The law reports – May 2012

May 1st, 2012
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Heinrich Schulze BLC LLB (UP) LLD (Unisa) is a professor of law at Unisa.

March 2012 (2) The South African Law Reports (pp 1 – 335) [2012] 1 The All South African Law Reports February no 1 (pp 243 – 366 and no 2 (pp 367 – 479); March 2012 (1) The South African Criminal Law Reports (pp 209 – 319)

Abbreviations:

CC: Constitutional Court

GNP: North Gauteng High Court

GSJ: South Gauteng High Court

Children’s rights

Automatic review of removal of children: The CC in C and Others v Department of Health and Social Development, Gauteng and Others 2012 (2) SA 208 (CC) considered the validity of ss 151 and 152 of the Children’s Act 38 of 2005 (the Act). These sections provide for the removal of children to temporary safe care. It was alleged that these sections infringed the rights of children and parents by failing to provide for automatic review of such removals by a court.

The GNP, per Fabricius J, declared these sections unconstitutional to the extent that they provide for a child to be removed from family care by state officials and placed in temporary safe care without providing for automatic review before the children’s court. In terms of s 172(2)(a) of the Constitution, an order of constitutional invalidity by a High Court must be referred to the CC for confirmation, without which it will have no force. This case thus concerned the constitutionality of the statutory framework for the removal of children from their family environment and their placement in temporary safe care at the instance of the state.

In a majority judgment, Yacoob J confirmed the court a quo’s declaration of invalidity of ss 151 and 152 of the Act. The court ordered as remedies certain reading-in and a severance, the latter of which will not be discussed here.

The court suggested the reading-in of a new subsection, to be numbered 2A, into s 151, which provides that the court ordering the removal must simultaneously refer the matter to a designated social worker and direct that social worker to ensure, inter alia, that the removal is placed before the children’s court for review before the expiry of the next court day after the removal. Unless it is impracticable, the child and the parents/guardian/caregiver must be present in court.

The court also ordered the reading-in of a similarly worded additional paragraph (d) into s 152(2).

Company law

Winding-up: In Budge and Others NNO v Midnight Storm Investments 256 (Pty) Ltd and Another 2012 (2) SA 28 (GSJ) the applicants applied for the winding-up of a company and a close corporation under s 81(1)(d)(iii) of the Companies Act 71 of 2008 (the 2008 Companies Act). Section 81(1)(d)(iii) provides:

‘(1) A court may order a solvent company to be wound up if –

(d) the company, one or more directors or one or more shareholders have applied to the court for an order to wind-up the company on the grounds that –

(iii) it is otherwise just and equitable for the company to be wound up …’ (my emphasis).

The respondents submitted that this ground for winding-up should be restrictively interpreted and limited to the circumstances referred to in the preceding ss 81(1)(c), 81(1)(d)(i) and 81(1)(d)(ii).

The applicants relied, inter alia, on the judgment of Muller v Lilly Valley (Pty) Ltd [2012] 1 All SA 187 (GSJ) delivered in the GSJ on 24 October 2011, in which Weiner J held that the legal basis for winding-up under s 81(1)(d)(iii) of the 2008 Companies Act is the same as that under s 344(h) of the Companies Act 61 of 1973 (the 1973 Companies Act).

In the present case, Meyer J held that the ‘just and equitable’ basis for the winding-up of a solvent company in terms of s 81(1)(d)(iii) should not be interpreted so as to only include matters eiusdem generis the other grounds in s 81. In enacting s 81(1)(d)(i), which applies to a situation where the directors are deadlocked in the management of a company, and s 81(1)(d)(ii), which applies to a situation where the shareholders are deadlocked in voting power, the legislature modified the judicially developed deadlock category that forms part of the just and equitable ground for the winding-up of a company, and made its application subject to certain new requirements.

