The law reports – January/February 2013

February 1st, 2013
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Heinrich Schulze BLC LLB (UP) LLD (Unisa) is a professor of law at Unisa.

November 2012 (6) The South African Law Reports (pp 1 – 328); [2012] 4 The All South African Law Reports October no 1 (pp 1 – 120) and no 2 (pp 121 – 238)

Abbreviations:

SCA: Supreme Court of Appeal

Children

Access by grandparents: In LH and Another v LA 2012 (6) SA 41 (ECG) the respondent’s son was born soon after her husband was killed in a car accident. After she remarried, relations between her and the parents of her deceased husband (the applicants) deteriorated and all contact between them and their grandson ended. The applicants wanted to re-establish contact with their grandson and approached the High Court for an order granting them access. The respondent opposed the application on the basis that the initial contact with them had resulted in numerous problems that convinced her that further contact with the applicants would not be in her son’s best interests.

Smith J held that it is usually in a child’s best interests to maintain a close relationship with his grandparents. In the present case the respondent’s attitude was motivated by her personal difficulties with the applicants rather than a consideration of her son’s best interests. Contact between the applicants and their grandson, although desirable, had to be carefully circumscribed so as not to interfere with the respondent and her second husband’s parental responsibilities. A reasonable transition period was required for the repair of the soured relationship between the respondent and the applicants.

The court ordered that the applicants be allowed to visit their grandchild at least once a week, for three hours at a time, at his home or anywhere else the respondent deemed appropriate.

As the applicants were successful, ordinarily they would have been entitled to costs; however, the court reasoned that it was inevitable that any attempt on their part to recover costs from the respondent would further strain their relationship and negatively impact their attempts to re-establish a close relationship with their grandchild. The court therefore held that such a costs order would not be in the best interests of the child and, in the circumstances, it would be appropriate for each party to pay its own costs.

Foster care order: In SS v Presiding Officer, Children’s Court, Krugersdorp and Others 2012 (6) SA 45 (GSJ) the court was asked to pronounce on whether a foster care order had to be made in respect of SS, an orphaned child of 12 who was living with his aunt and uncle (the Ls), who were providing for him from their ‘meagre’ means.

An application for such an order had been refused by the children’s court on the ground that SS was not in ‘need of care and protection’ since he was being taken care of by the Ls. Section 150(1)(a) of the Children’s Act 38 of 2005 stipulates that a child is ‘in need of care and protection’ if ‘the child has been abandoned or orphaned and is without any visible means of support’ (my emphasis). On appeal, the High Court was asked to interpret these two phrases.

Saldulker J held that s 150(1)(a) envisaged a two-stage inquiry: The commissioner first had to investigate the abandoned or orphaned child’s living arrangements and welfare to determine whether he is in need of care or protection. Once this is established, the commissioner has to determine whether the child lacks ‘visible means of support’. ‘Visible’ means ‘evident’ and the focus is on the financial means of the child, not of the foster parent or de facto caregiver. The commissioner has to determine whether anyone, including the child’s current caregivers, has a legal duty to support him. Not all relatives owe a legal duty of support and relatives are eligible foster parents. If the child is not readily able to access any such means of support, then he is in need of foster care and the ancillary foster grant, to be accessed through the foster parent(s).

The following kin bear a duty of support: Biological and adoptive parents, whether married or not; maternal and paternal grandparents, regardless of whether the parents were married; siblings; and step-parents in exceptional, narrowly defined cases. Uncles and aunts, however, owe no duty of support to their nieces and nephews.

The commissioner had erred in finding that because SS was in the care of the Ls, who lacked a legal duty to support him, he therefore had ‘visible means of support’ and was thus excluded from foster care services. His conclusion was based on an ‘implausible interpretation’ of s 150(1)(a), which could not have been intended by the legislature. The commissioner should have found SS to be a minor child in need of care and protection and without visible means of support, and should have placed him in the foster care of the Ls. The Ls were entitled to a foster care grant for the duration of the foster care order, backdated to the date the commissioner handed down judgment.

There was no order as to costs.

Contract of sale

Doctrine of fictional fulfilment: The facts in Lekup Prop Co No 4 (Pty) Ltd v Wright [2012] 4 All SA 136 (SCA) were as follows. The appellant seller owned immovable property, which it sold to the respondent purchaser in April 2004. The sale agreement contained an acknowledgment by the purchaser that he was aware that the property was not yet sub-divided and the agreement of sale was subject to sub-division being formally approved and registered by 31 October 2004. It was further agreed that in the event of sub-division not being registered by this date, the agreement would be cancelled. The date was subsequently extended, but the sub-division was still not approved by the agreed date. The case was conducted on the basis that despite the reference to cancellation in the agreement, the meaning of the clause was that if the condition had not been fulfilled by the date specified, the agreement would lapse.

The seller brought an application in the court a quo on the basis that the agreement had lapsed. By consent, the matter was later referred to trial. The purchaser alleged that the seller had deliberately and intentionally failed to procure the required rezoning and sub-division of the property. In doing so, the purchaser relied on the doctrine of fictional fulfilment in contending that the relevant terms of the contract should, for purposes of the allegation that the agreement had lapsed, be deemed to have been fulfilled. The court a quo found in the purchaser’s favour and held that the agreement of sale had not lapsed and the suspensive condition was deemed to have been fulfilled.

