The law reports – August 2013

August 1st, 2013
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David Matlala BProc (University of the North) LLB (Wits) LLM (UCT) LLM (Harvard) HDip Tax Law (Wits) is an adjunct professor of law at the University of Fort Hare.

June 2013 (3) The South African Law Reports (pp 325 – 645); [2013] 2 The All South African Law Reports May no 1 (pp 251 – 375); and no 2 (pp 377 – 499)

Abbreviations:

CC: Constitutional Court

GNP: North Gauteng High Court, Pretoria

GSJ: South Gauteng High Court

SCA: Supreme Court of Appeal

WCC: Western Cape High Court

Administrative law

Access to information held by a public body: In February 2002 the former president of the country, President Mbeki, appointed a Judicial Observer Mission (JOM), consisting of two judges, to observe and report to him personally on whether in the period before, during and shortly after presidential elections in Zimbabwe the constitution, electoral laws and other laws of that country, which were relevant to the elections, could ensure credible or substantially free and fair elections and also whether the elections there had been conducted in substantial compliance with the legislative frame. The JOM duly obliged and reported to the President.

In M & G Media Ltd v President of the Republic of South Africa and Others 2013 (3) SA 591 (GNP), [2013] 2 All SA 316 (GNP) the applicant, M & G Media, made a request for a copy of the report, which was denied. Thereafter the applicant was granted an order in the GNP requiring the respondents, the President and others, to make the report available to the applicant. An appeal against that order was dismissed by the SCA but on further appeal the CC remitted the matter to the High Court to be heard de novo.

The respondents resisted the application mainly on the basis of ss 41(1)(b)(i) and 44(1)(a) of the Promotion of Access to Information Act 2 of 2000 (PAIA), contending that the information contained in the report was supplied in confidence by or on behalf of another state or international organisation as contemplated in s 41(1)(b)(i) and further that the report was prepared for the purpose of assisting the President to formulate executive policy on Zimbabwe as contemplated in s 44(1)(a).

The court set aside the refusal by the respondents for access to the report, ordering them to make it available to the applicant within ten days unless an appeal was lodged against the order. The respondents were ordered to pay the costs.

Raulinga J held that the contents of the report did not support the contention that its disclosure would reveal information supplied in confidence by or on behalf of another state or international organisation contrary to s 41(1)(b)(i) of PAIA. There was also no indication that the report was prepared for the purposes of assisting the President to formulate executive policy on Zimbabwe as contemplated in s 44(1)(a).

It was common cause that the report contained the findings of the two judges regarding the conduct of the elections in Zimbabwe, such as whether the legal requirements for the elections were met. That could not be construed as information supplied in confidence by or on behalf of another state. After all, most of the information was public knowledge.

Furthermore, information provided by individuals who happened to be members of the public service could not be said to be information supplied by or on behalf of another state. Moreover, the information was supplied also by persons who did not qualify as members of another state, as well as by independent lawyers.

NB: Another reported case dealing with the topic was BHP Billiton plc Inc and Another v De Lange and Others 2013 (3) SA 571 (SCA) where the issue was protection of commercial or confidential information of a third party.

Banking

Ownership of funds deposited into the customer’s account: In Trustees, Estate Whitehead v Dumas and Another 2013 (3) SA 331 (SCA) Mr Graham Whitehead ran a lucrative investment scheme that was operated in the United Kingdom (UK) and to which he recruited members of the public in South Africa.

A few days after investing some R 3 million in the scheme by way of depositing money into Whitehead’s banking account, the first respondent, Dumas, established that the scheme was in fact a ‘Ponzi scheme’ – that is, an unlawful pyramid scheme – and that Whitehead had been arrested. Whitehead’s estates in the UK and South Africa were duly sequestrated.

As a result Dumas sought a return of his money from Whitehead’s bank, Absa Bank, where the funds lay. The basis of his claim was the condictio ob turpem vel iniustam causam, being a remedy that is available to a plaintiff who innocently transfers money to a defendant under an agreement which, to the knowledge of the defendant, is illegal. However, the problem was that the money had not been transferred to the bank, but to Whitehead who had an account with the bank and into which it had been deposited.