The application of s 81(1)(d)(iii) to deadlock categories and to the circumstances referred to in s 81(1)(c) would render the provisions of s 81(1)(d)(i) and (ii) nugatory since an applicant who is unable to meet the requirements of those subsections would nevertheless be able to invoke the judicially developed deadlock category that forms part of the just and equitable ground for winding-up in terms of s 81(1)(d)(iii). The court excluded the eiusdem generis rule because the specific words of s 81(1)(d)(i) and (ii) exhaust the genus, in this instance deadlock.

The eiusdem generis rule was thus inapplicable to s 81(1)(d)(iii) of the 2008 Companies Act.

Because the applicants had proved on a balance of probabilities that there existed a justifiable lack of confidence in the conduct of one of the directors and in the management of the affairs of the two corporate entities, the application for the winding-up of these two entities was allowed.

Constitutional law

Appointment of National Director of Public Prosecutions: The decision in Democratic Alliance v President of the RSA and Others [2012] 1 All SA 243 (SCA) concerned a matter of national and constitutional importance. The appellant, the Democratic Alliance (DA), was a registered political party and the official opposition in parliament. It approached the High Court on an urgent basis for an order declaring that the decision of the first respondent, the President, to appoint the fourth respondent as the National Director of Public Prosecutions (NDPP), purportedly taken in terms of s 179 of the Constitution read with ss 9 and 10 of the National Prosecuting Authority Act 32 of 1998 (the Act), was inconsistent with the Constitution and was thus invalid. The High Court was asked to review and set aside the appointment.

Central to the dispute between the parties was the submission in the opposing affidavit by the second respondent, the Minister of Justice and Constitutional Development, that, while the President may consult with the national executive, the final decision on whom to appoint as NDPP is his and his alone. The DA’s position was that this power was not unfettered. It submitted that the power to appoint must be made in accordance with the law and is subject to scrutiny by a court. The parties differed about whether constitutional and statutory prescripts were met when the fourth respondent was appointed as NDPP.

The President’s stance was that the requirement that the person considered for appointment must be a fit and proper person was a subjective requirement and that it was his subjective decision that was called for.

The High Court, per Van der Byl AJ, held that there was no basis on which to interfere with the President’s decision to appoint the fourth respondent as NDPP. It dismissed the DA’s application and made no order as to costs.

On appeal, Navsa JA held that, to understand the importance of the office of the NDPP and the power that he wields, regard should first be had to the provisions of s 179(2) of the Constitution. The prosecuting authority has the power to institute criminal proceedings on behalf of the state and to carry out any necessary functions incidental thereto. Section 20(1) of the Act entrenches that power. Section 9(1)(b) of the Act has to be construed against this constitutional and statutory background.

While the President’s decision to appoint the NDPP amounts to executive rather than administrative action, this does not mean that it is beyond judicial scrutiny. The rule of law requires that the exercise of public power by the executive and other functionaries should not be arbitrary. Decisions must be rationally related to the purpose for which the power was given, otherwise they are in effect arbitrary and inconsistent with this requirement. It follows that, in order to pass constitutional scrutiny, the exercise of public power by the executive and other functionaries must, at least, comply with this requirement. The exercise of public power must therefore comply with the Constitution, which incorporates the doctrine of legality. Section 9(1)(b) thus requires the President to, at the very least, consider whether the person he has in mind for appointment as the NDPP has the qualities described in the subsection.

The evidence before the court showed that the President had announced beforehand that he had firm views on the appointment of the fourth respondent as NDPP. This was not the correct approach to have taken. Section 9(1)(b) does not allow for a firm view before a consideration of the qualities referred to therein. The President ended up taking a decision in respect of which he ignored relevant considerations. The President did not undertake a proper inquiry of whether the objective requirements of s 9(1)(b) were satisfied. On the available evidence, the President could not in any event have reached a conclusion favourable to the fourth respondent, as there were too many unresolved questions concerning his integrity and experience.

The appeal was accordingly upheld and the President’s decision to appoint the fourth respondent was set aside. The first, second and fourth respondents were ordered, jointly and severally, to pay the DA’s costs.

 

Powers of municipal council: The appellant in Democratic Alliance v Ethekwini Municipality [2012] 1 All SA 412 (SCA), the Democratic Alliance (DA), was a registered political party that was represented on the council of the respondent municipality. The African National Congress (ANC) held the majority representation on the council, while the DA was a minority party.

