The law reports – December 2017

December 1st, 2017
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David Matlala BProc (University of the North) LLB (Wits) LLM (UCT) LLM (Harvard) LLD (Fort Hare)HDip Tax Law (Wits) is an adjunct professor of law at the University of Fort Hare.

October 2017 (5) South African Law Reports (pp 329 – 660); July [2017] 3 All South African Law Reports (pp 1 – 364); August [2017] 3 All South African Law Reports (pp 365 – 737); September [2017] 3 All South African Law Reports (pp 739 – 1076); 2017 (8) Butterworths Constitutional Law Reports – August (pp 949 – 1087)

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

Abbreviations

CC: Constitutional Court

ECG: Eastern Cape Division, Grahamstown

EqC, J: Equality Court, Gauteng Local Division, Johannesburg

GJ: Gauteng Local Division, Johannesburg

GP: Gauteng Division, Pretoria

SCA: Supreme Court of Appeal

WCC: Western Cape Division, Cape Town

Appeal – execution of judgment pending

Exceptional circumstances justifying execution of judgment pending finalisation of leave to appeal or appeal itself: Section 18(1) of the Superior Courts Act 10 of 2013 (the Act) provides that: ‘[U]nless the court under exceptional circumstances orders otherwise, the operation and execution of a decision which is the subject of an application for leave to appeal or of an appeal, is suspended pending the decision of the application or appeal.’ In other words unless the court orders, under exceptional circumstances, that execution of judgment may proceed, application for leave to appeal or the noting of an appeal suspends execution of judgment.

In Ntlemeza v Helen Suzman Foundation and Another 2017 (5) SA 402 (SCA); [2017] 3 All SA 589 (SCA) the then Minister of Police appointed the appellant, General Ntlemeza, as the national head of the Directorate for Priority Crime Investigation (DPCI), an institution commonly known as the ‘Hawks’. Section 17CA(1) of the South African Police Service Act 68 of 1995, which governs the DPCI, requires the person appointed as head of the institution to be a fit and proper person who has integrity. The first and second respondents, the Helen Suzman Foundation and Freedom Under Law NPC, both being non-profit organisations, approached the High Court for an order reviewing and setting aside the appointment of the appellant, alleging that his appointment by the minister was irrational and unlawful as he was not a fit and proper person and that he lacked integrity. The accusations stemmed from an earlier case of Sibiya v Minister of Police and Others (GP) (unreported case no 5203/2015, 20-2-2015) (Matojane J) in which the appellant, then as respondent, did a number of questionable things such as lying under oath, which led the presiding judge, Matojane J, to conclude that he was not a fit and proper person to lead the DPCI and further that he lacked integrity.

Because of adverse findings on the character of the appellant in the Sibiya case, the Full Court of the GP per Mabuse J (Kollapen and Baqwa JJ concurring) held that the appointment of the appellant was irrational and unlawful with the result that it was reviewed and set aside. The appellant applied for leave to appeal against the order, while the respondents launched a counter-application in terms of which they sought a declarator that the operation and execution of the order should not be suspended by virtue of any application for leave to appeal or any appeal. The High Court dismissed the appellant’s application for leave to appeal and upheld the counter-application. The court ruled that the operation and execution of its order would not be suspended and would accordingly continue to be operational and executed in full whether or not there were any applications for leave to appeal and appeal or whether or not there was any petition for leave to appeal against the order. As expected the appellant appealed against the execution order. The present matter was an appeal against the execution order, which the SCA dismissed with costs to be paid by the appellant personally. The personal payment of costs order was necessitated by the fact that although the state was not a party to the proceedings, it was nevertheless funding the appellant’s litigation, and that unfortunately for no apparent reason.

Navsa JA (Ponnan, Majiedt, Dambuza and Mathopo JJA concurring) held that there was no doubt that the counter-application by the respondents for leave to execute, had there not been one earlier, could have been and would have been competent after application for leave to appeal was filed in the court. Courts had to be guardians of their own processes and be quick to avoid a ‘toing and froing’ of litigants. The High Court’s order achieved that objective. A proper case had been made out by the respondents for anticipatory relief. The High Court reasonably apprehended on the evidence before it that further appeals were in the offing and issued an order that sought not just to crystallise the position but also to anticipate further appeal processes.

