The law reports – December 2013

December 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.

October 2013 (5) The South African Law Reports (pp 325 – 639); [2013] 3 The All South African Law Reports September no 1 (pp 481 – 603) and no 2 (pp 605 – 670)

Abbreviations

CC: Constitutional Court

GNP: Gauteng North High Court, Pretoria

GSJ: Gauteng South High Court, Johannesburg

KZD: KwaZulu-Natal High Court, Durban

SCA: Supreme Court of Appeal

WCC: Western Cape High Court, Cape Town

Civil procedure

Service of summons on employee of another entity: Rule 4(1)(a)(v) of the uniform rules of court provides that service of any process of the court directed to the sheriff shall be effected by the sheriff in one or other of the following manners, namely in the case of a close corporation or company, by delivery of a copy to a responsible employee thereof at its registered office or its principal place of business within the court’s jurisdiction, or if there be no such employee willing to accept the service, by affixing a copy to the main door of such office or place or in any other manner provided by law.

In Arendsnes Sweefspoor CC v Botha 2013 (5) SA 399 (SCA), [2013] 3 All SA 605 (SCA) the appellant, Arends­nes, was a close corporation that had a registered office but had ceased trading and had no presence there. A summons issued against it was served by the sheriff there on one P. However, P was not an employee of the appellant but of another entity that was conducting business at the premises.

The appellant contended that, as the summons had not been affixed to the main door at the premises but was served on an employee of another entity, there was no proper service with the result that the debt had prescribed. The GNP, per Stockwell AJ, dismissed the special plea of prescription. An appeal to the SCA was dismissed with costs.

Shongwe JA (Mthiyane DP, Pillay and Petse JJA concurring and Leach JA reading a separate concurring judgment) held that effectiveness of the service of a court process or substantial compliance should trump form. In other words, by reason of the fact that a copy of the summons was served at the registered office of the appellant there had been substantial compliance with the requirements of r 4(1)(a)(v) even though the service did not strictly comply with the rule. It would not be a proper exercise of a court’s discretion to uphold the special plea in circumstances where there was substantial compliance with the rules. Moreover, a corporation should not be permitted to register an office address where it had no purpose or business and by so doing frustrate service of summons and other court processes on it.

Constitutional law

Constitutional damages for infringement of the right to parental care: In M and Another v Minister of Police 2013 (5) SA 622 (GNP) one WM died in police custody after he was seriously assaulted by fellow police cell inmates. As a result his two wives sued the defendant, the Minister of Police, for the loss of support they suffered. Furthermore, they also sued for loss of parental care suffered by their minor children as a result of the death of their father.

The claim for the loss of support suffered by the wives was settled in terms of an agreement that was made an order of court. After preparing a stated case in terms of which the facts were agreed, the parties requested the court to adjudicate on whether the minor children’s action for loss of parental care was sustainable in law. The court held that such a claim was valid and ordered the defendant to pay costs. The issue of quantum was referred to the trial court for determination.

Mothle J held that although South Africa, unlike some countries, did not have a statute providing for compensation to any child for damages consequent to the unlawful death of a parent at the hands of a third party, the law nevertheless recognised that con­stitutional damages could be awarded as appropriate relief in compensation for loss suffered as a consequence of the unlawful infringement of a constitutional right. In this regard, a court could fashion a new remedy and make an award in the form of constitutional damages as appropriate relief to compensate for an infringement of that right.

Any claim for damages on behalf of a minor child had to be based on the provisions of s 28 of the Constitution (children’s rights) read with the relevant provisions of the Children’s Act 38 of 2005 (the Act). A party intending to claim damages on behalf of a child for loss of parental care as a result of the unlawful death of a parent should also base such a claim on s 28 of the Constitution read with the relevant provisions of the Act, depending on which specific right was alleged to have been infringed.

The cause of action for such constitutional damages should be stated in terms of s 15 of the Act as appropriate relief in the form of a claim for damages arising out of loss of parental care. The court cautioned though that a child could not claim for both loss of support and deprivation of parental care separately as the former was part of the latter. Claiming for both would be a duplication and amount to undue enrichment.

