August 2015 (4) South African Law Reports (pp 329 – 643); [2015] 3 All South African Law Reports July no 1 (pp 1 – 129) and no 2 (pp 131 – 254); [2015] 3 August no 1 (pp 255 – 386) and no 2 (pp 387 – 521); 2015 (8) Butterworths Constitutional Law Reports – August (pp 887 – 1001)
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.
| 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
GJ: Gauteng Local Division, Johannesburg
GP: Gauteng Division, Pretoria
KZD: KwaZulu-Natal Local Division, Durban
NCK: Northern Cape Division, Kimberley
SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town
Civil procedure
Superannuation of judgment if warrant of execution is not effected within three years: Section 63 of the Magistrates’ Courts Act 32 of 1944 (the Act) provides among others that: ‘Execution against property may not be issued upon a judgment after three years from the day on which it was pronounced or on which the last payment in respect thereof was made, except upon an order of the court …’. The issue arose in Absa Bank Ltd v Snyman 2015 (4) SA 329 (SCA), [2015] 3 All SA 1 (SCA) where the appellant, Absa Bank, obtained default judgment in the magistrates’ court against the respondent, Steyn, after he defaulted on loan repayment. On the same date, 18 December 2007, the appellant also obtained a warrant of execution against the mortgaged house of the respondent, which had been declared executable. Nothing happened concerning the warrant of execution, which was reissued on 18 December 2010 and served on the respondent in February 2011. Thereafter, the property was sold in execution after which the new owner proceeded to evict the respondent. The respondent challenged the validity of the execution and sale of the property to the new owner on the basis that the warrant of execution had been issued more than three years after the granting of default judgment.
On appeal to the High Court the WCC held, per Davis J (Blignaut J concurring), that as judgment was granted on 18 December 2007 it superannuated at midnight on 17 December 2010 with the result that a reissue of the warrant of execution the following day on 18 December 2010 was not competent. That had the result that the reissued warrant of execution was invalid and could not bring about a valid sale in execution. A further appeal to the SCA was upheld, the court standing over the issue of costs. The matter was remitted to the High Court for verification whether in the meantime the respondent had not made payment, as it appeared that he did so. If that was the case it would affect superannuation of the judgment as the three-year period would start running from the period of the last payment and not the date of the court order.
Brand JA (Cachalia, Shongwe, Wallis and Petse JJA concurring) held that properly construed s 63 of the Act provided that a judgment sounding in money became superannuated, unless the execution sale took place within three years of that judgment. As a result, the date on which the warrant of execution was issued, was of no consequence. Therefore, the date of reissue of a warrant of execution would not avoid execution once the three-year period from the date of judgment elapsed. Extension of the superannuation period could only occur by order of court, something which was not obtained by the appellant in the instant case. It followed that the question whether or not the reissue occurred on 18 December 2010 or on an earlier date was of no consequence. What was relevant was the date of the sale in execution, which in the instant case was 6 December 2011. That was clearly more than three years after the date of judgment on 18 December 2007.
Cohabitation
No reciprocal duty of support between partners in a cohabitation relationship: In Steyn v Hasse and Another 2015 (4) SA 405 (WCC) the first respondent, Hasse, was a married German national who spent most of his time in Germany. However, he owned a house in Somerset West in the Western Cape, in which he lived for four months in a year. He had a romantic relationship with the appellant, Ms Steyn and invited her to live in the house free of charge, also providing her with funds to run the house. Furthermore, he also gave her gifts. When the romantic relationship ended the first respondent requested the appellant to vacate the house but she did not. It was her contention that the first respondent promised her that she would live in the house for a period of ten years ending in 2017 and that if the romantic relationship were to end he would buy her a townhouse similar to the one she was renting before the relationship started. The magistrate held that there was no reciprocal duty of support between parties in a cohabitation relationship and as a result ordered her to vacate. An appeal against that decision was dismissed with no order as to costs, given that the appellant was an elderly person who was not in good health and was unemployed.
