The law reports – September 2019

September 1st, 2019
x
Bookmark

July 2019 (4) South African Law Reports (pp 1 – 329)

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

Abbreviations

ECG: Eastern Cape Division, Grahamstown

GJ: Gauteng Local Division, Johannesburg

KZP: KwaZulu-Natal Division, Pietermaritzburg

LCC: Land Claims Court

MN: Mpumalanga Division, Nelspruit

SCA: Supreme Court of Appeal

WCC: Western Cape Division, Cape Town

Costs

Court’s discretion to order peregrine private individuals to furnish security for the costs of claims pursued against incolae of South Africa (SA): In Barker v Bishops Diocesan College and Others 2019 (4) SA 1 (WCC) the court had to decide whether to order the appellant, MB, a permanent resident of the United Kingdom who held no assets in SA, to furnish security for costs in a claim he was pursuing here against the respondent. The plaintiffs, MB and his parents, claimed damages from Bishops College (the school) for injuries MB sustained in SA in 2005. The plaintiffs did initially furnish security for the school’s costs but refused to increase it when the school later complained that the furnished security had been depleted by the costs since incurred. The school successfully applied to the High Court seized of the matter for an order directing the plaintiffs to furnish additional security, MB appealed to a Full Bench.

The court held that while peregrini were generally obliged to provide for security for costs for litigation conducted in SA, incolae had no right to demand it: It was a discretionary matter for the judge, who had to conduct a balancing exercise, taking into account considerations of equity and fairness; weighing the injustice to the plaintiff if prevented from pursuing his claim by an order for security, and the injustice to the defendant if no security was ordered. The court pointed out that a litigant resisting an application for security had to provide documentation to support allegations of impecuniosity, and a failure to do so might lead to the inference that the allegations were unfounded, and that undisclosed documentation would contradict them.

Applying these principles to the case, the court, per Steyn J (Yekiso and Schippers JJ concurring) found that if MB had wanted the High Court to consider his financial position in isolation from that of his parents, he should have shown, on a balance of probabilities, that being required to furnish security would stifle his action. It was incumbent on him to clearly set out the financial backing available to him from all sources, including his parents. Since it was probable that MB had access to funding from his parents, he had failed to show that he would be unable to furnish security if considered separately from them, or that he would as a result of this inability be unable to continue with the action. Hence the finding of the court a quo that MB was not impecunious was correct. The appeal was accordingly dismissed.

Delict

Municipal liability for flood damage: The facts in Bergrivier Municipality v Van Ryn Beck 2019 (4) SA 127 (SCA) were as follows: Following rainfall, the storm water system near Mr Van Ryn Beck’s home was overwhelmed, and his home flooded. He later sued the municipality for his damages, alleging it had negligently and wrongfully failed to –

  • provide an effective system;
  • maintain the system; and
  • timeously effect flood-prevention measures.

The High Court dismissed the action, concluding that the evidence established neither negligence, nor wrongfulness, nor causation. Van Ryn Beck then appealed to the Full Bench, which upheld the appeal. It was satisfied the evidence established those elements.

The municipality appealed to the SCA, which agreed with the High Court. In its view, as regards negligence, Van Ryn Beck had failed to establish what could be foreseen by the municipality, and what steps could have been taken to prevent the flooding.

Concerning wrongfulness, it stated that such a finding would result in an onerous duty on municipalities generally and would ignore the budgetary priorities of the Bergrivier Municipality, specifically.

Accordingly, it upheld the appeal, set aside the Full Bench’s order and substituted it with an order dismissing Van Ryn Beck’s appeal against the High Court’s decision.

 

Liability of a school for injury of a visitor to its property: In Parktown High School for Girls v Emeran and Another 2019 (4) SA 188 (SCA), the second respondent, a boy, attended a fashion show at Parktown High School for Girls organised by its representative council of students. After paying the entrance fee and entering the grounds, he at some point came to lean against a concrete table. The table, which was for use of learners, comprised of a top that rested on – but was not secured – to its base. When the second respondent so leaned, the top fell off and injured his hand.

The second respondent and his father, the first respondent, later instituted an action for their respective damages against the school. They based the action on the school’s alleged omission to secure the table tops.

In response the school raised a special plea that the state was the proper defendant. This was on the basis of s 60(1) of the South African Schools Act 84 of 1996. The first and second respondents, invoking s 60(4), contended that the school was properly cited.