The GNP held, per Makgoba J that the bank would be enriched if it kept the money and accordingly ordered it to repay the money to Dumas. An appeal against the order was upheld with costs.

Cachalia JA (Lewis, Ponnan, Theron and Petse JJA concurring) held that, in general, where money was deposited into a bank account of an account holder (such as Whitehead) it mixed with other money and, by virtue of commixtio, became the property of the bank regardless of the circumstances in which the deposit was made or by whom it was made. The account holder had no real right of ownership of the money standing to his credit, but acquired a personal right to payment of that amount from the bank arising from their bank-customer relationship.

This was also the case where no money in its physical form was in issue and the payment by one bank to another, on a client’s instructions, was no more than an entry in the receiving bank’s account. The bank’s obligation, as owner of the funds credited to the customer’s account, was to honour the customer’s payment instructions. Where the depositor (such as Dumas) was not the account holder, he relinquished any right to the money and could not reverse the transfer without the account holder’s concurrence.

As between account holders no personal rights were transferred. The personal right to the credit of the one account holder was extinguished on transfer and a new personal right created immediately for the other. Therefore, Whitehead, as a customer of Absa Bank, immediately acquired the new right to the money in his account, which was enforceable against the bank when ownership passed to it, despite the absence of a valid causa, that is, a valid underlying agreement.

Absa Bank then had both a duty to account and a corresponding liability to its customer, Whitehead, and, on his sequestration, to the trustees of his insolvent estate. Absa Bank was therefore not enriched and no enrichment action lay against it. Dumas had only a delictual claim against Whitehead arising from the fraudulent misrepresentation that induced the transfer of the money and, on the latter’s sequestration, a claim against the trustees.

Companies

Liability of directors for reckless or fraudulent conduct of business of a company: Section 424(1) of the repealed Companies Act 61 of 1973 (the Act) provided, among others, that when it appeared that any business of the company was or had been carried on recklessly or with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose the court could, on application, declare that any person who was knowingly a party to the carrying on of the business in that manner was personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the court would direct.

In Tsung and Another v Industrial Development Corporation of South Africa Ltd and Another 2013 (3) SA 468 (SCA) the directors of a company, Dynasty Textiles (Pty) Ltd – being Robert and Bobby Tsung, father and son – were held personally liable for the debts of their company on the basis of s 424(1).

The proceedings were instituted by two major creditors, namely the first respondent, Industrial Development Corporation of South Africa Ltd, and its subsidiary, Findevco (Pty) Ltd, after the company failed to repay large sums of money due. It was alleged that the Tsungs had conducted the business of the company in a number of ways that rendered them personally liable for the debts of the company in terms of s 424(1). Such allegations included, among others, that the directors had used the banking account of the company as a conduit to transfer funds to Hong Kong to pay personal debts to a creditor there and also to transfer money to Lio Ho, a company in which they, together with Mrs Tsung, were shareholders and that funds were also transferred to repay shareholders’ loans.

Furthermore, it was also alleged that a credit card of the company had been used to pay for personal expenses for items that included, inter alia, clothing, golf courses, flights to Australia, school fees for a child, a motor vehicle, and house relocation expenses of Bobby. All these payments occurred at the time when the company was hopelessly insolvent and could not pay its debts.

In the WCC Davis J declared the directors personally liable for the debts of the company. An appeal to the SCA was dismissed with costs.

Lewis JA (Cachalia, Theron, Schoeman JJA and Van der Merwe AJA concurring) held that, in a case where the company was ‘hopelessly insolvent’, a causal link between the fraudulent or reckless conduct and the company’s inability to pay its debt did not have to be established as s 424(1) did not require proof of a causal link between the conduct and the company’s inability to pay the debt. It was sufficient that there was some link or connection in time between the conduct complained of and the company’s inability to pay.

The carrying on of the business of a company recklessly meant carrying it on by conduct that evinced a lack of any genuine concern for its prosperity. A fortiori, if one deliberately depleted the company’s assets or misused its corporate form for one’s own purposes, that conduct would fall within the ambit of s 424(1). Ordinarily if a company, while carrying on its business, incurred debts at a time when, to the knowledge of its directors, there was no reasonable prospect of the creditors’ ever receiving payment, there was carrying on of its business with the intent to defraud those creditors.