The proper functioning of the foremost corruption-busting and crime-fighting unit in the country dictated that it should be free of taint. The adverse prior judicial pronouncements and the place that the South African Police Service maintained in the constitutional scheme, as well as the vital role of the national head of the DPCI and the public interest, were all factors that weighed with the court in its conclusion that there were exceptional circumstances.

Attorneys

Contingency fee agreement – strict compliance with the Act required: In Mfengwana v Road Accident Fund 2017 (5) SA 445 (ECG) the plaintiff, Mfengwana, who had a claim against the defendant, the Road Accident Fund, entered into a contingency fee agreement with his attorneys BR Rubushe Attorneys in East London. The matter was settled by agreement between the parties and as required by the Contingency Fees Act 66 of 1997 (the Act) the settlement agreement had to be made an order of court. To that end the court requested to be furnished with the contingency fee agreement and accompanying affidavits by both the attorney and plaintiff. The contingency fee agreement and affidavit by the attorney were provided but no affidavit by the plaintiff. Clause 5 of the agreement provided that in the event of success the attorney would be entitled to 25% of the total of damages awarded. The attorney’s affidavit attempted to moderate the impact of that obvious problem. The issue before the court was whether the agreement was valid.

Plasket J held that the contingency fee agreement was invalid and accordingly set it aside. Strict compliance with the Act was necessary to prevent abuses on the part of unscrupulous legal practitioners willing to take advantage of their clients, a phenomenon that was all too common. Problems in relation to contingency fee agreements that came to the attention of the courts appeared, in all likelihood, to be the tip of the iceberg.

The matter was yet another case in which an attorney, an officer of the court who was supposed to act with integrity and comply with the highest ethical standards, was guilty of an attempt to grossly overreach his client, thus engaging in rapacious and unconscionable conduct. Anecdotal evidence within the legal profession pointed towards widespread abuses, a manifestation of endemic corruption embedded in the attorney’s profession.

As the contingency fee agreement was invalid the common law applied. That meant that the attorney was entitled to a reasonable fee in relation to the work performed, with taxation being the means by which the reasonableness of a fee was assessed. In other words, the attorney was only entitled to such fees as were taxed or assessed on an attorney and own client basis. Given the amount and quality of work done in the instant case the 25% fee translated into a grossly disproportionate amount and overreaching on an outrageous scale.

  • NB It was held in Nash and Another v Mostert and Others [2017] 3 All SA 918 (GP) (see law reports ‘Attorney’s fees’ 2017 (Sept) DR 40) that a contingency fee agreement could not be entered into regarding non-litigious work done by persons who were not legal practitioners such as curators of pension funds. Therefore, such an agreement could only be entered into between a legal representative, attorney or advocate, and their client.

Companies

Relief from oppressive conduct: The facts in the case of De Sousa and Another v Technology Corporate Management (Pty) Ltd and Others 2017 (5) SA 577 (GJ); [2017] 3 All SA 47 (GJ) were that when the first defendant company, Technology Corporate Management (Pty) Ltd was started in 1987, it had two directors who were the only shareholders, namely the first plaintiff, De Sousa, and the second defendant, Cornelli. It was thus a domestic company, which was owned and managed on an equal basis, the relationship between the first plaintiff and the second defendant being akin to that between partners. Subsequently, three other shareholders were added, this bringing the number of shareholders to five. It was not long before the parties divided into two opposing camps, the plaintiffs De Sousa and Diez being minority shareholders holding 37% of the shares, while Cornelli and his camp held the remaining 67%. The majority shareholders, led by Cornelli, embarked on conduct that was oppressive, unfairly prejudicial and unjust as against the minority shareholders. That conduct included, among others, increasing emoluments payable to the majority shareholders who were also directors of the company while reducing those of the minority; causing the company to assist, Hassim, one of the majority shareholders financially and to pay for the acquisition of the company’s shares (in contravention of the law); denying payment of dividends so that the minority could be without funds; misappropriation of company funds; exclusion of the minority from management of the affairs of the company and a few other such things. When the minority sought to sell their shares and leave the company, Cornelli refused to enter into negotiations in good faith.

Because of the above problems the minority (the plaintiffs) approached the High Court in terms of s 252 of the Companies Act 61 of 1973 (the Act) for relief from oppressive conduct, requesting that they be bought out by the company. The order sought was granted, the court also ordering the appointment of a referee to determine the value of shares as on the date of the granting of the order, with no allowance to be made for the fact that plaintiffs were minority shareholders, that is, no discount was to be factored for that reason. The remedy being sought having been essentially against the majority shareholders, rather than the company, it was ordered that they pay costs on attorney and client basis for the things they did and the manner in which they conducted the litigation. Moreover, the court held that the matter could have been resolved by agreement without the need for litigation.