The High Court dismissed the plea but granted the school leave to appeal to the SCA. The issue there was whether the omission was in connection with a ‘school activity’ (s 60(1)), which would render the state liable; or in connection with a ‘business’ or ‘enterprise’, which would result in the school being liable.

The SCA concluded that the show was merely a ‘school activity’ and not an ‘enterprise or business’, and accordingly held that the school had been miscited as the defendant.

It upheld the appeal, set aside the order of the High Court, and replaced it with an order upholding the special plea, and dismissing the first and second respondents’ claims.

 

Liability of a school for injury to a student: In Gora v Kingswood College and Others 2019 (4) SA 162 (ECG), by an oversight, a grade 9 history class at the first defendant school was left unattended for an hour. In that time, the plaintiff, a then 15-year-old minor, provoked a pupil, and was struck in the face by another 15-year-old pupil.

The blow shattered the plaintiff’s glasses and injured his eye. The plaintiff, now aged 20, sued the school for damages. The plaintiff’s claim was that leaving the class unattended was negligent and wrong. The school denied negligence, but asserted that, if negligence is established, then liability was excluded by the contract between the plaintiff’s parents and the school. The school did, however, concede wrongfulness.

The High Court, per Pickering J, found that the law was to the effect that the degree of supervision required was dependent on the risks in the environment concerned. Here, it was not foreseeable that should the class be left unattended, the incident would occur. This was because –

  • there were no inherent risks in the classroom;
  • the school was ‘extremely well regulated’;
  • pupils were left unsupervised outside the classroom daily, without incident; and
  • the age of the plaintiff and the boy he had provoked supported an expectation that they would act maturely.

Accordingly, neither negligence nor indeed gross negligence having been established, the action was dismissed.

Divorce law

Permitted exclusions from accruals: In BF v RF 2019 (4) SA 145 (GJ) the husband (respondent) and wife (appellant), were married out of community of property with accrual. They were involved in divorce proceedings, and disputed a clause of their antenuptial contract, excluding, inter alia, certain shares from the husband’s estate, for purposes of the accrual calculation.

On the commencement of the marriage the husband had possessed a certain number of the shares, which, it was agreed, would be excluded from the calculation. But during the marriage the husband had acquired further shares in the same company, and the issue was whether these were excluded from his estate for accrual purposes. The additional shares had not been acquired through the fruits or realisation of any of the shares possessed at the commencement of the marriage.

The judge – who was presented with the issue in a stated case – held that the clause excluded the shares acquired after commencement of the marriage. Dissatisfied, the wife appealed to the Full Bench. Sutherland J (Matojane J concurring, Siwendu J dissenting) found that properly interpreted, the clause did not exclude the later-acquired shares from the husband’s estate. Moreover, the Matrimonial Property Act 88 of 1984 only permitted exclusion – in an antenuptial contract – of assets actually possessed at the commencement of the marriage. These, and assets acquired later, by virtue of them, could alone be excluded. Assets not already possessed on commencement, and which would not derive from assets held on commencement, could not be excluded.

The appeal was upheld, and it was declared, inter alia, that only the shares possessed at the commencement of the marriage were excluded from the accrual calculation.

Equality legislation

Poverty qualifying as unlisted prohibited ground of unfair discrimination under the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (the Act): Social Justice Coalition and Others v Minister of Police and Others 2019 (4) SA 82 (WCC) dealt with the separated issue of whether the South African Police Service’s human resources allocation policy in the Western Cape indirectly resulted in unfair discrimination – as contemplated in the Act – against black and poor people. While race is listed under para (a) of the ‘prohibited grounds’ of discrimination in s 1 of the Act, poverty is not. This raised the issue whether poverty constituted ‘any other ground’ under para (b) of the ‘prohibited grounds’.

The court, per Dolamo J (Boqwana J concurring), agreed with the applicant that while the policy was ostensibly intended to benefit historically poor and black areas, it resulted in allocations, which were skewed in favour of privileged and historically white areas. It held that this prima facie constituted indirect discrimination on the listed ground of race and on the unlisted ground of poverty; and that, the respondents having failed to discharge the onus of proving that such discrimination was fair, it constituted unfair discrimination under the Act.

Financial institutions

Liability of financial adviser for losses incurred by investor: In Symons NO and Another v Rob Roy Investments CC t/a Assetsure 2019 (4) SA 112 (KZP) the plaintiffs, the trustees of a family trust, instituted an action against their former financial adviser for damages incurred when the company recommended by the adviser for investment collapsed. The respondent close corporation was represented by one Griffen, a financial adviser registered with the Financial Services Board as a financial services provider.