The present case concerned the renaming of streets, freeways and buildings within the municipality’s boundaries. The first decision of the council in this regard resulted in nine streets and two buildings being renamed. The council’s second decision, just over a year later, resulted in the change of 99 street names. The DA applied to court to have these decisions set aside. The DA’s objection was based on allegations that no proper public consultation process preceded either of the decisions; no proper deliberative process took place in any of the committees or the council itself with reference to these decisions; and the council failed to comply with its own street-naming policy of 29 October 2001 and with the guidelines set out by the South African Geographical Names Council. The main legal basis for the challenge to the process was based on the Promotion of Administrative Justice Act 3 of 2000. Both applications were dismissed by Ntshangase J in the court a quo.

On appeal, Brand JA held that the crux of the matter turned on whether the impugned decisions taken by the council constituted the exercise of an executive or a legislative function, or administrative action. The court was satisfied that the impugned decisions did not constitute administrative action under the Promotion of Administrative Justice Act.

This finding did not, however, entail that the decisions by the council could not be subjected to judicial review. In terms of the principle of legality, the exercise of all public power – be it legislative, executive or administrative – is only legitimate when lawful. The principle of legality not only requires that the decision must satisfy all legal requirements, but also means that the decision should not be arbitrary or irrational.

The DA argued that the impugned decisions were illegal in that they fell foul of statutory requirements and also failed to meet the rationality test. The objection was that the decisions were not preceded by a process of public participation as required by statute. The inquiry in the present case was thus whether the council had acted reasonably in facilitating public involvement. One of the considerations in deciding this question was whether the council complied with its own rules. In this regard, the starting point was the street-naming policy that the council adopted on 29 October 2001. According to that policy, the changing of street names would be subject to prior consultation with addressees and all other affected parties. This was the position at the time the first decision was taken. It was apparent from the evidence that the council had not complied with that policy. Furthermore, the notice afforded members of the public only seven days to submit written comment. The court held that the time allowed for public response was indeed inadequate, rendering the renaming of the first nine streets unlawful.

The DA’s challenge to the second decision by the council, which culminated in the renaming of 99 streets, differed from the first. For considerations of space, I will merely mention that the court held that the second decision was not subject to the same criticism levelled against the first decision because by the time the second decision was taken the renaming policy had been changed.

The appeal was accordingly upheld in respect of the first of the decisions. The council’s decision to rename the nine streets was set aside and the municipality was ordered to remove all signage referring to the relevant streets by any names other than their original ones.

Contract law

Suspensive condition: The decision in Diggers Development (Pty) Ltd v City of Matlosana and Another [2012] 1 All SA 428 (SCA) concerned two issues of law: The effect of a suspensive condition in a contract and the validity of a sale of municipal land. The facts were as follows. In September 2006 the first respondent municipality invited proposals to enhance and promote development on certain land that comprised immovable properties registered in the name of the municipality. The second respondent was one of the developers who responded to the invitation. Subsequent to the appointment of the second respondent as the preferred provider, a written agreement for the sale of the land was concluded on 2 October 2007. It was intended that a regional shopping mall would be constructed and developed on the property, which would compete for business with the mall operated by the appellant, Diggers – hence the latter’s interest in the present proceedings.

Subsequent to the decision to sell the land, the municipality published a notice in terms of s 33 of the Local Government: Municipal Finance Management Act 56 of 2003 (MFMA), read with s 21A of the Local Government: Municipal Systems Act 32 of 2000 (the Systems Act), giving notice of its intention to conclude a contract that would impose financial obligations on the municipality beyond the three-year period covered in the annual budget for that financial year. The municipality’s council resolved to approve the sale agreement, which it then implemented.

Diggers argued that the procedure adopted by the municipality in complying with the provisions of s 79(18)(b) of the Transvaal Local Government Ordinance 17 of 1939 (the ordinance), and ss 14 and 33 of the MFMA was incorrect. According to Diggers, the municipality had failed to comply with these provisions before concluding the agreement of sale, thus rendering the sale invalid. Conversely, the municipality and the second respondent contended that there had been substantial compliance with the relevant legislative provisions. Diggers’ application was dismissed by Murphy J in the court a quo.