Boruchowitz J held that the only practicable order that could be made was that the company be directed to purchase the plaintiffs’ shares. To that end the plaintiffs were entitled to be paid a fair price for their shares. As a general rule, where the aggrieved shareholder’s shares were to be purchased, a fair price was the value that the shares would have had if there had been no unfair treatment.

Section 252 of the Act provided a member or part of the members of a company with the means of obtaining relief from unfairly prejudicial, unjust or inequitable acts or omissions of the company or conduct of its affairs. Emphasis was on the unfairness of the conduct complained of. A member seeking relief had to show that the conduct was unfairly prejudicial, unjust or inequitable to that member or some of the members. The conduct complained of should not only be prejudicial but unfairly so. Therefore, fairness was the criterion by which a court had to decide whether it had jurisdiction to grant relief.

In proceedings for relief in terms of the section or its successor s 163 of the Companies Act 71 of 2008, it was not required of the court to resolve every factual dispute. The real and overriding question for determination was whether there was lack of probity and unfair dealing in the affairs of the company, which gave rise to a breakdown in the confidence and trust among the shareholders; whether the majority voting power had been abused or unfairly used to the prejudice of the minority shareholders and whether the plaintiffs had been treated by the company in a manner that was unfairly prejudicial, unjust or inequitable.

To determine whether conduct was unfairly prejudicial the court was not required to consider each complaint in isolation. What mattered was the cumulative effect of the complaints. The unfairness lay not just in the plaintiffs’ exclusion from participating in the management of the company, but their exclusion coupled with an alleged inability to dispose of their shares at a fair value. Fairness required that the plaintiffs should not have to maintain their investment in the company, which was managed by the majority with whom they had fallen out. Such unfairness would disappear if the plaintiffs were offered a fair price for their shares.

In determining the nature of the relief to be granted, the court had to consider an order that was appropriate at the time of the hearing and not what would have been appropriate at the date of presentation of the application or institution of the action.

  • NB Proceedings in the above matter commenced in 2010 before the Companies Act 71 of 2008 came into operation, hence application of the Companies Act 61 of 1973.

Consumer credit agreements

Repossession of goods sold in terms of instalment sale agreement when consumer falls into arrears and require giving written notice of the estimated value of the goods repossessed: Section 127(1) of the National Credit Act 34 of 2005 (the NCA) provides that a consumer under an instalment agreement may give written notice to the credit provider to terminate the agreement and return the goods to the credit provider’s place of business. Within ten business days after receiving the goods the credit provider is required to give the consumer a written notice setting out the estimated value of the goods (s 127(2)), this affording the consumer the opportunity to withdraw the notice to terminate the agreement and accordingly resume possession of the goods unless the consumer was in default under the credit agreement.

In Audi Financial Services (a division of Wesbank; a division of FirstRand Bank Ltd) v Safter [2017] 3 All SA 778 (WCC), Audi Centre sold a motor vehicle to the defendant, Safter, in terms of an instalment sale agreement. When the defendant fell into arrears with payment he was given notice of the default after which the agreement was cancelled. Thereafter, Audi Centre ceded the claim to the plaintiff Audi Financial Services who instituted proceedings for confirmation of cancellation of the contract and return of the vehicle. The order to that effect was granted by Eloff AJ who refused leave to appeal. The defendant petitioned the SCA for leave to appeal to the Full Court, which petition was granted. The appeal itself was dismissed with costs on 21 January 2013. However, in the meantime and while the appeal was still pending, the plaintiff repossessed the vehicle after the defendant signed a notice of termination of the contract referred to in s 127(1) and eventually sold the vehicle at an auction.

The present action was for damages suffered by the plaintiff when the repossessed vehicle was sold at an auction for less than the outstanding contract price. The defendant contested the action mainly on the ground that notice of termination of the contract given to Audi Centre was not valid as it had not been given voluntarily and further that he had not been given written notice of the estimated value of the repossessed vehicle.

