The Law Reports

January 27th, 2016
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November 2015 (6) South African Law Reports (pp 1 – 316); [2015] 4 All South African Law Reports October no 1 (pp 1 – 130); and no 2 (pp 131 – 254);  [2014] 2 All South African Law Reports June no 1 (pp 493 – 633) and no 2 (pp 635 – 726)

Heinrich Schulze BLC LLB (UP) LLD (Unisa) is a professor of law at Unisa.

Heinrich Schulze BLC LLB (UP) LLD (Unisa) is a professor of law at Unisa.

 

 

 

 

 

 

 

 

 

 

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

ECG: Eastern Cape Division, Grahamstown

ECP: Eastern Cape Local Division, Port Elizabeth

GP: Gauteng Division, Pretoria
KZP: KwaZulu-Natal Division, Pietermaritzburg

SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town

 

Advocates

Costs – attorney and client costs: In Society of Advocates of KwaZulu-Natal v Levin 2015 (6) SA 50 (KZP); [2015] 4 All SA 213 (KZP) the applicant law society brought an application to remove the respondent advocate from the roll of advocates. On the first day of the hearing the respondent consented to his removal from the roll of advocates and to an order, which included provision for costs, in terms of which the respondent was directed to pay the applicant’s costs on the attorney and client scale. In passing, attorney and client costs are intended to ensure that a successful party will recoup all reasonable expenses, including counsel’s fees, incurred as a result of litigation. The taxing master has a discretion in this regard.

The applicant, having presented its bills for taxation, was unhappy with the taxing master’s deduction of
R 246 000 from its (senior) counsel’s fees of R 403 000, and requested the taxing master to state a case in respect of the disputed rulings. According to a survey by the Society of Advocates of KwaZulu-Natal, the fee spectrum for senior counsel ranged from R 2 400 to R 4 500 per hour and from R 19 200 to R 36 000 per day for consultations. The taxing master’s stated case and final report were placed before the court for determination. The applicant’s main objection to the taxing master’s ruling was that, although the court had ordered attorney and client costs, specified the necessary witnesses and directed that counsel’s preparation and consultation fees be included in the order, the fees in question (which were necessary and reasonable) were in many instances disallowed. The respondent, in turn, argued that the taxing master had complied with the court order and that no interference with the taxed bill was warranted.

Moodley J referred with approval to earlier case law in City of Cape Town v Arun Property Development (Pty) Ltd and Another 2009 (5) SA 227 (C) and Hennie de Beer Game Lodge CC v Waterbok Bosveld Plaas CC and Another 2010 (5) SA 227 (C) and held that while the decisive criterion remained the value of the work done, it was permissible to charge counsel’s fees on a time-spent basis. In this regard it held that an objective assessment of the features of the case is primary, and time actually spent in preparing an appeal cannot be decisive in determining the reasonableness, between party and party, of a fee for that work.

The court further held that the taxing master had to assume that the agreed fees were reasonable unless there were compelling grounds for thinking otherwise. In the present case counsel’s rate of R 2 400 per hour and R 24 000
per day were at the lower end of the senior counsel’s fee spectrum and hence reasonable.

The court held that the applicant was correct in arguing that the taxing master should have assessed counsel’s fees for the drafting of the heads of argument on a time-spent basis, which ought to be standard practice in KwaZulu-Natal. Although advice on evidence and consultations with necessary witnesses might be considered attorney and client costs, they would nevertheless be allowed in an attorney and client bill, even when payable by the unsuccessful party. The taxing master should in the present case have found that the impugned witness consultations were reasonable and necessary, though their duration and number were susceptible to assessment. While clients were expected to attend consultations between instructing attorneys and counsel, their absence did not necessarily mean that the costs incurred were unreasonable. The taxing master should not have disallowed the consultation costs.

The applicant further disputed a number of individual rulings by the taxing master. The court dealt with each of the rulings ordered that the changes allowed on review be substituted for the amounts allowed by the taxing master.

Attorneys

Misconduct: In Law Society of the Cape of Good Hope v Randell [2015] 4 All SA 173 (ECG) the court was asked to decide whether the respondent attorney was a fit and proper person to continue to practise as an attorney.

Seeking an order that the respondent attorney’s name be struck off the roll of attorneys, the applicant law society referred to criminal proceedings against the attorney and a co-accused. The latter’s plea explanation made reference to the attorney and incriminated the attorney in criminal activity. The law society applied for leave to file a further affidavit in which the co-accused confirmed the correctness of the allegations in his plea explanation. As the co-accused was not in South Africa, the law society contended that the hearsay evidence contained in the plea explanation should be admitted in evidence in terms of
s 3(1)(c) of the Law of Evidence Amendment Act 45 of 1988 on the basis that it would be in the interests of justice.