On appeal, Cloete and Mhlantla JJA pointed out that the primary issue was whether the municipality had complied with the provisions of s 79(18)(b) of the ordinance. Section 79(18)(b) was triggered once the council (here the municipality) ‘wishes’ to exercise any power referred to in s 79(18)(a). It must then publish notices to enable persons to object. The word ‘wishes’ indicates a settled intention. However, that was not the position when the sale agreement was signed. No final decision to alienate the land was taken before the notice of intention to do so was advertised and, when the council of the first respondent decided to do so, there had been compliance with the requirements of the section.

In dealing with the effect of a suspensive condition in a contract, the court referred to the case of Corondimas and Another v Badat 1946 AD 548. The court confirmed the principle that where a sale agreement is subject to a suspensive condition, no contract comes about until the suspensive condition is fulfilled. The agreement in the present case thus only came into existence after the suspensive conditions had been fulfilled. The council’s intention to exercise the power to alienate was only formulated after the municipality had complied with the provisions of s 79(18)(b) of the ordinance.

There was thus proper compliance with the provisions of s 79(18)(b) of the ordinance and the appeal was dismissed with costs.

Criminal law

Theft of electricity: The case of S v Ndebele and Others 2012 (1) SACR 245 (GSJ) concerned an interesting question of law, namely whether it is possible to steal electricity. In S v Mintoor 1996 (1) SACR 514 (C) it was held that electricity is an energy and is incapable of theft.

The three accused in the Ndebele case faced a large number of charges relating to manipulation of vending machines dispensing electricity credit vouchers, including charges of electricity theft. At the commencement of the trial an application was brought to quash some of the charges based on a contention that electricity was not capable of theft. The application was dependent on the finding, at that stage, that electricity had the physical properties contemplated in S v Mintoor.

Lamont J held that the underlying objection to holding that an incorporeal was capable of theft was the requirement that there should be a contrectatio. Put differently, because taking was required, there could only be the taking of a physical movable. However, in S v Harper and Another 1981 (2) SA 638 (D) the court held that an incorporeal was capable of theft. It has also long been recognised that the abstract and incorporeal nature of a right that has been taken, in the context of notes and coins, is a loss (see, for example, R v Scoulides 1956 (2) SA 388 (A)). In Nissan South Africa (Pty) Ltd v Marnitz NO and Others (Stand 186 Aeroport (Pty) Ltd Intervening) 2005 (1) SA 441 (SCA); [2006] 4 All SA 120 it was held that a person who received money into a bank account in his name and who used it, knowing that he was not entitled thereto, committed theft. Inherent in the finding in the Nissan case was that the appropriation (or contrectatio) of a characteristic attaching to a thing could constitute theft. The contrectatio was thus not constituted by, or restricted to, a physical removal of something from the owner but by the appropriation of a characteristic that attached to a thing and by depriving the owner of that characteristic. Finally, the court held that Eskom produced electricity by inserting and driving energised electrons through a grid. The characteristic attaching to the energised electrons was that, when they were driven in this way, they were capable of driving a load.

Once that characteristic – the energy by which it moved – was used by an electrical appliance or a load, it was no more. It was this difference that constituted the characteristic lost by the use of electricity.

The first two accused were accordingly found guilty of the charges against them, including the theft of electricity. The third accused was acquitted due to the absence of sufficient evidence entitling the court to convict him.

Customary law

Effect of non-registration of customary marriage: In MG v BM and Others 2012 (2) SA 253 (GSJ) the applicant (the second wife) sought an order compelling the second respondent, the Department of Home Affairs, to register a customary marriage entered into between her and her deceased husband on 8 June 2000. The application was opposed by the first respondent, the deceased’s first wife and the executrix of his estate. While an otherwise valid customary marriage as provided for in the Recognition of Customary Marriages Act 120 of 1998 (date of commencement 15 November 2000) had been concluded between the deceased and the applicant, there remained questions regarding the effect of –

  • the department’s refusal to register the marriage, as intended in s 4 of the Act, on the ground that the application was made out of time; and
  • the deceased’s failure to apply for the approval of a written contract regulating the future matrimonial property system of his marriages, as intended in s 7(6) of the Act.

