC in the following circumstances. All tenderers were required to complete a document headed ‘Declaration of Bidder’s Past Supply Chain Management Practices’. Clause 3 of that document reads as follows: ‘The bid of any bidder may be rejected if that bidder, or any of its directors have: a abused the municipality’s/municipal entity’s supply chain management system or committed any improper conduct in relation to such system; b been convicted for fraud or corruption during the past five years; c wilfully neglected, reneged on or failed to comply with any government, municipal or other public sector contract during the past five years; or d been listed in the Register for Tender Defaulters in terms of section 29 of the Prevention and Combatting of Corrupt Activities Act (No 12 of 2004).’ The tenderers were then required to answer certain questions. The first of these was whether the bidder or any of its directors were listed on the National Treasury’s data base as a company or person prohibited from doing business with the public sector. Fidelity answered this in the negative. [10] Unbeknown to Fidelity, when the tender was submitted Mr Godfrey Jack, one of its directors, had been so listed on the National Treasury’s data base. It was not disputed that the data base was not accessible either to companies or to individuals, but only to public bodies on application to National Treasury, and therefore the erroneous answer to the question posed in the declaration was inadvertent and unavoidable. There is a note in the declaration suggesting that companies or people who are placed on the data base will be informed of that by National Treasury, but neither Fidelity nor Mr Jack had been so informed. Fidelity became aware of Mr Jack’s listing on the data base on 4 September 2011, which was after the submission of its tender. It acted speedily and Mr Jack resigned as a director on 6 September 2011. [11] The Municipality only became aware that Mr Jack’s name had appeared on the National Treasury’s data base, when it received a letter from the auditor general on 8 November 2011. That letter related to the existing contract between the Municipality and Fidelity for the provision of security services, and not the tender. It appears to have generated some panic among the officials of the Municipality. On the same day Ms Liebenberg, the Manager: Supply Chain Management, had a telephonic discussion with Fidelity’s Tenders Administrator, Ms Madondo. She raised the matter of Mr Jack’s status with Ms Madondo, who informed her that Mr Jack had resigned as a director on 6 September 2011. Later that morning Ms Madondo sent an e-mail to Ms Liebenberg informing her that Fidelity had become aware of Mr Jack’s position on 4 September 2011 and that he had resigned on 6 September 2011. She attached all the relevant CIPC documents in substantiation of that. [12] Ms Liebenberg referred this e-mail to various other officials, including the Municipality’s legal advisor. She was concerned whether the existing contract with Fidelity should be terminated and whether the expenditure on it should be treated as irregular. She also wrote to Mr Fourie, the General Manager: National Tenders of Fidelity on 8 November 2011. The heading to that letter referred to the existing contract between the Municipality and Fidelity for the provision of security services. The body of the letter read as follows: ‘The award of the abovementioned contract has reference. It has come to our attention that one of your directors, Mr Godfrey Jack, has been prohibited by National Treasury to do business with any organ of state, due to misrepresentation, for the period 20/11/2003 until 19/11/2013. After a telephonic [conversation] between our Ms Renell Liebenberg and your Ms Priscilla Madondo on the 07 November 2011, your office has forwarded copies of the Cipro documentation with regard to the change of director. We also want to enquire from yourselves as to why your company withheld this important information to ourselves which the Municipality believes that you had a legal obligation to do so. It will however be appreciated if you can officially respond to the statement by the Auditor-General as the expenditure that Mogale City has incurred to date in respect of this contract, is now regarded as irregular expenditure.’ [13] On 18 November 2011 Ms Madondo wrote to the municipal manager of the Municipality attaching a number of documents, most of which were those previously furnished to Ms Liebenberg, but they also showed that a Mr Mahlangu had been appointed a director in place of Mr Jack. One document did not, however, deal with Mr Jack’s position. It was a letter that Ms Liebenberg had addressed to Fidelity on 14 November 2011 asking it to agree to extend the validity of its tender for the contract SS(T&S) 01/2012 to 31 December 2011. That was the tender in dispute in this case. Fidelity was asked if it was willing to hold its tender valid for the further period. The answer, given by Fidelity on 18 November 2011, was in the affirmative. Ms Madondo’s letter to the municipal manager bore the tender reference as its heading. Accordingly, while clarity was being sought and given in regard to Mr Jack’s position, Fidelity was asked by the very official responsible for supply chain management to extend the validity of its tender and it agreed to do so. [14] It is against that background that the BEC met on 13 January 2012 to consider the different tenders. It had before it a report, from the Manager: Traffic, Security and VIP Protection, recommending that the contract be split between the two highest scoring tenderers, namely, Red Ant and Fidelity (itself an unexplained irregularity in the tender proceedings as there was nothing in the tender documents permitting such a split). It also had all the documents provided by Fidelity in relation to Mr Jack’s position and his resignation as a director. During the course of the meeting, the BEC sought and obtained the advice of the acting manager of legal services in the Municipality about the validity of Fidelity’s tender. His advice was that it fell to be rejected on the grounds that at the time that the tender was submitted Mr Jack’s name appeared on the National Treasury data base. [15] That advice was embodied in the BEC’s recommendation to the BAC, which read as follows: ‘Fidelity Security Services is rejected based on the fact that the information as provided in their tender submission is based on the details of the company shareholding with Mr Godfrey Jack still listed as a shareholder – blacklisted shareholder. The advice from the Legal Section was that information obtained during the quotation process, cannot be used for a different procurement process. The tender has to be evaluated based on the information as provided in the tender submission.’ At its meeting on 12 March 2012 the BAC adopted this advice. In the result Fidelity’s bid was not considered. The advice was, however, patently wrong, as counsel for the municipality accepted. A bar on awarding a tender does not mean that a possible obstacle to the award of the tender cannot be removed before the decision on the tender is made. The exclusion of Fidelity was accordingly wrong and a reviewable error in terms of PAJA. [16] It is largely unnecessary to canvass the other complaints by Fidelity about the tender process. I should, however, highlight two of them. The first is that in scoring the tenders for functionality that of the ultimately successful tenderer, Mafoko, received such a poor mark that it should have been disqualified at that stage. In circumstances that remain obscure its score was revised so as to afford it a qualifying score and kept it under consideration. That was itself an irregularity warranting the setting aside of the award of the tender. The second is that the BEC recommended that the contract be awarded in arbitrarily determined proportions to Red Ant and Fidelity. That was inconsistent with the advertised basis of the tender and was also irregular and warranted the setting aside of the award of the tender. [17] The adjudication of the tender was therefore in breach of Fidelity’s right to fair administrative action. The award of the tender accordingly fell to be set aside. The high court made the following order: ‘1 The decision(s) of the first respondent of 19 March 2012 and/or thereafter to award tender No SS (T&S) 01/2012 to the second respondent is reviewed and set aside. 2 The contract between the first respondent and the second respondent pursuant to tender No SS (T&S) 01/2012 is set aside and declared void ab initio. 3 The first respondent is to re-evaluate the bids submitted for tender No SS (T&S) 01/2012 and re-award the contract within 4 weeks of the date of this order. 4 The first respondent is ordered to pay the fourth respondent’s costs of the counter- application, including the costs of two counsel.’ [18] There is no objection to the first paragraph of this order and there clearly could not be in the light of the Constitutional Court’s judgment in Allpay.4 Nor was it disputed that the result of the award of the tender being set aside, had to be the invalidation of the contract concluded pursuant thereto and the re-evaluation of the bids. The only concern with 4 Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency and Others 2014 (1) SA 604 (CC) paras 25 and 56. the second and third paragraphs of the court below’s order was that an immediate invalidation of the contract awarded to Mafoko would leave the Municipality without a service provider in respect of security services in its area of jurisdiction. [19] In order to address this concern counsel for the Municipality submitted that we should craft an order that was conditional on the outcome of the re-evaluation of the bids, along the lines of the order in Millennium Waste,5 in which an order of invalidity in respect of the existing contract would issue only if, after the re-evaluation process, the contract was to be awarded to a bidder other than the existing contractor. Fidelity, on the other hand, argued that it would be more appropriate to make an order of invalidity in respect of the contract, but to suspend the operation of that order for a period sufficient to enable the re-evaluation of the bids to take place and, thereafter, to provide enough time for an orderly hand-over (assuming that to be the outcome of the re-evaluation) from Mafoko to the successful bidder. It pointed to the relief eventually granted in Allpay in support of this submission.6 In my view that is the more appropriate course to follow, especially as it may be that Mafoko’s bid is disqualified from consideration in the re-evaluation process. That serves to distinguish this case from Millennium Waste, where the original successful tenderer might still have been awarded the contract after a re- evaluation of the bidding process. 5 Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo Province and Others 2008 (2) SA 481 (SCA) para 35. 6 Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency and Others 2014 (4) SA 179 (CC) para 78. [20] The parties agreed that two weeks was adequate to enable the Municipality to re-evaluate the bids. We were informed from the bar, on instructions obtained in the course of the hearing, that the Municipality will not seek to take the matter on further appeal to the Constitutional Court. In those circumstances there should not be any delay in undertaking the re-evaluation or awarding a contract for the balance of the tender period.7 The suspension of the order of invalidity for a period of three weeks from the date upon which this judgment is delivered should therefore ensure that the Municipality does not find itself deprived of security services. However, it is not always feasible for a court, on the basis of limited and frequently imperfect information, to cater for every possible eventuality. It is accordingly appropriate to record that if any dispute arises in the process of re-evaluation or as to the award of a contract pursuant to that process it must be dealt with in fresh proceedings before the high court having jurisdiction. In other words we do not retain jurisdiction to oversee the bid re-evaluation process and its outcome. [21] One final comment is required. The tender process in this case was so defective and involved so many flaws that it seems extraordinary to think that a public authority could engage in such a farcical endeavour. To recapitulate, the successful tenderer should have been disqualified in the initial evaluation of tenders. The two tenders that were evaluated as the best, namely those of Red Ant and Fidelity, were clearly so much better than those of the other bidders that the decision should have been to award it to one of them. Instead the recommendation was that the 7 Unlike in Allpay we were not asked to order that any fresh contract be awarded for a period extending beyond the period of the existing contract. contract should be split between them in arbitrarily determined proportions contrary to the terms of the tender and without any apparent investigation as to whether that was an appropriate or feasible basis for security services to be provided to the Municipality. Red Ant was allowed to continue as a bidder (and at one time the preferred bidder) at a time when it was sponsoring a major function for the Municipality, which both elected and employed officials attended and where they were the recipients of gifts. Then, when the review proceedings were underway, and with the apparent agreement of the Municipality, Red Ant and Mafoko entered into an agreement under which they would share the contract between them. This litany of errors is such that it is appropriate to remind the Municipality that it runs the risk, if there is a recurrence of such conduct, either at the re-evaluation stage or when dealing with other tenders, that a court may be minded to take the decision out of its hands and, rather than referring it back, to order that the tender be awarded to the bidder to whom, in the court’s view, it should have been awarded had a proper process been followed.8 That may also result in identifiable officials responsible for that situation being ordered to pay the costs personally, because: ‘It is time for courts to seriously consider holding officials who behave in the high- handed manner described above, personally liable for costs incurred. This might have a sobering effect on truant public office bearers.’9 [22] In the result the following order is made: 1 Paragraph 3 of the order of the court below is amended to replace the period of four weeks with a period of two weeks. 8 Gauteng Gambling Board v Silverstar Development Ltd and Others 2005 (4) SA 67 (SCA) paras 28- 29 and 38-40. 9 Gauteng Gambling Board and Another v MEC for Economic Development, Gauteng 2013 (50 SA 24 (SCA) para 54. 2 An additional paragraph to be numbered 5 is added to the order of the court below reading as follows: ‘The order of invalidity in paragraph 2 hereof is suspended for a period of three weeks from the date of this order, whereafter it will take effect.’ 3 The references in paragraphs 3 and 5 of the order of the court below to ‘the date of this order’ are to be construed as meaning the date on which this judgment is delivered. 4 The appeal is otherwise 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: I W Maleka SC (with him N Mayet)(the heads of argument having been prepared by I W Maleka SC and S Yacoob) Instructed by: TGR Attorneys, Sandhurst, Johannesburg Webbers Attorneys, Bloemfontein For respondent: Carol Steinberg (with her Nick Ferreira) Instructed by: Blake Bester Inc, Roodepoort Phatshoane Henney 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: 19 November 2014 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. Mogale City Municipality v Fidelity Security Services (Pty) Ltd The SCA today dismissed an appeal by the Mogale City Municipality against an order of the South Gauteng High Court setting aside the award of a tender for the provision of security services to the municipality for a period from 2011 to 2014. The court ordered that the municipality re-evaluate the original tenders within a period of two weeks from the date of its order and reach a fresh decision on the award of the tender. It provided a further week to enable an orderly hand-over of services from the existing contractor to the tenderer to whom the balance of the contract was awarded. The tender was set aside because the tender by Fidelity Security Services, which was at the time the existing provider of security services to the municipality, was wrongly disqualified by the Bid Evaluation Committee and the Bid Adjudication Committee. In addition the court highlighted a number of other irregularities in the tender adjudication process. These included an unexplained rescoring for functionality of the bid of the ultimately successful tenderer, whose tender should have been excluded from consideration on these grounds; a decision to recommend that two separate contracts be awarded to different tenderers and the continued consideration of one tender when the bidder was sponsoring a function for the municipality that involved the giving of gifts to municipal officials. The court also expressed disquiet over the fact that the initial review proceedings were withdrawn after the successful tenderer and the unsuccessful tenderer that instituted the proceedings agreed to share the contract, with the apparent approval of the municipality. The Court sounded a warning that in cases such as these it might in future hold that the decision to award a tender be taken out of the hands of the municipality and taken by the court. It also warned that in future errant officials might be held personally liable for the costs of similar proceedings.

3594

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case Nos: 38/2019; 47/2019 & 999/2019 In the matter between: THE STANDARD BANK FIRST APPELLANT NEDBANK LIMITED SECOND APPELLANT FIRSTRAND BANK LIMITED THIRD APPELLANT and EZRA MAKIKOLE MPONGO FIRST RESPONDENT MYRA GERALDINE WOODITADPERSAD SECOND RESPONDENT RADESH WOODITADPERSAD THIRD RESPONDENT JOYCE HLUPHEKILE NKWINIKA FOURTH RESPONDENT KARIN MADIAU SAMANTHA LEMPA FIFTH RESPONDENT NEELSIE GOEIEMAN SIXTH RESPONDENT ANGELINE ROSE GOEIEMAN SEVENTH RESPONDENT JULIA MAMPURU THOBEJANE EIGHTH RESPONDENT AUBREY RAMORABANE SONKO NINTH RESPONDENT ONESIMUS SOLOMON MATOME MALATJI TENTH RESPONDENT MODIEGI PERTUNIA MALATJI ELEVENTH RESPONDENT GRACE M MAHLANGU TWELFTH RESPONDENT KEY HINRICH LANGBEHN THIRTEENTH RESPONDENT and in the matter between: THE STANDARD BANK FIRST APPELLANT NEDBANK LIMITED SECOND APPELLANT and V W GQIRANA N O FIRST RESPONDENT V W GQIRANA SECOND RESPONDENT and THE SOUTH AFRICAN HUMAN RIGHTS AMICUS CURIAE COMMISSION THE DEPARTMENT OF JUSTICE AND AMICUS CURIAE CONSTITUTIONAL DEVELOPMENT PRETORIA SOCIETY OF ADVOCATES AMICUS CURIAE Neutral citation: The Standard Bank of SA Ltd and Others v Thobejane and Others (38/2019 & 47/2019) and The Standard Bank of SA Ltd v Gqirana N O and Another (999/2019) [2021] ZASCA 92 (25 June 2021) Coram: MAYA P, PETSE DP, DAMBUZA and PLASKET JJA and SUTHERLAND AJA Heard: 20 August 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 10h00 on 25 June 2021. Summary: A court is obliged by law to hear any matter that falls within its jurisdiction and has no power to exercise a discretion to decline to hear such a matter on the ground that another court has concurrent jurisdiction. ORDER In case numbers 38/2019 and 47/2019: On appeal from the Gauteng Division of the High Court, Pretoria (Ledwaba DJP, Tolmay and Mothle JJ sitting as court of first instance): The appeal is upheld, with no order as to costs. The order of the court below is set aside and replaced with the following order: ‘It is declared that: (1) The High Court must entertain matters within its territorial jurisdiction that fall within the jurisdiction of a Magistrates’ Courts, if brought before it, because it has concurrent jurisdiction with the Magistrates’ Court. (2) The High Court is obliged to entertain matters that fall within the jurisdiction of a Magistrates’ Court because the High Court has concurrent jurisdiction. (3) The main seat of a Division of a High Court is obliged to entertain matters that fall within the jurisdiction of a local seat of that Division because the main seat has concurrent jurisdiction. (4) There is no obligation in law on financial institutions to consider the cost implications and access to justice of financially distressed people when a particular court of competent jurisdiction is chosen in which to institute proceedings. 3. There is no order as to costs.’ In case number 999/2019: On appeal from the Eastern Cape Division of the High Court, Grahamstown (Hartle, Lowe and Jolwana JJ sitting as court of first instance): The appeal succeeds, with no order as to costs. 2. The order of the court below is set aside and replaced with the following: ‘It is declared that: (1) The High Court must entertain matters within its territorial jurisdiction that fall within the jurisdiction of a Magistrates’ Courts, if brought before it, because it has concurrent jurisdiction with the Magistrates’ Court. (2) The High Court is obliged to entertain matters that fall within the jurisdiction of a Magistrates’ Court because the High Court has concurrent jurisdiction. (3) There is no obligation in law on financial institutions to consider the cost implications and access to justice of financially distressed people when a particular court of competent jurisdiction is chosen in which to institute proceedings. 3. There is no order as to costs.’ JUDGMENT Sutherland AJA (Maya P, and Petse, Dambuza and Plasket JJA concurring) [1] This appeal concerns two matters, one decided in the Gauteng Division of the High Court, Pretoria (the Gauteng Court) and the other in the Eastern Cape Division of the High Court, Grahamstown (the Eastern Cape Court) dealing with jurisdictional issues. The essence of this matter is whether a High Court may properly refuse to hear a matter over which it has jurisdiction where another court has concurrent jurisdiction in either of two circumstances: when a High Court and a Magistrates’ Court both have jurisdiction in respect of the same proceedings, and when the main seat of a Division of a High Court and a local seat both have jurisdiction in respect of the same proceedings. Background and facts [2] The context in which these matters came to be heard, and the orders which were given, were unusual. Before both courts, there were applications by several banks, the applicants a quo and the present appellants, against debtors who had either taken up mortgages or had purchased motor vehicles on credit and had defaulted on repayment. As is usual, and in accordance with established practice, in the absence of any notices of intention to oppose from the defendants, the applications were enrolled in the Unopposed Motion Court where orders were sought for repayment of the outstanding indebtedness and for leave to specially execute on the mortgaged residential properties. At no stage did the debtors cited as defendants in the court a quo, participate in the hearing. [3] At the instance of the respective Judges-President several of such cases were placed before a full court of each Division. As appears from the judgments, the trigger was apparently twofold. First there was a concern that the rolls of the High Court were being congested by matters which could have been heard in the Magistrates’ Court. In Gauteng there was a concern about matters that could have been heard in the local seat in Johannesburg clogging-up the roll in the main seat in Pretoria. Second, there was a belief that impecunious debtors were suffering prejudice because they would, should they wish to oppose a claim, have to travel to a High Court when a Magistrates’ Court was supposedly nearby and more convenient to attend. Also, were a debtor to wish to resist a claim, legal costs would be less in the Magistrates’ Court than in the High Court. In the light of these considerations was it appropriate for a plaintiff to sue out of a court other than that closest to the defendant? [4] Having collected the cases to be heard by the respective full courts, the Judges President formulated a number of questions for them to answer. Four questions were posed to the Gauteng Court. The questions were thus: (i)Why should the High Court entertain matters that fall within the jurisdiction of the Magistrate’s Court? [ii] Is the High Court obliged to entertain matters that fall within the jurisdiction of the Magistrate’s Court purely on the basis that the High Court may have concurrent jurisdiction? [iii] Is the Provincial Division (sic) of the High Court obliged to entertain matters that fall within the jurisdiction of a Local Division (sic) on the basis that the Provincial Division (sic) has concurrent jurisdiction; 1 [iv] Is there not an obligation on financial institutions to consider the cost implication and access to justice of financially distressed people when a particular forum is considered?’ Only questions 1, 2 and 4 were posed to the Eastern Cape Court. [5] The courts a quo sought assistance from several amici curiae. Although it is not entirely clear whether the amici approached the debtors to supply any evidence, the position is clear that no debtor did so. The only source of facts were the applications filed by the banks for the judgments by default and the additional affidavits filed by the banks after the several matters had been, pursuant to the directives of the Judges-President, referred to the full courts. These additional affidavits addressed the questions posed and explained why the choice of the High Court as the appropriate forum was premised on several practical 1 Strictly speaking, there are no longer ‘Provincial Divisions’ and ‘Local Divisions’ of the High Court. Each province is host to a single Division of the High Court which has a designated main seat. Any additional seats are not ‘Local Divisions’ but rather ‘local seats’ See s 6 of the Superior Courts Act 10 of 2013. See too, Malcolm Wallis: ‘What’s in a name? A note on nomenclature’ (2020) 137 SALJ at 25, where the history of these convolutions is described. considerations. In essence, these considerations were that litigation in the High Courts was quicker and more efficient, and moreover, could often, also be cheaper in the long run. It was also alleged that legal assistance to indigent litigants was usually more accessible at the seat of a High Court than at Magistrates’ Courts. These allegations of fact and explanations of motive were unrebutted and were never challenged. [6] Different answers to the posed questions were given by each of the courts a quo. Appeals against each of the orders were lodged by the banks. The answers given by each court appear from the conclusions stated and orders given, which are set out below. The Gauteng Court in Thobejane2 [7] The Gauteng Court based its conclusions on two sources. First, Tolmay J, in her judgment, cited statistics of the number of cases heard in Pretoria and Johannesburg, as well as the number of judges in the Gauteng Division. The apparent purpose of this ‘evidence’, which the banks saw for the first time in the judgment, was to support the contention that the High Court ‘may soon be unable to provide proper access to justice’ and that the system is in danger of collapse. Secondly, she set out in some detail allegations made by the South African Human Rights Commission. These were broad, sweeping generalisations, and not facts. She took the view that the mere fact of the banks instituting proceedings in the High Court when they could have proceeded in the Magistrates’ Court was an abuse of process. [8] The crux of her conclusions and the order that was made were the following:3 2 Nedbank Ltd v Thobejane and similar matters 2019 (1) SA 594 (GP); [2018] 4 All SA 694 (GP). 3 Ibid paras 91-93 and 96. ‘[91] In our view the solution pertaining to matters that fall within the jurisdiction of the magistrates' courts is that such matters should be issued in the magistrates' courts. If a party is of the view that a matter that falls within the jurisdiction of the magistrates’ courts should more appropriately be heard in this division, an application must be issued setting out reasonable grounds why the matter should be heard in this division. Inefficiency of the other court,[ie the Magistrates Court] real or perceived, and the convenience of the plaintiff alone will, however, not constitute such reasonable grounds. Only after leave has been granted may the summons be issued in the High Court. [92] To answer the questions posed in the directive, in our view the High Court is not obliged to entertain matters that fall within the jurisdiction of the magistrates' courts purely on the basis that the High Court may have concurrent jurisdiction. Furthermore, both the local and provincial division can mero motu transfer a matter to the other court, if it is in the interests of justice to do so. Lastly, there is an obligation, not only on financial institutions, but also on all litigants, to consider the question of access to justice when actions or applications are issued, and the courts have a duty to ensure that access to justice is ensured by exercising appropriate judicial oversight. [93] Regarding matters where the local and/or provincial division is the more appropriate forum, the court hearing the matter may mero motu transfer the matter to that court. ... [96] Consequently, the following order [is issued]: (1) To promote access to justice, as from 2 February 2019 civil actions and/or applications, where the monetary value claimed is within the jurisdiction of the magistrates’ courts, should be instituted in the magistrates' court having jurisdiction, unless the High Court has granted leave to hear the matter in the High Court. (2) It is declared that a High Court is entitled to transfer a matter mero motu to another court, ie magistrates’ courts and/or local and provincial divisions, if it is in the interests of justice to do so.’ The Eastern Cape Court in Gqirana4 [9] A majority of the Eastern Cape Court (Lowe and Hartle JJ, Jolwana J dissenting) disagreed with the conclusion arrived at by the Gauteng Court. They held, however, that the National Credit Act 34 of 2005 (the NCA) ousted the jurisdiction of the High Court. The result was that all NCA matters had to be instituted in the Magistrates’ Court. [10] The crux of the reasoning of Lowe J, and the order that was made were the following: ‘[73] In the result, I am respectfully of the view that the relief in Thobejane was too widely cast and, in any event, on what is before us arises only in fact in respect of NCA matters. [74] A proper application of the s 34 right, [ie, section 34 of the Constitution] as read with the Magistrates' Courts Act and the NCA, recognising the purpose and imperative of the NCA as stated above, makes it clear that to afford equality and access to a fair hearing right to the mostly financially, previously disadvantaged persons subject to the Act, and thus proper access to justice in all NCA matters falling within the monetary jurisdiction of the magistrates' court (all NCA matters in fact), must be brought in that court, save only if there are exceptional circumstances justifying otherwise (such not to include the banks' suggested advantages in High Court litigation). Put otherwise, the NCA properly provides necessarily that, save in exceptional circumstances, all NCA matters be brought in the magistrates' court. What may constitute exceptional circumstances would have to be decided on a case-by-case basis. [75] In summary it follows from the above that: [75.1] Generally, post-1994 the concurrency of jurisdiction between the High Court and magistrates' court remains in place — put otherwise, the High Court retains jurisdiction in respect of matters falling within the monetary jurisdiction of the magistrates' court. [75.2] This remains so unless the jurisdiction of the High Court in such matters is ousted by legislation either expressly or by necessary implication. 4 Nedbank Ltd v Gqirana N O and Another, and similar matters 2019 (6) SA 139 (ECG); [2019] 4 All SA 211 (ECG). [75.3] The NCA extends jurisdiction to the magistrates' court in all matters which properly constitute issues falling within the ambit of the NCA. [75.4] The NCA seeks to provide for specific structures and procedures in order to enable the mostly financially, previously disadvantaged to benefit from the provisions of the NCA itself. [75.5] There is no express legislative provision in the NCA or other legislation ousting the High Court jurisdiction generally in respect of matters subject to the magistrates' court jurisdiction. [75.6] The provisions of the NCA, however, properly interpreted through the prism of the Constitution, create a specific set of structures and procedures relating to NCA matters which, read in context and on a generous interpretation, by necessary implication provides for the magistrates' court to be the court of first adjudication in all NCA matters, to the exclusion of the High Court as a court of first adjudication, save only in the event that there are unusual or extraordinary factual or legal issues raised which in the opinion of the High Court warrant them being heard first in the High Court. [75.7] Insufficiency and/or related delays in the magistrates' court, perceived or real, are not factors which constitute such unusual circumstances. [75.8] In the result, all but unusual and extraordinary cases falling within the provisions of the NCA (which will be few and far between) must be brought in the magistrates' court as court of first instance. [76] This does not implicate other non-NCA matters, upon which I make no finding as this would be clearly obiter. …. [78] Order 1. To promote access to justice in the context of the Magistrates' Courts Act and the NCA, as read with ss 9 and 34 of the Constitution, and as from 1 August 2019, civil actions and/or applications arising within the ambit of the NCA (and thus falling within the magistrates' courts' jurisdiction) should be instituted in the magistrates' court having jurisdiction. . . . .’ Comments on the approach taken by the courts a quo [11] In neither of the courts a quo were material facts adduced to substantiate the arguments presented about the litigation dynamics and their supposed implications for constitutional values which were central to the debate. Not one of the defendants filed an affidavit to set out their means, why they did not oppose the claims brought against them or whether or not their right of access to court had been affected in any way by the banks’ choice of forum. The primary platform for the conclusions reached was the notion that by an appeal to ‘constitutional values’ the plight of impecunious litigants could be alleviated. The paradigm in which the questions were considered was that in which a stereotypical plaintiff was characterised as a bank foreclosing on a mortgage bond and the stereotypical defendant was characterised as being of poor circumstances. [12] These characterisations are self-evidently not applicable in every case implicating the concurrent jurisdiction controversy. In any event, the proposition that the debtors were all of poor circumstances and were inhibited by either geography or lack of means from participation in the matters, was wholly unsubstantiated on the record. The debts were all within the jurisdiction of the Magistrates’ Court. No other material facts about the debtors were before the courts. [13] Indeed, the several amici were driven to present arguments on the basis of speculative extrapolations from moral sensibilities rather than from established fact. As stated above, in the Gauteng Court, factual averments about the work-load of the Pretoria and of the Johannesburg seats, upon which that court relied to reach its conclusions, were ventilated for the first time in the judgment and were never put to the litigants in the hearing for them to address. In the Eastern Cape Court, the foundation of the thesis for the Court’s conclusions that the NCA ousted the jurisdiction of the High Court was never put to the parties’ counsel. Moreover, both courts addressed the question of transfers of matters from the High Court to another court, and made orders about that subject, despite this plainly not being a question posed by the Judges-President in their directives. [14] Many of the issues addressed in the judgments may be proper matters for investigation and consideration. However, these issues implicate policy considerations which, in my view, plainly and properly belong within the province of Parliament. The statutory provisions in the Superior Court Act 10 of 2013 (SC Act), the Magistrates’ Court Act 32 of 1944 (the MC Act) and in the Uniform Rules of Court which were subjected to a critique were not challenged on the basis that the provisions were unconstitutional. The forensic exploration a quo was therefore limited to an exercise in interpretation of the statutes to endeavour to reach conclusions on their meaning such as to render them consistent with the constitutional guarantee in s 34 of the Constitution as to access to a court to resolve justiciable disputes and, more broadly, consistent with s 9 of the Constitution as to the guarantee of human dignity. Largely, factual findings with no proper evidential basis, the resort to generalised and speculative conclusions with no proper evidential foundation, and the unjustified ignoring or rejection of the only evidence before the courts a quo explain the shortcomings in both judgments. The law relevant to concurrency of jurisdiction and the choice of court The constitutional and statutory framework [15] In our country, the Constitution establishes judicial authority. Several Courts are created. Section 166(b) creates the High Court and s 166(d) creates the Magistrates’ Courts. The scope of the substantive decision-making power of these courts is addressed in ss 169 and 170. [16] Section 169(1) provides: ‘(1) The High Court of South Africa may decide— (a) any constitutional matter except a matter that— (i) the Constitutional Court has agreed to hear directly in terms of section 167(6)(a); or (ii) is assigned by an Act of Parliament to another court of a status similar to the High Court of South Africa; and (b) any other matter not assigned to another court by an Act of Parliament.’ The import of this section is to authorise the High Court to decide all matters other than those reserved for other courts. The notion that the sweep of this authorisation can lightly be compromised is untenable.5 No monetary cap exists in respect of the High Court; an indication of its universal scope of authority, subject only to s 169. [17] S 170 stipulates that a Magistrates’ Court may decide any matter determined by a statute. The monetary cap on the reach of the jurisdiction of the Magistrates’ Court is stipulated in s 29(1) of the Magistrates’ Court Act. [18] In s 173 it is provided that the ‘. . . High Court has inherent power to protect and regulate their own process, and to develop the common law, taking into account the interests of justice’. [19] In s 171, in relation to ‘court procedures’, it is provided that ‘[a]ll courts function in terms of national legislation, and their rules and procedures must be provided for in terms of national legislation’. The national legislation referenced in the Constitution has been, at all relevant times to this case, the SC Act and the Magistrates’ Court Act. [20] The critical provisions of the SC Act are ss 21 and 27. Section 21 provides: 5 See too, para 26 of this judgment infra. ‘(1) A Division [of the High Court] has jurisdiction over all persons residing or being in, and in relation to all causes arising and all offences triable within, its area of jurisdiction and all other matters of which it may according to law take cognisance, and has the power— (a) to hear and determine appeals from all Magistrates' Courts within its area of jurisdiction; (b) to review the proceedings of all such courts; (c) in its discretion, and at the instance of any interested person, to enquire into and determine any existing, future or contingent right or obligation, notwithstanding that such person cannot claim any relief consequential upon the determination. (2) A Division also has jurisdiction over any person residing or being outside its area of jurisdiction who is joined as a party to any cause in relation to which such court has jurisdiction or who in terms of a third party notice, becomes a party to such a cause, if the said person resides or is within the area of jurisdiction of any other Division. . . . .’ [21] S 27 is headed ‘Removal of proceedings from one Division to another or from one seat to another in same Division’. It provides: ‘(1) If any proceedings have been instituted in a Division or at a seat of a Division, and it appears to the court that such proceedings— (a) should have been instituted in another Division or at another seat of that Division; or (b) would be more conveniently or more appropriately heard or determined— (i) at another seat of that Division; or (ii) by another Division, that court may, upon application by any party thereto and after hearing all other parties thereto, order such proceedings to be removed to that other Division or seat, as the case may be. (2) An order for removal under subsection (1) must be transmitted to the registrar of the court to which the removal is ordered, and upon the receipt of such order that court may hear and determine the proceedings in question.’ [22] The relevant sections in the Magistrates’ Court Act are s 29(1) and s 50(1). S 29(1) is headed ‘Jurisdiction in respect of causes of action’. It provides: ‘(1) Subject to the provisions of this Act and the National Credit Act, 2005 (Act 34 of 2005), a court in respect of causes of action, shall have jurisdiction in- (a) actions in which is claimed the delivery or transfer of any property, movable or immovable, not exceeding in value the amount determined by the Minister from time to time by notice in the Gazette; (b) actions of ejectment against the occupier of any premises or land within the district or regional division: Provided that, where the right of occupation of any such premises or land is in dispute between the parties, such right does not exceed the amount determined by the Minister from time to time by notice in the Gazette in clear value to the occupier; (c) actions for the determination of a right of way, notwithstanding the provisions of section 46; (d) actions on or arising out of a liquid document or a mortgage bond, where the claim does not exceed the amount determined by the Minister from time to time by notice in the Gazette; (e) actions on or arising out of any credit agreement as defined in section 1 of the National Credit Act, 2005 (Act 34 of 2005); (f) actions in terms of section 16 (1) of the Matrimonial Property Act, 1984 (Act 88 of 1984), where the claim or the value of the property in dispute does not exceed the amount determined by the Minister from time to time by notice in the Gazette; (fA) actions, including an application for liquidation, in terms of the Close Corporations Act, 1984 (Act 69 of 1984); (g) actions other than those already mentioned in this section, where the claim or the value of the matter in dispute does not exceed the amount determined by the Minister from time to time by notice in the Gazette.’ [23] S 50(1) is headed ‘Removal of actions from court to provincial or local division’. It provides: ‘(1) Any action in which the amount of the claim exceeds the amount determined by the Minister from time to time by notice in the Gazette, exclusive of interest and costs, may, upon application to the court by the defendant, or if there is more than one defendant, by any defendant, be removed to the provincial or local division having jurisdiction where the court is held, subject to the following provisions- (a) notice of intention to make such application shall be given to the plaintiff, and to other defendants (if any) before the date on which the action is set down for hearing; (b) the notice shall state that the applicant objects to the action being tried by the court or any magistrate's court; . . . Upon compliance by the applicant with those provisions, all proceedings in the action in the court shall be stayed, and the action and all proceedings therein, shall, if the plaintiff so requires, be as to the defendant or defendants, forthwith removed from the court into the provincial or local division aforesaid having jurisdiction. Upon the removal, the summons in the court shall, as to the defendant or defendants, stand as the summons in the division to which the action is removed, the return date thereof being the date of the order of removal in an action other than one founded on a liquid document, and, in an action founded on a liquid document, being such convenient day on which the said division sits for the hearing of provisional sentence cases, as the court may order: Provided that the plaintiff in the action may, instead of requiring the action to be so removed, issue a fresh summons against the defendant or defendants in any competent court and the costs already incurred by the parties to the action shall be costs in the cause.’ [24] In addition, Uniform Rule of Court 39(22) provides: ‘By consent the parties to a trial shall be entitled, at any time, before trial, on written application to a judge through the registrar, to have the cause transferred to the magistrates court; Provided that the matter is one within the jurisdiction of the latter court whether by way of consent or otherwise.’ [25] Self-evidently, litigation begins by a plaintiff initiating a claim. Axiomatically, it must be the plaintiff who chooses a court of competent jurisdiction in just the same way that a game of cricket must begin by a ball being bowled. The batsman cannot begin. This elementary fact is recognised as a rule of the common law, founded, as it is, on common sense. The right of a plaintiff to do so was recognised in a Full Court of the Gauteng Division in Moosa v Moosa,6. That Court relied on Marth v Collier7 where it was stated: ‘The granting of an order for the transfer of legal proceedings from the Supreme Court to the Magistrates’ Court, in the absence of a Plaintiff ’s consent, would clearly infringe upon the latter’s substantive right to choose the forum in which he or she wishes to institute proceedings. As little as our courts have the inherent power to create substantive law (See: the Cerebos Foods case (supra) at 173D; Universal City Studios Inc & Others v Network Video (Pty) Ltd 1986 (2) SA 734 (A) at 754E-755E) do they have the power, in the absence of statutory - or common law authorisation or legal precedent. . . to make orders which infringe upon the substantive rights of litigants or others (See: Eynon v Du Toit 1927 CPD 76; E v E and Another 1940 TPD 333), such as the right of a Plaintiff, as dominus litis, to decide in which of concurrent fora he or she wishes to enforce his or her rights.’ The Gauteng Court expressed a view that the concept of a plaintiff as dominis litis is ‘outdated’ was unfortunate and was unsubstantiated by reference to any authorities or learning. Concurrent jurisdiction: the case law [26] The concurrency of jurisdiction in circumstances in which a claim justiciable in a Magistrates’ Court has been brought in a High Court has been recognised for over a century. In Koch v Realty Corporation of South Africa8 the court held: 'Now the first question we have to decide is: What is the policy of the Magistrates' Courts Act? Is it the policy of the Magistrates' Courts Act to take away from this Court the consideration of questions involving an amount of less than £200, or is it the policy of the Act to enable lawsuits as a general rule to be brought more cheaply than would be the case if they had to be brought before this Court? Was it ever the policy, of the Magistrates Courts Act to deprive this Court of the right of hearing suits involving an amount less than £200? Now there is nothing said in the Magistrates' Courts Act that cases under £200 are to be brought exclusively in that Court, therefore 6 Moosa v Moosa 2014 JDR 2194 (GP) para 19. 7 Marth v Collier [1996] 3 All SA 506 (C) at 509. 8 Koch v Realty Corporation of South Africa 1918 TPD 356 at 359. this Court has a concurrent jurisdiction with the magistrates' court in all such cases as the magistrate is entitled to hear.’ [27] It is also law of long standing that when a High Court has a matter before it that could have been brought in a Magistrates’ Court, it has no power to refuse to hear the matter. In Goldberg v Goldberg,9 the point was taken that as a Magistrates’ Court had jurisdiction (in respect of contempt proceedings concerning the non-payment of maintenance) the Supreme Court should refuse to hear the matter. After referring to a statutory provision that was unique to Natal at the time, that allowed for the transfer of cases where there was concurrent jurisdiction, Schreiner J held:10 ‘But apart from such cases and apart from the exercise of the Court's inherent jurisdiction to refuse to entertain proceedings which amount to abuse of its process (and that, in my opinion, is not the case here) I think that there is no power to refuse to hear a matter which is within the Court's jurisdiction. The discretion which the Court has in regard to costs provides a powerful deterrent against the bringing of proceedings in the Supreme Court which might more conveniently have been brought in the Magistrate's Court. Not only may a successful applicant be awarded only Magistrate's Court costs but he may even be deprived of his costs and be ordered to pay any additional costs incurred by the respondent by reason of the case having been brought to the Supreme Court. In all normal cases these powers should suffice to protect the respondent against the hardship of being subjected to bring unnecessarily expensive proceedings.’ [28] In circumstances similar to those in the two cases with which this appeal is concerned, the issue of the concurrence of jurisdiction between Magistrates’ Courts and High Courts was considered by a full court of the then Witwatersrand Local Division of the Transvaal Provincial Division in Standard Credit Corporation Ltd v 9 Goldberg v Goldberg 1938 WLD 83. 10 Ibid at 85-86. Bester and Others.11 The issues to be decided in that case were defined by the court to be ‘the right of the plaintiff to issue summons and to claim judgment in the Supreme Court, since each claim falls within the jurisdiction of the Magistrate’s Court, and, conversely, the right of the Supreme Court to refuse to hear these actions because they fall within the jurisdiction of the Magistrate’s Court’.12 [29] Van der Walt J, with reference to Coetzee DJP’s judgment in Standard Bank of South Africa Ltd v Shiba,13 held that if he had ‘intended to hold that the Supreme Court has an inherent jurisdiction to refuse to hear a litigant and to entertain proceedings in a matter within its jurisdiction and properly before the Court, his judgment cannot be supported’.14 With reference to a slew of cases on this issue, Van der Walt J concluded:15 ‘In spite of statements referring to an apparent right vested in the Supreme Court to refuse to entertain a matter within its jurisdiction in some of these cases, in none of these cases did the Supreme Court in fact purport to exercise such a right of summarily refusing to entertain a matter within its jurisdiction because a lower court also had jurisdiction. A predominant feature in these cases was the Supreme Court's concern about the expenses caused to the litigants by recourse to the Supreme Court, and appropriate orders limiting or disallowing costs were consequently made. From none of these cases can a principle be extracted that the Supreme Court has an inherent jurisdiction to refuse to hear a litigant and to entertain proceedings in a matter within its jurisdiction and properly before the Court.’ Indeed, he found that Goldberg’s case was ‘clear authority that no such principle exists’.16 11 Standard Credit Corporation v Bester and Others 1987 (1) SA 812 (W); [1987] 3 All SA 96 (W). 12 Ibid at 814C-D. 13 Standard Bank of South Africa Ltd v Shiba Standard Bank of South Africa v van Den Berg 1984 (1) SA 153 (W); [1984] 3 All SA 152 (W). 14 Standard Credit Corporation v Bester and Others above note 12 at 815E. 15 Ibid at 817J-818B. 16 Ibid at 818B-C. [30] After an exhaustive analysis of the authorities, Van der Walt J came to the conclusion that a High Court ‘should hear a matter properly before it and within its jurisdiction’ and that if a Magistrates’ Court also had jurisdiction, and the matter could be dealt with less expensively in that court, the High Court can discourage litigation before it ‘by an appropriate order regarding costs’.17 [31] This court confirmed the correctness of Bester in Agri Wire (Pty) Ltd and Another v Commissioner, Competition Commission and Others,18 holding that ‘[s]ave in admiralty matters, our law does not recognise the doctrine of forum non conveniens, and our courts are not entitled to decline to hear cases properly brought before them in the exercise of their jurisdiction’. [32] In Makhanya v University of Zululand,19 this court set out the position when litigants have a choice of fora in which to bring their claims. Nugent JA said: ‘Some surprise was expressed in Chirwa at the notion that a plaintiff might formulate his or her claim in different ways and thereby bring it before a forum of his or her choice but that surprise seems to me to be misplaced. A plaintiff might indeed formulate a claim in whatever way he or she chooses – though it might end up that the claim is bad. But if a claim, as formulated by the claimant, is enforceable in a particular court, then the plaintiff is entitled to bring it before that court. And if there are two courts before which it might be brought then that should not evoke surprise, because that is the nature of concurrent jurisdiction. It might be that the claim, as formulated, is a bad claim, and it will be dismissed for that reason, but that is another matter.’ 17 Standard Credit Corporation v Bester and Others above note 12 at 819E. 18 Agri Wire (Pty) Ltd v Commissioner, Competition Commission and Others [2012] ZASCA 134; [2012] 4 All SA 365 (SCA); 2013 (5) SA 484 (SCA) para 19. 19 Makhanya v University of Zululand [2009] ZASCA 69; 2010 (1) SA 62 (SCA); [2009] 4 All SA 146 (SCA) para 34. [33] There is also a jurisdictional overlap in those Divisions of the High Court that have local seats. In those instances, concurrent jurisdiction is enjoyed by a local seat, within its area of jurisdiction, and the main seat, which has jurisdiction over its entire province. In Thembani Wholesalers (Pty) Ltd v September and Another,20 Chetty J, with reference to s 50 of the SC Act held that ‘[g]rammatically, its meaning is clear and unambiguous – the local seats of the division, identified as the Eastern Cape High Courts, Bhisho, Mthatha and Port Elizabeth, are endowed with concurrent jurisdiction over smaller areas than that enjoyed by the main seat’ and that ‘the division's area of jurisdiction, conferred by s 21, comprises the entire province of the Eastern Cape’. The Thobejane judgment [34] It was argued on behalf of the banks that the Thobejane judgment strove to synthesise three aspects to reach its conclusions: the notion of an abuse of the process, a violation of the guarantee of access to a court in s 34 of the Constitution, and the scope of the exercise of the inherent jurisdiction of the High Court as codified in s 173 of the Constitution. I agree that it is useful to analyse the judgment in relation to those themes. [35] The essence of the judgment is that a plaintiff commits an abuse of the process by suing out of a court that suits its interests when, supposedly, that choice would not necessarily suit the defendant’s interests. In answer to the banks’ assertion to the contrary, Tolmay J said: 20 Thembani Wholesalers (Pty) Ltd v September and Another 2014 (5) SA 51 (ECG); [2014] 3 All SA 683 (WCC) para 10. ‘We beg to differ, if impecunious litigants are denied proper access to justice, or the High Court is incapable of dealing properly and effectively with its workload, due to this practice, it must constitute an abuse.’ This supposed abuse is illustrated by a plaintiff suing out of the High Court when the alternative exists of suing out of the Magistrates’ Court or suing in the Pretoria seat of the Gauteng Division when the matter could have been sued out of the Johannesburg seat. [36] The judgment holds that the abuse manifests itself in two ways. First, a defendant could have more conveniently attended a Magistrates’ Court having concurrent jurisdiction, supposedly nearby, rather than travel to the seat of a High Court, assumed to be remote. Second, a defendant has to incur greater legal costs if the case is before the High Court. As to suing out of the Pretoria seat, rather than out of the Johannesburg seat, proximity, not costs is the concern as regards the defendants. These hypothetical effects violate, according to the Gauteng Court, a defendant’s s 34 right of access to court. In addition, it is egregiously unfair to burden the roll in Pretoria with matters that could have been heard in Johannesburg. [37] In the view of the Gauteng Court, the violation of s 34 can be cured by the High Court exercising its inherent jurisdiction, as contemplated in s 173 of the Constitution: the High Court would, by refusing, as a matter of course, to hear any matter that could have been brought in another court having jurisdiction, eliminate the abuse of the process it was concerned with and uphold s 34 rights. [38] This premise is relied on to justify a general injunction to prevent any plaintiff from instituting a matter in the Pretoria seat of the Division when the Johannesburg seat has jurisdiction or instituting a matter in either seat where the Magistrates’ Court has jurisdiction. A single qualification to this regime was recognised by the Gauteng Court: in a case where good cause can be shown why it would be appropriate that the High Court, rather than a Magistrates’ Court, should hear a matter, an application prior to the issue of process must be brought to obtain leave from a High Court to do so. [39] In my view, the reasoning of the Gauteng Court cannot be sustained. At its very root it is flawed. Anterior to the justifications offered by it in support of its thesis is the fundamental misconception that a High Court can decline to hear a matter which is within its jurisdiction. This finding is contrary to Goldberg,21 Bester22 and also contrary to Agri Wire23 which, being a judgment of this Court that was on point, bound the Court a quo. Agri Wire confirmed the correctness of Bester on the point in issue. [40] It was argued by the South African Human Rights Commission that s 169 of the Constitution now grants a High Court a discretion to decline to hear a matter within its jurisdiction. This argument is based on the fact that s 169(1) provides that the ‘High Court of South Africa may decide’ the types of matter listed in subsections (a) and (b). [41] This argument is untenable. The term ‘may decide’ is used in all of the sections dealing with the jurisdiction of all of the courts listed in chapter 8 of the Constitution. This would mean, for instance, that the Constitutional Court could refuse to hear even those matters over which it has exclusive jurisdiction; the Supreme Court of Appeal could refuse to hear appeals over which it has jurisdiction 21 Goldberg v Goldberg above note 10. 22 Standard Credit Corporation v Bester and Others above note 12. 23 Agri Wire (Pty) Ltd v Commissioner, Competition Commission and Others above note 19. and Magistrates’ Courts could refuse to hear matters within their jurisdiction. Bizarrely, this interpretation would enable a High Court to refuse to hear a matter that falls within the jurisdiction of a Magistrates’ Court, for that reason, and the Magistrates’ Court to refuse to hear the same matter because the High Court has concurrent jurisdiction. Counsel for the banks were correct, in my view, when they argued that, in proper context that the term ‘may decide’ simply means that each court is empowered to decide the types of cases listed in the various empowering sections. In the result, s 169 of the Constitution does not enable a High Court to refuse to hear a matter because a Magistrates’ Court also has jurisdiction to do so; and the cases cited above remain good law. [42] The Gauteng Court’s finding that a court may refuse to hear matters in order to reduce its workload is also wrong. This issue is a well-trodden trail.24 Only two cases need to be addressed. In Bester,25 the Full Court addressed virtually all the concerns ventilated in the Court a quo and reached the opposite conclusion. The judgment contains a traverse of the case law about the debate concerning congestion of the roll by matters that could have been heard by another court. It concluded that it was not open to the High Court to decline to hear any matter over which it had jurisdiction and no abuse could exist on the part of a plaintiff who deemed it more propitious to sue out of the High Court than out of the Magistrates’ Court. It also held:26 ‘That, however, is not the end of the matter. In the Bank of Lisbon and South Africa judgment Coetzee DJP elaborated on the problem of the congested rolls and what should be understood by the term “access to justice”. Without being drawn into a fruitless debate on this topic, I can only 24 The topic was ventilated as early Koch v Realty Corporation of South Africa above note 9 where it was held that it was policy that the High Court deal with all matters over which it had jurisdiction. This verdict was reiterated in Goldberg v Goldberg above note 10. 25 Standard Credit Corporation v Bester and Others above note 12. 26 Ibid at 820H-I. state that courts should be extremely wary of closing their doors to any litigant entitled to approach a particular court. The doors of the courts should at all times be open to litigants falling within their jurisdiction. If congested rolls tend to hamper the proper functioning of the courts then a solution should be found elsewhere, but not by refusing to hear a litigant or to entertain proceedings in a matter within the court's jurisdiction and properly before the court.’ [43] In Nedbank Ltd v Mateman and Others; Nedbank Ltd v Stringer and Another,27 also a Full Court decision of the Gauteng Court, it was held, following Bester, that it was beyond the reach of the Court to refuse to hear any matter within its jurisdiction. It concluded: ‘As can be seen from the registrar's letter referred to above, he complains about the number of actions issued out of the Transvaal Provincial Division whereas they could have been dealt with in the Witwatersrand Local Division. As also pointed out above the Transvaal Provincial Division and the Witwatersrand Local Division have concurrent jurisdiction in terms of s 6 of the [Supreme Court Act 59 of 1959]. That is something that this court cannot change. If it is a matter of concern to the registrar and if it is something that affects the efficient functioning of this court, it is a matter of policy which should be dealt with by the department of justice and constitutional development. Once a court has jurisdiction to entertain a matter it cannot refuse to do so unless the action amounts to an abuse of the process of the court. See the [Bester case]. Any abuse of the process of the court in the matters before us was disavowed.’ [44] The Gauteng Court also erred in finding that the mere fact that the banks instituted proceedings in the High Court when they could have done so in the Magistrates’ Court was an abuse of process. Once again, the case law is clear. 27 Nedbank Ltd v Mateman and Others; Nedbank Ltd v Stringer and Another 2008 (4) SA 276 (T); [2008] 1 All SA 593 (T) at 286B-C. [45] In Corderoy v Union Government (Minister of Finance),28 a case concerning vexatious litigation (now regulated by statute), Innes CJ held that there was no doubt that a court ‘has an inherent power to stop frivolous and vexatious proceedings, for they amount to an abuse of process’. He went on to find that the power was exercisable on a case-by-case basis: ‘That individual suits or applications may be stayed on this ground is clear, and that power has been frequently recognized by South African Courts. But the order with which we are concerned goes far beyond that. It prohibits all suits in the future, in any court, in connection with a particular subject matter, not only against the defendant but against any person in his employ.’ [46] In Bester,29 Van der Walt J said that while it would be ‘unwise to endeavor to formulate an all-encompassing definition of “abuse of process”, because that would encroach upon the exercise of the discretion of a court’, an abuse of process could be said, in general terms, to occur when a court process ‘is used by a litigant for a purpose for which it was not intended or designed, to the prejudice or potential prejudice of the other party to the proceedings’. Interestingly, the reasons given by the bank in that case for instituting proceedings in the Supreme Court are essentially similar to the reasons given in the two cases with which this appeal is concerned; and Van der Walt J held that those reasons did not constitute an abuse of process.30 [47] Bester’s definition was endorsed by Mahomed CJ in Beinash v Wixley,31 who said: ‘What does constitute an abuse of the process of the Court is a matter which needs to be determined by the circumstances of each case. There can be no all-encompassing definition of the concept of 28 Corderoy v Union Government (Minister of Finance) 1918 AD 512 at 517. See too In re Anastassiades 1955 (2) SA 220 (W) at 225-226. 29 Standard Credit Corporation v Bester and Others above note 12 at 820A-B. 30 Ibid at 820G-H. 31 Beinash v Wixley 1997 (3) SA 721 (SCA); [1997] 2 All SA 241 (A) at 734G. “abuse of process”. It can be said in general terms, however, that an abuse of process takes place where the procedures permitted by the Rules of the Court to facilitate the pursuit of the truth are used for a purpose extraneous to that objective.’ [48] There was no evidence before the court to even suggest that by instituting proceedings in the High Court the banks were using a procedure for an extraneous or improper purpose. Indeed, the banks gave a full explanation of why they follow this procedure. Their reasons include the saving of time and money as a result of a greater efficiency in disposing of these matters in the High Court as opposed the Magistrates’ Court; the saving of costs through the centralisation of litigation; and the benefit of judges, rather than magistrates, overseeing the process of execution that inevitably follows a judgment on a mortgage bond which, they say, is an inherently complex decision-making process. In cases falling within the monetary jurisdiction of the Magistrates’ Court, the banks usually only seek a costs order on the Magistrates’ Court scale. In any event, it is difficult to see how litigants can be accused of abusing the process by exercising a choice that the law gives them. [49] Section 34 of the Constitution reads: ‘Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.’ For present purposes, the controversy is confined to access to a court. Care must be taken not to impose on s 34 work that it is not designed to perform. Its role is that of a grundnorm and does not implicate the peculiar organisation of a litigation system in which respect for this value must exist. The guarantee is solely that there must be a forum with competence to address any and every dispute about a legal right and it must be presided over by persons who can render a fair process. [50] It is the task of statute law, in this case, the SC Act and the Magistrates’ Court Act, to establish a system that is consistent with the guarantee. Nothing in either statute contradicts the provisions of s 34. Therefore, the invocation of s 34 as a basis for an interpretation of national legislation (or the common law) to conclude that one of the two courts with concurrent jurisdiction ought to be preferred over the other is misconceived. Where the statute offers alternative fora, it is a matter of sheer practicality that the initiating party may choose one or the other.32 [51] The irony that lies within the notion that, in a democratic society, a litigant is denied access to a High Court of competent jurisdiction in the absence of an express ouster ought not to be overlooked; and as rightly argued on behalf of the banks, no analysis as contemplated by s 36 of the Constitution took place in this regard.33 Accordingly, the policy choice favoured by the Court a quo, cannot be founded on the provisions of s 34 because the objective of the section is realised regardless of which court hears the matter. This proposition is incontrovertible as the Constitutional Court has plainly stated in Mukaddam v Pioneer Foods (Pty) Ltd and Others:34 ‘. . . Our Constitution guarantees everyone the right of access to courts which are independent of other arms of government. But the guarantee in section 34 of the Constitution does not include the choice of procedure or forum in which access to courts is to be exercised. This omission is in line 32 See para 25 of this judgment, above. 33 Section 36 of the Constitution: ‘Limitation of rights (1) The rights in the Bill of Rights may be limited only in terms of law of general application to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors, including— (a) the nature of the right; (b) the importance of the purpose of the limitation; (c) the nature and extent of the limitation; (d) the relation between the limitation and its purpose; and (e) less restrictive means to achieve the purpose. (2) Except as provided in subsection (1) or in any other provision of the Constitution, no law may limit any right entrenched in the Bill of Rights.’ 34 Mukaddam v Pioneer Foods (Pty) Ltd and Others [2013] ZACC 23; 2013 (5) SA 89 (CC) para 28. with the recognition that courts have an inherent power to protect and regulate their own process in terms of section 173 of the Constitution . . .’ [52] It may of course be speculated that by reason of a deliberate policy choice by Parliament, it might be thought that where more than one court has jurisdiction, a particular court should have pride of place over the other. However, that policy choice cannot be informed by s 34 and, insofar as the issues in this case are concerned, has not been made. [53] The concept of the High Court’s inherent jurisdiction to regulate its own process was invoked to justify compelling the banks to initiate proceedings in the court supposedly closer to the defendant, despite concurrent jurisdiction existing. The application of inherent jurisdiction to these circumstances is misconceived. The inherent jurisdiction of the High Court can only be applied to address a lacuna which, in the absence of judicial intervention, would result in injustice. [54] The circumstances where inherent power can properly be employed has been extensively addressed by this Court and by the Constitutional Court and the authorities demonstrate that resort to that power under the circumstances dealt with in the Court a quo, would be inappropriate. The High Court cannot by a purported exercise of inherent jurisdiction create a new legal right to contradict an existing legal right and thereby deprive a person of an existing legal right. [55] The Constitutional Court held in Phillips and Others v National Director of Public Prosecutions:35 35 Phillips and Others v National Director of Public Prosecutions 2006 (1) SA 505 (CC) paras 47-51. ‘[47] The Constitution requires that judicial authority must vest in the courts which must be independent and subject only to the Constitution and the law. Therefore, courts derive their power from the Constitution itself. They do not enjoy original jurisdiction conferred by a source other than the Constitution. Moreover, in procedural matters, s 171 makes plain that “(a)ll courts function in terms of national legislation and their rules and procedures must be provided for in national legislation”. On the other hand, s 173 of the Constitution preserves the inherent power of the courts to protect and regulate their own process in the interests of justice. In S v Pennington and Another, this Court held that: “It is a power which has to be exercised with caution. It is not necessary to decide whether it is subject to the same constraints as the "inherent reservoir of power to regulate its procedures in the interests of the proper administration of justice" which vested in the Appellate Division prior to the passing of the 1996 Constitution. Even if it is subject to such constraints, the present situation, in which there is a vacuum because the legislation and rules contemplated by the Constitution have not been passed, is an extraordinary one in which it would be appropriate to exercise the power.” [48] In Parbhoo and Others v Getz NO and Another too, this Court turned to its “inherent power” to meet an “extraordinary” procedural situation pending enactment of relevant legislation and promulgation of rules of procedure. In both cases the points are made that ordinarily the power in s 173 to protect and regulate relates to the process of court and arises when there is a legislative lacuna in the process. The power must be exercised sparingly having taken into account interests of justice in a manner consistent with the Constitution. [49] It may be that the High Court could legitimately claim inherent power of holding the scales of justice where no specific law directly provides for a given situation or where there is a need to supplement an otherwise limited statutory procedure such as the one in s 26 of the Act. This can wait for a decision in the future when such a case presents itself. [50] In the present matter the applicants made no attempt whatsoever to bring their case within the provisions of the Act, which they could have done. The effect of the High Court order rescinding the restraint order was to ignore the statutory provisions of an Act of Parliament. [51] Whatever the true meaning and ambit of s 173, I do not think that an Act of Parliament can simply be ignored and reliance placed directly on a provision in the Constitution, nor is it permissible to side-step an Act of Parliament by resorting to the common law.’ [56] This Court, in Oosthuizen v Road Accident Fund,36 addressed a controversy concerning a plaintiff who wished to have the action he had instituted in the Magistrates’ Court transferred to the High Court. The issue implicated s 50(1) of the Magistrates’ Court Act that provided for a defendant to seek such a transfer but did not accord a plaintiff a similar option. A High Court had dismissed the application. On appeal it was held: ‘[21] This brings me to the point where it is necessary to deal with the appellant's general submission that the interests of justice” required of the High Court to use its inherent jurisdiction to order a transfer of the case to the High Court. In this regard the submission appears to be that in appropriate circumstances a court was obliged to create a remedy for the appellant where none exists. [22] It was submitted that there was a discrimination of sorts between plaintiff and defendant reflected in s 50(1) of the Magistrates' Courts Act, which impacts negatively on the appellant's entitlement to have his case adjudicated. It was contended on behalf of the appellant that constitutional norms dictated that a litigant in the circumstances of the appellant should not be left destitute. These submissions ignore the fact that it is a plaintiff who chooses the forum in which to litigate and not a defendant. In the present case the appellant was legally represented and fully informed about all the implications of the injuries sustained by him. The appellant's attorneys, even when they became aware of the full extent of his claim, nevertheless persisted in the path that led them to the application to the High Court, which is the subject of the present appeal. They ought to have switched forums when it became clear that they should do so to protect his interests. [23] Counsel for the Fund contended that to allow a transfer of the case in the prevailing circumstances would be more than overcoming a procedural hurdle, as submitted by the appellant, but would be akin to breathing new life into a claim that has been extinguished by prescription. Put differently, the contention that the appellant requests no more than procedural intervention is fallacious. Acceding to the appellant's request would have a substantive effect, namely the revival of a prescribed claim. Claims against the Fund are understandably time-bound. 36 Oosthuizen v Road Accident Fund [2011] ZASCA 118; 2011 (6) SA 31 (SCA); [2011] 4 All SA 71 (SCA) paras 21-27. There are statutorily prescribed prescription periods. The Fund, like any other litigant, is entitled to raise a defence based on prescription. The appellant seeks to deprive the Fund of such a lawful defence in circumstances in which his attorneys have been remiss. [24] As conceded by counsel on appellant's behalf, the appellant is not without remedy. He has a right to institute a claim for compensation against his attorneys for the difference between what might be recovered through the magistrates' court and the full extent of his loss. In these circumstances, I fail to see how it can be in the interests of justice for the High Court to come to the appellant's assistance on the basis suggested by him. Indeed, the contrary is true. [25] The appellant's access to court was not impeded by some lacuna in the law. His attorneys chose the wrong forum and persisted therein when it was clear on the available evidence that a change of forum was imperative. [26] A High Court may not use its inherent jurisdiction to create a right. The appellant's reliance on the expression “ubi jus ibi remedium” is misplaced. The appellant had a right to institute action in the appropriate forum to the full extent of his claim. Prescription has extinguished part of his claim. For that consequence his attorneys are to blame. As pointed out above, he has a remedy in that regard. [27] In the circumstances of the present case, I share the reservations of the court below that allowing the exercise of inherent jurisdiction in the manner suggested opens the door to uncertainty and potential chaos. If there is a case in which it is necessary to fashion a constitutionally acceptable remedy because of the interests of justice, this is not it.’ [57] Accordingly, the premise relied on in the court a quo that the inherent jurisdiction of the court can be the basis for directly contradicting a legal right cannot be sustained. The statutory provision or the rule of common law which founds the premise of the legal right would have to be declared unconstitutional, an issue never addressed, and indeed, in relation to the questions posed to the court, could not legitimately have been addressed. If as a matter of policy, a hierarchy of choice about courts of concurrent jurisdiction is to be imposed on litigants, it is beyond the power of the High Court to create such a hierarchy pursuant to a purported exercise of an inherent jurisdiction to regulate its own process. [58] In recognition of the fact that a plaintiff’s choice of forum may have a prejudicial impact on a defendant, common law and statutory mechanisms are in place to mitigate any such consequences. The first is the transfer of matters from one court to another. In terms of s 27 of the SC Act, on the application of one of the parties, a matter may be transferred from one Division of the High Court to another or from one seat a Division of the High Court to another. Section 50(1) of the Magistrates’ Court Act provides for a transfer from the Magistrates’ Court to the High Court on application by a defendant, while Uniform Rule of Court 39(22) requires consent to transfer a matter from the High Court to the Magistrates’ Court.37 [59] Secondly, as an exception to the general rule, a court may refuse to hear a matter over which it has jurisdiction if the plaintiff is guilty of an abuse of process.38 37 There is authority that a High Court can nevertheless mero motu effect a transfer from the High Court to a Magistrates’ Court. In Thembani Wholesalers (Pty) Ltd v September and Another 2014 (5) SA 51 (ECG); [2014] 3 All SA 683 (WCC) para 13, s 27 of the SC Act was addressed. After citing an unreported judgment by Plasket J in Jeremy Davis v Kenneth James Denton ECD (case no. 630/08) unreported, which addressed the circumstances that would make an application for a transfer meritorious, the court stated: ‘Although the section provides the machinery for the removal of a matter to another court on application, there is in my view nothing to preclude a judge, sitting as a court of first instance in the Eastern Cape High Court, Grahamstown, from mero motu concluding that, notwithstanding the court having original territorial jurisdiction, the balance of convenience clearly dictates that the matter properly be heard at a particular local seat and order that it be so removed. The inconvenience to a litigant hauled before a far-flung court will, no doubt, not be lightly countenanced and, the court's opprobrium, marked by an appropriate costs order. Consequently, the convenience argument relied upon as an aid to the interpretation contended for, must fail.’ A similar decision was made in Veto v Ibhayi City Council 1990 (4) SA 93 (SE) where the Court, dealing with the effect of Uniform Rule of Court 39(22) took the view that it could transfer a case unilaterally by a resort to its inherent power. It is doubtful that these decisions are correct. This approach was criticised by Binns-Ward J in PT v LT and Another 2012 (2) 623 (WCC) para 15 and footnote 13, where he questioned whether a cogent rationale could exist to effect transfer at variance with the procedure provided in the statute and the Rules of Court. Again, in Marth N O v Collier and Another [1996] 3 All SA 506 (C) Van Reenen J disapproved of the dictum in Ihbayi. I am in full agreement with these criticisms. In any event, such an approach is self-evidently one that recognises that it could only be applied in a fact-specific enquiry in a given case and is no precedent for a pre-emptive ruling. 38 Corderoy v Union Government (Minister of Finance) above note 31 at 517. Thirdly, courts may make appropriate costs orders. In Goldberg v Goldberg,39 Schreiner J said that that not only could a ‘successful applicant be awarded only magistrate’s court costs but he may even be deprived of his costs and be ordered to pay any additional costs incurred by the respondent by reason of the case having been brought to the Supreme Court’. The application of all of these rules involves a fact specific enquiry on a case-by-case basis. That, of necessity, requires a defendant who alleges prejudice of one form or another to establish that prejudice. Decisions of this nature cannot be made in the abstract. [60] The Court a quo endeavoured to rationalise its conclusions by an appeal to constitutional values in the abstract, and that approach dominates the judgment. As alluded to earlier, in the absence of facts of actual prejudice, the Court a quo was not equipped to properly delve into these concerns. The moral value expressed as ‘access to justice’ is so broad that it can encompass almost every shortcoming of a legal system to effectively meet the needs of the litigating populace. The primary focus of the Court a quo’s attention was on what is necessary to facilitate an impecunious person being able to effectively assert or defend a right in a court of law. That concern covers a very wide range of social factors. [61] It does not automatically follow that the obvious need to address the plight of the poor means that the practicalities of concurrent jurisdiction are causally connected with that plight. The facilitation of an effective opportunity for poor folk to vindicate their rights requires more than proximity of a forum and low costs. It 39 Goldberg v Goldberg above note 10. See too Koch v Realty Corporation of South Africa above note 9. See further, Greef v Raubenheimer en ‘n Ander 1976 (3) SA 37 (A); [1976] 3 All SA 321 (A), a defamation case, where the court held at 44E that the appropriate order as to the scale upon which costs should be awarded, on either of the Magistrates’ Court or of the High Court scale, is to be determined by reference to what the ‘reasonable plaintiff’, at the time of instituting proceedings, had to consider. A vindication of reputation warranted costs on the higher scale. requires, regardless of where the lis is contested, to have appropriate expertise available to them. Moreover, it is an appropriate question to pose, in relation to foreclosure matters as a prime example, whether so drastic an event as the repossession of a person’s home ought not, as a matter of policy, to enjoy the scrutiny of the High Court rather than the Magistrates’ Court.40 In the absence of a holistic and evidence-based enquiry the invocation of constitutional values in the abstract is unhelpful. The subject of how to enable poor folk to use the courts effectively implicates the role (and funding) of Legal Aid South Africa, and the several NGOs which give assistance to the poor to litigate, no less than the exercise by a plaintiff of a choice of venue. The idea that there might be a causal connection between the implications of concurrent jurisdiction and an effective way to alleviate these social circumstances warrants an empirical enquiry to determine that as a fact. The court a quo was denied the opportunity to consider the matter based on the fruits of such an enquiry. [62] Accordingly, the decision in Thobejane cannot be sustained. The appeal must succeed and the appropriate answers to the questions are those as set out in the order of this court. The Gqirana judgment [63] The Eastern Cape Court decided Gqirana after Thobejane had been decided and thus had the benefit of the analysis and reasoning set out in Thobejane. Interestingly, the evidence put up by the banks that after they had, in compliance with the Thobejane judgment, instituted process only in the Magistrates’ Court there 40 Since the decision in Jaftha v Schoeman and Others; Van Rooyen v Stoltz and Others 2005 (2) SA 140 (CC); 2005 (1) BCLR 78 (CC) an application to deprive mortgagees of their homes by way of foreclosure has required a judicial interrogation, mero motu, of the circumstances that make such an order consistent with s 26 of the Constitution. This enquiry is a delicate exercise as is amply demonstrated by the burgeoning case law on the issue. had been no evidence of an increase in the number of matters being defended. This evidence was unrebutted. The Eastern Cape Court rejected the Gauteng Court’s reasoning, holding that the test for an abuse of the process is fact-specific and could only be determined ex post facto, that a resort to the exercise of inherent jurisdiction to regulate process was inappropriate and that no common law rule needed development. Instead, it conducted an interpretation exercise to determine whether the NCA ousted the jurisdiction of the High Court, leaving the Magistrates’ Court with exclusive jurisdiction in NCA matters. [64] It was argued on behalf of the banks that this issue was not within the purview of the questions posed in the Judge-President’s directive. This is correct. Moreover, and more importantly, as alluded to earlier, the NCA thesis was not put to the counsel who argued the matter. The Court a quo states that the topic was ignored by the parties. The upshot was that the Court a quo did not have the benefit of any argument by any party as to the merits of the NCA thesis. Regrettably, a consequence of that is that the arguments advanced on appeal were never considered by the Court a quo. The conclusions reached in the Gqirana judgment are, however, unsustainable. [65] The judgment acknowledged that there was no express ouster of the High Courts’ jurisdiction. Rather, an implied ouster rested on the statement that ‘(generally) issuing summons in the High Court for a debt that could be recovered in the Magistrates’ Court runs counter to the express purpose of the NCA’.41 This proposition exhibits an obvious internal difficulty. Quite how an ouster can ‘generally’ exist, and thus not exist in every instance, is puzzling and a fundamental flaw in this thesis. 41 Paragraphs 37.9 of the Thobejane judgment, read with para 37.8. [66] The proposition was seemingly inspired by a remark in Absa Bank v Myburgh,42 an application for default judgment in an NCA matter. The registrar had referred it to the court because the credit agreement concerned included a clause that stated that the debtor consented to the jurisdiction of the High Court. This violated s 90(2)(k)(vi)(aa) of the NCA. The case turned on that crisp point. However, the court engaged in an expansive obiter traverse of the NCA and, among several observations, it opined that it was irregular for a plaintiff to institute a claim in the High Court for a sum within the Magistrates’ Court jurisdiction.43 Notably, Myburgh did not state that High Courts’ jurisdiction, per se, over NCA matters, was ousted. This decision cannot be taken as authority for the proposition that the High Courts’ jurisdiction is ousted in NCA matters, wholly or partially. [67] The nub of the Eastern Cape Court’s finding in respect of the implied ouster of the High Court’s jurisdiction is the following:44 ‘The provisions of the NCA, however, properly interpreted through the prism of the Constitution, create a specific set of structures and procedures relating to NCA matters which, read in context and on a generous interpretation, by necessary implication, provides for the magistrates’ court to be the court of first adjudication of all NCA matters, to the exclusion of the High Court as a court of first adjudication, save only in the event that there are unusual or extraordinary factual or legal issues raised which in the opinion of the High Court warrant them being heard first in the High Court.’ [68] There is a strong presumption against the ouster of the High Court’s jurisdiction, and the mere fact that a statute vests jurisdiction in one court is insufficient to create an implication that the jurisdiction of another court is thereby 42Absa Bank v Myburgh 2009 (3) SA 209 (T). 43 Ibid paras 53-55. 44 Nedbank Ltd v Gqirana N O and Another, and similar matters above note 4 para 75.6. ousted. In Makhanya v University of Zululand,45 Nugent JA explained the position thus: ‘[24] In general, the High Courts thus exercise the original authority of the state to resolve all disputes, of any kind, that are capable of being resolved by a resort to law, unless that authority has been assigned to another court. When a High Court resolves a contractual claim it exercises that original jurisdiction. When it considers a claim for enforcement of a constitutional right it exercises that original jurisdiction. So too when it enforces a statutory right. [25] But the state might also create special courts to resolve disputes of a particular kind. Generally those will be disputes concerning the infringement of rights that are created by the particular statute that creates the special court (though that will not always be so). When a statute confers judicial power upon a special court it will do so in one of two ways. It will do so either by (a) conferring power on the special court and simultaneously (b) excluding the ordinary power of the High Court in such cases (it does that when “exclusive jurisdiction” is conferred on the special court). Or it will do so by conferring power on the special court without excluding the ordinary power of the High Court (by conferring on the special court jurisdiction to be exercised concurrently with the original power of the High Courts). In the latter case the claim might be brought before either court. [26] . . . [27] Naturally a claim that falls within the concurrent jurisdiction of both the High Court and a special court could not be brought in both courts. A litigant who did that would be confronted in one court by either a plea of lis pendens (the claim is pending in another court) or by a plea of res judicata (the claim has been disposed of by the other court). A claimant who has a claim that is capable of being considered by either of two courts that have concurrent jurisdiction must necessarily choose in which court to pursue the claim and, once having made that election, will not be able to bring the same claim before the other court. But where a person has two separate claims, each for enforcement of a different right, the position is altogether different, because then both claims will be capable of being pursued, simultaneously or sequentially, either both in one court, or each in one of those courts.’ 45 Makhanya v University of Zululand above note 20 paras 24, 25 and 27. [69] The threshold to sustain the proposition that there is an ouster of the High Court’s jurisdiction is very high. In Metcash Trading Ltd v Commissioner, South African Revenue Service and Another,46 Kriegler J, in the course of determining whether a statute had ousted the jurisdiction, the High Court demonstrated the method of deciding the question. He said that ‘there is nothing in s 36 to suggest that the inherent jurisdiction of a High Court to grant appropriate other or ancillary relief is excluded’ and that the section ‘does not say so expressly nor is such an ouster necessarily implicit in its terms, while it is trite that there is a strong presumption against such an implication’. [70] In Richards Bay Bulk Storage (Pty) Ltd v Minister of Public Enterprises47 this Court set out the approach to deciding whether an ouster can be inferred: ‘The question at issue is therefore whether the Court a quo had jurisdiction to hear the review application. This in turn depends on whether the Act excluded such jurisdiction. The Act does not do so in express terms, and the question then is whether it contains an implication to that effect. The parties were ad idem that there is a strong presumption against such an implication: “. . . (T)he Court's jurisdiction is excluded only if that conclusion flows by necessary implication from the particular provisions under consideration, and then only to the extent indicated by such necessary implication. . . .” (Welkom Village Management Board v Leteno 1958 (1) SA 490 (A) at 502G-H. See also Local Road Transportation Board and Another v Durban City Council and Another 1965 (1) SA 586 (A) at 593B- C and Paper Printing, Wood and Allied Workers' Union v Pienaar NO and Others 1993 (4) SA 621 (A) at 635A-B.) In argument before us the respondent's counsel contended that an intention to exclude the Supreme Court's review jurisdiction should be inferred from the nature and amplitude of the powers granted to the Special Court created by s 15 of the Act. Now, of course, it would not be 46 Metcash Trading Ltd v Commissioner, South African Revenue Service and Another 2001 (1) SA 1109 (CC); 2001 (1) BCLR 1 (CC) para 43. 47 Richards Bay Bulk Storage v Minister of Public Enterprises 1996 (4) SA 490 (A). enough for the respondent to show that the Special Court enjoys powers of review similar to those exercised by the Supreme Court under its inherent jurisdiction. In the present context the respondent would have to go further and show that the Legislature intended such powers to be exclusive. It is quite conceivable that review powers concurrent with those exercised by the Supreme Court could be bestowed, as was found to have happened in Pienaar's case supra. In such a case the grant of review powers to the tribunal in question would not mean that the Supreme Court has been deprived of its common-law jurisdiction. However, before any suggestion of concurrent jurisdiction can arise one must examine whether the Special Court was clothed with any review jurisdiction at all . . . .’48 [71] The Eastern Cape Court relied for the implied ouster of the High Court’s jurisdiction on two sections of the NCA, namely ss 3 and 90(2)(k)(vi)(aa), and s 29(1)(e) of the MC Act. [72] Section 3 of the NCA sets out its purposes as follows: ‘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; (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; 48 Richards Bay Bulk Storage (Pty) Ltd v Minister of Public Enterprises 1996 (4) SA 490 (A) at 494G – 495. (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.’ [73] Section 90 of the NCA is concerned with unlawful provisions in credit agreements. Section 90(1) states that a credit agreement ‘must not contain an unlawful provision’ and s 90(2) then lists a range of provisions that are unlawful. So, for instance, a provision in a credit agreement is unlawful if its purpose or effect is to ‘defeat the purposes or policies’ of the NCA49 or to ‘deceive the consumer’.50 S 90(2)(k)(vi)(aa) provides: ‘A provision of a credit agreement is unlawful if— . . . (k) it expresses, on behalf of the consumer— . . . (vi) a consent to the jurisdiction of— 49 Section 90(2)(a)(i). 50 Section 90(2)(a)(ii). (aa) the High Court, if the magistrate's court has concurrent jurisdiction.’ [74] Section 29 of the Magistrates’ Court Act, in so far as NCA matters are concerned, provides: ‘(1) Subject to the provisions of this Act and the National Credit Act, 2005 (Act 34 of 2005), a court in respect of causes of action, shall have jurisdiction in- (a) actions in which is claimed the delivery or transfer of any property, movable or immovable, not exceeding in value the amount determined by the Minister from time to time by notice in the Gazette; . . . (e) actions on or arising out of any credit agreement as defined in section 1 of the National Credit Act, 2005 (Act 34 of 2005).’ [75] The complete answer to the Eastern Cape Court’s finding is contained in Standard Bank’s argument. It is that, far from impliedly ousting the concurrent jurisdiction of the High Court, the sections of the NCA that it relied on and s 29 of the Magistrates’ Court Act are premised on the High Court having concurrent jurisdiction with Magistrates’ Courts. [76] There is no indication of an implied ouster of jurisdiction in s 3 of the NCA. It is concerned with the purposes of the Act. These purposes, as one would expect of a provision such as this, are expressed in broad and general terms and not one of these even mentions a court, let alone a preferred choice of court. Section 29 of the Magistrates’ Court Act is, and has always been, premised on concurrent jurisdiction. All that s 29(1)(e) has done is to expand the jurisdiction of Magistrates’ Courts – and that does not carry with it an implication that the jurisdiction the High Court is correspondingly decreased.51 Section 90(2)(k)(vi)(aa) of the NCA puts the matter beyond doubt, but not in the way that the Eastern Cape Court found. It prohibits, when a credit agreement is concluded, the inclusion of a term that the parties agree to the exclusive jurisdiction of the High Court if a Magistrates’ Court ‘has concurrent jurisdiction’. Far from impliedly ousting the jurisdiction of the High Court, this section of the NCA expressly recognises that the High Court has jurisdiction, concurrent with Magistrates’ Courts. [77] The approach of the Eastern Cape Court was considered and rejected by a Full Court in Nedbank Ltd v Mateman and Others; Nedbank Ltd v Stringer and Another.52 The credit agreements in issue in that case contained a provision to the effect that while the debtor consented to the jurisdiction of the Magistrates’ Court, the bank was ‘nonetheless, at its option entitled to institute proceedings in any division of the High Court of South Africa which has jurisdiction’. It was argued that this provision was in conflict with s 90(2)(k)(vi)(aa) of the NCA. [78] The court accepted that, leaving the NCA aside, it was ‘settled law that the High Court has concurrent jurisdiction with any magistrates’ court in its area of jurisdiction’53 and that where reliance is placed on an implied ouster of jurisdiction, the inference to that effect must be clear and unequivocal.54 The court found that 51 Makhanya v University of Zululand above note 20 para 25; Welkom Village Management Board v Leteno 1958 (1) SA 490 (A) at 502-503. 52 Nedbank Ltd v Mateman and Others; Nedbank Ltd v Stringer and Another above note 30. 53 Ibid at 280B. 54 Ibid at 280J-281D. Reliance was placed, inter alia, on Welkom Village Management Board v Leteno above note 55 at 502-503; Minister of Law and Order and Others v Hurley and Another 1986 (3) SA 568 (A) at 584A-B; Reid-Daly v Hickman and Others 1981 (2) SA 315 (ZA) at 318F-G; Millman and Another NNO v Pieterse and Others 1997 (1) SA 784 (C) at 788G-J. s 90(2)(k)(vi)(aa) did not oust the jurisdiction of the High Court in NCA matters. It held:55 ‘In my judgment s 90 of the NCA does not affect the jurisdiction of the High Court. The High Courts retain their jurisdiction in terms of the [Supreme Court Act 59 of 1959] as set out earlier herein. Section 90 was intended to outlaw forum shopping in credit agreements. To extend its scope and purview to the overall jurisdiction of the High Court beyond mere clauses in credit agreements is to accord the section a meaning which it neither has nor was ever intended to have.’ [79] It also dealt with s 3 of the NCA, and its purpose. It held:56 ‘Section 2(1) of the NCA provides as follows: “The Act must be interpreted in a manner that gives effect to the purposes set out in s 3.” Section 3 then deals with the purpose of the Act. The purposes are set out in detail. All the purposes so set out are laudable purposes to promote and advance the social and economic welfare of South Africans, to promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry and to protect consumers. Not a single purpose, however, is indicative of the fact that the jurisdiction of the High Court is intended to be ousted.’ [80] There are other indications in the NCA which demonstrate incompatibility with an ouster of the High Court’s jurisdiction and strengthen the conclusion that no such inference of an ouster can be drawn. For instance, s 130(1) states: ‘Subject to subsection (2), a credit provider may approach the court for an order to enforce a credit agreement only if, at that time, the consumer is in default and has been in default under that credit agreement for at least 20 business days and. . . .’ There is no qualification to which ‘court’ reference is made, the word ‘court’ being undefined in the NCA. This provision can only be understood to refer to any court with competent jurisdiction and therefore includes both the High Court and the Magistrates’ Court. 55 Nedbank Ltd v Mateman and Others; Nedbank Ltd v Stringer and Another above note 30 at 284F-G. 56 Nedbank Ltd v Mateman and Others; Nedbank Ltd v Stringer and Another above note 30 at 285I-J. [81] Sometimes, however, the NCA is specific about the Magistrates’ Court being the exclusive forum to make certain decisions. In those instances, the NCA expressly stipulates the Magistrates’ Court to the exclusion of any other court. For example: s 86(9) provides that if ‘a debt counsellor rejects an application as contemplated in subsection (7)(a), the consumer, with leave of the Magistrate's Court, may apply directly to the Magistrate's Court, in the prescribed manner and form, for an order contemplated in subsection (7)(c)’; s 87 provides that if ‘a debt counsellor makes a proposal to the Magistrates’ Court in terms of section 86(8)(b), or a consumer applies to the Magistrates’ Court in terms of section 86(9), the Magistrate's Court must conduct . . .’; s 127(8)(a) provides that if a debtor ‘fails to pay an amount demanded in terms of subsection (7) within 10 business days after receiving a demand notice, the credit provider may commence proceedings in terms of the Magistrates' Courts Act for judgment enforcing the credit agreement’; and s 162 provides that ‘[d]espite anything to the contrary contained in any other law, a Magistrate's Court has jurisdiction to impose any penalty provided for in section 161’. [82] By implication in the last example, the High Court has such a power, and s 162 exists to confer a like power on the Magistrates’ Court to impose such penalties too, an example of the need to authorise power to the Magistrates’ Court by statute, as contemplated in s 170 of the Constitution. If the NCA had intended to impliedly oust the jurisdiction of the High Court, and to vest exclusive jurisdiction in the Magistrates’ Court, these provisions, which do indeed reserve particular decisions for that court, would be odd, if not superfluous. [83] The foundation of the Eastern Cape Court’s thesis was that a constitutional value was somehow thwarted if the Magistrates’ Court was not assigned primacy of jurisdiction in NCA matters and this justified an interpretation that, so it held, would promote those values. The articulation of this thesis was at a high level of generality. Reference was made to a ‘balancing of fairness’ and to examining the NCA through the ‘prism of the Constitution’. In this, the approach was an echo of approach of the Gauteng Court in Thobejane and a repetition of the analysis in respect of that judgment is unnecessary. [84] Paradoxically, having held that the High Court’s jurisdiction was excluded because it would otherwise violate constitutional values, the court found that the High Court was somehow nevertheless vested with a form of residual jurisdiction to hear exceptional cases. This thesis too must falter on grounds of incoherence. Fish cannot sometimes be fowl. [85] The majority judgment of the Eastern Cape Court is wrong. So too, in my view, is the minority judgment which holds, on grounds similar to the Gauteng Court, that in all cases in which a Magistrates’ Court has jurisdiction, a High Court’s jurisdiction is ousted. [86] In the result, in my view, the NCA cannot have the effect as found by the court a quo. Accordingly, the decision in Gqirana cannot be sustained and the appeal must succeed. The answers to the questions posed to the Court will be set out in the order below. Conclusion [87] As to costs, given the test-case character of the matter, no costs were sought. The Court expresses its appreciation, in particular, to the several amici curiae and their counsel. [88] The following orders are made: In case numbers 38/2019 and 47/2019: The appeal is upheld, with no order as to costs. The order of the court below is set aside and replaced with the following order: ‘It is declared that: (1) The High Court must entertain matters within its territorial jurisdiction that fall within the jurisdiction of a Magistrates’ Courts, if brought before it, because it has concurrent jurisdiction with the Magistrates’ Court. (2) The High Court is obliged to entertain matters that fall within the jurisdiction of a Magistrates’ Court because the High Court has concurrent jurisdiction. (3) The main seat of a Division of a High Court is obliged to entertain matters that fall within the jurisdiction of a local seat of that Division because the main seat has concurrent jurisdiction. (4) There is no obligation in law on financial institutions to consider the cost implications and access to justice of financially distressed people when a particular court of competent jurisdiction is chosen in which to institute proceedings. 3. There is no order as to costs’ In case number 999/2019: The appeal succeeds, with no order as to costs. The order of the court below is set aside and replaced with the following: ‘It is declared that: (1) The High Court must entertain matters within its territorial jurisdiction that fall within the jurisdiction of a Magistrates’ Courts, if brought before it, because it has concurrent jurisdiction with the Magistrates’ Court. (2) The High Court is obliged to entertain matters that fall within the jurisdiction of a Magistrates’ Court because the High Court has concurrent jurisdiction. (3) There is no obligation in law on financial institutions to consider the cost implications and access to justice of financially distressed people when a particular court of competent jurisdiction is chosen in which to institute proceedings. 3. There is no order as to costs.’ ________________________ ROLAND SUTHERLAND ACTING JUDGE OF APPEAL APPEARANCES For Standard Bank K. Hofmeyr, with her, A. Armstrong. Instructed by: Edward Nathan Sonnenbergs Inc., Johannesburg Webbers Attorneys, Bloemfontein For Nedbank A. Cockrell SC, with him, N. Luthuli. Instructed by: Cliffe Dekker Hofmeyr Inc., Sandton Webbers, Bloemfontein. For First National Bank P G Cilliers SC, with him, A P Ellis. Instructed by: PDR Attorneys, Pretoria Rossouws Attorneys, Bloemfontein The Amici Curiae: The Department of Justice and Constitutional Development, Pretoria: A. Platt, with her, L. Maite. The South African Human Rights Commission, Johannesburg: M. Chaskalson SC, with him, E. Webber, L. Makapela. The Pretoria Society of Advocates, Pretoria AJ Louw SC, with him, SW Davies and S Van der Walt.