 

Unconscionable abuse of juristic personality of a company: Section 20(9) of the Companies Act 71 of 2008 (the Act) provides among others that, if on application by an interested person or in any proceedings in which a company is involved, a court finds that the incorporation of the company, any use of the company or any act by or on behalf of the company constitutes an unconscionable abuse of the juristic personality of the company as a separate entity, the court may declare that the company is to be deemed not to be a juristic person in respect of any right, obligation or liability of the company or of a shareholder or of another person specified in the declaration. Furthermore, the court is given power to make any further order it considers appropriate to give effect to the declaration thus made.

The application of the above provisions arose in Ex parte Gore and Others NNO 2013 (3) SA 382 (WCC), [2013] 2 All SA 437 (WCC), a case that dealt with the King group of companies that consisted of 41 companies whose holding company was King Financial Holdings Ltd. The group was established by three King brothers who did not make a distinction between the various companies within the group.

The entire group was operated as one entity through the holding company. Funds solicited from investors were transferred by the controllers of the group, the King brothers, between the various companies in the group at will with no regard to the individual identity of the companies concerned, and with grossly inadequate record-keeping. During investigations into the affairs of the group the King brothers admitted that they treated the companies as one.

After the collapse of the group the liquidators of the various companies within the group applied for an order in terms of s 20(9) of the Act declaring, among others, that the companies within the group should be regarded as a single entity by ignoring their separate legal existence and treating the holding company, King Financial Holdings, as if it were the only company. The order was granted, the costs of the application being treated as costs in the winding-up of King Financial Holdings.

Binns-Ward J held that the disregard by the King brothers for the separate corporate personalities of the companies in the King Group was so extensive as to impel the conclusion that the group was in fact a sham. There was, in reality, no distinction for practical purposes when it came to dealing with investors’ funds between the holding company and its subsidiaries. The improprieties involved included the controllers of the companies treating the group in a way that drew no proper distinction between the separate personalities of the constituent members and using the investors’ funds in a manner inconsistent with what had been represented.

The first-mentioned category of impropriety constituted an unconscionable abuse by the controllers of the juristic personalities of the relevant subsidiary companies as separate entities and brought the case within the ambit of the statutory provision. The phrase ‘unconscionable abuse of the juristic personality of a company’ postulated conduct, in relation to the formation and use of companies, diverse enough to cover all descriptive terms like ‘sham’, ‘device’, ‘stratagem’ and the like used in that connection.

The provision brought about that a remedy could be provided whenever the illegitimate use of the concept of juristic personality adversely affected a third party in a way that reasonably should not be countenanced. Moreover, it would be appropriate to regard s 20(9) as supplementary to the common law rather than substitutive. The unqualified availability of the remedy in terms of the statutory provision militated against an approach that it should be granted only in the absence of an alternative remedy.

Close corporations

Validity of agreements concluded during deregistration period: Before its amendment in terms of the provisions of the Companies Act 71 of 2008, s 26 of the Close Corporations Act 69 of 1984 (the Act) provided for deregistration of a close corporation on certain specified grounds. The section also made provision for restoration of registration by the Registrar of Close Corporations that was governed by s 26(7). The latter section provided that, if granted, the registrar had to give notice of such restoration of registration and the date thereof in the prescribed manner and as from such date the corporation would continue to exist and be deemed to have continued in existence as from the date of deregistration as if it were not deregistered.

The issue in Kadoma Trading 15 (Pty) Ltd v Noble Crest CC 2013 (3) SA 338 (SCA) was the effect of s 26(7) on contracts concluded by a close corporation during the deregistration period. The respondent, Noble Crest CC (the corporation), entered into a sale and a franchise agreement during the time when, as it later transpired, the corporation was deregistered. However, a month after conclusion of the last agreement the corporation was reregistered. The respondent contended that reregistration of the corporation validated the agreements with retrospective effect so that they could be enforced.

