The law reports

December 1st, 2016
x
Bookmark

October 2016 (5) South African Law Reports (pp 335 – 667); [2016] 3 All South African Law Reports August (pp 345 – 667); [2016] 3 All South African Law Reports September (pp 669 – 959); and 2016 (10) Butterworths Constitutional Law Reports – October (pp 1253 – 1388)

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

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

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

 

Abbreviations

CC: Constitutional Court

ECG: Eastern Cape Division, Grahamstown

GP: Gauteng Division, Pretoria

KZD: KwaZulu-Natal Local Division, Durban

KZP: KwaZulu-Natal Division, Pietermaritzburg

LAC: Labour Appeal Court

LC: Labour Court

LCC: Land Claims Court

SCA: Supreme Court of Appeal

WCC: Western Cape Division, Cape Town

Constitutional law

Invalidity of legislation for failure to facilitate adequate public involvement in the legislative process: The Restitution of Land Rights Act 22 of 1994, which deals with restitution of land rights or compensation for individuals and communities deprived of rights in land as a result of racially discriminatory laws or practices, set the cut-off date for lodging claims for restitution as 31 December 1998. Desirous of extending the cut-off date to a new date Parliament passed the Restitution of Land Rights Amendment Act 15 of 2014 (the Amendment Act) that came into operation on 1 July 2014 and extended the cut-off date for lodging claims to 30 June 2019.

The issue in Land Access Movement of South Africa and Others v Chairperson, National Council of Provinces and Others 2016 (5) SA 635 (CC); 2016 (10) BCLR 1277 (CC), was not about the substance but the process by which the Amendment Act was brought about. The applicants, the Land Access Movement of South Africa and others, sought in the main, a CC order declaring the Amendment Act unlawful for having been passed by the National Council of Provinces (NCOP) contrary to s 72(1)(a) of the Constitution, which requires the NCOP to facilitate public involvement in its legislative and other processes, as well as those of its committees. The gist of the complaint was that there was ‘unexplained rush’ in the manner in which the first respondent, the NCOP and its select committee, passed the Amendment Act, which was done in a very short period of one month. The main reason for the ‘unexplained rush’ was the desire to have it passed before dissolution of Parliament and holding of general elections in May 2014. In that rush a lot of rough justice was manifested. For example, after delegating the task of facilitating public involvement to provincial legislatures, as it was entitled to do, rather than facilitating public involvement itself, on being briefed by the Department of Land Affairs and Rural Development at the end of February 2014, the Select Committee (the Committee) of the NCOP had to brief all provincial legislatures the following week, within a very short period of three days. In the week that followed and over a period of five days public hearings were to be held in all provinces, after which on the fourth day after such hearings, provinces were to hold their negotiating mandate meetings to discuss their position regarding the Amendment Act and seven days thereafter, hold a final mandate meeting and prepare a report. Because of a very tight time-frame the envisaged public hearings were not well-advertised, attendance was poor, some public hearings were very short while at some hearings no questions were entertained. For example, in the Northern Cape only one municipality was involved and held a single public hearing while in the Western Cape one public hearing was held, attended by 30 people and lasted 90 minutes. In Gauteng one meeting was held and lasted three hours but no questions were allowed. In the North West all public hearings were addressed in Setswana only, while in the Free State all hearings were conducted predominantly in Sesotho. The list of deficiencies in the planning and conduct of public hearings was simply endless.

The CC held that in terms of s 167(4)(e) of the Constitution it had exclusive jurisdiction in respect of matters in which it was alleged that the President or Parliament had failed to fulfil a constitutional obligation. After careful analysis of all the deficiencies attendant on the public hearings concerned, it was held that Parliament, through NCOP, had failed to satisfy its obligation to facilitate public involvement in accordance with s 72(1)(a). As a result the Amendment Act was declared invalid, effective from the date of the judgment. The purpose of prospective operation of the order of invalidity was to save some 80 000 new claims, which had since been lodged after the Amendment Act came into operation on 1 July 2014. However, the Chief Land Claims Commissioner (the Commissioner) was interdicted from processing those new claims. If Parliament were to fail to re-enact a properly done Amendment Act within two years of the court order, the Commissioner or any other interested party, was given leave to approach the court, within two months after the expiration of the two-year period, for an appropriate order on the processing of claims lodged from 1 July 2014. The NCOP was ordered to pay costs.