Goliath J (Schippers J concurring) held that cohabitation generally referred to people who, regardless of their gender, lived together without being validly married to each other. Cohabitants generally did not have the same rights as partners in marriage or civil union. Although no reciprocal duty of support arose by operation of law in the case of unmarried persons, there was nothing precluding such duty from being regulated by agreement. Nevertheless, the courts provided some measure of recognition to cohabitation and had on many occasions found that an express or implied universal partnership existed between cohabitants. A universal partnership existed when parties acted like partners in all material respects without expressly entering into a partnership agreement. The three essentials of such a partnership were –
In the instant case, it was not in dispute that the relationship did not comply with the essential requirements of a universal partnership. There was, therefore, no legal basis on which to find that there existed reciprocal rights and duties of support between the appellant and the first respondent.
Companies
Business rescue application that does not suspend liquidation of a company: Section 131(6) of the Companies Act 71 of 2008 (the Act) provides among others that if liquidation proceedings have already been commenced by, or against the company, at the time an application for business rescue is made, the application will suspend the liquidation proceedings until the court has adjudicated upon the application or the business rescue proceedings end.
In Knipe and Another v Noordman NO and Others 2015 (4) SA 338 (NCK) two companies, K and S, were placed under provisional liquidation, which was eventually made final. In the course of liquidation of the affairs of the companies their provisional liquidators, Noordman and others, entered into an agreement for the capturing, removal and sale of cattle belonging to the estate of the deceased Knipe senior (the father) but, which were grazing on the farms owned by the companies. The applicants, the Knipe brothers, launched an urgent application for an interdict prohibiting the capturing, removal and sale of the cattle. It was their contention that removal and sale of the cattle would destroy a lien, which the companies in liquidation, of which they were shareholders, enjoyed. Moreover, they had in the meantime also applied for a business rescue of the companies in question even though at the launch of the application it was over one and half years since the final winding-up order had been granted.
Mamosebo AJ dismissed the urgent interdict application with costs on an attorney and client scale. The court held that there was no urgency in the application as the applicants had plenty of time in which they could have launched it. Furthermore, the applicants had no locus standi as the farms belonged to the companies in winding-up and they were only shareholders. Moreover, an undertaking had been given to the effect that the proceeds of the sale would be deposited into a trust account for protection. On the issue of the relationship between winding-up and business rescue applications, the court held that liquidators had a duty and responsibility to look after the assets and affairs of the companies in liquidation. The fact that in the instant case the liquidators confirmed the existence of a lien and undertook to protect it underscored their responsibilities and bona fides. The legislature did not intend to create a situation where provisional liquidators would be disempowered to carry out their responsibilities. Since in this case a business rescue practitioner had not been appointed and the circumstances were different in that final liquidation was granted on the basis that it was just and equitable to do so, and not because the companies were in dire financial distress, the provisional liquidators could not be hamstrung by the business rescue application.
NB: The above case should be contrasted with Elias Mechanicos Building & Civil Engineering Contractors (Pty) Ltd v Stedone Developments (Pty) Ltd and Others 2015 (4) SA 485 (KZD) where it was held that leave to institute legal proceedings should be obtained before instituting the proceedings and not sought as part of the main application. It should, however, be noted that the latter deals with s 133(1)(b), and not s 131(6), of the Act.
Contracts
Mortgage bond may secure indebtedness relating to unjust enrichment claim: In Panamo Properties 103 (Pty) Ltd v Land and Agricultural Development Bank of South Africa [2015] 3 All SA 42 (SCA) the appellant, Panamo, entered into a loan agreement with the respondent, Land and Agricultural Development (the bank), in terms of which money was advanced to the appellant to acquire agricultural land for development into an urban township. To secure repayment of the loan a covering mortgage bond was registered over the two properties in question. However, as it turned out the loan agreement was invalid for contravention of s 3 of the Land and Agricultural Development Bank Act 15 of 2002 (the Act), which makes provision making loans by the bank for among others the promotion, facilitation and support of commercial agriculture and food security and not township development. Furthermore, ss 66 and 68 of the Public Finance Management Act 1 of 1999 (the PFMA) provide that where a public institution, such as the bank, enters into a transaction that is not authorised by legislation governing the institution, it will not be bound by the transaction.
Two issues fell to be decided, namely, the validity of the loan agreement and also, if the agreement was invalid the mortgage bond could still be enforced on the basis of unjust enrichment. The GJ held per Claassen J that such was the position. An appeal against that decision was dismissed with costs by the SCA.