In the WCC, Saba AJ held that the invalidity of the agreements was retroactively cured by the corporation’s reregistration and that they remained valid and binding on the parties as they had not been validly cancelled. The SCA dismissed the appeal against the High Court order with costs on attorney-and-own-client scale as provided for in the franchise agreement.

Maya JA (Shongwe, Pillay JJA, Erasmus and Swain AJJA concurring) held that s 26 of the Act unambiguously made provision for an administrative procedure that was entirely controlled by the registrar and required no court intervention. The provisions of s 26(6) were significant. They empowered the registrar to reregister a corporation by the same administrative process on application by any interested person, if he or she was satisfied that a corporation was, at the time of its deregistration, carrying on business or was in operation or that it was otherwise just that the registration of the corporation be restored.

These provisions made it clear that the legislature was not oblivious to the possibility of deregistration not coming to the attention of a corporation or the registrar wrongly assuming that a corporation was not in operation or carrying on business. It was significant that the legislature contemplated restoration precisely in a situation where the corporation was deregistered, despite the fact that it was in operation or carrying on business. That signified an objective to save a corporation’s acts, performed in good faith during a period of deregistration, from invalidity.

The plain meaning of the words of s 26(7) was nothing other than what they said, namely that a corporation was deemed to have continued in existence as from the date of its deregistration as if it were never deregistered, and was deemed to have been in existence with legal personality and was capable of performing juristic acts, including entering into valid contracts. The interpretation that the High Court gave to the deeming provisions was therefore correct.

Delict

Condictio furtiva: In Chetty v Italtile Ceramics Ltd 2013 (3) SA 374 (SCA) the appellant, Chetty, entered into a joint venture and franchise agreement with the respondent, Italtile, and became manager of a warehouse and retail store. Contrary to the policy of the respondent, the owner of the stock in the warehouse and the store, the appellant embarked on certain practices that resulted in loss of stock by rolling stock over, which meant taking the stock off the computer system at the beginning of the month only to reverse that entry at the end of the month with the intention to disguise losses that were being suffered. The appellant also sold stock on credit instead of in cash as required by the respondent to benefit certain customers who would pay at the end of the month. After discovering these practices, the respondent terminated the agreements it had with the appellant and sought to recover damages for missing stock on the basis of condictio furtiva.

In the GNP, Makgoka J found for the respondent, holding that the appellant’s practices of a delivery book (credit) system, false write-offs and reversals of missing stock resulted in the respondent suffering patrimonial loss. The SCA upheld an appeal against the High Court order with costs.

Malan JA (Brand, Pillay, Southwood JJA and Erasmus AJA concurring) held that the question of the respondent suffering patrimonial loss was not the issue, since the question was whether the appellant could be held liable on account of the furtum usus. The question required an investigation into whether the requirements for theft of that kind had been met.

The condictio furtiva is a remedy the owner of or someone with an interest in a thing has against a thief and his or her heirs for damages and is generally characterised as a delictual action. It is required that the object involved be stolen before the condictio can find application.

At common law ‘theft’ has a wider meaning and includes furtum usus or the appropriation of the use of another’s thing. Theft or use of another person’s thing is no longer a crime. The intention to appropriate the thing permanently, as in the case of criminal theft, is not a requirement of the condictio where furtum usus is concerned. The condictio furtiva is available where, for example, the defendant withdraws the thing from the possession of another or takes and uses it while intending to restore possession after use and it entitles the owner of the thing to the highest value of the thing between the time it was stolen and litis contestatio.

In the instant case the conduct complained of did not constitute the use of the respondent’s property. What the appellant did was to post false entries to the accounts to mislead the respondent. That could well have amounted to fraud, but it was not use of the stock. As for the loss suffered by the respondent, that loss arose not directly from the use of the goods, but from the failure of the respondent to take steps to collect the outstanding debts after termination of the agreement with the appellant.

The conduct of the appellant was the factual cause of the loss suffered by the respondent but it could not be said that the appellant’s conduct was sufficiently closely or directly linked to the loss for legal liability to ensue. The respondent had the opportunity to collect outstanding debts from the customers but did not do so.

