The law reports – April 2017

April 1st, 2017
x
Bookmark

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.

February 2017 (1) South African Law Reports (pp 333 – 653); [2016] 3 All South African Law Reports August (pp 345 – 667); [2016] 4 All South African Law Reports November (pp 299 – 664); [2016] 4 All South African Law Reports December (pp 665 – 980); January [2017] 1 All South African Law Reports (pp 1 – 312); 2017 (2) Butterworths Constitutional Law Reports – February (pp 131 – 266)

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

 

Abbreviations

CC: Constitutional Court

ECG: Eastern Cape Division, Grahamstown

GJ: Gauteng Local Division, Johannesburg

GP: Gauteng Division, Pretoria

KZP: KwaZulu-Natal Division, Pietermaritzburg

LAC: Labour Appeal Court

LC: Labour Court

SCA: Supreme Court of Appeal

WCC: Western Cape Division, Cape Town

Attorneys

Applicant must be a fit and proper person to be admitted and enrolled as an attorney: The facts in the case of Ex parte Mdyogolo 2017 (1) SA 432 (ECG) were that in 2015 the applicant, Mdyogolo, applied to court for admission and enrolment as an attorney. However, he had a criminal record in that in 1991 he was convicted of theft and sentenced to two months imprisonment after stealing a cassette tape from a shop. In 2010 he was convicted of drunken driving and sentenced to a fine. More difficult though was a conviction for armed robbery with aggravating circumstances, which he committed in June 1994. On that occasion the applicant, together with another person, being armed with a semi-automatic rifle, robbed a petrol filling station. In his admission application he stated that the robbery was committed for political reasons as part of the armed struggle conducted by Azanian People’s Liberation Army, a military wing of the Pan Africanist Congress (PAC), a political party. However, that was not true as by then the armed struggle was over, the PAC had taken part in general elections held in April 1994 and was represented in Parliament. For the robbery he was sentenced to prison for ten years, during which time he applied to the Truth and Reconciliation Commission (TRC) for amnesty. In the TRC application he also provided false information. The TRC application was discontinued as he was granted parole concerning the robbery sentence. Given his background the question before the court in the admission application was whether he was a fit and proper person to be admitted and enrolled as an attorney.

Plasket J (Beshe J concurring) held that he was not and dismissed the application. The attorney’s profession was an honourable one, which demanded complete honesty and integrity from its members. When a court was called on to determine whether a person was fit and proper to become or remain an attorney, it was required to weigh up the conduct that was alleged to disqualify the person against the conduct expected of an attorney. The mere fact that a person had committed an offence was not a bar to his or her appointment or a trigger for his or her name to be struck from the roll.

The applicant’s participation in a robbery in which he was armed with a semi-automatic rifle was indicative of a grave character flaw. The version of events that he placed before the TRC, which was given under oath, was clearly mendacious, and transparently so. That too was indicative of a person who was not fit and proper to be admitted as an attorney. In the present application he lied about the robbery. That, apart from being dishonest and completely at odds with the ethical probity expected of an attorney, amounted to a cynical attempt to mislead the provincial law society and the court. That was evidence of lack of honesty, integrity and trustworthiness, all of which were essential qualities for any member of the attorney’s profession.

Banking

Duty of bank in respect of customer’s deposits where an account has been attached by notarial bondholder: In Spar Group Limited v FirstRand Bank Ltd and Another 2017 (1) SA 449 (GP); [2016] 4 All SA 646 (GP) the plaintiff, Spar Group, a wholesaler, had an agreement with Umtshingo (U), a retailer which was represented by one, Paulo, in terms of which the plaintiff supplied goods and services to U on credit. U operated three businesses in Nelspruit, Mpumalanga, each of which had a separate banking account with the first defendant FirstRand Bank. To secure U’s indebtedness, the plaintiff and U entered into a notarial bond covering U’s movables. When U defaulted on repayments the plaintiff obtained a court order perfecting the notarial bond and took over control, as well as possession of the businesses, which continued operating, as Paulo contended that closing them down would be financially harmful. The money generated by the continued operation of the businesses was paid into the old accounts, Paulo refusing to substitute the plaintiff as the new beneficiary. As U was indebted to the first defendant in respect of overdraft facilities provided, the latter used speed-point payments and cash deposits credited into one of the businesses’ account to set-off the debt owed to it. The funds going into the other two accounts of the businesses were withdrawn by Paulo. That had the result that although the plaintiff had perfected the notarial bond and was running the businesses, it did not receive the expected financial benefits. Accordingly, it instituted proceedings against the first defendant to recover the funds that had been used to set off its debt, and against Paulo for withdrawals made. It was the plaintiff’s case that in using the funds to set off its claim, the first defendant had unlawfully appropriated funds, which belonged to it while in the case of funds withdrawn by Paulo it was alleged that the first defendant had breached a duty of care, which it owed to it to warehouse. In other words, the plaintiff’s contention was that there was a duty on the first defendant to prevent Paulo from withdrawing the funds as a result of perfection of the notarial bond. The plaintiff having obtained default judgment against Paulo, proceedings continued against the first defendant only. The claims were dismissed with costs.