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: 25 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 The Standard Bank of SA Ltd and Others v Thobejane and Others (38/2019 & 47/2019) and The Standard Bank of SA Ltd v Gqirana N O and Another (999/2019) [2021] ZASCA 92 (25 June 2021). Today the Supreme Court of Appeal (SCA) handed down a judgment upholding the appeals against the Gauteng Division of the High Court, Pretoria and the Eastern Cape Division of the High Court, Grahamstown with no orders of costs. In both the Gauteng and Eastern Cape Divisions of the High Court, the Judges-President posed questions to Full Courts about whether those courts had the power to refuse to hear matters that were within their jurisdiction when such matters were also within the jurisdiction of the Magistrates’ Court. The enquiry was prompted by the idea that defendants were prejudiced by being sued in the High Court rather than a Magistrates Court because of having to travel further to court than the, supposedly, nearby magistrates court and because legal costs were higher in the High Court etc. It was also a concern that matters than could have been sued out of the Johannesburg seat of the High Court were instead sued out of the Pretoria seat burdening the Latter Court’s rolls. The Gauteng Court held that suing in the High Court for a sum that was within the Magistrates’ Court jurisdiction was an abuse of the process and a violation of s 34 of the Constitution which guarantees access to a court to address a dispute over any legal right. To remedy this abuse, the Gauteng Court ordered that no matter that could be brought in the Magistrates’ Court could be sued out of a High Court and no matter that could be brought in Johannesburg seat of the High Court could be brought in Pretoria seat. However, it held that in exceptional circumstances, if a matter was of such a nature that it was more appropriate that a High Court hear it, an application to get leave to do so should be made to the relevant High Court before issuing summons. The SCA held that a court has no power to refuse to hear a matter within its jurisdiction. The SCA rejected the idea that it was an abuse of the process to choose to sue in the High Court when the Magistrates’ Court also had jurisdiction. It held that such a choice could not be an abuse because the law gave a plaintiff or applicant exactly that right. A court could not, pursuant to its inherent jurisdiction, overturn that right. The inherent jurisdiction of a High Court to regulate and protect its process was available to address acts that exploited the process for improper purposes, but to exercise a right to choose a court of jurisdiction could not constitute such an abuse. s 34 of the Constitution was not infringed as it did not go further than to guarantee that there must be a court that could hear any claim about a right. The Eastern Cape Court held that the National Credit Act 34 of 2005 (NCA), properly interpreted, excluded the jurisdiction of the High Court in all matters that were regulated by the NCA. However, it also held that in exceptional cases a High Court could hear such a matter. The SCA examined the provisions of the NCA and concluded that not only did the NCA not reserve jurisdiction to the Magistrates’ Court but that there were several provisions that indicated plainly that the High Court has concurrent jurisdiction. The threshold to oust the jurisdiction of the High Court is high and there was no cogent reason to justify an inference that it had been ousted. In the result, the SCA declared that: 1. The High Court must entertain matters within its territorial jurisdiction that fall within the jurisdiction of a Magistrates’ Courts, if brought before it, because it has concurrent jurisdiction with the Magistrates’ Court; 2. The High Court is obliged to entertain matters that fall within the jurisdiction of a Magistrates’ Court because the High Court has concurrent jurisdiction; 3. The main seat of a Division of a High Court is obliged to entertain matters that fall within the jurisdiction of a local seat of that Division because the main seat has concurrent jurisdiction; 4. There is no obligation in law on financial institutions to consider the cost implications and access to justice of financially distressed people when a particular court of competent jurisdiction is chosen in which to institute proceedings; 5. There is no order as to costs. ~~~~ends~~~~