Boqwana J granted the plaintiff damages as sought with costs payable on the Regional Court scale as the claim could have been prosecuted there. It was held that s 127 dealt with a situation where the consumer wished to terminate a credit agreement by giving notice to the credit provider and surrendering the goods to same. In that regard s 127(2) required the credit provider to give the consumer written notice of the estimated value so that the consumer could, under s 127(3), consider whether or not to withdraw the written notice of termination and resume possession of the goods, if such consumer was not in default under the agreement. If the consumer did not respond to the notice sent within the stipulated period of ten days, the credit provider had to sell the goods for the best price reasonably obtainable as soon as possible. After selling the goods the credit provider had to credit or debit the consumer with a payment or charge equivalent to the proceeds of the sale and deduct its expenses incurred in connection with the sale. Thereafter, the credit provider had to give written notice to the consumer of the settlement value before the sale and other relevant information resulting from the sale. The above provisions were applicable when the consumer surrendered the goods to the credit provider voluntarily. As the credit agreement was cancelled, on the authority of Edwards v FirstRand Bank Ltd t/a Wesbank 2017 (1) SA 316 (SCA), [2016] 4 All SA 692 (SCA) (see law reports ‘National Credit Act’ 2017 (March) DR 28), the defendant was not entitled to reinstate the agreement and resume possession of the vehicle as envisaged in s 127(2).

The court also held obiter that it was arguable that an e-mail (computer transmitted electronic message) or SMS (cellular telephone transmitted short message system), if such were chosen by the parties concerned beforehand, could constitute written notice, as long as it conformed to the relevant provision and contained information stipulated in the section as a traditional written notice would contain.      

Delict

Liability of Provincial Department of Social Welfare for death of child at day-care centre: In Barley and Another v Moore and Another [2017] 3 All SA 799 (WCC) the first defendant M was a day-care service provider who took Ava, an infant of five and half months of age, into her care. She put the sleeping infant on a bed in her bedroom to prepare her a bottle. When she returned after some 45 minutes the infant had fallen from the bed and lay dead on the floor. As a result the infant’s parents, the plaintiffs Mr and Mrs Barley, sued both M, as the first defendant, and the Provincial Department of Social Development in the Western Cape, as the second defendant (the department), being the one in charge of day-care centres in the province. M was sued for failing to take care of the infant while in her care and the department for breach of its obligations in terms of the Constitution and the Children’s Act 38 of 2005 and the regulations published thereunder. As it turned out the day-care centre was not registered, M was not qualified or trained to render day-care services nor was her assistant who was in fact her domestic worker. The department was fully aware of the above shortcomings but failed to shut down the day-care centre or insist that it complied with the law.

Dlodlo J held that the probable cause of the death of the infant was her rolling from the bed and falling as a result of which she suffocated after having been left unattended while sleeping on a bed and not in a cot or other secure resting place. Both defendants were held jointly and severally liable for the resulting loss and costs. The quantum of damages was postponed sine die.

The court held that it was the department’s obligation to facilitate the protection and promotion of the rights of children in line with s 28 of the Constitution. There could be no dispute that the department had to ensure that the day-care centre facilities, services and programmes were well managed, equipped and maintained. There was a duty on the department to monitor the quality of day-care centre facilities, services and programmes in order to ensure adherence to safety standards. It was of importance that the department recognised that registration of partial care facilities in accordance with the Act was a necessary safeguard for young children and to ensure that basic and adequate health and safety standards had been met.

Had the department processed the first defendant’s application and visited the premises, which it was supposed to do as part of the evaluation of the application, it would have realised, among others, that the first defendant and her staff were not properly qualified or trained to look after infants and were unfamiliar with safe sleeping practices, which they were not implementing. Had the department fulfilled its function by visiting the facility, by assessing the services there, assessing the experience and qualifications of staff, by mentoring and training the staff, advising on safe sleeping practices and ensuring compliance with the prescribed minimum norms and standards, by registering the facility, that would have significantly reduced the chances of occurrence of the incident under review. Therefore, the department’s failure to comply with its statutory duties seriously compromised the care and safety of the children at the facility, which omission caused or materially contributed towards the death of the infant while at the facility. The death of the infant would probably have been prevented had the department intervened as it could and should have done.

  • NB The judgment mentions the department only, while saying nothing about the first defendant. That had to be so since after seeing trouble coming M left the country ‘for good’ as a result of which default judgment was granted against her.