Fourie J held that mere knowledge of the bank about a particular arrangement between the accountholder and a third party (perfection of the notarial bond in this case) was not sufficient. A person, such as the plaintiff in the instant case, claiming to have a quasi-vindicatory claim with regard to funds deposited into an account held in the name of a client of the bank would have to prove that the bank was a party to an agreement with its client to warehouse such moneys on behalf of such other person claiming to be entitled thereto. That was a sound principle because in the absence of such an agreement (between the bank and its client, the accountholder) it would mean, for instance, that the accountholder and a third party would be able to agree, if the client’s account showed a debit balance, that funds deposited into that account by the third party would not fall into the ownership of the bank by merely notifying the bank about that arrangement. The effect would be that a bank could then unilaterally be deprived of its ownership with regard to moneys deposited into such account without being a party to the agreement. In this case there was no such warehousing agreement between the plaintiff and the first defendant.

It would be unreasonable to conclude that the first defendant had a legal duty (the duty of care) to avoid economic loss to the plaintiff by preventing U or Paulo from withdrawing money from the accounts concerned in the absence of a warehousing agreement with it.

 

Powers and duties of a Repayment Administrator under the Banks Act: The facts in Kruger v Joint Trustees of the Insolvent Estate of Paulos Bhekinkosi Zulu and Another [2017] 1 All SA 1 (SCA) were that in March 2011 the Registrar of Banks, acting in terms of the South African Reserve Bank Act 90 of 1989 (the Act), appointed the appellant, Kruger, as temporary inspector to investigate the activities of one Zulu and the entity which he controlled, known as Travel Ventures Institution (TVI). The inspection indicated that Zulu, through TVI, was conducting the business of banking by obtaining money from members of the public contrary to the provisions of the Banks Act 94 of 1990 (the Banks Act), as both were not registered as a bank or authorised to conduct the business of a bank in terms of the Banks Act. Moreover, Zulu was operating a pyramid scheme, the like of which had been declared unlawful in a number of countries around the world. As a result the registrar appointed the appellant as a repayment administrator to manage and control repayment of all moneys obtained by Zulu through his entity. Although it was not necessary to seek a court order to that effect as the Banks Act gave him authority to do so, the appellant nevertheless approached the court by way of urgent ex parte application for an order authorising him to recover and take control of all of Zulu’s assets, including, immovable properties. The KZP, per Radebe J, granted the rule nisi which it discharged on the return day on the grounds that the application was not urgent, Zulu had not been served with the application (as it was ex parte) and further that interested parties had not been joined. That led to the present appeal to the SCA. However, by the time of the hearing of the appeal the matter had become moot as the estate of Zulu had been sequestrated and his trustees substituted as the respondents. The appeal was upheld, with costs to be costs in sequestration of Zulu’s insolvent estate.

Dambuza JA (Mpati AP, Willis, Salduker JJA and Poterill AJA concurring) held that even though Zulu’s assets could no longer be placed in appellant’s possession, it was still necessary to consider the appeal to clarify the powers and obligations of a repayment administrator under the Banks Act and to set out the correct approach when considering similar matters.

The duty of the repayment administrator was to recover and take possession of the assets of a person who was the subject of a directive. To require the repayment administrator to approach a court on notice to the person subject to the directive and adherence to normal filing times would defeat the purpose of the repayment process. By operation of law, the assets of a person who was the subject of the registrar’s directive vested in the repayment administrator immediately on his or her appointment.