Alkema J held that experience and common sense dictated that allegations in plea explanations are more often than not designed to shift blame to a co-accused or to underplay the accused’s own involvement and overemphasise the role played by others. The potential prejudice to the attorney if the relevant documents were admitted in evidence was clear. The documents were declared to be inadmissible hearsay evidence, and were excluded in their entirety.

The facts underlying the application involved the attorney’s role as trustee, member and vice-chairman of the governing body of a school. The law society contended that the attorney’s personal interest conflicted with his duties to the school and he was not entitled to make a secret profit at the expense of the school.

A court derives its power to strike an attorney from the Roll of Attorneys from
s 22(1)(d) of the Attorneys Act 53 of 1979 (the Act). Section 22(1)(d) of the Act provides that if the attorney in question, in the discretion of the court, is not a fit and proper person to continue to practise as an attorney, his name may be struck from the roll of attorneys. Thus, the essential question in this case was whether the attorney was a fit and proper person to continue to practise as an attorney.

The inquiry into whether a person is a fit and proper person, in turn, contemplates a three-stage inquiry –

  • first, the court must decide whether the alleged offending conduct has been established on a preponderance of probabilities;
  • secondly, if so, whether in the discretion of the court, the person is a fit and proper person to continue to practise as an attorney; and
  • thirdly, if not, whether in all the circumstances the person in question is to be removed from the roll of attorneys, or whether an order suspending him from practice for a specified time will suffice.

Whether a fiduciary duty exists, depend on the facts of each case. Here the attorney at all material times had attracted a fiduciary duty to the school. Those in a position of trust who have such a fiduciary duty must act in the best interests of the beneficiaries of that trust and they may not act to their own advantage at the cost of the beneficiaries.

The attorney was found to have acted in breach of his fiduciary duties, and the court held that there was no reason not to strike his name from the roll.

Company law

Locus standi of creditor in winding-up: In Express Model Trading 289 CC v Dolphin Ridge Body Corporate 2015 (6) SA 224 (SCA); [2014] 2 All SA 513 (SCA) the court was asked to consider the locus standi of a creditor of a company that was being wound up.

Express Model Trading 289 CC (the applicant) was the owner of units in the Dolphin Ridge sectional title development outside Bloubergstrand on the West Coast. Over a long period it fell in arrears with the payment of the levies due under the sectional title scheme. This resulted in the applicant owing a substantial amount to the respondent, the body corporate. The body corporate subsequently obtained a provisional winding-up order against the applicant. An undisclosed third party settled the arrears. However, the proceedings continued and a final winding-up order was granted. The applicant appealed to the SCA, but its appeal lapsed when it failed to file heads of argument in time. It then applied for condonation. The question was whether there were prospects of success on appeal.

The applicant contented that –

  • payment of the arrears by the third party – the basis of the winding-up application – caused the body corporate to lose its locus standi;
  • its ability to pay its debts could be inferred from it being able to procure the third party to pay the arrears; and
  • it had assets – which it could liquidate – which covered all its liabilities.

Ponnan JA held, regarding the applicant’s first contention, that the body corporate retained locus standi. The levies were an ongoing obligation which, even after the payment, the applicant continued to breach.

Regarding the applicant’s second contention, the court held that while a debtor’s ability to raise a loan might demonstrate its creditworthiness and thence its ability to pay its debts, it might also demonstrate the opposite. It depends on the facts of each case. Here it emerged that the third party was ultimately controlled by the applicant’s sole member. Creditworthiness could thus not be inferred from the fact that the applicant managed to arrange payment of its debts by a third party.

As to the applicant’s third contention, the court held, on the basis of a report by the liquidator, that the applicant’s liabilities exceeded its assets. The court confirmed that absent an adequate explanation for the delay and prospects of success on appeal, condonation could not be justified.

The appeal was dismissed with costs.

Delict

Loss of support: In Osman v Road Accident Fund 2015 (6) SA 74 (GP) the plaintiff’s son (the deceased) was killed in a motor-vehicle accident. The plaintiff’s claim was based on the notion of indigency in that she alleged that the deceased supported her during his lifetime. The deceased at the time of the collision was 28 years old. He was married and he resided in the same house as the plaintiff. The deceased was, at the time of the collision, employed at Standard Bank of South Africa and earned a monthly salary of
R 7 837.

