The Law Reports

June 1st, 2016
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April 2016 (2) South African Law Reports (pp 317 – 631); [2016] 1 All South African Law Reports March (pp 629 – 882); 2016 (2) Butterworths Constitutional Law Reports – February (pp 157 – 309)

David Matlala BProc (University of the North) LLB (Wits) LLM (UCT) LLM (Harvard) LLD (Fort Hare)HDip Tax Law (Wits) is an adjunct professor of law at the University of Fort Hare.

David Matlala BProc (University of the North) LLB (Wits) LLM (UCT) LLM (Harvard) LLD (Fort Hare) HDip Tax Law (Wits) is an adjunct professor of law at the University of Fort Hare.

 

 

 

 

 

 

 

 

 

 

 

This column discusses judgments as and when they are published in the South African Law Reports, the All South African Law Reports and the South African Criminal Law Reports. Readers should note that some reported judgments may have been overruled or overturned on appeal or have an appeal pending against them: Readers should not rely on a judgment discussed here without checking on that possibility – Editor.

Abbreviations

CC: Constitutional Court

ECG: Eastern Cape Division, Grahamstown

GJ: Gauteng Local Division, Johannesburg

GP: Gauteng Division, Pretoria

SCA: Supreme Court of Appeal

WCC: Western Cape Division, Cape Town

 

Advocates – admission

LLB degree as a requirement for admission of advocates: Section 3(2) of the Admission of Advocates Act 74 of 1964 (the Act) provides among others that to be admitted as an advocate a person shall have the degree of Bachelor of Laws (LLB), referred to as Baccalaureus Legum degree in Latin. In Pretoria Society of Advocates v Salemane and Another [2016] 1 All SA 847 (GJ) the first respondent, Salemane, was admitted as an advocate after which he did his pupillage. However, he did not have the LLB degree. Instead, he had a Baccalaureus Procurationis (BProc) degree, which he completed over a period of five years. The applicant did not oppose the first respondent’s admission application as it expected the second respondent, the Society of Advocates, Witwatersrand Local Division (Johannesburg Bar) to oppose it given that the application was made to the GJ. Due to oversight no such opposition was made and as a result the second respondent was admitted.

Rescinding and setting aside with costs the order of Willis J and Kolbe AJ in terms of which, the first respondent had been admitted as an advocate, Moshidi J (Meyer J and Muzi AJ concurring) the court held that the provisions of
s 3(2) of the Act made it clear that the academic requirement for admission as an advocate was the LLB degree. Even if it were to be accepted in the first respondent’s favour that he possessed the BProc degree (even though he did not attach the BProc degree certificate to the application but only a statement of examination results), it was common cause that he did not have an LLB degree. The first respondent’s contention that a five-year study towards a BProc degree was equivalent to an LLB degree could not be sustained. It could never have been the intention of the legislature in the provisions of
s 3(2) to equate a BProc degree to an LLB degree. In short, the first respondent’s application as an advocate was erroneously sought and granted as he ought never to have applied for admission as an advocate in the first place.

Civil procedure

Appeal against execution order: Section 83(b) of the Magistrates’ Court Act 32 of 1944 (the Act) provides among others that:

‘(A) party to any civil suit or proceedings in a court may appeal to the provincial or local division of the Supreme Court having jurisdiction to hear the appeal against –

(b) any rule or order made in such suit or proceeding and having the effect of a final judgment… .’

In Mathale v Linda and Another 2016 (2) SA 461 (CC); 2016 (2) BCLR 226 (CC), the applicant, Mathale, was the occupant of Stand No. 8207 in Winnie Mandela Park, Tembisa in Ekurhuleni Metropolitan Municipality (East Rand), the latter being the second respondent in the matter (the municipality). The property in question had been allocated by the Municipality to the first respondent, Linda. However, Linda did not have the title deed, that is, was not the registered owner of the property, nor was he in charge thereof. The magistrate granted the first respondent an eviction order. Because of the difficulty of preparing the appeal record the appeal stalled. As a result, pending finalisation of the appeal the first respondent applied for an order for the execution of the eviction order in the interim. Another magistrate, granted the interim execution order. It was against that order that the applicant appealed to the GP where it was held that the execution order was not appealable, hence the dismissal of the appeal. An application for special leave to appeal to the SCA was also dismissed. That being the case, the applicant applied for leave to appeal to the CC. Such leave was granted and the appeal itself upheld. The applicant having been represented by a public-interest law firm, and not pressing for costs, each party was ordered to pay own costs. The costs orders of the courts a quo were set aside.