On appeal to the SCA, Cloete JA referred to earlier case law and explained the remedy of fictional fulfilment as follows. A condition is deemed to have been fulfilled as against a person who would, subject to its fulfilment, be bound by an obligation, and who has designedly prevented its fulfilment, unless the nature of the contract or the circumstances show an absence of dolus on his part. Dolus in this context does not carry its usual meaning of deliberate wrongdoing or fraudulent intent, but carries a more specific meaning, namely ‘the deliberate intention of preventing the fulfilment of the condition in order to escape the obligation subject to it’. The doctrine focuses on intention rather than motive and negligence does not suffice.

The seller accepted that he had a tacit contractual duty to take all reasonable steps to ensure that the property was sub-divided and the sub-division registered. The doctrine of fictional fulfilment is an equitable doctrine. Equity, in turn, demands that in certain cases a contracting party should be held to a bargain where it has deliberately not performed an obligation for the purpose of avoiding the contract. In order to successfully invoke the doctrine of fictional fulfilment, the purchaser bore the onus of proving that the seller, by deliberate commission or omission, prevented the sub-division from taking place with the intention of avoiding its obligations under the agreement.

The court was not convinced that the seller acted with dolus and that it was prompted by a desire to escape the obligations it had under the agreement. Therefore, the purchaser did not discharge the onus on him. The relief sought, based on the doctrine of fictional fulfilment, which was granted by the court a quo, should have been refused.

The appeal was thus upheld with costs.

Credit agreements

Whether incidental credit agreement is subject to NCA: In Voltex (Pty) Ltd v SWP Projects CC and Another 2012 (6) SA 60 (GSJ) the plaintiff sold and delivered goods to the defendant, payment being due and payable within 30 days of date of delivery and late payment attracting interest. In an application for default judgment against the defendant, the issue was whether the agreement of sale constituted a ‘credit agreement’ in terms of s 8 of the National Credit Act 34 of 2005 (NCA), in particular whether it fell within the s 1 definition of ‘incidental credit agreement’.

Bhikha AJ held that the interest was not charged ‘in terms of’ the agreement, as required in the NCA, but was instead payable as damages in consequence of breach of the agreement.

The court concluded that the transaction was not an ‘incidental credit agreement’ and the NCA did not apply. Default judgment was thus granted.

Note: Readers’ attention is drawn to an earlier case that also involved the plaintiff in this matter, namely Voltex (Pty) Ltd v Chenleza CC and Others 2010 (5) SA 267 (KZP). In this matter there was no deferment as the entire debt was payable within 30 days. Accordingly, so the court reasoned, the agreement did not constitute a credit facility. The court further pointed out that the agreement did not constitute an incidental credit agreement or ‘any other agreement’ as there was no provision stipulating payment of a fee or interest for the deferment of payment. The mora interest claimed by Voltex was in the nature of damages suffered. It was fixed, not by the agreement, but by operation of law.

  • See 2010 (Nov) DR 41.

Delict

Damages – trust: The decision in Raath v Nel [2012] 4 All SA 26 (SCA) concerned a medical malpractice claim. As a result of a failed pre-operation intubation procedure conducted by the appellant anaesthetist (the defendant in the court a quo) the respondent (the plaintiff in the court a quo) sued the appellant for damages. The procedure administered by the appellant resulted in the respondent spending more than a month in the intensive care unit of a hospital. His physical and mental recovery after his discharge was slow and problematic.

The respondent sought damages for the loss caused by his inability to see to the affairs of his business as a game farmer and auto dealer to the same degree as prior to the procedure; for future medical and hospital expenses; and for general damages. The appellant accepted liability for such damages that the respondent proved or as agreed, and the trial court made the awards it deemed appropriate. The present appeal was limited to specific amounts for future medical and hospital expenses; loss of income and earning capacity; and an amount for general damages.

On the issue of loss of income and earning capacity, it was argued that any loss that may have been suffered was not suffered by the respondent personally, because for estate planning and estate duty considerations, the respondent had sold all his assets, including his shares and loan account in his business to a trust.

Majiedt JA pointed out that the question was whether the loss suffered by the respondent’s business prior to the sale of assets to the trust, and by the trust thereafter, over the relevant period could be characterised as his loss. The court reasoned that the respondent was not a capital beneficiary of the trust but was, in the discretion of the trustees, a potential income beneficiary thereof. The court noted that this type of trust has become popular for estate planning and tax purposes.

The court referred to case law to the effect that a trust estate, comprising an accumulation of assets and liabilities, is a separate entity, but with no legal personality. It emphasised that the core concept of a trust is the separation of ownership or control from enjoyment. Applied to the present matter, the separateness of the trust estate had to be recognised and emphasised, despite being adverse to the respondent. What the respondent sought, in effect, was the advantage of both a reduction in estate duty and the continued retention of control and advantages of ownership of the trust assets. The appeal in respect of the claim for loss of earning capacity after the date of the sale of assets to the trust was thus upheld with costs.