 

Separation of powers between the judiciary and executive: Section 2 of the Performing Animals Protection Act 24 of 1935 (the Act) provides that any person intending to exhibit or train for exhibition any animals, or who uses a dog for safeguarding, may apply in writing in the prescribed manner to the magistrate of his or her district for a licence to do so. Section 3 provides that the holder of a licence shall not exhibit, train or use any dog for safeguarding unless he or she is in possession of a certificate authorising such exhibition, training or use of all animals covered by the licence.

The constitutionality of these provisions was challen­ged in NSPCA v Minister of Agri­culture, Forestry and Fisheries and Others 2013 (5) SA 571 (CC) where the applicant, the National Society for the Prevention of Cruelty to Animals (NSPCA), contended that they encroached on the principle of separation of powers between the judiciary and the executive by empowering a judicial officer, a magistrate, to do a non-judicial function, namely an administrative func­tion of granting licences.

The GNP held, per Legodi J, that the provisions were unconstitutional and declared the sections invalid. Pending confirmation of the invalidity order by the CC the High Court ordered that a committee consisting of five members had to perform the licensing function.

The invalidity order was confirmed by the CC that amended the High Court order by removing the part relating to the appointment of the committee of five. The court suspended the order of invalidity for a period of 18 months during which the sections would continue to apply. No order was made as to costs.

Reading a unanimous judgment of the court, Zondo J held that although the South African model of separation of powers was not one that required a complete or total separation and it permitted the performance of some non-judicial functions by the judiciary, the court had to take an approach that promoted rather than diluted the principle of separation of powers and the independence of the judiciary. In other words, while the approach to be taken should enhance and promote the se­paration of powers, it had at the same time to be based on an acceptance that there would always be some administrative functions that members of the judiciary would perform from time to time without infringing the doctrine of separation of powers

The performance by the judiciary of administrative functions that the Constitution sanctioned did not offend against the doctrine. Furthermore, the performance of certain administrative functions by the judiciary that were closely connected with the core function of the judiciary did not offend the doctrine. The appropriate approach to be followed involved the following questions, namely:

  • Whether the function complained of was a non-judicial one. It if was a judicial function, that was the end of the inquiry as there could be no concern. If it was a non-judicial function, the inquiry proceeded to the next question.
  • Whether the performance of the non-judicial function by a member of the judiciary was expressly provided for in the Constitution. If it was, that was the end of the inquiry as there could be no infringement of the separation of powers doctrine. If it was not, the inquiry proceeded to the next question.
  • Whether the non-judicial function was closely connected with the core function of the judiciary. If it was, the doctrine was not offended. If not, the inquiry proceeded to the next question.
  • Whether there was a compelling reason why a non-judicial function that was not closely connected with the core function of the judiciary should be performed by a member of the judiciary and not be the executive or a person appointed by the executive for that purpose.

In the instant case the performance by a magistrate of the function complained of offended against separation of powers doctrine and was therefore inconsistent with the Constitution as there was no compelling reason why it could not be performed by the executive or some other person appointed by the executive.

Consumer credit agreements

Unlawful service charges: Section 101(1) of the National Credit Act 34 of 2005 (the NCA) provides, among others, that a credit agreement must not require payment by the consumer of any money or other consideration except the principal debt, initiation fee and a service fee that must not exceed the prescribed amount relative to the debt.

In Barko Financial Services (Pty) Ltd v National Credit Regulator and Another 2013 (5) SA 370 (GNP) the amount of the prescribed service fee agreement was R 50 per month per transaction. The credit provider was the appellant Barko, which provided credit services to a number of consumers. After investigating the business activities of the appellant the first respondent, the National Credit Regulator, found them inconsistent with the NCA and issued a compliance notice requiring the appellant to make repayment to the consumers. The compliance notice was upheld by the National Consumer Tribunal against whose decision the appellant appealed to the High Court.

In terms of an agreement concluded between the appellant and the consumer, the latter had to pay a service fee to the former. Furthermore, the consumer had to pay an additional service fee to a third party, NuPay, with whom the consumer did not have a separate agreement. That payment was in excess of the prescribed R 50 per month and was made for a service rendered by NuPay to the appellant, not to the consumer. Furthermore, such payment was made to the appellant from whom NuPay would collect it. The appellant’s appeal against the decision of the National Consumer Tribunal was dismissed with costs.