Fundamental rights

Freedom of the press and other media to broadcast court proceedings: In Van Breda v Media 24 Ltd and Others 2017 (5) SA 533 (SCA); [2017] 3 All SA 622 (SCA) the appellant, Van Breda, was charged with murder of three members of his family and attempted murder of his younger sister who survived, as well as defeating or obstructing the course of justice. The first respondent, Media24, a publisher of news to the general public, brought an urgent application seeking to be allowed to install two video cameras in the trial courtroom in order to record and broadcast the proceedings or alternatively to be permitted to broadcast the proceedings by microphone and sound. It also applied to be allowed to take still photographs and video footage in court for 30 minutes before commencement and after adjournment of proceedings each day. The appellant and the second appellant, the National Director of Public Prosecutions (the NDPP) opposed the respondent’s application. The WCC per Desai J granted the order sought, subject to modifications (para 1.3) including the requirement that the cameras be installed 15 minutes, not 30 minutes, before commencement of proceedings; that video cameras be stationary and not attended to by a person and that they be left to record and broadcast.

The appellant appealed the High Court’s decision to allow the first respondent to record and broadcast the proceedings as provided for in para 1.3 of the court order while he had no problem with the recording and broadcast of counsel’s argument, rulings and judgment of the court. In contrast the NDPP sought a blanket ban on any part of the proceedings being broadcast. The appeal was upheld to the extent that para 1.3 of the High Court order was set aside and the matter remitted to the High Court for reconsideration in the light of the decision of the SCA. The first respondent was ordered to pay the costs.

Ponnan JA (Leach, Mbha, Zondi and Van der Merwe JJA concurring) held that the question whether and under what circumstances cameras should be permitted in courtrooms provoked tension between the rights of the press, on the one hand, and fair trial rights of the accused, on the other. For that reason a court had the inherent power to make any order in relation to the publicity of the proceedings. However, such order had to be consistent with constitutional requirements. That had the result that a blanket ban on all broadcasting or adopting a one-size-fits-all approach was not acceptable.

In permitting televising of court proceedings the court was doing no more than recognising the appropriate starting point. It would always remain open to the trial court to direct that some or all of the proceedings before it should not be broadcast at all or should only be broadcast in, for example, audio form. It was for the trial court, in the exercise of its discretion under s 173 of the Constitution, to do so. It was for the media to request access from the presiding judge on a case-by-case basis. It was undesirable for the court to lay down any rigid rules as to how such requests should be considered.

The default position was that there could be no objection in principle to the media recording and broadcasting counsel’s address and all rulings, as well as judgments in respect of both conviction and sentence, delivered in open court. When a witness objected to coverage of their testimony, such witness should be required to assert such objection before the trial judge, specifying the grounds therefore and the effect they assert such coverage would have on their testimony. That approach entailed a witness-by-witness determination. Such individualised inquiry was more attuned to reconciling the competing rights at play than was a blanket ban on the presence of cameras from the whole proceedings when only one participant objected. In brief, courts should not restrict the nature and scope of the broadcast unless the prejudice was demonstrable and there was a real risk that such prejudice would occur. Mere conjecture or speculation that prejudice could occur would not be enough.

 

Neither the Constitution nor legislation confers on a public school or school governing body the right to adopt the ethos of one single religion to the exclusion of other religions: Section 15 of the Constitution which deals with freedom of religion, belief and opinion and provides that: ‘Everyone has the right to freedom of conscience, religion, thought belief and opinion’. In line with the section the South African Schools Act 84 of 1996 (the Schools Act) provides in s 7 that: ‘Subject to the Constitution and any applicable provincial law, religious observances may be conducted at a public school under rules issued by the governing body if such observances are conducted on an equitable basis and attendance at them by learners and members of staff is free and voluntary’. Apart from the above every province has its own education legislation containing similar provisions.

In Organisasie vir Godsdienste Onderrig en Demokrasie v Laerskool Randhart and Others (Council for the Advancement of the South African Constitution and Others as amici curiae) [2017] 3 All SA 943 (GJ) the applicant organisation was a voluntary association that acted in the interests of its members and their children at public schools. Although the name of the applicant suggests that it stands for the advancement of religion and democracy, the opposite is in fact the case. Before the court the applicant sought total elimination and removal of religion from public schools, and Christianity in particular. To that end it sought a total of 71 final interdicts prohibiting religious activities and observances at any public school, as well as several declarations, including one to the effect that neither the Constitution nor the Schools Act confers on a public school or school governing body (SGB) the right to adopt the ethos of one single religion to the exclusion of others.