Measure of damages – contractual link: In Hentiq 1320 (Pty) Ltd v Mediterranean Shipping Co 2012 (6) SA 88 (SCA) the appellant (the plaintiff in the court a quo) sued the respondent (the defendant in the court a quo) for damages in delict and in contract after the respondent had delivered three cargoes of defective rice to the appellant. It was common cause that the supplier had fraudulently misdescribed the rice on the bills of lading. The parties to the contract of sale in respect of the rice were the supplier and a Hong Kong company, Kingsburg, which had financed the deal. Kingsburg, in turn, on-sold the rice to the appellant. Although the fraud was discovered by Kingsburg and the sale cancelled, on being invoiced the appellant nevertheless felt morally obliged to pay Kingsburg for the defective rice.

The court a quo dismissed the appellant’s claim because it failed to prove that it had sustained a recoverable loss. The structure of the transactions involved back-to-back sales from the suppliers to Kingsburg and from Kingsburg to the appellant, and therefore the appellant had no contractual link with the supplier. The party to which it was entitled to look for performance of the contract was Kingsburg. The latter had agreed to sell it rice of a particular description and the rice it delivered was defective. While the supplier was the source of the problem, at the level of contract the only party against whom the appellant had a remedy was Kingsburg. It was entitled to reject the rice that was tendered for delivery for being defective, to cancel the sale and refuse to pay for the rice. Had it done so, it would have been acting in accordance with its rights and would have suffered no loss.

On appeal, Farlam JA concurred with the reasoning of the High Court, which held that the appellant, by failing to show a liability to pay Kingsburg, had failed to prove a recoverable loss.

The appeal was dismissed with costs.

Husband and wife

Settlement agreement: PL v YL 2012 (6) SA 29 (ECP) concerned an application for leave to appeal by both parties against an order made in an unopposed divorce. The gravamen of the complaint was that Alkema J refused to make a specific paragraph of the deed of settlement – which dealt with the division of the parties’ ownership in an immovable property – an order of court. The issue was therefore not so much what the court ordered, but rather what it failed to order.

The High Court has a discretion in divorce proceedings to make a settlement agreement an order of court. The discretion is conferred by s 7(1) of the Divorce Act 70 of 1979 (the Act), which empowers the court to make or refuse to make a settlement agreement relating to maintenance or the division of assets an order of court. The suggestion that the complete settlement agreement should in all cases be made an order of court as a matter of course would remove the element of discretion. The discretion is given by s 7(1) of the Act and no rule of practice, however firmly established, can remove such a discretion.

Alkema J referred to his earlier judgment in Thutha v Thutha 2008 (3) SA 494 (Tk), where the principle was established that, instead of courts battling to find ways of dealing with problems when disputes arise between litigants in respect of private agreements that had been made an order of court, such problems should rather be prevented by refusing to make such an agreement an order of court.

Should disputes subsequently arise between the contracting parties, they must be allowed to resolve these under the law of contract in the normal way.

The court accordingly granted leave to appeal against its order, but only on the basis of whether, generally, the earlier decision in the Thutha matter was correctly decided (including the nature of the discretion to be exercised) and, if so, whether or not the guidelines stipulated in that decision on when to make a settlement agreement an order of court are a proper exercise of the court’s discretion and should be followed in the Eastern Cape High Court.

  • See 2008 (Aug) DR 41.

Praedial servitude

Right of aqueduct: The facts in Zeeman v De Wet en Andere NNO 2012 (6) SA 1 (SCA) were as follows. The respondents were the trustees of the De Wetshof Landgoed Trust, which owned the farm De Wetshof in the Robertson district. In 2003 the appellant, Zeeman, and the respondents concluded an agreement of servitude that provided that De Wetshof, in order to facilitate the planting of new vineyards, would be entitled to relocate a pipeline. The pipeline formed the object of an existing servitude of aqueduct over De Wetshof to Zeeman’s neighbouring farm. The subsequently executed notarial deed of servitude specifically provided for reasonable access by Zeeman and his labourers to De Wetshof for the exercise of the servitude. The agreement provided that De Wetshof would, at its own expense, maintain the pipeline and, at the request of Zeeman remove any obstructions.

Zeeman was, however, dissatisfied with his access to the works and applied for an order directing De Wetshof to clear a two-metre-wide strip along the pipeline through its new vineyards to facilitate exercise of the servitude. According to Zeeman, the new vineyards and ancillary irrigation works prevented him and his labourers from walking along the pipeline, meaning they had to circle the vineyards to inspect it at intervals and had to take a detour to clear an often-blocked sluicegate. However, in contrast to these allegations, it appeared from the evidence that Zeeman had not inspected the pipeline once between 2002 and 2010. Zeeman’s application was dismissed by the court a quo.

On appeal, Malan JA held that the principal issue was what constituted a reasonable right of access for the exercise of the servitude. The agreement, in amending the common law by transferring the duty of upkeep from Zeeman to De Wetshof, had also amended Zeeman’s common law right of access to the works, since it was thereafter only necessary for him to visit De Wetshof to inspect the sluicegate, for which purpose the detour past the vineyards was adequate. Although Zeeman’s failure to exercise his rights under the servitude did not affect its existence, it did serve to illustrate what constituted reasonable conduct in the circumstances. It was clear that, in the event of an interruption of the water supply, Zeeman could simply have phoned De Wetshof to demand that it comply with its duty of upkeep. Since there was no indication it was unwilling to so comply, there was, all things considered, no grounds for the granting of Zeeman’s application.

The appeal was dismissed with costs.