In the majority judgment Lewis J (Pillay, Willis JJA, Schoeman and Gorven AJJA concurring) held that the acquisition of agricultural land for the purpose of transforming it into an urban township was not only not consonant with the objects of the Act, but was also completely contrary to that which the bank was supposed to achieve. Accordingly, the loan agreement was in contravention of the Act and invalid with the result that it could not be enforced. The issue of possible validity and enforcement of the second agreement, namely the mortgage bond, was dealt with by Gorven AJA in a concurring judgment, where it was held that even though the loan was void that did not mean that there was no other obligation secured by the bond. Assuming, without deciding, that the respondent had a valid claim for unjust enrichment, such would give rise to indebtedness. There was no reason for a mortgage bond not to secure a debt arising from an enrichment claim. The mortgage bond, in the instant case, was cast in the broadest possible terms enabling the respondent to recover payment from the appellant for a claim arising from ‘whatsoever reason’. The wording of the mortgage bond conclusively showed that a basis existed for invoking the security to secure indebtedness, which did not have to arise from an agreement or even the terms of the mortgage bond. Therefore, the security afforded by the bond covered a lawful claim by the respondent which fell outside the terms of any agreement or the bond and could clearly cover a debt arising from an enrichment claim.
Criminal law
Child trafficking, rape and abuse or exploitation for sexual purposes: In Jezile v S (National House of Traditional Leaders and Others as Amici Curiae) [2015] 3 All SA 201 (WCC) the appellant Jezile was found guilty of human trafficking, rape, assault with intent to cause serious bodily harm and common assault by the court and sentenced to an effective 22 years imprisonment. That was after a group of males representing his family agreed with another group of males representing the complainant’s family, to a marriage between the appellant and the complainant, a girl aged 14. The complainant refused to marry the appellant as she wanted to continue with her schooling. Moreover, the appellant was a total stranger to her. The complainant’s uncle, together with another man, literally grabbed her by her hands and took her by force to the appellant’s home where she was forced to have sex with the appellant. After escaping she was tracked down and returned to him. Eventually the two left the village in the Eastern Cape for Cape Town where she was held in captivity, with the door and gates locked, so that she could not escape. Repeated raping took place and she was also assaulted for not being co-operative. At long last she escaped and reported the problem to the police.
On appeal to the High Court the convictions on counts of assault with intent to cause grievous bodily harm and common assault were set aside as they were found to be part of the offence of rape. However, an appeal against convictions and sentence on human trafficking and rape was dismissed. In a unanimous judgment Cloete, Saldanha and Yekiso JJ held that it could not be countenanced that practices associated with the aberrant form of the traditional practice of ukuthwala (forced marriage – essentially meaning grabbing a mate) could secure protection under the law, as the appellant sought to do. The court could not, therefore, even on the rather precarious ground of assertion by the appellant of a belief in the aberrant form of ukuthwala as constituting ‘traditional’ customs of his community, which allegedly led to a ‘putative customary marriage’, find that he had neither trafficked the complainant for sexual purposes nor committed rape without the necessary intention.
Divorce
Validity of unregistered antenuptial contract: Section 86 of the Deeds Registries Act 47 of 1937 (the Act) provides among others that an antenuptial contract shall be registered, failing which it shall be of no force or effect as against any person who is not a party thereto. The application of the section fell to be decided in S v S [2015] 3 All SA 85 (KZD) where before entering into marriage the parties gave their attorney an instruction and power of attorney, also signing a draft antenuptial contract, to execute an antenuptial contract and have it registered in terms of the Act. It was the intention of the parties to enter into a marriage out of community of property with no community of profit and loss but subject to the accrual system. When the parties divorced more than twenty years later, they discovered that the antenuptial contract had not been registered. As a result the plaintiff, Mrs S, contended that the marriage was in community of property, while the defendant husband took the view that as per the intention of the parties the marriage was out of community of property.