Delivering a unanimous judgment of the court, Madlanga J held that the Constitution demanded that the public should be afforded a meaningful chance of participating in the legislative process. The standard to be applied in determining whether Parliament had met its obligation of facilitating public participation was one of reasonableness and depended on the circumstances, as well as the facts of each case. In the instant matter the NCOP adopted a truncated time line for itself and provincial legislatures to facilitate the involvement of the public in the legislative process. That time line was the root cause of all the deficiencies in the process. Given the gravitas of the legislation and the thoroughgoing public participation process that was warranted, the truncated time line was inherently unreasonable. Objectively, on the terms stipulated by the time line, it was simply impossible for the NCOP, and by extension the provincial legislatures, to afford the public a meaningful opportunity to participate.

Consumer credit agreements – execution against primary residence

Primary home should not be declared executable if there are good prospects of reinstatement of the credit agreement: Before its amendment in 2014, and which came into effect in March 2015, s 129(3) of the National Credit Act 34 of 2005 (the NCA) provided among others that at any time before the credit provider had cancelled the agreement, the consumer could reinstate it by paying all amounts that were overdue together with default charges and reasonable costs of enforcing the agreement up to the time of reinstatement. Subsection (4) provided that a consumer could not reinstate a credit agreement after the sale of any property in terms of an attachment order or in the execution of any other court order enforcing that agreement.

In Firstrand Bank Ltd v Mdletye and Another 2016 (5) SA 550 (KZD) the applicant, Firstrand Bank, applied for default judgment in which it sought against the respondents, Mr and Mrs Mdletye, payment of the total contract amount outstanding, as provided for in the acceleration clause, interest and costs on attorney and client scale. Furthermore, it sought an order declaring the property, which was the respondents’ primary residence, executable. The court granted the order relating to payment of the outstanding contract amount, interest and costs but adjourned sine die the issue relating to executability of the property.

Gorven J held that if the arrears could be eliminated and the amounts referred to in s 129(3) paid (default charges and reasonable costs of enforcing the agreement up to the time of reinstatement) the agreement would be reinstated. From the date of reinstatement the default judgment would have no legal force. If the property was sold by virtue of an attachment following a declaration of executability, the agreement would not be capable of being reinstated and the respondents would lose their home. The potential for that to occur had to be a factor to be taken into account in an application to declare the property executable. The significance thereof was that, unlike many of the other factors that relate to alternative ways of satisfying the entire judgment debt, reinstatement did not require payment of the full contract amount but only the arrears and other specified charges. In the instant case there was a reasonable prospect that the agreement was capable of being reinstated within a relatively short period.

Delict

Doctrine of abuse of rights: In Koukoudis and Another v Abrina 1772 (Pty) Ltd and Another 2016 (5) SA 352 (SCA); [2016] 3 All SA 398 (SCA), the first respondent, Abrina, was the owner of property situated in Centurion, City of Tshwane Municipality (Pretoria), which was zoned ‘agricultural’. As the first respondent wanted to develop it into a shopping centre and conduct a steakhouse business there, it applied for its rezoning into a township. The first appellant, Koukoudis (K), lodged an objection against the rezoning and thus started a long delay caused by the appeal process that followed, which also included litigation and court orders. The reasons given by K for his objection, included failure by the respondent to address fundamental issues such as environment impact assessments, traffic issues and requirements of statutes such as the National Environmental Affairs Act 107 of 1998 and the like. However, as it later transpired, the real reason for the objection was to prevent the establishment of a shopping centre in the vicinity of a shopping mall, which was only some 600 metres away and was owned by companies in which K had an interest as a director and shareholder. In brief, the purpose of the objection was to protect the commercial interests of K and his companies.