There was no basis for distinguishing between assets acquired through the operation of the unlawful banking business and those acquired innocently. In fact, s 84(4) of the Banks Act did not exclude honestly acquired assets from consideration for realisation for purposes of raising repayment funds. The section merely set out as one of the duties of repayment administrator, the taking of reasonable steps to expedite repayment of money.

The High Court erred in discharging the rule nisi. The appellant was entitled, even without the court order, to take the steps in respect of which he sought the court’s pronouncement. However, in the light of Zulu’s sequestration and the consequent appointment of trustees to assume control of his estate it was not open to the court to grant an order the effect of which would be to authorise the appellant to also take the assets in Zulu’s estate. The role of a repayment administrator was different from that of a trustee and was limited to repayment of money unlawfully obtained in the conduct of an unregistered banking business. In this case, once the order of sequestration was granted, the powers of the trustees, on appointment, took precedence over those of the repayment officer.

Constitutional law

Unconstitutionality of Parliament’s rules and policy on limiting broadcasting of unparliamentary conduct and grave disorder: Paragraph 8.3.3.2 of Parliament’s Policy on Filming and Broadcasting (the policy) – which was adopted in September 2003, but was applied for the first time in November 2014, due to disruptive behaviour in Parliament of the Economic Freedom Fighters, a political party – provides that televising of parliamentary proceedings may continue during incidents of grave disorder or unparliamentary behaviour. However, during that time a television camera is required to focus on the Chair, meaning the Speaker of the National Assembly or the Chairperson in the case of National Council of Provinces. The policy defines ‘unparliamentary behaviour’ as any conduct which amounts to defiance of the person presiding over the proceedings, being the Speaker or Chairperson, as the case may be. Rule 2 of the Rules of Parliament (rules) defines ‘grave disorder’ as incidents of an individual, but more likely collective misconduct, of such a seriously disruptive nature as to place in jeopardy the continuation of the sitting. Both the policy and rules may conveniently be referred to as ‘disruption provisions’. Their essence is that in the event of disruptive behaviour in Parliament, television cameras should focus on the person presiding over the proceedings and not the troublemaker.

The constitutionality of the above disruption provisions was challenged in Primedia (Pty) Ltd and Others v Speaker of the National Assembly and Others 2017 (1) SA 572 (SCA); [2016] 4 All SA 793 (SCA), where the SCA dealt with an appeal against the decision of the WCC per Dlodlo J, with whom Henney J concurred, while Savage J dissented. The High Court having dismissed an urgent application for an order declaring the provisions unconstitutional, the SCA upheld the appeal with costs. The SCA also declared unconstitutional the incident of jamming of signal of cellular telephones and other electronic equipment which preceded the State of the Nation Address (Sona) by the President of the country in February 2015. The appellants, Primedia and others, contended that the disruption provisions and jamming of electronic devices violated the public’s right to see and hear what was said and done in Parliament during Sona of 2015.

Lewis JA (Cachalia, Tshiqi, Swain and Zondi JJA concurring) held that usage of a jamming device was unlawful as it had been activated without the approval of the Speaker as required. On the other issues in the case it was held that the behaviour of Members of Parliament (MP) in Parliament was something which the public had the right to see and hear. It was political speech of the first order. Freedom of speech in Parliament was fundamental to an open and democratic state. The right to vote held by all adult citizens in the country could be exercised meaningfully only if voters knew what their representatives did and said in Parliament. Since the vast majority of people were not actually in Parliament, they relied on public reports and broadcasts.

Any measure adopted by Parliament had to be objectively reasonable. If it was not, it would be subject to review and constitutional challenge. In considering whether a measure was reasonable, a court had to balance parliamentary autonomy with the right of the public to participate in public affairs. The test to be applied was not only whether the limitation was proportionate to the end sought to be achieved, but also whether other measures would better achieve that end or would do so without limiting other people’s rights. That was the test in the limitations provision in the Constitution (s 36(1)(e) – dealing with less restrictive means to achieve the purpose). In determining the reasonableness of a limitation insofar as an administrative decision was concerned, where the power conferred identified a goal to be achieved, but did not dictate the method of achieving it, a court had to pay due respect to the route chosen by the decision-maker.