Prescription

Prescription – interruption: In Village Freezer t/a Ashmel Spar v CA Focus CC 2012 (6) SA 80 (ECG) the respondent (the plaintiff in the court a quo) was deregistered after rendering certain services to the appellant (the defendant in the court a quo). The respondent issued summons against the appellant while it was deregistered, although it was later reregistered. Unless prescription had been interrupted by the issue of summons, the respondent’s claim would have prescribed while it was deregistered.

The respondent contended that the summons was cured by the subsequent restoration of registration and that its claim against the appellant had accordingly been revived.

Makaula J pointed out that although the SCA 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 (SCA) had held that a restoration order validated the institution of legal proceedings on behalf of a company that did not exist, the judgment did not go so far as to say that where debts owed to the company have been extinguished by prescription, such debts would be revived.

A summons issued by a company after deregistration is a nullity. A right was created in favour of the appellant as at the time when the debt was extinguished by prescription. Thus it was an existing right at the time of reregistration. The debt could not be revived once so extinguished by a legislative fiction that deemed the respondent to have been in existence at the time of issue of summons.

The appeal was thus allowed with costs.

Property

Spoliation order – search warrant: The facts in Ivanov v North West Gambling Board and Others [2012] 4 All SA 1 (SCA); 2012 (6) SA 67 (SCA) were as follows. The first respondent was a provincial gambling board (the board). In January 2010 the third respondent, an inspector employed by the board, inspected the business premises of the appellant, Ivanov. Suspecting that gambling activities were taking place in contravention of the North West Gambling Act 2 of 2001 (the Act), the inspector applied and was issued with a search warrant. When the warrant was executed, it was confirmed that the appellant was in possession of gambling equipment.

In an urgent ex parte application in the magistrate’s court, Ivanov sought an order cancelling the search warrant and directing the members of the South African Police Service to restore possession of his business premises to him, averring that the warrant was invalid. The magistrate granted an order for the restoration of his business premises, but made no order that affected the validity of the warrant.

The appellant was charged with illegal gambling and the police and members of the board returned to his premises and seized machines and equipment that appeared to be gambling machines. The appellant instituted an ex parte application in the High Court against the first to fifth respondents. He attacked the validity of the search warrant and sought an order directing the respondents to restore the machines to him with immediate effect. This was granted and the machines were returned to the appellant pending the return day.

On the return day the court discharged the rule nisi in part. It declared the warrant invalid for being too general and vague and accordingly set it aside. However, the search and seizure were held not to be unlawful because although the search warrant was invalid, it had not yet been set aside when the police executed it and it had empowered the police to conduct the search and seizure. It was further held that the appellant was not entitled to a spoliation order and had adopted the incorrect procedure and relied on a wrong cause of action. The court ordered the return of the machines to the respondents with the qualification that the appellant was only entitled to the return of the items he might lawfully possess. Leave to appeal to the SCA was granted.

Two issues were raised on appeal. First, whether the declaration of invalidity of the search warrant could transform a bona fide search that was executed under a warrant into a spoliation; and whether, as a result of the declaration of invalidity of the search warrant, the appellant was entitled to unqualified restoration of the machines, the possession of which without a licence is prohibited by the Act.

Mhlantla JA held that the aim of spoliation is to prevent self-help. An applicant who applies for a spoliation order must prove that he was in possession of the spoliated thing. The cause of possession is irrelevant; that is why possession by a thief is protected. The applicant must further prove that he was wrongfully deprived of possession. The principle is simple: Possession must first be restored to the person spoliated, irrespective of the parties’ actual rights to possession. Questions of illegality or wrongfulness of the spoliator’s possession are irrelevant.

The appellant had succeeded in establishing that he had been in peaceful and undisturbed possession of the machines and that he had been unlawfully deprived of that possession. He had no duty to prove the lawfulness of his possession and the issues raised on behalf of the respondents relating to the lawfulness of the possession were irrelevant for the purposes of the application.

The appeal was accordingly upheld with costs and the respondents were ordered to restore the machines to the appellant.

Other cases

Apart from the cases and topics referred to above, the material under review also contained cases dealing with administrative law, amendment of pleadings, appeals, civil procedure, company law, constitutional law, consumer credit, criminal law, criminal procedure, education, insolvency, interdicts, labour law, pension funds, sale in execution and unlawful occupation of land.

This article was first published in De Rebus in 2013 (Jan/Feb) DR 46.


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.

December 2012 (6) The South African Law Reports (pp 329 – 655); [2012] 4 The All South African Law Reports November no 1 (pp 251 – 363) and no 2 (pp 365 – 482)

Abbreviations:

CC: Constitutional Court

GSJ: South Gauteng High Court

SCA: Supreme Court of Appeal

WCC: Western Cape High Court

Constitutional law

Unconstitutionality of National Assembly rules requiring permission before introducing Bill: Section 57(1)(b) of the Constitution provides that the National Assembly may make rules and orders concerning its business, with due regard to representative and participatory democracy, accountability, transparency and public involvement. Acting in terms of the section, the National Assembly had passed a number of rules providing that its members could introduce a Bill only if the assembly had granted permission to do so. The effect of these rules was that members of minority parties in the assembly could not initiate a Bill without the support of the majority party. In Oriani-Ambrosini v Sisulu, Speaker of the National Assembly 2012 (6) SA 588 (CC) the appellant, Oriani-Ambrosini, a member of a minority party in the assembly, namely the Inkatha Freedom Party, challenged the constitutionality of these rules and sought an order declaring them invalid. The WCC, per Allie J, held that the impugned rules were not in breach of a member’s constitutional power to introduce a Bill and accordingly dismissed the application.