Ismail J dealt with the case law relating to indigency. In Oosthuizen v Stanley 1938 AD 322 (at 327 – 328) the court held that: ‘There is no doubt on the authorities which are quoted in Waterson v Mayberry (1934 TPD 210) that the plaintiff had to prove not only that [his children] contributed to his support but that there was a legal duty to contribute because his circumstances were such as that he needed the contribution. The liability of children to support their parents, if they are indigent (inopes) is beyond question; … Whether a parent is in such a state of comparative indigency or destitution that a court of law can compel a child to supplement the parent’s income is a question of fact depending upon the circumstances of each case’. In Fosi v Road Accident Fund and Another 2008 (3) SA 560 (C) this duty was explained as follows: ‘Simplistically put, the deciding principle seems to be whether the parent can prove that he or she was dependent on the child’s contribution for the necessities of life. Indeed, what constitutes necessities of life will in turn depend upon the individual parent’s station in life.’

The court held that a child’s duty to support a needy parent, as recognised under African customary law, must be extended to cultures – such as Muslim and Hindu – which share African culture’s societal norms in respect of parents and the elderly, and impose a similar duty on children to support their parents.

In the present case the plaintiff was dependent on her deceased son’s support and awarded her an amount of R 136 060,40 as damages.

 

Medical negligence: In Nzimande v MEC for Health, Gauteng 2015 (6) SA 192 (GP) the plaintiff, Nzimande, claimed damages, both in her own capacity and on behalf of her child, arising from their treatment during and after a caesarean birth at a hospital administered by the Member of the Executive Council for Health in Gauteng (the MEC). Nzimande claimed that both she and her newborn daughter endured unnecessary pain and suffering as a result of the negligence of doctors and nurses at the hospital. It emerged from the evidence of Nzimande that her child – who was cut on an arm during the procedure – was afterwards taken to the neonatal ward without Nzimande having been allowed to see her new-born child.

When, after three days, Nzimande was finally taken to her child, she found her in a non-functioning incubator and with her wounds untreated. The child was neither fed for three days, nor was she put on a drip. The child was simply neglected. In the meantime Nzimande herself had been left untreated, in pain, and ridden with anxiety about the welfare of her child. Medical experts stated the cut on the child’s arm was ‘undoubtedly due to the negligence of the surgeon’; that she thereafter ‘suffered pain and discomfort for three months’; and that she was left with scarring that would require further treatment and, eventually, surgery. According to expert evidence procured by the court the whole ordeal left Nzimande with mild post-traumatic stress disorder characterised by feelings of dismay, fear and anxiety.

For his part the MEC offered no more than a bare denial of liability, and counsel for Nzimande submitted the doctrine of res ipsa loquitur (the matter speaks for itself) should apply to her claim.

Bertelsmann J held that while res ipsa loquitur seldom applied in medical negligence cases, the present circumstances were unusual enough to justify its application. The evidence established a strong prima facie case of grave negligence in the treatment of both mother and child. The MEC, having decided to oppose the action without leading evidence to dispel the allegation that the conduct of the personnel involved was substandard, had only himself to blame if the doctrine found application. Without refutation by the MEC, the strong prima facie case became proof on a balance of probabilities. While the issue of the potential consequences of the negligence was not properly addressed by counsel for Nzimande, this unfortunate mistake would not be allowed to derail the claim: Expert evidence would, in the interests of justice, be obtained by the court. In addition to the mother and child’s future medical expenses,
R 300 000 and R 200 000 would be awarded as general damages for the child and mother, respectively.

The court awarded attorney and client costs against the MEC as a mark of the court’s disapproval of his uncompassionate and obstructive conduct.

Divorce law

Jurisdictional conflict: In SW v SW and Another 2015 (6) SA 300 (ECP) divorce proceedings between the applicant, the husband, and the first respondent, the wife, were pending before the regional court, when the husband brought an urgent application before the High Court in terms of r 43 of the Uniform Rules. It was opposed on the ground that it was not urgent and that it constituted an abuse of the process. The wife filed a counter-application seeking, in the event that the application was not dismissed for the reasons stated, that it be postponed to enable her to deal comprehensively with the husband’s papers.