2208

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 489/08 THE CITY OF JOHANNESBURG First Appellant JOHANNESBURG WATER (PTY) LTD Second Appellant THE MINISTER OF WATER AFFAIRS & FORESTRY Third Appellant and LINDIWE MAZIBUKO First Respondent GRACE MUNYAI Second Respondent JENNIFER MAKOATSANE Third Respondent SOPHIA MALEKUTU Fourth Respondent VUSIMUZI PAKI Fifth Respondent THE CENTRE ON HOUSING RIGHTS AND EVICTIONS Amicus Curiae Neutral citation: City of Johannesburg v L Mazibuko (489/08) [2009] ZASCA 20 (25 March 2009) Coram: STREICHER, MTHIYANE, JAFTA, MAYA JJA & HURT AJA Heard: 23, 24 & 25 FEBRUARY 2009 Delivered: 25 MARCH 2009 Summary: Section 27 of Constitution – sufficient water is the quantity of water required for dignified human existence – the Water Services Act 108 of 1997 does not deprive anyone of the right of access to sufficient water in terms of s 27(1) – a person who cannot afford to pay for water has no access to water being charged for – local authority obliged to supply free water to residents who cannot afford to pay for the water if reasonable to expect it to do so – prepayment water meters used by appellants not authorised by bylaws and unlawful. _____________________________________________________________________ ORDER _____________________________________________________________________ On appeal from: Johannesburg High Court (Tsoka J sitting as court of first instance) The appeal is upheld and the order by the court below is replaced with the following order: ‘1 The decision of the first respondent and/or the second respondent to limit the free basic water supply to the residents of Phiri to 25 litres per person per day or 6 kl per household per month is reviewed and set aside. It is declared: (a) That 42 litres water per Phiri resident per day would constitute sufficient water in terms of s 27(1) of the Constitution. (b) That the first respondent is, to the extent that it is in terms of s 27(1) of the Constitution reasonable to do so, having regard to its available resources and other relevant considerations, obliged to provide 42 litres free water to each Phiri resident who cannot afford to pay for such water. The first and second respondents are ordered to reconsider and reformulate their free water policy in the light of the preceding paragraphs of this order. Pending the reformulation of their free water policy the first and second respondents are ordered to provide each account holder in Phiri who is registered with the first respondent as an indigent with 42 litres of free water per day per member of his or her household. It is declared that the prepayment water meters used in Phiri Township in respect of water service level 3 consumers are unlawful. The order in paragraph 5 is suspended for a period of two years in order to enable the first respondent to legalise the use of prepayment meters in so far as it may be possible to do so.’ _____________________________________________________________________ JUDGMENT _____________________________________________________________________ STREICHER JA (MTHIYANE, JAFTA, MAYA JJA and HURT AJA concurring) [1] Do the City of Johannesburg (‘the City’), the first appellant, and Johannesburg Water (Pty) Limited (‘Johannesburg Water’), the second appellant, a company in which the City is the sole shareholder, have a constitutional duty to provide free water to the residents of Phiri (a township in Soweto, Johannesburg), who cannot afford to pay for such water? This question is one of two main issues to be decided in this case. The other one is whether the City and Johannesburg Water (unless the context indicates otherwise, henceforth jointly referred to as the City) could restrict access to water by the Phiri residents by way of prepayment water meters. [2] Upon application by the five respondents, all of whom are resident in Phiri, the Johannesburg High Court (per Tsoka J) made an order in terms of which it: (a) Reviewed and set aside the decision of the City alternatively Johannesburg Water to limit free basic water supply to 25 litres per person per day or 6 kilolitres per household per month. (b) Declared the prepayment water system used in Phiri Township, the ‘forced installation’ of the system and the choice given by the City alternatively Johannesburg Water to the respondents and other residents of Phiri of either a prepayment water supply or a water supply through standpipes, unconstitutional and unlawful. (c) Ordered the City alternatively Johannesburg Water to provide each applicant ‘and other similarly placed residents of Phiri Township’ with a free basic water supply of 50 liters per person per day and the option of a metered supply installed at the cost of the City. With the leave of the court a quo the City and Johannesburg Water together with the third appellant, the Minister of Water Affairs and Forestry, now appeal to this court. [3] The City is a municipality in the Province of Gauteng. In terms of the Constitution one of the objects of local government is to ensure the provision of services to communities in a sustainable manner (s 152(1)(b)). Like the other objects of local government a municipality must strive, within its financial and administrative capacity, to achieve that object (s 152(2)). It has executive authority in respect of, and has the right to administer, among others, water and sanitation services (s 156(1)) and may make bylaws for the effective administration of these services (s 156(2)). [4] The residents of Phiri are very poor, but, for years, until 2004, they, like residents in the rest of Soweto, Alexandra and other townships within the area of jurisdiction of the City, had access to an unlimited supply of water which was not metered and for which they were charged on the basis of a deemed consumption of 20kl per month. In 2004 the deemed consumption was discontinued by the City and prepayment meters were installed dispensing 6kl water per stand per month free. Additional water had to be pre-paid for. The respondents contended that 6kl water per stand per month was insufficient water for the residents of Phiri and that in terms of s 27 of the Constitution, they had a right of access to sufficient water, which they contended would be 50 litres water per person per day. That quantity of water, so they contended, had to be provided free to each resident in Phiri who could not afford to pay for such water. [5] Section 27 of the Constitution provides that everyone has the right to have access to sufficient water. The section reads as follows: ‘(1) Everyone has the right to have access to – (a) health care services, including reproductive health care; (b) sufficient food and water; and (c) social security, including, if they are unable to support themselves and their dependents, appropriate social assistance. (2) The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of each of these rights.’ [6] Giving effect to its obligation in terms of s 27(2) the state enacted the Water Services Act 108 of 1997. Section 4 of the Act provides that water services must be provided in terms of conditions set by the water services provider which must accord with conditions for the provision of water services contained in bylaws made by the water services authority having jurisdiction in the area in question. The City is a water services authority and Johannesburg Water is a water services provider as defined in the Act. [7] In the preamble to the Act ‘the rights of access to basic water supply and basic sanitation necessary to ensure sufficient water and an environment not harmful to health or well-being’ are recognised. Section 3 provides as follows: ‘(1) Everyone has a right of access to basic water supply and basic sanitation. (2) Every water services institution must take reasonable measures to realise these rights. (3) Every water services authority must, in its water services development plan, provide for measures to realise these rights. (4) The rights mentioned in this section are subject to the limitations contained in this Act.’ [8] ‘“Basic water supply” means the prescribed minimum standard of water supply services necessary for the reliable supply of a sufficient quantity and quality of water to households, including informal households, to support life and personal hygiene’ (s 1). It follows that in terms of s 3(1) everyone has a right of access to ‘the prescribed minimum standard of water supply services necessary for the reliable supply of a sufficient quantity of water to households . . . to support life and personal hygiene.’ [9] As envisaged in s 3 read with the definition of ‘basic water supply’ water services regulations providing for the minimum standard of water supply services were promulgated. Regulation 3 provides: ‘3 The minimum standard for basic water supply services is – (a) . . . (b) a minimum quantity of potable water of 25 litres per person per day or 6 kilolitres per household per month – (i) at a minimum flow rate of not less than 10 litres per minute; (ii) within 200 metres of a household; and (iii) with an effectiveness such that no consumer is without a supply for more than seven full days in any year.’ [10] Section 3 of the Act read with regulation 3(b) therefore provides that everyone has a right of access to a minimum quantity of water of 25 litres per person per day or 6 kilolitres per household per month. The appellants submitted that as a result of this legislation the respondents could no longer base their claim on a right of access to sufficient water in terms of s 27 of the Constitution but had to base their claim on the provisions of the Act. They submitted that where national legislation had been enacted to give effect to a constitutional right, it was impermissible for a litigant to rely directly on the constitutional right concerned. In this regard they relied on MEC for Education, KwaZulu-Natal, and Others v Pillay 2008 (1) SA 474 (CC) at para 40 where Langa CJ said: ‘This court has held in the context of both administrative and labour law that a litigant cannot circumvent legislation enacted to give effect to a constitutional right by attempting to rely directly on the constitutional right. To do so would be to “fail to recognise the important task conferred upon the legislature by the Constitution to respect, protect, promote and fulfil the rights in the Bill of Rights”. The same principle applies to the Equality Act. Absent a direct challenge to the Act, courts must assume that the Equality Act is consistent with the Constitution and claims must be decided within its margins.’ [11] The respondents conceded that this rule, (‘the direct reliance rule’), is well established. But, they submitted that the rule does not operate whenever legislation gives effect to a constitutional right. It operates only if and when, on a proper interpretation of the legislation read with the constitutional right to which it gives effect, the legislation is intended to be exhaustive of the right, that is, if parliament intended to cover the field. In support of this submission they relied on Chaskalson CJ’s reasoning in Minister of Health and Another v New Clicks South Africa (Pty) Ltd 2006 (2) SA 311 (CC) in which he held that a review of administrative action can no longer be brought directly under s 33 (1) of the Constitution and has to be brought under the Promotion of Administrative Justice Act 3 of 2000. Chaskalson CJ said: ‘PAJA is the national legislation that was passed to give effect to the rights contained in s 33. It was clearly intended to be, and in substance is, a codification of these rights. It was required to cover the field and purports to do so. A litigant cannot avoid the provisions of PAJA by going behind it, and seeking to rely on s 33(1) of the Constitution or the common law. That would defeat the purpose of the Constitution in requiring the rights contained in s 33 to be given effect to by means of national legislation.’1 [12] However, there is a substantial difference between, on the one hand, the constitutional provisions and legislation that gave rise to the application of the direct reliance rule and, on the other hand, s 27 of the Constitution and the Water Services Act. (i) Section 9(4) of the Constitution provides that no person may unfairly discriminate against anyone on one or more of the grounds mentioned and then adds that national legislation must be enacted to prevent or prohibit unfair discrimination. The Equality Act was thereupon enacted to give effect to s 9. That is the background to the Constitutional Court’s decision in Pillay referred to above. (ii) Section 33(1) of the Constitution provides that everyone has the right to administrative action that is lawful, reasonable and procedurally fair and subsection (3) requires national legislation to be enacted to give effect to that right. PAJA was thereupon enacted to give effect to that right. It is on that basis that Chaskalson CJ applied the direct reliance rule in New Clicks. (iii) Section 23(5) of the Constitution provides that every trade union, employers’ organisation and employer has the right to engage in collective bargaining and that national legislation may be enacted to 1 At paras 95-96. regulate collective bargaining. Regulations in terms of the Defence Act 44 of 1957, which in terms of the Constitution qualify as national legislation, were promulgated to regulate collective bargaining. This led O’Regan J in giving the judgment of the Constitutional Court in South African National Defence Union v Minister of Defence and Others 2007 (5) SA 400 (CC) to say in para 52 that ‘a litigant who seeks to assert his or her right to engage in collective bargaining under s 23(5) should in the first place base his or her case on any legislation enacted to regulate the right, not on s 23(5). [13] In all these cases the direct reliance rule was applied in circumstances where the Constitution provided that legislation could be or had to be enacted to give effect to the right in terms of the Constitution and where that had been done. In the present case the Constitution does not provide that legislation could or had to be enacted to give effect to the right of access to sufficient water. It provides that legislative and other measures must be taken to achieve the progressive realisation of each of the rights mentioned in s 27(1). It was in my view realised that there were people who had access to sufficient water and others who did not have such access and could not immediately be given such access. It is for the latter category of people that the Constitution requires the state to take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of the right of access to sufficient water. Section 27(2) was therefore not intended to cover the field and to deprive anyone of its right to rely on the provisions of s 27(1). On the contrary it simply recognises that it may, in certain circumstances, not be possible for the state to give immediate effect to the provisions of s 27(1) and requires the state to take reasonable legislative and other measures to encourage the progressive realisation of the right of access to sufficient water. [14] The Water Services Act together with the regulations promulgated in terms thereof, provide that 6kl water per household per month or 25 litres per person per day, is the minimum quantity of water that would constitute a sufficient quantity of water for households to support life and personal hygiene. In terms of s 3 and subject to the limitations contained in the Act (s 3(4)) everyone has a right of access to that quantity of water (s 3(1)), every water services institution must take reasonable measures to realise these rights (s 3(2)) and every water services authority must, in its water services development plan, provide for measures to realise these rights (s 3(3)). These provisions were not intended to detract from the right of everyone of access to sufficient water in terms of s 27(1) of the Constitution. They were intended, as required by s 27(2), to achieve a progressive realisation of those rights. As a result of these provisions it cannot be contended by a water services institution that a lesser quantity of water would constitute sufficient water to support life and personal hygiene. The quantity stipulated is the minimum that may constitute sufficient water. However, circumstances differ, some people, like the residents of Phiri, may have waterborne sanitation while others have pit latrines which makes a dramatic difference to the water required. By stipulating the minimum that would constitute sufficient water the legislature has not stipulated that that quantity would in all circumstances constitute sufficient water. [15] It follows that the Water Services Act does not deprive anyone of the right of access to sufficient water in terms of s 27(1). This interpretation gives rise to three questions, namely: (i) What would constitute sufficient water in terms of s 27(1); (ii) Does the City have to provide residents of Phiri with access to that quantity of water; and (iii) Does the City have to provide such access or access to a lesser quantity of water free. I shall deal with each of these questions in turn. What would constitute sufficient water in terms of s 27(1)? [16] In interpreting the right to sufficient water a purposive approach should be followed. In determining the purpose of the right one should have regard to the history and background to the adoption of the Constitution and the other provisions of the Constitution, in particular the other rights with which it is associated in the Bill of Rights.2 On this approach the following passage in Soobramoney is apposite:3 ‘There is a high level of unemployment, inadequate social security, and many do not have access to clean water or to adequate health services. These conditions already existed when the Constitution was adopted and a commitment to address them, and to transform our society into one in which there will be human dignity, freedom and equality, lies at the heart of our new constitutional order. For as long as these conditions continue to exist that aspiration will have a hollow ring.’ [17] A commitment to address a lack of access to clean water and to transform our society into one in which there will be human dignity and equality, lying at the heart of our Constitution, it follows that a right of access to sufficient water cannot be anything less than a right of access to that quantity of water that is required for dignified human existence. Support for this conclusion is to be found in the 2002 General Comment 15 of the United Nations Committee on Economic, Social and Cultural Rights on the International Covenant on Economic, Social and Cultural 2 S v Zuma and Others 1995 (2) SA 642 (CC) para 15; and S v Makwanyane and Another 1995 (3) SA 391 (CC) para 9 and 10. 3 Soobramoney v Minister of Health (Kwazulu-Natal) 1998 (1) SA 765 (CC) at para 8. Rights, in which it is stated: ‘The human right to water is indispensable for leading a life in human dignity. It is a prerequisite for the realization of other human rights.’4 And ‘The right to water clearly falls within the category of guarantees essential for securing an adequate standard of living, particularly since it is one of the most fundamental conditions for survival. . . . The right should also be seen in conjunction with other rights enshrined in the International Bill of Human Rights, foremost amongst them the right to life and human dignity.’5 For this reason ‘the elements of the right to water must be adequate for human dignity, life and health’.6 [18] The quantity of water that is required for dignified human existence would depend on the circumstances of the individual concerned. As stated above the Water Services Act, read with the regulations promulgated in terms thereof, prescribes a basic minimum supply of water of 6kl per household per month or 25 litres per person per day. Being a basic minimum supply of water and bearing in mind that many people who are in desperate need of adequate access to water, do not have waterborne sanitation; the basic minimum supply of water in terms of the Act must have been determined by reference to the needs of households or individuals who can manage without waterborne sanitation. That is so because according to the evidence a flush toilet dispenses approximately 10 litres of water per flush and nobody has suggested, or could on the evidence suggest, that 6kl per household per month or 25 litres per person per day constituted sufficient water for leading a life in human dignity where use had to be made of flush toilets, as is the case in Phiri. 4 Para 1. 5 Para 3. 6 Para 11. [19] Confirmation of the aforegoing is to be found in the White Paper issued by the Department of Water Affairs and Forestry in November 1994 entitled ‘Water Supply and Sanitation Policy’. In respect of water supply it is said: ‘Basic water supply is defined as 25 litres per person per day. This is considered to be the minimum required for direct consumption, for the preparation of food and for personal hygiene. It is not considered to be adequate for a full, healthy and productive life which is why it is considered as a minimum.’ [20] In September 2003 the Department issued a Strategic Framework for Water Services entitled ‘Water is Life, Sanitation is Dignity’. According to the Framework, basic levels of service would be ‘reviewed in future to consider increasing the basic level from 25 to 50 litres per person’. [21] As to what quantity of water would constitute sufficient water for the residents of Phiri the respondents relied on and the court below accepted the evidence of P H Gleick the author of an article entitled ‘Basic water requirements for human activities: Meeting basic needs’ published in Water International, 21 (1996) 83-92. According to the article the water requirements of a resident of Phiri per day are a minimum of (i) three litres by way of fluid replacement under average temperate climate conditions and 5 litres in tropical and subtropical conditions; (ii) 5 to 15 litres for adequate bathing; (iii) 10 litres for food preparation, including dishwashing; and (iv) 20 litres for waterborne sanitation. On this basis he recommended in the article that a minimum of 50 litres per person per day be provided taking the upper limit for drinking water and bathing. No reason for taking the upper limit in respect of bathing is advanced. In an affidavit filed in support of the respondents’ claim Gleick stated that 50 litres per person, made up in the same way, should be viewed as a minimum basic need. The 15 litres per day for bathing he justified on the basis that Phiri residents cannot rely on rivers for bathing. However, the statement in the article that 5 to 15 litres would be adequate for bathing is not qualified in this manner. In the result, reducing the 50 litres minimum by 2 litres in respect of drinking water Gleick’s evidence, at best for the respondents, is to the effect that a Phiri resident, who is not living in tropical or subtropical conditions, requires a minimum of 48 litres per day. [22] The appellants relied on an affidavit by I H Palmer in respect of the water requirements of the residents of Phiri. Palmer is a civil engineer and managing director of Palmer Development Group (Pty) Ltd a consultancy company offering consultancy services in respect of, among others, water supply and sanitation. According to him 3 litres drinking water per person per day is considered reasonable for a Highveld climate, 7 litres per person per day is consistently used in the literature as a minimum for personal washing but 14 litres per day is consistent with research carried out for a low income water use category, 9.2 litres per person is required by a household of four in respect of cooking, washing of dishes, washing of clothes and cleaning of the premises and 15 litres (1.5 toilet flushes) in respect of toilet flushing ie, taking the upper limit in respect of personal washing which is almost the same as the figure suggested by Gleick, a total of 41.2 litres per person per day is required. [23] The appellants objected to the court a quo’s reliance on the evidence of Gleick on the basis, amongst others, that in terms of the Plascon Evans rule, the matter having been brought on application, it should be decided on the appellants’ (respondents in the court below) evidence in so far as it differs from that of Gleick. The respondents on the other hand submitted that Palmer’s evidence could not be accepted because he applied the wrong standard. According to the submission Palmer’s standard was the quantity of water required for the public benefit and not the quantity of water required for dignified human existence. I do not think that this criticism of Palmer’s evidence is justified. It is clear from his evidence that he realised that what he had to determine was the quantity of water required for dignified human existence and that that was what he attempted to do. His quantification is specifically done under the heading ‘Quantifying the amount of water needed for health (and human dignity). [24] The only real difference between the evidence of Gleick and Palmer is that Palmer is of the opinion that 15 litres of water would suffice for waterborne sanitation whereas Gleick is of the opinion that 20 litres are required. There is no basis upon which the evidence of Gleick can on the papers be preferred to that of Palmer. The same applies to the minor differences in respect of personal washing and cooking and house cleaning. For these reasons I am of the view, on the evidence presented, that 42 litres water per person per day would constitute sufficient water in terms of s 27(1) of the Constitution. Does the City have to provide Phiri residents with 42 litres of water per person per day? [25] In terms of s 11 of the Water Services Act every water services authority has a duty to all consumers in its area of jurisdiction to progressively ensure efficient, affordable, economical and sustainable access to water services (s 11(1)). This duty is subject to, amongst others, the availability of resources; the need for an equitable allocation of resources to all consumers; the need to regulate access to water services in an equitable way; the duty of consumers to pay reasonable charges; and the right 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 (s 11(2)). In ensuring access to water services, a water services authority must take into account factors such as the need for regional efficiency; the need to achieve benefit of scale; and the requirements of equity (s 11(3)). It may not unreasonably refuse or fail to give access to water services to a consumer or potential consumer in its area of jurisdiction (s 11(4)). [26] Although s 27(1) provides that everyone has the right to sufficient water everyone does not have a claim for the immediate fulfilment of that right. As was said by Chaskalson CJ in Soobramoney v Minister of Health (KwaZulu-Natal) 1998 (1) SA 765 (CC) para 11: ‘What is apparent from these provisions is that the obligations imposed on the state by sections 26 and 27 in regard to access to housing, health care, food, water and social security are dependent upon the resources available for such purposes, and that the corresponding rights themselves are limited by reason of the lack of resources. Given this lack of resources and the significant demands on them that have already been referred to, an unqualified obligation to meet these needs would not presently be capable of being fulfilled.’ [27] A local authority such as the City is required only to act reasonably and to progressively fulfil its obligation to ensure that everyone has access to sufficient water.7 It is, however, not the City’s case that it is unable to provide the residents of Phiri with sufficient water and that it is not obliged to provide them with access to sufficient water, be it 42 litres 7 Minister of Health and Others v Treatment Action Campaign and Others (No 2) 2002 (5) SA 721 (CC) para 35. or a greater quantity. The City’s case is that it does not have to provide free water. Subject to the residents paying for such water they are not restricted to a certain quantity of water. Does the City have to provide such access or access to a lesser quantity of water free of charge? [28] In terms of s 27(1) everyone has the right to have access to sufficient water ie every Phiri resident has the right to have access to 42 litres per day. But many of the Phiri residents are poor and at least some of them cannot afford to pay for the water they need. Not being able to pay for the water, they have no access to that water. Compare in this regard 2002 General Comment 15 of the United Nations Committee on Economic, Social and Cultural Rights on the International Covenant on Economic, Social and Cultural Rights8 in which it is said, under the heading ‘Accessibility’, that water, and water facilities and services, must be affordable for all and must be accessible to all including the most vulnerable or marginalized sections of the population, in law and in fact. [29] The City did not contend that a person who cannot afford to pay for water has access to that water. It contended, as stated above, that the respondents could not rely on the Constitution but had to rely on the Water Services Act. In terms thereof, so it submitted, the City was obliged to take reasonable measures to secure access to basic water services as prescribed in the Water Regulations and not to provide such basic services free. I have already rejected the submission that the respondents could not base their claim on s 27(1) of the Constitution and I do not agree that, in terms of the Act, no water is to be provided free. Section 4(3)(c) of the Act expressly provides that ‘procedures for the 8 At para 12(c). limitation or discontinuation of water services must not result in a person being denied access to basic water services for non-payment, where that person proves, to the satisfaction of the relevant water services authority, that he or she is unable to pay for basic services’. It is also not the policy of the Department of Water Affairs and Forestry or of the City not to provide free water in any circumstances. [30] A contention that the state and the City are not obliged to provide water free to people who cannot afford to pay for that water in circumstances where it would be reasonable to expect the state or the City to do so is in my view untenable. Whether it would be reasonable will of course depend on its available resources and other relevant considerations. The state and the City realised that to be so. That much is clear from the free water policy adopted by the state and the City to which I now turn. [31] In February 2001 the Minister of Water Affairs and Forestry announced that government had resolved to ensure that poor households were given a basic supply of water free of charge. He went on to state that Cabinet had approved a policy to provide 6kl of safe water per household per month. In May 2001 the Chief Directorate: Water Services of the Department of Water Affairs and Forestry issued Version 1 of its ‘Free Basic Water’ Implementation Strategy Document in which it is said: ‘Again it needs to be recognised that local authorities should still have some discretion over this amount. In some areas they may choose to provide a greater amount, while in other areas only a smaller amount may be possible. For example, in some remote areas with scattered settlements, high water costs and water stressed areas it is often not feasible to provide 6000 litres of water. . . . In some areas where poor households have waterborne sanitation the total amount of water seen as a “basic supply” may need to be adjusted upwards (if financially feasible) to take into account water used for flushing.’ [32] Shortly after the promulgation of the water regulations on 28 June 2001 the City approved Johannesburg Water’s business plan in terms of which it was recommended that each household be provided with 6kl free water per month. The provision of 6kl free water per month may have been brought about by the regulations read with s 4(3)(c) of the Water Services Act which provide, as stated above, that procedures for the limitation or discontinuation of water services must not result in a person being denied access to basic water services for non-payment, where that person proves, to the satisfaction of the relevant water services authority, that he or she is unable to pay for basic water services. Initially the decision to provide 6kl free water per month was only implemented in areas other than deemed consumption areas such as Soweto. Later, when prepayment water meters had been installed in Phiri the first 6kl per month per stand was also provided free but for all water required in excess of 6kl prepayment had to be made. [33] The City from time to time revised its free water policy. In mid- 2005 it appointed consultants to undertake, amongst others, the development of a clear set of policy recommendations for how to restructure the City’s social package designed to assist the poor, the assessment of past experience of the City in implementing successive versions of the social package and the evaluation of a variety of options for targeting the social package so that it optimally benefits poor households. The work culminated in two documents one of which is titled ‘A Social Package Policy Base Document’ dated 8 June 2006 (‘the Base Document’). The Base Document recommends that 10kl free water per month per consumer unit be provided to properties valued at less than a certain amount and that no free water be provided to other properties. It adds: ‘6kl of water per month is the standard for free basic water per month. The amount of 6kl is based on the RDP standard of 25l per day, and a household size of 8 people. This amount is adequate for households with no reticulation . . .. Evidence suggests that the average consumer unit size in the poorer areas of Johannesburg is 7 to 8 people . . .. A consumer unit of 7 people using 50l of water per day will use 10.5kl of water per month. It is recommended that the free basic water allocation to poor households be increased to 10kl a month. This will go a long way to ensuring that larger households in Johannesburg have access to adequate water.’ [34] The recommendations contained in the Base Document have not been adopted by the City. At the time when the answering affidavits were deposed to, namely January 2007, it was envisaged that a new social package policy would be implemented effective July 2008 but that has not happened. The Mayoral Committee of the City however decided, as an interim measure: (i) That the free basic water allocation to targeted poor households be increased from 6kl to 10kl so as to ensure that up to 13 people on a stand would receive at least 25 litres of water per day. (ii) That the City’s existing Register of Indigents be used as a basis for targeting poor households ie that 10kl of free water be provided to accountholders on the Register of Indigents. (Section 23 of the Credit Control and Debt Collection By-Laws of the City makes provision for registration upon application of a person as an indigent person. As at January 2007 there were 118 549 accountholders registered on the register.) (iii) That an additional 4kl free water per annum be allowed to every accountholder with a prepayment meter to cover any emergency requiring additional water. (iv) That representations be considered for additional water in the case of people whose circumstances warrant an additional allocation of water. [35] At the time it was envisaged that the interim measures would be introduced as from March 2007. That did not happen but according to the appellants they were fully introduced by the time that the application for leave to appeal was heard. The respondents dispute that a representation mechanism has been established but in the light of the conclusion to which I have arrived there is no need to deal with this dispute. [36] The City maintains that it has no constitutional obligation to provide more than 25 litres free water per person per day and concedes that what it is trying to achieve by way of the interim measures is to get 25 litres per day to everyone who cannot afford to pay for water. That is with the exception of special cases such as where a person is suffering from AIDS, where a greater quantity of water may be provided. The City concedes that the method adopted to target those that cannot afford to pay for water is not perfect but contends that it is a practical approach and that the cost of a more targeted solution would be prohibitive. [37] Apart from submitting that the respondents had no right of access to more water than the basic water supply in terms of the Water Services Act read with the water regulations ie 6 kl per household or 25 litres per person, the City, quite correctly, submitted that its obligation extended only to its capacity within its available resources and that all that could be expected of it was to take reasonable steps within its available resources, aimed at a progressive fulfilment of everyone’s right to have access to sufficient water. It submitted that it did not have the resources to provide sufficient free water to those who cannot afford to pay for water. In this regard the City relied on the fact that the City as well as Johannesburg Water had emerged from periods of acute financial crises, the fact that the City operates under budgetary constraints and that it is not allowed to spend more than is brought in on its operating budget and the fact that there are many other demands on its resources. The other demands on the City’s resources include primary health care services, emergency services, public transportation, delivery of other essential services such as waste collection and electricity, development and maintenance of roads, storm water and other infrastructure, safety, security and housing. The City is required to balance different delivery and development expenditure priorities and in doing so budgeted to spend R17,8 billion of its projected operating revenue of R17,9 billion in the 2006/2007 financial year. The largest portion of the City’s capital budget, namely R726m (or 34% of the budget), is directed to Johannesburg Water infrastructure projects. In addition the City directs R570m to fund its Social Package which includes free water. The City contends that it is unreasonable in these circumstances to require the provision of more free water to those who cannot afford to pay for such water, more so in the light of the fact that there are some 105 000 households in informal settlements within the City who do not have access to even basic water services and also the fact that, under the City’s so-called ‘stepped’ or ‘rising block’ tariff, water usage by lower income and lower volume users is heavily subsidised by higher income and high volume users. [38] However, the free water policy of the City was adopted on the basis that it was in terms of the Water Services Act obliged to provide the residents within its area of jurisdiction access to 6kl water per household per month or 25 litres per person per day, that this obligation did not entail that the provision had to be free to those who could not afford to pay and that the obligation superseded the constitutional duty that it may have had before the Act was enacted. For the reasons stated the policy was materially influenced by an error of law and falls to be set aside on that basis. [39] The court below held that the City’s provision of 25 litres of free water per person per day was unreasonable and ordered the City alternatively Johannesburg Water to provide each of the respondents and other similarly placed residents of Phiri with a free basic water supply of 50 litres per person per day. However, the circumstances of the respondents are so dissimilar that it would be impossible to give effect to the order. For example, the fourth respondent lives in a house with two others. They are getting 6kl water per month free ie approximately 60 litres per person per day. Her complaint is against a prepayment meter that had not functioned properly. The fifth respondent lives in a house jointly owned by him and his brother together with nine tenants. No case is made out that they cannot afford to pay for water. His complaint is that the water ran out when one of the shacks on his property caught fire. [40] The respondents submitted that it would be appropriate in these circumstances to replace the order of the court below with an order that the City provide the quantity of water that is found to constitute sufficient water in terms of s 27(1) free of charge to every resident in Phiri. According to them, the City’s case on the papers is not that it cannot afford to do so and having failed to take action against non-payers the City had in fact, for many years provided an unlimited quantity of water free to the deemed consumption areas such as Phiri. They submitted further that to now, except in special cases, provide only 25 litres per person per day free is a retrogressive step. [41] The City may of course be able to divert funds budgeted for other expenses and so make funds available to provide sufficient water free to every citizen in Phiri. But it contends that it would be unreasonable to expect it to do so. More so because an order that the City should provide 42 litres of free water to the residents of Phiri who cannot afford to pay for such water will in effect oblige the City to provide that quantity of water free to other residents in the City whose circumstances are similar to those of the Phiri residents. [42] Having concluded that the City’s free water policy falls to be reviewed and set aside a revised free water policy which is reasonable has to be adopted. In formulating that policy regard should be had to the available resources and many competing interests. A reasonable balance will have to be struck between those interests. In addition regard should be had to logistical problems that will have to be overcome in order to target those in need of free water in a practical and cost effective way. Without even knowing what the costs implications to the City would be if the City were to provide 42 litres free water to all of its residents who cannot afford to pay for such water and without the expertise to deal with the logistical problems, it would be irresponsible of a court to usurp the function of the City and to itself revise the City’s free water policy. The court is in no position to do so whereas the City should have the knowledge and expertise required to do the exercise. As was said in Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Others 2004 (4) SA 490 (CC) at para 45: ‘The Court should take care not to usurp the functions of administrative agencies. Its task is to ensure that the decisions taken by administrative agencies fall within the bounds of reasonableness as required by the Constitution.’ [43] For these reasons the matter should be referred back to the City to formulate a revised water policy in the light of the finding that it is constitutionally obliged to grant each Phiri resident who cannot afford to pay for water access to 42 litres of water per day free in so far as it can reasonably be done having regard to its available resources and other relevant considerations. [44] The respondents submitted that the constitutional rights of the residents of Phiri have been violated and that, as a result, those that cannot afford to pay for water have been forced to live in squalor for years. Referring to s 38 of the Constitution which provides that a court may grant appropriate relief in respect of an infringement of a right in the Bill of Rights they submitted that only effective relief would constitute appropriate relief. In Fose v Minister of Safety and Security 1997 (3) SA 786 (CC) at para 69 Ackermann J said: ‘[A]n appropriate remedy must mean an effective remedy, for without effective remedies for breach, the values underlying and the right entrenched in the Constitution cannot properly be upheld or enhanced. Particularly in a country where so few have the means to enforce their rights through the courts, it is essential that on those occasions when the legal process does establish that an infringement of an entrenched right has occurred, it be effectively vindicated. The courts have a particular responsibility in this regard and are obliged to “forge new tools” and shape innovative remedies, if needs be, to achieve this goal.’ [45] Having regard to the fact that the recommendations contained in the Social Package Base Document dated 8 June 2006 are apparently still under consideration while there is a dispute about the extent to which the interim measures adopted by the City in the light of those recommendations have been implemented, the respondents submitted that it would take a long time for the City to adopt a revised policy in the light of the findings of this court. In the meantime the constitutional rights of the residents of Phiri will be violated and they will have to continue living in squalor. To refer the matter back to the City would in these circumstances not constitute effective relief. When asked to formulate an order having regard to the logistical problems that will be encountered in giving effect to an order that a certain quantity of water had to be provided to all Phiri residents who cannot afford to pay for water, the respondents could do no better than suggest that the City should be allowed to identify the people who qualify for free water by any reasonable means. That is to say, at least in respect of the identification of people entitled to free water, they conceded that the matter had to be referred back to the City for them to adopt an appropriate policy. However, they suggested that an interim order should be made that sufficient water must be provided free to all inhabitants of Phiri so as to serve as an incentive to the City to adopt a revised free water policy as soon as possible. [46] An interim order will indeed be an effective order pending the implementation of a revised water policy. There is however no reason why, in the interim, free water should be provided to inhabitants of Phiri who can afford to pay for the water. The question then is how to identify those than cannot do so. At least as an interim measure there would not seem to be any other practical way than to do what the City has done and that is to use the City’s Register of Indigents as a basis for targeting poor households. There are 118 549 accountholders registered as indigents and provision is made in section 23(1) of the City’s Credit Control and Debt Collection By-laws for applications to be registered as an indigent. An order that 42 litres of free water per person per day be provided to those households should not cause undue hardship to the City because in terms of the interim measures adopted by the City, 10kl of free water per month is already provided to these households. As a result households registered on the register of indigents and consisting of 8 or less people are being provided with 42 litres free water per person per day. Such an order would nevertheless ensure that those in dire need of water would not have to go without sufficient water pending the adoption and implementation of a revised free water policy by the City. It would put some pressure on the City to adopt and implement a revised policy as soon as possible. Prepayment meters [47] As stated above the City provided an unlimited unmetered quantity of water to the residents of Soweto including Phiri and charged them on the basis of a deemed consumption of 20kl per month. However, the infrastructure was in a lamentable condition. The piping system was chaotic and there were fundamental technical problems in that it was incompatible with pressure systems resulting in fractures and innumerable leaks in primary and secondary water reticulation. As a result of the deemed consumption system coupled with the chaotic water reticulation infrastructure the actual ‘consumption’, including wastage and leaks of water in Soweto, was in the order of 67kl per household per month. That was not the only problem faced by Johannesburg Water. The payment rate of municipal bills was less than 10%. Non-paying account holders amassed substantial arrears on their accounts. The City ascribes the non-payment for water services to a culture of non-payment which took root in the 1980’s under the apartheid system. In the result, as is stated by Karen Brits in the answering affidavit filed by the City, those consumers were in effect receiving unlimited free water. This situation was considered by the City to be unsustainable. However, the City does recognise that many of the residents are not able to pay for the water provided to them. [48] The problems with the deemed consumption system and the water reticulation infrastructure led to the appointment in mid-late June 2001 of a project team within Johannesburg Water to devise a strategy to reduce unaccounted for water in the deemed consumption areas. The project was called Operation Gcin’manzi (‘OGA’). A report was prepared by the OGA task team in terms of which they recommended that prepayment water meters be installed. The report added: ‘As prepayment represents a major paradigm shift from conventional metering and enforces payment for services electronically, prepayment should not be enforced on customers until such time as majority acceptance (critical mass) has been obtained, i.e. installation of a prepayment meter on any property should be by choice of the customer per predefined area.’ The report was adopted and it was decided that a pilot project should first be undertaken in a prototype area. Phiri was selected for the pilot project. Construction of the ‘bulk infrastructure’ phase of the project started on 11 August 2003 and the installation of prepayment meters in Phiri was completed in February 2005. [49] The court below, referring to s 21 of the Water Services Act (which provides that every water services authority such as the City must make bylaws which contain conditions for the provision of water services) and to the bylaws made by the City, held that the bylaws did not authorise the installation of prepayment meters in respect of the water services rendered to the respondents. [50] In terms of bylaw 3 of the City’s Water Services By-Laws the City may provide three levels of service. Service level 1 must consist of a water supply from communal water points and a ventilated improved pit latrine located on each site. Service level 2 must consist of an unmetered water connection to each stand with an individual yard standpipe; a water borne connection connected to either a municipal sewer or a shallow communal sewer system; and a pour flush toilet which must not be directly connected to the water installation. Service level 3 must consist of a metered full pressure water connection to each stand and a conventional water borne drainage installation connected to the City’s sewer. The level of service to be provided to a community may be established in accordance with the policy of the City and subject to the conditions determined by the City. The provision of service level 2 is subject to certain conditions and in terms of bylaw 3(3) the City, in the event of a consumer receiving service level 2 contravening certain of those conditions, may install a prepayment meter in the service pipe on the premises. [51] The City submitted that, in the case of Phiri, service level 3 is provided to consumers and that the use of prepayment meters is authorised because level 3 requires a ‘metered full pressure water connection’ without specifying the nature of the meter to be used. [52] In my view ‘metered’ in the specifications of a level 3 service was not intended to include ‘metered’ by way of a prepayment meter. If that was the intention one would have expected that to have been mentioned expressly in the light of the specific authorization to install prepayment meters in respect of the level 2 service by way of a penalty for having breached the conditions upon which that service is being provided. One would also have expected mention being made of the circumstances under which prepayment meters instead of a credit meters may be used. More so in the light of the statement in the OGA report that prepayment in respect of water represents ‘a major paradigm shift from conventional metering’. [53] There are several other indications that ‘metered’ was not intended to include metered by way of a prepayment meter. Section 7(1) requires every consumer on application for the provision of water services and before such water services are provided to deposit with the City a sum of money equal to the estimated fees for two average months’ water services as determined by the City. If ‘metered’ was intended to include prepayment it is unlikely that the same deposit would have been required from those applying for the provision of prepaid water services as from those applying for the provision of water services on credit. Not surprisingly we were informed at the hearing that no deposit is required in respect of prepaid water services. [54] In terms of s 4 of the Water Services Act water services must be provided in terms of conditions set by the water services provider and these conditions must provide for the circumstances under which water services may be limited or discontinued and for procedures for limiting or discontinuing water services. Furthermore, procedures for the limitation or discontinuation of water services must be fair and equitable, provide for reasonable notice of intention to limit or discontinue the services and for an opportunity to make representations. They may not result in a person being denied access to basic water services for non-payment, where that person proves to the satisfaction of the relevant water services authority that he or she is unable to pay for basic services. [55] The City submitted that the cut-off of the water supply by a prepayment meter does not amount to a discontinuation of water services because the water services are still available against payment. On that basis one can argue that water services are not discontinued to a consumer to whom water is provided on credit when the water supply is cut-off due to non-payment. The only difference being that in the case of prepayment meters the customer can himself restore the supply whereas in the case of credit meters the co-operation of the supplier is required. In my view a cut-off of water services by a prepayment meter when the credit runs out clearly amounts to a discontinuation of the services (see R v Director general of Water Services [1999] Env. L.R. 114 (QB)). [56] As stated above, in terms of s 4 of the Water Services Act water services must be provided in terms of conditions set by the water services provider which must accord with conditions for the provision of water services contained in bylaws. The City’s Water Services By-Laws provide for the circumstances under which water services may be discontinued and for procedures for doing so (s 9.C). Subsection 6 for example provides for the sending of a discontinuation notice in the event of non-payment which notice must contain information advising the consumer of steps which can be taken to have the service reconnected. Subsection 7 requires a final demand notice in the event of representations having been unsuccessful. Subsection 8 states under what circumstances water services to a consumer may be discontinued. These provisions provide for cut-offs for non-payment but do not authorise the cut-off by a prepayment meter. The City submitted that the prepayment meters are designed to give a warning signal before the credit is exhausted and that, since the hearing of the case in the court below, representations can be made to the City not to discontinue the service when the credit runs out. The respondents dispute that a special cases representation procedure has been implemented and contend that the prepayment meters in Phiri, in any event, give no warning that would allow sufficient time for representations or for purchasing further water credits so as to avoid the cut-off. However that may be, if ‘metered’ in bylaw 3 was intended to apply also to metered by way of prepayment meters, the bylaws would have stipulated, as in the case of credit meters, as to what warning had to be given before the water services could be discontinued and would have contained, as in the case of credit meters, comprehensive provisions as to the making of representations. [57] The City contends that bylaws 31, 8A and 31A(2) make it clear that prepayment meters may be used. These bylaws do refer to prepayment meters but the provisions which refer to prepayment meters are necessitated by the fact that, as stated above, the bylaws do authorise the installation of prepayment meters as a penalty for a breach of conditions imposed in respect of level 2 services. The City also submitted that the use of prepayment meters is envisaged in the Local Government: Municipal Systems Act 32 of 2000. In terms of s 95(i) thereof a municipality must within its financial and administrative capacity provide accessible pay points and other mechanisms for settling accounts or for making pre-payments. That the section envisages prepayments is clear but that is a far cry from authorising prepayment water meters. In addition the City referred to s 156(5) of the Constitution which provides that a municipality has the right to exercise any power concerning a matter reasonably necessary for, or incidental to, the effective performance of its functions. It submitted that the introduction of prepayment meters in the circumstances prevailing in Phiri, falls within the powers reasonably necessary for, and incidental to, those powers expressly articulated in the Constitution and national legislation. That may be so but the argument loses sight of the fact that the Council of the City in terms of the bylaws decided what water services would be provided to consumers. The question therefore remains whether the bylaws authorise the use of prepayment meters in the case of level 3 water services. [58] For the reasons mentioned I am of the view that the City’s Water Services By-Laws do not authorise the installation of prepayment water meters in respect of its level 3 water services and that such installation was unlawful. Once again the question arises as to what the appropriate remedy would be. The court below made the following order: ‘183.2 The forced installation of prepayment water meter system in Phiri Township by the City of Johannesburg alternatively Johannesburg Water (Pty) Ltd without the choice of all available water supply options, is declared unconstitutional and unlawful. 183.3 The choice given by the City of Johannesburg alternatively Johannesburg Water (Pty) Ltd to the applicants and other similarly placed residents of Phiri of either a prepayment water supply or supply through standpipes is declared unconstitutional and unlawful. 183.4 The prepayment water system used in Phiri Township is declared unconstitutional and unlawful. 183.5 The City of Johannesburg alternatively Johannesburg Water (Pty) Ltd is ordered to provide each applicant and other similarly placed residents of Phiri Township with – 183.5.1 . . . 183.5.2 the option of a metered supply installed at the cost of the City of Johannesburg.’ If the prepayment water system used in Phiri in respect of the level 3 service is unlawful as I have found it to be, it follows that the installation thereof and the choice given to the residents of Phiri (that was a choice between a level 3 and a level 2 water service) was unlawful. There was therefore no need for the orders in paragraphs 183.2 and 183.3. [59] Having been declared unlawful, the City was obliged to remove the prepayment meters. I do not think that was the appropriate remedy in the circumstances. According to the City the residents of Phiri are better off with prepayment meters and many of them prefer to have them; no other mechanism allows a guaranteed monthly delivery of free water; the introduction of prepayment meters involved massive capital expenditure (as of September 2007 a total of 82 591 had been installed); and the implementation of OGA has been effective, resulting in a dramatic reduction in the level of unaccounted for water, enabling the City to plan for the extension of basic water infrastructure to the estimated 105 000 households that do not have access to basic water. [60] In the circumstances an order having the effect that the prepayment meters that have already been installed should be removed is inappropriate. The City, by amending its bylaws, to at least some extent may alleviate the problems caused by the unauthorized installation of the prepayment meters. By doing so it may be able to retain the prepayment meters at least in respect of consumers who prefer to have them and possibly also in respect of those who cannot pay a deposit or who do not pay their accounts. For these reasons the appropriate order would in my view be to suspend the order of unlawfulness for a period of two years to enable the City to take such steps as it may be advised to take to legalise the use of prepayment water meters. [61] The appellants do not ask for a costs order against the respondents and have achieved a sufficient measure of success in this appeal not to be ordered to pay any of the respondents’ costs. [62] For these reasons the following order is made: The appeal is upheld and the order by the court below is replaced with the following order: ‘1 The decision of the first respondent and/or the second respondent to limit the free basic water supply to the residents of Phiri to 25 litres per person per day or 6 kl per household per month is reviewed and set aside. It is declared: (a) That 42 litres water per Phiri resident per day would constitute sufficient water in terms of s 27(1) of the Constitution. (b) That the first respondent is, to the extent that it is in terms of s 27(1) of the Constitution reasonable to do so, having regard to its available resources and other relevant considerations, obliged to provide 42 litres free water to each Phiri resident who cannot afford to pay for such water. The first and second respondents are ordered to reconsider and reformulate their free water policy in the light of the preceding paragraphs of this order. Pending the reformulation of their free water policy the first and second respondents are ordered to provide each accountholder in Phiri who is registered with the first respondent as an indigent with 42 litres of free water per day per member of his or her household. It is declared that the prepayment water meters used in Phiri Township in respect of water service level 3 consumers are unlawful. The order in paragraph 5 is suspended for a period of two years in order to enable the first respondent to legalise the use of prepayment meters in so far as it may be possible to do so. The respondents are jointly and severally ordered to pay the costs of the application, which costs are to include the costs of three counsel.’ ___________________ P E STREICHER JUDGE OF APPEAL APPEARANCES: For 1st appellant: G Marcus SC A Stein For 2nd appellant: K D Moroka SC K Pillay Instructed by: Bowman Gilfillan Inc, Sandton, Johannesburg (1st & 2nd) McIntyre & Van der Post, Bloemfontein The Minister of Water Affairs & Forestry, C/o The State Attorney, Johannesburg (3rd) State Attorney, Bloemfontein For respondent: W Trengove SC N Fourie Instructed by: Cals Litigation Unit, Braamfontein, Johannesburg Webbers, Bloemfontein Amicus curiae: R Moultrie M S Baloyi Amicus Curiae: Legal Resources Centre, Johannesburg 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: 25 March 2009 Status: Immediate THE CITY OF JOHANNESBURG & OTHERS v L MAZIBUKO & OTHERS 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 declared that the pre-payment water meters used in Phiri (a township in Soweto) in respect of water level 3 consumers is unlawful, because such use is not authorised by the by-laws, but suspended its order for a period of two years so as to enable the City of Johannesburg to legalise that use if it was able to do so. The SCA also declared that the City of Johannesburg is constitutionally obliged to provide 42 litres free water to each Phiri resident who cannot afford to pay for such water, to the extent that it is reasonable to do so, having regard to its available resources. It ordered the City and Johannesburg Water (Pty) Ltd to reconsider and reformulate their free water policy accordingly. Until such time as that policy is reformulated the City and Johannesburg Water were ordered to provide accountholders in Phiri who are registered as indigent with 42 litres free water per day per member of his or her household. The appeal that was brought by the City, Johannesburg Water and the Minister of Water Affairs and Forestry against declarations and orders made against them by the Johannesburg High Court was partially successful, to the extent that those declarations and orders were amended.

2984

non-electoral

2015

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable CASE NO: 1084/2013 In the matter between: MINISTER OF SAFETY AND SECURITY APPELLANT and MAPULA PAULINE MORUDU FIRST RESPONDENT Neutral Citation: Minister of Safety and Security v Morudu (1084/2013) [2015] ZASCA 91 (29 May 2015). Coram: Navsa ADP, Brand, Saldulker & Mbha JJA and Dambuza AJA Heard: 12 May 2015 Delivered: 29 May 2015 Summary: Vicarious liability – test to be applied in deviation cases – spirit, purport and objects of the Bill of Rights to be considered – acts of policeman not sufficiently close to give rise to vicarious liability. ______________________________________________________________________ ORDER ______________________________________________________________________ On appeal from: The North Gauteng High Court, Pretoria (Molefe AJ sitting as court of first instance). The following order is made: 1. The appeal is upheld and no order is made as to costs. 2. The order of the court below is set aside and substituted as follows: „The plaintiffs‟ claims are dismissed and no order is made as to costs.‟ ______________________________________________________________________ JUDGMENT ______________________________________________________________________ Navsa ADP (Brand, Saldulker & Mbha JJA and Dambuza AJA concurring): [1] The events of the morning of the day before Christmas 2001 will, no doubt, continue to haunt the respondents, Mrs Mapula Pauline Morudu and her four children for the rest of their lives. On that fateful day Inspector Frans Duba (Duba), then employed by the appellant, the Minister of Safety and Security, drove to their home situated at 22 Zone 5, Seshego Township in the Limpopo Province. Upon arrival he called out the name of Mr Mothibi Elias Morudu, the first respondent‟s husband and the father of the other respondents. Duba asked about the whereabouts of Mrs Duba, his wife. Shortly thereafter he pursued Mr Morudu, through the house and ultimately shot and killed him. [2] At the time of the events referred to in the preceding paragraph, Duba was attached to what is now known as the Polokwane Criminal Record and Crime Scene Management Unit of the South African Police. Simply put, he was a fingerprint investigator and a member of a police unit that attended crime scenes for investigative purposes when called upon to do so. Duba drove to the house where he shot Mr Morudu (the deceased) in an unmarked police vehicle that had been assigned to his unit. At that time, he and another colleague were on call to attend crime scenes, should the need arise. The firearm which he used in perpetrating the awful deed was his own and not of official issue. The question on appeal, as in the court below, is whether, following on the death of the deceased, the appellant should be held vicariously liable for the respondents‟ alleged loss of support sustained as a result of Duba‟s actions. The details that follow have been distilled from the evidence adduced in the Gauteng Division, Pretoria,1 following on an action instituted by the respondents in which they claimed damages flowing from the unlawful killing of the deceased. [3] During the morning of Monday, 24 December 2001, shortly after she awoke, the first respondent, in preparing to start her daily household chores, took the youngest of her three children to the room where her other children slept. She returned to her bedroom when suddenly, Duba appeared from behind the curtains, calling out her husband‟s name and asking about the whereabouts of his wife, Mrs Duba. The first respondent was terrified. Duba, who was armed, fired shots in her bedroom. The first respondent managed to escape from the room and whilst fleeing grabbed one of her children who was standing in a passage of the house. The first respondent exited through the kitchen door and sought refuge in a neighbouring house. From the neighbour‟s premises she saw a white unmarked motor vehicle, which Duba had used to travel to the scene. It was parked around a corner close to her house. When she returned to the house she found the deceased lying close to the kitchen door. He had been shot and killed by Duba. [4] The first respondent had encountered Duba for the first time on a prior occasion when he had visited her home on a Sunday afternoon and had sought the deceased. 1 Formerly known as the North Gauteng High Court, Pretoria (GNP) between 1 March 2009 and 23 August 2013 in terms of the Renaming of High Courts 2014 (3) SA 319 and has since been renamed the Gauteng Division of the High Court Pretoria. When she informed Duba that her husband had gone to church he, in turn, told her that the deceased had been intimate with his (Duba‟s) wife. This came as a surprise to the first respondent. When the deceased returned and was confronted by the first respondent about the accusation made by Duba, he had denied it. [5] At the time of the incident, the first respondent‟s youngest child was 18-months- old. Another was 10-years-old. A third was 12-years-old and the eldest was 22-years- old. They are the second to fifth respondents respectively. [6] The first respondent had discovered only after Duba‟s arrest that he was a policeman. On the two occasions that Duba had visited the deceased‟s house, he was dressed in civilian clothing. The first respondent was uncertain about whether the deceased had indeed, been intimately involved with Duba‟s wife. The first respondent did, however, recall finding a letter, which she identified in court, ostensibly written by Duba‟s wife and addressed to the deceased. The letter was suggestive of a romantic relationship between the deceased and Duba‟s wife. [7] Ms Tebogo Portia Khumalo (Tebogo), the fifth respondent, the eldest daughter of the deceased and the first respondent, testified about the events of the day in question. At that time she was a student enrolled at the Pretoria Technikon. She recalled her mother bringing her youngest sibling to her bedroom and then departing. Shortly thereafter she heard shots being fired. She went towards her mother‟s bedroom and saw sparks flying and heard her mother screaming. Tebogo was petrified. Her mother ran into the passage, picked up her brother and ran out of the house. Tebogo then made her way towards her own bedroom and saw the deceased running into a passage. Duba pursued the deceased and when he encountered Tebogo in the passage, asked her where her father was. She answered that she did not know and re- entered her bedroom where she hid between the window and the bed. The deceased went into the bathroom and locked himself in. She later heard a window being shattered and shots being fired. The deceased emerged from the bathroom and entered her bedroom. Duba tried to kick her bedroom door down. The deceased undertook to come out and pleaded with Duba not to shoot, informing him that there was a child in the room. The deceased proceeded to open the door. More shots were fired and Tebogo heard the deceased physically struggling with Duba. When she emerged from her bedroom, she saw the deceased lying close to the kitchen door. [8] Captain Viljoen (Viljoen), a member of the South African Police Service, presently employed at the Polokwane Criminal Record and Crime Scene Management Unit (the Unit), was stationed there during December 2001. At that time, the commanding officer was Lieutenant-Colonel Makafola (Makafola). Viljoen was the most senior officer after Makafola. The Unit was located on the corner of Schoeman and Bodenstein Street in Polokwane. Viljoen had worked with Duba. He testified that members of the Unit did not wear police uniforms. Members travelled to crime scenes in unmarked police vehicles assigned to them. The Toyota Hilux motor vehicle which Duba had used on the day in question was such a vehicle. It had a Northern Province registration reflected on the vehicle‟s number plate. Civilians would have no indication that it was a police vehicle. Viljoen had been the duty officer during the week when the deceased was shot and killed. With reference to official documents presented during the trial he confirmed that at the material time two members of the Unit were on standby to attend crime scenes within Polokwane and the surrounding areas of Mangkweng, Mogoadi and Malebogo. Duba was identified as one of the members on standby. The following part of Viljoen‟s evidence bears repeating: „Being on standby means that you are responsible for standby activities during and after hours. The standby activities means that a person is allocated a state phone and a state vehicle where the vehicle is garaged at a specific place predetermined. Then whenever the person is activated by means of the cell phone to do standby activities he will then place himself on duty in his pocket book, he will move to the place where the activity is, finalise the activity, come back to the place which was determined for the garaging of the vehicle, garage the vehicle and then place [himself] off duty again in his pocket book.‟ [9] It is common cause that Duba had not made an entry in his pocket book before he drove out to the deceased‟s house. Furthermore, he had not, during that time, been dispatched to do duty at any crime scene. The duty areas that Duba and his colleague were assigned to did not include Seshego, where the deceased resided. [10] The Toyota vehicle which Duba had used had been assigned to the Unit and was required to be garaged at the South African Police barracks in Seshego. This, according to Viljoen, meant that the vehicle had to remain at the barracks until Duba and the other member of the unit were „activated‟ to attend a crime scene. After completing their tasks they were obliged to return the vehicle to the barracks. At the material time, Duba and his standby colleague were residing at the barracks. This was a requirement when a member was on standby duty. [11] Duba and his colleague were required to attend a daily inspection at the Unit‟s offices in Seshego between 07h00 and 07h30. They would thereafter be required to attend at police stations where they might collect cases for investigation. The distance between the barracks and the Unit‟s Seshego office is 22 kilometres. [12] During the morning of 24 December 2001, just before 07h00, Viljoen received a phone call from Duba, who informed him that he had shot someone and that he was presently at the Seshego police station where the barracks are also situated. He required Viljoen to come and collect the police cellular telephone which had been assigned to him. Viljoen travelled to the police station and was told that Duba did not want to see him. At that time the Toyota motor vehicle was parked at the police station. According to Viljoen the distance from the Seshego police station to the deceased‟s house is approximately six kilometres. Upon checking the vehicle‟s official record, Viljoen found that Duba had used it to travel a distance of 431 kilometres, the purpose of which was not noted. Viljoen recorded that usage as being unauthorised. Under cross-examination he conceded that perhaps not all of it was unauthorised. He had arrived at the prior conclusion on the basis that the travelling had not been accounted for. He could not investigate that aspect any further because Duba was in custody. [13] Viljoen testified that Duba had never been issued with an official police firearm. Viljoen explained that being a fingerprint investigator, like Duba, was the first step towards becoming a fingerprint expert. As far as Viljoen was aware, no one had „activated‟ Duba to attend a crime scene during the morning of the events in question. [14] The last witness to testify was Warrant Officer Selepe (Selepe). He was the colleague on standby duty with Duba during the week in which the deceased was killed. The duty week stretched from Friday to Friday. Selepe was adamant that the Toyota vehicle assigned to them could only be used for official duties and not for private errands. Like Duba, Selepe slept at the barracks during the duty week. He confirmed that he and Duba had been issued with an official cellular telephone which was used to contact them in the event that they were to be placed at a crime scene. [15] Selepe described the events of the morning during which the deceased was killed. He was in his room preparing to go to work when Duba came to make arrangements for them to travel to the office together. They agreed at 06h00 that they would leave at 07h00. Approximately 45 minutes later Duba came to him holding a bleeding arm. He informed Selepe that he had shot someone and handed over the car keys and the official cellular telephone. Duba‟s private firearm was on his hip. He did not see Duba thereafter. Under cross-examination Selepe was adamant that the work of the Unit was confined to dealing with fingerprints and taking photographs of crime scenes. He insisted that the uniform branch were the principal crime fighters tasked with arresting criminals. Selepe resisted attempts by counsel on behalf of the appellant to have him concede that his primary duty as a member of the South African Police Service was to actively protect citizens. He repeatedly stated that the Unit‟s function was an investigative one. According to Selepe the unauthorised kilometres recorded by Viljoen were due to Duba and not to him. He testified that he had accounted for all of his official travels and that he had handed the keys to Duba, with an odometer reading 432 kilometres less than that ultimately recorded by Viljoen. According to Viljoen, given its closeness to the barracks, Duba could quite easily have travelled to the deceased‟s house using public transport. For completeness, it is necessary to record that Viljoen‟s testimony was ultimately unchallenged that an hourly allowance of R16.80 payable to officials of the South African Police Service who are on standby duty per 24 hour period is not paid to members of the Unit because of a statutory exemption. [16] The court below (Molefe AJ) had regard to two decisions of the Constitutional Court, namely, K v Minister of Safety and Security [2005] ZACC 8; 2005 (6) SA 419 (CC) and F v Minister of Safety and Security [2011] ZACC 37; 2012 (1) SA 536 (CC), and stated that in adjudicating whether there should be vicarious liability, the focus is now on whether the connection between the conduct of the policeman and his employment was sufficiently close to render the Minister liable. Molefe AJ said the following (in para 8): „The establishment of this connection is assessed by explicit recognition of the normative factors that point to vicarious liability.‟ (Footnote omitted.) Following the Constitutional Court‟s lead, she held that the fact that a member of the South African Police was on standby, rather than active duty, and the question of payment for that duty was not determinative. [17] The following paragraph of the judgment of the court below sets out the ratio for its conclusion that the appellant was vicariously liable (in para 20): „Although the Second Defendant‟s murdering of the deceased had nothing to do with his official duties, I am of the view that there is a sufficiently close link between his act for his own personal gratification and the business of the First Defendant. In casu, the Second Defendant was on standby duty as instructed by his employer, the First Defendant. He utilized the employer‟s vehicle to attend to his personal matters by going to murder the deceased, which action was an intentional deviation from his duties.‟ [18] The question in this appeal is whether that reasoning and the conclusion are correct. The judgment of the Constitutional Court in F is instructive. In para 40, Mogoeng J, as he then was, restated the general rule in relation to vicarious liability, namely, that an employer is vicariously liable for the wrongful acts or omissions of an employee committed within the course and scope of employment, or whilst the employee was engaged in any activity incidental to it. He went on to record that two tests apply in determining vicarious liability: The first applies where an employee commits a delict when going about the employer‟s business, this is referred to as the standard test. The second is where the wrongdoing occurs outside the course and scope of employment, those are referred to as „deviation cases‟. This matter, as in F, is a deviation case. [19] With reference to the decision of this Court in Feldman (Pty) Ltd v Mall 1945 AD 733, the Constitutional Court in F examined the rationale behind holding an employer liable where an employee had deviated from his or her duties. In para 45 of F the following appears: „Central to this passage is the proposition that employees are extensions of their employers. This is indeed so because, figuratively, employees are the hands through which employers do their work. Employers could therefore be held to have created a risk of harm to others should their employees prove to be inefficient or untrustworthy. That potential risk imposes an obligation on employers to ensure that the employees they hold out as the hands through which they would serve or do business with others, would not do the opposite of what they are instructed and obliged to do. Should they, however, act inconsistently with the employer‟s core business, some link between the employers‟ business and the delictual conduct must be established before the employers may be held vicariously liable.‟ [20] In Minister of Police v Rabie 1986 (1) 117 (A) this Court was dealing with a claim for damages arising from the wrongful arrest, detention and assault of an individual. The acts complained of had been perpetrated by an off-duty mechanic employed by the South African Police Service. At the time of the arrest, he had not been wearing a police uniform. He had, however, identified himself as a policeman, took the person he had arrested to the police station, filled-out a police docket and wrongfully charged his victim with attempted housebreaking and then detained him. At 134C-E the following appears: „It seems clear that an act done by a servant solely for his own interests and purposes, although occasioned by his employment, may fall outside the course or scope of his employment, and that in deciding whether an act by the servant does so fall, some reference is to be made to the servant‟s intention (cf Estate Van der Byl v Swanepoel 1927 AD 141 at 150). The test is in this regard subjective. On the other hand, if there is nevertheless a sufficiently close link between the servant‟s acts for his own interests and purposes and the business of his master, the master may yet be liable. This is an objective test. And it may be useful to add that according to the Salmond test . . . : “a master . . . is liable even for acts which he has not authorized provided that they are so connected with acts which he has authorized that they may rightly be regarded as modes – although improper modes – of doing them . . .”‟ [21] In K, decided before F, the Constitutional Court was intent on explaining that the application of this test is not merely fact based. In our constitutional order, the test for vicarious liability cannot be shorn of normative content and social policy. In K, the Constitutional Court appreciated that the application of the test on the aforesaid basis will be difficult and will involve courts drawing difficult lines. Utilising the test in Rabie as a basis, the Constitutional Court formulated the test for determining vicarious liability in deviation cases as follows (Para 32): „The approach makes it clear that there are two questions to be asked. The first is whether the wrongful acts were done solely for the purposes of the employee. This question requires a subjective consideration of the employee‟s state of mind and is a purely factual question. Even if it is answered in the affirmative, however, the employer may nevertheless be liable vicariously if the second question, an objective one, is answered affirmatively. That question is whether, even though the acts have been done solely for the purpose of the employee, there is nevertheless a sufficiently close link between the employee‟s acts for his own interests and the purposes and the business of the employer. This question does not raise purely factual questions, but mixed questions of fact and law. The questions of law it raises relate to what is “sufficiently close” to give rise to vicarious liability. It is in answering this question that a court should consider the need to give effect to the spirit, purport and objects of the Bill of Rights.‟ (Footnote omitted.) [22] At this stage, it is necessary to have regard to the facts in K and F and to reflect on how, applying the test referred to above, the Constitutional Court arrived at a conclusion in terms of which the State was there held vicariously liable. [23] In K, three policemen who had offered Ms K a lift home raped her in a police vehicle and then threw her out. They were on duty at the time. The then prevailing police standing orders prohibited the transport of unauthorised passengers in police vehicles. The Court considered it to be a matter of profound importance that Ms K‟s right to security of the person, dignity, privacy and substantive equality were implicated. As important, was the consideration that it was part of the work of the police to ensure the safety and security of all South Africans. The Constitutional Court was firm in its view that the vulnerability of women and children to sexual violence and South Africa‟s international obligations in that regard were factors that could not be ignored. [24] In para 44 of K the following appears: „The objective element of the test which relates to the connection between the deviant conduct and the employment, approached with the spirit, purport and objects of the Constitution in mind, is sufficiently flexible to incorporate not only constitutional norms, but other norms as well. It requires a court, when applying, it to articulate its reasoning for its conclusions as to whether there is a sufficient connection between the wrongful conduct and the employment or not. Thus developed, by the explicit recognition of the normative content of the objective stage of the test, its application should not offend the Bill of Rights or be at odds with our constitutional order.‟ [25] Importantly, the Constitutional Court went on to state (in para 45): „The common-law test for vicarious liability in deviation cases as developed in Rabie’s case and further developed earlier in this judgment needs to be applied to new sets of facts in each case in the light of the spirit, purport and objects of our Constitution. As courts determine whether employers are liable in each set of factual circumstances, the rule will be developed. The test is one which contains both a factual assessment (the question of the subjective intention of the perpetrators of the delict) as well as a consideration which raises a question of mixed fact and law, the objective question of whether the delict committed is “sufficiently connected to the business of the employer” to render the employer liable.‟ [26] In K, the Constitutional Court took into account that the rape perpetrated by the policemen was clearly a deviation from their duties but considered it significant that when they committed the rape, they were simultaneously omitting to perform their duties as policemen. That consideration was relevant in determining vicarious liability and will be particularly relevant in answering the second question posed in Rabie, namely, whether there was a sufficiently close connection between the delict and the purposes and business of the employer. [27] The Constitutional Court thought that in addition to the statutory and constitutional duty the police bore to prevent crime and protect members of the public, their victim in K had placed her trust in them when they had offered to assist her in getting her home safely. Paragraphs 52 and 53 of that judgment bear repeating: „Our Constitution mandates members of the police to protect members of the community and to prevent crime. It is an important mandate which should quite legitimately and reasonably result in the trust of the police by members of the community. Where such trust is established, the achievement of the tasks of the police will be facilitated. In determining whether the Minister is liable in these circumstances, courts must take account of the importance of the constitutional role entrusted to the police and the importance of nurturing the confidence and trust of the community in the police in order to ensure that their role is successfully performed. In this case, and viewed objectively, it was reasonable for the applicant to place her trust in the policemen who were in uniform and offered to assist her. Thirdly, the conduct of the policemen which caused harm constituted a simultaneous commission and omission. The commission lay in their brutal rape of the applicant. Their simultaneous omission lay in their failing while on duty to protect her from harm, something which they bore a general duty to do, and a special duty on the facts of this case. In my view, these three inter-related factors make it plain that viewed against the background of our Constitution, and, in particular, the constitutional rights of the applicant and the constitutional obligations of the respondent, the connection between the conduct of the policemen and their employment was sufficiently close to render the respondent liable.‟ [28] In F, the relevant facts were as follows. At the material time Ms F was 13-years- old and had been to a nightclub in George. During the early morning hours she was offered a lift home by a member of the South African Police Service, who was on standby duty and entitled to the prescribed hourly tariff for being on standby duty. It meant that he could, at any time, be called upon to attend to any crime-related incident. He had been assigned an unmarked police vehicle to enable him to discharge police functions when required to do so. The police vehicle had been equipped with a police radio which Ms F noticed. After the policemen had dropped off two other passengers, Ms F moved to the front passenger seat and noticed a pile of police dockets bearing his name and rank. When she asked about the dockets, he told her that he was a private detective which she understood to mean that he was a policeman. [29] Instead of driving Ms F home the policeman drove to a dark spot where he stopped the vehicle. Realising that she was in danger she alighted and fled and hid herself from him. That was not the end of her ordeal. The policeman waited for her to emerge and when he saw her hitchhiking stopped alongside her and once again offered to transport her to her home. Even though she was apprehensive, she relented and accepted the offer because she was desperate. A short while thereafter he turned off the road and despite her efforts to flee, overpowered and raped her. He subsequently took her home and threatened to kill her if she reported the incident. [30] The Constitutional Court considered the following parts of Ms F‟s testimony important (in para 13): „[S]he said that the fact that she believed Mr Van Wyk to be a policeman played a role in allaying her fears, because she “trusted” him (hom vertrou het) as, at that stage, she thought he was a detective. She chose to repose her trust in a person of whom she was suspicious because she understood him to be a policeman.‟ [31] The importance of members of the public considering it safe to repose their trust in members of the South African police was a particularly significant factor. In F, the Constitutional Court said the following (in para 66): „Whenever a vulnerable woman or girl-child places her trust in a policeman on standby duty, and that policeman abuses that trust by raping her, he would be personally liable for damages arising from the rape. Additionally, if his employment as a policeman secured the trust the vulnerable person placed in him, and if his employment facilitated the abuse of that trust, the State might be held vicariously liable for the delict. The victim‟s understanding of the situation would presumably be that she is being protected or assisted by a law enforcement agent, empowered and obliged by the law to do so. Whether he is on or off duty would, in all likelihood, be immaterial to her. From where she stands, he is a policeman, employed to protect her, and should therefore be trusted to uphold, and not to contravene, the law.‟ (Footnote omitted.) Right at the outset in F, the Constitutional Court pointed out that in adjudicating whether the Minister should be held vicariously liable, two related factors were critical: First is the State‟s constitutional obligation to respect, protect and promote the citizens‟ right to dignity and to freedom and security of the person, to which is related the establishment of a police service for the execution of the constitutional obligation to protect and secure the inhabitants of our country. Second is the trust the public was entitled to repose in the police. [32] In F, as was found by the Constitutional Court, Ms F with an apparent appreciation of the police service‟s obligation to protect her, looked for protection to the policeman who had offered her a lift. She did so as a result of his employment as a policeman, which placed him in a position of trust. It is this trust that is necessary for the fulfilment of the police service‟s mandate. It was this trust that he violated. The following three paragraphs in F are important (paras 79-81): „There are factual differences between this case and K. There the policemen were on duty and in uniform, driving a marked police vehicle. Ms K placed her trust in them for those clear reasons, which created the link between the policemen‟s employment and their subsequent misdeed. The factors here are admittedly more tenuous. It is so that Mr Van Wyk was not in uniform, that his police car was unmarked and he was not on duty but on standby. But his use of a police car facilitated the rape. That he was on standby is not an irrelevant consideration. His duty to protect the public while on standby was incipient. But it must be seen as cumulative to the rest of the factors that point to the necessary connection. He could be summoned at any time to exercise his powers as a police official to protect a member of the public. What is more, in that time and space he had the power to place himself on duty. I am therefore satisfied that a sufficiently close link existed to impose vicarious liability on Mr Van Wyk‟s employer. In conclusion: The police vehicle, which was issued to him precisely because he was on standby, enabled Mr Van Wyk to commit the rape. It enhanced his mobility and enabled him to give a lift to Ms F. Further, when Ms F re-entered the vehicle, she understood Mr Van Wyk to be a policeman. She made this deduction from the dockets and the police radio in the vehicle. In other words, he was identifiable as a policeman. And, in fact, he was a policeman. Pivotal is the normative component of the connection test. Beyond her subjective trust in Mr Van Wyk is the fact that any member of the public, and in particular one who requires assistance from the police, is entitled to turn to and to repose trust in a police official.‟ [33] Returning to the present case, it is necessary, at inception, to have regard to the subjective element. In the present case, Duba was convinced that he was a cuckold. He travelled to the home of the respondents to kill the person he considered to be his wife‟s lover. That was the motivation for the tragic act that followed. It was a radical deviation from the tasks incidental to his employment. [34] I now turn to the objective element, namely, whether there is a sufficiently close link between Duba‟s acts for his own interests and purposes and his duties as a policeman. None of the respondents identified Duba as a policeman. None reposed trust in him. The only police accoutrements were the radio and the vehicle. The radio was not visible or seen and the vehicle was unmarked. It is true that he used the police vehicle to travel to their home but he could just as easily have used public transport. The area to which he travelled was not an area to which he had been assigned. [35] I am not unmindful that Duba was a member of the South African Police Service and that the police are required to serve and protect. However, it is not entirely without significance that Duba was a member of a unit which interfaced with the public on a limited basis and mainly after a crime had already been perpetrated. The Unit was not a division of the police to which the public would intuitively turn for protection. I hasten to add that this does not mean that, in appropriate circumstances, members of the public would not be entitled to repose trust in it and to look to it for protection, the breach of which might lead to vicarious liability being imposed on the appellant. [36] This is a difficult case because of the terrible consequences for the respondents. The trauma they suffered in witnessing a husband and father being gunned-down in front of them is difficult to fully appreciate. Drawing a line that does not hold the Minister liable for the loss of their breadwinner is in itself difficult. In K, the Constitutional Court in exhorting courts to keep in mind the values of the Constitution when adjudicating cases such as the present stated that this does not mean that an employer will inevitably be saddled with damages simply because the consequences are horrendous.2 [37] Considering the interplay between the factors set out by the Constitutional Court, I am unable to conclude that there is a sufficiently close link between Duba‟s actions for his own interests and his duties as a policeman. [38] Counsel on behalf of the police accepted that, given the circumstances, it would not be appropriate to insist on a costs order against the respondents. It is necessary to record that before us, there was no appearance on behalf of the respondents, ostensibly because of a lack of funds. For the reasons aforesaid the following order is made: 1. The appeal is upheld and no order is made as to costs. 2. The order of the court below is set aside and substituted as follows: „The plaintiffs‟ claims are dismissed and no order is made as to costs.‟ ________________________ M S NAVSA ACTING DEPUTY PRESIDENT 2 In para 23. APPEARANCES: FOR APPELLANT: Adv. S Joubert Instructed by: The State Attorney, Pretoria The State Attorney, Bloemfontein FOR RESPONDENTS: Not presented Abide the decision of the Court