Pretorius J (Vorster and Hughes AJJA concurring) held that s 101(1) of the NCA did not make provision for the consumer to pay additional fees that would exceed the prescribed amount of R 50. In the instant case, even though the appellant argued that the consumer benefitted from the services of NuPay, it was in fact the appellant who benefitted. An additional monetary liability was imposed on the consumer by the so-called agreement with NuPay in respect of which the appellant contravened s 100(1)(d). The capped service fee of the appellant was R 50 but, in addition, the consumer had to pay a monthly service fee to NuPay. The appellant contravened s 90(2) by providing for an additional service fee and evading the provisions of s 101.

Exchange control

Validity of 10% levy imposed on removal of funds from the country: In February 2003 after his budget speech the Minister of Finance released a circular announcing that anyone leaving the country would be allowed to take with a maximum amount of R 750 000 and that taking any amount in excess thereof would need authorisation from the Exchange Control Department of the South African Reserve Bank (SARB). If granted, such authorisation would be conditional on the emigrant paying a 10% levy on such extra amount. The circular was issued pursuant to the exchange control regulations made in terms of the Currency and Exchanges Act 9 of 1933 (the Act).

In Shuttleworth v South African Reserve Bank and Others [2013] 3 All SA 625 (GNP) the applicant Shuttleworth (S) was a South African citizen who emigrated to the Isle of Man, British Isles, in 2001 and had an amount of R 4,27 billion to take along. It was arranged that the amount would be taken in blocks. In 2009 S sought to take the last block of some R 2,5 billion.

The first respondent, the SARB, through its Exchange Control Department, approved the removal of the funds from the country but subject to the 10% levy of some R 250 million which S duly paid, although under protest. Thereafter the applicant sought an order reviewing and setting aside the levy of 10% imposed on him, the return of the amount thus paid together with interest. He also sought an order declaring a number of regulations unconstitutional, as well as one declaring invalid the ‘closed door policy’ of the SARB in terms of which members of the public wishing to take money out of the country made application to authorised dealers or commercial banks instead of dealing directly with the SARB.

Under challenge also was the power of the president of the country to make regulations amending or suspending any part of the Act or any other Act of parliament. The application succeeded in part but failed in a number of respects. As a result each party was ordered to pay their own costs. Some regulations that were found unconstitutional were struck down, while the invalidity others was suspended for 12 months.

Legodi J held that the first respondent’s ‘closed door policy’ was neither unlawful nor unconstitutionally unfair since providing information or advice on exchange control or currency matters as well as granting approval or permission in respect of exchange, currency and gold transactions were governed by the regulations. When those roles were assigned to commercial banks it could not be said that there was no empowering authority for doing so.

Turning to the 10% levy, the court held that once it was found that the decision to impose a levy was derived from the empowering s 9(1) of the Act and reg 10(1)(c), there was nothing left of the track of unconstitutionality of the rules, circulars and rulings issued by the minister. The object of the levy was to limit the adverse consequences of the outflow of funds on the external balance of payments that was necessary to maintain the country’s macro-economic health and to promote financial growth and stability.

On the question of s 9(3) of the Act the court held that it gave the president not only the power, through regulations, to amend or suspend any part of the Act and any other law relating to currency, banking or exchange but also the power to amend or suspend any other Act of parliament. That was an extraordinary wide power that effectively vested in the president the power to amend or suspend any Act of parliament irrespective of whether that other piece of legislation dealt with issues of currency, banking or exchange. Without further ado, s 9(3) had to be found to be inconsistent with the Constitution.

Foreign judgments and orders

Recognition of foreign judgments and orders: Article 32 of the Tribunal Protocol (the tribunal) provides, among others, that states and institutions of the Southern African Development Community shall take all measures necessary to ensure execution of decisions of the tribunal. It further provides that those decisions shall be binding on the parties to the dispute in respect of the particular case and will be enforceable within the territories of the states.

The tribunal was established in terms of the Treaty of the Southern African Development Community (the treaty) to which South Africa and Zimbabwe belong. The goals of the treaty include guaranteeing democratic rights as well as observing human rights and the rule of law.