The public had an interest in knowing about incidents of grave disorder. It had the right to know who caused it and who regulated it. The disorderly conduct of MP’s, public representatives of the people, was a matter of public concern. It was not only proper behaviour that was of concern. Even loud, rowdy and fractious political life was good for democracy. Members of the public had the right to see and hear elected members of Parliament misbehave.

  • See law reports ‘Parliament’ 2015 (Oct) DR 43.

Constitutional litigation

Discretion of the High Court to make adverse costs order against private litigant so as to prevent abuse of court process: The facts in Lawyers for Human Rights v Minister in the Presidency and Others 2017 (1) SA 645 (CC) were that in May 2015 and after attacks on non-South Africans in several parts of the country, the police and army launched large-scale operations in terms of which they cordoned off areas to conduct search-and-arrest operations, carrying out multiple raids in the process. In Johannesburg, search-and-arrest operations were carried out in private homes in the early hours of the morning, during which scores of people were arrested. The raids were done without warrants. The applicant Lawyers for Human Rights (the LHR), representing most of those arrested, challenged the constitutionality of the operation, and particularly the manner in which it was carried out, more so that it was done without a warrant. However, the manner in which the applicant mounted the challenge created problems as it approached the High Court by way of urgent application some six weeks after completion of the operation. The state parties, the respondents, being four ministers and high ranking officials in their departments, were given one day within which to file opposing papers.

The GP, per Hiemstra AJ, struck the application from the roll with costs, holding that it was gravely inappropriate to bring the application on an urgent basis. Leave to appeal was refused with costs. Thereafter, the applicant applied to the SCA for leave to appeal against the costs order only. The application was dismissed with costs. As a result the applicant sought the leave of the CC to appeal to it. Leave was granted but the appeal itself dismissed with no order as to costs, the court holding that the leave to appeal application had been made properly without acting frivolously or inappropriately.

In a unanimous judgment the court held that in constitutional litigation the general rule was not to award costs against unsuccessful litigants when they were litigating against state parties and the matter was of genuine constitutional import. That general rule applied not only to costs orders on the merits, but also to ancillary issues and points. This was so as the threat of hefty costs orders could chill constitutional assertiveness and
discourage parties from challenging questionable practices of the state. Parties seeking to ventilate important constitutional principles should not be discouraged by the risk of having to pay costs of the state adversaries merely because the court held adversely to them.

However, constitutional litigation was not risk free. The court, in its discretion, could order costs against a private litigant if the constitutional grounds of attack were frivolous or vexatious or if the litigant acted from improper motives or if there were other circumstances that made it in the interests of justice to make such a costs order since the court controlled its process. Although, in this case, the issues raised by the applicant could in other circumstances have protected it if it lost the litigation, bringing the application six weeks after completion of the operation, and giving government parties barely a day in which to respond, was not justified. It was not proper. A worthy cause or motive could not immunise a litigant from a judicially considered, discretionary imposed adverse costs order.

Consumer protection

Strict liability of the supplier arises if there is a supplier and consumer relationship between the parties: Section 61(1) of the Consumer Protection Act 68 of 2008 (the Act) provides among others that the producer, importer, distributor or retailer of any goods is liable for any harm caused wholly or partly as a consequence of supplying any unsafe goods, a product failure, defect or hazard in any goods or inadequate instructions or warnings provided to the consumer pertaining to any hazard arising from or associated with the use of any goods, irrespective of whether the harm resulted from any negligence on the part of the producer, importer, distributor or retailer, as the case may be.

In Eskom Holdings Ltd v Halstead-Cleak 2017 (1) SA 333 (SCA) the respondent Halstead-Cleak suffered severe electrical burns when he came into contact with a low-hanging live electrical power line while cycling with friends. The power line hung low due to interference by vandals. The issue before the court was whether the appellant Eskom Holdings attracted liability in terms of s 61 of the Act in those circumstances, more so that the respondent was not injured by electricity, which he was receiving from the appellant in terms of a supplier and consumer agreement.