The High Court separated the issues and granted a degree of divorce, making ancillary orders relating among others to custody of the minor child. The question of the applicable matrimonial regime was decided at a later stage where Kruger J held that the marriage was, as per the intention of the parties, out of community of property, with no community of profit and loss but subject to the accrual system. It was clear from the provisions of s 86 of the Act that an antenuptial contract, which had not been registered was of no force or effect as against any person who was not a party thereto. The antenuptial contract would, however, be valid and binding as between the parties. That was because the unregistered antenuptial contract reflected the common intention of the parties at the time the contract was entered into. That had the effect that an informal antenuptial contract existed between the parties. The date of determination of the accrual system was that of litis contestatio and not the granting of a decree of divorce. The practical effect of litis contestatio was to expedite the trial and do much to limit the temptation to squander assets that some spouses seemed to find irresistible and also discourage the situation were a spouse deliberately delayed the proceedings in order to increase his or her claim when the divorce was eventually granted.
Housing
Protection of vulnerable purchasers: Very briefly ss 21 and 22 of the Alienation of Land Act 68 of 1981 (the Act) provides among others that on insolvency of the seller the purchaser of a residential property who buys in terms of a contract that provides for payment of the purchase price in two or more instalments over a period of one year or more may, after making arrangements for payment of the balance, take transfer of the property. However, the sections do not have similar provisions for the protection of a purchaser who has paid the price in full but has not yet taken transfer at the time of the seller’s insolvency. Such a purchaser simply loses out as the property falls into the insolvent estate.
In Sarrahwitz v Maritz NO and Another 2015 (4) SA 491 (CC); 2015 (8) BCLR 925 (CC) the applicant, Ms Sarrahwitz (S), had paid the full purchase price for a residential property which she bought from Mr P (P), who promised to transfer it to her and instructed his lawyers to do so. However, there was an inordinate delay of some four years in effecting the transfer and when the estate of P was declared insolvent the property, which was still registered in his name, vested in the trustee of his estate, the respondent Maritz who refused to transfer it to the applicant. The High Court dismissed the applicant’s claim for transfer of the property into her name. Leave to appeal to the full Bench of the High Court or alternatively the SCA having been denied, the applicant sought leave of the CC to appeal to it, raising the question of constitutionality of the common law and the Act for the first time on appeal. Leave to appeal was granted and the appeal upheld, with no order as to costs. The court followed the severance and reading-in approach with the result that the provisions of the Act were extended to apply to purchasers who had paid the purchase price for residential property in full but had not yet taken transfer. The order did not have retrospective application to matters already finalised by then.
Reading the majority judgment Mogoeng CJ (Cameron and Froneman JJ concurring for totally different reasons in a separate judgment) held that it was difficult to conceive of an instance where the refusal to transfer a home to a vulnerable purchaser, who had paid the purchase price in full, coupled with inevitable homelessness, would not outweigh the advantage to creditors of the seller’s insolvent estate. There was no rational basis for protecting a vulnerable instalment purchaser of a residential property who paid over a period of one year or longer, while leaving out an equally vulnerable purchaser who borrowed money to pay the full purchase price at once or one who did so in one instalment or several instalments within one year. So long as there existed a real risk within the legislative scheme for vulnerable purchasers to be rendered homeless, the scheme was under-inclusive, violated the right of access to adequate housing and limited purchasers’ rights unjustifiably. The impugned provisions were unconstitutional to the extent that they excluded the transfer of a house from an insolvent estate to a vulnerable purchaser who had paid for it within one year even in circumstances where that exclusion was unjustifiable and could result in homelessness of the purchaser.