These goals were disregarded in Zimbabwe and led to litigation in Government of the Republic of Zimbabwe v Fick and Others 2013 (5) SA 325 (CC) when the appellant, the government of Zimbabwe, acting in terms of the constitution of that country, expropriated agricultural land belonging to commercial farmers without compensation. The same constitution denied farmers access to courts regarding complaints about expropriation. As a result the respondents, being Fick and others, took the matter to the tribunal in terms of art 32.

The tribunal made a ruling, with costs, in favour of the respondents but that ruling had to be taken to the summit of the treaty consisting of heads of state or government for final determination. In the meantime the respondents wanted to execute the costs order and, since that could not be done in Zimbabwe because of the provisions of the constitution of that country, they turned to South Africa to attach and execute on property of the appellant situated in this country.

The GNP, per Rabie J found in favour of the respondents, as did the SCA. As a result the appellant appealed to the CC, contending in the main that as a sovereign state it was immune from civil litigation in South Africa as provided for in the Foreign States Immunities Act 87 of 1981 (the Immunities Act). The CC granted leave to appeal to it but dismissed the appeal with costs.

Reading the main judgment, from which Jafta J dissented, Mogoeng CJ held that art 32 of the tribunal imposed a legal obligation on South Africa to take all legal steps necessary to facilitate the execution of decisions taken. Although, in terms of the Immunities Act, the government of Zimbabwe would be immune from the jurisdiction of the courts of South Africa that would not be so if immunity was expressly waived. In the instant case such waiver took place when Zimbabwe agreed to be bound by the tribunal.

More problematic though was the fact that, in terms of s 2(1) of the Enforcement of Foreign Civil Judgments Act 32 of 1988 (the Enforcement Act), foreign civil judgments could be enforced in South Africa if they were granted by a component of the ‘domestic court system of any country’ whereas the tribunal was not part of the domestic system of any country. Moreover, the application of the Enforcement Act was confined to South African magistrates’ courts. To overcome this problem and put the superior courts in a position to enforce an order of the tribunal, the CC held that the common law had to be developed to extend the meaning of a ‘foreign court’ to include the tribunal.

As a result s 34 of the Constitution, which makes provision for access to courts, had to be interpreted, and the common law developed, so as to grant the right of access to South African courts to facilitate the enforcement of the decisions of the tribunal in this country. Such development of the common law was not retrospective but was confined to the instant case and future matters.

Government procurement

Interdicting a tender that was not awarded to highest-scoring tenderer: In WJ Building & Civil Engineering Contractors CC v Umhlathuze Municipality and Another 2013 (5) SA 461 (KZD) after the first respondent municipality, Umhlathuze Municipality (Richards Bay) invited bids for a building contract for sewage works, the applicant WJ Building (WJ) emerged as the apparent winner after scoring the highest points and offering the lowest price. However, the tender was awarded to the runner-up, the second respondent PC.

The reason for not awarding the tender to the front-runner was that it had in the recent past been awarded two contracts, this creating a desire on the part of the municipality to rotate the award of tenders. However, such considerations were not part of the bidding process. Aggrieved by the award of the tender, the applicant sought an interdict restraining the execution of the contract pending prosecution of review proceedings to have the award set aside. The interdict was granted, costs being reserved for determination in review proceedings.

Lopes J held that the municipality’s rationale for not awarding the contract to the appellant, which scored the highest points, had to be based on objective criteria that were reasonable and justifiable. On the contrary, the reasons put forward by the municipality’s evaluation committee were arbitrary and did not appear in the tender invitation advertisement, the Preferential Procurement Policy Framework Act 5 of 2000 (the PPPFA) or the preferential procurement regulations, nor were they evident from the municipality’s preferential procurement policy.

The arbitrary use of any measure to determine the success or failure of a bid was contrary to the functions required of the bid evaluation committee by the municipality’s supply chain management policy. The fact that the applicant might have benefitted from previous projects was not, of itself, a reason for rejecting its bid. The deciding number of previous projects, for example, was an arbitrary decision by the bid evaluation committee.

The need to encourage rotation of service providers, which could be a legitimate objective of the municipality, was nowhere expressed as a factor that could be taken into account in determining the successful bidder. It should have been reflected in the invitations to bid, otherwise tenderers would not have been able to consider and deal with it. Therefore, the award of the project to the second respondent was made on an unfair basis. The applicant had thus established a prima facie case for an interdict.