At the trial of the action the parties agreed for separation of issues with the result that the trial proceeded only on the issue of liability of the appellant in terms of s 61(1) while the remaining issues stood over for determination at a later stage, if necessary. The GP held that the appellant was 100% liable for damage suffered by the respondent, hence the appeal to the SCA. The appeal was upheld with costs and the matter remitted to the High Court for trial of the other issues.

Schoeman AJA (Lewis, Willis JJA, Fourie and Makgoka AJJA concurring) held that the High Court lost sight of the fact that there should be a supplier and consumer relationship for the appellant to be strictly liable for harm as the purpose of the Act was to protect consumers. In this case, the respondent was not a consumer vis-à-vis the appellant as he did not enter into any transaction with it as a supplier or producer of electricity in the ordinary course of its business. Furthermore, the respondent was not utilising electricity, nor was he a recipient or beneficiary thereof when he got injured. The supply of unsafe product, electricity in this case, also presupposed that the appellant sold it in the ordinary course of business for consideration, which was not the position here. The application of s 61(1) was restricted to a supplier and consumer relationship. In the present case the respondent was not utilising the electricity when he was injured. Accordingly, the respondent was not a consumer that was entitled to the protection of the Act. This was particularly so as the circumstances of the case fell outside the ambit of a consumer and supplier relationship to which the Act applied.

Divorce

Non-member of a pension fund is entitled to pension benefits even if they are not mentioned in the divorce order:  Section 7(7)(a) of the Divorce Act 70 of 1979 (the Act) provides among others that in the determination of patrimonial benefits to which the parties to any divorce action may be entitled, the pension interest of a party shall be deemed to be part of his assets. In GN v JN 2017 (1) SA 342 (SCA) the parties were married in community of property. When a decree of divorce was granted by the regional court in 2012, a settlement agreement was made an order of court. The agreement made provision for equal division of immovable and movable property in the joint estate but did not say anything about pension benefits. When division of the joint estate was not forthcoming the wife approached the GP for an order appointing a liquidator to divide the joint estate, as well as for an order declaring that each spouse was entitled to half of the other’s pension interest. The husband opposed the application on the basis that in her divorce proceedings his former wife did not claim for his pension benefits, the settlement agreement did not mention such benefits and also the divorce order did not mention them. Kgomo J dismissed the application. An appeal against the High Court order was upheld with costs by the SCA.

Petse JA (Mpati AP and Swain JA concurring while Makgoka AJA, in whose judgment Seriti JA concurred, dissented) held that s 7(7)(a) of the Act was self-contained and was not subject to s 7(8), which dealt with endorsement of pension interest after the granting of the decree of divorce. The section deemed a pension interest to be part of the joint estate for the limited purpose of determining the patrimonial benefits to which the parties were entitled as at the time of divorce. It would be inimical to the scheme and purpose of s 7(7)(a) if it only applied if the court granting a decree of divorce made a declaration that in the determination of the patrimonial benefits to which the parties to a divorce action would be entitled, the pension interest of a party would be deemed part of his or her assets. It was not necessary for the parties to mention in their settlement agreement what was obvious, namely, that their respective pension interests were part of their joint assets which they agreed would be shared equally between them.

By inserting s 7(7)(a) in the Act, the legislature intended to enhance the patrimonial benefits of the non-member spouse over that which – prior to its insertion – had been available under the common law. The language of the section was clear and unequivocal. It created a fiction that a pension interest of a party became an integral part of the joint estate on divorce, which was to be shared between the parties.

NB: The case is reported in South African Law Reports as GN v JN, whereas, in the All South African Law Reports it is Ndaba v Ndaba [2017] 1 All SA 33 (SCA). A quick glance may not reveal that it is the same case.

Environmental law

Protection of state against claims when acting lawfully, without negligence or in good faith: Section 49 of the National Environmental Management Act 107 of 1998 (NEMA) provides among others that neither the state nor any other person is liable for any damage or loss caused by the exercise of any power or the performance of any duty under the Act or any specific environmental management Act unless the exercise or failure to perform the duty was unlawful, negligent or in bad faith. Any specific environmental Act includes Environmental Conservation Act 73 of 1989 (ECA), which in s 34(1) provides among others that if in terms of its provisions limitations were placed on the purposes for which land could be used or on activities which may be undertaken on the land, the owner of such land shall have a right to recover compensation from the Minister or competent authority concerned in respect of actual loss suffered by him consequent on the application of such limitations. A related s 37 of ECA provides that no person, including the state, shall be liable in respect of anything done in good faith in the exercise of a power or the performance of a duty conferred or imposed in terms of ECA.