Parliament
Freedom from arrest for anything said in the National Assembly, Council of Provinces or any of their committees: Section 11 of the Powers, Privileges and Immunities of Parliament and Provincial Legislatures Act 4 of 2000 (the Act) allows the Speaker of the National Assembly (NA) or Chairperson of the National Council of Provinces (NCOP) or a person designated by them to order ‘a staff member or a member of the security forces’ to arrest and remove any person creating or taking part in a disturbance during parliamentary, house or committee sittings. In Democratic Alliance v Speaker of the National Assembly and Others 2015 (4) SA 351 (WCC), [2015] 3 All SA 72 (WCC) the applicant Democratic Alliance, a political party and official opposition in the NA, sought a court order declaring the section inconsistent with the Constitution, and accordingly invalid, on the ground that s 58(1)(a) of the Constitution afforded cabinet members, deputy ministers and members of the NA a right of speech in the NA and its committees, and that s 58(1)(b) protected such members against, inter alia arrest, imprisonment or a damages claim ‘for anything they said in, produced before or submitted to the Assembly or any of its committees’. Delegates to the NCOP, participating local government representative and members of the national executive were afforded the same privileges and powers by s 71 of the Constitution. It was argued that the section violated the constitutional privileges by permitting a member to be arrested for what he or she might say on the floor of the NA. The issue arose after members of another political party, the Economic Freedom Fighters (EFF), had been ejected from a joint sitting of the NA and NCOP for repeatedly interrupting the President’s state of the nation address speech.
The High Court granted with costs an order declaring the section unconstitutional, suspending the operation thereof for 12 months during which Parliament was afforded the opportunity to remedy the defect. The order was referred to the CC for confirmation. Le Grange J (Cloete and Boqwana JJ concurring) held that inasmuch as Parliament was entitled to conduct its own affairs, the privilege of freedom of speech was vital to allow Parliament to perform its function of permitting unrestrained debate about matters of public importance. Section 11 of the Act infringed a member’s privilege of free speech and his or her privilege not to be arrested as protected under ss 58(1)(a) and 71(1)(b). The provision in s 11 was not envisaged by ss 58(2) and 71(1) of the Constitution and, therefore, did not pass the constitutional muster as it permitted a member to be arrested for what he or she might say on the floor of the NA. That violated a member’s constitutional privilege of freedom of speech and freedom from arrest as guaranteed under ss 58(1) and 71(1) of the Constitution. The provision of s 11 was overboard and as a result constitutionally flawed.
NB: It should be noted that s 11 proscribed causing ‘disturbance’ and not ‘making speech’, the latter being duly protected. It would appear, therefore, that the case was decided on the facts that did not exist.
Limitation on broadcasting of unparliamentary conduct and grave disorder: Acting in terms of ss 57(1) and 70(1) of the Constitution, Parliament adopted rules and a policy relating to the broadcasting of parliamentary proceedings which provide, among others, that during incidents of grave disorder or unparliamentary conduct the parliamentary camera should focus on the occupant of the chair, meaning the Speaker of Parliament in the case of the National Assembly or the Chairperson in the case of the National Council of Provinces. This means that the grave disorder or unparliamentary conduct incident would not be given coverage, except that in the case of unparliamentary conduct occasional wide-range shots of the chamber are acceptable. The constitutionality of the rules and the policy was challenged in Primedia Broadcasting Ltd and Others v Speaker of the National Assembly and Others 2015 (4) SA 525 (WCC); [2015] 3 All SA 340 (WCC) were the applicants, Primedia Broadcasting and others, also sought an order declaring the use of the jamming device unconstitutional and invalid. All this took place after an incident during the state of the nation address by the President during which members of an opposition political party, the Economic Freedom Fighters, were removed from Parliamentary precinct by the security agency and the service of electronic devices interrupted for a short period. In other words, the applicants wanted full live television and other electronic coverage of the disruption. The application was dismissed, each party being ordered to pay own costs.
Dlodlo J (Henney J concurring and Savage J dissenting) held that the rules and policy in issue survived the application of the proper test for reasonableness. Sections 59(1) and 72(1) of the Constitution authorised Parliament to take reasonable measures to regulate public access, including access of the media, to it. In other words the Constitution did not contemplate unrestricted access (free-for-all). It rather expressly reserved for Parliament the power to limit access by the public, including the media, to its proceedings, provided that the limiting measures were reasonable. There was no obligation on Parliament to broadcast conduct that clearly obstructed or disrupted its proceedings and unreasonably impaired its ability to conduct its business in an orderly and regular manner in a democratic society, simply because such conduct was not legitimate parliamentary business. When that was contrasted with the suggestion by the applicants that Parliament had to feed broadcasting visuals of the grossest behaviour and gravest disorder without limitation, the later was and remained unreasonable.