Labour law

Liability of a trade union for breach of mandate to represent its members after undertaking to do so: In Food and Allied Workers Union v Ngcobo NO and Another 2013 (5) SA 378 (SCA) Ndlela and Mkhize, the respondents, were employees of Nestlé and members of the appellant trade union, Food and Allied Workers Union (FAWU). After their unfair dismissal, in that they were informed of their retrenchment by the employer who did not follow the required retrenchment procedure as required by s 189 of the Labour Relations Act 66 of 1996 (the LRA), the appellant represented them at the Commission for Conciliation, Mediation and Arbitration (CCMA) where the dispute was not resolved and had to be referred to the Labour Court.

The respondents duly mandated the appellant to refer the dispute to the Labour Court. After much assurance that the dispute had been referred to the Labour Court as requested, the respondents established about a year later that no such referral had been done. At that stage the appellant advised that condonation for late referral of the dispute was required, but neither the appellant nor the respondents applied for the condonation.

As a result the respondents’ claim against the employer was lost. The respondents therefore instituted High Court proceedings against the appellant for breach of mandate in which they claimed what they would have recovered had their dispute with the employer been referred to the Labour Court

The KZD held, per Swain J, that the appellant had to pay the respondents’ damages in an amount equal to twelve months’ pay. The appellant appealed against that decision while the respondents cross-appealed, seeking damages in an amount equal to twenty-four months’ pay. Both the appeal and cross-appeal were dismissed, the appellant being ordered to pay the costs.

Ponnan JA and Plasket AJA (Malan and Tshiqi JJA concurring and Southwood AJA dissenting) held that the respondents’ claim was based on contract and not on delict. What the respondents were alleging was that there was a contract between the parties that imposed an obligation on the appellant, which the latter failed to perform in the manner contemplated by the contract.

That contract was a mandate that, once accepted, the appellant was obliged to perform its functions faithfully, honestly and with care and due diligence. The mandate given to the appellant was a relatively simple one in that all it had to do was to take such steps as were necessary to have the respondents’ labour dispute with their employer determined in accordance with the provisions of the LRA which the appellant could easily have done but did not, thus committing breach.

It committed breach in the first place by failing to timeously refer the respondents’ dispute with the employer to the Labour Court and, in the second place, by failing to secure condonation for that failure. In both instances it failed to act honestly or diligently. All that the respondents had to establish to succeed in the action against the appellant was that, had their dispute been referred by the appellant to the Labour Court in accordance with the terms of the mandate, it would have been resolved in their favour.

Marriage

No claim for prospective loss for breach of promise to marry: In the case of Cloete v Maritz 2013 (5) SA 448 (WCC) the facts were that in 1998 the plaintiff, Ms Cloete, and the defendant, Mr Maritz, orally agreed to marry each other within a reasonable time. As a result they became engaged in 1999.

Some ten years later, in 2009, the defendant repudiated the agreement by orally refusing to marry the plaintiff and informing her that he did not want to see her again as he had found someone new in his life.

This being the case, the plaintiff instituted a claim against him consisting of three heads, namely –

  • payment of the amount of donation that she allegedly made to him;
  • loss of financial benefits of the marriage in the form of enjoyment of immovable property and maintenance she would have received had the parties married; and
  • breach of her dignity and reputation by the contumelious manner in which the defendant breached the promise to marry, allegedly having used foul language and telling his new woman many things about the plaintiff.

The defendant raised a special plea to the claim for loss of financial benefits, contending that such claim was no longer available in South African law. The special plea was upheld and costs stood over for later determination.

Henney J held that the law relating to breach of promise to marry had to be considered in the light of the prevailing mores and public policy considerations if regard was to be had to the values that underlie the Constitution. The existing approach to engagement did not reflect the current boni mores or public policy considerations based on the values of the Constitution, that is, to see a party’s failure to honour his or her original promise to marry purely within the context of contractual damages was not acceptable.