Section 4(1) of the Act provides that ‘(t)he spouses of a customary marriage have a duty to ensure that their marriage is registered’, while s 7(6) provides that a ‘husband … who wishes to enter into a further customary marriage with another woman after the commencement of this Act must make an application to the court to approve a written contract which will regulate the future matrimonial property system of his marriages’.

As to the first question, Moshidi J held that s 4(9) of the Act made it clear that failure to register a customary marriage as prescribed did not affect its validity and, since a valid customary marriage had been entered into, the court was obliged to issue an order for the registration of the marriage as intended in s 4(7) of the Act.

As to the second question, the court held that it was clear that the marriage of 8 June had been validly entered into and, accordingly, the issue was whether the deceased’s failure to comply with s 7(6) was fatal to the second wife’s case. This question had to be answered in the negative, firstly because the marriage had been entered into after the commencement of the Act and, secondly, because it could not have been the intention of the legislature that failure to comply with s 7(6) should invalidate an otherwise valid marriage, particularly in view of the rights acquired by the second wife as a result of the marriage.

Finally, the court held that the wording of s 7(6), which has resulted in much uncertainty because of the absence of a penalty provision in the event of non-compliance, required the urgent attention of the legislature.

Sale in execution

Alternative accommodation: In Ives v Rajah 2012 (2) SA 167 (WCC) the appellant, Ives, appealed against an eviction order granted against her in a magistrate’s court at the instance of the respondent, Rajah. The property Rajah applied to evict Ives from was a residential dwelling in Parow, Cape Town. In 2003, Ives, who inherited the property from her mother, sold the property to one Kotze, who, according to Ives, agreed that she could occupy the property for life. No interest of this kind was registered against the title deed and Kotze bonded the property to Standard Bank. Kotze in all likelihood defaulted on his obligations, because in 2009 the property was sold in execution for R 276 000 to Rajah, who was unaware of Ives’ transaction with Kotze. In terms of the conditions of sale, the sheriff sold the property to Rajah free of any leases and on the basis that she was to evict any occupants of the property at her own expense, if necessary.

At the time of the sale, Ives, who was confined to a wheelchair, was in occupation of the property. A few days after the sale, Rajah agreed to allow Ives to remain in occupation until the end of October 2009 against payment of one month’s rental of R 1 000. However, Ives failed to pay this amount and did not vacate the property. She also failed to comply with subsequent requests by Rajah and a formal letter of demand that she leave the property. In May 2010 Rajah initiated eviction proceedings in terms of s 4 of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE).

On appeal to the High Court, Rogers AJ referred to s 4(7) of PIE, which provides: ‘If an unlawful occupier has occupied the land in question for more than six months at the time when the proceedings are initiated, a court may grant an order for eviction if it is of the opinion that it is just and equitable to do so, after considering all the relevant circumstances, including, except where the land is sold in a sale of execution pursuant to a mortgage, whether land has been made available or can reasonably be made available by a municipality or other organ of state or another landowner for the relocation of the unlawful occupier, and including the rights and needs of the elderly, children, disabled persons and households headed by women’ (my emphasis).

The repetition of the word ‘including’ and the placing of a comma before each usage leads to the conclusion that, on the grammatical meaning of s 4(7), the ‘except’ clause only applies to the first ‘including’ phrase. In other words, where there is a sale of mortgaged property in execution, the question of alternative land is excluded as a relevant consideration but the rights of the elderly and so forth must still be taken into account.

In the present matter, where there was such a sale and the occupier was disabled, the question arose as to how Ives’ rights were required by s 4(7) to be considered by the evicting court, having regard to the exclusion from consideration of the question whether alternative land was available for the occupier. Where the eviction of a disabled person is under consideration, a relevant factor must be whether the person will have somewhere suitable to go on eviction.