In Minister of Water and Environmental Affairs and Another v Really Useful Investments No 219 (Pty) Ltd and Another 2017 (1) SA 505 (SCA), [2017] 1 All SA 14 (SCA) the first appellant, Really Useful Investments (RUI), was the owner of land located along a river in Hout Bay, Cape Town. The land was subdivided into several properties for development as residential units. Because the land was located in a low-lying area, RUI raised the level to four metres above sea-level by dumping rubble and also by landfill. When the second respondent, the City of Cape Town (the City) came to know of the activities of RUI, it directed it to restore the land to what it once was by removing the rubble, soil and landfill to the flood-line level and wetland state, bearing the costs thereof. That was duly done after which RUI sought compensation from the City, the first appellant the Minister of Water and Environmental
Affairs, as well as the relevant Member of the Executive Council (MEC) for the Western Cape. All three raised an exception to RUI’s particulars of claim as disclosing no cause of action in that it was not alleged that in the exercise of its powers in terms of s 31A of ECA the City had acted unlawfully, negligently or in bad faith. The three separate actions were consolidated, after which the WCC per Savage J dismissed the exception. An appeal against dismissal of the exception was upheld with costs.

Navsa JA (Wallis, Dambuza, Mocumie JJA and Dlodlo AJA concurring) held that it was not the case that in all instances in which potentially harmful activities on land were restricted that compensation would inevitably be payable. If that were so a refusal of authorisation for activities which could have a substantial detrimental effect on the environment, related for example to waste removal or chemical processes would automatically entitle a holder of a right in land to compensation. It was not the case that a person seeking to use his land, adjacent to a residential area, for a manufacturing process that will emit noxious gases in the area, would claim compensation in the event of a refusal of authorisation for him to do so. Put differently, it was difficult to conceive of a right to compensation for restrictions being put in place to prohibit dangerous process.

To interpret and apply s 34 of ECA to allow for such compensation would be to discourage environmental authorities from fulfilling their constitutional obligation to protect the environment and put people first in applying the environmental management principles set out in NEMA. It would, perversely, encourage land owners to act in an environmentally offensive manner so as to solicit compensation. That would fly in the face of the common law and also lead to absurdity. The power under s 31A(2) to cause harmful conduct to be remedied was a power to compel the landowner to do so at its own expense. It was incongruous in the extreme that having done so at own expense, it could then turn around and say that it was entitled to compensation for loss suffered by it, which would include that self-same expense. That was the position, even if as a result the land became less valuable. In exercising its powers under s 31A(1) of ECA, the City was complying with its constitutional and statutory obligations to prevent harm to the environment. RUI’s case as pleaded disclosed no cause of action as the actions taken by the City in issuing a directive in terms of s 31A did not fall within the purview of s 34.     

Estate agents

An estate agent is required to have a valid Fidelity Fund Certificate to claim commission for work done: Section 34A of the Estate Agency Affairs Act 112 of 1976 (the Act) provides among others that no estate agent shall be entitled to any remuneration or other payment in respect of or arising from the performance of any duties of an estate agent, unless at the time of the performance of the act a valid Fidelity Fund Certificate (FFC) has been issued to such estate agent and if such estate agent is a company, the FFC was also issued to every director of such company. In Crous International (Pty) Ltd v Printing Industries Federation of South Africa [2017] 1 All SA 146 (GJ) the plaintiff, Crous International, sold the defendant Printing Industries Federation’s property to the buyer African Leadership Academy (ALA). Thereafter, the defendant refused to pay the agreed remuneration (commission) contending that the main issue was that as the buyer was an already existing tenant of the property, the plaintiff had not introduced it. In other words, the contention was that the plaintiff was not the effective cause of the sale. Secondly, the defendant also contended that the plaintiff was not entitled to remuneration as at the time of the sale, the plaintiff was not issued with (in possession of) a FFC. At the time the plaintiff had in fact successfully applied for the certificate but due to a technical error the Estate Agency Affairs Board (the Board) could not print it. Nevertheless, the certificates for the plaintiff’s directors had been printed and issued to them.

