The law reports – August 2019

August 1st, 2019
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June 2019 (3) South African Law Reports (pp 341 – 662); May [2019] 2 All South African Law Reports (pp 307 – 628); 2019 (2) Butterworths Constitutional Law Reports – February (pp 165 – 288); 2019 (3) Butterworths Constitutional Law Reports – March (pp 289 – 428)

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

KZP: KwaZulu-Natal Division, Pietermaritzburg

LAC: Labour Appeal Court

LC: Labour Court

LCC: Land Claims Court

SCA: Supreme Court of Appeal

WCC: Western Cape Division, Cape Town

Access to information

Defence that documents sought do not exist or are not in the possession of the respondent: The facts in the case of Manuel v Sahara Computers (Pty) Ltd and Another [2019] 2 All SA 417 (GP) were that News24, an online news provider, published an article in which it was alleged that the first respondent, Sahara Computers, a company owned by the Gupta family, and the second respondent, Chawla, its former Chief Executive Officer (CEO), had unlawfully obtained and disclosed personal information of the applicant Manuel and his wife. The article claimed that the applicant and his wife had been subjected to unlawful surveillance and that their personal details such as identity numbers and traveling arrangements had been collected and disclosed to the respondents. The applicant did not know those responsible for the unlawful surveillance. In order to identify the culprits and consequently protect his constitutional right to privacy the applicant, after unsuccessfully engaging the respondents, approached the GP for access to information in terms of s 78(2) of the Promotion of Access to Information Act 2 of 2000 (PAIA). Relying on s 50 of PAIA he further requested access to certain records. As the case unfolded the request of the applicant changed to referral of the matter to oral hearing where the respondents and their witnesses could testify and be cross-examined to establish information and documents in their possession.

The court granted an order postponing the matter to a later date to be arranged with the Registrar for the hearing of oral evidence. The second respondent and the CEO of the first respondent were ordered to attend that hearing for examination and cross-examination. Costs were reserved.

Weiner J held that in establishing that information was required for the exercise or protection of a right, the applicant was required to satisfy two distinct requirements, namely:

  • He had to identify the rights which he sought to exercise or protect and show that prima facie he had established that he had such a right.
  • He should demonstrate how the information would assist in exercising or protecting the right in question. He should, therefore, establish a connection between the information requested and the right sought to be exercised or protected. The information should provide the applicant with ‘assistance’ in the sense of substantial advantage or an element of need.

In the present case, the applicant was entitled to use PAIA to establish who his defendants could be and/or what cause of action he had against them. He did not require the records to assess his prospects of success, which would amount to pre-litigation discovery. Therefore, the request was permitted under PAIA and did not amount to pre-litigation discovery.

Contracts

No termination of contract of perpetual duration and concurrent liability in delict and contract: In Trio Engineered Products Inc v Pilot Crushtec International (Pty) Ltd 2019 (3) SA 580 (GJ) the plaintiff, Trio Products, had a contract with the defendant, Pilot Crushtec, in terms of which the defendant was given the sole and exclusive right to sell and distribute the products of the plaintiff in defined territories. When the plaintiff sought payment from the defendant in terms of the contract, the latter lodged a counterclaim based on three grounds:

  • The defendant alleged that the plaintiff breached the agreement by replacing the party with W Group as distributor, for which breach it sought damages.
  • The defendant alleged that the plaintiff breached the agreement, which was required to run ‘continuously and indefinitely’.
  • In the alternative to the claim above the defendant alleged that the plaintiff, through its holding company W Group, unlawfully competed with it contrary to the distribution agreement, which gave it the sole and exclusive right to distribute the products.

The plaintiff excepted to the defendant’s second counterclaim on the ground that it failed to rely on any term that prevented the plaintiff from terminating the agreement. That being the case the contract was terminable on reasonable notice. The plaintiff further excepted to the second counterclaim on the ground that as it was based on delict, it was not sustainable in a contractual context.

The court dismissed the exceptions with costs. Unterhalter J held that an agreement of unspecified duration was valid. Such agreement could not be terminated unless it contained a clause to that effect, express or tacit. Absent a term of the agreement permitting termination, which was a question of construction, there was no presumption that a contract of unspecified duration was terminable on reasonable notice. If the agreement was one in perpetuity, the parties would be held to the bargain. As in the present case the defendant pleaded that the agreement was continuous and indefinite, it was not one of unspecified duration in the sense that it was silent on the matter of duration. On the contrary it was specified to be indefinite. Once that averment was made the agreement had to be understood to endure in perpetuity, requiring no plea that it was not terminable. There was no presumption that an agreement expressed to be of indefinite duration had to be taken to be tacitly subject to termination on reasonable notice. On the contrary once an agreement was expressed to endure in perpetuity, it was for the party relying on reasonable notice to make the case for such construction. Where the agreement was silent as to the duration, it was terminable on reasonable notice, in the absence of a conclusion that it was intended to continue indefinitely.

Turning to the question of concurrence of action in delict and contract, the court held that few areas of private law had given rise to as much conceptual uncertainty as the circumstances in which a breach of contract could subsist alongside an actionable delict. From the case of Lillicrap, Wassenaar & Partners v Pilkington Brothers (SA) (Pty) Ltd 1985 (1) SA 475 (A) the following principles emerged, namely –

  • a breach of contract itself and without more was not a wrongful act for the purposes of Aquilian liability;
  • where the duty of care arose independently of any contractual duty, there was a concurrence of actions in contract and delict provided the other requirements for liability were satisfied; and
  • where the duty arose strictly in contract and where such contract subsisted, there was no need to extend liability beyond that arising under the contract because the remedy in contract sufficed and extension of liability into the realm of delict would infringe the autonomy of the parties in framing their rights and obligations under the contract.