Reading a unanimous judgment of the court Khampepe J held that ordinarily interim execution orders were considered interlocutory in that they provided parties with interim relief, pending finalisation of the legal action. Generally, it was not in the interests of justice for interlocutory relief to be subject to appeal as that would defeat the very purpose of that relief. In the instant case there was little doubt that, once a court permitted the eviction order to be executed, pending the appeal, the applicant’s right to occupy his home would be brought to an abrupt end. When the eviction order was granted he was not afforded alternative accommodation by the municipality. He was a poor individual who resorted to unlawfully occupying land, a choice made out of desperation and destitution. If evicted, he would inevitably have to resort to some similar expedience in order to continue to provide accommodation for his family.

The execution order had an immediate and devastating effect on implementation as it rendered the applicant homeless. The suffering and indignity that were to result from giving effect to that execution order were immeasurable. It was indubitable that the execution order had the effect of a final judgment and was therefore appealable. Properly interpreted, s 83(b) of the Act meant that all orders, even if they were interlocutory, were appealable if they had the effect of a final judgment. In other words, the section made interlocutory relief appealable provided it was final in effect. The ‘final in effect’ threshold provided the High Court with the necessary flexibility to dismiss frivolous and vexatious appeals and also avoided the possibility of the High Court being inundated with appeals against execution orders. That approach required the High Court to examine the facts and circumstances of each case to determine whether, in truth, the order was final in effect. If not, it was not appealable.

 

Service of urgent application: The case of South African Airways Soc v BDFM Publishers (Pty) Ltd and Others 2016 (2) SA 561 (GJ), [2016] 1 All SA 860 (GJ) dealt with two issues, namely service of urgent application on the respondents and protection of confidential information concerning legal advice privilege. The issues arose after the applicant South African Airways (SAA) was granted, in an urgent application, an order preventing the respondents, being three media houses, from publishing the contents of a certain document, which the applicant alleged to be confidential. The document in question was prepared and signed by the applicant’s in-house attorney and dealt with the difficult financial position, which the applicant was facing at the time. In the document, the attorney expressed her opinion and advice. The court accepted that by its very nature the information contained in the document was confidential. However, there were two problems. First, the applicant only served the notice of motion on the respondents on 22 November 2015 at 10 pm by way of e-mail in which it was indicated that the matter would be heard at 10:30 pm, that is, thirty minutes later, but did not indicate where the hearing was to take place such as at the judge’s home, in chambers or in open court. Some respondents did not read the e-mails until the following morning. Telephone communication with the respondents reached only one of the three. The order sought was granted just after midnight. However, as it turned out both at the time of ‘service’ of the notice of motion and granting of the court order the information sought to be protected had already been published in print and online, which made the court order meaningless. Thereafter the respondents applied for a reconsideration, in terms of
r 6(12)(c) of the Uniform Rules of Court, of the order granted while the applicant sought that it be made a final court order. The court set aside the order previously granted with costs on attorney and client scale.

Sutherland J held that the purported service of the application by e-mail was, de facto, no service at all. Therefore, the order had been granted ex parte as the purported service was a farce.  The nature of the relief sought was not such that an ex parte order could ever have been justified. What the applicant and its legal representatives did, pursuant to a responsibility to achieve effective service in order to respect the principle of audi alteram partem, was not only clumsy, but was also unprofessional. When a litigant contemplated any application in which it was thought necessary to truncate the times for service in the rules of court, care had to be taken to use all reasonable steps to mitigate such truncation. In a matter in which less than a day’s notice was thought to be justifiable, the would-be applicant’s attorney had to take all reasonable steps to ameliorate the effect thereof on the would-be respondent. The taking of all reasonable steps was not a collegial courtesy but a mandatory professional responsibility that was central to the condonation necessary to truncate the times for service. When there was a prospect of a hearing before a judge after business hours and, even more so, when there was a prospect of the hearing taking place elsewhere than in a courthouse, the duty to take reasonable steps was even more important and imperative.