Eventually approval to establish a shopping centre was granted. Thereafter, the first respondent instituted a claim for damages against the first appellant and one of his companies, alleging that their objection to its rezoning was an abuse of the right to object and resulted in financial loss by delaying commencement of its business activities. It was alleged that K had acted with the specific intention of frustrating development of the shopping centre and causing financial harm. The GP, per Tolmay J, upheld the claim for damages.

An appeal against the High Court order was upheld with costs by the SCA. Leach JA (Majiedt, Pillay JJA, Victor and Baartman AJJA concurring) held that the weight of academic opinion was to the effect that conduct should not be regarded as being unlawful where it advanced a legitimate right of the person exercising it, even if in doing so another could be prejudiced. In order to constitute an abuse of right both the subjective requirement that an act be done with the sole or predominant intention to harm another and the objective requirement that the act serve no appreciable or legitimate interest should be present. In considering the question of the appellant’s liability one had to have regard, first, to the subjective requirement, namely whether the objection to the development was done with the sole or predominant intention to harm the respondents; and then second, the objective requirement, namely whether the objection served no appreciable or legitimate interest of the appellants. Such was not the case in the present matter as the appellants sought to protect their commercial interest in the nearby shopping mall. The respondents had thus failed to prove an abuse of the right to object to rezoning of the property.

Intentional interference by third party with contractual relationship is actionable: In Shoprite Checkers (Pty) Ltd v Masstores (Pty) Ltd and Another [2016] 3 All SA 926 (ECG) the applicant, Shoprite, had a lease agreement with the second respondent, Whirlprops, which gave it the exclusive right to operate a supermarket at the Mthatha Mall in the Eastern Cape. The first respondent, Masstores (Game), also had a lease agreement with the second respondent, which gave it the right to conduct the business of a general merchandiser, which did not include selling fresh fruit and vegetables or fresh meat and poultry products, all of which formed part of the exclusive business of a supermarket operated by the applicant. The first respondent started expanding its business to that of a supermarket and in 2014 the old lease agreement was cancelled and a new one concluded, which gave the first respondent the right to operate a supermarket business in the mall, notwithstanding the exclusive right that had been granted to the applicant. As a result the applicant sought by way of urgent application an interim interdict restraining the first respondent from operating a supermarket business. It also sought an interim interdict directing the second respondent to take all necessary reasonable steps to prevent the first respondent from operating a supermarket business in the mall. Both orders were granted with costs.

Lowe J held that the Aquilian action was available against a third party for the intentional interference with contractual relationship, which had the effect that a contracting party was deprived of the opportunity of obtaining the performance to which he was entitled, arising from the contract or where the contracting parties’ contractual obligations were increased. The requisites of a delict had to be satisfied in each case. Once such requisites were satisfied, liability would arise. Provided the requirements for the interdict had also been met, the wronged party would be entitled to an order restraining unlawful conduct.

Dolus eventualis was sufficient as far as intent was concerned. Concerning wrongfulness, the first respondent had acted unlawfully and wrongfully by at least usurping the applicant’s exclusivity entitlement to conduct the business of a supermarket. As a result, a prima facie right had been established by an unlawful act of the first respondent, which constituted interference in the contractual relationship between the applicant and the second respondent and which had been committed with the necessary form of intent. That satisfied the requirements to be met for a successful claim based on the interference in contractual relationship in the context of the usurpation of a right.

Expropriation

Calculation of compensation: Section 16 of the Land Reform (Labour Tenants) Act 3 of 1996 (the Land Reform Act) gives the LCC the power to award a part of the farm to a labour tenant, meaning a farm worker who lives on the farm, to use as his homestead, for grazing his livestock and sowing crops. As that is obviously expropriation, the Land Reform Act provides that the owner of the land so expropriated should be awarded compensation as provided for in s 25 of the Constitution, which deals with the issue. Section 25(3) provides that the amount of compensation, the time and manner of payment has to be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including –

‘(a) the current use of the property;

(b) the history of the acquisition and use of the property;

(c) the market value of the property;

(d) the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and

(e) the purpose of the expropriation.’