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 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. Minister of Safety and Security v Morudu (1084/2013) [2015] ZASCA 91 (29 May 2015) The Supreme Court of Appeal (SCA) today handed down judgment in a matter relating to the extent to which the Minister of Safety and Security can be held vicariously liable for acts of a policeman which were found not to be sufficiently close to his duties as a policeman in order to give rise to vicarious liability. Litigation in the case arose from events of Christmas-eve in 2001. On that day, Inspector Duba, an employee of the Minister of Safety and Security who was on stand-by duty on at the time, drove to the home of the respondents with an unmarked police vehicle, where upon his arrival, he called out the name of Mr Morudu (the first respondent’s husband and the father of the other respondents), whereafter he pursued Mr Morudu through the house and ultimately shot and killed him using his personal firearm, for the alleged extra-marital affair with Duba’s wife. At that time Duba had been employed as a fingerprint investigator at Polokwane Criminal Record and Crime Scene Management Unit of the South African Police Service. Mrs Morudu (the widow of Mr Morudu) instituted action in the North Gauteng High Court, Pretoria, for damages for the unlawful killing of the deceased. The question on appeal to the SCA, as in the court below, was whether, following on the death of Mr Morudu, the Minister should be held vicariously liable for the respondents’ alleged loss of support sustained as a result of Duba’s actions. The SCA found that it was necessary to have regard to the subjective element in the case ie whether there is a sufficiently close link between Duba’s acts for his own interests and purposes and his duties as a policeman, that Duba was convinced that he was a cuckold and that he travelled to the home of the Morudu to kill the person he considered to be his wife’s lover, which was the motivation for the tragic act that followed. The Court found that this was a radical deviation from the tasks incidental to Duba’s employment. In relation to the objective element, the SCA found that: (a) none of the Morudus identified Duba as a policeman and none of them reposed trust in him; (a) the only police accoutrements were the radio and the vehicle, and that the radio was not visible or seen while the vehicle was unmarked; (c) while it was true that Duba had used a police vehicle to travel to Morudu’s home, he could just as easily have used public transport; and (d) the area to which Duba travelled was not an area to which he had been assigned. The SCA further found that it was significant that Duba was a member of a unit of the police service which interfaced with the public on a limited basis after a crime had been perpetrated and that the unit was not a division of the police in which the public would intuitively turn for protection. The court a quo had found that although Duba’s act had nothing to do with his official duties, there was accordingly a sufficiently close link between Duba’s acts for personal reasons, and the business of the Minister of Safety and Security: Duba had utilized an official albeit unmarked vehicle to drive to Morudu’s house. The SCA stated this was a difficult case because of the terrible consequences for the Morudus. The trauma they suffered in witnessing a husband and father being gunned-down in front of them was difficult to fully appreciate. The Court said that drawing a line that does not hold the Minister liable for the loss of their breadwinner is in itself difficult. It held that keeping mind the values of the Constitution when adjudicating cases such as this, did not mean that an employer will inevitably be saddled with damages simply because the consequences are horrendous. The SCA accordingly upheld the appeal with no order as to costs and the judgment of the Gauteng Division of the High Court was set aside and replaced with an order dismissing Mrs Morudu’s actions with not order as to costs. --- ends ---

1839

non-electoral

2011

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case no: 436/10 GUIDO BRUNO BIDOLI Appellant and BARBARA LIESELOTTE BIDOLI First Respondent (in her capacity as executrix in the estate of the late Fabrizio Bidoli as well as in her personal capacity by virtue of her marriage in community of property) ROMOLO BIDOLI Second Respondent _____________________________________________________________ Neutral citation: Bidoli v Bidoli & another (436/10) [2011] ZASCA 82 (27 May 2011) BENCH: HARMS DP, NUGENT, PONNAN, MALAN and THERON JJA HEARD: 17 MAY 2011 DELIVERED: 27 MAY 2011 CORRECTED: SUMMARY: Arbitration - arbitrator – power of - to record a settlement reached by the parties in the form of an award on agreed terms. ____________________________________________________________ ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Western Cape High Court (Cape Town) (Fourie J sitting as court of first instance). The appeal is upheld with costs and the order of the court below is set aside to be replaced with: ‘1. The applicant’s application succeeds with costs. 2. The arbitrator’s award published on 10 December 2007 in the terms set out hereunder is made an order of court: a. The remaining property in Rome, at present registered in the name of the three brothers, shall remain as registered in equal undivided shares, to which the parties shall have equal rights and remain responsible, in equal shares, for the maintenance and upkeep, rates, taxes, levies and other charges as may be payable; b. The remaining money held in the aforesaid account with Banca Intesa, Rome, shall be divided in accordance with the written agreement signed by the parties and handed in as exhibit “C” and a true copy of which is annexed to this award. c. Should the amount at present held in the said account be any different to the amount reflected in exhibit “C”, then the funds shall be divided in accordance with the following ratio of division agreed upon, namely to Barbara (in her aforesaid capacities) 7.21%; to Romolo 17.50% and to Guido 75.29%. 3. The second respondent’s counter application is dismissed with costs.’ ___________________________________________________________________ JUDGMENT ___________________________________________________________________ PONNAN JA (HARMS DP, NUGENT, MALAN and THERON JJA concurring): [1] The brothers Bidoli – Guido, the appellant (the appellant); Fabrizio, the first respondent (who is deceased and whose estate is represented by its executrix, his wife, Barbara, who takes no part in these proceedings); and, Romolo, the second respondent (the respondent) - conducted business together with their father in various joint and separate enterprises since 1960. Much of that business as building contractors in South Africa, Namibia and Italy was conducted until 1995 under a partnership styled Bidoli and Sons. During that time as the respondent puts it they ‘operated as partners, as de facto partners in joint ventures, as joint shareholders in companies and on [their] own in partnerships with the parties’. [2] Although the partnerships and companies kept separate books of account, accurate records of how the profits from the various projects were distributed were not maintained. That was complicated by the fact that often the different partnerships and companies shared equipment or rendered services to each other. Since 1971 the brothers sent moneys to their late father in Italy which was used to finance the construction of a block of flats on the outskirts of Rome. The block of flats, which was completed in 1984, was registered by their father in the names of the three brothers. A vacant piece of land which adjoined the block of flats was acquired and also registered jointly in their names. During 2000 the block of flats was sold and the proceeds of that sale deposited into a bank account in Rome in the joint names of the brothers. [3] Disputes arose amongst the brothers and in 2007 they concluded an arbitration agreement with a view to having an arbitrator determine all of their disputes including those pertaining to their partnership and other claims and the funds standing to their credit in the joint bank account in Rome. The agreement provided that the arbitration would be governed by the Arbitration Act 42 of 1965 (the Act) and would deal with all of the parties’ disputes. Advocate Joe van der Westhuizen SC was appointed the arbitrator and attorney Hans Botma the case manager. The agreement further provided: ‘9 Hearing The hearing shall be commenced and conducted by the Arbitrator. All relevant evidence shall be admissible subject to the discretion of the Arbitrator. The general order of these proceedings shall be similar to that used in courts, subject to the discretion of the Arbitrator. Hearings, as well as all other activities, will be convened privately. The Arbitrator may proceed with the hearing if a party is absent without good cause. The Arbitrator shall administer an oath to each witness to tell the truth. Adjournments and/or postponements may be granted by the Arbitrator only for good cause as determined by the discretion of the Arbitrator. . . . Award The Arbitrator shall submit a written award based on law as applied to the facts. The Award of the Arbitrator shall be binding upon the parties without any right of appeal except for any review as may be allowed by or under The Arbitration Act (No. 42 of 1965) and each party shall abide by and comply with the Award in accordance with its terms. Each party undertakes to forthwith thereafter sign all such documents and authorities as may be necessary to give effect to the Award and failing which the Case Manager is hereby authorised and empowered to do so. Enforcement of the Award Judgment may be entered on the Award rendered in this case, and such judgment may be enforced pursuant to processes available under section 31 of the Arbitration Act (no.42 of 1965).’ [4] The parties filed their respective statements of claim during September 2007 and the hearing commenced before the arbitrator on 3 December 2007. On Friday 7 December 2007 the parties and certain family members met outside of the arbitration hearing to discuss a settlement of the matter. That led to the conclusion of a settlement agreement. However, on Monday 10 December 2007 the respondent contacted the case manager and expressed his dissatisfaction with the settlement agreement. As he put it: ‘At my request, the Arbitrator then re-opened the arbitration on Monday 10 December 2007. He requested me to state why I was dissatisfied with the settlement agreement and I tried to explain that I had signed the agreement by mistake. I felt that the calculation of the amount that I owed the Applicant was wrong. However, I was not able to articulate my grounds very well and the Arbitrator ruled that he would adopt the settlement agreement for his Award but that I could raise my objections before this Court when the Applicant or the First Respondent applied for the Arbitral Award to be confirmed and made an order of Court.’ [5] After a brief recitation of the history of the matter and the nature of the disputes between the parties, the arbitral award concluded: ‘12 There is no need to state the full extent of the various claims and counterclaims made by the parties. They have settled all of their disputes, whether by set-off of various claims against each other; compromise or abandonment; by agreeing that: a The remaining property in Rome, presently registered in the name of the three brothers, shall remain as registered in equal undivided shares, to which the parties shall have equal rights and remain responsible, in equal shares, for the maintenance and upkeep, rates, taxes, levies and other charges as may be payable; b The remaining money held in the aforesaid account with Banca Intesa, Rome, shall be divided in accordance with the written agreement signed by the parties and handed in as exhibit “C” and a true copy of which is annexed to this award. c Should the amount presently held in the said account be any different to the amount reflected in exhibit “C”, then the funds shall be divided in accordance with the following ratio of division agreed upon, namely to Barbara (in her aforesaid capacities) 7.21%; to Romolo 17.50% and to Guido 75.29%.’ [6] During February 2008 the appellant applied to the Western Cape High Court, Cape Town for the arbitral award to be made an order of court in terms of s 31 of the Act.1 He sought an order that: ‘1 the Arbitral Award published on 10 December 2007 be confirmed and made an order of court; and the Respondents’ be ordered to pay costs jointly and severally in the event that they oppose this application.’ The respondent opposed the application. He, moreover, counter applied for the following relief: ‘(a) That the Arbitral Award published on 10 December 2007 be set aside as void ab initio; 1Section 31 provides: ‘(1) An award may, on the application to a court of competent jurisdiction by any party to the reference after due notice to the other party or parties, be made an order of court. (2) The court to which application is so made, may, before making the award an order of court, correct in the award any clerical mistake or any patent error arising from any accidental slip or omission. (3) An award which has been made an order of court may be enforced in the same manner as any judgment or order to the same effect.’ (b) That the arbitration settlement agreement concluded by the parties on 7 December 2007 be declared void ab initio; (c) In the alternative to (a) and (b), that the Arbitral Award published on 10 December 2007 and the arbitration settlement agreement concluded by the parties on 7 December 2007 both be declared void ab initio and that the arbitration hearing of the parties’ disputes as set out in their Agreement to Arbitrate be re-opened; (d) That the Applicant and the First Respondent be restrained from taking any steps to have the Arbitral Award enforced, pending the Court’s determination of the matters before it;’ [7] Before Fourie J in the high court respondent’s counsel specifically abandoned his attack on the validity of the settlement agreement. He intimated rather that he was restricting himself in the counter application to the contention that the arbitral award fell to be set aside as being void ab initio. In support of that contention he advanced an argument not foreshadowed on the papers, namely that the parties having settled their dispute, the arbitrator’s mandate terminated automatically and in the result any such award as issued thereafter was void for want of jurisdiction. That argument found favour with Fourie J, who in dismissing the application and setting aside the arbitral award, held: ‘I accordingly agree with the submission of [counsel], that, upon the settlement of their disputes by the parties, the arbitrator’s appointment was at an end, for there was nothing left for him to decide in terms of the referral to arbitration. The publication of any award thereafter, which merely incorporates the settlement concluded by the parties, did not, in my opinion, bring about a valid award which may be made an order of court in terms of section 31 of the Arbitration Act. Nor can it, in terms of our common law, be regarded as a valid arbitral award.’2 The learned judge however thought it just and equitable to issue a special costs order that recognised that the ground upon which the counter application succeeded had not been advanced on the papers by the respondent. [8] What appeared to weigh with Fourie J was the fact that our Arbitration Act, unlike its English counterpart3 does not make provision for an arbitrator to record the settlement 2 Bidoli v Bidoli (2982/08) [2010] ZAWCHC 41 (15 March 2010) para 28. 3 Section 51 of the English Arbitration Act 1996 provides: ‘(1) If during arbitral proceedings the parties settle the dispute, the following provisions apply unless otherwise agreed by the parties. (2) The tribunal shall terminate the substantive proceedings and, if so requested by the parties and not objected to by the tribunal, shall record the settlement in the form of an agreed award. (3) An agreed award shall state that it is an award of the tribunal and shall have the same status and reached by the parties in the form of an agreed award. The English Act recognises that many cases settle before reaching the stage of a final award. And where the parties settle their dispute in the course of the arbitration it enables the arbitrator to issue an award recording the terms agreed. An agreed award thus has the status and effect of any other award on the merits. Accordingly, an agreed award is enforceable even though the arbitrator has not actually made a decision but simply recorded agreed terms.4 [9] I pause to record that as long ago as May 2001 the South African Law Commission recommended5 to the then Minister of Justice that we should have a new statute combining the best features of the United Nations Commission on International Trade Law (UNCITRAL) Model Law for domestic arbitrations and the English Act, while retaining certain provisions of our own Act that has worked well in practice. To that end a Draft Arbitration Bill was proposed. One of the suggested provisions of the proposed Bill reads: ‘Award on agreed terms 44. (1) If, during arbitral proceedings, the parties settle the dispute, the tribunal must terminate the proceedings and, if requested by the parties and not objected to by the tribunal, record the settlement in the form of an award on agreed terms. (2) An award on agreed terms must be made in accordance with the provisions of section 43(1) and (2) and must state that it is an award. (3) An award referred to in subsection (2) has the same status and effect as any other award on the merits of the dispute and may be made an order of court under section 53 if it is otherwise within the competence of the court to grant such order.’ Many developed and developing countries have adopted the UNCITRAL Model Law for domestic and international arbitrations.6 It is thus lamentable that a decade later the Law Commission’s recommendations are yet to be acted upon. [10] Fourie J took the view that ‘our common law relating to arbitration . . . does not provide for the making of an “agreed award” by an arbitrator’.7 Thus, according to him, in effect as any other award on the merits of the case. (4) The following provisions of this Part relating to awards (sections 52 to 58) apply to an agreed award. (5) Unless the parties have also settled the matter of the payment of the costs of the arbitration, the provisions of this Part relating to costs (sections 59 to 65) continue to apply.’ 4 David St John Sutton and Judith Gill Russell on Arbitration (2003) 22 ed para 6-023 and 6-025. 5 South African Law Commission Project 94 Report on Domestic Arbitration. 6 SA Law Commission Project 94 p 11; Marna Lourens 'The issue of "Arbitrability" in the context of International Commercial Arbitration (Part1)' 1999 SA Merc Law Journal at 363. the absence of a statutory provision there was ‘no legal basis upon which the arbitral award . . . can be regarded as a valid award for the purpose of having same made an order of court in terms of section 31 of the Arbitration Act’.8 In support of his view the learned judge called in aid Voet and the judgment of Didcott J in Parekh v Shah Jehan Cinemas (Pty) Ltd & others 1980 (1) SA 301 (D). [11] The relevant passage from Voet (4.8.11), upon which Fourie J relied, provides: ‘Paulus advises that it is no arbitration by which it has been arranged for the arbitrator to give a particular decision, nor by which it was agreed what the judgment ought to be. Since the whole force of a decision to be given by an arbitrator proceeds from the covenant of the parties, it would be absurd that he should proceed still to take in hand and settle matters which have already been so disposed of by compromise of the litigants that no greater stability can be added to them by the arbitrator’s judgment.’ Whilst that from Parekh v Shah Jehan Cinemas reads (at 304E-F): ‘Arbitration is a method for resolving disputes. That alone is its object, and its justification. A disputed claim is sent to arbitration so that the dispute which it involves may be determined. No purpose can be served, on the other hand, by arbitration on an undisputed claim. There is then nothing for the arbitrator to decide. He is not needed, for instance, for a judgment by consent or default.’ But that was not the full dictum. It continued: ‘All this is so obvious that it does not surprise one to find authority for the proposition that a dispute must exist before any question of arbitration can arise.’ That last sentence, which Fourie J lost from sight, qualified what had come before it in the quoted passage. [12] So qualified, Didcott J’s dictum, I daresay, lends no support for the more general conclusion reached by Fourie J that our common law does not provide for the making of an agreed award by an arbitrator. Nor, in my view, does Voet. The passage quoted from Voet is headed: ‘No arbitration where decision previously fixed’. Both authorities do no more than state a fairly trite principle, namely that a procedure cannot be an arbitration unless there is a formulated dispute in existence at the time when the arbitrator is appointed.9 The self evident absurdity that Voet alludes to is that of an arbitrator proceeding ‘still to take in hand and settle matters’ that have already been disposed of by 7 Para 25. 8 Para 27. 9 MJ M and SC Boyd The Law and Practice of Commercial Arbitration in England 2ed p 46-7. the parties. In a similar vein Huber (4.21.13) states: ‘When arbitrators have accepted the reference, they must take the case in hand and dispose of it. . . .’ Indeed in Telecall (Pty) Ltd v Logan 2000 (2) SA 782 (SCA) para 12, which approved the dictum of Didcott J, Plewman JA reiterated that general principle in these terms: ‘I conclude that before there can be a reference to arbitration a dispute, which is capable of proper formulation at the time when an arbitrator is to be appointed, must exist and there can not be an arbitration and therefore no appointment of an arbitrator can be made in the absence of such a dispute. It also follows that some care must be exercised in one’s use of the word “dispute”. If, for example, the word is used in a context which shows or indicates that what is intended is merely an expression of dissatisfaction not founded upon competing contentions no arbitration can be entered upon.’ [13] In my view none of the authorities cited by Fourie J bear directly on the question of whether an arbitrator may make an award by consent in the course of a hearing following upon a valid referral. They deal rather with whether an arbitrator can enter the arbitration if there is no dispute between the parties. Where there is no dispute between the parties the reference to arbitration would be a complete nullity from the outset. In this case however there was a dispute between the parties when the arbitration proceedings were entered upon. The arbitration had in fact commenced and run for several days before it was settled by the parties. The parties had agreed to the arbitrator issuing an award and it was furthermore envisaged that the award could be made an order of court in terms of s 31 of the Act. [14] The hallmark of arbitration, as reflected in s 3(1) of the Act, is that it is an adjudication flowing from the consent of the parties to the arbitration agreement, who define the powers of adjudication, and are equally free to modify or withdraw that power at any time by way of further agreement (Total Support Management (Pty) Ltd v Diversified Health Systems (SA) (Pty) Ltd 2002 (4) SA 661 (SCA) para 25). Here it was intended by the parties that the arbitration would come to an end with the issue by the arbitrator of the arbitral award. The settlement agreement was dependent upon the issue of that award. Both parties approached the arbitrator before then with the request that the arbitrator issue an award recording the terms agreed. I hesitate to say that it is not possible for parties to an arbitration to order their affairs in that way. For, as Russell on Arbitration10 points out with reference to s 51 of the English Arbitration Act: ‘[It] is an “opt out” provision so it applies unless the parties have agreed that it should not. The section apparently does not apply where the parties settle part only of their dispute. The tribunal may nevertheless at common law make an award dealing both with the issues requiring determination and recording the terms agreed in relation to issues settled by agreement between the parties.’ Moreover, various international tribunal rules11 also expressly provide for any settlement to be recorded in an award. Closer to home Rule 37 of the Rules for the Conduct of Arbitrations for the Association of Arbitrators - Southern Africa provides: ‘If, during the arbitration proceedings the parties settle the dispute or any part thereof, the Arbitrator may, if requested by the parties, record the settlement in the form of an Award on agreed terms.’ [15] It does not appear to me to follow that in the absence of a statutory provision the parties would not be free to elect to regulate their relationship with each other as occurred here. It must be added that almost immediately after the matter settled, the respondent, far from contending that the arbitrator’s mandate had terminated, made application to re- open the proceedings. That application was entertained by the arbitrator. Moreover the arbitrator issued an order for costs. That he could hardly have done had his mandate already been terminated, for, that was not encompassed by the settlement agreement, but rather the arbitration agreement which provided that ‘. . . the Arbitrator, in the exercise of a judicial discretion, at the conclusion of the Hearing, would be empowered to make an award of costs in favour of one or more of the parties’. The arbitrator here – as all arbitrators do - plainly derived his powers from his acceptance of a reference from the 10 D StJ Sutton and J Gill Russell on Arbitration (2003) 22 ed para 6-023. 11 The following are cited by way of example: Article 26 of the International Chamber of Commerce (ICC) Rules, which reads: ‘If the parties reach a settlement after the file has been transmitted to the Arbitral Tribunal in accordance with Article 13, the settlement shall be recorded in the form of an Award made by consent of the parties if so requested by the parties and if the tribunal agrees to do so.’ And Article 26.8 of the London Court of International Arbitration (LCIA) Rules, which reads: ‘In the event of a settlement of the parties’ dispute, the Arbitral Tribunal may render an award recording the settlement if the parties so request in writing (a “Consent Award”), provided always that such award contains an express statement that it is an award made by the parties’ consent. A Consent Award need not contain reasons. If the parties do not require a consent award, then on written confirmation by the parties to the LCIA Court that a settlement has been reached, the Arbitral Tribunal shall be discharged and the arbitration proceedings concluded, subject to payment by the parties of any outstanding costs of the arbitration under Article 28.’ parties to the arbitration agreement. He thereby undertook to hear their dispute and to make an award. Only when a final award was made did his authority as an arbitrator come to an end and with it his powers and duties in the reference. I thus hold that Fourie J was wrong in his conclusion that our common law does not permit for the making of an agreed award by an arbitrator. [16] That however is not the end of the matter, for, there were two further strings to Counsel’s bow. First, he contended that subparagraphs a, b and c of the arbitral award are merely declaratory of the parties’ rights. The short answer to that contention as Mustill and Boyd point out is that the law affords an arbitrator a considerable variety of forms from which to choose the type of award best suited to the circumstances of the case, including the power to make an award declaring what the rights of the parties are.12 According to Russell on Arbitration (6-117): ‘A tribunal now has power under section 48(3)13 of the [English] Arbitration Act 1996 to make declarations in an award as to any matter to be determined in the proceedings, provided the parties have not agreed otherwise in writing in the arbitration agreement. A declaration may be made with or without a decision on a related money claim and will be appropriate, for example, where the parties simply want a decision on their rights, or to determine the existence or meaning of a contract. The reference in the statute to “any matter to be determined” suggests that the power is to be construed widely.’ [17] Second, counsel contended that subparagraphs a, b and c of the arbitral award dealt with matters outside the court’s territorial jurisdiction and that, in principle, the high court ought not to make an order which can only be carried into effect outside of its area of jurisdiction. The respondent, who is an 81-year old Italian citizen, emigrated to this country in 1952. Both he and the appellant were (and had been for a considerable period of time) within the high court’s jurisdiction at the time the matter was heard. It is clearly within the respondent’s power to comply with the order of the high court. If needs be the order could be enforced against him by contempt of court proceedings. That remedy, which is 12 Mustill and Boyd at 371 and 390. 13 Section 48 headed ‘Remedies’ reads ‘(1) The parties are free to agree on the powers exercisable by the arbitral tribunal as regards remedies. (2) Unless otherwise agreed by the parties, the tribunal has the following powers. (3) The tribunal may make a declaration as to any matter to be determined in the proceedings. . . .’ available to the appellant in the event of respondent’s failure to comply with the order, renders it sufficiently effective. Moreover, to borrow from Streicher JA: ‘The order does not affect the sovereignty of a foreign court at all. It is an order in personam against respondents subject to the Court’s jurisdiction and not against third parties. It will, if not complied with, be enforced in South Africa against the respondents concerned.’ (Metlika Trading Ltd & others v Commissioner, South African Revenue Services 2005 (3) SA 1 (SCA) para 52.)14 [18] It follows that the appeal must succeed and it is accordingly upheld with costs and the order of the court below is set aside to be replaced with: ‘1. The applicant’s application succeeds with costs. 2. The arbitrator’s award published on 10 December 2007 in the terms set out hereunder is made an order of court: a. The remaining property in Rome, at present registered in the name of the three brothers, shall remain as registered in equal undivided shares, to which the parties shall have equal rights and remain responsible, in equal shares, for the maintenance and upkeep, rates, taxes, levies and other charges as may be payable; b. The remaining money held in the aforesaid account with Banca Intesa, Rome, shall be divided in accordance with the written agreement signed by the parties and handed in as exhibit “C” and a true copy of which is annexed to this award. c. Should the amount at present held in the said account be any different to the amount reflected in exhibit “C”, then the funds shall be divided in accordance with the following ratio of division agreed upon, namely to Barbara (in her aforesaid capacities) 7.21%; to Romolo 17.50% and to Guido 75.29%. 3. The second respondent’s counter application is dismissed with costs.’ _________________ V M PONNAN JUDGE OF APPEAL 14 See also Carmel Trading Co Ltd v Commissioner, South African Service and others 2008 (2) SA 433 (SCA). APPEARANCES: For Appellant: D R Mitchell SC Instructed by: Bisset Boehmke McBlain Cape Town Webbers Bloemfontein For First Respondent: Abides the decision of the Court Instructed by: For First Respondent: W G Burger SC A D Maher Instructed by: Tinkler Inc Claremont Rosendorff Reitz Barry 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 27 May 2011 STATUS Immediate Please note that the media summary is for the benefit of the media and does not form part of the judgment. Bidoli v Bidoli & another (436/10) [2011] ZASCA 82 (27 May 2011) Media Statement Today the Supreme Court of Appeal (SCA) upheld an appeal by Guido Bidoli against a judgment of the Western Cape High Court dismissing his application to have an arbitral award made an order of court in terms of s 31 of the Arbitration Act 42 of 1965. The brothers Bidoli conducted business with their father in various joint and separate enterprises, mainly as building contractors in South Africa, Namibia and Italy. Disputes arose amongst the brothers and in 2007 they concluded an arbitration agreement with the view to having their disputes determined by an arbitrator. An arbitrator was appointed and the hearing commenced on 3 December 2007. On 7 December 2007 the parties met outside the arbitration hearing, which meeting led to the conclusion of a settlement agreement. This settlement agreement, at the request of the parties, was incorporated into the arbitral award by the arbitrator. Guido Bidoli applied to have the arbitral award made an order of court in terms of s 31 of the Arbitration Act. Romolo opposed this application and counter applied for an order declaring the arbitral award void, on the basis that as the parties had settled their dispute, the arbitrator's mandate had terminated and as a result the arbitral award issued by the arbitrator after the settlement of the matter was void. The high court upheld this argument, finding that neither our Arbitration Act, unlike its English counterpart, nor our common law, makes provision for an arbitrator to record a settlement reached by the parties in the form of an agreed award. The SCA held that none of the authorities cited by the high court bear directly on the question of whether an arbitrator may make an award by consent. According to the SCA, all of the authorities relied upon by the high deal with the fairly trite principle that at the time of referral to arbitration, there must be a dispute between the parties. In this case there was a dispute when arbitration proceedings were entered upon. The SCA took the view that it does not seem to follow that in the absence of statutory provisions parties are not free to elect to regulate their relationship with each other in such a way as to allow for a settlement agreement to be made an arbitral award. The arbitrator derived his powers from his acceptance of a reference by the parties to the arbitration agreement. He undertook to hear their dispute and make an award. Accordingly, his authority as arbitrator only comes to an end when a final order has been made. The SCA noted that as long ago as May 2001, the South African Law Reform Commission had recommended to the then Minister of Justice that a new Arbitration Act be drafted, which should include, amongst others, provision for an award on agreed terms to bring South African arbitration law in line with modern trends worldwide. The SCA thought it lamentable that a decade later those recommendations were yet to be acted upon. The appeal was upheld with costs and the order of the court below set aside and replaced with an order making the arbitration award and order of court. --- ends ---

3883

non-electoral

2022

` THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 506/2021 In the matter between: N S APPELLANT and J N RESPONDENT Neutral citation: N S v J N (506/2021) [2022] ZASCA 122 (19 September 2022) Coram Ponnan, Hughes and Mabindla-Boqwana JJA and Musi and Goosen AJJA Heard: 18 August 2022 Delivered: 19 September 2022 Summary: Superior Courts Act 10 of 2013 - s 16(2)(a)(i) – parental rights and responsibilities in respect of a minor child - decision sought would have no practical effect or result. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Lamprecht AJ sitting as court of first instance): The appeal is dismissed with costs, including the costs of two counsel to be paid on the attorney and client scale. ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Musi AJA (Ponnan, Hughes and Mabindla-Boquana JJA and Goosen AJA concurring): [1] This is an appeal against a judgment of the Gauteng Division of the High Court, Pretoria (per Lamprecht AJ), arising from one of many applications brought by both parties against each other concerning their minor child. [2] The facts are the following. The appellant (the father) and the respondent (the mother) are the unmarried biological parents of their minor child, D, born on 4 May 2018. The respondent, is a South African citizen and permanent resident of Malaysia. Since his birth the child resided with the respondent in Malaysia. The parents had functional arrangements relating to parental rights and responsibilities in respect of the child until the imposition of lockdown travelling restrictions in March 2020 by both South Africa and Malaysia. Prior to this, by arrangement, the appellant visited the child in Malaysia and, on occasion, brought him to South Africa to visit his extended family and thereafter returned him to Malaysia. [3] During March 2020 the respondent, who was then in South Africa, travelled to Cape Town with the child. On 7 March 2020, a day before she returned to Malaysia, the appellant fetched the child with the understanding that he would return the child to Malaysia on 21 March 2020. As a result of the COVID-19 pandemic, Malaysia went into lockdown thus prohibiting commercial air travel from 18 March 2020. South Africa followed suit on 26 March 2020. When the air travel restrictions were lifted, the appellant refused to take the child back to Malaysia. This necessitated the respondent having to travel to South Africa to fetch the child. The once functional relationship between the parties, took a turn and quickly became acrimonious. [4] The appellant urgently approached the Pretoria High Court, on 17 September 2020, for an order in Part A that: (a) the Office of the Family Advocate as well as a social worker or psychologist conduct an urgent investigation into the best interests of the child with specific reference to parental rights and responsibilities; (b) the respondent be ordered not to remove the child from his care or South Africa pending the adjudication of Part B; (c) the primary residence of the child remain with him until the finalisation of Part B and (d) Part B be postponed sine die pending the investigation by the Office of the Family Advocate.1 In Part B he sought orders relating to him being awarded full parental rights and responsibilities in respect of the child and that the recommendations of the Family Advocate regarding primary residence and contact be implemented, alternatively that those be determined by the court. [5] The respondent launched a counter application for the return of the child and that it be declared that child’s primary residence is in Malaysia. The applications were heard by Mosopa J who issued an order on 1 October 2020, inter alia, ordering the appellant: (a) to restore the care and primary residence of the child to the respondent; (b) permitting the respondent to return to Malaysia with the child; (c) to handover to the respondent the child’s passport, birth certificate, immunisation card and baby book containing the child’s medical records and (d) to exercise contact with the child in Malaysia by way of telephone calls and Face Time. (e) Part B was postponed sine die and the parties were granted permission to supplement their papers if so advised. 1 On the same day the respondent launched an application in the High Court Johannesburg, inter alia, for the return of the child. On 22 September 2020, the application was dismissed with costs. The respondent immediately thereafter launched a counter application in the Pretoria High Court, on 22 September 2020. The counter application was struck from the roll and the costs reserved for determination in the main application. [6] On 3 October 2020, the appellant launched an urgent application that was heard by Sardiwalla J, who ordered the respondent not to remove the child from Gauteng Province or South Africa. Contrary to Mosopa J’s order, he ordered that the appellant retain the child’s passport and birth certificate. He postponed the case to 6 October 2020. In the meantime, on 2 October 2020, the appellant filed an application for leave to appeal against Mosopa J’s order. [7] On 7 October 2020, Sardiwalla J, issued the following order: ‘1. The status quo to remain the same that Judge Mosopa[’s] order remains in effect. 2. The matter to be investigated by the Family Advocate and that the issue of the minor child and all the issues around the minor child [and] the parental rights be discussed and that the applicant (father) and the respondent (mother) make themselves available to the Family Advocate and the Family Advocate is directed to deliver a report on its recommendation and findings based on the papers before Court. 3. Costs reserved.’ [8] On 12 October 2020, the respondent launched an urgent application wherein she sought an order that: (a) the orders of Sardiwalla J be declared pro non scripto and of no legal force and effect; (b) the appellant and others, including his attorneys, be held in contempt of court for refusing to hand over the child’s documents as per Mosopa J’s order; and (c) costs. The appellant launched a counter application wherein he sought an order: (a) for the confirmation of his paternity of the child; (b) declaring that he is the holder of full parental rights and responsibilities in respect of the child; (c) directing that pending the urgent investigation by the Family Advocate, as ordered by Sardiwalla J, he be allowed to exercise contact with the child including removing the child every alternative weekend when the child is in South Africa and removing the child for agreed upon periods when the child is in Malaysia; (d) directing the respondent to cooperate in rectifying the child’s birth certificate and passport to indicate that he is the child’s father; and (e) costs on a punitive scale. [9] The last application and counter application, the subject of the present appeal, came before Lamprecht AJ. On 11 November 2020, Lamprecht AJ issued an order: (a) declaring all the orders issued by Sardiwalla J to be of no force and effect and consequently set them aside; (b) declaring that the application for leave to appeal against Mosopa J’s order did not suspend that order (c) postponing the contempt of court application (d) dismissing the appellant’s application with regard to contact in South Africa and in Malaysia; (e) postponing the rest of the relief sought sine die to be determined with the relief sought in Part B of the main application; (f) directing the appellant to pay the costs of the 12 October 2020 application on the attorney and client scale; and (g) reserving the costs of the counter application for determination during the hearing of Part B of the main application. [10] Aggrieved by Lamprecht AJ’s order, the appellant unsuccessfully applied for leave to appeal. He thereafter successfully petitioned this Court for leave to appeal. [11] Before the hearing, the Registrar of this Court was requested by the Presiding Judge to transmit the following note to the parties: ‘1. Inasmuch as an appeal lies against the substantive order of a court and not its reasoning, on what basis is it contended that paragraphs 2 and 3 of the order of Lamprecht AJ are: (1.1) dispositive of any of the real issues between the parties; (1.2) determinative of the rights of the parties; (1.3) final in effect and thus appealable? 2. Given the various other applications between the parties that are yet to be finalised, will entertaining an appeal at this stage not give rise to a proliferation of piecemeal appeals and hearings? 3. Given the recordal in the judgment on the application for leave to appeal (record page 291 para 2) that ‘the respondent and the minor child have in the interim left the country and are now back in Malaysia’, has the appeal not been rendered academic? . . . .’ [12] The parties were invited to file supplementary heads of argument, if so advised. Both filed supplementary heads of argument. [13] Section 16(2)(a)(i) of the Superior Courts Act2 provides: 2 Superior Courts Act 10 of 2013. ‘When at the hearing of an appeal the issues are of such a nature that the decision sought will have no practical effect or result, the appeal may be dismissed on this ground alone.’ Courts are loath to grant orders that have no practical effect or result. It is self-evident that futile orders lead to a waste of overstretched judicial resources. In SA Metal Group v The International Trade Administration Commission3 this Court stated that: ‘After all, courts of appeal often have to deal with congested rolls. And, as Innes CJ observed in Geldenhuys & Neethling v Beuthin, they exist for the settlement of concrete controversies and actual infringements of rights, not to pronounce upon abstract questions, or to advise upon differing contentions, however important. . . .’4 [14] This principle was underscored by the Constitutional Court in Normandien Farms v South African Agency for Promotion of Petroleum Exportation and Exploitation5 when it pronounced that: ‘Mootness is when a matter “no longer presents an existing or live controversy”. The doctrine is based on the notion that judicial resources ought to be utilised efficiently and should not be dedicated to advisory opinions or abstract propositions of law, and that courts should avoid deciding matters that are “abstract, academic or hypothetical.’6 [15] Courts may, however, entertain appeals even when there are no live controversies to settle, if it is in the interests of justice to do so. The factors to consider in order to determine whether it is in the interests of justice to hear a moot matter, include: ‘(a) whether any order which it may make will have some practical effect either on the parties or on others; (b) the nature and extent of the practical effect that any possible order might have; (c) the importance of the issues; (d) the complexity of the issues; (e) the fullness or otherwise of the arguments advanced; and (f) resolving the disputes between different courts.’7 3 SA Metal Group (Proprietary) Limited v The International Trade Administration Commission (267/2016) [2017] ZASCA 14 (17 March 2017). 4 Ibid para 20. Footnote omitted. 5 Normandien Farms (Pty) Limited v South African Agency for Promotion of Petroleum Exportation and Exploitation SOC Limited and Others [2020] ZACC 5; 2020 (6) BCLR 748 (CC); 2020 (4) SA 409 (CC). 6 Ibid para 47. 7 Ibid para 50. [16] Lamprecht AJ’s order was issued on 11 November 2020. The application for leave to appeal was filed on 30 November 2020. During the hearing of the application for leave to appeal, Lamprecht AJ was informed that by that stage the respondent and the child had already returned to Malaysia. [17] We were informed from the Bar, in this Court, that the respondent and the child were currently in Singapore, where they now reside together with the respondent’s husband and another child born of that marriage. The appellant, however, contended that notwithstanding their absence the appeal ought to be determined because Part B was still pending. He argued that it would be impossible to enrol Part B without the Family Advocate’s report relating to parental rights, responsibilities, primary residency, contact and paternity. [18] The appellant was constrained to concede that Part B can be re-enrolled at any time. He also conceded that the fact that he can still apply for an order that the Family Advocate investigate the matter and report thereon was and still is an option. Additionally, he conceded that he could have sought an order for a referral of the matter to the Office of the Family Advocate via a case management Judge, in terms of the practice in the Gauteng Division of the High Court. What counsel for the appellant had some difficulty with, however, is how the Family Advocate could be expected to investigate and report to the Court whilst the respondent and minor child are outside the borders of this country. This clearly demonstrates the futility of this exercise. [19] Thus, even if the appeal were to succeed and Sardiwalla J’s order that the respondent should not leave Gauteng or South Africa with the child revived, it will have no practical effect because they have left already. The outcome of this appeal will also not have any effect on the relief that was postponed for determination together with Part B of the main application. The appellant correctly did not submit that, notwithstanding its mootness, it would otherwise be in the interests of justice to determine the appeal. It follows that the appeal ought to be dismissed in terms of s 16(2)(a)(i) of the Superior Courts Act. [20] Turning to costs: Lamprecht AJ made a punitive costs order against the appellant because he was of the view that the appellant wilfully disobeyed Mosopa J’s order and abused the court process. There was sufficient time after receipt of the note from the Presiding Judge for reflection and reconsideration. Undeterred, the appellant persisted with the appeal. Aside from this appeal, the appellant launched multiple applications, putting the respondent to considerable expense. The respondent accordingly sought punitive costs. The appellant implored us not to make a punitive costs order because he endeavoured to do what is in the best interests of the child. The litigation he embarked upon indicates that he lost sight of the best interest of the child and focused on his own interest. [21] In re: Alluvial Creek Ltd8 it was said that: ‘. . .There are people who enter into litigation with the most upright of purpose and a most firm belief in the justice of their cause, and yet [t]hose proceedings may be regarded as vexatious when they put the other side to unnecessary trouble and expense which the other side ought not to bear. . .’9 These proceedings were vexatious in the sense set out above and must attract a punitive costs order. [22] I accordingly make the following order: The appeal is dismissed with costs, including the costs of two counsel to be paid on the attorney and client scale. ______________________ C MUSI Acting Judge of Appeal 8 In re: Alluvial Creek Ltd 1929 CPD 532. 9 Ibid at 535. APPEARANCES: For Appellant: D B Du Preez SC (with him E de Lange) Instructed by: Muthray & Associates Inc., Pretoria Symington De Kok Attorneys, Bloemfontein For Respondent: ML Haskins SC (with L Segal SC) Instructed by: Tanya Brenner Attorneys, 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: 19 September 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 N S v J N (506/2021) [2022] ZASCA 122 (19 September 2022) Today the Supreme Court of Appeal (SCA) handed down judgment dismissing, with costs on the attorney and client scale including the costs of two counsel, an appeal against the decision of the Gauteng Division of the High Court of South Africa, Pretoria (the high court). The appellant (the father) and the respondent (the mother) were the unmarried biological parents of a minor child, D, born on 4 May 2018. The respondent, was a South African citizen and permanent resident of Malaysia. She resided in Malaysia with the child. The parents had functional arrangements relating to parental rights and responsibilities in respect of the child. By arrangement, the appellant visited the child in Malaysia and, on occasion, brought him to South Africa to visit his extended family and took him back to Malaysia. During March 2020 the respondent went to Cape Town with the child. On 7 March 2020, a day before she flew back to Malaysia, the appellant fetched the child with the understanding that he would take him back to Malaysia on 21 March 2020. As a result of the COVID- 19 pandemic, Malaysia went into lockdown thus prohibiting commercial air travel from on 18 March 2020. South Africa followed suit on 26 March 2020. When the air travel restrictions were lifted, the appellant refused to take the child back to Malaysia which necessitated the respondent to travel to South Africa to fetch the child. The father refused to return the child and approached the high court for an order that the Office of the Family Advocate as well as a social worker conduct an investigation into the best interests of the child and that the primary residence of the child should remain with him. His application was dismissed and the primary residence of the child restored to the mother. The father approached the high court and obtained an order that the mother should not remove the child from Gauteng Province, or South Africa. It also ordered that he should retain the child’s passport and birth certificate. The orders pertaining to the child’s passport and birth certificate as well as the order prohibiting her from leaving Gauteng or South Africa were subsequently set aside. The father applied for leave to appeal which was refused. During the hearing of the application for leave to appeal the court was informed that the mother and child left South Africa. The father was granted leave to appeal to the SCA. This Court found that the appeal would have no practical effect because the mother and child already left the country and the family advocate would not be able to investigate the matter as they were in Singapore. Because the appeal was vexatious the SCA dismissed it in terms of Section 16(2)(a)(i) of the Superior Courts Act 10 of 2013, with a punitive cost order. ~~~~ends~~~~