 

Negligence – security guard opening gate to robber posing as policeman: In the case of Imvula Quality Protection (Pty) Ltd v Loureiro and Others 2013 (3) SA 407 (SCA) the appellant, Imvula, had a contract with the first respondent, Loureiro, in terms of which the appellant provided security services in the form of security guards to the first respondent. The first respondent specifically instructed the security guards not to allow anyone access without his permission.

One evening a police vehicle with a flashing blue light stopped in the driveway. A man in police uniform and wearing a vest marked ‘Police’ climbed out of the car and produced a police card. A security guard on duty, one Mahlangu, tried to communicate with the policeman using the intercom system, which did not work. As a result Mahlangu went to the pedestrian gate and opened it to find out what the policeman was looking for.

As it turned out, the policeman was in fact a robber who pointed a gun at Mahlangu’s head. Other robbers climbed out of the vehicle and the first respondent was robbed of valuables amounting to some R 11 million. As a result Loureiro and members of his family sought compensation from Imvula on the basis of breach of contract and delict.

The main issue was whether the conduct of Mahlangu in opening the gate was negligent. To a lesser extent the other issue was also whether Mahlangu’s conduct was unlawful. In the GSJ, Satchwell J held the appellant liable for the loss suffered by the respondents as the conduct of Mahlangu was found to have been negligent. The SCA upheld with costs an appeal against the High Court order.

Mhlantla JA (Mthiyane DP, Bosielo JA, Mbha AJA concurring and Cloete JA dissenting) held that Mahlangu intended to open the gate to find out what the policeman wanted, not to allow access to anyone. He thought he could help the police officer who was looking for something. There was nothing suspicious about the person that could and should have put him on his guard. He was not unreasonable in believing that the individual, who was for all intents and purposes dressed like a genuine police officer, was a policeman.

It followed that Mahlangu was not negligent in opening the gate to establish what the police officer wanted and could not be criticised for assuming that he was dealing with a policeman engaged in official patrol. No reasonable person in Mahlangu’s position could have believed that he was not dealing with a genuine policeman. Mahlangu was not negligent in being duped by the robbers. A bonus paterfamilias would not have foreseen that he was opening the gate to robbers and that he would be overpowered.

Moreover, Mahlangu could not lawfully resist opening the gate to a policeman’s demand for entry to the premises if he had legitimate grounds for doing so. He, at all times, acted in good faith under the impression that he was assisting the police. He could not be held to have acted unlawfully when he opened the gate to speak to a ‘policeman’.

Immigration

Unreasonable delay in making decision to grant or deny visa: In Buthelezi and Another v Minister of Home Affairs and Others 2013 (3) SA 325 (SCA) on two occasions in the recent past the Dalai Lama, the spiritual leader of the Gelug school of Tibetan Buddhism and his entourage applied for visas to enter South Africa. The first respondent, the Minister of Home Affairs, made no decision to grant or refuse visas and, as a result, the visits were cancelled.

The appellants, Buthelezi and another, both being members of the National Assembly, and who intended inviting the Dalai Lama to the country, sought an order declaring that the conduct of the Minister in failing to make a decision on the granting or refusal of the visas was unlawful and therefore sought an assurance that it would not happen again.

The WCC per Baartman and Davis JJ held that, since the occasions for which the Dalai Lama had been invited to come to the country were a thing of the past, the issue of visas was no longer live. An appeal against the High Court order was upheld with costs.

Nugent JA (Heher, Tshiqi, Wallis JJA and Mbha AJA concurring) held that what was justified by the evidence was an inference that the issue of granting visas was deliberately delayed so as to avoid a decision. It could not be over-emphasised that the Minister was not entitled to deliberately procrastinate. Procrastination by itself established unreasonable delay. The Minister unreasonably delayed her decision whether to grant or withhold the visas, for some four months and, in doing so, acted unlawfully.