In Msiza v Director-General, Department of Rural Development and Land Reform and Others 2016 (5) SA 513 (LCC) the LCC having awarded Msiza a portion of the farm for residential, cropping and grazing purposes, the issue was the amount of just and equitable compensation to be paid for that portion. The parties, the Department of Rural Development and Land Reform (the Department) and the owner of the farm, the Dee Cee Trust, agreed that the market value would be just and equitable compensation. However, the Department contended that the market value should be determined on the basis of use of the land, namely, as agricultural land, the value of which was R 1,8 million, while the owner contended that the market value of the property should be looked at in terms of its potential for development as a township, which value was R 4,36 million. The LCC rejected both contentions and held that the just and equitable compensation was an amount that was adjusted downwards to R 1,5 million. No order as costs was made.

Ngcukaitobi AJ (Canca AJ concurring) held that the market value was not the basis for the determination of compensation under s 25 of the Constitution where property or land had been acquired by the state in a compulsory fashion, as was the case in the instant matter. The point of departure for determination of compensation was justice and equity. Market value was simply one of the considerations to be borne in mind when a court assessed the just and equitable compensation. Market value was, therefore, not a pre-eminent consideration. The object was always to determine compensation which was just and equitable, not to determine the market value of the property. In determining what was just and equitable, a balance had to be struck between the interests of the private landowner and the public interest. Therefore, compensation which was below the market value could be compliant with the Constitution, if it qualified as just and equitable.

The development potential of the property, as a factor in the calculation of market value, was far-fetched and speculative as there were no development plans in place but only a remote hope. Following that approach, would distort the real value of the land and produce outcomes, which were inconsistent with the purposes of compensation. That approach could also create a perverse incentive for landowners to artificially raise the potential value of their land if they knew that by the simple device of generating interest in the land, its market value could be significantly altered. The purpose of s 25 of the Constitution was not to reward property speculators but to serve public interest. Accordingly, it would be unfair to the national fiscus to reward the landowner on the scale sought in the instant case, with no discernible public benefit.

Fundamental rights

Right of media to access to disciplinary proceedings of state employees: In Media 24 (Pty) Ltd and Others v Department of Public Works and Others [2016] 3 All SA 870 (KZP) the first respondent, the Department of Public Works, instituted disciplinary proceedings against 11 of its employees, regarding involvement in unauthorised expenditure relating to President Zuma’s private residence, Nkandla, in KwaZulu-Natal. Because of massive public interest in the debacle, the applicants, three media houses, wanted to have their reporters attend the hearings and report thereon. The hearings proceeding separately rather than in a consolidated form, the chairperson in one hearing granting access, in respect of which the applicants wanted a court order confirming this. The order was denied by the court, which held that the decision to grant access was an administrative action, which remained valid until it was challenged.

In the case of those chairpersons who had not made a ruling on whether to grant access, the applicants sought a declaratory order to the effect that the ruling should be made within ten days of the court order. The court granted an order directing the decision of the chairpersons to be made within a month, and not ten days, of the court order. In those cases where the chairpersons had denied access, the rulings were reviewed and set aside, with the applicants granted access to the hearings. The respondents, excluding the first respondent, which abided by the decision of the court and did not oppose the application, were ordered to pay the costs of one, and not two, counsel.

Koen J held that the right to freedom of expression, which the applicants sought to enforce, was not one for the benefit of the media but rather for the benefit of all citizens. As a general rule disciplinary disputes relating to employees of the state might not attract public attention but that did not mean that because they could be regulated in terms of a contract, they were all private and confidential with the result that the media was not entitled to access. The discretion whether or not to grant media access vested in the presiding chairperson. Such discretion had to be exercised independently. Openness and transparency demanded the hearings should not be held behind closed doors, as much as publicity would not be welcomed by the employees or for that matter witnesses who would be required to give evidence. In brief, public interest favoured that proceedings, including disciplinary proceedings generally, should be open (to the public and the media).