2449

non-electoral

2013

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 433/2012 Reportable In the matter between: CITY OF TSHWANE APPELLANT and MARIUS BLOM & GC GERMISHUIZEN INCORPORATED FIRST RESPONDENT KAWARI BELEGGINGS CC SECOND RESPONDENT Neutral citation: City of Tshwane v Blom 433/2012 [433/12] 88 ZASCA (31 May 2013) Coram: MTHIYANE DP, LEWIS, SHONGWE, PETSE JJA et ZONDI AJA Heard: 22 MAY 2013 Delivered: Summary: Local authority – interpretation of sections 8(1) and 8 (2) of the Local Government: Municipal Property Rates Act 6 of 2004 ─ criteria according to which different categories are determined set out in s 8(2) ─list of categories of rateable property not intended to be exhaustive ─ competent for municipality to add a category of 'non-permitted use' to the list. ____________________________________________________________________________ ORDER On appeal from: North Gauteng High Court, Pretoria (Hiemstra AJ sitting as court of first instance): The appeal is upheld with costs including the costs of two counsel. The order of the court a quo is set aside and replaced with the following: 'The application is dismissed with costs.' ______________________________________________________________ JUDGMENT ZONDI AJA (Mthiyane DP, Lewis, Shongwe et Petse JJA concurring) Introduction [1] The central issue in this matter involves the interpretation and application of sub-sections 8(1) and (2) of the Local Government: Municipal Property Rates Act 6 of 2004 (the Rates Act) and in particular whether it confers authority on the appellant to add to the list of categories of rateable property by creating in its rates policy a category called 'non-permitted use' or 'illegal use', and to levy a rate accordingly. This issue arises because the appellant has categorised the second respondent's property as 'non permitted use' and levied a higher rate on the property than it levied on properties used for the purpose permitted. [2] When the respondents received an invoice for some R171 000 for rates they brought an application in the court a quo seeking the following relief: '1. A declaratory order that Act 6 of /2004, does not provide for a rating category of "illegal use" but only the categories provided for in Section 8 of the said Act; 2. A declaratory order that all levies levied by the Respondent against Portion 1 of Erf 91, Brooklyn, which is higher than the levies levied in respect of all other residential properties of a similar zoning, in Brooklyn, should be repaid to the Applicant; 3. That the Applicant be given leave to re-enrol this matter on the same papers, supplemented by an affidavit, for an order for the debating of the account, should the Applicant not be satisfied that the correct adjustment has been made by the Respondent pursuant to the above; 4. Costs.' [3] In the court a quo the respondents contended that the appellant does not have authority in terms of s 8 of the Rates Act to add to the list of categories of rateable property by creating a category called 'illegal use' or 'non-permitted use', and argued that on a proper interpretation of s 8 it was clear that the list of categories of rateable property is exhaustive. The court a quo rejected the respondents' contention and held that it was competent for the appellant to add to the list of categories of rateable properties. However, it found that the addition of 'illegal use' or 'non-permitted use' category was not competent and proceeded to make an order in the following terms: '1. It is hereby declared that it is not permissible for the respondent to include a category of "illegal use" or "non-permitted use" for the rating of properties in its Rating Policy; 2. The respondent is ordered to rate Portion 1 of Erf 91, Brooklyn, for as long as it is used for business purposes according to the rates applicable to business properties in Brooklyn. 3. The respondent is ordered to adjust the levies imposed on Portion 1 of Erf 91, Brooklyn, to that applicable to properties for business use from the time that it imposed a rate for "illegal use" or "non-permitted use" to the date of adjustment. 4. The applicant is granted leave to re-enrol this matter on the same papers, supplemented by an affidavit, for an order for the debating of the account, should the applicant not be satisfied with the adjustment of the rates as ordered. 5. The respondent is ordered to pay the costs of this application.' [4] The court a quo's order was predicated on its finding that the appellant's power to create additional categories of rateable property is not unfettered. In its view additional categories have to be 'of a similar nature or of the same genus as those listed' in s 8(2). It reasoned that since all the categories listed in s 8(2) are lawful uses of the properties, the appellant may add only lawful uses. It held that the appellant may not add a category 'illegal use' to the list as to do so would make illegal use lawful. The court a quo concluded by holding that to levy 'a higher rate than the normal rate' on a property because it is used for non- permitted purposes amounts to an imposition of a penalty without due process. The present appeal, with the leave of the court a quo, is directed against the judgment and the findings underlying the order of the court a quo. Background [5] The facts in light of which the issues in this matter are to be determined are largely common cause. The second respondent is the registered owner of Portion 1 of erf 91, Brooklyn, also known as 835 Duncan Street, Brooklyn, Pretoria (the property) which is the subject of these proceedings. The property is situated within the area of jurisdiction of the appellant and is zoned for residential purposes in terms of the appellant's applicable Town Planning Scheme. The first respondent, a firm of attorneys, occupied the property in terms of a lease with the second respondent and used the property for business purposes, namely as attorneys' offices. In terms of the lease, the first respondent was responsible for the payment of rates and taxes, which is why it took issue with the appellant. The first respondent's use of the property, which is zoned for use as 'residential', was contrary to the provisions of the appellant's Town Planning Scheme. By allowing the first respondent to use the property as it did, the second respondent was committing an offence. [6] Section 2 of the Rates Act empowers a metropolitan or local municipality to levy rates on properties within its area. In terms of s 8(1) it may levy different rates for different categories of rateable property according to specified criteria. Section 8(2) sets out the different categories of rateable property that may be determined in terms of s 8(1). Acting in terms of s 3 of the Act, the appellant adopted rates policies from time to time and the relevant rates policy is the one that came into operation on 1 July 2008. In this rates policy the appellant introduced a 'non-permitted use' category of rateable property for the purposes of creating differential rates and categorised the property as 'non-permitted use'. The effect of this categorisation was that not only did the second respondent lose the benefit of a rebate, but also had to pay a higher rate. Legal Framework [7] Section 156(2) of the Constitution empowers municipalities to make and administer by-laws in order to give effect to the functional areas in which they are authorised to govern. Section 156(5) affords a municipality 'incidental powers', that is to say, it has the right to exercise any power concerning a matter reasonably necessary for, or incidental to the effective performance of its functions. In particular s 229(1)(a) of the Constitution expressly authorises a municipality to impose 'rates on property and surcharges on fees for services provided by or on behalf of the municipality'. But the exercise of this power is subject to the provisions of the Constitution, the Rates Act and the rates policy which the municipality may have adopted. [8] Section 3 of the Rates Act, which deals with the adoption and contents of rates policies, enjoins the council of a municipality to adopt a policy for the levying of rates on rateable property which is consistent with the Act. Subsection (3) provides that the rates policy must inter alia determine the criteria to be applied by the municipality if it levies different rates for different categories of properties, and determine or provide for the criteria for the determination of categories of properties for the purpose of levying rates and categories of owners of properties or categories of properties. [9] Section 8(1) of the Rates Act provides for the determination of differential rates in respect of different categories of rateable property listed in s 8(2). To the extent here relevant those subsections provide: '8 (1) Subject to section 19, a municipality may in terms of the criteria set out in its rates policy levy different rates for different categories of rateable property, which may include categories determined according to the – (a) use of the property; (b) permitted use of the property; or (c) geographical area in which the property is situated. (2) Categories of rateable property that may be determined in terms of subsection (1) include the following: (a) Residential properties; (b) industrial properties; (c) business and commercial properties;' . . ." [10] The rates policy which finds application in this matter is the one adopted by the appellant on 1 July 2008. Clause 3.1 of the appellant's property rates policy provides as follows: '3.1 Different Categories and Rates of Properties  Categories of rateable property for purposes of levying differential rates are determined as follows: o Residential properties o Business and commercial properties o Industrial properties o Municipal property [rateable] o Municipal property [not rateable] o State-owned properties o Public Service Infrastructure o Agricultural o Agricultural vacant o Non-permitted use (my emphasis) o Multiple use properties o Vacant land o State Trust Land' [11] The appellant's rates policy makes it clear that the criteria for levying different rates for different categories of rateable property are determined according to the actual use of the property, permitted use of the property or the geographical area in which the relevant property is located. And as required by s 6 of the Rates Act, the appellant adopted the Property Rates By-Law to give effect to the implementation of its rates policy. Interpretation of section 8 of the Act [12] Counsel for the appellant submitted in the heads of argument that s 8, properly interpreted, affords the appellant a discretion to determine categories of rateable property. Counsel argued that although s 8(1) refers to certain factors that may be considered in determining categories of rateable property, it is not a numerus clausus, and does not restrict or limit the appellant's discretion in any manner. The use of the word 'include' in conjunction with 'may' in the section, he argued, signifies that the legislature intended to enlarge or extend the specific guidelines and that the categories of properties referred to in s 8(2) are merely guidelines. Counsel pointed out that even if only the factors referred to in s 8(1) must be considered, it is clear from the context in which the word 'include' is used that non-permitted use was intended to be included in such categories. In advancing these arguments reliance was placed on the following dictum in De Reuck v Director of Public Prosecutions, Witwatersrand Local Division, & others:1 '[18] The correct sense of "includes" in a statute must be ascertained from the context in which it is used. Debele [1956 (4) SA 570 (A)] provides useful guidelines for this determination. If the primary meaning of the term is well known and not in need of definition and the items in the list introduced by "includes" go beyond that primary meaning, the purpose of that list is then usually taken to be to add to the primary meaning so that "includes" is non-exhaustive. If, as in this case, the primary meaning already encompasses all the items in the list, then the purpose of the list is to make the definition 1 De Reuck v Director of Public Prosecutions, Witwatersrand Local Division, & others 2004 (1) SA 406 (CC) para 18. more precise. In such a case "includes" is used exhaustively. Between these two situations there is a third, where the drafters have for convenience grouped together several things in the definition of one term, whose primary meaning – if it is a word in ordinary, non- legal usage – fits some of them better than others. Such a list may also be intended as exhaustive, if only to avoid what was referred to in Debele as "'n moeras van onsekerheid" (a quagmire of uncertainty) in the application of the term.' [13] Counsel for the respondents correctly pointed out in his heads of argument that s 8(1) authorises the municipality, in terms of the criteria set out in its rates policy, to levy different rates for different categories of rateable property listed in s 8(2), and which authority has to be exercised in accordance with the provisions of s 229 of the Constitution and the Rates Act. Counsel argued that s 8(1) does not, however, empower the municipality to create further categories not listed in s 8(2) as the list of different categories of rateable property is exhaustive. The basis for his argument is that the terms 'property', 'category' and 'rates' contained in the Rates Act are not infinitely elastic terms but are specifically limited by the Act's definition. And using the 'golden rule' of interpretation,2 which, counsel submitted, finds application in the construction of the provision of s 8 in the instant matter, he argued that the Act's definitions make it clear that the municipality's power to levy different rates for different categories of 2 25 LAWSA, 2 ed para 314. rateable property does not include the power to create a 'non-permitted use' or 'illegal use' category. He submitted that the creation by the appellant of a category in its rates policy of non-permitted use was contrary to the provisions of s 8(1) and (2) of the Rates Act, and that it was unfair to levy a punitive rate on the property. [14] The proper approach to the interpretation of statutes was recently repeated by this court in Natal Joint Municipal Pension Fund v Endumeni Municipality.3 Wallis JA writing for the court explained:4 '[18] 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. 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 3 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) paras 17-26. 4 Para 18. 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 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.' [15] Thus the appropriate starting point in interpreting a statute is the language of the provision itself (South African Airways (Pty) Ltd v Aviation Union of South Africa & others;5 Bastian Financial Services (Pty) Ltd v General Hendrik Schoeman Primary School6) read in the context and having regard to the purpose of the provision and the background to the preparation and enactment of the statute. [16] Turning to the present matter, in my view the court a quo correctly held that the list of categories of rateable property is not exhaustive and that it is competent for the appellant to add categories to that list. The use of the word 'include' in s 8(2) signifies that the list extends the meaning of categories of rateable property that may be determined in terms of s 8(1). 5 South African Airways (Pty) Ltd v Aviation Union of South Africa & others 2011 (3) SA 148 (SCA) paras 25- 30. 6 Bastian Financial Services (Pty) Ltd v General Hendrik Schoeman Priamry School 2008 (5) SA 1 (SCA). (De Reuck supra; Ndlovu v Ngcobo; Bekker & another v Jika7). This means that other grounds of differentiation besides those mentioned in s 8(1) may be used. [17] In my view, when consideration is given to the words 'use of the property' and 'permitted use of the property' appearing in s 8 in the light of the ordinary rules of grammar and syntax, the context in which they appear and the apparent purpose to which they are directed, it is clear that 'use' is wide enough to include 'non-permitted use'. If this were not the case no purpose would be served in having a separate category for 'use'. Non- permitted use is a form of 'use' contrasted with permitted use. It is therefore competent for the municipality to include in its rates policy a 'non-permitted use' category for the purposes of determining applicable rates. [18] The term 'permitted use' is defined in the Rates Act as 'the limited purposes for which the property may be used in terms of . . . any restrictions imposed by . . . a condition of title, a provision of a town planning or land use scheme; or any legislation applicable to any specific property; or any alleviation of such restrictions'. Section 8(2) lists a number of categories of 7 Ndlovu v Ngcobo; Bekker & another v Jika 2003 (1) SA 113 (SCA) para 20. rateable property that may attract different rates. These categories are optional.8 The municipality may adopt all of them, drop some or include new categories depending on the nature of the objectives its rates policy seeks to achieve. The municipality has a choice. Rates policies entail, by definition, policy choices which lie at the core of municipal autonomy, and as long as the rates policy treats ratepayers equitably and is consistent with the provisions of the Constitution and the Rates Act, there can be no basis for questioning the choices it makes with regard to properties that may be differentially rated with respect to different categories of property. The court a quo therefore erred in finding that the creation of a 'non-permitted use' category was improper. [19] I reject the respondents' contention that the appellant breached the audi alteram partem principle when it determined that the property's use falls under a 'non permitted use' category without any prior reference to the respondents. There was no obligation on the appellant to do so other than through the process described below. The municipality's power to impose taxes is an original power which stems from the Constitution in terms of s 229(1)(a).9 It is a legislative act. As such, it is not an administrative action 8 Professor N Steytler and Dr J de Visser, Local Government Law of South Africa (2012) at 13-35. 9 City of Cape Town and another v Robertson & another 2005 (2) SA 323 (CC) para 57; Fedsure Life Assurance Ltd & others v Greater Johannesburg Transitional Metropolitan Council & others 1999 (1) SA 374 (CC). subject to administrative law. That being the case, the setting of rates and determination of categories of rateable property under s 8 of the Rates Act cannot be challenged, as counsel for the respondent seemed to suggest in his argument, simply on the ground that it is unfair. [20] The court a quo also found that a punitive rate imposed on the property as a result of its being categorised as non-permitted use amounts to the imposition of a penalty without due process. This finding is incorrect. The Rates Act contains built-in mechanisms in terms of which the disputes about the propriety of rates levies can be resolved. The property owner who is aggrieved by a rate that has been levied on his or her property is not without a remedy. [21] Once the determination of different categories of rateable property in terms of s 8 is completed the valuation process begins. The valuation is done by a municipal valuer who is designated by the municipality in terms of s 33 of the Rates Act. The valuer must inter alia value all the properties and prepare a valuation roll of all the properties in the municipality. After the compilation of the valuation roll, it is open for objections by the public and the municipality. A property owner may then object, within a stipulated period, to the valuation or categorisation. If his or her objection is not dealt with to his or her satisfaction he or she may then appeal to a valuation appeal board whose decision is final and binding on the municipality. [22] It is not suggested by the respondents that they were not aware that, in the valuation roll, the use of the property was termed 'illegal' for the purposes of determining the applicable rate. (It should have been termed 'non-permitted use'). It is therefore not open to the respondents to now contend that the categorisation of the property and the resultant rate is unreasonable on the basis that it constitutes a penalty without due process. The respondents should have used the legal mechanisms provided for in the Act if they wished to challenge the correctness of the property categorisation and the rate determined. This they failed to do. [23] To conclude, the court a quo erred in finding that it is not competent for the appellant to add to the list of categories in s 8(2) by creation of a category called 'non permitted use' in the rates policy and that to levy a 'higher rate than the normal rate on a property' on the basis of such categorisation is to impose a penalty without due process. [24] With regard to costs counsel for the appellant submitted on authority of City of Tshwane Metropolitan Municipality v Grobler & other 10 that, should the appeal succeed, the respondents should be ordered to pay costs on the scale as between attorney and client on the basis that when they brought the application they knew that their use of the property was in contravention of the appellant's town-planning scheme. They were using it for commercial purposes for which they had not been granted permission by the appellant. It was presumptuous of the respondents, his argument proceeded, to contend that the property should be rated as residential property. He argued that the respondents' conduct was in flagrant disregard of the provisions of the Act. [25] In my view the punitive costs order is not appropriate in the instant matter. While I accept that the respondents were aware that their use of the property was in contravention of the appellant's town-planning scheme, I do not agree that that knowledge in itself constitutes a sufficient basis for this court to order them to pay costs on a punitive scale. The dispute between the parties is essentially about the interpretation and application of s 8 of the Rates Act, the provisions of which are far from clear and thus susceptible to different interpretations. The respondents were entitled to come to court and 10 City of Tshwane Metropolitan Municipality v Grobler & others 2005 (6) SA 61 (T) para 12. challenge the correctness of the construction of the section contended for by the appellant. In these circumstances there can be no basis for the contention that their conduct was vexatious such as to warrant the special order of costs. In my view costs should be ordered on a normal scale. [26] In the result the following order is made: 1 The appeal is upheld with costs including the costs of two counsel. 2 The order of the court a quo is set aside and replaced with the following: 'The application is dismissed with costs.' ________________ D H ZONDI Acting Judge of Appeal APPEARANCES For Appellant: T Strydom SC J J Botha Instructed by: Hugo Ngwenya Attorneys Pretoria Claude Reid Attorneys Bloemfontein For Respondents: S Güldenpfennig H J Snyman Instructed by: Couzyn Hertzog & Horak Inc Pretoria Honey Attorneys 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: 31 May 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. City of Tshwane v Blom & Others 433/2012 [433/12] 88 ZASCA (31 May 2013) [1] The Supreme Court of Appeal (SCA) today upheld an appeal by the City of Tshwane (the appellant) against the judgment and orders made by the North Gauteng High Court, Pretoria (High Court). The matter involved a dispute between a ratepayer and the appellant in whose area the property is situated, over the latter’s inclusion in its rates policy of a category of the rateable property called 'non permitted use'. The core issue relates to the interpretation and application of sections 8(1) and (2) of the Local Government: Municipal Property Rates Act 6 of 2004 (the Act), in particular whether the municipality is empowered to add to the list of categories of rateable property by creating in its rates policy a 'non-permitted use' category and to impose a higher rate on the property used for non-permitted purpose. [2] The first respondent occupied the property owned by the second respondent in terms of a lease agreement. This property is situated within the area of jurisdiction of the appellant and is zoned for residential purposes in terms of the appellant's applicable Town Planning Scheme. The first respondent utilised the property for business purposes, which use is thus contrary to the provisions of the appellant’s Town Planning Scheme. In July 2008 the appellant adopted a new rates policy pursuant to s 3 of the Act, which policy introduced a ‘non-permitted use’ category of rateable property. In terms of that rates policy, the appellant categorised the relevant property as a ‘non-permitted use’ property, and levied a higher rate on the property than it levied on properties used for the purpose permitted. As a result, the second respondent was charged a higher rate while simultaneously losing a benefit of a rebate. [3] The respondents brought an application in the High Court, seeking an order declaring, inter alia, that the Act does not provide for a rating category of 'non-permitted use' or ‘illegal use’, but only the categories provided for in section 8 of the Act and that all levies levied by the appellant on the property which are in excess of levies payable in respect of all other residential properties in Brooklyn should be repaid to the respondents by the appellant. The basis for the application was that the list of categories of rateable property in the Act is exhaustive and does not allow additions. [4] The High Court held that the appellant was indeed authorised to add to the list of categories of rateable properties, but nevertheless found that the addition of the ‘non- permitted use’ or 'illegal use' category was not competent on the basis that any such additions were required to be of a similar nature to those already included in the Act. Furthermore, the High Court held that the levy for ‘non-permitted use’ amounted to the imposition of a penalty without due process.The appeal is before this Court with the leave of the High Court. [5] The SCA held that, when the provisions in the relevant section are interpreted using the ordinary rules of grammar and syntax, the context in which they appear and the apparent purpose to which they are directed it was clear that they are wide enough to include 'non- permitted use'. The High Court therefore erred in holding that it was not competent for the appellant to include in its rates policy a 'non-permitted use' category for the purposes of determining applicable rates. [6] This was so, the SCA concluded, because rates policies entail, by definition, policy choices which lie at the core of municipal autonomy, and as long as the rates policy treats ratepayers equitably and is consistent with the provisions of the Constitution and the Act there can be no basis for questioning the choices the municipality makes with regard to properties that may be differentially rated with respect to different categories of property. The appeal was therefore upheld with costs.

3657

non-electoral

2021

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 781/2020 In the matter between: THE OMBUD FOR FINANCIAL SERVICES PROVIDERS APPELLANT and CS BROKERS CC FIRST RESPONDENT EMILE STORM SECOND RESPONDENT HIS LORDSHIP MR JUSTICE OF APPEAL RETIRED, L T C HARMS N O THIRD RESPONDENT Z MABHOZA N O FOURTH RESPONDENT G MADLANGA N O FIFTH RESPONDENT J B WALLACE SIXTH RESPONDENT Neutral citation: Ombud for Financial Services Providers v CS Brokers CC and Others (Case no 781/2020) [2021] ZASCA 117 (17 September 2021) Coram: PONNAN, MATHOPO, MOLEMELA, MBATHA and GORVEN JJA Heard: 2 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 17 September 2021. Summary: Review – Financial Advisory and Intermediary Services Act – application under s 27(3) for hearing of oral evidence or referral to court – Ombud’s discretion – no discretion exercised at all – decision not to allow application reviewable. _____________________________________________________________ ORDER ________________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Fabricius J, sitting as court of first instance): The appeal is dismissed with costs, such costs to include the costs of two counsel, wherever so employed. _____________________________________________________________ JUDGMENT _____________________________________________________________ Gorven JA (Ponnan, Mathopo, Molemela and Mbatha JJA concurring) [1] On 19 November 2009, the sixth respondent on appeal, Mr J B Wallace (Mr Wallace), invested a sum of R730 000 with a company known as Sharemax; R600 000 of this was money entrusted to Mr Wallace by his mother, a pensioner based in the United Kingdom, to invest on her behalf. The balance came from his own funds. At the time, one Mr Marais was his financial advisor. Mr Marais informed Mr Wallace that he was unable to advise him on an investment with Sharemax and referred him to the second appellant (Mr Storm). Mr Storm functioned as an authorised representative of the first appellant, CS Brokers CC (CS Brokers). I shall refer to them jointly as CS Brokers unless it is necessary to distinguish them. CS Brokers was an authorised Financial Services Provider under the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS). [2] Mr Wallace, Mr Marais and Mr Storm met more than once. The investment in Sharemax resulted from these meetings. Sharemax offered a number of investments which were essentially property syndications. Some of the funds of Mr Wallace and his mother were placed in the Villa Development and the balance in the Zambezi Development. Each had its own prospectus. There are differing versions as to how this came about. In her determination, the appellant, the Ombud for Financial Services Providers appointed under FAIS (the Ombud), noted that there was a factual dispute as to whether either Mr Storm or Mr Marais had advised Mr Wallace to invest in Sharemax. She notes that Mr Storm and Mr Marais said that Mr Wallace had already decided to do so prior to meeting Mr Storm. These disputes, of course, go to the heart of the claim of Mr Wallace. CS Brokers points to other factual disputes in addition to those noted by the Ombud. [3] Despite Mr Wallace expecting income from the investments, by September 2010, no income had been received. Mr Wallace approached Mr Storm and alleged that Mr Storm assured him that the capital was safe, but that there had been a delay in income due to internal problems. On 9 November 2010, Mr Wallace wrote to Mr Storm requesting the return of the capital amount invested. A meeting took place on 19 November 2010 but no money was forthcoming. Mr Wallace then lodged a complaint with the Ombud. The complaint was supported by an unsworn statement and responded to by CS Brokers in like manner. [4] The complaint was laid with the Ombud on 10 December 2010. She posed certain questions to CS Brokers, to which she received a response. On 9 May 2011, CS Brokers applied to the Ombud under s 27(3) of FAIS to hold a hearing or to refer the complaint to a court. The motivation was that it was a matter requiring oral evidence and cross-examination to resolve factual disputes as well as expert evidence. On 11 May 2011, the Ombud in effect refused that application. She went on to deal with the matter on the material before her. Some five years later, on 26 April 2016, the Ombud made a determination. She ordered CS Brokers to pay Mr Wallace the sum of R730 000 along with interest. CS Brokers applied to the Ombud for leave to appeal, which was refused. [5] CS Brokers then applied to the Chair of the Appeal Board under s 26B(12) of the Financial Services Board Act 97 of 1990 (the Board Act). Such an application is one to allow further oral and written evidence or factual information and documentation not made available to the Ombud prior to the making of the decision against which the appeal was lodged. The members of the Appeal Board (the Board) are the third, fourth and fifth respondents in this appeal. The Chair dismissed that application. CS Brokers then applied to the Board for leave to appeal against the determination of the Ombud and were granted leave to appeal on limited grounds, namely: ‘1. Was Mrs Wallace a ‘complainant’ as defined in sec 1 of the FAIS Act and if not, was the Ombud entitled to make an order in respect of her loss? 2. Does the Plascon-Evans rule apply in inquisitorial investigations – and in that context did the Ombud in deciding the disputes of fact use her inquisitorial powers or did she decide the factual disputes on the counter-allegations only? 3. Did the Ombud conflate the risk profiles of the three different investors? 4. Was the advice at the time it was given negligent taking into account the extent to which the risks were indicated? In this regard are the reasons of the Ombud in her determination and her dismissal of the leave to appeal the same or materially different? 5. Would a reasonable FSP have reasonable grounds at the time of the advice to suspect that the Sharemax scheme was a Ponzi scheme? 6. Did the Ombud rely on ex post facts for her conclusion? 7. Was the loss reasonably foreseeable at the time of the advice?’ After considering the record of the Ombud and forming its own view, the Board dismissed the appeal against the Ombud’s determination in respect of CS Brokers. [6] This prompted an application by CS Brokers to the Gauteng Division of the High Court, Pretoria (the high court), to review and set aside a range of decisions. By the time the matter was argued, the following relief was sought: ‘1. The decision by the First Respondent, alternatively the failure by the First Respondent to make a decision not to grant the application brought by the Applicants in terms of Section 27(3)(c) of the Financial Advisory & Intermediary Services Act 37 of 2002, to decline to entertain the complaint, is reviewed, set aside and substituted with the following decision: “This office declines to entertain the complaint in terms of Section 27(3)(c) in that it would be more appropriate for the complaint to be dealt with by a Court or through any other available dispute resolution process”. 2. All actions of the First, Second, Third and Fourth Respondents, following upon the First Respondent’s aforesaid impugned decision are as a consequence of the setting aside of that decision, also set aside. 3. It is recorded that should the Fifth Respondent institute action against the Applicants, based on the facts contained in his complaint to the First Respondent, the Applicants undertake not to raise prescription as a Plea, subject to such action being instituted within a 6 (six) month period of the date of this order. 4. The First Respondent is ordered to pay the costs of the Applicants.’ [7] The matter was heard by Fabricius J, whose order, properly construed as agreed by the parties, reviewed and set aside all of the decisions of the Ombud and the Board. These included: the refusal of the application under s 27(3); the determination by the Ombud; the refusal of the Chair of the Board of the application under s 26B(12) of the Board Act; and the dismissal of the appeal by the Board. The Ombud then applied for leave to appeal, which was refused. The appeal is before us as a result of this Court granting leave. As was the case in the high court, the third to sixth respondents take no part in the appeal. [8] The parties agreed that the appeal stands or falls on whether the high court should have granted the following order: ‘1. The decision by the First Respondent, to decline to entertain the complaint in terms of s 27(3)(c) of the FAIS Act, is reviewed, set aside and substituted with the following decision: “This office declines to entertain the complaint in terms of Section 27(3)(c) in that it would be more appropriate for the complaint to be dealt with by a Court or through any other available dispute resolution process.”.’ The basis of the appeal is the submission that the Ombud properly exercised her discretion when she refused the application in terms of s 27(3) of FAIS. In argument, this was posed by the parties as the sole issue to be decided by this Court. [9] A brief synopsis of the relevant legislation will assist. Section 20 of FAIS created the office of the Ombud, whose functions are to be performed by the Ombud. Sections 20(3) and (4) set out the objective of the Ombud as follows: ‘(3) The Objective of the Ombud is to consider and dispose of complaints in a procedurally fair, informal, economical and expeditious manner and by reference to what is equitable in all the circumstances, with due regard to – (a) the contractual arrangement or other legal relationship between the complainant and any other party to the complaint; and (b) the provisions of this Act. (4) When dealing with complaints in terms of sections 27 and 28 the Ombud is independent and must be impartial.’ [10] The Ombud was thus created as a mechanism for the speedy resolution of disputes, which would otherwise be dealt with in court. A complainant has an election to either utilise the Ombud or approach a court. Financial Services Providers have no such election. They must meet the claim in whichever forum is selected by the complainant. The powers of the Ombud are akin to those of a court as seen in s 28. The relevant parts are contained in ss 28(1) and 28(5). Section 28(1), provides: ‘The Ombud must in any case where a matter has not been settled or a recommendation referred to in section 27(5)(c) has not been accepted by all parties concerned, make a final determination, which may include – (a) the dismissal of the complaint; or (b) the upholding of the complaint, wholly or partially, in which case – (i) the complainant may be awarded an amount as fair compensation for any financial prejudice or damage suffered; (ii) a direction may be issued that the authorised financial services provider, representative or other party concerned take such steps in relation to the complaint as the Ombud deems appropriate and just; (iii) the Ombud may make any other order which a Court may make.’ and s 28(5), which provides: ‘A determination – (a) or a final decision of the board of appeal, as the case may be, is regarded as a civil judgment of a Court, had the matter in question been heard by a Court, and must be so noted by the clerk or registrar, as the case may be, of that Court; (b) is only appealable to the board of appeal – (i) with the leave of the Ombud after taking into consideration – (aa) the complexity of the matter; or (bb) the reasonable likelihood that the board of appeal may reach a different conclusion; or (ii) if the Ombud refuses leave to appeal, with the permission of the chairperson of the board of appeal.’ [11] The procedure for the Ombud to deal with complaints is set out in s 27. Of relevance is s 27(3)(c) of FAIS, which provides: ‘(3) The following jurisdictional provisions apply to the Ombud in respect of the investigation of complaints: . . . (c) The Ombud may on reasonable grounds determine that it is more appropriate that the complaint be dealt with by a Court or through any other available dispute resolution process, and decline to entertain the complaint.’ and s 27(5)(a), which provides: ‘(5) The Ombud – (a) may, in investigating or determining an officially received complaint, follow and implement any procedure (including mediation) which the Ombud deems appropriate, and may allow any party the right of legal representation.’ [12] It can thus be seen that the Ombud is granted extensive substantive powers. It was correctly conceded in argument by the Ombud that these are akin to quasi-judicial powers rather than purely administrative ones. A determination is regarded as a civil judgment of a court. In addition, the Ombud is accorded a discretion as to the appropriate procedure. This includes a discretion under s 27(3)(c) to decline to entertain the complaint on the basis that a court, or some other dispute resolution forum, is the more appropriate forum to decide the complaint. In addition, the procedural discretion allows the Ombud to receive oral evidence, among other options. [13] As indicated, the matter turns on whether the Ombud properly exercised her discretion in dealing with the application of CS Brokers under s 27(3). It requested her to decline to decide the matter and to refer it to court, alternatively to hear oral evidence on the basis that factual disputes existed which could only be resolved by following that procedure. [14] There was much debate before us as to the nature of the discretion to be exercised by the Ombud. This also occupied the high court. The Ombud submitted that she had a broad discretion as to procedure and had properly exercised her discretion against hearing oral evidence or declining to deal with the matter on the basis that it should be dealt with by a court. CS Brokers, on the other hand, contended that the discretion was one which was required to be exercised judicially. Interesting though that debate may be, in my view it does not arise in the present matter and need not detain us. That is because this matter turns on the facts. [15] As indicated, the application under s 27(3) was dated 9 May 2011, in which the attorneys representing CS Brokers requested that the Ombud hold a hearing or defer to the court in respect of the complaint. On 11 May 2011, the Ombud responded by letter, saying simply: ‘this Office does not hold hearings’.1 [16] During argument, counsel for the Ombud readily conceded that the application required a specific ruling along with reasons. The reason given for not holding a hearing with oral evidence is simply that the Ombud does not do so. The response is one which clearly indicates that no discretion at all was exercised on the application. Instead, a predetermined policy was applied, without reference to the specific issues in the matter before her. This when the Ombud is invested with a wide range of procedural options which can be tailored to different situations and complaints. This does not constitute an improper exercise of her discretion but an approach which, as the Board put it in the appeal determination, ‘disregards her statutory obligation to exercise her discretion’. With this statement, I can find no fault. [17] In argument, the Ombud referred to the final determination to attempt to demonstrate that reasons were given. What is said in the determination is: ‘Storm’s attorneys criticize this office for not holding hearings to resolve “material factual disputes”. This office does not have a policy that prohibits the holding of hearings. Where it is appropriate, a hearing will be held. In this case there are no material disputes of fact that require such a hearing.’ This clearly contradicts the refusal at the time on the basis that ‘this Office does not hold hearings’. It is the latter statement by which the Ombud 1 The full response was: ‘Your application that the matters involving your clients be referred to court is inappropriate as that is the decision of the Ombud. We add that there is nothing distinguishing the matters involving your clients to the hundreds of matters handled by this office. Once again, this Office does not hold hearings’. responded to the application. In any event, the reasons given in the determination do not address the factual disputes noted by the Ombud herself which go to the heart of the claim of Mr Wallace. It suffices to say that it is difficult to discern which factors weighed and occupied her mind when she gave her decision. To say that there were no material disputes of fact when the parties disagreed whether Mr Wallace had already decided to invest in Sharemax when he met with Mr Storm simply beggars belief. [18] It is therefore unnecessary to address the manner in which the discretion of the Ombud should be exercised and the test for interference with it on review. If no discretion is exercised, when the Ombud was indeed vested with a discretion, that has to be the end of the matter. As was agreed by the parties before us, the entire appeal turns on this single issue. It is clear in these circumstances that the appeal must fail. [19] In the result, the appeal is dismissed with costs, such costs to include the costs of two counsel, wherever so employed. __________________ T R GORVEN JUDGE OF APPEAL Appearances For appellant: S Shangisa SC (heads prepared by V Ngalwana SC and S Shangisa SC) Instructed by: Ramushu Mashile Twala Incorporated, Sandton. Claude Reid Inc Attorneys, Bloemfontein. For First and Second respondents: P F Louw SC (with him E Van As) Instructed by: Bieldermans Incorporated, Sandton. Honey 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: 17 September 2021 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 Ombud for Financial Services Providers v CS Brokers CC and Others (Case no 781/2020) [2021] ZASCA 117 Today the Supreme Court of Appeal dismissed an appeal from the Gauteng Division of the High Court, Johannesburg (per Fabricius J). The Ombud for Financial Services Providers, appointed under the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS), dealt with a complaint lodged by Mr J B Wallace (Mr Wallace) against CS Brokers CC and Mr Storm, who was a financial services provider functioning through CS Brokers (together referred to as CS Brokers). The complaint related to two investments made by Mr Wallace through CS Brokers in two of the investment schemes formed by a company known as Sharemax. Mr Wallace felt that he had been promised interim payments which did not eventuate and lodged a claim for repayment of the monies invested. This claim was not met. The Ombud has extensive substantive and procedural powers under FAIS. A determination is akin to a civil judgment of a court and the Ombud is accorded wide discretions as to the procedure of determining a complaint. Amongst other things, the Ombud may refer a complaint to a court and may receive oral evidence. CS Brokers applied under s 27(3) of FAIS to the Ombud to either refer the complaint of Mr Wallace to court or to receive oral evidence. This application was simply responded to by a letter which, as regards the application to receive oral evidence, said ‘this Office does not hold hearings’. The Ombud then made a determination ordering CS Brokers to repay the amount of the investment to Mr Wallace. An appeal to the Board constituted to deal with such appeals also failed. CS Brokers approached the Gauteng Division of the High Court, Pretoria to review the refusal of the Ombud to receive oral evidence and for relief setting aside the subsequent decisions. Fabricius J granted the relief sought. The Ombud, not satisfied, appealed to the Supreme Court of Appeal on the basis that she was vested with a wide discretion and had exercised it appropriately. A debate ensued concerning the nature of the discretion to be exercised in the circumstances. The Supreme Court of Appeal held that it was unnecessary on the facts of that matter to decide that debate. Whatever test one applied, the Ombud had clearly responded to the application with a predetermined policy not to hold hearings without exercising any discretion at all. In the circumstances, the appeal of the Ombud was dismissed with costs.

4166

non-electoral

2024

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not reportable Case number: 1262/2022 In the matter between REMO VENTURES (PTY) LTD FIRST APPELLANT EKUZENI SUPPLIES (PTY) LTD SECOND APPELLANT NTHABISENG SEGOALE THIRD APPELLANT and CECILE VAN ZYL FIRST RESPONDENT SUSAN LEONORA MEINTJIES SECOND RESPONDENT JUDGE NEELS CLAASEN THIRD RESPONDENT Neutral citation: Remo Ventures Pty Ltd v Cecile Van Zyl and Others (1262/2022) [2024] ZASCA 09 (26 JANUARY 2024) Coram: MOCUMIE, MOKGOHLOA, CARELSE and GOOSEN JJA and TOKOTA AJJA Heard: 6 November 2023 Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives via e-mail, publication on the Supreme Court of Appeal website and released to SAFLII. The date and time for hand-down are deemed to be delivered on 26 January 2026 Summary: Arbitration – interpretation of the Sales of Shares agreement – interpretation of the arbitration agreement – whether the purported arbitration agreement concluded between the parties and the resultant steps and proceedings are void as a result of the Sale of Shares agreement upon which it is predicated being a nullity. ____________________________________________________________________________ ORDER On appeal from: Gauteng Division of the High Court, Pretoria (Molefe J, sitting as a court of first instance): The appeal is upheld with costs. The order of the high court is set aside and replaced with the following: ‘(a) It is declared that the arbitration contract entered into between the applicant and second to fourth respondents is a nullity. (b) It is declared that the purported appointment of the first respondent in terms of Annexure A [the arbitration contract] is a nullity. (c) It is declared that the resultant purported arbitration proceedings, including the purported award by the first respondent dated 10 May 2021 Annexure C, is a nullity. (d) The costs of the application are to be paid by the second and third respondents.’ ____________________________________________________________________________ JUDGMENT ____________________________________________________________________________ Mocumie JA(Mokgohloa, Carelse and Goosen JJA and Tokota AJA concurring) Introduction [1] This is an appeal against the judgment and order of the Gauteng Division of the high court, Pretoria (Molefe J) sitting as a court of first instance. The matter concerns the validity of an arbitration agreement to which it related. The arbitration agreement purported to amend an arbitration clause contained in the Sale of Shares Agreement in circumstances where that agreement was void, where, unbeknown to the parties the Sale of Shares Agreement had already lapsed. Arbitration proceedings were conducted in terms of the arbitration agreement and an award was issued. The appeal is with leave of the court a quo. Factual matrix [2] The appellant is Remo Ventures (Pty) Ltd, a private for-profit company, duly incorporated and registered in terms of the company laws of the Republic of South Africa. The second appellant is Ekuzeni Supplies (Pty) Ltd, a private for-profit company (previously Segoale Supplies (Pty) Ltd), duly incorporated and registered in terms of the company laws of the Republic of South Africa. The third appellant is Mr Nthabiseng Segoale (Mr Segoale) a business person and director of the first and second appellants. The first respondent is the retired Judge of the Gauteng Division of the High court, Judge Neels Claassen who has since passed on. The second respondent is Ms Cecile Van Zyl, a business person and entrepreneur. The third respondent is Ms Susan Leonora Meintjies, a business person and entrepreneur. The fourth respondent is Suceco Partnerships of which the second and third respondents are the partners. [3] The facts are largely common cause. On 3 April 2017, the appellants and the second and third respondents (the respondents) concluded a written Sale of Shares Agreement (the SoS agreement). In terms of this SoS agreement, the purchase price of R50 million was payable in tranches, with the first tranche of R10 million being paid on 16 March 2017. The second tranche of R20 million was payable on the effective date, described as 21 June 2017. However, on 20 July 2017, after the agreement had already lapsed, the parties concluded a so-called ‘Date Agreement’, in terms of which the date for payment of the second tranche was extended to 26 July 2017. Payment of the second tranche was effected on 31 August 2017, and accepted by the respondents. Transfer of the shares was effected on the same day. [4] In terms of Clause 3.1 of the SoS agreement the sale was subject to a number of conditions precedent which included that the purchaser, Mr Segoale was to cede a life insurance policy on his life to the sellers (the first and second respondents) to the value of R15 million (fifteen million rand) on or before the effective date being 21 June 2017. Clause 3.4 of the sale agreement provided that if any conditions precedent is not timeously fulfilled for any reason whatsoever, and is not waived in terms of clause 3.3, then the whole sale agreement shall be of no force or effect. Clause 22 had a dispute resolution/arbitration clause which made provision for arbitration under the rules of the Arbitration Foundation of South Africa (AFSA) and for the arbitrator to be appointed by AFSA. [5] By 21 June 2017, Mr Segoale had failed to pay the balance of the purchase price in full and final settlement and to cede his life policy. As a result of this breach, the suspensive condition in clause 3.4 was triggered. Ex lege, the SoS agreement became a nullity. Notwithstanding the above non-fulfilment, the parties acted under the belief that the SoS agreement was still in force and valid and continued to implement it. On 31 July 2018, the respondents demanded payment of the third tranche of R10 million. [6] During 2018 and 2019, various disputes on performance obligations of the contracting parties in terms of the SoS agreement arose, which the contracting parties believed was still in force. However, as a result of the non-fulfilment of the suspensive condition, the SoS agreement had already fallen away and lapsed. On 20 February 2019, the parties concluded an arbitration agreement which was predicated and dependent upon the existence and validity of the SoS agreement and purported to: ‘12.1 Amend clause 22 of the SoS agreement but substituting such clause in its entirety with the provisions of the arbitration contract; and 12.2 Refer the disputes that had arisen aforesaid to the arbitration in terms of clause 22 as purportedly amended in terms of which the arbitrator, the late retired Judge Claassen (‘the third respondent’), was by agreement between the parties appointed to conduct the arbitration in accordance with a different procedure outside the AFSA rules. In essence, the parties entered into privately conducted and administered arbitration proceedings and appointed the third respondent as their own arbitrator.’ [7] Clause 4.2 of the arbitration agreement provides: ‘The parties, to the extent that it is necessary, and for the purposes of the current arbitration proceedings, substitute the provisions of this Arbitration Agreement for clause 14 of the Sale of Business Agreement, and clause 22 of the Sale of Shares Agreement, and all the arbitration clause contained in any other ancillary agreement entered into between the parties, which will form part of the Disputes to be adjudicated by the Arbitrator.’ [8] On the basis of the arbitration agreement, and unaware of the SoS having lapsed; in a later arbitration, the respondents claimed specific performance, ie payment of R20 million, such being the balance of the purchase price. The appellant in the Statement of Defence and Counter claim, pleaded that the respondents had breached their performance obligations in various respects under the agreement and were entitled to withhold payment, alternatively to apply for set off. The respondents tried to effect amendments to their Statement of Claim and also unsuccessfully applied for the recusal of the arbitrator. Only in the amendment introduced in April 2020 was the non-fulfilment of the suspensive condition and the resultant lapsing of the SoS raised for the first time. The appellant claimed that the SoS agreement had been reinstated but without the suspensive condition. [9] Before the high court, the parties argued the issue whether SoS agreement had been reinstated, as a separated issue on common cause facts. The main application before the high court was premised on the contention by the appellant that since it was common cause that the SoS agreement was a nullity due to the failure to fulfil the suspensive condition, it followed that the arbitration agreement was also a nullity. Therefore, the subsequent award delivered by the third respondent must also be a nullity and be declared as such. In the alternative, the third respondent did not have the power to issue the award, and the award therefore fell to be reviewed and set aside in terms of s 33 of the Arbitration Act 42 of 1965 (the Arbitration Act). [10] The respondents’ defence was that the arbitration agreement was a self-standing agreement extraneous to the SoS agreement. Therefore, it survived the SoS agreement. Findings of the high court [11] The high court considered clause 4.2 of the arbitration agreement and held that ‘it is clear on a proper interpretation of the arbitration agreement that it was entered into intended to survive the voidness of the share agreement since it was intended to cover various agreements, which agreements remain valid and binding despite the fact that the shares agreement may be void. An example is the sale of a business agreement which is still alive despite the death of the shares agreement. The arbitration agreement cannot therefore lapse merely because the shares agreement has lapsed due to non-fulfilment of the conditions in that agreement.’ [12] It held further that ‘clause 22.1 of the shares agreement provides that if the parties are unable to reach an acceptable settlement of any dispute . . . concerning any provision, any party may submit the dispute to the AFSA for mediation in accordance with the terms set by the secretariat of AFSA.’ [13] Important to the determination of this appeal, the high court also held ‘ . . . on a proper interpretation, it was not therefore a referral to arbitration in terms of clause 22 of the shares agreement but a new referral to arbitration which superseded the original referral to arbitration in terms of clause 22.The only reasonable interpretation is that in so far as there is a dispute concerning the shares agreement, the arbitration agreement will ‘substitute’ for clause 22 of the shares agreement [in terms of clause 4.2 of the arbitration agreement].’ Issues for determination before this Court [14] The issue for determination before this Court is whether the arbitration agreement is a nullity on account of the SoS agreement being a nullity. In essence, the question was whether the SoS Agreement could be interpreted in such a manner as to allow for the existence of the Arbitration Agreement. [15] Counsel for the appellant contended that the parties agreed to conclude several commercial agreements with reference to a number of business ventures, inter alia, the SoS agreement. The SoS agreement was subject to a number of suspensive conditions. The parties had in mind, one broad composite agreement with various sub-agreements; interrelated but separate contracts which were moored in the actual text of the contract. To the extent that these agreements formed part of one composite agreement, if one agreement (and in this instance the SoS agreement) fell through, then the substratum of the composite agreement disappeared; the SoS agreement accordingly becomes unenforceable between the parties. He relied on clause 12 of the SoS agreement which provides that ‘all of the transactions and arrangements contemplated by this Agreement constitutes a single and indivisible transaction.’ [16] He submitted that ‘the ineluctable conclusion from the language, context and purpose . . . is that the purported arbitration agreement was predicated and dependent on the existence and validity of the SoS.’ This is so, because the SoS agreement never existed, on account of non-fulfilment of the suspensive condition, nothing of the SoS agreement can be used in the arbitration agreement. This would mean that the arbitration proceedings, as far as it applied to the SoS agreement, could not have taken place because the SoS agreement did not and does not exist. [17] He argued on the strength of Capitec Bank Holdings Ltd and Another v Coral Lagoon Investments 194 (Pty) Ltd1 that, upon proper interpretation, the SoS agreement and the subsequent arbitration agreement cannot be read in isolation from one another. Doing so, he argued, will disregard the context and the language of the agreement which the parties intended to be bound by. [18] To the contrary, the respondents contend that clause 3.2 of the arbitration agreement makes specific reference to arbitration proceedings and that ‘any dispute that arises’ from the ‘said Agreements’, including the sales agreement, will be decided by private commercial arbitration. On a proper interpretation of the arbitration agreement, it was intended to be a self-standing agreement and extraneous to the SoS agreement. In addition, even if the arbitration agreement was not extraneous to the SoS agreement but became a term there, a proper interpretation of the SoS agreement (as amended) is that the arbitration agreement was intended to survive the invalidity of the SoS agreement to allow that very dispute to be decided in arbitration proceedings. This is so on the presumption that commercial people intend to litigate in one forum and to use arbitration as a ‘one-stop shop’ to resolve all their disputes arising out of the SoS agreement. The high court agreed with the respondents. Thus, this appeal is against the order of the high court. The law [19] As a point of departure, the following principles are highlighted: In Africast (Pty) Ltd v Pangbourne Properties Limited2 in which this Court held: ‘A contract containing a suspensive condition is enforceable immediately upon its conclusion but some of the obligations are postponed pending fulfilment of the suspensive condition. If the condition is fulfilled the contract is deemed to have existed ex tunc. If the condition is not fulfilled, then no contract came into existence. Once the condition is fulfilled: “[T]he contract and mutual rights of the parties relate back to, and are deemed to have been in force from, the date of the 1 Capitec Bank Holdings Ltd and Another v Coral Lagoon Investments 194 (Pty) Ltd [2021] ZASCA 99; [2021] 3 All SA 647 (SCA). 2 Africast (Pty) Ltd v Pangbourne Properties Limited [2014] ZASCA 33; [2014] 3 All SA 653 (SCA). agreement and not from the date of the fulfilment of the condition, ie ex tunc.”’ 3 [20] In addition to this, this Court has held in Paradyskloof Golf Estate (Pty) Ltd v Municipality of Stellenbosch4 that ‘[a]n agreement of purchase and sale entered into subject to a suspensive condition does not there and then establish a contract of sale “but there is nevertheless created “a very real and definite contractual relationship” which, on fulfilment of the condition, develops into the relationship of seller and purchaser. . .” Upon fulfilment of the condition the contract thus becomes enforceable. Non-fulfilment of the suspensive condition, however, renders the contract void ab initio . . .’ 5 [21] With specific reference to arbitration agreements, this Court in North East Finance (Pty) Ltd v Standard Bank of South Africa Ltd6 (North East), held: ‘If a contract is void from the outset then all of its clauses, including exemption and reference to arbitration clauses, fall with it. The principle was most recently enunciated by this Court in North West Provincial Government and another v Tswaing Consulting and others where Cameron JA said that an arbitration clause “embedded in a fraud-tainted agreement” could not stand. The court referred in this regard to Wayland v Everite Group Ltd which in turn relied on Allied Mineral Development Corporation (Pty) Ltd v Gemsbok Vlei Kwartsiet (Edms) Bpk. That decision referred to Heyman and another v Darwins Ltd where Viscount Simon LC said: ‘An arbitration clause is a written submission, agreed to by the parties to the contract , and, like other written submissions to arbitration, must be construed according to its language and in the light of the circumstances in which it is made. If the dispute is as to whether the contract which contains the clause has ever been entered into at all, that issue cannot go to arbitration under the clause, for the party who denies that he has ever entered into the contract is thereby denying that he has ever joined in the submission. Similarly, if one party to the alleged contract is contending that it is void ab initio (because, for example, the making of such a contract is illegal), the arbitration clause cannot operate, for on this view the clause itself is also void .’7 [22] This Court in Capitec v Coral Lagoon held: ‘Most contracts, and in particular commercial contracts, are constructed with a design in mind, 3 Ibid para 37. 4 Paradyskloof Golf Estate (Pty) Ltd v Municipality of Stellenbosch [2010] ZASCA 92; [2010] 4 All SA 591 (SCA); 2011 (2) SA 525 (SCA) (Paradyskloof). 5 Ibid para 17. 6 North East Finance (Pty) Ltd v Standard Bank of South Africa Ltd [2013] ZASCA 76; 2013 (5) SA 1 (SCA). 7 Ibid para 12. and their architects choose words and concepts to give effect to that design. For this reason, interpretation begins with the text and its structure. They have a gravitational pull that is important. The proposition that context is everything is not a licence to contend for meanings unmoored in the text and its structure. Rather, context and purpose may be used to elucidate the text.’8 Discussion [23] It is common cause that the suspensive conditions set out in the SoS agreement were not fulfilled. As such, and following the approach outlined above, the agreement in question ought to be treated as if it never came into existence; it was never cancelled or resiled from. The SoS agreement certainly existed prior to the fulfilment of the condition, and the contract would have become enforceable upon the fulfilment of the condition. The parties, unfortunately, continued to act in terms of the agreement in the erroneous belief that all conditions had been properly and timeously fulfilled. Interpretation of the SoS and arbitration agreement in general [24] This Court in North East held: ‘The court asked to construe a contract must ascertain what the parties intended their contract to mean. That requires a consideration of the words used by them and the contract as whole and whether or not there is any possible ambiguity in their meaning, the court must consider the factual matrix (or context) in which the contract was concluded. . . . In addition, a contract must be interpreted so as to give it a commercially sensible meaning . . . This is the approach taken to considering the ambit of an arbitration clause . . . We must thus examine what the parties intended having regard to the purpose of their contract.’ (Footnotes omitted.)9 [25] The respondents argued that the arbitration agreement, was intended to be a self- standing agreement and extraneous to the SoS agreement. As a result, the arbitration agreement was intended to survive the invalidity of the SoS agreement to allow that very dispute to be determined in arbitration proceedings. We must, they contend, assume that the parties intended that the lapsed SoS agreement would be substituted by the new 8 Coral Lagoon para 51. 9 North East paras 24-25. agreement, the arbitration agreement. This is so because when the dispute arose, it was on the interpretation of the new agreement: whether the substitution of the arbitration agreement was a reinstatement of the SoS agreement. [26] For the determination of the issue before this Court several clauses of the SoS agreement and arbitration agreement are relevant. Clause 3 of the SoS agreement stipulates: ‘3.1 This agreement is subject to the following conditions precedent: 3.1.1 That both Sellers sign Executive Employment Agreements with the Company on or before the Effective Date, copies of which is annexed hereto as “Annexures D2-D3” 3.1.2 That Nthabiseng Segoale signs an Executive Employment Agreement with the Company on or before the effective date, a copy of which is annexed hereto as Annexure “D1” 3.1.3 The Directors of the Company of Segoale Supplies (Pty) Ltd, Registration Number: 2017/117592/07 authorising. 3.1.4 That Nthabiseng Segoale cede a life insurance policy on his life to the Sellers to the total value of R15 million (fifteen million rand) on or before the Effective Date. The original Policy shall be handed to the Sellers. Nthabiseng SEGOALE shall maintain payment of the Policy until such time as the full Purchase Price in terms of this Agreement 3.1.5 That the Company sign a Lease Agreement with KALFIELAND CC for the rental of Plot 22,WHEATLANDS,RANDFONTEIN,being the current Premises from where the business which forms the subject matter of this Agreement is being operated, for a period of not less than 7(seven) years calculated from the effective date, Annexure “E1” 3.1.6 . . . 3.1.7 . . . 3.4 If any condition is not timeously fulfilled for any reason whatsoever and is not waived in terms of clause 3.3 then: 3.4.1 This whole agreement shall be of no force or effect; 3.4. 2 The parties shall be entitled to be restored as near as possible to the positions they would have been, had this Agreement not been entered into; and 3.4.3 No party shall have any claim against any other party in terms of this Agreement except for such claims (if any) as may arise from a breach of any other provision of this Agreement by which the parties remain bound. . . . 10 PURCHASE OF THE SHARES SUBJECT TO THE FULFULMENT OF THE CONDITIONS. 10.1 Subject to the fulfilment of the Conditions Precedent and subject to the terms and conditions of this Purchase Agreement . . . ‘22.1 Save as specifically provided elsewhere in this Agreement, should any dispute arise between the parties concerning any provision of this Agreement, the parties shall use their best endeavours to resolve the dispute by negotiation. Any party may call upon the other party by written notice to [the other party] meet with the former for purpose of reaching a mutually acceptable settlement of the dispute within 7(seven) days after the date of such notice. . . . 22.4 These provisions contained in this Clause 22 shall not preclude any party from obtaining interim relief, on an urgent basis.’ [28] Clause 4.2 of the Arbitration agreement provides: ‘The parties, to the extent that it is necessary, and for the purposes of the current arbitration proceedings, substitute the provisions of this Arbitration Agreement, for clause 14 of the Sale of Business Agreement, and clause 22 of the Sale of Shares Agreement, and all the arbitration clauses contained in any other ancillary agreements entered into between the parties, which will form part of the disputes, to be adjudicated by the Arbitrator.’ [29] The high court was correct to find that the arbitration agreement was predicated and dependent on the existence and validity of the SoS agreement. It, however, erred when it then concluded that the arbitration agreement constituted a self-standing new arbitration agreement, separate and distinct from the SoS agreement and had survived the lapsing of the SoS agreement. These two findings are irreconcilable. To the extent that these are irreconcilable, it means they cannot be correct. It is either one or the other. In my view, the correct view is the one supported by the context of the agreement concluded by the parties which spells out their intention to have one umbrella agreement subsuming all others – if it falls foul and become invalid, all agreements thereunder are inevitably impacted. [30] It is evident from the common cause facts that there was no dispute over the non- fulfilment of the suspensive condition between the parties. The parties knew what was referred for arbitration: a dispute on who had breached the contract (breach of contract and specific performance). The arbitrator instead went beyond what the parties sought to be determined on the basis that he had the wide powers to determine what the real issue in dispute was between the parties, contrary to what the parties expressly referred to him for arbitration. That is why the appellant raised an application for his recusal, which he dismissed. [31] In its counter claim, the appellant introduced a reinstatement of the SoS agreement. The contention for the respondents was that the conduct of the parties showed that they considered the arbitration agreement as a reinstatement of the SoS agreement. But this cannot be correct because once it is accepted that, despite the conduct of the parties after the SoS agreement had lapsed, the truth is, the SoS agreement lapsed. That should be the end of the matter. In other words, it should mean that whatever the parties did subsequent to the lapsing of the SoS agreement cannot resuscitate the SoS agreement in the context of the express provisions of the SoS agreement that: (a) if any condition is not timeously fulfilled for any reason whatsoever and is not waived in terms of clause 3.3 then this shall be of no force and effect (3.4.1); the parties shall be entitled to be restored as near as possible to the positions in which they would have been, had this agreement not been entered into (3.4.2); and no party shall have claim against any other party in terms of the agreement except for such claims (if any) as may arise from a breach of any other provision of the agreement by which the parties remain bound (3.4.3); (b) the parties agreed that all the transactions and arrangements contemplated by the agreement constituted a single and indivisible transaction. This means that, if one agreement fell through due to non-fulfilment of the suspensive condition, all other agreements fell through. Had the parties intended otherwise, when they concluded the arbitration agreement, they would have expressly said so. [32] Even on a cursive reading, the arbitration agreement gives no such impression. In any event, the SoS agreement makes no provision for the arbitration agreement the parties concluded outside of what they contemplated under clause 22, under the rules of the AFSA and for the arbitrator to be appointed by AFSA. If anything, even if it is accepted that clause 22 was purportedly substituted by clause 4.2 of the arbitration agreement; this is contrary to the express provision of clause 29 of the SoS agreement that ‘this agreement constitutes the whole agreement between the parties as to the subject matter hereof, and no agreement, representations or warranties between the parties other than those set out herein are binding on the parties.’ [33] The argument that the parties agreed that the arbitration agreement is severable and can survive outside the SoS agreement, is of no assistance to the respondents as well because, although clause 25 of the SoS agreement specifically provides that each provision of the SoS agreement is severable from all of others, this is with reference to the SoS agreement. To accept, as the respondents contend, that the arbitration agreement revived the lapsed SoS agreement, means that the other agreements will continue to exist and impose on the parties a contract they did not contemplate. This interpretation will disregard the context and the language of the agreement which the parties intended to be bound by. This is a dispute as defined by the parties even under the purported arbitration agreement which means, under definitions, clause 2.10 of the Arbitration agreement, ‘disputes as framed in the statement(s) of claims, defences, counter claims, and counter defences, filed as part of these Arbitration Proceedings.’ [34] This is so because, the SoS agreement is but one composite agreement comprised of several other agreements which should fall by the wayside because one agreement fell through. Contrary to what the respondents submitted, it would be ‘unbusiness-like’ for commercial people to agree to have a single composite agreement comprising of more than one agreement subject to one suspensive condition, to continue with others when one agreement falls through or has lapsed. The agreements are interrelated. That is the expected domino effect. [35] I agree with counsel for the appellant that when the SoS agreement is considered as a whole with the background of what the parties intended – conclusion of various agreements as one single and indivisible transaction – the arbitration agreement cannot be interpreted in isolation from that intention and context. The many contracts under one umbrella were ‘constructed with a design in mind, and their architects choose words and concepts to give effect to that design.’ Courts’ approach to interpret such contracts cannot construct such contracts in piece-meal, but as whole, particularly where there is no possible ambiguity in their meaning. Assuming that the respondents are correct in their contention that the parties intended the arbitration to be a new agreement, distinct from the SoS agreement, to the extent that even where the SoS agreement became null and void, the arbitration agreement concluded subsequently, survived the SoS agreement; in line with the authorities cited above, this would fly in the face of what the parties clearly intended. The context is clear; the parties intended that all the agreements be one indivisible agreement which lapsed. The arbitrator simply went beyond what the parties agreed should be arbitrated. He deviated from his mandate of the parties. Thus, the parties could not be bound by that decision which was in essence ultra vires. It is obvious that if this Court holds that the SoS agreement lapsed and that the subsequent arbitration agreement could not have survived its death, the arbitration award ought not to have been granted. [36] Finally, if consideration is given to the words used by the parties even in the subsequent Arbitration Agreement, such as ‘any dispute that arises from the said Agreements’, cannot be taken to mean any dispute, but that which the parties have agreed upon as defined under the contractual definitions. Clause 2.10 of the purported Arbitration Agreement referred to private commercial arbitration read with AA1 to AA7. This means that the dispute referred to the arbitrator; not the arbitrator’s unilateral decision was the issue for determination, contrary to the parties’ mandate. The respondents know this but are evidently latching on this technicality, the purported decision of the arbitrator, well aware of what the parties actually intended. Apart from this, as is trite and in line with judgments such as North East Finance (Pty) Ltd v Standard Bank of South Africa Ltd, if one party to the alleged contract contends that it is void ab initio, the arbitration clause cannot operate, for on this view the clause itself is also void. Conclusion [37] In conclusion, the question posited was whether or not the arbitration agreement which was predicated on the existence and validity of the sales agreement, which in turn purported to amend the SoS agreement and purported to include it being as part of the arbitration agreement, was void. From the brief exposition above, the answer must be ‘yes’. It is clear that the SoS agreement ought to be treated as having never existed as it lapsed upon the non-fulfilment of the suspensive condition. The whole SoS agreement was moored in the understanding and purpose of the ‘suite of interrelated and interdependent ancillary contracts to give effect to the broad transaction and structure of one business contract.’ As such, any reliance placed on any provision in the lapsed contract is without basis and cannot stand on the simple basis that in our law ‘non- fulfilment of the suspensive conditions renders the contract void ab initio. . .’10 In the absence of any ambiguity in the meaning of the words used in the SoS agreement read with the arbitration agreement, the factual matrix (or context) in which the agreement was concluded, I am satisfied that the arbitration agreement did not substitute the SoS agreement in terms of clause 4.2 thereof to revive the SoS Agreement (See Paradyskloof Golf Estate (Pty) Ltd v Municipality of Stellenbosch). The SoS agreement also did not survive after the effective date which had come and gone without the fulfilment of the suspensive condition. It therefore follows that the arbitration agreement is a nullity as a result of the SoS agreement being a nullity. For these reasons the appeal ought to succeed. [38] In the result, the following order issues. The appeal is upheld with costs. The order of the high court is set aside and replaced with the following: ‘(a) It is declared that the arbitration contract entered between the applicant and second to fourth respondents is a nullity. (b) It is declared that the purported appointment of the first respondent in terms of Annexure A [the arbitration contract] is a nullity. (c) It is declared that the resultant purported arbitration proceedings, including the purported award by the first respondent dated 10 May 2021, Annexure C, is a nullity. (d) The costs of the application are to be paid by the second and third respondents.’ B C MOCUMIE JUDGE OF APPEAL 10 Ibid para 17. For the 1st to 3rd appellant. Adv MC Maritz SC Instructed by: Pierre Marais Attorneys, Pretoria Phatsoane Henney Attorneys, Bloemfontein For the 1st to 3rd respondent: Adv G Kairinos SC Instructed by: HJ Can Rensburg Inc Attorneys, Vanderbijlpark, AP Pretorius 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: 26 January 2024 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 Remo Ventures & Others v Cecil van Zyl and Others (Case no 1262/2022) [2024] ZASCA 09 (26 January 2024) Today the Supreme Court of Appeal (SCA) upheld an appeal from the Gauteng Division of the High Court, Pretoria (the high court). The SCA set aside the order of the high court and replaced it with one nullifying the arbitration contract entered into, including its proceedings, as well as the appointment of the first respondent in terms of the arbitration contract. On 3 April 2017, the appellants and the second and third respondents (the respondents) concluded a written Sale of Shares Agreement (the SoS agreement). In terms of this SoS agreement, the purchase price of R50 million was payable in tranches, with the first tranche of R10 million being paid on 16 March 2017. The second tranche of R20 million was payable on the effective date, described as 21 June 2017. However, on 20 July 2017, after the agreement had already lapsed, the parties concluded a so-called ‘Date Agreement’, in terms of which the date for payment of the second tranche was extended to 26 July 2017. Payment of the second tranche was effected on 31 August 2017, and accepted by the respondents. Transfer of the shares was effected on the same day. The SoS agreement was subject to a number of conditions precedent which included that the purchaser was to cede a life insurance policy on his life to the sellers to the value of R15 million (fifteen million rand) on or before the effective date being 21 June 2017. The sale agreement provided that if any conditions precedent were not timeously fulfilled and was not waived, then the whole sale agreement shall be of no force or effect. Clause 22 of the SoS agreement, however, did provide for dispute resolution proceedings through arbitration under the rules of the Arbitration Foundation of South Africa (AFSA). On the 21st of June 2021, the purchaser did not fulfil his obligations in terms of the contract. As a result, of this non-compliance, the suspensive condition came into existence and the SoS agreement became void. However, the parties disregarded this non-compliance and carried on as if the SoS agreement was still valid. On the 31st of July 2018 the respondents proceeded to demand payment of the third tranche of R10 million. On 20 February 2019, the parties concluded an arbitration agreement which was predicated and dependent upon the existence and validity of the SoS agreement. The parties entered into privately conducted and administered arbitration proceedings and appointed the third respondent as their own arbitrator. When the matter proceeded to the high court, the appellants pleaded that the SoS agreement was a nullity due to the fact that the suspensive condition was not fulfilled. As such, the arbitration agreement was also a nullity which, in turn, also made the decision of the arbitrator a nullity. The respondents’ defence was that the arbitration clause was independent and not related to the SoS agreement. The issue before the SCA was whether, despite the suspensive condition, the SoS agreement could be interpreted in such a manner as to allow for the existence of the arbitration agreement. This Court found that the arbitration agreement was void as the non-fulfilment of the suspensive condition deemed the SoS agreement to be non-existent. As such the respondents could not rely on any of the provisions that were contained in the lapsed contract; this was the express consequence of a suspensive condition. Because the SoS agreement did not survive the effective date by virtue of the suspensive condition, the arbitration agreement was a nullity. In the result, the SCA upheld the appeal and replaced the order of the high court with one nullifying the arbitration contract entered into, including its proceedings, as well as the appointment of the first respondent in terms of the arbitration contract. --------oOo--------