The divorce litigation between the parties was acrimonious and hard fought. A central issue in the litigation concerned the care and residence of the parties’ six-year old daughter. That dispute involved allegations and counter-allegations relating to what is termed parental alienation. The question of what care and contact
arrangements were in the best interests of the minor child had been considered by several experts appointed by the parties, respectively. One of these reports was that of the family-advocate. The husband did not agree with the content of the report and it was his dissatisfaction with the report that prompted him to launch the present application.

The husband requested the court for various types of relief, the first of which was an order directing the family advocate to reinvestigate the issue of parental responsibilities in relation to the primary care and residence of the minor child and to report on the investigation.

The core issue before Goosen J was whether the present court had jurisdiction to hear the application. The court held that a litigant who is a party to a divorce action pending before another court (in this case, the regional court) cannot invoke the jurisdiction of the High Court to secure relief in terms of r 43 of the Uniform Rules of Court. The court can, however, exercise its inherent common-law jurisdiction to act in appropriate circumstances in the interests of minor children to make an order, notwithstanding such proceedings. To invoke such inherent jurisdiction the applicant (here: the husband) must establish –

  • that considerations of urgency justify the intervention; and
  • that intervention is necessary to protect the best interests of the minor.

It is not a jurisdiction that will be lightly exercised. The court retains an inherent discretion not to exercise such jurisdiction to avoid a multiplicity of suits with the concomitant risk of jurisdictional conflict.

The application was accordingly dismissed with costs.

Property

Sale of church property: The facts in Savage and Others v Order of the Sisters of the Holy Cross, Cape Province and Others 2015 (6) SA 1 (WCC); [2015] 4 All SA 199 (WCC) were as follows: The first respondent, the church, is the registered owner of immovable property, which belonged to the Catholic Church. Because of financial difficulties, the church decided to sell the property to the third respondent (the buyer). The applicants were tenants of six cottages on the property, and had lived there for many years. Their forebears had lived on the property for multiple generations as guests of the Catholic Church (represented by the second respondent), and later, the applicants occupied the property as tenants of the first respondent.

The applicants, who were paying a nominal monthly rental, sought to interdict the transfer pending an application to be brought by them. The applicants alleged that their tenancy was based on cessions of lifelong leases, which the church had concluded with their forebears. They argued that the property was under the umbrella of the church, and that canon law and common-law principles precluded the church from alienating it. They also relied on the humanistic and communitarian principles of ubuntu.

The church, in turn, invoked economic necessity, arguing that it had to sell because the property was an untenable drain on their strained financial resources.

According to the applicants, they feared that should the transfer proceed, the buyer might evict them, leaving them destitute. They contended further that the church had not complied with canon law governing the Catholic Church, regarding the sale of church property.

Mahomed AJ held that the applicants were required to establish the requirements for a final interdict, namely, a clear right, infringement of such right and the absence of a suitable alternative remedy.

While the courts would not interpret property rights without regard to principles of ubuntu, they were not compromised by the church’s effort to address its financial woes by selling the cottages. Though the alleged cession agreements could not be construed on the affidavits, the applicants were able to establish prima facie rights emanating from the lifelong lease.

A serious factual dispute thus existed regarding the extent of the applicants’ rights in the property. There were two mutually destructive versions and various disputes of fact, which could not be resolved on the affidavits.

The transfer of the property was imminent, and unless the interdict was granted the applicants’ claim in the main action would be defeated. The court reasoned that the refusal of the interdict would be final to the applicants’ cause, whereas its grant would not.

In the light of the circumstances of the case and having regard to the fact that the trial court would be seized with the merits of the matter, the court held that there was no other satisfactory remedy available to the applicants and that the application for an interim interdict should be granted.

Spoliation

Requirements for spoliation order: The crisp facts in Top Assist 24 (Pty) Ltd t/a Form Work Construction (Registration No: 2006/037960/07) v Cremer and Another [2015] 4 All SA 236 (WCC) were that the applicant, the contractor, and the respondents, the owners, agreed that the former would erect a house for the latter. Suffice it to say that the relationship soured and that the owners were unhappy with various aspects of the contractor’s work.

The owners appointed an independent third party to compile a list of defects in the building project. The owners discussed the content of the list with the contractor but the parties held conflicting views on the correctness of the list. The contractor rejected the owners’ cancellation of the building contract.

While the contractor was off-site, the owners convinced the contractor’s foreman and site manager to hand them the keys of the house, thus depriving the contractor access to the property. The third party, acting on the owners’ instruction, ordered and/or requested the site manager to vacate the site and to remove the contractor’s equipment from the site.