Whether the constitutional right to adequate housing is infringed by defective construction of houses for low-income group: In City of Cape Town v Khaya Projects (Pty) Ltd and Others 2016 (5) SA 579 (SCA) the appellant, City of Cape Town (the City), entered into an agreement in terms of which the second respondent, Peer Africa, was to oversee development of an informal settlement in Atlantis, a small coastal town outside Cape Town, into a formal residential area. Construction work was done by the first respondent, Khaya, with whom Peer Africa concluded an agreement to do so. There was no contract between the City and Khaya. After completion of construction work the second respondent issued certificates signifying acceptance of the houses. Shortly thereafter it turned out that a number of the houses built had severe defects. As a result the City, seeking to put a stop to the alleged widespread problem of contractors building government-funded low-cost houses, which were defective, sought a court order declaring that the first respondent failed to comply with a constitutional obligation to construct adequate houses in terms of s 26 of the Constitution. The WCC, per Mantame J, dismissed the application. An appeal against that order was dismissed with costs by the SCA.

Victor AJA (Maya DP, Majiedt, Seriti and Willis JJA concurring) held that the second respondent undertook to make sure that the buildings would comply with all legal requirements and regulations. However, there was no contractual nexus between the City and the first respondent. Also, there was no reference at all to any constitutional obligation on the part of the first respondent when it concluded the agreement with the second respondent. That being the case there was, therefore, no basis for a finding that the first respondent, a construction company, which was neither controlled by the appellant nor performed a nationwide public function, was an entity in the position of an organ of state. The first respondent agreed with the second respondent, and not the appellant, to construct houses. It did not enter into any contract with the appellant, and also did not undertake that the appellant’s constitutional obligations would be effectively achieved in regard to the housing project. Accordingly, it would be wrong to impose a constitutional obligation ex post facto the procurement event. Doing so would be inconsistent with the principles of fairness. It would also not be equitable or transparent. In light of a finding that there was no constitutional obligation on the first respondent, the declaration sought could not be granted.

Government procurement

A tender bid is required to comply with all the specifications, prescripts, requirements or conditions specified in a tender document: In Afriline Civils (Pty) Ltd v Minister of Rural Development & Land Reform and Another; Asla Construction (Pty) Ltd v Head of the Department of Rural Development and Land Reform and Another [2016] 3 All SA 686 (WCC) the first respondent, the Department of Rural Development and Land Reform (the Department), invited tenders for construction of bulk irrigation revitalisation in the Western Cape. The tender documents specified the requirements, which the tenderers had to meet, which included, among others, a valid tax clearance certificate issued by the South African Revenue Service and valid registration as a contractor with the Construction Industry Development Board (CIDB). If a tenderer were to make use of a sub-contractor the name thereof had to be specified, each sub-contractor in turn having to comply with the requirements of tax clearance certificate and registration with the CIDB. The tender bid of Afriline Civils (Afriline) was rejected as it did not attach the tax clearance certificate of one of its sub-contractors, namely TT Innovations (TT). Furthermore, Afriline’s registration with the CIDB lapsed before the tenders could be considered. In the case of Asla, its tender bid also failed to attach the tax clearance certificate of TT. The tender was awarded to Exeo because it was able to attach the tax clearance certificate of TT, which the other two tenderers did not do. As a result
Afriline and Asla applied for an order reviewing and setting aside the award of the tender to Exeo. The application was dismissed with costs.

Dlodlo J held that the award of a tender by an organ of state constituted administrative action under the Promotion of Administrative Justice Act 3 of 2000 and had to be lawful, procedurally fair and justifiable. It was an established principle that non-compliance with specifications, requirements or conditions included in the tender documents would render a tender bid unacceptable or non-responsive and liable to be disqualified. If unacceptable or non-responsive tenders were to be further considered despite failing to comply with the mandatory requirements, the consequences would be that the tender process as a whole would not be transparent as required by the provisions of the Preferential Procurement Policy Framework Act 5 of 2000 and s 217(1) of the Constitution. Non-compliance with the specifications as stated in the tender document could be condoned only if the document conferred a discretion on the administrative authority to condone such non-compliance with a mandatory requirement, which was not the case in the instant matter.      