Final interdict applications failed, while the declaration against pre-eminence of any religion as against all other religions was granted. The court made no order as to costs. The Full Court, per Lamont, Siwendu and Van der Linde JJ, held that according to the subsidiary principle, if there was a specific piece of legislation governing a matter provided for in the Constitution, the provisions of that legislation, rather than the Constitution, would apply. It meant that the impugned conduct had to fall foul of s 7 of the Schools Act, in which case that would be the basis of unlawfulness or, assuming that the conduct was legitimised by s 7 but was still alleged to be constitutionally offensive, the applicant had to attack the constitutional validity of the section. That was not the position in the instant matter as religious observance was provided for in the section whose constitutionality was not challenged. Furthermore, school governing bodies, which had power to make rules for schools, had not been cited as parties to the proceedings nor had any of their rules and policies been challenged in the founding affidavits.

On the pre-eminence of any religion over others the court held that neither a school governing body nor a public school could lawfully hold out that it subscribed to only a single particular religion to the exclusion of others.

Limitation of rights

Hate speech – freedom of expression is not limitless, absolute or a preeminent right: Section 10(1) of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (the Equality Act) provides that ‘no person may publish, propagate, advocate or communicate words based on one or more of the prohibited grounds, against any person, that could reasonably be construed to demonstrate a clear intention to be –

(a) hurtful;

(b) be harmful, or to incite harm;

(c) promote or propagate hatred.’

In South African Human Rights Commission obo South African Jewish Board of Deputies v Masuku and Another [2017] 3 All SA 1029 (Eq C, J) the complainant South African Human Rights Commission (the Commission), acting on behalf of the South African Jewish Board of Deputies (SAJBOD) filed a complaint at the EqC, J,  against the first respondent Masuku, an International Relations Secretary of the Congress of South African Trade Unions (COSATU), the second respondent. That was after the first respondent posted a message on a social media platform (blog) and, thereafter, delivered a speech at a rally organised by Palestinian Solidarity Committee at the University of the Witwatersrand. The message and speech were pro-Palestine and anti-Israel. Statements therein contained proclaimed among others that the respondents were engaged in the ‘struggle to liberate Palestine from the racists, fascists and Zionists who belong to the era of their friend Hitler’ and that Zionists should be subjected to harm and perpetual suffering. Many other such remarks and comments were also made. The complaint was that the remarks amounted to hate speech, which was prohibited by the Equality Act and the Constitution. On the other hand the first respondent contended that he had exercised freedom of expression, the remarks were true, amounted to fair comment, were in the public interest and no more than his personal beliefs.

Moshidi J held that the impugned statements constituted proscribed hate speech and could reasonably be interpreted to indicate a plan intended to be hurtful, harmful or propagate hatred. Some of the utterances made could with ease amount to direct incitement to cause harm to the South African Jewish Community. There was nothing to the contrary in the content or context of the utterances other than a clear intention to perpetrate hate speech. In essence, the utterances were made to instil detestation, enmity, ill-will and malevolence towards Jewish people in South Africa. They were distinct advocacy of hatred and nothing else. The settled and trite approach was that although the right to freedom of expression was inseparable from normal democracy, it was, however, neither absolute, limitless nor a pre-eminent right.

Harm that could flow from offensive utterances did not have to be violence or criminal activity. It covered emotional damage which could have serious psychological consequences, resulting in humiliation and degradation of the individual targeted by hate speech.

As a remedy the court ordered the respondents to tender an unconditional apology to the Jewish Community within 30 days of the granting of the court order or within such other period as the parties could agree. Such apology was required to receive at least the same publicity as the offending statements. The respondents were ordered to pay costs.             