Coppin J upheld the plaintiff’s claim for remuneration with costs, holding that the plaintiff had established on a balance of probabilities that it carried out the terms of its mandate to find a buyer for the property, being ALA, and that it was the effective cause of the sale between ALA and the defendant. However, the mere fact that the plaintiff fulfilled its mandate and was the effective cause of the sale did not entitle it to be paid the agreed commission. In terms of s 26 of the Act, read together with s 34A, the plaintiff would be entitled to the commission if at the time of performing the acts as an estate agent those sections had been complied with regarding the issue of FFC. A strict, narrow textual or literal approach was not apposite to achieving that objective. A more purposive or substantive approach was called for. If the purpose of those provisions had been achieved, the sections would substantially have been complied with.

The evidence in the case was that the plaintiff had complied with all of the provisions of the Act. There was, therefore, no reason at all why certificates for the relevant period should not have been issued to the plaintiff by the Board, save for the fact that the Board had not been able to print them. One could, therefore, conclude that there had been compliance with ss 26 and 34A of the Act even though the certificates were not issued to the plaintiff company itself due to the printing difficulty experienced by the Board. In substance, though not in form, the plaintiff was authorised by the Board to perform acts as an estate agent for payment.       

Eviction of foreign nationals

Foreign nationals are eligible for temporary emergency accommodation: Section 4(7) of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE) provides among others that 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 whether land has been made available or can reasonably be made available by a municipality or other organ of state or another land owner for the relocation of the unlawful occupier.

The issue in Chapelgate Properties 1022 CC v Unlawful Occupiers of Erf 644 Kew and Another 2017 (1) SA 403 (GJ); [2016] 3 All SA 508 (GJ) was whether the second respondent, the City of Johannesburg (the municipality), was under an obligation to provide temporary emergency accommodation to the respondents, the unlawful occupiers of property belonging to the applicant Chapelgate Properties. The majority of the respondents (the evictees), being some 60% of them, were not South African citizens and were almost all illegal foreigners as they did not have valid papers, or any papers at all in some instances, to be in the country. The court granted the eviction order with no order as to costs. In accordance with the provisions of s 4(12) of PIE the eviction order was made subject to conditions in terms of which the municipality was required to provide temporary emergency accommodation to eligible (needy) evictees on condition that by a specified date they provided proof to the municipality that their stay in South Africa had been regularised (meaning that their papers were in order) or that they had applied for asylum, which process was underway.

Spilg J held that illegal foreigners could not per se be precluded from being provided with temporary emergency housing while in dire situation. Nevertheless, where emergency assistance was to be provided to an illegal foreigner it remained subject to conditions prescribed by the Department of Home Affairs on a case-by-case basis. Until an illegal foreigner’s status was determined and until lawful detention or deportation he or she was entitled, while in the country, to the benefits accorded to any citizen of temporary emergency shelter. In considering the plight of illegal foreigners subject to eviction under PIE read with s 26(3) of the Constitution (progressive realisation of the right of access to adequate housing), the provision of temporary emergency housing would not become the gateway to securing for them access to an incrementally progressive housing programme unless their status changed. In the present case it appeared reasonable to impose a condition that those respondents who were illegal foreigners had to regularise their status, with a proviso that it they did not produce proof to that effect within a specified period which the court considered reasonable, the municipality could apply for a declaratory order that they were no longer entitled to receive temporary emergency accommodation.

Labour law

Compensation as remedy for unfair dismissal: In South African Revenue Service v Commission for Conciliation, Mediation and Arbitration and Others 2017 (1) SA 549 (CC); 2017 (2) BCLR 241 (CC) two employees of the applicant South African Revenue Service (Sars), being Kruger and Mboweni, had an altercation on two occasions in July and August 2007 after which Kruger hurled racial insults at Mboweni, his superior, calling him the ‘k’ word. Kruger was alleged to have said that he could not understand how ‘k’ thought and that a ‘k’ could not tell him what to do. Calling a person the ‘k’ word was derogatory, dehumanising and effectively meant that such a person was a baboon, was lazy and could not think. Kruger was taken to a disciplinary inquiry to face charges of misconduct in using racist remarks or alternatively using derogatory and abusive language towards his team leader, Mboweni. Kruger pleaded guilty to the charges and a deal was struck in terms of which he received a very favourable sanction of final written warning, which was valid for six months, was suspended from work without pay for ten days and furthermore he had to undergo counselling. On receipt of the report on the outcome of the disciplinary inquiry the Sars Commissioner changed the decision from final written warning to dismissal. In making that change Kruger was not afforded the opportunity to contest the appropriateness of the dismissal sanction. Aggrieved by the dismissal Kruger took the dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) where the arbitrator held that the Sars Commissioner did not have authority to change the decision of the disciplinary inquiry. On that basis alone the dismissal was held to have been unfair. Kruger was reinstated to his position. A review application against the CCMA award to both the LC and the LAC was unsuccessful.