Turning to jamming of electronic devices, it was held that the employment of any means, including the use of signal disruption, to protect the President, Deputy President and dignitaries against the potential threat, existing or perceived to be existing, while still outside the chamber and prior to the start of the address, was entirely justified and was therefore not unlawful.
Rei vindicatio
Claim for rei vindicatio not constituting debt or prescribing in three years: In Absa Bank v Keet 2015 (4) SA 474 (SCA) the respondent, Keet, entered into an instalment sale agreement with Eastvaal Motors for the sale of a vehicle, namely a tractor. Eastvaal Motors having ceded its right, title and interest in the agreement to the appellant, Absa Bank, the latter instituted proceedings for confirmation that the agreement had been cancelled as a result of breach of contract by the respondent who defaulted in payment of agreed instalments and also sought recovery of the vehicle. The respondent raised a special plea of prescription, alleging that as a period of three years had expired since the date on which final payment of instalments ought to have been made, the claim for payment of arrear instalments and recovery of the vehicle had prescribed. The GP, Pretoria per Fabricius J having upheld the special plea, an appeal against that decision was upheld by the SCA. The court made no order as to costs as the matter had essentially become moot since it was settled. That being the case the respondent withdrew his opposition to the appeal.
Zondi JA (Maya, Bosielo, Wallis JJA and Meyer AJA concurring) held that a debt was an obligation to do something, either by payment or delivery of goods or services. It was one pole of an obligation, which encompassed a right to receive and a corresponding duty to give. It was that which was owing or due, anything such as money, goods or services which a person was under obligation to pay or render to another. Therefore, there was merit in the argument that a vindicatory claim, since it was based on ownership of a thing, could not be described as a debt as envisaged in the Prescription Act 68 of 1969. The solution to the problem of prescription was to be found in a distinction between a real right (jus in re) and a personal right (jus in personam). Real rights were primarily concerned with the relationship between a person and a thing while personal rights were concerned with the relationship between two (or more persons). The person who was entitled to a real right over a thing could, by way of a vindicatory action, claim that thing from any person who interfered with his right. Such a right was one of ownership and not personal.
Unlawful competition
Protection against unlawful competition: In Mullane and Another v Smith and Others [2015] 3 All SA 230 (GJ) the first applicant, Mullane, was a minority shareholder and director of the second applicant, Coleman Tunnelling. The first respondent, Smith, was also a minority shareholder and director of the second applicant, as well as its employee. When the possibility of acquisition of the second applicant by the third respondent, Bothar Boring, arose the first respondent was provided with the second applicant’s confidential information to negotiate the deal that eventually failed. After certain allegations were made against the first respondent he resigned as a director of the second applicant and joined the third respondent. However, he did not leave empty-handed as he took all the information he required, which was copied from his office computer. The problem though was that the second applicant and the third respondent were direct competitors. As a result the applicants sought an interdict prohibiting the respondent from unlawfully utilising, communicating and/or publicising any of the second applicant’s confidential information and/or trade secrets. The interdict was granted with costs.
Spilg J held that the right to protection from unlawful competition required a wrongful interference with another’s right as a trader. In order to succeed with an application for final interdict the second applicant had to demonstrate that –
In unlawful competition cases care had to be taken to recognise the erstwhile employee’s right to utilise knowledge and skills acquired when moving to a new employer. In the instant case, the conduct of each of the respondents demonstrated a disregard for the second applicant’s rights and a clear attempt to take unfair and wrongful advantage of inside knowledge that was otherwise protectable against filching or economic espionage. There was no reason why such protection could not be extended to issues of unfair competition.
Other cases
Apart from the cases and material dealt with or referred to above the material under review also contained cases dealing with the act of insolvency, bias by presiding officer, breach of contract, business rescue proceedings, classification of health care products, consumer credit agreements, conveyancing, detention of illegal foreigners, dispute of fact, eviction of occupiers from leased property, improper approval of building plans by local government, interruption of extinctive prescription, liability for omission, mandament van spolie, objection to tax assessment, pension fund surplus, provision of temporary emergency accommodation by municipality, rape, right to legal representation during sentencing, right to life versus voluntary euthanasia, seaman’s lien for wages, Turquand rule and winding-up of companies.
This article was first published in De Rebus in 2015 (Oct) DR 43.