Motor vehicle accidents

Limit in respect of annual loss of income or support: Section 17(4)(c) of the Road Accident Fund Act 56 of 1996 (the Act) provides, among others, that where a claim for compensation includes a claim for loss of income or support, the annual loss – irrespective of the actual loss – shall be proportionately calculated to an amount not exceeding R 160 000 per year in the case of a claim for loss of income and in respect of each deceased breadwinner in the case of a claim for loss of support. In terms of s 4A(a) the Road Accident Fund is required, by notice in the Government Gazette, to adjust the amounts referred to above quarterly in order to counter the effect of inflation.

In Sil and Others v Road Accident Fund 2013 (3) SA 402 (GSJ) the breadwinner, Mr Brzdek, was killed in a motor vehicle collision in respect of which the defendant, the Road Accident Fund (the fund) initially accepted liability for funeral expenses only, but eventually also accepted liability for loss of support suffered by the widow and her two children. As a result the only outstanding issue was the amount of such loss. The court made an order as to the amount to be given to each defendant and costs.

Sutherland J held that s 17(4)(c) meant firstly that an amount, referred to as ‘annual loss’, was to be calculated. Secondly, that amount was to be recalculated having regard to the maximum sum as adjusted every quarter of the year. Therefore, if the initial ‘annual loss’ so calculated was higher than the prescribed sum, the maximum notional ‘annual loss’ was that maximum; whereas if the initial ‘annual loss’ was less than the prescribed sum, the notional ‘annual loss’ was that lesser amount.

Because the purpose of the capping (limiting the annual loss to be paid) was merely to limit the sum to be paid, and its purpose was not to interfere in the calculation of the loss, the contingencies were part of the exercise in calculating actual loss and should therefore already have been dealt with before capping was applied to calculating the amount of compensation. The artificially set maxima existed to resolve the challenges to the fund in funding the demands made on it and not to prescribe a new methodology of calculating loss. Therefore, the practice of calculating contingencies as it existed for decades did not have to be disturbed.

Practice

Power of the court to set aside referee’s report if it is patently unreasonable, irregular or incorrect: Section 19bis(1) of the Supreme Court Act 59 of 1959 (the Act) provides that in any civil proceedings any court may, with the consent of the parties, refer any matter that requires extensive examination of documents which, in the opinion of the court, cannot be conveniently conducted by it; or any matter that relates wholly or in part to accounts for inquiry and report to a referee and the court may adopt the report of any such referee, either wholly or in part, and either with or without modifications, or may remit such report for further inquiry or report or consideration by such referee or make such other order in regard thereto as may be necessary or desirable. Subsection (2) provides that such report or any part thereof which is adopted by the court, whether with or without modifications, shall have effect as if it were a finding by the court in civil proceedings in question.

In Wright v Wright and Another 2013 (3) SA 360 (GSJ) the court had made an order to the effect that there was a partnership in existence between the applicant William Wright and the first respondent Alec Wright, which partnership had since been dissolved. As a result the first respondent was ordered to provide an accounting of the partnership business to be debated and the amount due to the applicant, if any, to be paid to him. The parties were not able to resolve the dispute and, as a result, agreed that the first respondent’s indebtedness to the applicant, if any, be determined by a referee in terms of s 19bis(1).

The referee duly determined that the first respondent was indebted to the applicant in an amount of just over R 1 million. Acting on the basis of the report, the applicant sought an order that the referee’s report be adopted and that the first respondent be ordered to pay the amount thus determined, with interest. The first respondent opposed the application and sought, by way of counter-application, an order that the application be referred to trial for a determination of whether the referee’s report should be rejected in whole or in part. The counter-application was dismissed with costs, the court adopting the report of the referee without modification and granting the main application with costs.

Kathree-Setiloane J held that the power of the court in terms of s 19bis(1) to make such other order as would be necessary or desirable included the power to set aside the findings of the referee if they were patently unreasonable, irregular or wrong. A court was afforded a wide discretion in terms of s 19bis. It could adopt any one of the courses provided for in the section, such as adopting the report of the referee either in whole or in part and either with or without modifications, or it could remit the report for further inquiry or report or consideration by the referee, or make such other order in regard to the findings of the referee as was necessary or desirable.