As a result the applicant sought leave of the CC to appeal against the decision of the LAC. That leave was granted and the appeal upheld. Kruger was dismissed but received compensation equal to six months’ pay, as per agreement with the applicant. Each party was ordered to pay own costs as both had achieved substantial success, being reversal of reinstatement in the case of the applicant and entitlement to compensation on the part of Kruger. Moreover, it was because of the errors of the applicant that the matter had to proceed all the way to the CC.

Reading a unanimous judgment of the court Mogoeng CJ held that an arbitration award issued by the CCMA arbitrator in dismissal disputes constituted an administrative action which s 33(1) of the Constitution required to be lawful, reasonable and procedurally fair. Unreasonableness was one of the grounds on which an arbitrator’s award, issued under the auspices of the CCMA, could be reviewed and set aside. In this case, by ordering the applicant to reinstate Kruger the arbitrator acted unreasonably. She also did not appear to have been mindful of the fact that in terms of s 193(2) of the Labour Relations Act 66 of 1995, reinstatement would not follow as a matter of course. It would in fact not be an option if circumstances surrounding the dismissal were such that a continued employment relationship would be intolerable. No reasonable arbitrator could have ordered reinstatement. Accordingly, the reinstatement part of the arbitrator’s award was unreasonable and had to be reviewed and set aside.

Turning to the question of compensation the court held that generally speaking, an unfair dismissal ought to earn an employee compensation where reinstatement was not feasible by reason of the intolerability of the continued working relationship. The applicant had offered Kruger compensation for his unfair dismissal. However, compensation was not automatic as it was a discretionary exercise. A whole range of factors had to be taken into account to determine whether compensation had to be paid and if so, for how many months. One of the key considerations was the need to ensure that employers were not inadvertently encouraged by the non-payment of compensation to adopt a shotgun approach of dismissing employees without affording them the opportunity to be heard. Compensation was a just and equitable remedy that was appropriate in the case. Moreover, the applicant had reconciled itself with the possibility of payment of up to six months. But for the applicant’s offer and a series of blunders, compensation for a lesser period or no compensation at all would arguably have been more appropriate. Compensation equivalent to six months’ pay for misconduct as gross as that of Kruger and the lies he told the arbitrator as the CCMA disciplinary inquiry was by any standard generous.

Other cases

Apart from the cases and material dealt with or referred to above the material under review also contained cases dealing with: Application for postponement of civil trial, defamatory postings on social media account, deponent to have personal knowledge of facts deposed to, disallowing second medical examination by similar expert, discovery of documents in motion proceedings, discretion of court to grant rescission of default judgment, eviction of unlawful occupiers of land if it is just and equitable to do so, experts who were not called to testify not being entitled to a fee, interlocutory order not being appealable, legality of declaration of national road as toll road, no legal duty on third parties not to infringe trading rights between contracting parties, non-disclosure of private deliberations on judicial appointments, objections to a liquidation and distribution account first to be made to the Master, order implementing judgment pending appeal available only in exceptional circumstances, prohibition of use of property contrary to title deed restriction, reasonableness of steps taken to avoid injury to other persons, reviewing and setting aside of final report of Public Protector, right of shareholder to demand that company take legal action and tariffs payable for transportation of crude oil.

Erratum

In law reports ‘Marriage: Waiver of maintenance’ 2017 (Jan/Feb) DR 42, we referred to Weinkove AJ as Weinkove J. We apologise for any inconvenience caused.

This article was first published in De Rebus in 2017 (April) DR 30.

Loading...