3483

non-electoral

2020

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not reportable Case no: 259/2018 In the matter between: ANESH RUGNANAN APPLICANT and THE STATE RESPONDENT Neutral citation: Rugnanan v State (Case no 259/18) [2020] ZASCA 166 (10 December 2020) Coram: PETSE DP, MBHA and DLODLO JJA and MATOJANE and GOOSEN AJJA Heard: 5 November 2020 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 9:45 on 10 December 2020. Summary: Criminal law and procedure – application for reconsideration of order refusing special leave – whether evidence of single witness passed muster – failure by the prosecution to call crucial witness – whether such failure warranted drawing of adverse inference – whether magistrate erred in not allowing cross-examination of the complainant in terms of s 227 of the Criminal Procedure Act 51 of 1977. ______________________________________________________________________ ORDER ______________________________________________________________________ On appeal from: KwaZulu-Natal Division of the High Court, Pietermaritzburg (Poyo- Dlwati J and Monyemore AJ), dismissing applicant’s petition seeking leave to appeal against refusal of leave to appeal by the regional court, Madadeni: Condonation for the late filing of the applicant’s application is granted. Condonation for the late filing of the respondent’s heads of argument is granted. The application for reconsideration of the order of this Court granted on 29 June 2015 refusing special leave to appeal is dismissed. ______________________________________________________________________ JUDGMENT ______________________________________________________________________ DLODLO JA (Petse DP, Mbha JA, Matojane and Goosen AJJA concurring) [1] The applicant, Mr Anesh Rugnanan, was convicted by the regional court, Madadeni, KwaZulu-Natal (the trial court), of two counts of rape read with the provisions of s 51 and Schedule 2 of the Criminal Law Amendment Act 105 of 1997 (the Minimum Sentences Act). He was also convicted of assault with intent to do grievous bodily harm and contravention of s 7(A) of the Sexual Offences Act 32 of 2007 for compelling the complainant, NR, to commit an act of masturbation. The applicant was effectively sentenced to 14 years’ imprisonment. The trial court refused the applicant leave to appeal against his conviction. The applicant also unsuccessfully petitioned the KwaZulu-Natal Division of the High Court, Pietermaritzburg (high court) for leave to appeal against his conviction. He, thereafter, proceeded to apply for special leave to appeal to this Court. His application was dismissed, on 29 June 2015 by this Court (Shongwe and Mathopo JJA) on the ground that there were no special circumstances meriting a further appeal. Thus, this is an application to reconsider the earlier order which dismissed the petition. In other words, this Court is called upon to make a determination on whether the trial court, the high court and this Court should have found that the applicant had reasonable prospects of success on appeal. [2] Before dealing with the merits of the application, it is necessary to dispose of one preliminary issue. Both parties have made applications for condonation for non- compliance with the rules of this Court regulating time limits within which to lodge the application and file heads of argument respectively. The respondent did not oppose the applicant’s condonation application. The applicant, on the other hand, opposed the respondent’s condonation application. Although he did not file an answering affidavit, he made oral submissions in this regard. It is common cause that the respondent’s condonation application explained that the relevant prosecutor to whom this matter was assigned fell ill and, as a result could not give this matter the attention it deserved. I am of the view that there are no justifiable reasons for the applicant to resist the respondent’s condonation application which must be granted herein. [3] Section 17(2)(f) of the Superior Courts Act 10 of 2013 (SC Act) confers a power on the President of this Court, in exceptional circumstances, to refer a decision of this Court refusing an application for leave to appeal to the Court for reconsideration and, if necessary, variation. Section 17(2)(f) provides: ‘The decision of the majority of the judges considering an application referred to in paragraph (b), or the decision of the court, as the case may be, to grant or to refuse the application shall be final: Provided that the President of the Supreme Court of Appeal may in exceptional circumstances, whether of his or her own accord or on application filed within one month of the decision, refer the decision to the court for reconsideration and, if necessary, variation.’ [4] In order for this application to succeed, the applicant must show that there exist exceptional circumstances. What constitutes exceptional circumstances in the context of s 17(2)(f) of the SC Act will be determined by considering the facts of each case.1 In MV AIS Mamas Seatrans Maritime2 Thring J remarked that: ‘1. What is ordinarily contemplated by the words “exceptional circumstances” is something out of the ordinary and of an unusual nature; something which is expected in the sense that the general rule does not apply to it; something uncommon, rare or different . . . 1 Joseph Manyike v The State [2017] ZASCA 96; see also Avnit v First Rand Bank Ltd [2014] ZASCA 132 para 4; S v Dlamin;, S v Dladla and Others; S v Joubert; S v Schietekat 1999 (4) SA 623 (CC) paras 75-77. 2 MV AIS Mamas Seatrans Maritime v Owners, MV AIS Mamas and Another 2002 (6) SA 150 (C) at 156 H. 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 literal meaning to the phrase, and by carefully examining any circumstances relied on as allegedly being exceptional.’ [5] In Liesching,3 the Constitutional Court enunciated the principles that are crucial to the enquiry by stating: ‘Without being exhaustive, exceptional circumstances, in the context of section 17(2)(f), and apart from its dictionary meaning, should be linked to either the probability of grave individual injustice (per Avnit) or a situation where, even if grave individual injustice might not follow, the administration of justice might be brought into disrepute if no reconsideration occurs. A relevant example may be the kind of situation that occurred in the Van Der Walt, where “contrary orders in two cases which were materially identical” were made by the Supreme Court of Appeal, and considered in this court. In summary, section 17(2)(f) is not intended to afford disappointed litigants a further attempt to procure relief that has already been refused. It is intended to enable the President to deal with a situation where otherwise injustice might result and does not afford litigants a parallel appeal process in order to pursue additional bites at the proverbial appeal cherry.’ Holmes JA remarked in De Jager: ‘It is clearly not in the interests of the administration of justice that issues of fact, once judicially investigated and pronounced upon, should lightly be re-opened and amplified. And there is always the possibility, such is human frailty, that an accused, having seen where the shoe pinches, might tend to shape the evidence to meet the difficulty.’4 3 S v Liesching and Others [2018] ZACC 25; 2019 (4) SA 219 (CC) paras 138 and 139. 4 S v De Jager 1965 (2) SA 612 (A) at 613A-B; confirmed in S v Liesching [2016] ZACC 41; 2017 (2) SACR 193 (CC); 2017 (4) BCLR 454 (CC). [6] In line with a strict construction of ‘exceptional circumstances’ in s 17(2)(f) of the SC Act, Mpati P held in Avnit: ‘Prospects of success do not constitute an exceptional curcumstances. The case must truly raise a substantial point of law, or be of great public importance or demonstrate that without leave a grave injustice might result. Such cases will be likely to be few and far between and the judges who deal with the original application will readily identify cases of the ilk. But the power under s 17(2)(f) is one that can be exercised even when special leave has been refused, so “exceptional circumstances” must involve more than satisfying the requriements for special leave to appeal. The power is likely to be exercised only when the President believes that some matter of importance has possibly been overlooked or a grave injustice will otherwise result.’5 [7] In order to assess whether exceptional circumstances exist in this case, it is necessary to consider the evidence that was led at the trial in order to enable us to decide whether there are reasonable prospects of success for purposes of the appeal against the refusal of the petition.6 The evidence led in this matter is foundational to the findings made by the trial court. It is for this reason necessary that such evidence is briefly set out hereunder. As this Court held in Smith,7 ultimately, in order to be granted leave to appeal, the applicant must convince the Court ‘on proper grounds that he has prospects of success on appeal and that those prospects are not remote, but have a realistic chance of succeeding’. [8] The applicant contended that he has prospects of success because, in his view, the trial court erred inter alia: (a) In accepting the evidence of the complainant who was a single witness and rejecting his; (b) in failing to call Ms Desiree Steenkamp (Desiree) and that this warranted the drawing of an adverse inference against the prosecution; (c) his right to a fair trial was violated in that: (i) the state did not ‘timeously’ offer Desiree as a witness to the defence; 5 Avnit v First Rand Trading [2014] ZASCA 132 para 7. 6 S v Matshona [2008] ZASCA 58; [2008] 4 All 68 (SCA); 2013 (2) SACR 126 (SCA) para 5. 7 S v Smith [2011] ZASCA 15; 2012 (1) SACR 567 (SCA) para 7. (ii) the trial court refused his application to cross-examine the complainant on her previous sexual history; and (iii) inadmissible evidence was allowed. [9] The complainant testified that she met the applicant through a social media platform called Mxit. She resorted to Mxit because she wanted to make friends. She exchanged her details with the applicant, resulting in the latter coming to her home in Nkandu Park, Newcastle. His arrival evoked no suspicion to the complainant because he was in the company of a woman who introduced herself as Jasmine. The three travelled together in the applicant’s motor vehicle proceeding to the applicant’s home in Lennoxton, Newcastle. The complainant was subsequently informed by Jasmine that her real name was Desiree and that she made a living by selling sexual favours to men. When the complainant wanted to go home, the applicant suggested that she stay over because it was late at night. All three of them spent the night sleeping in the same bed. The complainant was only taken home the next morning at 11h00. During the week, the complainant visited the applicant on several occasions. On one of those occasions, the applicant took the complainant to his place of work at Newcastle State Hospital, where he introduced her to his colleagues as his girlfriend. [10] There was also an occasion when the applicant was on an outing with the complainant and stopped the vehicle in order to buy cigarettes. The complainant got out of the vehicle in order to converse with a friend who she saw at the shop. This, apparently annoyed the applicant, and he became very angry. He drove out of Newcastle town towards Chelmsford Dam. In the middle of nowhere, the applicant stopped the vehicle and ordered the complainant out of the vehicle and told her to walk home. He further told her that when she was with him she was not permitted to converse with other men. She had to promise that it would not happen again before she could be allowed back into the applicant’s vehicle. Desiree who was also in the vehicle witnessed this episode. They went back to the applicant’s home and on this occasion they slept in separate bedrooms; but when the complainant awoke in the morning she discovered that the applicant was in bed next to her trying to undress her. She told the court that she refused the applicant’s advances because she was not ready for a relationship. After breakfast, the applicant took her home. He kept on pressurising her into becoming his girlfriend. The complainant, having recognised signs of aggression on the part of the applicant, went to Mxit on her cellular phone and deleted him from her contact list. She later received a request on Mxit and when she responded to the request, she immediately realised that it was the applicant. The applicant then accused her of having stolen his four gold rings, cash and clothing which she denied. She explained to the court that on one visit when she stayed over, she had no extra clothes and was given a jacket, a t-shirt and sneakers to use by the applicant. [11] Realising the false accusation, the complainant told the applicant that he could take back the items of clothing he had given her. She made it plain that she did not take anything else from the applicant. On the same day at 15h00, the applicant arrived at the complainant’s house with the police to search for the allegedly stolen items. However, none of the items that were alleged to have been stolen from the applicant were found. Clothing which the applicant had given to her was handed back to him. She, nevertheless, was put in the police van and taken to the police station as an arrested person, where she was later questioned. The applicant asked that the police allow him to speak to the complainant on the side This was allowed and the two spoke at the smoking area of the police station in the presence of Desiree. There, the applicant told the complainant to either confess to theft or that she would be locked up. The complainant felt intimidated and scared, and this resulted in her agreeing to what the applicant proposed. She decided to instead go with the applicant to his home to search for the missing goods. This event resulted in the applicant not opening a case of theft against her. The applicant and Desiree took the complainant to the applicant’s house. Once all three were inside, the applicant locked the driveway gate as well as the security gate to the house. [12] Whilst the complainant was busy looking for the missing items in the kitchen, the applicant physically assaulted the complainant, forced her to remove her clothing and threatened to rape her, which he in fact later did. He also forced her to masturbate and took a video of this incident on his cellular phone. These photographs contained in exhibit A were tendered as evidence with the consent of the defence. [13] Whilst all of this was happening, Desiree brought a piece of paper and a pen to the applicant who forced the complainant to write a confession, which he dictated to her. Eventually, the applicant returned her clothes and she got dressed. He told her that he would take her home. He threatened her that he would upload her naked photos to the internet. The applicant also took the complainant’s cellular phone and identity book. He first drove to the police station with her and parked his vehicle at the official parking. He got out, but on realising that the complainant was about to alight from the vehicle, he suddenly returned and drove her to her home. Before dropping her off at her home, he told her that he now owns her and that she must become a prostitute so that she can pay back whatever she owed him. On arrival at her home, the complainant woke her ex- husband up and reported to him that she had been raped and assaulted. Her ex-husband immediately took her to the police station where the matter was reported. [14] Detective Akram, who investigated this matter, noted numerous injuries on the complainant who was visibly upset and was crying at the time. Injuries noted by Akram, were inter alia; (a) Scrapes on her left cheek which were red; (b) three to four lineal welts on the left shoulder; (c) a welt on the right buttock, swelling on the left elbow described as a ‘lump’; (d) pinpoint blood dot on the right thumb; and (e) a graze on the left knee. At the applicant’s home the detective found the applicant together with Desiree. The applicant handed over to the detective a written document received by the trial court as exhibit B, purporting to be a confession by the complainant to the theft of the applicant’s items. The complainant’s identity book and cellular phone were also recovered from the applicant’s home by the detective. [15] Mr Francois Renison, the complainant’s ex-husband, testified as a first report witness. He explained how, late on Saturday night, 1 August 2009, the complainant came home traumatised and crying. She had bruises on her face and on her knees. He explained that the complainant reported to him how she was raped and assaulted. [16] Under cross-examination, the complainant testified that it was because of the applicant’s aggression and possessiveness that she decided to end their friendship. She denied that she and the applicant had a sexual encounter before 1 August 2009 or that she was in a sexual relationship with the applicant. She denied that on the night of the rape incident she had made sexual advances towards the applicant. Dr Singh, who examined the complainant after the incident, was not called to testify. Instead, the State handed in a statement in terms of s 212(4) of the Criminal Procedure Act8 accompanied by a J88 form completed by Dr Singh. [17] The applicant’s evidence was that he met the complainant on an electronic platform known as MIG33 in 2004/2005. They had a sexual relationship that lasted for two to three months, before he terminated their relationship. He explained that he subsequently met her again in 2009 on Mxit. [18] The applicant testified that the complainant stole six to eight rings from him and R600 in cash and that while they were at the police station, the complainant told him that they should go to his home and search for the rings. Indeed, he, the complainant and Desiree returned to the applicant’s home. He told the court that the complainant made sexual advances towards him and that they had sexual intercourse later on. He also admitted to taking two of the photographs of the complainant depicted in Exhibit A. He denied that the video on his profile of a woman masturbating was the complainant, but he could not explain who the person was or how the video clip had got onto his phone. According to the applicant, the complainant agreed to leave her identity document and cellular phone with him and then wrote a confession regarding her misdemeanours. The so-called confession by the complainant was Exhibit B in the trial court. He drove the complainant home, but first stopped at the police station to inform the police that things had been sorted out. However, at the police station he decided against this and took the complainant home. He could not, however, explain how she sustained injuries. [19] Under cross-examination, the applicant stated that from the moment he and the complainant met, the latter knew that he wanted sexual favours. Neither he nor the 8 Criminal Procedure Act 51 of 1977 as amended. complainant ever discussed that they recognised each other from a previous sexual relationship some three or four years previously. Importantly, the magistrate recorded that under cross-examination the applicant’s memory seemed to fade and he could no longer recall the details he gave in his evidence-in-chief. He claimed his loss of memory was due to the fact that the incidents happened a long time ago and that he felt scared and intimidated by the prosecutor. He changed his versions of events on several occasions. The applicant’s version was that the sexual intercourse they had in August 2009 was because the complainant enticed him and masturbated in his presence. [20] The magistrate in evaluating the evidence took into account that the complainant was a single witness and he accordingly approached her evidence with caution. He found the complainant to be an honest witness. The magistrate found that she tendered her evidence in a straightforward manner and that even after a gruelling cross-examination her version remained constant. The magistrate also found that she gave a coherent account of the events to which she testified even under cross-examination. And that her ex-husband and Detective Akram confirmed the injuries she sustained. These injuries were also confirmed in the medico-legal examination conducted by the doctor. [21] The applicant was found by the magistrate to have been an unimpressive witness. The magistrate also found that the applicant was making up his version of events as he went along in his evidence-in-chief. It is common cause that the applicant provided detailed accounts of at least the first six encounters with the complainant in his evidence- in-chief but when he was cross-examined, he claimed that his memory loss was due to intimidation by the prosecutor. The magistrate was justifiably concerned when he said the following in his judgment: ‘The question arises; why take her back to his home to search for the goods if she stole it and it would not be there. The true version would be that it was the accused who lured the complainant by way of intimidation back to his home. He manipulated the complainant by the threat of arrest by the police, by assaulting and humiliating her into complying or into committing sexual acts to his perverted desire.’ [22] The applicant presented a version which was rejected as a lie by the magistrate. The remarks in this regard by the magistrate are telling: ‘It is clear to this court that the version of the accused cannot be believed and can safely be rejected as false’. The magistrate in his analysis of the evidence as a whole made credibility and factual findings. He took into account the fact that the complainant was a single witness and correctly employed the necessary caution relying on relevant authorities in this regard. As held in S v Sauls and Others,9 the magistrate satisfied himself that the truth was told by the complainant in this matter. [23] It is trite that an accused can be convicted of any offence on the evidence of a single competent witness.10 The well-established practice though, is that the evidence of a single witness should be approached with caution and that his or her merits as a witness are properly weighed against factors which militate against his or her credibility. The cautionary rule does not require that the evidence of a single witness must be free of all conceivable criticism. The requirement is merely that it should be substantially satisfactory in relation to material aspects or be corroborated. As mentioned above, the magistrate’s judgment demonstrated that the complainant’s evidence was evaluated with caution. She was found to be a straightforward witness whose version remained constant notwithstanding protracted cross-examination. In S v Francis,11 this Court guidingly warned: ‘Bearing in mind the advantage which a trial Court has of seeing, hearing and appraising a witness, it is only in exceptional cases that this Court will be entitled to interfere with a trial Court’s evaluation of oral testimony.’ In Mashongwa, Mogoeng CJ pointedly held that: ‘It is undesirable for this court to second guess the well-reasoned findings of the trial court. Only under certain circumstances may an appellate court interfere with factual findings of a trial court. 9 S v Sauls and Others 1981 (3) SA 172 (A) at 180E-G: ‘There is no rule of thumb test or formula to apply when it comes to a consideration of the credibility of the single witness (see the remarks of Rumpff JA in S v Webber. . .). The trial Judge will weigh his evidence, will consider its merits and demerits and, having done so, will decide whether it is trustworthy and whether, despite the fact that there are shortcomings or defects or contradictions in the testimony, he is satisfied that the truth has been told. The cautionary rule referred to by De Villiers JP in 1932 [in R v Mokoena 1932 OPD 79 at 80] may be a guide to a right decision but it does not mean “that the appeal must succeed if any criticism, however slender, of the witnesses’ evidence were well-founded” (per Schreiner JA in R v Nhlapo (AD 10 November 1952) quoted in R v Bellingham 1955 (2) SA 566 (A) at 569). It has been said more than once that the exercise of caution must not be allowed to displace the exercise of common sense.’ 10 Section 208 of the Criminal Procedure Act. 11 S v Francis 1991 (1) SACR 198 (A) at 204C-E. See also Rex v Dlhumayo and Another 1948 (2) SA 677 (A) at 705-706; S v Hadebe and Others 1998 (1) SACR 422 (SCA) at 426A-C. What constitutes those circumstances are demonstrable and material misdirection and a finding that is clearly wrong. Otherwise trial courts are best placed to make such findings.’12 Thus, the trial court’s factual findings cannot be faulted. The conclusion it arrived at was correct when one has regard to the totality of the evidential material and the fact that the applicant was demonstrably an unsatisfactory witness. It is trite that an appellate court’s powers to interfere with findings of fact by a trial court are limited. [24] Moreover, the evidence of the complainant’s ex-husband, Detective Akram, as well as the content of the medical report provide corroboration of the complainant’s evidence. The magistrate found no material contradictions in the State’s case.I am unable to fault the learned magistrate in this regard. It matters not whether it was the complainant’s knee or cheek that was injured. The proven fact is that she sustained injuries which were inflicted by the applicant. The fact that Desiree was not immediately available is of no consequence.The fact is that she was eventually made available to the defence as a witness and the State cannot be blamed for her disappearance. The applicant was on extended bail during the hearing. He was reportedly staying with Desiree. As the complainant was cross-examined on what Desiree would say, the conclusion that the defence must have had the opportunity to consult with her is accordingly justifiable. I fail to see how her disappearance thwarted the applicant’s right to a fair trial. [25] Another complaint put forth by the applicant is that the magistrate erroneously turned down his application to cross-examine the complainant about her previous sexual encounters. This was a reference to his application in terms of s 227 of the Criminal Procedure Act. The thrust of s 227 is that evidence and cross-examination directed at previous sexual experience may be allowed. When dealing with a sexual offence as is the case in this appeal, evidence and cross-examination relating to the previous sexual experience of the complainant is allowed only after the court has granted an application under s 227(2). It is to be noted that the court may grant such application only if it is satisfied that such evidence or questioning is relevant to the proceedings before the court.13 The criteria is set out in subsecs (5) and (6). The applicant’s version was that he 12 Mashongwa v Passenger Rail Agency of South Africa [2015] ZACC 36; 2016 (3) SA 528 (CC) para 45. 13 Section 227(4) of Criminal Procedure Act. had previously had a sexual relationship with the complainant in 2005/2006. Perhaps, therefore, the rationale behind the application was that since she had (on his version) previously consented, she was likely to consent years later. That is far-fetched and would have been unfair to the complainant. The application was clearly not relevant to the applicant’s defence of consent. The magistrate was correct in dismissing this application. In any event the complainant denied that there was a previous relationship between them. And the applicant’s assertion to the contrary is belied by the fact that even on his version he never, at any stage, mentioned this to the complainant during the period that he was still on friendly terms with her. [26] The applicant did not establish any exceptional circumstances meriting a further appeal to this Court. Having painstakingly gone through the record of proceedings in search of prospects of success, I have found none. In order to be granted leave to appeal, an applicant must make out a case that the envisaged appeal would have a reasonable prospect of succeeding. Under s 17(1)(a) of the SC Act, leave to appeal ‘may only be given’ where one of these two requirements are satisfied: (i) First, in terms of s 17(1)(a)(i) of the SC Act ‘the appeal would have a reasonable prospect of success’; or (ii) Second, in terms of s 17(1)(a)(ii) of the SC Act ‘there is some other compelling reason why the appeal should be heard, including conflicting judgments on the matter under consideration’. [27] The applicant has failed to meet the requirements stipulated by the SC Act. The truth is that the State in this matter presented a formidable case against the applicant; which case the applicant failed to meet. In the circumstances therefore, the application falls to be dismissed. [28] In the result the following order is made: Condonation for the late filing of the applicant’s application is granted. Condonation for the late filing of the respondent’s heads of argument is granted. The application for reconsideration of the order of this Court granted on 29 June 2015 refusing special leave to appeal is dismissed. _________________ D V DLODLO JUDGE OF APPEAL Appearances: For Applicant: N Terblanche Instructed by: Beirowski Attorneys, Pretoria Peyper Attorneys, Bloemfontein For Respondent: C Cander Instructed by: Director of Public Prosecutions, Pietermaritzburg 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: 10 December 2020 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. Rugnanan v The State (259/2018) [2020] ZASCA 166 (10 December 2020) Today, the Supreme Court of Appeal (SCA) dismissed the application for reconsideration of the earlier order dated 29 June 2015 refusing special leave to appeal. The applicant, Mr Anesh Rugnanan, was convicted by the regional court, Madadeni, KwaZulu-Natal, of two counts of rape read with the provisions of s 51 and Schedule 2 of the Criminal Law Amendment Act 105 of 1997. He was also found guilty of assault with intent to do grievous bodily harm and contravention of s 7(A) of the Sexual Offences Act 32 of 2007. He was effectively sentenced to 14 years’ imprisonment. Aggrieved with the conviction, the applicant applied for leave to appeal. The regional court dismissed that application on the basis that it lacked prospects of success in the contemplated appeal. Anesh Rugnanan then petitioned the KwaZulu-Natal High Court, Pietermaritzburg (high court). His petition was dismissed by the high court on the same basis that there were no reasonable prospects of success in the envisaged appeal. Further aggrieved by this dismissal, the applicant proceeded to approach the SCA for special leave to appeal against the high court's dismissal of his petition, which was also dismissed. He then applied in terms of s 17(2)(f) of the Superior Court Act 10 of 2013 to the President of the SCA for reconsideration of this Court's earlier order. The President referred the application to a panel of five judges. The parties made oral submissions. The issue for determination before the SCA was whether exceptional circumstances in the context of s 17(2)(f) of the Superior Courts Act 10 of 2013 existed, meriting a further appeal to the SCA. On appeal, the SCA held that the application must fail in that no exceptional circumstances had been shown to exist meriting a further appeal to it. The SCA found further that in any event the contemplated appeal had no prospects of success. The SCA therefore in dismissing the application for reconsideration endorsed its earlier order which dismissed the application for special leave to appeal. -END-

3927

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case no: 715/2021 In the matter between: PACIFIC SOLAR TECHNOLOGIES (PTY) LTD APPELLANT and THE COMMISSIONER OF THE SOUTH AFRICAN REVENUE SERVICE RESPONDENT Neutral citation: Pacific Solar Technologies (Pty) Ltd v The Commissioner of the South African Revenue Service (Case no 715/2021) [2022] ZASCA 166 (29 November 2022) Coram: PONNAN, GORVEN and MABINDLA-BOQWANA JJA and BASSON and MASIPA AJJA Heard: 15 November 2022 Delivered: 29 November 2022 Summary: Customs and Excise Act 91 of 1964 – whether solar home system has the essential character of an energy source and power generation device or that of a lighting kit – product has a utility of its own – it constitutes a fully functioning lamp – classifiable under tariff heading 9405.40.21 of Part 1 of Schedule 1 to the Act. __________________________________________________________________ ORDER __________________________________________________________________ On appeal from: Gauteng Division of the High Court, Pretoria (Baloyi-Mere AJ, sitting as court of first instance): 1 The appeal is dismissed with costs, including those of two counsel. 2 The order of the high court is amended by the addition of the following: ‘The product is determined to be classifiable under tariff heading 9405.40.21 of Part 1 of Schedule 1 to the Customs and Excise Act 91 of 1964.’ __________________________________________________________________ JUDGMENT __________________________________________________________________ Ponnan JA (Gorven and Mabindla-Boqwana JJA and Basson and Masipa AJJA concurring) [1] This is an appeal against an order made under s 47(9)(e) of the Customs and Excise Act 91 of 1964 (the Act) by Baloyi-Mere AJ in the Gauteng Division of the High Court, Pretoria (the high court). [2] The amount of customs duty payable upon importation depends on the tariff heading (TH) or sub-heading in Part 1 of Schedule 1 to the Act, under which the product is to be classified. The appellant, Pacific Solar Technologies (Pty) Ltd (Pacific Solar), imports five different types of what are described as solar home systems (the product), which was entered under TH 8501.31. On 29 March 2018, the respondent, the Commissioner of the South African Revenue Service (the Commissioner), made tariff determinations in respect of two of the models imported by Pacific Solar, namely the PVES 20W and PVES 100W models. The Commissioner determined that both (being the only two relevant for the purposes of this appeal) were classifiable under TH 9405.40.90. [3] Preliminarily, three observations need to be made. First, the Commissioner explained that the initial classification under TH 9405.40.90 was made in error and that the correct classification was rather TH 9405.40.21. Nothing turns on that, as the matter proceeded and was argued on the latter basis before the high court. Second, although Pacific Solar had specifically sought an order that ‘[t]he determinations made by the Commissioner that [the product] imported by [Pacific Solar] be classified under TH 9405.40 be set aside and be substituted with a determination that the imported goods be classified under TH 8501.31’, the high court merely dismissed the application with costs including those of two counsel. In so doing, the court appears to have lost from sight that as the application before it was a hearing de novo, it ought in that regard to have made a formal determination and order. Before us, it was accepted that when regard is had to the judgment of the high court as a whole, the absence of a formal determination was clearly due to an oversight on the part of the learned judge; we were accordingly asked to rectify the shortcoming by adding the requisite order. Third, as the only competing headings were respectively ‘8501’ and ‘9405’, the reference by the high court to heading ‘9404’ (instead of ‘9405’) was one clearly in error. [4] It is unnecessary for the purposes of this judgment to discuss once again the general principles of tariff classification. Those were recently restated in Samsung Electronics SA (Pty) Ltd v The Commissioner for the South African Revenue Service [2022] ZASCA 126. [5] The two competing tariff headings in this case are 8501.31 (as contended by Pacific Solar) and 9405.40.21 (as contended by the Commissioner). They respectively provide: ‘8501 – electric motors and generators (excluding generating sets) 8501.31 – Of an output not exceeding 750W.’ ‘9405 – Lamps and lighting fittings including searchlights and spotlights and part thereof, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included. 9405.40 – Other electric lamps and lighting fittings. 9405.40.21 – Other light fittings, containing light emitting diodes (LED) as a source of illumination.’ [6] The Section Notes and Explanatory Notes to Section XVI of the Harmonized Commodity Description and Coding System dated 14 June 1983 provide: ‘3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. 4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function.’ [7] Pacific Solar contends that ‘Other electric lamps and lighting fittings’ in the tariff sub-heading 9405.40, refers to the source of illumination, for example, the globe or LED. In order to address this argument, it is necessary that regard also be had to the relevant explanatory note to tariff heading 94.05 and subheading 9405.40. It provides: ‘Lamps and light fittings of this group can be constituted of any material (excluding those materials described in Note 1 to Chapter 71) and use any source of light (candles, oil, petrol, paraffin (or kerosene), gas, acetylene, electricity, etc.). Electrical lamps and lighting fittings of this heading may be equipped with lamp-holders, switches, flex and plugs, transformers, etc., or, as in the case of fluorescent strip fixtures, a starter or a ballast.’ [8] The explanation that ‘lamps and lighting fittings . . . can . . . use any source of light’ and ‘may be equipped’ with any type of components alluded to, are destructive of Pacific Solar’s contention. TH 9405.40.21 gives further effect to the provisions in the heading, as explained and supported by the explanatory note. It describes the lamps classifiable therein with reference to both the lamp/light fitting and the light source. The words ‘containing light emitting diodes (LED) as a source of illumination’ make it clear that the product to be classified is the ‘light fittings’. [9] As presented on importation, the product, which bears the description ‘Solar Lighting Kit’, comprised the following three main components: (a) a solar panel; (b) a power bank (battery and controller); and (c) LEDs (including the cabling). Although there are some issues on which the experts do not agree, which relate in the main to finer technical aspects and not the fundamental features of the product, it is not in dispute between them that, as presented upon importation, the kits are fully functional lamps. It is also not in dispute that the product is similar to that which formed the subject of the dispute in Ellies Electronics (Pty) Ltd v The South African Revenue Service.1 [10] In that regard, Pacific Solar’s expert, Professor Fourie, stated: ‘[54] I have compared the Ellies Product with the Solar Home System. The Solar Home System has been discussed in detail above. [55] The Ellies Products are very similar to the Solar Home System. The only clear difference is the power ratings or output. The Solar Home System has a much higher power rating, allowing a wider range of electronics to be powered either alone or simultaneously than the Ellies Products. [56] I have physically verified that the Solar Home System can power electronics in parallel with the LED lamps, or even when no LED lamps are present. From what I can gather from documentation, the Ellies products can do the same. [57] Apart from the difference in power rating or output, the Solar Home System and Ellies Product are very similar. I cannot verify the exact DC connectors on the Ellies Products, but it looks probable that the Ellies lamp connectors use the very same DC connectors as the Solar Home System. In that case, lamps are completely interchangeable between the Ellies and Solar Home System, which would nullify any claim that the lamps are dependent on their specific solar power units. Even if the DC connector sizes differ, these are all industry standard. [58] As for the lamps: the Ellies Products and the Solar Home System products all use the same standard E27 screw connector, so that the lamps can be directly interchanged between the Ellies Products and the Solar Home System and they would work with any of the devices. The lamps were thus clearly not designed to be used specifically with the products with which they are sold, but are added as standard accessories to the solar power generators for both the Ellies Product and the Solar Home System.’ 1 Ellies Electronics (Pty) Ltd v The South African Revenue Service [2019] ZAGPPHC 61. [11] In the Ellies Electronics matter, Van der Westhuizen J observed: ‘The point of dispute is a narrow one. The issue is whether the product is merely a generator, or, a source of illumination as described in Tariff Heading 9405.40.21, as contended for by the respondent. In considering this dispute, what has to be determined is whether the product can be described having an essential part, or whether the product has no essential part but is made up of different components, all having no essential characteristics.’2 [12] The learned judge held: ‘The product as presented, and as described in the product manual or data sheet supplied therewith, is in my view clearly aimed at supplying an alternative light source. It is irrelevant for what the end user may use the product. Further in my view, had the product as presented not contained the lights, the approach adopted by the applicant and as contended for on its behalf, may have been persuasive. However, the inclusion of the lights, as part of the product, cannot be ignored . . . The inclusion of the lights have a purpose. That purpose is clearly defined by the combination of the three main components in the package and as defined in the product manual or data sheet. The primary design and use of the product is a solar panel light kit. The primary design and use of the product being a solar power panel light kit, the product as presented cannot fall under Tariff Heading 85.01 “– Electric motors and generators (excluding generating sets)” of Part 1 of Schedule No 1 to the Customs and Excise Act. The more appropriate Tariff Heading, in my view, is that of “9405.40.21” of Schedule 1, “Lamps and lighting fittings, including searchlights and spotlights and parts thereof not elsewhere specified or included: Other electric lamps and lighting fittings: Other [light fittings], containing light emitting diodes (LED) as source of illumination.”.’3 2 Ibid paras 17 &18. 3 Ibid paras 21-24. [13] This accords with what was said by this Court (per Heher JA) in Commissioner for the South African Revenue Services v LG Electronics SA (Pty) Ltd.4 In that matter, the respondent, LG Electronics, imported plasma display screens from Korea. It also imported tuners (also described as interface boards) from the same source. When the two were appropriately combined, they constituted a television set. A tuner is the means by which television signals are received and converted to an optical image on the screen. Absent a tuner, the screen lacked the essential character of a complete television set. The screens, which were per se functional video monitors, were sold and used as such. Although the overwhelming use by retailers and the public of the two items was in combination as a television set, the respondent did not itself assemble the screens and tuners into television sets, but sold them separately. This Court accepted that the modus operandi of the respondent was what it purports to be, namely the importation of two separate items, each having its own commercial utility. [14] On that score, Heher JA reasoned: ‘While it is clear that each determination must be made according to the salient facts attaching to the goods in question (and, in particular, its objective characteristics), and while in one case an engine may properly be regarded as the essence of the goods, in another a frame or chassis may be sufficient to satisfy that test. In Autoware (Pty) Ltd v Secretary for Customs and Excise, Colman J was required to consider whether a vehicle was a panel van or an incomplete station wagon on importation. The learned judge found that the relative simplicity and low cost of modification was not a decisive criterion, because the enquiry does not turn on what the product was going to be or 4 Commissioner for the South African Revenue Services v LG Electronics SA (Pty) Ltd [2010] ZASCA 79; 2012 (5) SA 439 (SCA). what it will be adapted to be. Rather, the court must consider what the product was at the time of importation. Colman J held that that issue – “must be decided on the basis of the presence or absence, in the unmodified vehicles, of the essential features or components of a station wagon . . . What I mean by an essential feature of a station wagon is not a feature which is important, for one reason or another, or even one which is essential for the proper functioning of a station wagon. I mean a feature which is essential in that it embodies the essence of a station wagon, and differentiates such a vehicle from others which are not station wagons.” I respectfully endorse that approach. At the time of entry the screens were, as the appellant concedes, functional video monitors. They possessed an existence and utility of their own which did not include or require the incorporation of a device capable of receiving high frequency radio waves and converting the signal into optical images. But without such a device the use of the screens as ‘reception apparatus for television’ was totally excluded. That the screen was designed to accept such a device or could be easily modified to accept it, is, as, Colman J pointed out, of no consequence if the essential nature does not exist at the time of importation. Nor does the ‘unnecessary’ addition of the ‘sophisticated’ features which are embodied in the respondent’s screens, make up for the absence of the means of receiving and converting signals albeit that it strongly indicates an intention on the part of the importer that the product is to offer an alternative use to the ultimate purchaser. It is the primary design and use which carries most persuasion.’5 [15] The corollary, so it seems to me, must be that if the screen and tuner had been packaged and presented, as here, in combination as a composite machine, the product, upon importation, would have been classifiable as a television set. The product in this matter, as presented at the time of entry, constituted a fully functioning lamp. That is common cause. Accordingly, by application of the 5 Ibid paras 15 and 16. principle in the LG Electronics matter, the product falls to be classifiable under TH 9405.40.21. Pacific Solar attempts to elide the fact that, as presented, the kits were fully functional lamps and, as such, ‘possessed an existence and utility of their own’. And, seeks to wish away the presence of one of the main components of the product, namely the LEDs and cabling connecting them to the power bank. It, of course, has to do so to establish a proper factual foundation, upon which to rest its case. [16] In the result: 1 The appeal is dismissed with costs, including those of two counsel. 2 The order of the high court is amended by the addition of the following: ‘The product is determined to be classifiable under tariff heading 9405.40.21 of Part 1 of Schedule 1 to the Customs and Excise Act 91 of 1964.’ _________________ V M PONNAN JUDGE OF APPEAL APPEARANCES For appellant: A P Joubert SC and D Gintner Instructed by: Harris Billings Attorneys, Johannesburg Webbers, Bloemfontein For respondent: J A Meyer SC and W N Mothibe Instructed by: Klagsbrun Edelstein Bosman & Du Plessis Attorneys, 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: 29 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 Pacific Solar Technologies (Pty) Ltd v The Commissioner of the South African Revenue Service (Case no 715/2021) [2022] ZASCA 166 (29 November 2022) Today, the Supreme Court of Appeal (SCA) handed down judgment dismissing an appeal against a decision of the Gauteng Division of the High Court, Pretoria (the high court). The issue before the SCA was whether a solar home system had the essential character of an energy source and power generation device or that of a lighting kit. The amount of customs duty payable upon importation depends on the tariff heading (TH) or sub- heading in Part 1 of Schedule 1 to the Customs and Excise Act 91 of 1964 (the Act), under which the product is to be classified. The appellant, Pacific Solar Technologies (Pty) Ltd (Pacific Solar), imported five different types of solar home systems (the product), which was entered under TH 8501.31. On 29 March 2018, the respondent, the Commissioner of the South African Revenue Service (the Commissioner), made tariff determinations in respect of two of the models imported by Pacific Solar, namely the PVES 20W and PVES 100W models. The two competing tariff headings in the case were 8501.31 (as contended by Pacific Solar) and 9405.40.21 (as contended by the Commissioner). They respectively provide: ‘8501 – electric motors and generators (excluding generating sets) 8501.31 – Of an output not exceeding 750W.’ ‘9405 – Lamps and lighting fittings including searchlights and spotlights and part thereof, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included. 9405.40 – Other electric lamps and lighting fittings. 9405.40.21 – Other light fittings, containing light emitting diodes (LED) as a source of illumination.’ The SCA relied on the principle set out in Commissioner for the South African Revenue Services v LG Electronics SA (Pty) Ltd (LG Electronics) [2010] ZASCA 79, wherein it was held that the enquiry ‘does not turn on what the product was going to be or what it will be adapted to be. Rather, the court must consider what the product was at the time of importation’. The SCA found that the product, as presented at the time of entry, constituted a fully functioning lamp, which was common cause. Accordingly, by application of the principle in the LG Electronics matter, the product fell to be classifiable under TH 9405.40.21. ~~~~ends~~~~