Practice

No rescission of judgment without basis therefor: In the case of Moraitis Investments (Pty) Ltd and Others v Montic Dairy (Pty) Ltd 2017 (5) SA 508 (SCA); [2017] 3 All SA 485 (SCA) Moraitis and Kebert worked together in a business which they owned indirectly in that the first respondent Montic Dairy (MD) was a beneficiary of Moraitis Trust (MT), which in turn was shareholder in the first appellant Moraitis Investments (MI) and six other respondent companies. Kebert also had a similar arrangement in that he was a beneficiary of Kebert Trust (KT) who owned shares in Tropica Investments, which in turn owned shares in the first six respondents in the case. When a fall-out took place, to resolve the deadlock between Moraitis and Kebert, MT and MI instituted proceedings for the winding-up of MD and the other companies in which both sides were shareholders. Alternatively, MT and MI requested that their shares in MD and the other companies be bought by the Kebert Group (K Group). While those proceedings were underway Kebert instituted a claim against Moraitis personally for payment of money regarding his deceased mother’s share of a hotel business, which his mother and Moraitis developed together. Some of the litigation between the two sides took place in the GP, while the other took place in the GJ. To solve endless litigation which the two groups had against each other negotiations were held, a settlement agreement reached and made an order of court. The agreement was signed by Moraitis for the M Group and Kebert for the K Group. In terms of the agreement the K Group would buy M Group’s shares in the contested companies for R 600 000. Apparently, the M Group was not happy with the settlement agreement as a few weeks later MI instituted proceedings to set aside the settlement agreement and court order, alleging that Moraitis had not been authorised by it and MT to enter into the settlement agreement.

The GJ per Windell J granted the order setting aside the settlement agreement and draft order. That order was reversed on appeal to the Full Bench, per Matojane J (Hawyes AJ concurring while Moshidi J dissented). An appeal against the Full Bench decision was dismissed with costs. The SCA per Wallis JA (Leach, Tshiqi, Saldulker JJA and Fourie AJA concurring) held that once it was accepted that it had not been shown that MT and MI were not parties to the settlement agreement, they were bound by the provision thereof due to the fact that they consented to it being made an order of court. Accordingly, when the agreement was submitted to the judge for that purpose, counsel was acting for all the parties to the settlement agreement. The court would only grant a consent judgment if the parties to the litigation consented to its granting. If they did not do so but the court was misled into thinking that they did, the judgment had to be set aside.

The approach to rescission of judgment differed depending on whether it was a default judgment or one given in the course of contested proceedings. In the case of default judgment it could be rescinded in terms of either r 31(2)(b) or r 42 of the Uniform Rules of Court or under the common law on good cause shown. In contested proceedings the test was more stringent. A judgment could be rescinded at the instance of an innocent party if it were induced by fraud on the part of the successful party or fraud to which the successful litigant was a party. It was only where fraud, usually in the form of perjured evidence or concealed documents, was proved that restitutio in integrum was granted and the judgment set aside. The mere fact that a wrong judgment had been given on the basis of perjured evidence was not a sufficient basis for setting aside the judgment. Apart from fraud the only other basis empowering a court to set aside its own order was justus error. Although a non-fraudulent misrepresentation, if material, would provide a ground for avoiding a contract, it did not provide a ground for rescission of judgment.

Prescription

Interruption of prescription by acknowledgment of indebtedness by a debtor embodied in a without prejudice letter written for the purpose of settling litigation: Section 14 of the Prescription Act 68 of 1969 (the Act) provides that the running of prescription shall be interrupted by an express or tacit acknowledgment of liability by the debtor and further that if the running of prescription is so interrupted, it shall commence to run afresh from the day on which the interruption takes place.

The application of the above provisions was dealt with in KLD Residential CC v Empire Earth Investments 17 (Pty) Ltd [2017] 3 All SA 739 (SCA) where in 2006 the appellant KLD and the respondent Empire Earth, then trading as Seeff, entered into an agreement in terms of which the appellant would market the respondent’s residential units and receive commission when transfer took place to the buyer. The appellant alleged that between the years 2008 and 2009 it sold a number of units as a result of which it became entitled to commission in the amount of over R 2 million. It accordingly instituted proceedings in June 2013 to recover the amount claimed. The respondent raised the special plea of prescription to which the appellant replicated, alleging that in July 2011 the respondent’s attorneys of record made a written acknowledgment of debt, by way of a letter, the effect of which was to interrupt prescription and cause it to commence running afresh. That had the further effect that a debt, which would have prescribed, was revived by that written acknowledgment of debt.

The issue before the court, in respect of which the matter proceeded by way of a stated case as the facts were common cause, was whether the written acknowledgment of debt, contained in a without prejudice letter, interrupted the running of prescription. The WCC held, per Rogers J, that the running of prescription had not been interrupted by the without prejudice acknowledgment of debt. An appeal against the High Court order was upheld with costs by the SCA.