It was incumbent on the attorney of any person who contemplated an urgent application on less than 24 hours’ notice, to undertake the following default actions in fulfilment of the duty to ensure effective service:

  • Once the respondents were properly identified, the names and contact details, being the telephone, cellular telephone, e-mail, facsimile and physical addresses of persons who have the authority to address the application should be ascertained.
  • At the earliest moment after deciding to bring an urgent application, contact should be made to demand compliance with the relief to be sought and to alert one or more of such persons of the intention to bring the application, stating where it was likely to be heard, when it was likely to be served, and the identity of the judge on urgent duty. Agreement should be reached about who should receive service on behalf of the respondent by e-mail or facsimile or other method.
  • The urgent judge should be alerted, and a report made, whether or not the respondents have been alerted.
  • When the papers are ready for service, direct contact should again be made with the persons dealing with the matter on behalf of the respondents. Where delays occur, the respondents should be kept informed by interim telephone calls to report progress.
  • Sufficient time should be allowed for the respondents to read and digest the papers. It would be appropriate to send a notice of motion in advance of the founding papers to give the respondents a chance to formulate a view about the relief being sought.
  • When the papers were about to be served electronically or otherwise, the urgent judge should be consulted about when and where the hearing will take place, if at all, and how much time should be given, in the context of earlier alerts to the respondents.
  • Once served in a manner other than by personal physical delivery, the attorney should immediately call the respondents’ representatives directly to confirm actual receipt of all the papers.

As regards the aspect concerning logistics of the service of an urgent application and a failure to properly inform a judge in an ex parte application, a failure to properly inform a judge of all material facts, whether inadvertently or deliberately, could lead to a dismissal on such grounds alone.

Costs (security for)

Requiring security for costs does not amount to unfair discrimination and/or violation of constitutional right to equality of peregrinus: Section 21(1) of the Arbitration Act 42 of 1965 (the Act) provides in more general terms that in relation to arbitration proceedings before an arbitrator, the court shall have the same power of making orders in respect of amongst others security for costs. In Blastrite (Pty) Ltd v Genpaco Ltd 2016 (2) SA 622 (WCC) the applicant, Blastrite, was a South African company while the respondent, Genpaco, was a Nigerian company that did not own immovable property in South Africa. A dispute having arisen between the parties concerning their contract, the matter was referred to arbitration, the respondent being the claimant who sought an interdict against the applicant. The respondent provided security in the amount of some R 120 000 in respect of arbitration proceedings but the applicant wanted the amount to be increased by a further R 250 000, which the respondent declined. As a result the present application was made to court to force the respondent to provide the required additional security. The application was resisted on a number of grounds, including that requiring security to be provided by a plaintiff peregrinus was a violation of the constitutional right to equality before the law, was displaying xenophobic attitude to the respondent and also amounted to unfair discrimination.

Schippers J ordered, with costs, the respondent to furnish the required security by a specified date, failing which, the applicant was granted leave to apply for dismissal of arbitration proceedings or have them stayed until such security was furnished. It was held that in deciding whether a party should be required to furnish security, a court had judicial discretion, having regard to the particular circumstances of the case and the considerations of fairness and equity to both the incola and the peregrinus. The court should not adopt a predisposition in favour of or against security but should carry out a balancing exercise by weighing the injustice to the respondent, if prevented from pursuing a proper claim by an order for security, against the injustice to the applicant, if no security was ordered. In the instant case the consideration that the respondent could be prevented from pursuing its claim did not arise. The respondent was able to furnish security from its own resources and never complained that the amount required was unreasonable. As against that consideration the applicant, on the other hand, if it obtained a costs order in its favour, would have to proceed against the respondent in a foreign country and incur uncertainty, inconvenience and additional expense associated with the enforcement of that order.

The practice regarding security for costs had nothing to do with xenophobia. It was laid down as far back as 1828 in Witham v Venables (1828) 1 Menz 291. The fact that the practice regarding security treated a peregrinus plaintiff differently from an incola plaintiff was not itself a violation of s 9(1) (the equality clause) of the Constitution as it served a legitimate government purpose of protecting the applicant. Furthermore, the common-law practice, in terms of which a non-resident plaintiff who did not own immovable property in South Africa could be called on to give security for costs of lawsuit was consistent with the Constitution.

Election law

Lack of free and fair municipal elections: In Kham and Others v Electoral Commission and Another 2016 (2) SA 338 (CC); 2016 (2) BCLR 157 (CC), Kham and seven other applicants were former African National Congress (ANC) and municipal councillors who had been expelled from the party. They sought a court order declaring by-election results in Tlokwe Local Municipality (Potchefstroom) invalid. The Electoral Court per Moshidi J (Mthimunye (chairperson) concurring and Wepener J dissenting) held that as the number of votes involved in irregular registration was small and would not change by-election results, there was no need to set aside the results. For that reason the applicants sought and were granted leave to appeal to the CC, which upheld the appeal with costs. The by-election results were set aside and fresh elections ordered, the date of which was to be determined by the municipality in terms of the Local Government: Municipal Structures Act 117 of 1998. The court also gave ancillary relief regarding the requirements for holding future elections and by-elections.