3729

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 887/2020 In the matter between: BOOL SMUTS FIRST APPELLANT LANDMARK LEOPARD AND PREDATOR PROJECT – SOUTH AFRICA SECOND APPELLANT and HERMAN BOTHA RESPONDENT Neutral Citation: Bool Smuts and Another v Herman Botha (887/20) [2022] ZASCA 3 (10 January 2022) Coram: ZONDI, MATHOPO, PLASKET and MBATHA JJA and UNTERHALTER AJA Heard: 23 November 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 15h00 on 10 January 2022. Summary: Right to privacy – the right to freedom of expression – public disclosure of personal information by owner – whether such personal information protected by right to privacy – personal information ceases to be private once released to public domain by owner – appeal upheld. ___________________________________________________________________ ORDER ___________________________________________________________________ On appeal from: The Eastern Cape Division of the High Court, Port Elizabeth (Roberson J sitting as court of first instance): The appeal is upheld with costs including costs of senior counsel. The order of the Eastern Cape Division of the High Court, Port Elizabeth is set aside and replaced with the following: ‘(a) The rule nisi is discharged with costs. (b) The application is dismissed with costs.’ ___________________________________________________________________ JUDGMENT ___________________________________________________________________ Mathopo JA (Zondi JA, Plasket JA, Mbatha JA and Unterhalter AJA concurring): [1] On the 23 September 2019, in the early hours of the morning, a group of cyclists were participating in an adventure ride organised by Quantum Adventure. During their ride, they traversed the farm Varsfontein belonging to the respondent, Mr Herman Botha (Mr Botha). Nicholas Louw, one of the cyclists noticed two cages on the farm, one containing a dead baboon, the other a dead porcupine. According to his observations, the cages were positioned where there was no shade and water. There were some oranges near the baboon. He formed the view that the animals had died as a result of dehydration whilst trapped in the cages. Incensed by what he saw, he took photographs of the cages containing the dead animals and sent them to the first appellant, Mr Smuts, a wildlife conservationist and activist who for the past 17 years has been a leader in efforts to promote the conservation of indigenous wildlife in South Africa, particularly in the Eastern, Western and Northern Provinces. He is also the founder and executive director of the second appellant, Landmark Leopard and Predator Project–South Africa (Landmark Leopard). [2] Upon receipt of the photographs, Mr Smuts contacted Mr Botha via WhatsApp and Mr Botha confirmed that he had a valid permit to hunt, capture and/or kill the baboons, porcupines and other vermin. On the 9 October 2019, Mr Smuts posted, on Landmark Leopard’s Facebook pages, pictures of the dead baboon and porcupine trapped on the farm owned by Mr Botha. On his Facebook page, Mr Smuts also included a picture of Mr Botha holding his six-month old daughter. Additionally, he posted a Google Search Location of Mr Botha’s business, his home address and his telephone numbers. A WhatsApp conversation between Mr Smuts and Mr Botha was also posted. In that post, Mr Botha was asked by Mr Smuts if he had a permit to trap animals to which he responded in the affirmative. Mr Smuts captioned the post with the following commentary: ‘While we spend our efforts trying to promote ecologically acceptable practices on livestock farms to promote ecological integrity and regeneration, we are inundated by reports of contrarian practices that are unethical, barbaric and utterly ruinous to biodiversity. These images are from a farm near Alicedale in the Eastern Cape owned by Mr Herman Botha of Port Elizabeth, who is involved in the insurance industry. The farm is Varsfontein. This is utterly vile. It is ecologically ruinous. Mr Botha claims to have permits to do this – see the Whatsapp conversation with him attached. The images show a trap to capture baboons (they climb through the drum to get access to the oranges – often poisoned – and then cannot get out). See the porcupine in traps too. Utterly unethical, cruel and barbaric.’ [3] The post generated many comments on Facebook, which were mostly critical of Mr Botha and the particular practice of trapping animals. People who viewed the post in turn posted slanderous and insulting comments about Mr Botha and his practice. One user suggested that, ‘he should be in that cage’ and another user suggested that Mr Botha should be ‘paid a visit’. One person suggested that Mr Botha’s business should be boycotted and a campaign launched to name and shame him and his insurance brokerage business. [4] Unhappy with the posts and the publicity it generated, Mr Botha instituted an urgent application in the High Court of the Eastern Cape Division, Port Elizabeth (the high court) for an interim interdict prohibiting Mr Smuts and Landmark Leopard from publishing defamatory statements about him. Mullins AJ granted a rule nisi, in terms of which Mr Smuts and Landmark Leopard were ordered to remove the photographs of Mr Botha and certain portions of the Facebook that made reference to Mr Botha, his business, its location and the name of the farm. Mr Smuts and Landmark Leopard were also prohibited from making further posts making reference to Mr Botha, his family and his business. The photograph of Mr Botha and his daughter was removed by Mr Smuts before the interim order was granted. [5] On the return date, the rule nisi was confirmed by Roberson J. The high court held that although Mr Smuts and Landmark Leopard were entitled to publish the photographs and to comment on them, they were not entitled to publish the fact that the photographs were taken on a farm belonging to Mr Botha. The high court reasoned that the name of the farm and Mr Botha’s identity, as owner of it, constituted personal information protected by his right to privacy. It held that Mr Botha established a clear right to an interdict, and his right to privacy was infringed by the publication of his personal information on Facebook. It adopted an approach that the public interest lay in the topic and not in Mr Botha’s personal information. As a result, the high court concluded that Mr Smuts and Landmark Leopard had acted unlawfully in linking Mr Botha to the practice of animal trapping. This appeal is with the leave of the high court. [6] The question to be answered is whether the publication of Mr Botha’s personal information such as Mr Botha's identity and his business and home address enjoys the protection of the right to privacy. This issue raises a number of interconnected questions. First, whether it is in the public interests that the personal information of Mr Botha be published. Second, whether Mr Smuts could inform the public about the activities on Mr Botha’s farm without disclosing his personal information. In other words, was it in the public interest to know the exact location of Mr Botha’s farm? Third, was the high court correct in placing emphasis on Mr Botha’s personal information despite the fact that this was already in the public domain. [7] At the centre of this appeal is whether the publication of the Facebook posts by Mr Smuts is protected by the right to freedom of expression. In essence, what is implicated in this appeal is the tension between the right to privacy and the right to freedom of expression. This calls for a delicate balance to be drawn between these two important, competing rights. [8] The right to privacy is a fundamental right that is protected under the Constitution. It is a right of a person to be free from intrusion or publicity of information or matters of a personal nature. It is central to the protection of human dignity, and forms the cornerstone of any democratic society. It supports and buttresses other rights such as freedom of expression, information and association. It is also about respect; every individual has a desire to keep at least some of his/her information private and away from prying eyes. Another individual or group does not have the right to ignore his wishes or to be disrespectful of his desire for privacy without a solid and reasoned basis. [9] In Bernstein v Bester NO1, Ackermann J, writing for the majority, provided a rich account of the right to privacy. Although the judgment interpreted the right to privacy in the interim Constitution, its interpretation remains of durable value to an understanding of the right to privacy in s14 of the Constitution. Ackermann J put the matter this way: the scope of a person’s privacy extends ‘to those aspects in regard to which a legitimate expectation of privacy can be harboured’ A legitimate expectation of privacy has two component parts: ‘a subjective expectation of privacy…that society has recognized…as objectively reasonable’.2 This rather abstract formulation is made more concrete by the adoption of the concept of a continuum of privacy interests.3 The right to privacy is most powerfully engaged where the inner sanctum of a person’s life is protected from intrusion. But as a 1 Bernstein v Bester NO 1996 (2) SA 751 (CC). 2 At para 75. 3 A phrase coined by Sachs J in Ministry v Interim National Medical and Dental Council of South Africa 1998 (4) SA 1127 (CC) at para 27. person moves into the world of communal, business and social interaction, the scope for the exercise of the right diminishes.4 [10] Privacy enables individuals to create barriers and boundaries to protect themselves from unwarranted interference in their lives. It helps to establish boundaries to limit who has access to their space, possessions, as well as their commercial and other information. It affords persons the ability to assert their rights in the face of significant imbalances. It is an essential way to protect individuals and society against arbitrary and unjustified use of power by reducing what can be known about, and done to them. The right to privacy is not sacrosanct, it must be balanced with the rights of other citizens. [11] In South African National Defence Union v Minister of Defence and Another, the Constitutional Court stated that: ‘Freedom of expression lies at the heart of a democracy. It is valuable for many reasons, including its instrumental function as a guarantor of democracy, its implicit recognition and protection of the moral agency of individuals in our society and its facilitation of the search for truth by individuals and society generally. The Constitution recognises that individuals in our society need to be able to hear, form and express opinions and views freely on a wide range of matters.’ 5 [12] There is an illuminating discussion on the meaning of freedom of expression by Kriegler J in S v Mamabolo, where he said the following: ‘Freedom of expression, especially when gauged in conjunction with its accompanying fundamental freedoms, is of the utmost importance in the kind of open and democratic society the Constitution has set as our aspirational norm.’6 [13] In Khumalo v Holomisa, the Constitutional Court, discussing the link between the right to freedom and human dignity, held that: ‘Freedom of expression is integral to a democratic society for many reasons. It is constitutive of the dignity and autonomy of human beings. Moreover, without it, the ability of 4 Bernstein at para 67. 5 South African National Defence Union v Minister of Defence 1999 (6) BCLR 615 (CC); 1999 (4) SA 469 (CC) para 7. 6 S v Mamabolo 2001 (5) BCLR 449 (CC); 2001 (3) SA 409 (CC) para 37. citizens to make responsible political decisions and to participate effectively in public life would be stifled.’7 [14] Although this case dealt with the rights of the media to disseminate information and ideas, the remarks of the court apply with equal force in respect of activists like Mr Smuts who have views to advance that are relevant to public debate about the treatment of animals. I hasten to say it is in the public interest that divergent views be aired in public and subjected to scrutiny and debate. Mr Smuts, in his defence, stated that his intention in publishing the post was not to defame or otherwise harm Mr Botha but rather, to publicise or ‘out’ his animal trapping practices so as to stimulate the debate on this thorny and controversial issue. [15] Mr Smuts contended that the comments made on his Facebook post constitute protected or fair comment. The comments sought to expose the use of animal traps which, in the opinion of Mr Smuts, are cruel, barbaric, vile and utterly ruinous to biodiversity. The argument advanced on behalf of Mr Smuts is that even if his views are extreme or prejudicial, the opinion he holds is one which a fair person might honestly hold. To buttress his case, he relied on the judgement of the Constitutional Court in Islamic Unity Convention v Independent Broadcasting Authority,8 where the court, quoted with approval the European Court of Human Right, which stated that the public interest in free speech applies ‘not only to “information” or “ideas” that are favourably received or regarded as inoffensive or as a matter of indifference, but also to those that offend, shock or disturb…Such are the demands of that pluralism, tolerance and broadmindedness without which there is no “democratic society”’. [16] Mr Botha contended that Mr Smuts’ Facebook post infringed on his right to privacy as it disclosed his identity, family, home address and his business address. He further contended that the Facebook post is inflammatory to the extent that it makes reference to practices that are unethical, barbaric and utterly ruinous to biodiversity. He submitted that the posts suggest that Mr Botha only purports to have 7 Khumalo v Holomisa 2002 (8) BCLR 771 (CC); 2002 (5) SA 401 (CC) para 20. 8 Islamic Unity Convention v Independent Broadcasting Authority 2002 (2) SA 294 (CC); 2002 (2) BCLR 433 (CC) para 26. a permit whereas in truth and fact, he is acting unlawfully. According to Mr Botha, these comments were intended to undermine his reputation, status, good name, cause harm to his business and endanger his family. [17] Mr Botha conceded that, although freedom of expression is an important fundamental right, he is entitled to the protection of his personality right to privacy under circumstances where the offensive publication is defamatory of, and concerning him. It was further submitted that references in the posts that are said to be unethical, barbaric and utterly ruinous to biodiversity is a reference to his conduct. This, he argued, does not constitute an opinion and could not have been understood by a reasonable reader to be a mere opinion. He urged upon us to accept that the post exceeded what could reasonably have been expected under the circumstances and thus breached his rights to privacy. [18] In support of his case, Mr Botha relied on the remarks made by Neethling et al regarding personality rights, where the authors said the following: ‘Privacy is an individual condition of life characterized by seclusion from the public and publicity. This condition embraces all those personal facts which the person concerned has himself determined to be excluded from the knowledge of outsiders and in respect of which he has the will that they be kept in private.’ 9 [19] The issue resolves itself thus, following the formulation of the right to privacy in Bernstein v Bester NO: can it be said that Mr Botha has the subjective expectation of privacy that society recognises as objectively reasonable. Objectively speaking, the answer is in the negative. Violations of privacy are fact specific. The right to privacy must be approached from a people-centred perspective. It is abundantly clear, as correctly found by the high court, that society cannot countenance the use of traps which exposes the animals to cruelty and vile treatment. Doubtless Mr Botha considered that there were particulars of the posts that offended his expectation of privacy. But would society concur that his expectation is objectively reasonable? And, more particularly do the posts reference the truly personal realm of Mr Botha’s life, where the expectation of privacy is more likely to be considered reasonable? 9 J Neethling, J M Potgieter & A Roos Neethling on Personality Right. (2019) at 45. [20] Where does the personal information concerning Mr Botha lie on the continuum of private interests? In this case, the identity of Mr Botha and his farm are matters that he permitted to be placed in the public domain. So too are his practices of animal trapping; he openly admitted his use of animal traps. No effort was made by him to keep this information or his activities private. His discomfort that these practices formed the subject of Mr Smuts’ critical posts did not render the information he had made public, now private. The commercial farming activities of Mr Botha and the practices used by him to carry out these activities carry a very modest expectation of privacy from the perspective of what society would consider reasonable. [21] The high court accepted that the use of animal traps is a matter of public interest and that voices of activists like Mr Smuts must be heard and engaged. Nonetheless, it found that there was no compelling public interest in the disclosure of Mr Botha’s personal information. In my view, the high court erred in three respects. Firstly, it disregarded the content of Mr Smuts’ post and focused on the response by members of the public. This approach, has far-reaching implications on activists like Mr Smuts because it stifles the debate and censors the activists’ rights to disseminate information to the public. In so doing, it denies citizens the right to receive information and a platform for the exchange of ideas, which is crucial to the development of a democratic culture. Secondly, it interferes with the right of freedom of expression and activism and fails to strike a proper balance between personal information and the right to privacy. Thirdly, it failed to recognise that publicising the truth about Mr Botha’s animal trapping activities, to which the public have access and interest, does not trump his right of privacy. [22] The effect of limitation which the high court imposed in this case is substantial, affecting as it does, the right of activists such as Mr Smuts and that of the public to receive information, views and opinions. It cannot be denied that the public has a right to be informed about the animal practices at Mr Botha’s farm. The question to be asked is whether Mr Smuts could use less restrictive means to achieve the purpose of ‘outing’ Mr Botha’s animal trapping activities without publicising his personal information. I think not. It is clear that the inroads postulated by Mr Botha on Mr Smuts’ right to freedom of expression are by far too extensive and outweighed by the public interest in the matter. It can scarcely lie in the mouth of Mr Botha that the publication of his personal information should be protected when he has posted such information in the public domain. [23] Mr Botha’s reliance on Neethling’s article is misplaced. For the test of privacy to succeed, the facts must be excluded from the knowledge of outsiders, such information must be private and having been kept from outsiders by the individual concerned (in this case Mr Botha). The right to privacy is most simply the right of a person to be left alone, to be free from unwarranted publicity and to live without unwarranted interference by the public in matters with which the public is not necessarily concerned. However, in this case, the identity of Mr Botha and his farm are matters that he has placed in the public domain. So too are his practices of animal trapping; he openly admitted to the use of animal trappings. As a commercial farmer dealing with animal trappings, Mr Botha has put all his personal information in the public domain. No effort has been made by him to keep this information or activities private. The public interests in the treatment of animals apart from the lawfulness of the trapping must accordingly enjoy protection over his personal information. To give context to this matter, the issue relates to the ethics, cruelty and vile treatment of the animals. Apart from the unlawfulness, the public has a right to know about the activities of his business that directly impact animals. [24] It is axiomatic that animals are worthy of protection not because of the reflection that this has on human values but because, as Cameron JA held in National Council of Societies for the Prevention of Cruelty to Animal v Openshaw,10 ‘animals are sentient beings that are capable of suffering and of experiencing pain’ and unfortunately, ‘humans are capable of inflicting suffering on animals and causing them pain’. What Mr Louw, the cyclist, observed at Mr Botha’s farm must have left him with a sense of revulsion hence he took it upon himself to take the photographs of the dead animals and send them to Mr Smuts for his intervention as an activist 10 National Council of Societies for the Prevention of Cruelty to Animal v Openshaw [2008] ZASCA 78; [2008] 4 All SA 225 (SCA); 2008 (5) SA 339 (SCA) para 38. and conservationist. It seems to me clear that Mr Smuts was rightly impelled to action when he noticed the condition of the dead animals. [25] In my view, the right to freedom of expression in s 16 of the Bill of Rights protects every citizen to express himself or herself and to receive information and ideas. The same right is accorded to activists to disseminate information to the public. The Constitution recognises that individuals in our society need to be able to hear, form and express opinions freely, on a wide range of topics. Honest information and publication of animal trappings is no exception. Mr Smuts had a right to expose what he considered to be the cruel and inhumane treatment of animals at Mr Botha’s farm. This was a fair comment and the public interests is best served by publicising the truth rather than oppressing it. The public has a right to be informed of the humane or inhumane treatment of animals at Mr Botha’s farm. Members of the public have the freedom to decide which commercial enterprise they support and which they do not. That freedom of choice can only be exercised if activities happening at Mr Botha’s farm are laid bare for the public. [26] I agree with Mr Smuts that it would serve no useful purpose in publishing the photographs without stating where they were taken, by whom the traps were used and naming the farm and identifying its owner. Mr Botha’s claim to privacy is unsustainable. The use of animal traps in the course of commercial farming operation are conducted in public and thus fall outside the realm of protected privacy. What is damning for Mr Botha is that he makes use of animal traps openly where hunters and cyclists have access. I fail to understand how it can be contended that it was unlawful for Mr Smuts to publicise the fact that the photographs were taken on a farm belonging to Mr Botha. It is telling that Mr Botha did not allege that Mr Smuts’ publication of the fact that the photos were taken on his farm, which publicly linked him to the use of animal traps, damaged his reputation. [27] A further difficulty facing Mr Botha is that the information published by Mr Smuts can easily be found in the Deeds Office as well as on Google. This is not information which Mr Botha can legitimately exclude from the public. The fact that he disclosed his personal information strips him of the right to claim privacy in respect of that information. In Bernstein v Bester,11 the Constitutional Court said the following: ‘The scope of privacy has been closely related to the concept of identity and it has been stated that “rights, like the right to privacy, are not based on a notion of the unencumbered self, but on the notion of what is necessary to have one’s own autonomous identity”. . . . The truism that no right is to be considered absolute, implies that from the outset of interpretation each right is always already limited by every other right accruing to another citizen. In the context of privacy this would mean that it is only the inner sanctum of a person, such as his/her family life, sexual preference and home environment, which is shielded from erosion by conflicting rights of the community. This implies that community rights and the rights of fellow members place a corresponding obligation on a citizen, thereby shaping the abstract notion of individualism towards identifying a concrete member of civil society. Privacy is acknowledged in the truly personal realm, but as a person moves into communal relations and activities such as business and social interaction, the scope of personal space shrinks accordingly.’12 [28] It is conceptually flawed that such information can remain private when it has been made public by Mr Botha himself. The fact that he is a commercial farmer who uses animal traps is not a matter that he should keep private at all. There is no suggestion in the posts that Mr Botha is acting unlawfully. What the posts asserted is that he is acting unethically and thus the public have a right to know of such practices. The purpose of the public debate is to say things that others find different and difficult. Public debate does not require politeness. What Mr Botha seeks to do is to unjustifiably limit Mr Smuts’ right to freedom of expression and his entitlement to make a fair comment on the facts that are true and related to matters of public interests. [29] The high court, in recognising Mr Smuts’ right to freedom of expression, erred in two respects. First, it considered Mr Botha to have a right to privacy of comparable importance. That is not so because the information was in the public domain, and Mr Botha consequently had a weak right to privacy in respect of that information. Second, the high court approached the matter by asking whether Mr 11 Bernstein and Others v Bester NO and Others 1996 (4) BCLR 449 (CC); 1996 (2) SA 751 (CC). 12 Ibid paras 65 & 67. Smuts could have exercised his right to freedom of expression with greater restraint so as to afford Mr Botha’s right to privacy greater protection. That is not the correct way to look at the matter. A court should not act as a censor to determine how best persons might speak. In this case, Mr Smuts enjoyed the right to air his views as to animal cruelty and attribute to Mr Botha the practice of trapping. After all, that information was true, never denied by Mr Botha, nor hidden by him. In these circumstances, the test is not whether Mr Smuts could have posted more cautiously, the question is whether Mr Botha had any claim to privacy in respect of the information posted. His claim, as I have explained, was weak. [30] The contention by Mr Botha that the Facebook post suggested that Mr Botha acted unlawfully when he trapped the baboons and porcupine in cages and that he allegedly poisoned the captured animals has no merit. The Facebook post merely states that Mr Botha claims to have a permit. Nowhere in the post is it suggested that he is acting unlawfully. In the answering affidavit, Mr Smuts stated that he was not concerned with the legality of Mr Botha’s actions, but rather their ethics. A reading of the post indicates clearly that reference to poisoned oranges is not a reference to how Mr Botha entrapped animals but to how animals are lured and trapped in the cages in general. [31] In sum, Mr Botha’s personal information was in the public domain before Mr Smuts published the posts. His ownership of the farm Varsfontein was a matter of public record in the Deeds Registry, his name and occupation as an insurance broker, along with his Port Elizabeth address had been published on the internet by Mr Botha himself thus, his right to privacy was not infringed. Essentially what Mr Smuts did was to give further publicity to information about Mr Botha that was already in the public domain. That said, there was no basis for the interdict against Mr Smuts. The appeal must be upheld. [32] In the result, the following order is made: The appeal is upheld with costs including costs of senior counsel. The order of the Eastern Cape Division of the High Court, Port Elizabeth is set aside and replaced with the following: ‘(a) The rule nisi is discharged with costs. (b) The application is dismissed with costs.’ ________________________ R S Mathopo Judge of Appeal APPEARANCES: For appellant: Matthew Blumberg SC (with him Mushahida Adhikari) Instructed by: BDLS Attorneys Inc., Port Elizabeth Honey Attorneys, Bloemfontein For respondent: Albert Beyleveld SC (with him David Bands) Instructed by: Lawrence Masiza Vorster Inc., Port Elizabeth 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: 10 January 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 Bool Smuts and Another v Herman Botha (887/20) [2021] ZASCA 3 (10 January 2021) Today the Supreme Court of Appeal (SCA) handed down judgment upholding, with costs, an appeal against a decision of the Eastern Cape Division of the High Court, Grahamstown (the high court). The issue before the SCA was whether the publication of the Facebook posts by Mr Smuts is protected by the right to freedom of expression. On 23 September 2019, a group of cyclists were participating in an adventure ride organised by Quantum Adventure. During their ride, they traversed Farm Varsfontein belonging to the respondent, Mr Herman Botha (Mr Botha). Nicholas Louw, one of the cyclists noticed two cages on the farm, one containing a dead baboon, the other a dead porcupine. According to his observations, the cages were positioned where there was no shade and water and there were some oranges near the baboon. He formed the view that the animals had died as a result of dehydration whilst trapped in the cages. Incensed by what he saw, he took photographs of the cages containing the dead animals and sent them to the first appellant, Mr Smuts, a wildlife conservationist and founder and executive director of the second appellant, Landmark Leopard and Predator Project–South Africa (Landmark Leopard). Upon receipt of the photos, Mr Smuts contacted Mr Botha via WhatsApp and Mr Botha confirmed that he had a valid permit to hunt, capture and/or kill the baboons, porcupines and other vermin. On 9 October 2019, Mr Smuts posted, on Landmark Leopard’s Facebook pages, pictures of a dead baboon and porcupine trapped on the farm owned by Mr Botha. In the Facebook page, Mr Smuts also included a picture of Mr Botha’s six-month old daughter. Additionally, he posted a Google Search Location of Mr Botha’s business, his home address and his telephone numbers. A WhatsApp conversation between Mr Smuts and Mr Botha was also posted. In that post, Mr Botha was asked by Mr Smuts if he had a permit to trap animals to which he responded in the affirmative. The post was accompanied by a caption, part of which read as follows: ‘[t]his is utterly vile. It is ecologically ruinous. Mr Botha claims to have permits to do this – see the Whatsapp conversation with him attached’. Mr Botha contended that Mr Smuts’ Facebook post infringed on his right to privacy as it included his identity, family, home address and his business address. He further contended that the Facebook post is inflammatory to the extent that it makes reference to practices that are unethical, barbaric and utterly ruinous to biodiversity. The SCA held that Mr Smuts was right to expose what he considered to be the cruel and inhumane treatment of animals at Mr Botha’s farm. It held further that Mr Botha’s post constituted a fair comment. Furthermore, the SCA held that the public has a right to be informed of the humane or inhumane treatment of animals at Mr Botha’s farm. Members of the public have the freedom to decide which commercial enterprise they support and which they do not. That freedom of choice can only be exercised if activities happening at Mr Botha’s farm are laid bare for the public. It would serve no useful purpose in publishing the photographs without stating where they were taken, by whom the traps were used and naming the farm and identifying its owner. ~~~~ends~~~~

3933

non-electoral

2022

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Not Reportable Case no: 1224/2021 In the matter between: MARTINA CHRISTINA CATHARINA WULFFERS APPELLANT and BOXER DALE HOLDINGS (PTY) LTD FIRST RESPONDENT HENRY ANTHONY KLITSIE SECOND RESPONDENT ANTON HEINRICH GENADE THIRD RESPONDENT Neutral citation: Wulffers v Boxer Dale Holdings (Pty) Ltd and Others (1224/2021) [2022] ZASCA 172 (1 December 2022) Coram: PONNAN, PLASKET, MABINDLA-BOQWANA JJA and NHLANGULELA and WINDELL AJJA Heard: 7 November 2022 Delivered: 1 December 2022 Summary: Property law – servitude and way of necessity (via ex necessitate) over immovable property – parties unable to agree on a route – clear dispute of fact – application procedure not suitable – application dismissed. __________________________________________________________________ ORDER __________________________________________________________________ On appeal from: Eastern Cape Division of the High Court, Port Elizabeth (Naidu AJ, sitting as court of first instance): The appeal is upheld and the cross-appeal is dismissed, in each instance with costs. Paragraph 2 and 3 of the high court’s order are set aside and replaced with the following: ‘The application is dismissed with costs.’ __________________________________________________________________ JUDGMENT __________________________________________________________________ Windell AJA (Ponnan, Plasket, Mabindla-Boqwana JJA and Nhlangulela AJA concurring): [1] This is an appeal and cross-appeal from the Eastern Cape Division of the High Court, Port Elizabeth (the high court). The matter concerned a dispute as to whether a servitude exists over a portion of land owned by the appellant, Martina Christina Catharina Wulffers (Ms Wulffers). [2] Ms Wulffers and the respondents are all owners of portions of the farm Goed Geloof 745, in the district of Humansdorp (the farm), which is situated along the Krom River (the river) in St Francis Bay. The farm was subdivided in October 2010. Prior to the subdivision of the farm, it was jointly owned by the Klitsie and Wulffers families in equal shares since 1968. Currently, the second respondent, Henry Anthony Klitsie, and his two brothers (the Klitsies), are the owners of the remainder of Portion 133 of the farm. Ms Wulffers is the owner of Portion 233, which is a partition of Portion 133. The partition was registered on 19 August 2015. The first respondent, Boxer Dale Holdings (Pty) Ltd (Boxer Dale), represented by Pieter Jansen van Vuuren, and the third respondent, Anton Heinrich Genade (Mr Genade), are the owners of two adjacent properties, namely, Portions 159 and 51. [3] On a sketch plan (see below), the subdivision of Portion 133 is indicated. Essentially, the Klitsies own the two non-contiguous portions of land, in extent 0, 53 Ha and 0, 45 Ha each (Part A and Part C). Part B, which is owned by Ms Wulffers, is in the middle of Part A and Part C. Part C is landlocked (the landlocked property) and the Klitsies can only access it by traversing Part B, the Wulffers property. The properties of Boxer Dale and Mr Genade are situated on the western side of Part A, and their approximate positions are marked on the sketch plan as ‘D’ (Boxer Dale) and ‘E’ (Mr Genade). The properties of Boxer Dale and Mr Genade are not landlocked. They only require a route over the Wulffers property to enjoy access to the river on an adjacent property (marked ‘F’), where they and the Klitsies plan to build a jetty to launch their boats. In that regard, Boxer Dale and Mr Genade rely on a general reciprocal praedial road servitude, 6 metres wide, that was registered in 1993 over Portion 133 (Portions A, B and C). [4] The respondents assert that they had access to the landlocked property by traversing Ms Wulffers’ property via the route depicted as ‘x-y’ on the sketch plan. Ms Wulffers, describes that route as a ‘foot path’, which she says the Klitsies established without obtaining her permission. She contends that it bisects her property and expressed a preference for a route that would run along the western boundary of her property. However, there may be a difficulty with obtaining permission from the relevant government department for this route, because of its proximity to a wetland. In February 2019, Ms Wulffers suggested as an alternative, the route depicted as ‘m-n’ on the sketch map, which she described as the ‘fairest route’. However, that did not appear to have been acceptable to the respondents. When attempts to resolve the impasse failed, Ms Wulffers felt compelled to erect a fence at a point close to her property on the 'x-y’ route in March 2019. [5] The respondents then launched urgent application proceedings in the high court, in which they sought an interim order (Part A), operating as a rule nisi, for Ms Wulffers to remove the fence and the boom gate she had erected on her property. They further sought an order that Ms Wulffers be interdicted and restrained from erecting further installations on her property which would have the effect of interfering with the respondents’ access to the landlocked property. On 17 December 2019, the rule nisi was granted, pending the final determination of the relief sought in Part B. In Part B the respondents sought an order that a ‘servitude of right of way’ be registered over Ms Wulffers property in favour of the respondents as depicted on the sketch map ‘x-y’. [6] On 29 September 2020, the high court discharged the rule nisi, but found in favour of the second respondent only as far as the relief sought in Part B was concerned. It granted an order that a ‘route of registered servitude of right of way’ be registered over the Wulffers property, in favour of the remainder of Portion 133 as depicted on the sketch map as ‘x-y’. It further ordered that such servitude of right of way was to measure not less than five (5) metres in width. [7] Ms Wulffers and the respondents respectively sought leave to appeal and cross appeal from the high court. Ms Wulffers contended that the high court should have dismissed the respondents’ application in toto, instead of granting relief to the Klitsies in the terms set out in the order (the appeal). The respondents complained that the high court erred in discharging the rule nisi and in dismissing the relief sought by Boxer Dale and Mr Genade under Part B of the Notice of Motion (the cross-appeal). The appeal and cross-appeal are with leave of the high court. [8] In the founding affidavit (deposed to by the second respondent) all the respondents relied on what they described as a registered reciprocal praedial servitude that was registered over Portion 133 (Portion A, B and C) in 1993, the relevant part of which reads: ‘“Property Two” shall be subject to a General Servitude of Road Six (6) metres wide, from “Property One” to “Property Three” the route of which is to be agreed upon by the registered owners, in favour of “Properties Three to Thirteen”, subject to the terms and conditions more fully set out in paragraph 9.’ [9] The servitude is defined as being from ‘Property One’ to ‘Property Three’. It further provides that the servitude road must be agreed upon by the owners of ‘Property Two’, ‘Property Three’ and ‘Property One’. According to the descriptions of the properties, ‘Property Two’ is Portion 133 (Part A, B and C) before the subdivision and partition. ‘Property One’ is Portion 134 and ‘Property Three’ is Portion 22 (belonging to Boxer Dale). [10] Putting aside for the moment the dispute between Ms Wulffers and the respondents about which route is most suitable, there is no evidence on the papers to indicate where ‘Property One’ (Portion 134) is situated in relation to ‘Property Two’ and ‘Property Three’, or who the current owner of ‘Property One’ is. It seemed to have been accepted before this court that those property owners may well have a direct and substantial interest in these proceedings, because any route fixed here will likely impact their properties as well. Further, the route from ‘Property One’ to ‘Property Three’ has never been agreed upon by the registered owners. There is no evidence that the owner of ‘Property One’ had been consulted in determining the road and if they consulted, what such owner’s attitude is to its location. In the absence of these crucial facts, it is impossible to determine the route from ‘Property One’ to ‘Property Three’ on the evidence available. As a result, Boxer Dale and Mr Genade failed to establish their entitlement to any relief under Part B. [11] This brings me to the relief claimed by the Klitsies. Part C is landlocked. It may well be that the Klitsies are entitled to a way of necessity (via ex necessitate) over Ms Wulffers’ property to access the landlocked property.1 But, such a case was not advanced in the respondents’ founding papers. However, Ms Wulffers appears in principle to accept that the Klitsies may indeed have such a right. It is the route on which they seem unable to agree. [12] Rights over the property of another must be exercised civiliter modo.2 A way of necessity over the servient land must be a route that causes the least damage and prejudice to the latter and compensation in proportion to the advantage gained by the dominant owner and the disadvantages suffered by the servient owner is payable when this happens (ter naaster lage en minster schaden).3 [13] Despite a tender by Ms Wulffers to agree to register a right of way (‘m-n’) in favour of the Klitsies, that was not accepted. There is a real dispute of fact on the papers as to which route would be the most appropriate and least onerous for the servient owner. There is also a dispute as to the width of the road. In principle, the width of the road depends on the needs of the enclosed property.4 1 See Van Rensburg v Coetzee 1979 (4) SA 655 (A) at 671. 2 Hollmann and Another v Estate Latre 1970 (3) SA 638 (A) at 645D; Tshwane City v Link Africa and Others 2015 (6) SA 440 (CC) paras 142-144. 3 See Van der Walt The Law of Servitudes 357-358. 4 Van Rensburg at 675 G. [14] It is trite that motion proceedings are not suited to resolving the kinds of disputes of fact that we have here. They cannot be resolved on paper. When the respondents elected to proceed by way of application when there were foreseeable disputes of fact, they did so at their own peril. As none of the respondents had established any entitlement to relief under Part B, they were not entitled to any ancillary relief under Part A either. The high court therefore erred in determining the matter on affidavit and the application should have been dismissed with costs. While costs ought to follow the result, the costs of only one counsel are merited. [15] In the result, the following order is made: The appeal is upheld and the cross-appeal is dismissed, in each instance with costs. Paragraph 2 and 3 of the high court’s order are set aside and replaced with the following: ‘The application is dismissed with costs.’ __________________________ L WINDELL ACTING JUDGE OF APPEAL Appearances For appellant: P Jooste and T Rossi Instructed by: Nel Mentz Steyn Ellis Attorneys, Humansdorp McIntyre Van der Post, Bloemfontein For respondent: O Ronaasen SC and L Ellis Instructed by: Greyvensteins Incorporated, Port Elizabeth Muller Gonsior 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: 1 December 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 Martina Christina Catharina Wulffers and Boxer Dale Holdings (Pty) Ltd and Two Others [2022] ZASCA 172 Today the Supreme Court of Appeal (SCA) upheld an appeal and dismissed a cross-appeal from the Eastern Cape Division of the High Court, Port Elizabeth: Ms Wulffers and the respondents are all owners of portions of the farm Goed Geloof 745, in the district of Humansdorp (the farm), which is situated along the Krom River (the river) in St Francis Bay. The farm was subdivided in October 2010. Prior to the subdivision of the farm, it was jointly owned by the Klitsie and Wulffers families in equal shares since 1968. Currently, the second respondent, Henry Anthony Klitsie, and his two brothers (the Klitsies), are the owners of the remainder of Portion 133 of the farm. Ms Wulffers is the owner of Portion 233, which is a partition of Portion 133. The partition was registered on 19 August 2015. The first respondent, Boxer Dale Holdings (Pty) Ltd (Boxer Dale), represented by Pieter Jansen van Vuuren, and the third respondent, Anton Heinrich Genade (Mr Genade), are the owners of two adjacent properties, namely, Portions 159 and 51. Essentially, the Klitsies own the two non-contiguous portions of land, in extent 0,53 Ha and 0,45 Ha each (Part A and Part C). Part B, which is owned by Ms Wulffers, is in the middle of Part A and Part C. Part C is landlocked (the landlocked property) and the Klitsies can only access it by traversing Part B, the Wulffers property. The properties of Boxer Dale and Mr Genade are situated on the western side of Part A. The properties of Boxer Dale and Mr Genade are not landlocked. They only require a route over the Wulffers property to enjoy access to the river on an adjacent property, where they and the Klitsies plan to build a jetty to launch their boats. In that regard, Boxer Dale and Mr Genade rely on a general reciprocal praedial road servitude, 6 metres wide, that was registered in 1993 over Portion 133 (Portions A, B and C). The servitude is defined as being from ‘Property One’ to ‘Property Three’. It further provides that the servitude road must be agreed upon by the owners of ‘Property Two’, ‘Property Three’ and ‘Property One’. According to the descriptions of the properties, ‘Property Two’ is Portion 133 (Part A, B and C) before the subdivision and partition. ‘Property One’ is Portion 134 and ‘Property Three’ is Portion 22 (belonging to Boxer Dale). The respondents approached the court on application in two parts. In Part A they sought an interim order, operating as a rule nisi, for Ms Wulffers to remove the fence and the boom gate she had erected on her property. They further sought an order that Ms Wulffers be interdicted and restrained from erecting further installations on her property which would have the effect of interfering with the respondents’ access to the landlocked property. Part A was granted operating as an interim order pending the outcome of Part B. In Part B the respondents sought an order that a ‘servitude of right of way’ be registered over Ms Wulffers property in favour of the respondents as depicted on a sketch map ‘x-y’. SCA found that there was insufficient information to determine the route from ‘Property One’ to ‘Property Three’. As a result, Boxer Dale and Mr Genade failed to establish their entitlement to any relief under Part B of the application. As far as the Klitsies are concerned, it may well be that the Klitsies are entitled to a way of necessity (via ex necessitate) over Ms Wulffers’ property to access the landlocked property. There is however a real dispute of fact on the papers as to which route would be the most appropriate and least onerous for the servient owner. It is trite that motion proceedings are not suited to resolving these kinds of disputes of fact. They cannot be resolved on paper. When the respondents elected to proceed by way of application when there were foreseeable disputes of fact, they did so at their own peril. As none of the respondents had established any entitlement to relief under Part B, they were not entitled to any ancillary relief under Part A either. The high court therefore erred in determining the matter on affidavit and the application should have been dismissed with costs. While costs ought to follow the result, the costs of only one counsel are merited. --------oOo--------

2697

non-electoral

2012

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Case No: 260/11 Reportable In the matter between: HORATIO STEPHEN MATHEWSON First Appellant ANNEMI MARGERETHA MATHEWSON Second Appellant and MARTHA FRANCINA VAN NIEKERK First Respondent CHRISTOFFEL PETRUS PRINSLOO VAN NIEKERK Second Respondent STANDARD BANK BEPERK Third Respondent THE REGISTRAR OF DEEDS Fourth Respondent DITSOBOTLA LOCAL MUNICIPALITY Fifth Respondent WILLEM CHRISTOFFEL JANSEN VAN RENSBURG Sixth Respondent Neutral citation: Mathewson & another v Van Niekerk & others (260/11) [2012] ZASCA 12 (16 March 2012). Coram: NAVSA, CLOETE, VAN HEERDEN and LEACH JJA, and BORUCHOWITZ AJA Heard: 8 March 2012 Delivered: 16 March 2012 Summary: Sale of land: tacit term: not excluded by ‘sole contract’ clause; motion proceedings: dispute of fact: rejection of respondents’ version as farfetched or clearly untenable: test stringent and not easily satisfied. ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: North Gauteng High Court (Pretoria) (Ebersohn AJ sitting as court of first instance): 1. The appeal succeeds, with costs. 2. The order of the court a quo is set aside and the following order substituted: 'The application is dismissed, with costs.' ______________________________________________________________ JUDGMENT ______________________________________________________________ CLOETE JA (NAVSA, VAN HEERDEN and LEACH JJA, and BORUCHOWITZ AJA concurring): [1] The first and second respondents, as applicants, brought motion proceedings in the North Gauteng High Court, Pretoria against (amongst others) the appellants as the first and second respondents, for relief that depended on the valid cancellation by the appellants of a deed of sale of immovable property. Ebersohn AJ granted the application and refused leave to appeal. The appeal is with the leave of this court. It would be convenient to refer in this judgment to the parties as they were in the court a quo. [2] In terms of the deed of sale concluded on 26 March 2007 the respondents sold, and the applicants purchased, an erf in a township being developed by the respondents. Clause 17 of the deed of sale read as follows: '17. DIENSTE Die Ontwikkelaar waarborg dat die erwe voorsien sal wees met elektriese aansluiting, wateraansluiting sowel as riolering (septiese tenk of tenkstelsel soos goedgekeur deur die Plaaslike Munisipaliteit).' [3] On 6 May 2009 the applicants' attorney wrote to the respondents in the following terms: 'Voormelde koopooreenkoms sowel as klousule 17 van die ooreenkoms verwys. Ons kliënt se instruksies is dat geen dienste voorsien is aan die voormelde plaasgedeelte nie en dat hulle [sic: sc "u"] derhalwe waarborg breuk plaasgevind [sic: sc “gepleeg”] het, alternatiewelik repidiasie [sic] van die ooreenkoms plaasgevind het welke repidiasie [sic] van die ooreenkoms aanvaar word. Gevolglik is dit ons instruksies om u in kennis te stel dat indien voormelde gebrek nie reggestel word binne 7 (sewe) dae vanaf datum van hierdie skrywe nie, ons kliënte die reg behou om hierdie ooreenkoms te kanselleer.' The notice of motion which followed was issued on 2 June 2009. [4] The court a quo, having quoted clause 17 of the deed of sale, reasoned as follows: '15. Dit blyk oorvloediglik uit die stukke: (a) die elektriese aansluiting was nie in plek nie; (b) die wateraansluiting was nie in plek nie; en (c) die riolering was nie in plek nie. 16. . . . 17. Die applikante, as kopers, het per kennisgewing gedateer die 6de Mei 2009 die verkopers in kennis gestel dat as die dienste nie verskaf is binne 7 dae die koop gekanselleer sal word. Aan hierdie aanmaning is nie voldoen deur die verkopers nie en die aansoek aan hierdie hof het gevolg. 18. Dit bly onteenseglik so dat die verkopers inderdaad kontrakbreuk gepleeg het en die applikante is geregtig op die regshulp wat hulle vorder.' [5] The court a quo ignored the respondents' contention, which was plainly and unambiguously made in the answering affidavit, that the obligation to install the services referred to in clause 17 was subject to the tacit term that the applicants had to indicate to the respondents where the services were to be installed on the erf which they purchased. The court a quo further ignored the first respondent's assertion, also plainly and unambiguously made in the answering affidavit, that despite his repeated oral requests, the applicants had not given such an indication. [6] Clause 11 of the deed of sale is no answer to this case. That clause (which is poorly drafted) reads: 'GEHELE OOREENKOMS Die partye kom ooreen dat hierdie dokument die enigste ooreenkoms tussen hulle daar stel en dat enige [sic; sc "geen"] ander waarborge of voorstellings van watter aard ookal gemaak is, anders as wat hierin vervat is nie. Geen ander of verdere ooreenkoms of ooreenkomste met betrekking tot die onderwerp van hierdie kontrak is op enige van die partye bindend nie tensy op skrif gestel en deur beide partye onderteken.' The reason why the clause is no answer is set out in Wilkens NO v Voges 1994 (3) SA 130 (A). In that matter Nienaber JA was dealing with a written agreement for the sale of land which contained a clause 12 reading as follows: '12 Entire Agreement This document contains the entire agreement between the parties in respect of the matters dealt with herein and any variation or mutual cancellation of this agreement will only have legal force or effect if such variation or mutual cancellation is reduced to writing and signed by the parties hereto' (at 138B). The learned judge of appeal held (at 143J-144D): 'One final observation: it was argued on behalf of the plaintiff apropos of certain remarks in the judgment of the Court a quo (at 783C-784D) that the tacit term pleaded, if found to exist, would offend against both clause 12 of the agreement and the provisions of the Alienation of Land Act 68 of 1981 ("the Act"). Clause 12 is quoted earlier in this judgment. Section 2 of the Act provides: "2. Formalities in respect of alienation of land. (1) No alienation of land after the commencement of this section shall, subject to the provisions of s 28, be of any force or effect unless it is contained in a deed of alienation signed by the parties thereto or by their agents acting on their written authority." A tacit term in a written contract, be it actual or imputed, can be the corollary of the express terms ─ reading, as it were, between the lines ─ or it can be the product of the express terms read in conjunction with evidence of admissible surrounding circumstances. Either way, a tacit term, once found to exist, is simply read or blended into the contract: as such it is "contained" in the written deed. Not being an adjunct to but an integrated part of the contract, a tacit term does not in my opinion fall foul of either the clause in question (cf Marshall v LMM Investments (Pty) Ltd 1977 (3) SA 55 (W) at 58A-B) or the Act.' [7] Counsel for the applicants in argument before us did not rely on clause 11 but advanced a different argument. He acknowledged that, as his clients had instituted motion proceedings and because of the dispute of fact as to the existence of the tacit term relied upon by the respondents, the appeal would have to be decided on the respondents' version unless he could persuade us that the allegations made by the respondents were so far-fetched or clearly untenable that we were justified in rejecting them merely on the papers: Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) 623 (A) at 634E-635C. It needs to be emphasised that the test is a stringent one not easily satisfied. Two submissions were made. [8] First, it was submitted that the defence should be rejected as an afterthought because it had never been raised in the emails which passed between the parties. But counsel was unable to refer us to an email from his clients to which one would have expected the respondents to have replied by asserting the tacit term. The only email which could possibly be relevant in this context was dated 16 September 2008, wherein the first appellant said: 'Ons het daardie erf gekoop met die wete dat daar 'n infrastruktuur gaan wees, wat daar nie is nie.' But that statement did not specifically refer to the services in clause 17 (it could also, or exclusively, have referred to roads and a surrounding wall, as counsel readily conceded) and the statement was made in the context of a more general complaint ─ the email continues: 'Daar is gesê ander het gekoop, insluitende Willem van Rensburg, wat nie waar was nie. Daar is gesê ons mag nie uitklim nie, terwyl ander dit gedoen het sonder gevolge. So kan jy ons kwalik neem as ons ongeduldig klink. So asb Horatio, ons weet jy het ook dinge om uit te sorteer, en dit respekteer ons.' It is also important to bear in mind the wider context in which the email was sent. At that stage the parties were negotiating on the basis that the respondents would repurchase the erf from the applicants ─ not that the applicants wanted the services referred to in clause 17 to be installed because they intended building on the erf. [9] Second, it was submitted that further proof that the defence was an afterthought is to be found in the contradiction between, on the one hand, the first respondent's assertion that the services referred to in clause 17 were available 'op die landgoed' at the time the deed of sale was concluded (which, as I have said, was on 26 March 2007), and on the other, his statement (supported by documentary evidence) that the electricity supply agreement with Escom was only concluded on 5 June 2007. It may well be that the first respondent's first assertion was false. But the contradiction (assuming that there is one) is on an irrelevant aspect because it was not a term of the deed of sale that the services referred to in clause 17 had to have been installed at the time the deed of sale was concluded ─ clause 17 reads 'Die Ontwikkelaar waarborg dat die erwe voorsien sal wees . . .', not 'Die Ontwikkelaar waarborg dat die erwe voorsien is . . . .' The apparent contradiction would provide ammunition for cross-examination of the first respondent had the applicants requested a reference to oral evidence or trial (which they did not), but it is not a sufficient reason for rejecting the respondents' defence based on the tacit term, particularly for the reason given in the next paragraph. [10] The probabilities support the existence of the tacit term for which the respondents contend. The erf was 10 500 square metres in extent. In those circumstances, the following statement by the first respondent in his answering affidavit has the ring of truth: '[A]s gevolg van die groottes van die standplase (erf groottes wissel van 1.030 en 1.43 hektaar) is dit vir my as Ontwikkelaar 'n onbegonne taak om te bepaal waar iedere eienaar sy of haar woning gaan oprig en waar hy of sy byvoorbeeld sy elektrisiteits, water en rioleringspunt . . . geïnstalleer wil hê.' [11] In the circumstances it cannot be said that the respondents' version that the deed of sale contained the tacit term on which they found their defence, is so far-fetched or clearly untenable that the court would be justified in rejecting this version merely on the papers. As counsel on both sides agreed that this conclusion would dispose of the matter, the following order is made: 1. The appeal succeeds, with costs. 2. The order of the court a quo is set aside and the following order substituted: 'The application is dismissed, with costs.' ________________ T D CLOETE JUDGE OF APPEAL APPEARANCES: APPELLANTS: A Vorster Instructed by Van Rooyen Thlapi Wessels, Pretoria Symington & De Kok, Bloemfontein FIRST and SECOND RESPONDENTS: M Ackermann Instructed by Couzyn Hertzog & Horak, Pretoria Hill, McHardy & Herbst 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: 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 H S MATHEWSON & ANOTHER v M F VAN NIEKERK & OTHERS 1. The appellant sold and transferred land in a township in the course of development by him to the respondents. The respondents obtained an order in the court below which depended upon the valid cancellation of the sale. The court below held that the respondents were entitled to cancellation as essential services had not been installed, despite demand. 2. The SCA held that the court below was wrong in ignoring a tacit term relied upon by the appellant that before the essential services could be installed, the respondents had to indicate where on the property they required the installation to take place which, according to the appellant, they had not done. The argument that the tacit term was so farfetched or clearly untenable that it could be rejected on the papers was dismissed. --ends--