Nevertheless, the evicting court must respect the policy of the lawmaker that execution sales of mortgaged property are intended to result in the buyer obtaining vacant occupation. Thus the question of alternative accommodation should not necessarily receive the same weight in such a case as it might if the disabled person was occupying property that had not been sold in execution. Furthermore, the question of alternative accommodation would not, in the case of a disabled person, have to be dealt with in the context of a statutory provision that expressly requires the court to consider whether the local authority could provide accommodation.

The appeal was dismissed with costs.

Sale of land

Sale of land by surviving spouse: In Booysen and Others v Booysen and Others 2012 (2) SA 38 (GSJ) the court was asked to interpret the formalities for the sale of land as contained in s 2 of the Alienation of Land Act 68 of 1981 (the Act).

The facts were as follows. Joseph and Dora Booysen were married to each other in community of property. They were the parents of the first applicant, the second applicant and the first respondent. The second respondent was married to the first respondent in community of property. Dora Booysen died on 16 April 1998, and was survived by her husband, Joseph Booysen. Prior to her demise, Dora and Joseph Booysen executed a joint will on 1 December 1995.

On her death in April 1998, the estate of Dora Booysen was duly reported at the offices of the fifth respondent, the Master of the court. For reasons unknown to the court, the Master only appointed an executor on 1 July 2008, some ten years after the death of Dora Booysen. On 8 October 2007 Joseph Booysen concluded a written deed of sale in terms of which he sold the immovable property in the joint estate to his son, the first respondent, and his wife, the second respondent. The sale agreement had an addendum, which was signed by the first and the second respondents and the seller, Joseph Booysen, on 18 January 2008. On 8 May 2008 Joseph Booysen too passed away.

The issues for determination in this matter were, first, whether Joseph Booysen had legally sold the immovable property to the first and second respondents; secondly, whether the fourth respondent, as executor of the estate of the late Dora Booysen, had to consent to the sale; and finally whether the sale of the immovable property was governed by the provisions of the Act.

Moshidi J held that the surviving spouse of a couple married in community of property has, after the death of his spouse, no legal authority to enter into an agreement of sale of immovable property in the joint estate without the consent of the executor and in circumstances where the estate of the deceased spouse has not been finalised. As the deceased estate is not a separate legal persona, the executor is the person representing the estate and the only person with authority to sell the property.

Such an agreement of sale of immovable property by the surviving spouse does not comply with s 2(1) of the Act and is therefore void ab initio. Further, the agreement of sale cannot be rectified by attaching the signature of the executor subsequently.

The sale was thus invalid and void. The first and second respondents were ordered, jointly and severally, to pay the costs of the application.

Sectional title

Extension of schemes: The facts in Body Corporate of Savannah Park v Brainwave Projects 1147 CC and Others 2012 (2) SA 276 (SCA); [2012] 1 All SA 367 (SCA) were that the first respondent developer and the second respondent cellphone company concluded an agreement in terms of which the company erected a cellphone tower on a portion of the developer’s property in exchange for paying the developer a rental amount. The developer later established a sectional title scheme on the property and registered a right of extension under s 25(1) of the Sectional Titles Act 95 of 1986 over the portion of the common property on which the mast stood. The appellant, the body corporate established under the scheme, later laid claim to the rental income as a fruit of the common property, a claim resisted by the developer. In the court a quo Griffiths J allowed the developer’s claim.

In issue on appeal was the content of the developer’s right of extension and whether it included a usufruct. Cachalia JA held that the right of extension was a limited real right that did not include a usufruct. Accordingly, the body corporate was entitled to the rental income.

The appeal was accordingly upheld with costs.

Other cases

Apart from the cases and topics referred to above, the material under review also contained cases dealing with abduction of minors, actions by the state, administrative law, civil procedure, criminal law, duties of the state, evidence, insolvency, labour law, medicine, practice, property, sectional titles and townships and town planning.

This article was first published in De Rebus in 2012 (May) DR 50.