Decision to cancel a tender is non-reviewable executive action and not administrative action: The facts in SAAB Grintek Defence (Pty) Ltd v South African Police Service and Others [2016] 3 All SA 669 (SCA) were that in 2009 the first respondent, the South African Police Service (SAPS), acting through the second respondent, the State Information Technology Agency (SITA), invited tenders for the supply of mobile vehicle data command and control solution (command solution). The validity period of the tender bid was to expire in January 2011. The appellant, SAAB Grintek (SAAB), together with another company, Britehouse, were shortlisted. However, the tender was never awarded. After the expiry date of the tender period an extension was granted, followed by further extensions. The appellant’s tender bid was recommended by the Procurement Committee but no award was made. In August 2012 the first respondent advised SAAB that the tender had been cancelled as a long period had elapsed, this rendering the technology offered out of date in relation to its business needs. As a result the appellant approached the High Court for an order reviewing and setting aside the decision of the first respondent to cancel the tender, as well as an order directing that the tender be awarded to it and a contract between the parties be concluded. The GP, per Makgoba J, dismissed the application, holding that extension of the tender period was invalid as it was done after lapse of the tender in January 2011. An appeal to the SCA was dismissed with costs.

Mpati P (Cachalia, Theron, Wallis JJA and Victor AJA concurring) held that when the SAPS, as an organ of state, took the decision to procure the command solution and later cancel the tender relating thereto, it did so in the exercise of executive authority. Therefore, its decision to cancel the tender was not susceptible to review in terms of the Promotion of Administrative Justice Act 3 of 2000. As a result, the submission that SAPS’s decision to cancel the tender constituted an administrative action was not correct. It was inconceivable that the decision of SAPS to cancel the tender, which would otherwise have been taken in the exercise of executive authority could suddenly change character and become one of an administrative nature. A decision as to procurement of goods and services by an organ of state was one that lay within the heartland of the exercise of executive authority by that organ of state.

Labour law

Affirmative action – legality of exclusion of adequately represented or overrepresented groups from appointment: Before its amendment by the Employment Equity Amendment Act 47 of 2013 the Employment Equity Act 55 of 1998 (the EE Act) provided that when assessing whether a designated employer was implementing employment equity in compliance with the EE Act, one of the factors that ‘must’ be taken into account was the extent to which suitably qualified people from different designated groups were equitably represented within each occupational group level in that employer’s workforce in relation to the demographic profile of the national and regional profile of the ‘national’ and ‘regional’ economically active population. After the amendment the word ‘must’ was changed to ‘may’, thus making taking the relevant factors into account a discretionary rather than obligatory function.

In Solidarity and Others v Department of Correctional Services and Others 2016 (5) SA 594 (CC); 2016 (10) BCLR 1349 (CC), members of the first applicant trade union, Solidarity, and who were coloured persons, applied for certain positions in the respondent Department of Correctional Services (the Department). Although they were suitably qualified for the positions and were recommended by the interviewing panels, the Department rejected their appointment on the ground that coloured persons were overrepresented in the occupational levels for which they sought appointment. In reaching that decision the Department took into account the ‘national’ profile of the economically active population to the exclusion of the ‘regional’ profile, the region being the Western Cape where coloured persons were in the majority.

The LC held that the Department had discriminated against the job applicants unfairly and had also engaged in unfair labour practice. However, it did not declare the decision of the Department unlawful so as to set it aside. Moreover, it did not grant the applicants the relief sought but instead left it to the Department to take necessary measures. The LAC dismissed an appeal to it.

The CC granted leave to appeal and upheld the appeal, making no order as to costs. The decision of the Department not to appoint the applicants was declared unlawful and set aside. The court denied, by word only, that it was granting the applicants a ‘protective promotion’ (but of course did exactly so). In the case of applicants who sought posts which were still vacant, they were appointed with retrospective effect to the date when they should have been appointed in the first place. In the case of the positions which had since been filled, the applicants were ordered to keep their current lower positions but were entitled to receive, with retrospective effect, the remuneration and other benefits which they would have received had they been appointed.