The main trust of the applicants’ complaint was that voters from outside contested wards were registered in those wards and allowed to vote. Furthermore, voters’ roll were delivered very late, namely only seven days before the by-elections. That impacted negatively on candidates’ ability to canvass for votes. Moreover, the voters’ roll did not reflect the residential address of the voters.

Reading a unanimous decision of the court Wallis AJ held that the by-elections were not free and fair. The focus had to be on the impact that irregular registration of voters had on the applicants’ right to stand for public office. The issue was not whether the applicants would have won or lost had the arrangements for the by-elections been different and not suffered from the flaws of which they complained, but whether they were seriously hampered in their participation in the electoral process. As there was no internationally accepted definition of the phrase ‘free and fair elections’, whether any election could be so characterised fell to be assessed in the context in which it took place. Ultimately that characterisation involved a value judgment. In South Africa that decision had to be made in the context of the Constitution. The phrase highlighted both the freedom to participate in the electoral process and in the ability of political parties and candidates, both aligned and non-aligned, to compete with one another on relatively equal terms, so far as that could be achieved by the first respondent, the Independent Electoral Commission (IEC).

The following considerations were of fundamental importance to the conduct of free and fair elections:

  • Every person who was entitled to vote should, if possible, be registered to do so.
  • No one who was not entitled to vote should be permitted to do so.
  • Insofar as elections had a territorial component, as was the case with municipal elections were candidates were in the first instance elected to represent particular wards, the registration of voters should be undertaken in such a way at to ensure that only voters in that particular area (ward) were registered and permitted to vote.
  • The Constitution protected not only the act of voting and the outcome of elections, but also the right to participate in elections as a candidate and to seek public office.

Measuring whether an election was free and fair started by comparing what happened on the conduct of the election against the public standards put in place by legislation and the IEC itself for the conduct of free and fair elections. In the instant case the IEC fell short of those standards in that amongst others independent candidates (the applicants) were constrained to fight the by-elections under the shadow of uncertainty occasioned by the registration of an unknown number of voters who were not entitled to vote and on inability to identify those who were. The efforts of the applicants were hampered by the late delivery of the segments of the voters’ roll and in particular, the absence of voters’ addresses when those segments were delivered. The IEC was in breach of its obligations under s 16(3) of the Electoral Act 73 of 1998 in not furnishing segments of the voters’ roll with addresses where those were available.

Ensuring that voters were correctly registered in the voting district where they were ordinarily resident was of particular importance in the context of municipal elections as they were conducted on a ward basis. To the extent that in the instant case voters’ roll and some at least of the wrongly registered voters voted, there was a breach of the principle that only those legally entitled to do should be permitted to vote.

Evidence

Admissibility of unlawfully obtained evidence: Section 86(1) of the Electronic Communications and Transactions Act 25 of 2002 (ECTA) provides that: ‘[A]nyone who intentionally accesses or intercepts any data without authority or permission to do so, is guilty of an offence.’ In Harvey v Niland and Others 2016 (2) SA 436 (ECG) the applicant, Harvey, and the first respondent, Niland, were members of a close corporation, the second respondent, Huntershill, which was engaged in hunting and safaris business. After a fall out Niland left the employ of the corporation and started working for a rival entity but continued as a member of the corporation. The applicant suspected that Niland was acting in breach of the fiduciary duties, which he owed to the corporation by competing with it and soliciting business from its clients. To confirm the suspicion the applicant hacked Niland’s Facebook and unlawfully accessed his communications with various clients. The Facebook communications were copied and printed, after which they formed an annexure in an application for an interdict to restrain him from breaching his fiduciary duties to the corporation. Niland applied for striking out of the annexure or any reference to it or information emanating therefrom. In doing this Niland relied on s 86(1) of ECTA and s 14(d) (right to privacy) of the Constitution. The urgent interdict was granted with costs and the application for striking out was dismissed.

Plasket J held that it had to be accepted that in accessing Nilands’s Facebook communications the applicant acted unlawfully. Furthermore, it had to be accepted that apart from constituting criminal conduct, that conduct also constituted a violation of Niland’s right to privacy. That right to privacy had, however, to be viewed in its proper context. Far from being a ‘game-changer’, ECTA, by its silence on the issue, allowed for the admission of unlawfully obtained evidence subject to its exclusion in the discretion of the court. In the exercise of the discretion to exclude unlawfully obtained evidence, all relevant factors had to be considered. Those considerations included the extent to which, and the manner in which, one party’s right to privacy (or other rights) had been infringed, the nature and content of the evidence concerned and whether the party seeking to rely on the unlawfully obtained evidence attempted to obtain it by lawful means. In the instant case the evidence thus obtained was critical. Without it the applicant had no case and could neither institute an action nor launch an application. All that the applicant had was a suspicion but no evidence of Niland’s wrong doing. Therefore, the evidence was admissible.