To hold a party accountable on a rigid contractual footing where such party failed to abide by a promise to marry did not reflect the changed mores or public interest. To hold a party liable for contractual damages for breach of promise could lead parties to enter into marriages they did not in good conscience want to enter into, doing so purely due to fear of being faced with such a claim, which situation was untenable. Moreover, it would be illogical to recognise the irretrievable breakdown of marriage as a ground for divorce while not doing so in respect of the breakdown of an engagement.

Considerations of public policy and changed mores did not permit a party to be made to pay prospective damages on a purely contractual footing where such a party wanted to resile from a personal relationship and thus committed a breach of promise to marry. To base a claim for breach of promise to marry on a rigid contractual footing, in the sense that a claim for prospective losses would be permissible, was not a valid cause of action.

Motor vehicle accidents

Calculation of loss of income: In Jonosky v Road Acci­dent Fund 2013 (5) SA 356 (GSJ) the plaintiff, Jonosky, was injured in a motor vehicle collision and, as a result, instituted proceedings against the Road Accident Fund for recovery of compensation. All issues were settled save the amount of compensation for loss of income, which problem stemmed from different methods of calculation used by the parties’ actuaries, resulting in a difference of almost R 400 000.

The issue was therefore the correct interpretation and application of s 17(4)(c) and (4A)(b) of the Road Accident Fund 56 of 1996 (the Act). Section 17(4)(c) provides, among others, that where a claim for compensation includes a claim for loss of income the annual loss, irrespective of the actual loss, shall be proportionately calculated to an amount not exceeding R X per year in the case of a claim for loss of income. Section 17(4A)(b) on the other hand, provides that the amount, as adjusted quarterly in order to counter the effect of inflation, shall be the amount set out in the last notice issued prior to the date on which the cause of action arose.

Very briefly, the argument for the plaintiff was that the amount awarded in respect of both past and future loss of income had to be adjusted to counter the effect of inflation while for the defendant it was argued that no adjustment should be made for future loss of income as the future rate of inflation was subject to fluctuations and, as such, inexact while at best it was speculative.

Claassen J held that in cal­culating future loss of earnings beyond the date on which such calculation was made, an actuary was duty-bound to incorporate a projected future inflation rate on an annual basis. As a result the court awarded the higher amount sought by the plaintiff and granted the parties leave to prepare a draft order that would be made a final order of court.

It was held that s 17(4A)(b) contemplated the adjustment to the amounts stipulated in s 17(4)(c) in respect of a claim for loss of income as at the date when the loss occurred, this being the date of the collision. The subsection did not purport to deal with adjustments after the date on which the cause of action arose.

However, in respect of future annual loss, reliance had to be placed on the actuarial calculations of future loss of earnings which, in the past, had always taken into consideration a projected future inflation rate for each year up to the date of retirement. There was no need to disturb that methodology when calculating future loss of earnings.

There had always been a speculative ‘looking into a crystal ball’ to come up with a projected annual inflation rate during the future years up to retirement. Therefore the purpose of s 17(4A)(b) was intended to set a starting date for utilising adjustment amounts when calculating loss of earnings after the accident and for no other purpose.

Set-off

Debtor’s claim against pa­rent cannot be set-off against child’s claim: In Road Accident Fund v Myhill NO 2013 (5) SA 426 (SCA) a mother, one S, together with her two very young children, P and L, aged two years and four months respectively, were injured in a motor vehicle collision. Her attorney lodged a claim with the appellant, the Road Accident Fund.

For no very clear reasons the mother received no compensation at all, while P and L received offers of settlement in the amount of some R 8 000 and R 7 000 respectively from which the appellant deducted 30% for the mother’s alleged contributory negligence.

Some ten years later the respondent, Myhill, was appointed a curator ad litem to represent the minors and instituted proceedings for setting aside the settlement agreements on two grounds, namely that the amounts given were inadequate as the minors had suffered serious head injuries and also because set-off of the claims for a debt owed by the parent was not allowed. Moreover, new proceedings had been instituted on behalf of the minors in which a substantial amount of R 850 000 was sought for each child.

The GSJ, per Strydom AJ set aside the settlement agreements as they were prejudicial to the minors. An appeal to the SCA against that decision was dismissed with costs.