Delivering the majority judgment, Zondo J (Nugent AJ dissenting and Cameron J concurring in that dissenting judgment) held that the Barnard principle, namely the case of South African Police Service v Solidarity obo Barnard 2014 (6) SA 123 (CC); 2014 (10) BCLR 1195, was not limited to overrepresentation of White candidates only. Black candidates, whether they were African, Coloured or Indian people, were also subject to the overrepresentation principle. That had to be so as transformation of the workplace entailed that the workforce of a designated employer had to be broadly representative of the people of South Africa. The level of representation of each group had to be broadly in accordance with its level of representation among the people of the country. Therefore, a designated employer was entitled, as a matter of law, to deny an African, Coloured or Indian person appointment to a certain occupational level on the basis that African, Coloured or Indian people, as the case might be, were already overrepresented or adequately represented in that occupational level. Equally, an employer was entitled to refuse to appoint a man or woman to a particular level on the basis that men or women, as the case might be, were already overrepresented or adequately represented at that occupational level.

However, the Department used a wrong benchmark to determine the overrepresentation, namely by taking into account the national profile, to the exclusion of the regional profile, of the economically active population. In doing so the Department acted in breach of its obligations in terms of s 42(a) and accordingly acted unlawfully.

Land reform

Calculation of equitable redress in the form of financial compensation for loss of land: The facts in Jacobs v Department of Land Affairs and Others 2016 (5) SA 382 (LCC) were that by 1889 the Gordonia area (now Upington in the Northern Cape) was under control of British Government and administered as part of British Bechuanaland (now Botswana) and occupied by a Coloured community known as Basters (NB Although the name may seem derogatory, the community nevertheless called themselves such). One Abraham September was granted permanent quit-rent rights (rights of occupation, use and enjoyment) over a farm in the area. Thereafter, Gordonia was annexed, with the consent of the British Government, by the Cape Colonial Government and became part of the Cape Colony. Because of the Orange River the area offered great potential for irrigation. For that reason commercial farmers came up with several strategies to dispossess the Coloured people of their land. After the death of September, his sons – who had inherited the farm – ‘sold’ it to a commercial farmer, one Thorne, in 1906 in what turned out to have been a fraudulent sale as Thorne took advantage of the illiteracy of the sellers. Moreover, afterwards Thorne confessed that he bought the land for nothing as he did not pay anything. An attorney acting for the sellers was also attorney for the buyer Thorne and became an accomplice to the fraud perpetuated by Thorne. As if that was not enough an officer in the Deeds Registry turned a blind eye to the fraud, reporting that everything appeared normal. Thorne having in turn sold the farm to a new owner at a market value of 5 000 pounds sterling, the latter evicted September’s sons from the land in 1921.

In the present case the claimants, Jacobs and 393 others, all being direct descendants of Abraham September and his wife Elizabeth, sought compensation for the lost farm, from the defendant, Department of Land Affairs and Rural Development, and not from past or present owners of the farm, in terms of s 2(1)(c) of the Restitution of Land Rights Act 22 of 1994 (the Restitution Act). Restitution of the farm not being feasible, they sought an order which was just and equitable in the form of financial compensation. The value of the farm at the time of dispossession was 5000 pounds sterling, which translated into R 2 423 000 in current monetary terms. However, apart from that amount the claimants sought a further R 36 454 000 for loss of the land and additional R 58 330 000 for loss of use of the land. Their approach was based on the ‘fiction’ of undisturbed perpetual ownership and commercial exploitation of the land.

The LCC held, per Ngcukaitobi and Mpshe AJJ, that the ‘fiction’ approach was at odds with the views endorsed by the CC with regard to the object of compensation under the Restitution Act. If the court were to follow that approach it would not only be acting contrary to the CC authority as decided in Florence v Government of the Republic of South Africa 2014 (6) SA 456 (CC); 2014 (10) BCLR 1137, but would also open a vortex of speculative claims premised on unknown variables of the trajectory of the land and its use absent the dispossession.