The SCA dismissed an application for leave to appeal and the appellant approached the CC for leave to appeal, as well as for condonation as he had taken a number of necessary steps late. Condonation and leave to appeal were granted and the appeal was upheld. Each party was ordered to bear its own costs, save that the High Court costs order against the appellant was set aside.

Delivering the majority judgment, Mogoeng CJ (Jafta and Yacoob JJ dissenting) held that South Africa is a constitutional democracy designed to ensure that the voiceless are heard and that even those who, given a choice, would prefer not to entertain the views of the marginalised or the powerless minorities, listen. The power of an individual member of the assembly to introduce a Bill, particularly a member from the ranks of opposition parties, is more than ceremonial in significance. It gives members of opposition parties the opportunity to go beyond merely opposing to proposing constructively in a national forum another way of doing things.

Even if a Bill does not result in an Act of parliament, the power to introduce it is vital to the type of democracy envisaged by the Constitution. It is therefore an important power that should not be restricted without good reason. It would be inappropriate to interpret s 57 in a way that allows the assembly to make rules that undermine the power of an individual to initiate or prepare legislation and introduce a Bill. Therefore, the Constitution does not entitle the assembly to impose substantive or content-based limitations on the exercise of the constitutional powers of its members but rather contemplates rules that are procedural in nature. A permission requirement in the rules boils down to a mechanism that is inescapably prone to denying individual members and minority parties the power to initiate, prepare and introduce legislation, however well meaning those who drafted the rules could have been. Any rule that empowers the National Assembly to impose a permission requirement flies in the face of the meaning and purpose of s 57, read with ss 55(1)(b) and 73(2). Such a rule is therefore constitutionally invalid to the extent of such inconsistency.

Enrichment

Condictio ob turpem vel iniustam causam: In the case of Absa Bank Ltd v Lombard Insurance Co Ltd 2012 (6) SA 569 (SCA) M, a financial accountant in the employ of the respondent, Lombard Insurance, electronically transferred large sums of money from the respondent to accounts she held with the appellant, Absa Bank, and another bank, First National Bank (FNB). M had a current and a credit card account with the appellant, both of which had a debit balance. With FNB, M had a home loan, a cheque account and a credit card account; most, if not all, of which had a debit balance.

The funds thus transferred discharged M’s indebtedness to the banks in some accounts, reduced it in others and left her with a credit balance in a few other accounts. After discovering the fraud, the respondent approached the High Court for an order requiring the banks to repay the amounts fraudulently transferred by M to discharge or reduce her indebtedness to them. In doing so, the respondent relied on the condictio ob turpem vel iniustam causam.

The GSJ, per Meyer J, held that both banks had been enriched by the amounts transferred and had to return same to the respondent. An appeal against the decision of the High Court was upheld with costs by the SCA.

Malan JA (Mthiyane DP, Cloete, Pillay and Petse JJA concurring) held that the condictio ob turpem vel iniustam causam is available against a possessor of stolen property who acquired it with knowledge of the theft, as well as against a possessor who became aware of the theft at a later stage. The condictio is not only available against the person who received property with knowledge of illegality but is also available against one who learned of it while he was still in possession. This does not mean that such a person is treated as liable for a delict. His liability is limited to his enrichment, if he was enriched at all. The amount standing to the thief’s credit (M in the instant case) could be recovered by the condictio, but the amount that discharged a debt owed by the thief to the bank could not. Generally, where a customer deposits money into his account, he becomes entitled to repayment but only where the instruction given to the bank to collect or pay on his account pursuant to the general bank-and-customer contract is enforceable, not where it is contra bonos mores.

In the present case, M – both when she caused the fraudulent transfer from the respondent’s account to her FNB current account and when she made the other transfers from the latter account – intended to discharge or partially discharge her indebtedness to FNB on her credit card and bond accounts and her indebtedness to the appellant on her current and credit card accounts. Payments made into the customer’s (M’s) account extinguished any debit on it. It mattered not that the payments in the present case were made by electronic transfer. A bank was obliged to accept payments on a customer’s account whether they were made in cash, by cheque or by money transfer. Further, it did not matter if the account was a current, credit card or mortgage loan account because there was no contractual restriction on such payments on any of these accounts. When the funds were transferred into M’s accounts at a time when they were in debit and the banks had no knowledge of the theft, the latter were in the same position as any other creditor and were entitled to appropriate the funds transferred to extinguish the debts. Where the effect of the transfer was that there was no credit because the entire amount transferred was used to extinguish the debt on the account, the customer acquired no claim against his bank. However, the customer was enriched to the extent that the debt to the bank was no longer due. It followed that it was M who was enriched, and not FNB or the appellant, when the debit balances on her account were extinguished.

Fundamental rights

Freedom of expression: Section 16(1) of the Films and Publications Act 65 of 1996 (the Act) provides that any person may request that a publication, other than a bona fide newspaper, be classified in terms of the section. Section 16(2) provides, among others, that any person, except the publisher of a bona fide newspaper, who creates, produces or advertises any publication that contains sexual conduct for distribution or exhibition in the country shall submit such publication for examination and classification to the Film and Publication Board (the board) before such publication or exhibition. Section 24A makes it a punishable offence to distribute or exhibit such publication without submission to the board for examination and classification. The purposes of the examination and classification are to provide consumer advice, protect children from exposure to harmful or age-inappropriate material and ban child pornography.