Leach JA (Brand, Shongwe JJA, Willis and Van der Merwe AJJA concurring) held that the settlement agreements fell to be rescinded. The relatively trifling amounts at which the children’s claims were settled bore no realistic relationship to the measure of their damages, regard being had to the nature and severity of the injuries and the very real prospect that they could experience epilepsy in the future. The agreements could not be allowed to stand as they caused the children to suffer substantial prejudice.

On the issue of set-off the court held that the general principle was trite that in order for set-off to operate between two parties there should be reciprocal indebtedness which, if both debts were equal, would lead to their mutual discharge or, if they were not equal, to the larger being reduced by the amount of the smaller. It was also trite that individuals in their personal capacities were treated as different persons when they acted in representative capacities.

Consequently, a debt owed by or to a person in his or her individual capacity could not be set off against a debt owed to or by the same person in a representative capacity whether as executor, trustee, custodial parent, stakeholder or however. The time had come for the SCA to put the matter beyond doubt and rule that a debtor liable to a minor child, when sued by the child’s custodian parent, was not allowed to set off against its liability to that child any amount that it might personally be owed by the custodian parent.

Accordingly, it was impermissible to reduce the appellant’s liability to the minors by way of setting off against the claims the alleged personal liability of their mother to it arising from contributory negligence on her part. In the instant case the two children were clearly prejudiced by the appellant having done so.

Unlawful competition

Validity of corporate leniency policy: The Competition Commission (the commission), which was established in terms of the Competition Act 89 of 1998 (the Act), has adopted a corporate leniency policy (CLP) in terms of which a member of a cartel (whistleblower) who provides information about the existence of a cartel and its activities would be granted immunity.

In Agri Wire (Pty) Ltd and Another v Commissioner, Com­­petition Commission, and Others 2013 (5) SA 484 (SCA), Consolidated Wire Industries (CWI) was a member of a cartel in the steel industry that engaged in price fixing, division of the market and collusive tenders. CWI disclosed the existence of the cartel, its membership and activities to the Commission.

After investigation, the commission referred a complaint to the commission tribunal seeking an order declaring that –

  • the activities of the cartel were unlawful;
  • members should desist from engaging in such unlawful activities; and
  • each one of them should pay a penalty equal to 10% of its annual turnover for the 2008 financial year.

A member of the cartel, the appellant Agri Wire, sought a High Court order setting aside the adoption of the CLP by the commission, its granting to CWI and that evidence obtained in terms thereof should not be used in follow-up proceedings. It was the appellant’s case that if a complaint was lodged with the Competition Tribunal it had to be against all members of the cartel and not selectively by excluding the whistleblower. The GNP, per Zondo J, dismissed the application. An appeal to the SCA was dismissed with costs.

Wallis and Pillay JJA (Nugent, Leach and Tshiqi JJA concurring) held that the commission was empowered by the Act to adopt and implement the CLP by giving conditional and total immunity to parties who made disclosure and provided evidence that enabled it to pursue cartels and bring them to an end. The Act specifically provided that the commission could refer all or some of the particulars of the complaint and could add particulars to the complaint submitted by the complainant. If the complaint was that A and B and C had engaged in cartel behaviour, the commission could decide to refer only A and B. In that way the commission would have exercised the express statutory power to exclude certain particulars, namely C from referral. Equally, when the commission decided to add D as a participant in the cartel, that was in accordance with the express provisions of the statute.

NB: ‘Corporate leniency policy’ was also dealt with in Competition Commission v Arcelormittal South Africa Ltd and Others 2013 (5) SA 538 (SCA) where the main issue was confidentiality of the contents of application for leniency and waiver of such confidentiality.

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 environmental authorisation, arbitration of building contract disputes, claim by creditor against insolvent’s insurer, commencement of liquidation proceedings, commissioning of affidavit, contributory negligence, deferral of summary judgment, detention of illegal immigrants, filing answering affidavit and replying affidavit, free residue in insolvency, full and final settlement, impermissible payments to trustee of medical scheme, interpretation of construction guarantee, mandament van spolie, medical negligence, power of local government to impose rates on property, proceedings by liquidator on behalf of company, procedural requirements for sale in execution, proof of oral agreement, racketeering activity, registration of title in immovable property by other than ordinary procedure, requirements for interim interdict and warrant to take possession of insolvent estate’s property.

This article was first published in De Rebus in 2013 (Dec) DR 35.