 

Privilage – Confidentiality of legal advice: On the question of confidentiality of legal advice privilege, Sutherland J held in South African Airways Soc v BDFM Publishers (Pty) Ltd and Others 2016 (2) SA 561 (GJ), [2016] 1 All SA 860 (GJ) (see ‘service of urgent application’ above) that by invoking such legal advice privilege, no less than litigation privilege, the client would be invoking a ‘negative right’, meaning that the right entitled a client to refuse disclosure by holding up to the shield of privilege. What the right to refuse to disclose legal advice in proceedings could not be was a ‘positive right’, that is, a right to protection from the world learning of the advice if such is revealed to the world without authorisation. The client could indeed restrain a legal adviser on the grounds of their relationship, and could restrain a thief who took a document evidencing confidential information on delictual grounds.

But if the confidentiality was lost and the world came to know of the information, there was no remedy in law to restrain publication by strangers who learned of it. That was because what the law gave to the client was a ‘privilege’ to refuse disclosure, not a right to suppress publication if confidentiality was breached. A client should take steps to secure confidentiality and if those steps were ineffective, the quality or attribute of confidentiality in the legal advice was dissipated. The concept of legal advice privilege did not exist to secure confidentiality against misappropriation. It existed solely to legitimise a client in proceedings refusing to divulge the subject-matter of communications with a legal adviser, received in confidence. The vulnerability to loss of the confidentiality of the information over which a claim of privilege could and was made flowed from the nature of the right itself. Once confidentiality was shattered it could not be put back together again.   

Township development

Developer is liable for levies as property owner of unsold individual erven reflected on general plan establishing a township: In Heritage Hill Devco (Pty) Ltd v Heritage Hill Homeowners Association 2016 (2) SA 387 (GP) the appellant, Heritage Hill, was a company that bought a farm, took transfer and developed it into residential units which were sold to interested persons. The units were created in terms of a general plan designed for the development of a township (residential units) which was registered in terms of the Deeds Registries Act 47 of 1937 (the Deeds Act). The rights and obligations of owners of individual units were governed by the articles of association of the respondent homeowners association, the Heritage Hill Homeowners Association. The articles had a clause, which provided that any person, including the developer, who was the registered owner of the property, was a member of the respondent. Another clause provided that members of the respondent were liable for any levy determined by the directors from time to time in respect of each property owned by a member. Acting in terms of the articles the respondent charged a levy on the appellant in respect of all the units that had not been sold and therefore still belonged to it. Because there were quite a few such unsold units and in respect of which payment was in arrear the amount demanded was substantial, namely some R 2,5 million. The appellant contended that it was not the owner of unsold units but the original farm which had since been developed into the units. The GP, per Kollapen J held that the appellant was liable for the levy. An appeal to the full Bench was dismissed with costs.

Rabie J (Legodi and Baqwa JJ concurring) held that given the provisions of the Deeds Act and the articles of association of the respondent it was untenable for the appellant to argue that it was not the owner of individual erven (units) situated in the established township. In terms of s 46 of the Deeds Act it was clear that registration of the general plan, setting out the various units in the township, had the effect of creating separate erven, the ownership of which could only have vested in the township developer. In the instant case that developer was the appellant. Therefore, the court a quo was correct in its finding that the appellant was the registered owner of the unsold erven within the context of the respondent’s articles of association.

Other cases

Apart from the cases and material dealt with or referred to above the material under review also contained: Dealing with access to information held by a public body, apportionment of liability for contributory negligence, apportionment of surplus of pension fund, attachment and seizure of movables already under judicial attachment, base cost of asset when assessing capital gains tax, disposition made in the ordinary course of business, dolus eventualis, environmental law, eviction of unlawful occupier, fiscal investigation into municipality’s finances, independence of independent police investigative directorate, interference with contractual relationship, permission to relocate with minor children, ownership of certificated shares, prescription of special notarial bond secured debt, procurement, recognition of foreign trustee, rehabilitation of an insolvent, review of decision of Appeal Board by Registrar of Pension Funds, search warrant, town-planning and zoning schemes, as well as validity of wills.

This article was first published in De Rebus in 2016 (June) DR 40.