The validity of these provisions was challenged in Print Media South Africa and Another v Minister of Home Affairs and Another 2012 (6) SA 443 (CC). The first applicant, Print Media South Africa, an incorporated association not for gain, and the second applicant, the South African National Editors’ Forum, a non-profit organisation, contended that the sections, with their requirement of administrative prior classification before publication or exhibition of material, unduly trammelled upon and unjustifiably limited the right to freedom of expression. The GSJ, per Mathopo J, held that the sections were unconstitutional and invalid. As a result, the applicants applied to the CC for confirmation of the order of invalidity. The CC granted the confirmation order with costs and made some amendments to the order of the High Court.

Delivering the main judgment, Skweyiya J (Van der Westhuizen J delivering a concurring judgment in which Yacoob ADCJ and Froneman J concurred) held that the classification scheme initiated by s 16(2) was one of administrative prior classification. Under that model of prior classification, control was exercised before publication by an administrative body (the board), which was under the control of the executive branch of government. In essence, the person seeking to publish was required to submit the material to the administrative body, which had to decide whether to grant or deny permission to publish. If the administrative body concluded that the material was prohibited, the prospective publisher was prevented from publishing it. This amounted to a form of prior restraint, which was an inhibition on expression before it was disseminated. In the instant case, the respondents, the Minister of Home Affairs and the board, had failed to demonstrate that the Act’s administrative prior classification system was constitutionally defensible. Section 16(2) unjustifiably limited the right to freedom of expression by establishing an administrative prior classification scheme and was thus constitutionally invalid. Because the right to freedom of expression does not require regulation in a statute to give effect thereto, regulating it as the Act did amounted to limiting it. The upper limit of regulation could be an absolute ban, which totally extinguishes the right. Regulation to a lesser degree constitutes infringement to a smaller extent, but infringement nonetheless. The section is not the exclusive means through which its purposes, as well as those of the Act in general, could be achieved. Prohibiting the publication of child pornography and the exposure of children to pornography are governed by other sections in the Act, which are independent of the classification system. Consequently, s 16(2) was not necessary to achieve the Act’s purposes insofar as they pertain to children. A less restrictive alternative to administrative prior restraint would be a court interdict, which the Act could have resorted to. Apart from interdicts, another alternative was to permit publishers to approach the classification authorities for an opinion on material sought to be published prior to distribution, as doing so not only provides a means of obtaining legal certainty but also restores to publishers the discretion to make informed choices about whether or not to publish. Doing so places publishers in a better position to regulate their conduct in accordance with the law.

Road Accident Fund claims

Extension of dependant’s action to unmarried heterosexual cohabitees: In Paixão and Another v Road Accident Fund 2012 (6) SA 377 (SCA); [2012] 4 All SA 262 (SCA); after the death of G, who was killed in a motor vehicle collision, the first appellant, Paixão, and her youngest daughter, the second appellant, lodged a dependant’s claim for loss of maintenance and support with the respondent Road Accident Fund, which resisted the claim.

At the time of his death, G lived with the first appellant as if they were husband and wife although they were not married and their planned marriage was yet to take place. G played the role of head of the family, supporting the family financially and paying the second appellant’s school fees. Further, G and the first appellant made a joint will, which was typical of a married couple, in which they described the first appellant’s children as ‘our’ rather than ‘her’ children.

At the trial, the first appellant, supported by other witnesses, testified that G had agreed to support the family, something he, in any event, did during his lifetime. The GSJ, per Mathopo J, dismissed the appellants’ claim for loss of maintenance and support. The court held that the appellants had not established any legal duty on the part of G to support them, as whatever support they received from him arose out of gratitude, sympathy and kindness and was in return for assistance they gave him during difficult times when he was ill and in need. The SCA upheld an appeal against the decision of the High Court with costs.

Cachalia JA (Mthiyane DP, Tshiqi, Petse JJA and Southwood AJA concurring) held that the question to ask was whether the facts established a legally enforceable duty of support arising out of a relationship akin to marriage. Therefore, the appellants had to establish not only that they had an enforceable agreement against the deceased but that the obligations created by the nature of their relationship were worthy of the law’s protection, which was determined by reference to a boni mores criterion. Having regard to the incremental extension of the dependant’s action through the years, as well as society’s ideas of morals, justice, equity and decency, there was no reason of principle or policy not to extend the protection of the common law to the appellants in the present case. The general sense of justice of the community demanded that this be done. As a result, the dependant’s action was extended to unmarried persons in heterosexual relationships who had established a contractual reciprocal duty of support.

  • See 2012 (Dec) DR 26 and 42.

Loss of earning capacity: In Heese obo Peters v Road Accident Fund 2012 (6) SA 496 (WCC), at the age of 51, Peters, a German national, was injured in a motor vehicle collision in South Africa and suffered brain damage. As a result, he became permanently and totally unemployable. Through the curator ad litem, Heese, Peters instituted a claim for compensation against the defendant Road Accident Fund in terms of the provisions of the Road Accident Fund Act 56 of 1996 (the Act). The claim was settled on the basis that the defendant would be liable for the compensation of 100% of such damage the plaintiff could prove. Other aspects of the case were also settled, the only remaining issue being the quantum of damages for loss of earning capacity.