The background of the investment decision was as follows: When the first plaintiff, Symons, a wealthy former company director, in May 2009 told Griffen, his financial adviser, that he was interested in investments that would produce a monthly income, the latter mentioned Sharemax Investments (Pty) Ltd, a property syndication scheme. Griffen explained that the Sharemax product was an investment in a shopping mall and that Symons would receive 12,5 % interest from the date of the investment. Griffen left Symons a brochure and a prospectus that, inter alia, described the investment as a risk capital investment in a newly formed company. Two weeks later Symons signed the investment documents. He eventually invested R 5 million in Sharemax.

The Reserve Bank, however, intervened in Sharemax’s affairs, accusing it of taking unlawful deposits from the public and directing it to change its funding model, which it was unable to do. Finding it impossible to raise further funds, Sharemax collapsed. While Symons did not initially blame Griffen for having recommended Sharemax, he together with his fellow trustees eventually sued, alleging that the defendant had undertaken –

  • to advise the plaintiffs on low-risk investments;
  • to execute its mandate with the diligence and skill expected of financial advisers (which it represented it possessed); and
  • that it would not recommend any investment until it had satisfied itself that it was low-risk.

The plaintiffs contended that, contrary to these undertakings, the defendant persuaded them to invest in Sharemax, which it falsely represented to be a low-risk investment with guaranteed returns. This, and defendant’s failure to exercise the requisite level of skill and diligence by properly investigating Sharemax, resulted in the loss of their investment. The plaintiffs specifically pleaded that it was a material term of the agreement that it was a low-risk investment.

In deciding whether the defendant was liable, the court considered the following issues –

  • the risk attaching to the investment;
  • whether the defendant breached its contractual obligations; and
  • whether any such breach was the cause of the plaintiffs’ loss.

The court, per Ploos van Amstel J, held that the allegation that the defendant, via Griffen, breached its contractual obligations by advising the plaintiffs to invest in Sharemax made little sense since Symons understood that he was investing in a syndicated property development, and since the documents he had signed made it clear that repayment of income and capital were not guaranteed, there was no basis for a finding that Griffen had told him otherwise. The court was satisfied that, on the information given to Symons, he was able to make an informed decision, and it was probable that he substantially understood the nature of the investment and went into it with his eyes open. Symons’ initial failure to blame Griffen pointed to the aim of the action being to get compensation from the defendant’s professional indemnity insurer without having to go to court.

In the circumstances it could not be said that Griffen breached his contractual obligations to the plaintiffs, but even if it were so, the cause of the loss was not any breach on the part of the defendant; it was the unforeseeable intervention of the Reserve Bank, which caused the collapse of Sharemax, and therefore, such breach was not causally connected to plaintiffs’ loss. In the final analysis Symons was an astute businessman who made a considered investment when the intervention of the Reserve Bank, the cause of his loss, was not foreseeable by Griffen. Accordingly, it was held that the plaintiffs failed to establish liability on the part of the defendant. The claim was dismissed with costs.

Land reform

The legal status of a valuation by the Office of the Valuer-General in determination of just and equitable compensation: In Emakhasaneni Community and Others v Minister of Rural Development and Land Reform and Others 2019 (4) SA 286 (LCC) – a matter where, by agreement between the parties, ‘just and equitable compensation’ was to be determined by the LCC – the state parties (the Minister of Rural Development and Land Reform, and the Regional Land Claims Commissioner KwaZulu-Natal) contended that both they and the LCC were bound by the Office of the Valuer-General’s valuation.

For their stance the state parties relied on s 12(1)(a) of the Property Valuation Act 17 of 2014 (read with the definition of ‘value’ in the Act), which in relevant part provides that ‘[w]henever a property has been identified for –

(a) purposes of land reform, that property must be valued by the Office of the Valuer-General for purposes of determining the value of the property having regard to the prescribed criteria, procedures and guidelines’.

The court (per Canca AJ and assessor EJ Sibeko concurring), however, rejected the state parties’ interpretation of the Act, holding that on a proper reading the court retained the power to determine just and equitable compensation in respect of land, identified for land reform purposes, purchased by the minister. Neither the court nor the minister was not bound by the Office of the Valuer-General’s determination of value. In the result the minister was not prevented from paying compensation that exceeded the value determined by the Office of the Valuer-General.