Lewis JA (Mbha, Tshiqi JJA and Fourie AJA concurring while Schippers AJA dissented) held that the contention raised for by the appellant was well-founded. Where acknowledgments of liability were made such that by virtue of s 14 of the Act they would interrupt prescription, such acknowledgments should be admissible, but solely for the purpose of interrupting prescription. The exception to running of prescription was not absolute and would depend on the facts of each case. There was nothing to prevent the parties from expressly or impliedly ousting it in their discussions. What the exception allowed for was the prevention of abuse of the without prejudice rule and the protection of a creditor. The without prejudice admission remained protected insofar as proving the existence and quantum of the debt was concerned.

Unlawful occupation of land

Rights of unlawful occupiers and joinder of local authority in eviction proceedings: In Occupiers, Berea v De Wet NO and Another 2017 (5) SA 346 (CC); 2017 (8) BCLR 1015 (CC) the applicants were a group of 184 unlawful occupiers of a block of flats (the property) in Berea, Johannesburg, which belonged to a certain company, Rocchi Investments. In the process of liquidation of the company the property was sold to a third party, one Maseko, who sought to improve it and rent out flats to tenants on a commercial basis. To that end Maseko, using the liquidators of the company as nominal respondents, sought a court order evicting the applicants from the property. The applicants mandated four of their own to appear at the eviction hearing and ask for postponement of the matter so that they could seek legal representation. Far from asking for postponement, the four appearer applicants entered into a settlement agreement in terms of which the applicants were to vacate the property by a specified date. A draft order to that effect was made an order of court by Khumalo J. Thereafter, when the other applicants found out they sought rescission of that eviction order. The rescission application was dismissed by Adams AJ who later also dismissed the application for leave to appeal. A petition to the SCA for leave to appeal was also dismissed.

For that reason the applicants approached the CC for leave to appeal to it. Leave was granted and the appeal upheld. The eviction order of Khumalo J was rescinded while the dismissal of rescission application of Adams AJ was set aside. The matter was remitted to the High Court for reconsideration. The City of Johannesburg was joined as a further respondent to the High Court proceedings so that it could file a report showing how it would provide alternative land or emergency accommodation in the event of eviction. No order was made as to costs.

Reading a unanimous judgment of the court Mojapelo AJ held that the respondent failed to establish a connection between what was consented to by the four appearer applicants and the other 180 applicants who did not attend the hearing. Although the appearer applicants factually consented to the eviction order, that consent was without mandate and uninformed. An agreement to an eviction order would effectively entail the waiver of, at a minimum, the constitutional and statutory rights to –

  • an eviction order only after a court had considered all the relevant circumstances;
  • joinder of the local authority and production by it of a report on the need and availability of alternative accommodation;
  • a just and equitable order in terms of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE); and
  • temporary alternative accommodation in the event that eviction would result in homelessness.

The applicants, who were not legally represented, were not informed of any of the above rights which they were not aware of. The factual consent, which the appearer applicants gave to the eviction order, was not informed and was therefore not legally binding on the other applicants.

Although the court, which heard the eviction application was faced with a purported agreement, it was not absolved from its duties under PIE whose application was mandatory. Therefore, the court was not absolved from actively engaging with the relevant circumstances where the parties purported to consent. PIE enjoined courts to balance the interests of the parties before it and to ensure that if it was to order eviction, it would be just and equitable to do so. Without having regard to all the relevant circumstances including, but not limited to a purported agreement, the court would not have discharged the duties placed on it by PIE. Those duties arose even in circumstances where parties on both sides were represented and a comprehensive agreement was placed before the court.

Other cases

Apart from the cases and material dealt with or referred to above the material under review also contained cases dealing with: Agreement to extend lease extending both incidental and collateral terms of lease, arbitration award may be delivered in the absence of the parties, contravention of exchange control regulations, disclosure of identity of child victim is prohibited, duty of state to provide suitable alternative accommodation in the event of eviction of homeless occupiers, enforcement of foreign arbitration award, institution of review proceedings within a reasonable time, invalidity of renewal of firearm licences regime, invalidity of provisions authorising detention of illegal foreigners, limitation of parties to litigation to their pleadings, medical negligence, mora interest not running on unliquidated debt, nature of agreement subject to National Credit Act 34 of 2005, no cession of debt after extinction, repentance principle in repudiation of contract, sale of property in insolvency on authorisation by Master, and the usage of bail application affidavit in trial proceedings not allowed and validity of cession.

This article was first published in De Rebus in 2017 (Dec) DR 44.

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