Apart from running a successful business of selling magazines in his home country, Peters did not have any qualification, skills or experience for any vocation or profession. Further, Peters’ business was run on a massive fraudulent tax evasion basis, with Peters having under-declared his earnings and having claimed fictitious expenses over the years that amounted to millions of German marks (DM) (at a time before Germany adopted the euro as its currency). Presumably because of his health condition, the tax authorities in Germany withdrew tax evasion charges against him. The question before the court was whether Peters had proved a claim for damages in the form of loss of earning capacity.

Blignault J dismissed the claim with costs, holding that the plaintiff had not proved that Peters had an earning capacity that had value at the time of the accident.

An award of damages for the loss of a claimant’s earnings or earning capacity was intended to place him in the financial position he would have been in had it not been for the delict, which loss was generally quantified by an actuarial calculation. The object of such a calculation is to arrive at a lump sum that, if used by the claimant, allows him to enjoy financial benefits equal to the quantum of the earnings lost by him.

In the present case, Peters’ illegal conduct was not a technical contravention of fiscal legislation; it was nothing less than a common law fraud. Public policy would not allow payment of compensation for loss of earning capacity that was kept alive through illegal conduct. Had Peters not been involved in the accident and suffered such serious injuries, there was little doubt that the criminal proceedings against him would have proceeded. In South Africa the minimum sentence for fraud of the magnitude committed by Peters was 15 years of imprisonment, while in Germany a competent sentence was ten years’ imprisonment. During his incarceration, Peters would not have earned any income. After his discharge from prison, by which time he would have been in his sixties, he would not have been able to earn any income. Moreover, by that time nothing would have been left of his business. Given the stigma that would have attached to him as a result of his incarceration, it would have been difficult from him to build new business relationships.

Schools

Suspension of pregnant learners: In Head, Department of Education, Free State Province v Welkom High School and Another 2012 (6) SA 525 (SCA) two similar matters were consolidated and heard together. In the first matter the first respondent, Welkom High School, a public school, had a policy adopted by the school governing body in terms of which pregnant learners were to be suspended from the school for the academic year in question. Acting in terms of the policy, the principal of the school advised a pregnant learner to leave the school until the following academic year and repeat the grade on returning. In the second matter, acting in terms of a policy adopted by the school governing body, the principal of the second respondent, Harmony High School, also a public school, implemented the school’s policy not to re-admit a learner in the same year that she gave birth. As a result of the suspension of the learners from their schools, the head of the Department of Education (HOD) in the Free State province intervened and gave directives ordering reinstatement of the learners. This was done and the learners returned to class and passed the year. Aggrieved by the directives of the HOD, the respondents approached the High Court for an interdict restraining the HOD from taking steps to undermine decisions taken by the schools and their respective governing bodies pursuant to their policies on pregnancy, as well as for an order declaring that the decisions taken by the governing bodies and the implementation of the schools’ pregnancy policies were valid in law. Rampai J granted the orders sought but allowed the learners to return to their schools and continue with their studies. The SCA dismissed with costs an appeal against the High Court order, which the SCA also amended.

Theron JA (Mpati P, Cloete, Mhlantla JJA and Plasket AJA concurring) held that, whereas the ‘professional management’ of a public school had to be undertaken by the principal under the authority of the HOD, the ‘governance’ vested in the governing body. The adoption of a code of conduct was a governance issue that fell in the domain of the governing body; it did not fall in the professional management of a public school that had to be undertaken by the principal under the authority of the HOD. The HOD could issue appropriate instructions to a principal in relation to the professional management of the school but did not have authority, under the South African Schools Act 84 of 1996 (the Act), to issue an instruction to a principal to disregard a policy adopted by the governing body in relation to governance matters at the school. The HOD’s opinion that such policy could be unlawful was no justification for his interference in matters over which the governing body exercised responsibility. The conduct of the HOD in instructing the principals not to implement the schools’ policies was unlawful. The HOD in issuing such instructions to the principals was in effect substituting his own pregnancy policy for that of the respective schools. The HOD did not have the power, in terms of the Act, to determine pregnancy policies for schools. Having failed to adhere to the principle of legality, the conduct of the HOD was unlawful.

Sentencing

Prescribed minimum sentence: In terms of s 51 of the Criminal Law Amendment Act 105 of 1997 (the Act), a person convicted of rape faces a prescribed minimum sentence of ten years’ imprisonment. However, if the rape was accompanied by one or more of the specified aggravating factors, the prescribed sentence is life imprisonment, which can only be avoided if the court is satisfied that there are substantial and compelling circumstances that justify the imposition of a lesser sentence than the prescribed minimum sentence. (Note: This is a 2008 decision and the Act has since been amended by the Criminal Law (Sentencing) Amendment Act 38 of 2007, which came into effect on 31 December 2007.)

In S v Vilakazi 2012 (6) SA 353 (SCA) the regional court found the appellant, Vilakazi, guilty of raping a girl under the age of 16. The matter was committed to the Transvaal Provincial Division (now the GNP) for sentencing. Els J held that there were no substantial and compelling circumstances to justify a lesser sentence and accordingly sentenced the appellant to life imprisonment. In reaching this decision, the court took into account the fact that the complainant was, at the time of of the offence, 11 years old, was suffering from epilepsy and was mentally impaired.