The Office of the Valuer-General’s determination, the court pointed out, could at best be used as a guideline by the minister when negotiating the purchase price of any property they intended acquiring under s 42D of the Restitution of Land Rights Act 22 of 1994, and the landowner should then be able to approach the court for a determination of the just and equitable compensation should they be unhappy with the Office of the Valuer-General-based valuation at which the minister undertook to acquire the property.

Practice

Rescission application not suspending execution: In Pine Glow Investments (Pty) Ltd and Others v Brick-On-Brick Property and Others 2019 (4) SA 75 (MN) the applicant sought an order, inter alia, that certain judgments and orders were operational and executable. One of the respondent’s grounds of opposition was that there were rescission applications pending against certain of the orders, which they contended automatically suspended such orders.

For this contention the respondents relied on Peniel Developments (Pty) Ltd and Another v Pietersen and Others 2014 (2) SA 503 (GJ); [2014] 2 All SA 219 (GJ), where it was held that there was nothing in law that prevented a court from extending the common-law rule relating to the automatic suspension of orders pending appeal, to applications for rescission.

The court, per Legodi JP, declined to follow Peniel. The real question, it stated, was whether it was necessary to develop or extend the common-law rule to apply to rescission applications, in order to automatically suspend the operation of an order of court, in circumstances where a procedural rule is provided in the Uniform Rules of Court. In this regard it noted that an application for the rescission of a court order did not automatically suspend its execution, and that a party fearing irreparable harm from the execution of a bad order could apply under r 45A of the Uniform Rules of Court. (This rule provides that: ‘The court may suspend the execution of any order for such period as it may deem fit’.) The court accordingly concluded that it should not develop the common law in this regard, for to do so would result in parties resorting to meritless rescission applications to frustrate the execution of judgments or orders.

Road Accident Fund claims

What constitutes a ‘motor vehicle’: Mbele v Road Accident Fund 2019 (4) SA 65 (WCC) concerned an appeal to a High Court Full Bench against the dismissal by Desai J of a loss of support claim against the Road Accident Fund (the Fund). The appellant’s husband, a stevedore, had succumbed to injuries sustained after he was knocked over at his workplace in Cape Town Harbour, by a ‘reach stacker’. The ‘reach stacker’ is a large diesel-powered machine, 12 metres long and 4 metres wide, weighing over 70 tons, and designed to grab, lift, move and load ocean containers.

It appeared that while the stacker had a normal Cape Town registration number, its weight and size prevented it from operating on public roads without appropriate escort. In its day-to-day operations it did duty on both public and non-statutory roads within Cape Town Harbour. The court a quo agreed with the Fund’s basis for disputing liability: That the stacker was not a ‘motor vehicle’ as contemplated in s 1 of the Road Accident Fund Act 56 of 1996 (the Act), thus excluding the claim from the ambit of the Act.

The Full Bench’s approach was that the issue was to be decided by objectively ascertaining what the primary purpose of the design of the road stacker was; and if, in giving effect to that purpose it might need to travel on a road, that it would follow that it was a ‘motor vehicle’ as defined in the Act. The test was, therefore, not whether it travelled on roads, but whether, viewed objectively, the persons responsible for its design intended that it should be propelled on a road.

The court, per Gamble J (Le Grange J and Sievers AJ concurring) applied the above test to find that:

  • the stacker was clearly designed and equipped to move around the harbour along roads and over adjacent areas such as parking and storage lots in the ordinary course of its work;
  • its everyday functions required it to traverse both public and non-statutory roads; and
  • its designers, objectively viewed, would have contemplated that it would be required to be propelled along such roads.

The court accordingly concluded that the stacker was a motor vehicle as intended in s 1 of the Act and upheld the appeal.

Other cases

Apart from the cases and material dealt with or referred to above, the material under review also contained cases dealing with –

  • admission and enrolment requirements of an LLB degree obtained at any university and not encompassing private higher education institutions;
  • change in shareholding of company solely or mainly for purpose of utilising assessed loss;
  • creation of bus lane bounded by rumbling stones and solid island;
  • exceptional circumstances in leave to appeal;
  • handing-over of the bride as a requirement for customary marriage;
  • judgment rewritten by an attorney with approval of the magistrate;
  • referral of a decision by the SCA refusing leave to appeal; and
  • the requirement of where judgment or order arising from act or transaction connected with possession of ‘matter or material’.

This article was first published in De Rebus in 2019 (September) DR 17.