The contractor applied for a spoliation order to restore peaceful and undisturbed control and possession of the property to enable him to complete the building project.

Boqwana J pointed out that a spoliation order is a final determination of the immediate right to possession. It is the last word on the restoration of possession ante omnia.

In order to obtain a spoliation order the contractor must prove that it was in possession of the property and that the respondent deprived it of the possession forcibly or wrongfully against its consent. The possession need not have been exclusive possession. A spoliation claim will lie at the suit of a person that holds possession jointly with others, as was the case here.

Because the contractor rejected the owners’ purported cancellation of the agreement between them, the court held that there was no proof that the contractor, or its site manager consented to vacate the premises.

Because the parties had joint possession of the premises immediately before the site manager handed the owners the keys (both parties had keys to the premises) the granting of a spoliation order did not give the contractor more rights that it had prior to being deprived.

The spoliation order was accordingly granted with costs. The owners were ordered to restore the contractor’s peaceful and undisturbed possession of the property.

Suretyship

Limitation on surety’s liability: In Kilburn v Tuning Fork (Pty) Ltd 2015 (6) SA 244 (SCA) the facts were as follows: The surety admitted that he had signed a deed of suretyship in favour of Kilburn Auto Enterprises (Kilburn). The company (the creditor) was later divided into five trading divisions. The surety’s undertaking was in favour of one of the divisions known as the ‘After Market Products division’.

It was common cause that Kilburn’s indebtedness to the After Market Products division had been discharged. However, Kilburn was indebted to the Yamaha Distributors to the amount of R 800 000. Kilburn failed to make any payments in terms of this indebtedness.

When the creditor obtained a judgment against Kilburn for an unpaid debt and thereafter sought payment from the surety, the surety raised the defence that the debt had been incurred by another division of the company that traded under a different name. This defence was unsuccessful in the High Court because the court held that it was clear from the suretyship undertaking that the surety undertook liability for all the debts of Kilburn. The court pointed out that the divisions of a juristic entity (such as a company) are not, in law, regarded as distinct or severable or having separate personalities.

On appeal to the SCA, Saldulkar AJ and Meyer AJA pointed out that the Kilburn case turned on the interpretation of the deed of suretyship. Its provisions had to be interpreted in accordance with the established principles of interpretation. It was also important to understand ‘the factual matrix within which the deed of suretyship came into existence’. The particular contract that the surety signed contained the heading ‘Deed of Suretyship – Tuning Fork (Pty) Ltd t/a After Market Products’.

The court held that although the undertaking by the surety was for the ‘due fulfillment by the debtor of all its obligations to the creditor of whatsoever nature and howsoever arising, whether already incurred or which may from time to time hereafter be incurred, as a continuing surety … a court should not conclude, without good reason, that words in a single document are tautologous or superfluous’.

The heading of the undertaking and the detailed provisions of the deed of suretyship had to be read together. The heading was not meaningless or superfluous and the meaning that the High Court attributed to the concluding words of the heading ‘T/A After Market Products’, namely that they were intended to enhance the identification of the creditor, had no basis in its language or context.

Linguistically, when these words are read in isolation and in the context of the body of the deed of suretyship, it may be thought that they are not clear. However, clarity is achieved when the language is considered in the light of the relevant factual matrix, including the purpose of the deed of suretyship and the circumstances in which it came to be prepared and produced.

The court concluded that it was clear that the deed of suretyship came into existence only because security was required for Kilburn to buy goods on credit from the ‘After Market Products division’. Kilburn was rendered personally liable on the terms set out in the deed of suretyship for only the debts incurred by Kilburn Auto in purchasing goods on credit from the ‘After Market Products division’.

While there is, in law, only one creditor, there is nothing to prevent a suretyship securing only certain debts due to that creditor. The factual context, including the document’s purpose and the circumstances in which it came to be prepared, had to be taken into account – and here shed light on its intended meaning. The deed was drafted because After Market required security from Kilburn for its purchases on credit – it was intended to secure debts arising from those purchases only.

The appeal was accordingly allowed with costs, and the court a quo’s decision that Kilburn was liable to Tuning Fork for debts arising from Kilburn Auto’s purchases from Yamaha Distributors, reversed.

Other cases

Apart from the cases and topics that were discussed or referred to above, the material under review also contained cases dealing with civil procedure, constitutional law, costs, criminal law, labour law, land law, local authorities, motor-vehicle accidents, property law, revenue and sale of land.

This article was first published in De Rebus in 2016 (Jan/Feb) DR 38.