On appeal to the SCA, the sentence was reduced to 15 years’ imprisonment, the last two years of which did not have to be served as the appellant had already spent two years in prison between the time of his arrest and sentencing by the High Court.

Nugent JA (Streicher, Mlambo, Maya JA and Hurt AJA concurring) held that what was ‘striking’ about the dispensation brought about by the Act was the absence of any gradation between ten years’ imprisonment and life imprisonment. The minimum sentence of ten years’ imprisonment progressed immediately to the maximum sentence that was allowed once any of the aggravating factors was present, irrespective of how many of those factors were present, the degree in which the factor was present and whether the convicted person was a first or repeat offender. Nevertheless, from the terms in which the sentencing test was framed in S v Malgas 2001 (2) SA 1222 (SCA); [2001] 3 All SA 220 (SCA) and S v Dodo 2001 (3) SA 382 (CC); 2001 (5) BCLR 423 (CC) it is incumbent on a court in every case, before it imposes a prescribed sentence, to assess, on a consideration of all the circumstances of the particular case, whether the prescribed sentence is proportionate to the particular offence. If a court is satisfied that a lesser sentence is called for in a particular case, thus justifying a departure from the prescribed sentence, it is bound to impose that lesser sentence. Any circumstances that would render the prescribed sentence disproportionate to the offence would constitute justification for the imposition of a lesser sentence. The essence of the decision in the cases of Malgas and Dodo was that disproportionate sentences were not to be imposed as courts were not vehicles for injustice. A court was not compelled to perpetrate injustice by imposing a sentence that was disproportionate to the particular offence.

In the present case, the High Court misdirected itself in a number of respects. Firstly, it assumed that the complainant was 11 years old, whereas she was actually aged between 14 and 16. The High Court also accepted inadmissible evidence suggesting that the complainant had epilepsy and was mentally retarded. The only aggravating factor was that the complainant was under 16. Further, there was no extraneous violence and no physical injury was caused other than physical injury inherent in the offence. Moreover, the appellant at least minimised the risk of pregnancy and transmission of disease by using a condom. Accordingly, a substantial sentence of 15 years’ imprisonment was sufficient to ‘bring home to the appellant the gravity of his offence’ and to exact sufficient retribution for his crime.

Sports and contest

Delictual liability for illegal and dangerous sporting tackles: The facts in Roux v Hattingh 2012 (6) SA 428 (SCA) were that during a high school rugby match the appellant, Roux, launched a tackle on the respondent, Hattingh, as a result of which the latter sustained serious neck injuries. The tackle occurred when the teams engaged in a scrum, during which the respondent shouted the code ‘jackknife’, thus signalling the move that was to be taken. This resulted in the respondent being denied space to move his head in order to contest for possession of the ball. The respondent fell to the ground under the appellant and had to bear the pressure and weight that resulted in his serious neck injuries. The WCC, per Fourie J, held that the appellant had acted intentionally when he called the code ‘jackknife’ before the scrum and that his conduct was wrongful, deliberate, extremely dangerous and a serious violation of the rules of the rugby game. The appellant was accordingly held liable for the damage caused to the respondent. The SCA dismissed an appeal against the decision of the High Court with costs.

Plasket AJA (Theron, Pillay JJA and Southwood AJA concurring and Brand JA delivering a separate concurring judgment) held that the appellant’s conduct was wrongful. Firstly, the jackknife manoeuvre executed by him was in contravention of the rules of the game. It was also contrary to the spirit and conventions of the game. Secondly, because it had a code name, the manoeuvre had been pre-planned and was consequently executed deliberately. Thirdly, it was extremely dangerous. Fourthly, the appellant knew that the manoeuvre was likely to cause serious injury but proceeded to execute it nonetheless. Public and legal policy required such conduct to be stigmatised as wrongful. Because that conduct amounted to a serious violation of the rules, it was not normally associated with rugby and was very dangerous. It did not constitute conduct that rugby players would accept as part and parcel of the normal risks inherent to their participation in the game. That being the case, the conduct was wrongful and the justification of consent (volenti non fit iniuria) did not avail the appellant.

  • See 2011 (Nov) DR 38.

Other cases

Apart from the cases and material referred to above, the material under review also contained cases dealing with an act of insolvency, application for rehabilitation, application to amend a plea, automatic review in respect of convicted children, bank’s duty of care towards customer, contempt of court, contractual nature of sectional title scheme management rules, declaration of indebtedness and referral to debt counsellor, duty to obey court order, inquiry into affairs of a company, effect of deregistration of a close corporation, eviction of unlawful occupiers of land, extradition, failure to warn accused of possible imposition of prescribed minimum sentence, granting immunity to cartel whistle-blower, international cooperation in criminal matters, irrevocable documentary credit, liability for omission, meaning of administrative action, parties to a contract cannot exclude jurisdiction of court by agreement, presumption of destroying a will with intention to revoke it, right of electronic communications network service licencee to construct lines across land and waterways, right to privacy, dignity and reputation, service of sequestration application on employees of the insolvent, special leave to appeal, striking name from roll of advocates, striking name from roll of attorneys and variation of maintenance order.

This article was first published in De Rebus in 2013 (Jan/Feb) DR 50.