The power of the court to make such other report as was considered necessary or desirable included the power to set aside the report if it was patently unreasonable, irregular or incorrect or to refer the report or aspects thereof to oral evidence or trial if a real dispute of fact existed. The court could, however, only refer the question of whether to adopt the report or not to oral evidence or trial if a real dispute of fact was shown to exist in relation to the findings of the referee. In this case the first respondent failed to produce evidence that demonstrated that the referee’s report was unreasonable, irregular or wrong so as to lead to a patently inequitable result.

Unlawful occupation of land

Court to be specially sensitive to rights and needs of children, disabled mothers and woman-headed households: Section 4(7) of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (the Act) provides, among others, that if an unlawful occupier of land 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, and including the rights and needs of the elderly, children, disabled persons and households headed by women.

In Arendse v Arendse and Others 2013 (3) SA 347 (WCC) the applicant, Mrs Arendse, and the first respondent, Mr Arendse, were married to each other both in terms of Islamic law and in community of property under the common law. The Islamic law marriage provided that the first respondent would make a gift of a Mahr (house) to the applicant, which gift was never made.

The couple had a matrimonial home and three children.  A few years later the civil law marriage was terminated through divorce. Eventually the Islamic marriage was also terminated through divorce, but the parties continued living together.

Thereafter the first respondent bought another house to which the parties relocated, the first respondent occupying a separate building in the back while the applicant and the minor children occupied the front part of the property. The first matrimonial home was sold, the bond paid off and the balance taken by the applicant.

After his remarriage the first respondent obtained a magistrate’s court order evicting the applicant and minor children from his house on the basis that they were in unlawful occupation of his house after the applicant allegedly failed to pay the agreed R 800 monthly rental. Evidence showed that the applicant was not financially independent as she was not only unemployed but was also unemployable because of health problems; she was epileptic, had bipolar mood disorder and was prone to impulsive behaviour, for example, excessive gambling.

In the present application the applicant sought a High Court order reviewing and setting aside the magistrate’s eviction order. The application was granted with costs that were limited to the attorney’s disbursements.

Meer J held that the inquiry conducted in the court a quo fell far short of the standards prescribed in s 4(6) and s 4(7) of the Act. From the evidence before the magistrate it was clear that the order sought involved an eviction of children by their father and also of a woman who, according to medical evidence, suffered from bipolar mood disorder secondary to a stroke, and of a household headed by such a woman. Yet the magistrate did not consider the right and needs of the children, the disabled applicant and the woman-headed household, as he was specifically enjoined to do by ss 4(6) and 4(7) of the Act. Nor did he consider whether alternative accommodation was available to them, a highly relevant consideration in all the circumstances.

A consideration of such relevant circumstances was specified in s 4 of the Act as a prerequisite to a court arriving at the opinion that it was just and equitable to grant an eviction order. Without considering the rights and needs of the applicant and her children the magistrate could not have formed the opinion that it was just and equitable to evict them. At the very least the rights and interests of the applicant’s children, faced with an eviction at the behest of their father who had parental obligations to them, ought to have loomed large in the extraordinary circumstances of the case.

The court a quo failed to consider the glaringly obvious fact that an eviction order would render the applicant and her children homeless, since no alternative accommodation had been provided. The applicant and her children’s right of access to adequate housing were infringed and, as a result, she was entitled to a declaration to that effect.

Other cases

Apart from the cases and material dealt with or referred to above the material under review also contained cases dealing with actual and commercial insolvency, affirmative action that is inconsistent with equality, appeal against part of court order, approach to hearsay evidence, attorney’s role in sale of property agreement, condonation for late filing of appeal, consumer credit agreement, costs against public official, defamation, detention of illegal foreigner, doctrine of common purpose, educator post establishment, enforceability of restraint of trade agreement, exclusive jurisdiction of the Labour Court, lien for necessary or useful expenses, liability of conveyancer for late transfer of property, medical negligence, ownership of bunkers, procedural fairness of administrative action, property rates clearance certificate, property zoning, recusal of presiding officer on basis of bias, rei vindicatio, rescission of judgment based on consent, review of tender award, social grants, stay of civil proceedings due to pending criminal prosecution, and subdivision of agricultural land.

This article was first published in De Rebus in 2013 (July) DR 50.