1496

non-electoral

2016

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA JUDGMENT Reportable Case No: 137/2016 In the matter between: PASADENA LEATHER PRODUCTS CC T/A PASADENA PRODUCTS FIRST APPELLANT TRIFECTA TRADING 83 (PTY) LTD T/A DOS GROUP SECOND APPELLANT and FRANCO RESCA FIRST RESPONDENT ENRICO CUPIDO SECOND RESPONDENT Neutral citation: Pasadena v Resca (137/2016) [2016] ZASCA 204 (15 December 2016) Coram: Leach, Swain, Dambuza and Mathopo JJA and Makgoka AJA Heard: 23 November 2016 Delivered: 15 December 2016 Summary: Patent relating to a lockable holster : purposive interpretation : not all integers of respondents’ patent having been used by the appellants in the design of their holster: patent not infringed. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: The Court of the Commissioner of Patents for the Republic of South Africa (Louw J sitting as court of first instance): 1 The appeal succeeds, with costs. 2 Para (c) of the order of the court a quo is set aside and is substituted with the following: ‘(c)(i) The plaintiffs’ claims flowing from an alleged infringement of South African Patent ZA 98/6778 are dismissed. (ii) The parties are to bear their own costs.’ ________________________________________________________________ JUDGMENT ________________________________________________________________ Leach JA (Swain, Dambuza and Mathopo JJA and Makgoka AJA concurring) [1] The first appellant manufactures what is called a ‘swivel holster’ in which handheld firearms may be housed, a product both appellants have disposed of in this country. The respondents are the joint registered proprietors of a registered patent number ZA 98/6778 entitled ‘A Lockable Holster’ (the patent). They sued the appellants in the Court of the Commissioner of Patents, claiming that their swivel holster infringes the patent in various respects and seeking consequential relief. The appellants, in turn, filed a counter claim, contending that the patent was invalid as the invention to which it referred is not patentable under s 25 of the Patents Act 57 of 1978 (the Act) and ought to be revoked. [2] The respondents were successful. Not only was the appellants’ counter claim dismissed but an order in the respondents’ favour containing, inter alia, the following relief, was granted: ‘(i) The first and second appellants are interdicted from infringing each of claims 1 and 7 of the patent by, in the Republic, manufacturing, using, making, disposing or offering to dispose of the Swivel Holster or any other product falling within the scope of those claims. (ii) An order for the delivery up for destruction of any product in the possession or under the control of the appellants which infringe any of claims 1 and 7 of the patent; (iii) An enquiry into damages suffered by the respondents as a consequence of the infringement of the patent and payment of the amount of damages found to have been so suffered, alternatively into the extent of the infringement and the amount of a reasonable royalty to be paid in lieu of damages, and payment of the amount of royalties found to be so payable.’ It is against this order that the appellants appeal to this court. There is no appeal against the dismissal of their counter claim or a further order declaring the patent to be valid. [3] It is hardly necessary to say that an inquiry as to whether there has been an alleged infringement of a patent requires, as a first step, an interpretation of the patent itself. A patent is divided into two parts, firstly a description or the body of the specification which serves to describe the invention in sufficient detail that the rational person skilled in ‘that art’ can understand what the invention is and how it is put into practice. The second contains the claims in the patent, which serve to define and set limits to the monopoly that the patent is intended to secure and protect. As opposed to the specifications, the function of the claims in a patent is ‘to inform prospective rivals of the limits of the field denied to them while the patent lasts’.1 [4] The various claims thus define the exclusive rights of the patentee and are often referred to as the ‘fences’ or ‘boundaries’ which provide the ‘fields’ of the monopoly. As the primary object of a claim is therefore to limit and not extend the patentee’s monopoly, it has given rise to the well-worn phrase that ‘what is not claimed is disclaimed’. As was said in Electric and Musical Industries: ‘The function of the claims is to define clearly and with precision the monopoly claimed, so that others may know the exact boundary of the area within which they will be trespassers. Their primary object is to limit and not extend the monopoly. What is not claimed is disclaimed. The claims must undoubtedly be read as part of the entire document and not as a separate document; but the forbidden field must be found in the language of the claims and not elsewhere.’2 1 Per Holmes JA in Letraset Ltd v Helios Ltd 1972 (3) SA 245 (A) recently cited with approval in this court in Cipla Medpro (Pty) Ltd v Aventis Pharma SA and related appeal 2013 (4) SA 579 (SCA) para 24. 2 Electric and Musical Industries Ltd v Lissen Ltd (1938) 56 RPC 23 [UK]: Quoted by LTC Harms The Enforcement of Intellectual Property Rights: A Case Book 3 ed (2012) at 259. The necessity for the monopoly to be defined in the claim was graphically described as follows in Marconi’s Wireless Telegraph v Phillips Lamps Ltd 1933 RPC 287:3 ‘It is not sufficient for the inventor to discover his gold mine ─ he must also peg out his claim. Outside the pegs, the gold, if it is there, is free to all.’ [5] Bearing these principles in mind, I turn first to the specifications which are exhaustively and repetitively set out in the patent. Mention is made therein of ‘camming’ surfaces and how ‘attempted withdrawal of the fire-arm from the holster cavity without releasing the locking member results in the trigger guard bearing against the second camming surface exerting a moment around the pivot axis of the locking member thereby urging the locking member into a more firmly locked position’. [6] Crucial to this description and the operation of the invention (and for that matter the outcome of this appeal) is the meaning of ‘camming’ surfaces. In M Props (Pty) Ltd v K Riemann and Riemann Associates and another 1997 BIP 17 (CP) 22 the expert witnesses on both sides agreed that a cam is ‘a mechanical device used to convert one kind of displacement or motion to another kind of displacement or motion by making use of a specially designed profile’. The court (MacArthur J) accepted this and continued: 3 Also quoted by Harms at 259. ‘The conversion of the motion is achieved by the cam driving or guiding another component called a follower. It is not necessary to discuss the situations referred to by Dr Hunt where the follower controls the cam. Through the special shaping of the cam, i.e. the designed profile, the rotational movement in the cam may be converted into a linear motion in the follower. In the same way the cam could have a linear motion and be provided with a particular profile as to give a different linear motion in the follower. Likewise a rotational motion in the cam can provide a different rotational movement in the follower. In other words, the cam mechanism which comprises the cam and the follower can convert a given input motion into an output motion of a particular desired form. A cam system is clearly a versatile and flexible tool.’ [7] Relying upon M Props, the court a quo held a ‘camming surface’ to be the surface or site at which motion is imparted to the cam by the follower, in this case, the trigger guard. This finding was accepted by both sides in the appeal in this court, quite correctly, and will be used by me in the analysis that follows. [8] Bearing that in mind, the somewhat convoluted description of the patented holster’s operation set out above becomes clear once regard is had to the drawing, Figure 2, annexed to the patent and reproduced below: [9] In this figure, numeral 10 generally indicates a holster broadly in accordance with the invention. The working of the invention is further described in the specification in terms similar to those already quoted above: ‘The holster 10 has a body 12 and a locking member in the form of a latch 16 mounted on the body 12. . . . The latch 16 is pivotally mounted on an outer surface 17 of the body 12 for limited pivotal translation about a pivot axis defined by a pivot pin 26. The latch 16 is in the form of a first order lever and includes an effort arm 30 and a working arm 31 positioned on opposite sides of the pivot axis. A biasing spring 28 is positioned in compression between the effort arm 30 of the latch 16 and the body 12, biasing the effort arm 30 away from the body 12 into a locked or fire-arm retain position of the latch 16 (shown in solid lines in Figure 2), in which a portion of the working arm 31 protrudes into a trigger guard passage interfering position in the trigger guard retaining region 20 of the cavity 14. Two angularly spaced camming surfaces namely, a first camming surface 18 and a second camming surface 19 are provided on that portion of the working arm 31 which, in the locked or fire-arm retaining position of the latch 16 protrudes through the aperture 26 into the trigger guard region 20. . . . In Figure 2, reference numeral 50 generally indicates a fire-arm. The fire-arm 50 has a muzzle 58 and a trigger guard 52 having a leading or outer edge 54 and a trailing or inner edge 56. . . . In use, when the fire-arm 50 is inserted into the holster 10, the camming surface 18 of the latch 16 is engaged by the leading edge 54 of the trigger guard 52, cam-follower fashion, urging the camming surface 18 outwardly and causing the latch 16 to pivot in the direction of arrow 51 against the bias of the spring 28, to permit the passage of the trigger guard 52 past the working arm 31 into the trigger guard retaining region 20. When the trigger guard 52 has passed the camming surface 18 into the trigger guard retaining region 20, the latch 16 snaps back under the influence of the spring 28 into a locked position behind the trailing edge 56 of the trigger guard 52, thereby retaining the fire-arm 50 within the holster 10. Attempted withdrawal of the fire-arm from the holster cavity 14 without releasing the latch 16, i.e. displacing the latch towards its displaced position, results in the trailing edge of the trigger guard bearing against the second camming surface 19 thereby exerting a moment around the pivot axis 26 of the latch 16 which serves to urge the latch 16 into a more firmly locked position. This action is assisted by the inclination of the second camming surface 19. In order to remove the fire-arm 50 from the holster, the latch 16 is manually displaced, against the bias of the spring 28, in the direction of arrow 51 to its released position (shown in broken lines in Figure 2) in which the latch is clear of the trigger guard. This displacement past the trigger guard is assisted by the radiussed portion 21 of the camming surface 19. In this position, the working arm 31 is clear of the trigger guard 52 permitting the fire-arm 50 to be drawn from the holster 10.’ (Emphasis provided.) [10] More simply put, the specification describes that on insertion of a firearm into the holster its trigger guard, when coming into contact with the spring mounted latch on its camming surface 18, forces it out of the way towards the body of the holster. As the weapon is inserted deeper into the holster and the trigger guard passes its tip, the latch springs back behind the trigger guard, effectively locking the firearm into the holster. In order for the firearm to be withdrawn from this locked position, the latch has to be manually displaced. But should an attempt be made to withdraw the firearm without doing so, due to its angle of inclination and the curved shape of its camming surface 19, on coming into contact with the inside edge of the trigger guard, the latch will be forced deeper into the cavity behind the trigger guard and lock the weapon more firmly into place (this being the function emphasised in the specification as quoted above). [11] That then is the description of the invention as set out in the specification of the patent. I turn now to deal with the claims ‘pegged out’ by the patentee.4 There are ten claims set out in the patent, only two of which – claims one and seven – were relied upon by the respondents. In turn, claim seven is in itself, wholly dependent upon claim one. Consequently, both sides are agreed that if claim one of the patent has not been infringed, neither has claim seven. [12] The parties are also agreed that the integers of the first claim of the patent are the following: ‘(a) A lockable holster which includes (b) a moulded holster body within which part of a fire-arm having a trigger guard is receivable, (c) the holster body having walls defining a cavity for receiving at least part of the fire- arm including at least a portion of the trigger guard and (d) an aperture in a wall of the holster body at a location corresponding to a trigger guard retaining region of the holster body, (e) first locking means on the holster body 4 I plagiarise the phraseology used in Marconi’s Wireless quoted in para 3 above. (f) which has a releasable biased locking member which is displaceable between a locked position towards which it is biased and a released position, whereby the fire-arm is releasably locked in position in the holster body, (g) in which the locking member is in the form of a first order lever which is pivotally mounted on an outer surface of the holster body (h) with a finger engaging effort arm and a working arm which protrudes through the aperture and into the cavity when the locking member is in its locked position (i) and whereon angularly spaced apart first and second camming surfaces are provided, (j) wherein when the locking member is in its locked position the first camming surface is engageable, cam-follower fashion, by the trigger guard of the fire-arm upon insertion of the fire-arm into the holster (k) to displace the locking member away from its locked position to permit the trigger guard to pass the locking member and to permit the locking member to return to its locked position once the trigger guard has passed and (l) the second camming surface is engageable by the trigger guard to inhibit unauthorised withdrawal of the fire-arm from the holster, and (m) the holster body being configured such that when the fire-arm is locked in position in the holster body a slide of the fire-arm is accessible and displaceable to permit a round of ammunition to be chambered.’ [13] The crucial question is whether the appellants’ swivel holster infringes this claim. In order to determine whether an alleged infringement of the patent has been proved in a case such as this, it is necessary to compare the allegedly offending article (the swivel holster) against the words of the claims set out in the patent.5 In this inquiry, the language of the claim is to be purposively construed in order to establish what were intended to be the essential elements of the claim, regard being had to the context of the invention as a whole.6 [14] The allegedly offending holster is illustrated below to facilitate the comparison that has to be made between it and a device envisaged by the language of the patent (the diagram was attached to the heads of argument of respondents’ counsel): 5 Aktiebolaget Hässle & another v Triomed (Pty) Ltd 2003 (1) SA 155 (SCA) para 7 and the authority there cited. 6 Aktiebolaget paras 7-9. [15] It is apparent from this that what is described as the ‘locking lug 66’, at the end of the locking member 52, operates as a locking mechanism in a manner similar to that of the spring-mounted latch (or ‘locking member’ as defined in the claim) in that, upon a firearm being inserted into the holster the trigger guard, engaging with the angled surface 68 of the locking lug, will force it out of its path against the spring loaded arm towards the body of the holster until, after the trigger guard has passed beyond the nose of the lug, the latter snaps back into place to secure the firearm in a locked position within the holster. And, as in the case of the patent, the lug 66 has to be manually disengaged from that locked position to allow the weapon to thereafter be withdrawn from the holster. [16] The parties are therefore agreed that the surface 68 is a ‘camming surface’ as envisaged by the patent and that the appellants’ swivel holster satisfies the integers [j] and [k] of the first claim. The primary dispute between them, however, is whether it also contains integer [l], namely, a second camming surface ‘engageable by the trigger guard to inhibit unauthorised withdrawal of the firearm from the holster’. [17] On this issue, the court a quo was persuaded that the nose of the locking lug on the swivel holster, which is shaped as it is so as to allow the trigger guard to pass easily over it and move the locking lug out of the way when a firearm is either inserted into or withdrawn from the holster, constituted part of the surface 70. It found accordingly that surface 70 was to be construed as a second camming surface as envisaged by integer [l]. [18] In my view, whilst it can be accepted that the radiused nose is indeed designed to facilitate the trigger guard passing the locking lug once the locking member is manually released, the court a quo erred in concluding both that it is part of surface 70 or that it satisfies integer [l]. [19] The patent teaches that when the locking member is in its locked position with a firearm in the holster, the second camming surface is to be ‘engageable by the trigger guard to inhibit unauthorised withdrawal of the firearm’. This is achieved by the curved shape of the second camming surface and the acute angle at which it is inclined in relation to the trigger guard, the effect of which in the case of an attempted withdrawal without releasing the locking member is to urge the locking member into an even more firmly locked position. [20] In this regard it differs from the appellants’ swivel holster. In the case of the latter, when in the locked position, the radiused nose of the locking lug is orthogonal (at a right angle) to the trigger guard and extends well into the cavity of the holster. As a result, and due to its radiused form, the nose of the lug will not engage the trigger guard should there be an attempt to remove the firearm (it will only do so once the locking mechanism is released and the firearm partially withdrawn.) Instead such an attempt would result in the flat bottom surface 70 of the lug resisting the movement of the trigger guard rather than converting it into a movement displacing the locking lug away from the trigger guard. Thus the flat surface of the locking lug, when in its locked position, cannot be construed as being a camming surface. This alone distinguishes the appellants’ holster from a holster envisaged by integer [l]. Moreover, I can see no reason to regard the radiused nose of the locking lug, designed to facilitate the lug’s easy movement over the trigger guard when a firearm is being either inserted or withdrawn, as part of the flat surface designed to prevent withdrawal when the holster is in a locked position. [21] Counsel for the respondents sought to meet this by arguing that as the flat surface 70 of the locking lug was the site upon which motion was imparted by the trigger guard when the locking member was released, it performed a camming function during that operation and was, consequently, a camming surface in that context. He argued further that integer [l] did not require the second camming surface to perform a camming function at the time of an attempted unauthorised withdrawal, and that as long as surface 70 was a camming surface at some stage it was to be regarded as the second camming surface envisaged by integer [l]. [22] In support of the argument that integer [l] did not require the second camming surface to perform a camming function at the time of an attempted unauthorised withdrawal, counsel emphasised the teaching in integer [j] that the first camming surface is to be ‘engageable, cam-follower fashion, by the trigger guard of the firearm’ on its insertion whereas no mention is made in integer [l] of the second camming surface having to be engaged in a similar fashion on its withdrawal. Thus, so the argument went, if the flat surface of the locking lug performs a camming function in another context it should be regarded as a camming surface at all times envisaged by the patent. And as it performs a camming function once the locking mechanism is released, it falls within what is to be regarded as a second camming surface for purposes of integer [l]. [23] As was pointed out by this court in Aktiebolaget Hässle7 the language of the claim must be construed purposively in order to extract from it the essence for the essential elements of the invention, ‘rather than a purely literal one derived from applying to it the kind of meticulous verbal analysis in which lawyers are too often tempted by their training to indulge’.8 And as was made clear in Ausplow v Northpark Trading9 it is necessary when interpreting a patent to construct rather than deconstruct a text of the claim to arrive at an 7 Aktiebolaget Hässle & another v Triomed (Pty) Ltd 2003 (1) SA 155 (SCA) para 8. 8 Catnic Components Ltd and another v Hill & Smith Ltd [1982] RPC 183 (HL) at 242 cited in Aktiebolaget Hässle para 8. 9 Ausplow (Pty) Ltd v Northpark Tradng 3 (Pty) Ltd & others 2011 BIP 12 (SCA); [2011] 4 All SA 221 (SCA).. interpretation which is technically sensible. A claim is not to be considered in isolation but, as was held by this court in Vari-Deals,10 recourse should be had to the full context and background including the specification to decide what a person skilled in their art would have understood the claim to mean.11 [24] The essence of the patented invention is that an unauthorised withdrawal of a firearm results in it being secured more firmly in the holster. This purpose is achieved by way of the camming effect caused by the trigger guard of the firearm engaging the second camming surface. Bearing that in mind, and applying a purposive construction to the language used in integer [l], having regard to the context in which that integer appears in the patent – including the vital function of the second camming surface 19 as illustrated in figure 2 of the patent to force the latch deeper into the cavity behind the trigger guard to lock the weapon more firmly into place should there be an attempted unauthorised withdrawal – the language used, properly construed, conveys clearly that integer [l] requires the second camming surface to function in that way in order to inhibit an unauthorised withdrawal. The respondents’ argument to the contrary effect cannot be accepted. It would render superfluous the use of the phrase ‘second camming surface’ in the integer. 10 Vari-Deals 101 (Pty) Ltd t/a Vari-Deals v Sunsmart Products (Pty) Ltd 2008 (3) SA 447 (SCA) para 11. 11 See further: Kirin-Amgen Inc & others v Hoechst Marion Roussel& others [2005] 1 All ER 667 (HL) para 44 and Monsanto Co v MDB Animal Health (Pty) Ltd (formerly MD Biologies CC) 2001 (2) SA 887 (SCA) para 8. [25] One final issue needs to be discussed. As a last ditch stand, it was argued on behalf of the respondents that if sufficient force was applied to the appellants’ swivel holster in an attempted unauthorised withdrawal of a firearm without releasing the locking mechanism, the holster could be sufficiently deformed to the extent that its body could be twisted sufficiently so as to be no longer orthogonal to the locking lug. In that event, so the argument went, the lug could no longer be at a right angle when engaged by the trigger guard and could act as a second camming surface. Indeed, and surprisingly, much of the evidence of the trial related to the question of whether in this instance the appellants’ swivel holster’s locking mechanism was capable of in fact performing the securing function of the patent ie urging the locking lug into a more firmly locked position when an attempt was made to withdraw the weapon without first releasing the locking mechanism, similar to the way the patented holster operates. [26] Whilst the ingenuity of counsel never ceases to amaze, this is a red herring. There is no suggestion that the appellants’ swivel holster is designed to deform in any way, let alone in a manner that will cause the locking lug to be forced into a more firmly locked position during an unauthorised attempt to withdraw a firearm. The expert called on behalf of the appellants, Mr Kiesling, testified that the flat surface of the locking lug would remain orthogonal to the direction of the gun barrel and the engaging surface of the trigger guard, even if there was a deformity of the holster. It seems to me to be unnecessary to decide whether his view or that of the respondents’ expert, Mr Resca, who opined that a withdrawal could cause a degree of rotation of the locking lug due to a deformation around the pivot axis of the pivot point thereby causing the locking lug to act as a cam, needs be accepted. If, through the application of an extraordinary force, a holster deforms causing a part not designed as a camming surface to impart motion upon another part due to the deformation, this seems to me to be irrelevant in the process of interpreting the patent to decide whether that part should be viewed as a camming surface. The issue is whether the holster as designed infringes the patent, not how the individual parts of the holster might operate should it be deformed through extraordinary force. [27] Consequently, in my view, surface 70 of the locking lug 66 of the appellants’ swivel holster is not to be construed as a second camming surface as envisaged by integer [l] of the first claim in the respondents’ patent. It is designed to block motion and not to convert motion from the trigger guard into motion in another direction. That being the case, the respondents failed to show that the appellants’ holster included integer [l] of the first claim in the patent. [28] As already mentioned, the claims in a patent define the exclusive right of the monopoly that rests in the patentee. Infringement of a patent thus involves taking of the invention as set out in the claims. The fact that there are clearly in this case considerable similarities between the apparatus envisaged by the patent and the appellants’ swivel holster is insufficient to establish an infringement. In order for that to be the case:: ‘The patentee must show that the defendant has taken each and every one of the essential integers of the patentee’s claim. Therefore if, on its true construction, the claim in a patent claims a particular combination of integers and the alleged infringer of it omits one of them he will escape liability.’12 Thus in Rodi & Wienenberger AG v Henry Showell Ltd 1966 RPC 441 (CA) at 467, a passage cited with approval by this court, inter alia, in Raubenheimer & another v Kreepy Krauly (Pty) Ltd & another 1987 (2) SA 650 (A) at 656I- 657B, it was stressed that if the language the patentee has used: ‘. . . specifies a number of elements or integers acting in a particular relation to one another as constituting the essential features of his claim, the monopoly which it obtains is for that specified combination of elements or integers so acting in relation to one another ─ and for nothing else. There is no infringement of his monopoly unless each and every one of such elements is present in the process or article which is alleged to infringe his patent and such elements also act in relation to one another in the manner claimed.’ [29] As integer [l] of the first claim is not present in the appellants’ holster, the court a quo therefor erred in concluding that the patent had been infringed. Consequently, the respondents’ claims relating to the alleged infringement – set out in para (c) of the order a quo – must be set aside. However, paras (a) and (b) 12 Populin v H B Nominees (1982) 41 ALR 471 quoted by Harms op cit at 263. of that order which relate to the counter claim and the validity of the patent were not challenged on appeal and must stand. [30] In regard to costs, the appellants have been successful and are entitled to their costs of appeal. In respect of the costs in the court below, each side has ultimately enjoyed a measure of success – the appellants have successfully resisted the relief the respondents sought against them while the latter successfully defended the validity of their patent. As suggested by counsel for the appellants, an order that the parties should bear their own costs is appropriate in these circumstances. [31] It is therefore ordered as follows: 1 The appeal succeeds, with costs. 2 Para (c) of the order of the court a quo is set aside and is substituted with the following: ‘(c)(i) The plaintiffs’ claims flowing from an alleged infringement of South African Patent ZA 98/6778 are dismissed. (ii) The parties are to bear their own costs.’ _______________________ L E Leach Judge of Appeal Appearances: For the Appellant: A J Bester SC Instructed by: Spoor & Fisher, Pretoria Phatshoane Attorneys, Bloemfontein For the Respondent: G D Marriott Instructed by: Adams & Adams, Pretoria Honey Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA MEDIA SUMMARY From: The Registrar, Supreme Court of Appeal Date: 15 December 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 Neutral citation: Pasadena v Resca (137/2016) [2016] ZASCA 204 (15 December 2016) The issue in this matter is whether a lockable holster manufactured by the first appellant and disposed of by both appellants infringes patent ZA 98/6778 of which the respondents are the joint registered proprietors. The respondents had successfully sued the appellants in the Court of the Commissioner of Patents which concluded that the respondents’ holster infringed the patent. On appeal, the Supreme Court of Appeal today concluded otherwise. It held that in order for there to be an infringement of the respondents’ patent, there had to be shown that each and every essential integer of the patented invention was present in the holster made and disposed of by the appellants. On the facts of this case, it was held that an essential integer, namely a second camming surface which, should there be an unauthorised attempt to withdraw a firearm from the holster, operated to cause a locking mechanism to be inserted deeper into the holster and lock the weapon more securely, was not present in the appellants’ holster. The Supreme Court of Appeal therefore upheld the appeal and set aside the order of the court a quo to the extent that it found that there had been an infringement of the patent. ---ends---

2212

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case no: 315/08 SHOPRITE CHECKERS (PTY) LTD Appellant and COMMISSION FOR CONCILIATION, MEDIATION AND First Respondent ARBITRATION COMMISSIONER B MBHA NO Second Respondent RETAIL AND ALLIED WORKERS UNION Third Respondent J MAAKE Fourth Respondent ______________________________________________________________ Neutral citation: Shoprite v CCMA and others (315/08) [2008] ZASCA 24 (27 March 2009) CORAM: Navsa, Jafta, Ponnan, Mlambo JJA and Leach AJA HEARD: 6 March 2009 DELIVERED: 27 March 2009 CORRECTED: SUMMARY: Review of CCMA award ─ standard ─ reasonableness ─ power of reviewing court ─ application of s 145 of the Labour Relations Act 66 of 1995 ─ unacceptable delay in finalising labour matters. ______________________________________________________________ ______________________________________________________________ ORDER ______________________________________________________________ On appeal from: Labour Court, Johannesburg (Zondo JP sitting as court of first instance). 1. The appeal is upheld and there is no order as to costs. 2. The order of the LAC is substituted as follows: ‘(a) Both the appeal and the cross-appeal are dismissed and each party is to pay its own costs. (b) The order of the Labour Court is set aside and replaced with the following: “Both the review and counter review applications are dismissed and there is to be no order as to costs.” ‘ ______________________________________________________________ JUDGMENT ______________________________________________________________ NAVSA et PONNAN JJA (Jafta, Mlambo JJA and Leach AJA concurring): [1] This is an appeal, with the leave of this court, against a judgment of the Labour Appeal Court (the LAC). Leave was granted on the limited issue of the correctness of the remedy afforded to Mr Jan Maake, the fourth respondent, which was reinstatement with retrospective effect to the time of dismissal. [2] Regrettably, as will become evident, this case has had a long and gruelling journey. Counsel for the appellant urged us to give due consideration to what he described as systemic failures. We should all be concerned about the long delays in finalising especially labour matters. This is an aspect to which we will revert later in this judgment. [3] Mr Maake was employed by Shoprite Checkers (Pty) Ltd (Shoprite), a national supermarket chain, in 1972. At the material time, he worked for Shoprite as a controller in its delicatessen at its Silverton shop. Mr Maake’s problems leading to the litigation which culminated in the present appeal, started during the last quarter of 2000 when, without authority, he consumed food belonging to Shoprite. The consumption of the food in the delicatessen was captured on a surveillance camera and led to disciplinary proceedings against him during November 2000. [4] At the disciplinary enquiry Mr Maake was charged with three instances of misconduct, namely, of eating (on three separate occasions) Shoprite’s food without authorisation, in areas where doing so was prohibited. It is common cause that Shoprite’s rules prohibited eating in most of the areas in the store, including the delicatessen. He was found guilty on all counts and his services were terminated by Shoprite on 2 December 2000. By this time he had been employed by Shoprite for nearly 30 years. [5] It is unchallenged that, at the time of the commission of the offences by Mr Maake, shrinkage at Shoprite’s Silverton store was becoming an increasing problem. The precise nature of the shrinkage is not known.1 We do know that shrinkage at the store had increased from 1.5 per cent to 4 per cent ─ the norm for such stores is 1.5 per cent. This led to the installation of cameras within the store, in an attempt to identify those responsible for the shrinkage. [6] It is undisputed that, during the period 14 September 2000 – 21 October 2000, the camera captured Mr Maake in the delicatessen eating items of food. On at least two occasions Mr Maake was consuming food that clearly belonged to Shoprite. The video clips show Mr Maake, on each occasion, taking an item, first from a table and then off a plate, before consuming it. Neither the nature of the food, nor its value, was established. [7] Mr Maake did not appeal his dismissal internally. [8] The Retail and Allied Workers Union (RAWU), of which Mr Maake was a member, referred the matter, on his behalf, to the Commission for 1 During arbitration proceedings Mr Jurie Kemp, who was the store manager at the relevant time, testified that theft by customers, incorrect pricing of goods and pilferage by staff could all be contributing factors. We do not know in which departments the problem was most prevalent. Conciliation, Mediation and Arbitration (the CCMA) in terms of the Labour Relations Act 66 of 1995 (the LRA), initially for conciliation and later for arbitration. [9] On 3 April 2001, Commissioner Mathee found that Shoprite had not acted substantively or procedurally fairly and ordered Mr Maake’s retrospective reinstatement to the date of his dismissal. [10] On 10 May 2001, Shoprite, dissatisfied that it had to reinstate Mr Maake, launched a review application in the Labour Court in terms of s 145 of the Act. The Labour Court (Waglay J) handed down its judgment and made the following order on 10 May 2002: ‘In the result I am satisfied that [Ms Mathee] did in fact commit gross misconduct in relation to her duties as arbitrator and the award is therefore liable to be reviewed and set aside.’ It took almost a year for this review process to run its course. [11] The matter was referred back to the CCMA for arbitration afresh. The Commissioner involved in the new arbitration was the second respondent, Commissioner Mbha. Arbitration commenced on 13 September 2002 and was finalised on 7 August 2003 ─ a period of almost 11 months. The Commissioner found that Mr Maake had breached the rule referred to above. He held, however, that dismissal was not peremptory. He considered, in relation to the offence in question, that discipline in the workplace had to be progressively imposed. He took into account Mr Maake’s clean long service record and in the totality of the circumstances held that dismissal was too harsh a sanction. [12] Commissioner Mbha held that Mr Maake should be given a ‘severe’ final written warning, valid for six months. Shoprite was ordered to reinstate Mr Maake. The reinstatement would take effect from the date of the award and not from the time of dismissal. [13] That award was once again taken on review by Shoprite in terms of s 145 of the Act. Shoprite, it appears, was intent on securing Mr Maake’s dismissal. It complained that the Commissioner had failed to take into account that reinstatement would set a precedent amongst its other employees who would, as a consequence, be left with the impression that unauthorised consumption attracted only the sanction of a written warning. Shoprite contended that this would lead to inconsistency in applying discipline ─ several people had already been dismissed for the same offence. It was also submitted that reinstatement would mean that Shoprite would be required to continue employing dishonest people. [14] Mr Maake, in turn, launched a counter application, challenging the finding that he was guilty of misconduct and, in addition, complained about the terms of his reinstatement and the sanction imposed. During the disciplinary proceedings Mr Maake had denied that he was the person on the video clips. During the arbitration proceedings however, Mr Maake ultimately admitted that he was that person. His case then was that he had authority to taste food prepared in the delicatessen and was therefore only doing his job rather than being guilty of misconduct. In his counter application he reverted to his earlier denial that he was the person who featured in the video clips consuming food. It is safe to say that Mr Maake was not contrite. [15] The second review application, once again, came before Waglay J who encountered problems with the record of the second arbitration. His judgment reflects that there was no transcript available. During the hearing before Waglay J, a transcript of Commissioner Mbha’s handwritten notes was provided and the parties were agreed that they were a fair reflection of the arbitration proceedings and were prepared to have the matter decided on that basis. [16] On 13 August 2004, Waglay J, probably to the distress of both parties, stated the following in his judgment: ‘In this matter having regard to the summary of evidence I am satisfied that the decision of [Commissioner Mbha] was not one open to be reviewed. However, I am mindful of the fact that there is discontent on the part of both parties. Because of the unhappiness compounded by the absence of a proper record I believe that the best course to follow is to refer the matter back…for [it] to be arbitrated afresh before a [different] Commisioner.’ Yet again, Waglay J ordered that the matter be referred back to the CCMA for arbitration before a different Commissioner. Like the first, the second review had also taken almost one year to be finalised. [17] Shoprite, with the leave of the Labour Court granted on 18 July 2005,2 appealed that order to the LAC, contending, inter alia, that Waglay J should have decided the matter on the transcript presented to him. Mr Maake and his union, both noted a cross-appeal, maintaining that a reinstatement order retrospective to the time of dismissal was justified. [18] The matter was heard by the LAC on 15 September 2006, more than a year after leave was granted. Judgment was handed down on 21 December 2007, more than 15 months later. Zondo JP, writing for a unanimous court, said the following about the Labour Court’s approach to the matter (set out in para 16 above): ‘If that order…was given effect to, the new commissioner…would have been the third commissioner and the parties and the witnesses who had already testified in the previous two arbitrations…would be called to testify and those [who] had given evidence in the disciplinary hearing would have [been] subjected to cross-examination for the fourth time on the same events.’ [19] The learned Judge-President went on to record the following: ‘The order of the Labour Court in the second review application was issued on 13th August 2004. That would have been over three and a half years since the fourth respondent’s dismissal. What would happen if some important witnesses who had given evidence in the earlier two arbitrations were, for some or other reason, no longer available to give evidence? What would happen if the unavailability of some or other important witness who had testified in the earlier arbitrations led to a result which could not have ensued if he had been available and had given evidence? Of course, the result could well be a miscarriage of justice.’ 2 The application for leave to appeal was disposed of 11 months after judgment. [20] The LAC decided the appeal by Shoprite and the cross-appeal by Mr Maake. It held that the finding by Commissioner Mbha that dismissal was not warranted was unassailable. In respect of Mr Maake’s submission that a final warning as a sanction was unjustified, Zondo JP rightly disagreed. [21] The LAC held that Commissioner Mbha erred in not ordering retrospective reinstatement. It found that denying Mr Maake the benefit of reinstatement up to the time of dismissal would, in the light of the sanction of a final warning, be too punitive. The LAC took into consideration the period of more than two and a half years that had passed from the time of Mr Maake’s dismissal up to the time of Commissioner Mbha’s award and that he had been without remuneration for that period. The LAC found that Commissioner Mbha’s failure to order retrospective reinstatement was not justifiable, nor reasonable nor rational. In arriving at this decision the court took into account Mr Maake’s length of service, his clean disciplinary record and the ‘indignity’ of the preceding two and a half years without income. Zondo JP accepted that shrinkage was a problem for Shoprite but concluded that, in the totality of the circumstances, it was unreasonable to deny Mr Maake the benefit of his salary for the period between his dismissal and Commissioner Mbha’s award. [22] In the result, on 21 December 2007 the LAC made the following order: ‘1. The appeal is dismissed and the cross-appeal is upheld in part. 2. Each party is to pay its own costs in regard to the appeal and cross-appeal. 3. The order of the Labour Court is set aside and replaced with the following order: “(a) The review application is dismissed. (b) There is to be no order as to costs. (c) The counter-review application is granted in part. (d) The commissioner’s decision not to make the operation of the order of reinstatement retrospective to the date of dismissal is hereby reviewed and set aside. (e) There is to be no order as to costs. (f) The commissioner’s arbitration award is amended by the addition of the following order thereto: “(i) The order reinstating the applicant is to operate with retrospective effect to the date of the applicant’s dismissal.” ’ [23] It is against that order that Shoprite sought leave to appeal from this court. In granting leave this court stated: ‘The appeal is limited to the correctness or otherwise of the remedy that was allowed to [Mr Maake].’ Put differently, the question is whether the LAC ought to have substituted the award by Commissioner Mbha in the terms set out in the preceding paragraph. [24] As was stated in Sidumo v Rustenburg Platinum Mines Ltd 2008 (2) SA 24 (CC) para 55, the starting point in an enquiry such as the present is the Constitution. Everyone – employees and employers alike – has a right to fair labour practices (s 23(1)). The primary purpose of the Labour Relations Act ('LRA') is to give effect to the fundamental rights conferred by s 23. [25] In deciding how commissioners should approach the task of determining the fairness of a dismissal, it is important to bear in mind that security of employment is a core value of the Constitution which has been given effect to by the LRA.3 Thus whilst the decision to dismiss belongs to the employer, the determination of its fairness does not.4 The statutory scheme requires a commissioner to determine whether a disputed dismissal was fair. [26] No appeal lies against a decision of a commissioner. The only remedy available to a party in a matter such as the present one is to institute review proceedings in the Labour Court. Section 158(1)(g) confers on the Labour Court the power to review the performance or purported performance of any function provided for in the LRA on any grounds that are permissible in law. That power, whilst fairly wide, is subject to s 145, which to the extent here relevant, provides: '(1) Any party to a dispute who alleges a defect in any arbitration proceedings under the auspices of the Commission may apply to the Labour Court for an order setting aside the arbitration award – (a) within six weeks of the date that the award was served on the applicant, ... . . . 3 Sidumo para 72. 4 Sidumo para 75. (2) A defect referred to in subsection (1), means – (a) that the commissioner– (i) committed misconduct in relation to the duties of the commissioner as an arbitrator; (ii) committed a gross irregularity in the conduct of the arbitration proceedings; or (iii) exceeded the commissioner's powers; or (b) that an award has been improperly obtained.' The general powers of review of the Labour Court under s 158(1)(g) are therefore circumscribed by the provisions of s 145(2) which prescribe the grounds upon which arbitral awards of CCMA commissioners may be reviewed. It follows that a party who wishes to challenge an arbitral award under s 145(2) can only do so on one or more of the grounds envisaged in that section. [27] Section 145 is now suffused by the constitutional standard of reasonableness, the question to be asked being: 'Is the decision reached by the commissioner one that a reasonable decision-maker could not reach?'5 Applying that standard will give effect not only to the constitutional right to fair labour practices, but also the right to administrative action which is lawful, reasonable and procedurally fair.6 [28] There may well be a fine line between a review and an appeal, particularly where ─ as here ─ the standard of review almost inevitably involves a consideration of the merits. However, whilst at times it may be difficult to draw the line, the distinction must not be blurred.7 The drafters of the LRA were clearly alive to the distinction. They accordingly sought to introduce a cheap, accessible, quick and informal alternative dispute resolution process. In doing so, appeals were specifically excluded. They said: 'In order for this alternative process to be credible and legitimate and to achieve the purposes of the legislation, it must be cheap, accessible, quick and informal. These are the characteristics of arbitration, whose benefits over court adjudication have been shown in a number of international studies. The absence of an appeal from the arbitrator's award speeds 5 Sidumo para 110. 6 Sidumo para 110. 7 Sidumo paras 109 & 244. up the process and frees it from the legalism that accompanies appeal proceedings. It is tempting to provide for appeals because dismissal is a very serious matter, particularly given the lack of prospects of alternative employment in the present economic climate. However, this temptation must be resisted as appeals lead to records, lengthy proceedings, lawyers, legalism, inordinate delays and high costs. Appeals have a negative impact on reinstatement as a remedy, they undermine the basic purpose of the legislation and they make the system too expensive for individuals and small business. Without reinstatement as a primary remedy, the draft Bill's prohibition of strikes in support of dismissal disputes loses its legitimacy. Prior to the establishment of the present LAC, it was argued that an appeal structure would provide the consistency required to develop coherent guidelines on what constitutes acceptable industrial relations practice. This has not been the case. The LAC's judgments lack consistency and have had little impact in ensuring consistency in judgments of the industrial court. The draft Bill now regulates unfair dismissal in express and detailed terms and provides a Code of Good Practice to be taken into account by adjudicators. This will go a long way towards generating a consistent jurisprudence concerning unfair dismissal despite the absence of appeals.'8 [29] Returning to the facts of this case. In our view, the LAC appears in this particular instance to have misconceived the nature of its function. The LAC concluded that Waglay J ought to have finalised the review application instead of setting aside the arbitral award and remitting the matter to the CCMA for a hearing de novo. Ordinarily, in those circumstances the LAC ought itself to have remitted the matter to the Labour Court for finalisation. It chose instead to finalise the matter itself. Given the inordinate length of time that had passed since the dismissal, one would hesitate to criticise the approach of the LAC. [30] In following this approach however, it effectively stepped into the shoes of the Labour Court and was thus exercising, not its traditional appeal powers, but rather the fairly circumscribed s 145(2) review powers of the Labour Court. Its warrant for interference with the award of the arbitrator was narrowly confined. Tellingly, Waglay J stated in his judgment that [w]hen consideration is given to the limited record, the findings of the [arbitrator] cannot be faulted’. This ‘limited record’ was ultimately the record on which the matter was decided by the LAC. Given the decision-making powers conferred upon the arbitrator and having regard to the reasoning of the commissioner, it cannot 8 Explanatory Memorandum (1995) 16 ILJ 278 at 318, as cited in Sidumo para 244. be said that his conclusion was one that a reasonable decision-maker could not reach. [31] Since the decision in Sidumo during the first half of 2008 numerous cases have been decided in labour courts based on the reasonableness test formulated therein.9 A multitude of arbitrations would no doubt have occurred from that time, with commissioners discharging their duties and obligations in terms of the Labour Relations Act in the manner carefully and comprehensively spelt out by the Constitutional Court in that decision. Courts should strive to ensure a cohesive and consistent jurisprudence which promotes the rule of law. Workers and employers alike are entitled to certainty in the law as they strive to regulate their relationship in an environment that is often prone to disquiet and tension. [32] There was, in any event, a further limitation on the powers of interference by the LAC. Section 193(1)(a) provides that if the arbitrator finds that the dismissal is unfair, he or she may order the employer to reinstate the employee from any date not earlier than the date of dismissal. Those words clearly confer a discretion upon the arbitrator to order reinstatement which is not retrospective to the date of dismissal. The LAC in NUMSA v Fibre Flair CC t/a Kango Canopies10 held that the test for interference in a discretion exercised in terms of s 193(1)(a) is that formulated in Ex Parte Neethling.11 It has not been shown in this matter that the arbitrator exercised his discretion capriciously or upon a wrong principle or upon any other ground justifying interference. 9 In the Industrial Law Journal Vol 29 July 2008 Nicola Smit sets out the following list of cases decided in 2008 which applied the test of the reasonable decision maker: Edcon Ltd v Pillemer NO (2008) 29 ILJ 614 (LAC), Ster Kinekor Films (Pty) Ltd v Maseko NO [2008] JOL 21393 (LC), Mkhwanazi v Moodley NO (2008) 29 ILJ 1535 (LC), Hulett Aluminium (Pty) Ltd v Bargaining Council for the Metal Industry (2008) 29 ILJ 1180 (LC), [2008] 3 BLLR 241 (LC), Coca-Cola Fortune (Pty) Ltd v CCMA (Sibiya) [2008] JOL 21186 (LC), Consol Speciality Glass v NBC Cleaning Industry [2008] JOL 21073 (LC), MEC for Health (Gauteng) v Mathamini (2008) 29 ILJ 366 (LC) and Astore Africa (Pty) Ltd v CCMA [2008] 1 BLLR 14 (LC). No doubt this list has grown considerably since then. 10 [2006] 6 BLLR 631 (LAC). 11 1951 (4) SA 331 (A) at 335E. [33] It is true that the systemic failures referred to by Shoprite’s counsel made life difficult for both parties. The delays in no way serve to detract from the correctness of Commissioner Mbha’s reasoning. Nor do they bring the matter within the terms of s 145(2) of the LRA. It remains eminently reasonable. It should also be borne in mind that, by the time the matter came before the LAC, further systemic delays had impacted on both employer and employee. The answer is to eliminate systemic failure rather than punish either employers or employees unjustifiably. By interfering with the decision of the arbitrator, the LAC was therefore in effect substituting its discretion for that of the arbitrator. That it was not permitted to do. [34] It follows that the appeal should succeed. Before concluding it is, however, necessary to deal with one remaining aspect. It is the question of the delays in finalising this matter. It is necessary to record that neither Mr Maake nor the union were represented at the hearing of this appeal. Both filed notices to abide the decision of this court. A period of more than eight years has passed since Mr Maake was dismissed. The entire scheme of the LRA and its motivating philosophy are directed at cheap and easy access to dispute resolution procedures and courts. Speed of result was its clear intention. Labour matters invariably have serious implications for both employers and employees. Dismissals affect the very survival of workers. It is untenable that employees, whatever the rights or wrongs of their conduct, be put through the rigours, hardships and uncertainties that accompany delays of the kind here encountered. It is equally unfair that employers bear the brunt of systemic failure. The Registrar has been directed to serve this judgment on the Director of the CCMA. No doubt the LAC and the Labour Court will address the issues referred to above. [35] For all the reasons set out above, the following order is made: 1. The appeal is upheld and there is no order as to costs. 2. The order of the LAC is substituted as follows: ‘(a) Both the appeal and the cross-appeal are dismissed and each party is to pay its own costs. (b) The order of the Labour Court is set aside and replaced with the following: “Both the review and counter review applications are dismissed and there is to be no order as to costs.” ‘ _________________ M S NAVSA JUDGE OF APPEAL _________________ V M PONNAN JUDGE OF APPEAL APPEARANCES: For Appellant: A T Myburgh Instructed by Perrott, Van Niekerk, Woodhouse, Matyolo Inc Johannesburg Lovius Block Bloemfontein For Respondent: -

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 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 On 27 March 2009 the Supreme Court of Appeal handed down judgment in Shoprite Checkers (Pty) Ltd v CCMA and others. This was an appeal against a judgment of the Labour Appeal Court, in terms of which it reinstated an employee with retrospective effect to the date of his dismissal. The labour dispute culminating in the appeal has had a long, gruelling and unsatisfactory journey. The employee concerned, Mr Jan Maake, was dismissed by the appellant, Shoprite Checkers (Pty) Ltd, on 2 December 2000 for unlawfully consuming food belonging to it in areas in which such consumption was prohibited. This occurred on at least two occasions. On each occasion Mr Maake, who worked as a supervisor in the delicatessen at Shoprite’s Silverton store, removed an item from a plate and consumed it. The value of the food he consumed was not established. Shrinkage in the store, due to a variety of factors, was an increasing problem leading to the installation of surveillance cameras which caught Mr Maake in the acts that led to his dismissal. Mr Maake’s dismissal followed upon internal disciplinary proceedings. Mr Maake’s union, the Retail and Allied Workers Union, referred the matter, on his behalf, to the Commission for Conciliation, Mediation and Arbitration (the CCMA), initially for conciliation and later for arbitration. On 3 April 2001 a Commissioner found that Shoprite had not acted substantively or procedurally fairly and ordered Mr Maake’s reinstatement retrospective to the date of his dismissal. On 10 May 2001 Shoprite, intent on a dismissal, launched a review application in the Labour Appeal Court in terms of s 145 of the Labour Relations Act 66 of 1995 (the LRA). The Labour Court held that the Commissioner had acted improperly in ordering retrospective reinstatement, set aside the award and referred the matter back to the CCMA for arbitration afresh. The review process took almost a year to run its course. A new arbitration commenced on 13 September 2002 and was finalised almost 11 months thereafter on 7 August 2003. The new Commissioner, Mr Mbha, the second respondent, found that Mr Maake was guilty of the conduct complained of. He held that dismissal was not peremptory. He took into account that Mr Maake had been employed by Shoprite for almost 30 years and had a clean record. Mr Mbha held that Mr Maake should be given a final written warning valid for six months. He ordered Shoprite to reinstate Mr Maake from the date of the award rather than from the time of dismissal. Shoprite, in its pursuit of a dismissal, once again took the award on review before the Labour Court. This time a transcript of the CCMA proceedings was missing. The parties agreed that a transcript of the Commissioner’s written notes could be used to reach a decision. The Labour Court disagreed and on 13 August 2004, once again, referred the matter back to the CCMA for arbitration afresh. Shoprite appealed that order to the Labour Appeal Court (the LAC) which heard the matter on 15 September 2006 and handed down judgment more than 15 months later on 21 December 2007. The LAC set aside the order of the Labour Court and the award of Commissioner Mbha, substituting it with an order that Mr Maake be reinstated to the date of dismissal. This court granted Shoprite leave to appeal only against the propriety of the reinstatement order. It upheld the appeal. This court considered the test to be applied in reviewing an award by the CCMA and held that Commissioner Mbha’s reasoning and conclusions could not be faulted. It found that he had exercised his discretion in relation to reinstatement properly. This court was critical of the numerous delays in this matter. It expressed concern that labour matters took so long (eight years) to finalise considering the hardships faced by workers and the impact on employers. The Registrar was directed to bring the judgment to the attention of the Director of the CCMA. This court was confident that both the Labour Court and the Labour Appeal Court would take appropriate steps to ensure that this kind of delay would be averted in the future.

2222

non-electoral

2009

THE SUPREME COURT OF APPEAL REPUBLIC OF SOUTH AFRICA JUDGMENT Case No: 320/08 In the matter between: MANJAR ALI SHAIK YUSUF ULDE APPELLANT v MINISTER OF HOME AFFAIRS FIRST RESPONDENT PERSON IN CHARGE – LINDELA SECOND RESPONDENT DETENTION CENTRE LAWYERS FOR HUMAN RIGHTS AMICUS CURIAE Neutral citation: Ulde v Minister of Home Affairs (320/2008) [2009] ZASCA 34 (31 March 2009). Coram: Mpati P, Streicher, Ponnan, Cachalia JJA et Hurt AJA Heard: 16 February 2009 Delivered: 31 March 2009 Summary: An arrest of an illegal foreigner under s 34(1) of the Immigration Act 13 of 2002 is subject to the exercise of a discretion by an immigration officer. The discretion is to be construed in favorem libertatis. Where a magistrate had granted bail to a suspected illegal foreigner, an immigration officer could not ignore this fact in the exercise of his discretion. ________________________________________________________________ ORDER ________________________________________________________________ On appeal from: High Court, Johannesburg (Sutherland AJ sitting as court of first instance). The following orders are made: (1) The appeal is upheld and the respondents are ordered to pay the appellant’s costs; (2) The appeal against the referral of Mr Zehir Omar to the Law Society of the Northern Provinces is dismissed; (3) Paragraphs (1) and (2) of the order of the court below are set aside and in their place the following order is made: ‘(a) It is declared that the detention of the applicant is invalid and is set aside. (b) The respondents are to pay the costs of the application.’ ________________________________________________________________ JUDGMENT ________________________________________________________________ CACHALIA JA (Mpati P, Streicher, Ponnan JJA, Hurt AJA concurring) [1] This is an appeal against the judgment of the Johannesburg High Court (Sutherland AJ) dismissing an application by the appellant for his detention at the Lindela Detention Centre at the respondents’ instance to be declared unlawful.1 The appellant has since been deported to India. The high court granted the appellant leave to appeal to this court on the grounds that if he returns lawfully he may contemplate a claim for damages for his alleged unlawful detention and that its judgment could be an impediment. The appellant is represented by Mr Zehir Omar in this appeal as he was in the court below. I mention this because, as appears from the concluding paragraph in this judgment, Mr Omar has a personal interest in the order that is being appealed against. [2] The high court considered two grounds to support the averment that the detention was unlawful: First, that the question of the appellant’s status as an illegal immigrant was the subject of criminal proceedings in the Kempton Park Magistrate’s Court and that those proceedings disqualified the respondents from dealing with him through the machinery of the immigration laws, and, secondly that the appellant’s detention was invalid because the respondents had not complied with the provisions of s 8 of the Immigration Act 13 of 2002 before detaining him. It dismissed both. In the judgment of this court in Jeebhai v Minister of Home Affairs,2 which will be delivered together with the judgment in the present case, the second issue was decided in favour of the respondents. [3] Before us, Mr Katz, on behalf of the amicus curiae, raised a new point which is indirectly related to the first ground. He submitted that in arresting the appellant, and then detaining him, the immigration officer failed to exercise any discretion, or to the extent that he did, failed to do so properly. Accordingly, so he submitted, the appellant’s arrest and subsequent detention was unlawful. [4] The facts that are relevant to deciding this issue are these. The appellant was arrested on 15 January 2008, it having been alleged that he had obtained a passport and identity documents given to him by the Department of Home Affairs 1 Ulde v Minister of Home Affairs 2008 (6) SA 451 (W). 2 Jeebhai v Minister of Home Affairs (139/2008) [2009] ZASCA 35 (31 March 2009) in citation. fraudulently. The documents were seized and remained in the possession of an immigration official, Mr Moodley. The appellant faced criminal charges relating to alleged contraventions of the Immigration Act in the Kempton Park Magistrate’s Court. On 4 February 2008, the magistrate released him on bail despite the respondents’ vigorous opposition. In this regard they filed a detailed affidavit by an immigration officer, Willem Vorster, setting out the grounds for their opposition. These included the strength of the case against him and the likelihood that he would not stand trial if he was released on bail. [5] Two days later, while on a visit at Lindela Detention Centre the appellant was confronted by an immigration official, Mr Matone Peter Madia, who asked him to produce proof of his entitlement to be in the country. Madia’s version of what happened appears from his answering affidavit: ‘5.1 After initially, in terms of s 41 of the Immigration Act requesting the applicant to produce documentation or any other form of proof of his entitlement to be lawfully within the borders of the Republic of South Africa, the applicant informed me of the fact that his travel document was in possession of a certain Mr R Moodley who is an employee of the Department of Home Affairs in the special Investigations Branch. I then informed the applicant that I would communicate with Mr Moodley to assess what the position was regarding his passport. 5.2 I then telephonically communicated with Mr Moodley who thereupon informed me that, after investigations by the relevant sections of the Department of Home Affairs, it was found that the applicant’s entire sojourn, from the outset, in the Republic of South Africa is based upon fraudulent documentation . . . 5.3 I was then also informed of the content of the affidavit of Mr W Vorster which was tendered during the recent bail proceedings (which I have, subsequent to the lodging of this application had sight of). 5.4 I then confronted the applicant on the allegations made by Mr Moodley and which are contained in the affidavit of Mr Vorster, upon which the applicant was unable to furnish me with satisfactory answers, as a consequence whereof I was of the opinion that I was not satisfied that the applicant is entitled to be in the Republic of South Africa and thereafter proceeded to detain the applicant in terms of s 34 of the Immigration Act, as is the Department of Home Affairs’ obligation when regard is had to s 32 of the Immigration Act. (Emphasis added) . . . 8.1 I should also respectfully point out that the decision to detain the applicant is based solely upon the seriousness of the allegations levelled against the applicant regarding the applicant’s fraudulent conduct, as well as the nature and extent of such fraudulent conduct. 8.2 I verily believe that the applicant, should he be released, and regard being had to the extent to which the applicant is prepared to defraud or, alternately be party to a fraudulent scheme, that in the event the applicant would simply have, as is usually the case, “gone under the radar” of the officials of the Department of Home Affairs and simply disappeared . . . 8.3 My motivation to detain the applicant was based upon the premise that, regard being had to the content of the affidavit of Vorster which I had at my disposal on 6 February 2008, the applicant’s chances of succeeding in regularising his stay in the Republic of South Africa, are highly improbable.’ [6] In Jeebhai this court confirmed that an officer who decides that an illegal immigrant is liable to be deported has a discretion whether or not to arrest and detain the person pending his deportation. There is no obligation to do so.3 In Lawyers for Human Rights v Minister of Home Affairs4 Du Plessis J described the discretion that an immigration officer has not to arrest a person as ‘limited’ having regard to the fact that s 34(1) applies only to foreigners who are by definition in the country illegally. He went on to state: 3 At para 29. 4 2003 (8) BCLR 891 (T). ‘As such the Act renders their personal freedom subject to restriction . . . The immigration officer’s limited discretion therefore amounts to no more than not to arrest persons who are by reason of their transgression of the law liable to arrest. In its effect the immigration officer’s limited discretion operates in favour of the individual concerned. The absence of guidelines where the discretion is so limited does not in my view violate the rule of law. The section merely allows an immigration officer to be humane’.5 [7] What the learned judge said about the nature of an immigration officer’s discretion concerning an arrest of an illegal foreigner is clearly also applicable to the discretion to detain the foreigner concerned. But his description of the discretion not to arrest (or detain) as being ‘limited’ in that it allows the immigration officer to merely be humane is, however, misleading because this may be read to mean that the illegal foreigner ought presumptively to be arrested (or detained) unless the immigration officer decides not to do so for humane reasons. Bearing in mind that we are dealing here with the deprivation of a person’s liberty (albeit of an illegal foreigner’s), the immigration officer must still construe the exercise of his discretion in favorem libertatis when deciding whether or not to arrest or detain a person under s 34(1) – and be guided by certain minimum standards in making the decision.6 Our courts have over the years stated these standards as imposing an obligation on the repository of a discretionary power to demonstrate that he has ‘applied his mind to the matter’ – in the celebrated formulation of Colman J in Northwest Townships (Pty) Ltd v The Administrator of the Transvaal7 5See Lawyers for Human Rights above at 896 G-H. 6 Cf s 41(1). Section 41(1) read with s 34(2) confers on an immigration officer a discretion to detain a suspected illegal foreigner for a period not exceeding 48 hours for the purposes of conducting an investigation into his status – but only if the detention is necessary. The requirement of necessity (and the concomitant element of proportionality) connotes that an immigration officer must consider whether there are sufficient grounds for the detention and also whether there are other less coercive measures to achieve the objective (Saadi v United Kingdom 13229/03 [2008] ECHR 80 (29 January 2008)). However, the prerequisite for the detention to be necessary in s 41(1) is omitted from s 34(1) thus relieving the immigration officer of this more onerous justificatory requirement in the latter instance. The constitutionality of this omission is not before us. 7 1975 (4) SA 1 (T) p 8F-G. ‘(A) failure by the person vested with the discretion to apply his mind to the matter (includes) capriciousness, a failure on the part of the person enjoined to make the decision, to appreciate the nature and limits of the discretion to be exercised, a failure to direct his thoughts to the relevant data or the relevant principles, reliance on irrelevant considerations, an arbitrary approach, and the application of wrong principles.’ [8] The approach I have outlined is now subsumed under s 12(1)(a) of the Constitution which provides that freedom may not be deprived ‘arbitrarily or without just cause’. Simply put a person may not be deprived of his freedom for unacceptable reasons.8 However, once the decision-maker has demonstrated that the discretion has been properly exercised, a court will not interfere, even if it appears that the wrong decision was made. [9] Before examining whether, or how, Madia exercised his discretion to detain the appellant I must point out that the appellant did not in terms raise this as a ground of review in his founding affidavit. He asserted merely that his detention was unlawful because it arises from the very complaint for which the magistrate had ordered his release. In Northwest Townships parlance this complaint relates, in my view, to ‘a failure to direct [the immigration officer’s] thoughts to the relevant data’. The appellant has therefore put in issue Madia’s exercise of his discretion, albeit somewhat obliquely. [10] The amicus submitted that the appellant’s detention was unlawful because it was carried out pursuant to a blanket policy to detain all persons found to be illegal foreigners. There is merit in the submission. It is clear from the extract from Madia’s affidavit quoted above that he believed that he had an obligation to detain the appellant ‘when regard is had to s 32 of the Immigration Act’. But s 32 imposes an obligation on an immigration officer to ‘deport’ an illegal foreigner – it is not concerned with the power to detain.9 By assuming that he had an 8 S v Coetzee 1997 (3) SA 527 (CC) para 159, quoted in De Langa v Smuts 1998 (3) SA 785 (CC) para 18. 9 Section 32: ‘Illegal foreigners obligation to detain the appellant, Madia was not exercising any discretion – he was carrying out what he believed to be a ‘blanket policy’ which by definition precludes the exercise of a discretion. [11] However, to the extent that Madia may be said to have exercised a discretion this also was not done properly. The factors he says he took into account (and contradict his assertion that he had an obligation to detain the appellant) when deciding to detain the appellant were ‘the seriousness of the allegations’ against him; that he would simply have ‘gone under the radar’ and that ‘the chances of succeeding in regularizing his stay in the Republic of South Africa, are highly improbable’. These are the very considerations that the magistrate was asked to consider in the bail application. It seems to me that once the respondents had elected to charge the appellant, and the magistrate then decided to release him on bail, this should have been taken into account as a relevant and material factor in any further decision to detain him. Madia makes no mention, in his affidavit, that he considered the fact that the appellant was released on bail. He must have known of this fact because, on his own version, he had sight of Vorster’s affidavit made to support opposition to bail being granted to the appellant and would therefore have been aware that the appellant had been granted bail despite Vorster’s opposition. The magistrate’s order could not simply be ignored – which is what happened. The appellant was therefore detained for unacceptable reasons – thus rendering his detention unlawful. [12] I wish to express our gratitude to the amicus curiae for its most helpful submissions. [13] In its order dismissing the application for the appellant’s release from detention, the learned judge in his order also referred to the Law Society of the Northern Provinces, Mr Omar’s conduct in failing to inform the court of authority (1) Any illegal foreigner shall depart, unless authorised by the Director-General in the prescribed manner to remain in the Republic pending his or her application for a status. (2) Any illegal foreigner shall be deported.’ adverse to the appellant’s case and directed the Society to report the outcome of the referral to the Deputy-Judge President of the Johannesburg High Court. Mr Omar seeks to appeal that part of the order. However, while an order may be appealed against, a referral of an attorney’s conduct to the Law Society may not – it is not a judgment or order as contemplated in s 21A(1) of Supreme Court Act 59 of 1959. The following order is made: (1) The appeal is upheld and the respondents are ordered to pay the appellant’s costs; (2) The appeal against the referral of Mr Zehir Omar to the Law Society of the Northern Provinces is dismissed; (3) Paragraphs (1) and (2) of the order of the court below are set aside and in their place the following order is made: ‘(a) It is declared that the detention of the applicant is invalid and is set aside. (b) The respondents are to pay the costs of the application.’ ____________ A CACHALIA JUDGE OF APPEAL APPEARANCES: COUNSEL FOR APPELLANT: Z Omar (Attorney) Amicus Curiae: A Katz; M du Plessis; J van Garderen INSTRUCTED BY: Zehir Omar Attorneys; Springs CORRESPONDENT: E G Cooper & Sons Inc; Bloemfontein COUNSEL FOR RESPONDENT: P M Mtshaulana SC; G Bofilatos INSTRUCTED BY: The State Attorney; Pretoria CORRESPONDENT: 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: 31 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 Ulde v Minister of Home Affairs & others The Supreme Court of Appeal today declared that the detention of Mr Manjar Ali Shaik Yusuf Ulde at the Lindela Detention Centre on 6 February 2008 had been invalid and set it aside. The SCA held that the immigration officer (an official in the Department of Home Affairs) had failed to exercise any discretion or not properly exercised his discretion in deciding to detain him. It accordingly set aside a judgment of the Johannesburg High Court dismissing the application to declare Ulde’s detention unlawful. The facts before the court were that Ulde was arrested as an illegal foreigner 15 January 2008 and charged with this and other offences in the Kempton Park Magistrates Court. On 4 February 2008 the magistrate released him on bail despite the vigorous opposition of the Department. Two days later, while he was visiting a friend at the Lindela Detention Centre, he was once again detained by an immigration officer, Mr Matone Peter Madia, who was aware that Ulde had been released on bail. In his affidavit before the court Madia said that after he was satisfied that Ulde was an illegal foreigner he detained him because he had an ‘obligation’ to do so. He also asserted that because of the seriousness of the allegations against Ulde, and the unlikelihood that he could succeed in regularising his stay in the country, he would simply have disappeared and evaded his trial. It appears that after spending a brief period in detention in February Ulde was deported to India. The SCA held that Madia had not been under any obligation to detain Ulde because the law gave him a discretion on whether or not to detain him. Also, Madia was not entitled to simply ignore the magistrate’s decision to grant bail to Ulde, which were based on the very considerations that Madia used to detain Ulde. To the extent that Madia did exercise a discretion therefore, the SCA held that he had not done so properly. The Minister of Home Affairs was ordered to pay the costs of the application in the high court and of the appeal.