The law was clear, that the object of just and equitable compensation was to place the dispossessed persons in the same financial position they would have been in immediately after the dispossession. There was logic in that approach as nobody knew what would have happened to the land had it not been for the racially motivated dispossession. Furthermore, it was not known in what manner the value of the land would have been affected over time.

The starting point was that the claimants were entitled to the amount of R 2 423 000, which was the current equivalent of the actual financial loss suffered as a result of uncompensated racial dispossession. However, that amount failed to have regard to the particular hardship visited upon the Septembers as a result of their dispossession and ejectment from the land. Accordingly, the amount was adjusted upwards to R 10 million since the market value of the property lost, was a factor and not a goal in itself. The adjusted amount of R 10 million determined as just and equitable applied to the value of the land and its use. The Department was ordered to pay costs, less payments already made to the claimants.

Prescription

When without prejudice offer of settlement does not interrupt prescription: In KLD Residential CC v Empire Earth Investments 17 (Pty) Ltd 2016 (5) 485 (WCC); [2016] 3 All SA 832 (WCC) the plaintiff, KLD, sued the defendant, Empire Earth, for commission earned after selling certain erven in a development project and transferring ownership to buyers. The commission was earned between October 2008 and November 2009 when the transfers took place. The summons claiming commission was issued and served in June 2013, being a period that was more than three years after the last commission was earned, which meant that the claim had prescribed. However, the plaintiff alleged that the running of prescription had been interrupted when, in July 2011, the defendant’s attorneys, acting as the defendant’s authorised representatives, wrote a letter to the plaintiff’s attorneys in which they acknowledged that, after taking into account certain deductions, the plaintiff was entitled to a certain amount in respect of which a cheque was attached. Rogers J held that the acknowledgment of debt, and the offer of settlement made to the plaintiff in a without prejudice offer, did not interrupt prescription. As a result the plaintiff’s claim had prescribed and was, therefore, dismissed with costs.

The court held that the without prejudice rule was based on public policy. Parties to disputes were to be encouraged to avoid litigation, with the expense, delay, hostility and inconvenience it usually entailed, by resolving their differences amicably in full and frank discussions, without the fear that any admissions made by them during such discussions could be used against them in the ensuing litigation. The law allowed some exceptions to the without prejudice rule. One such exception was where a party alleged that the settlement discussions resulted in a compromise agreement. Certain other exceptions based on public policy have also been recognised. If the without prejudice communication contained a threat or constituted an act of insolvency, and if the making of the threat or the commission of an act of insolvency was relevant to particular proceedings, evidence of the communication could be adduced despite its without prejudice character. A further exception was an admission by a company of its commercial insolvency. An admission of part of a liability was sufficient to interrupt prescription. Before a creditor could rely on an acknowledgment of part of the liability as an interruption of prescription there had to be admissible evidence of the partial acknowledgment. In many without prejudice negotiations the alleged debtor would not make any admission of liability. Although such negotiations could appear to be worth pursuing, the running of prescription was not suspended. The three-year period of prescription was not an ungenerous allowance of time. If the parties needed more time, the creditor could make further talks conditional on agreement to hold prescription in abeyance. That was often done in practice.

Other cases

Apart from the cases and material dealt with or referred to above the material under review also contained cases dealing with: Abuse of process of enquiry into the affairs of a company, business rescue, contempt of court, derivative action, destruction of sectional title scheme and certain exclusive use areas, effect of delay in serving sentence, fraud and money laundering, granting of bail pending application for direct access to the Constitutional Court, interruption of extinctive prescription, jurisdiction of Advertising Standards Authority on non-members, jurisdiction of Consumer Affairs Court, loss of earnings in personal injury claims, member of Parliament not allowed to impugn integrity of other members, recognition of foreign court order, prescribed minimum sentence for rape, right of farm worker to bury family members on the farm and sale of insolvent estate’s property prior to second meeting of creditors.

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