A summary of the position was, therefore, that –

  • a breach of contract was not, without more, a delict;
  • the existence of a contract ordinarily excluded the recognition of delictual duties at variance with contractual ones;
  • parties to a contract could have additional or complementary duties arising independently in delict; and
  • determining wrongfulness, one had to proceed with caution when assessing whether a third party, harmed by a breach of contract, could sue a party to the contract for such harm, outside well-defined causes of action.

Foreign judgments

Recognition and enforcement of foreign civil judgment sounding in money if it is final and conclusive: The facts in Elan Boulevard (Pty) Ltd v Fnyn Investments (Pty) Ltd and Others 2019 (3) SA 441 (SCA) were that in 2002 Mr and Mrs Essack, South African nationals, emigrated to Australia where their trust, the Farhat Essack Family Trust (the Trust) concluded two contracts, one to buy an apartment and the other to buy furniture. Both Mr and Mrs Essack guaranteed performance by the Trust under the first contract, while Mr Essack alone guaranteed performance under the second contract. After breach of contract by the Trust, the appellant, Elan Boulevard sued the Trust in the Supreme Court of Queensland, Australia for damages and the Essacks under the guarantees. The court erroneously granted judgment against Mr and Mrs Essack for the full amount in respect of the two guarantees instead of splitting it up into judgment against Mr and Mrs Essack in respect of the first guarantee and against Mr Essack only regarding the second guarantee. As the Essacks had returned to South Africa the appellant applied to the GP for recognition and enforcement of the judgment of the Queensland Supreme Court. Legodi J dismissed the application.

The SCA upheld the appeal with costs. Ponnan JA (Dambuza, Mocumie, Schippers JJA and Mothle AJA concurring) held that it was a legal requirement of any action to enforce a foreign judgment in this country that the judgment be final and conclusive. The requirement of finality meant that the judgment had to be final in the particular court, which pronounced it. Final and conclusive meant that the judgment could not, although it would still be subject to appeal, be varied by the court which granted it. Furthermore, the judgment had to be final and conclusive on the merits and not only as to some interlocutory issue not affecting the merits.

South African courts would ordinarily not investigate the merits of a case adjudicated by a foreign court. It would not make a difference that a local court might have taken a different view or felt that the foreign court had erred. That was so as the remedy of an aggrieved litigant would be to appeal that judgment in the foreign jurisdiction. A South African court did not sit on appeal in relation to the judgment of a foreign court and, therefore, if it was contended that the decision of the foreign court was wrong, recourse has to be had to the mode of appeal provided for in that country.

In the instant case although notionally the foreign court order could have been varied by the Australian court to rectify the error, such variation would not relate to the merits of the liability of Mrs Essack, which was not disputed, but merely as to the quantum of such liability. As there was no appeal by the Essacks against the order of the Australian court, nor was there any attempt by them to have the obvious error corrected, that judgment was final and conclusive.

Fundamental rights

Differentiation between persons having same qualification not allowed: In terms of s 26(1)(a) of the Legal Practice Act 28 of 2014 (the LPA) for a person to be admitted and enrolled as a legal practitioner, they must have completed a Bachelor of Laws (LLB) degree offered at a ‘university’ over a period of four years. In Independent Institute of Education (Pty) Ltd v KwaZulu-Natal Law Society and Others [2019] 2 All SA 399 (KZP) the applicant, the Independent Institute of Education (IIE) approached the High Court for, among others, an order declaring that s 26(1)(a) of the LPA was unconstitutional and invalid to the extent that it failed to include Higher Education Institutions registered in terms of the Higher Education Act 101 of 1997 (the HEA), which were accredited and registered to provide an LLB degree approved by the South African Qualifications Authority (SAQA). That was after the first respondent, the KwaZulu-Natal Law Society, indicated that the LLB degree offered by the IIE did not meet the requirements for admission as an attorney in terms of s 2(1) of the Attorneys Act 53 of 1979, which has since been repealed by the LPA, which came into effect on 1 November 2018. After the repeal the admission of legal practitioners, including attorneys, fell under the LPA.

At the beginning of 2018, the applicant started offering the LLB degree at some of its campuses. The applicant is not a ‘university’ but a private ‘higher education institution’ duly registered in terms of the HEA. Its LLB degree was registered and accredited by SAQA and was on par with that offered at universities.

The court granted an order declaring s 26(1)(a) unconstitutional and invalid insofar as the use of the word ‘university’ excluded private higher education institutions duly registered and accredited to offer the LLB degree. It was further held that students graduating with an LLB degree offered by the applicant after January 2018 were qualified to enter the practice of the legal profession just like graduates from public universities. The Minister of Justice was ordered to pay costs.

Sibiya AJ held that having shown that the applicant met the criteria set out in s 29(3) (no discrimination on basis of race) of the Constitution and those in ch 7 of the HEA, the applicant enjoyed the same rights to offer the accredited four-year LLB degree as public universities. Its exclusion from s 26(1)(a) of the LPA limited that right. The impugned provision clearly differentiated between public ‘universities’ and private ‘higher education institutions’ that had been duly accredited to offer the LLB degree by the relevant structures in general and the applicant together with its students in particular. There was only one LLB degree that was accredited by SAQA and it was the same for public universities as that for the applicant. There was, therefore, no rational basis for differentiating between persons with the LLB degree obtained from the applicant following due recognition, accreditation and registration with the relevant educational authorities, including SAQA, from those with an LLB from public universities. That was particularly so because of confirmation from the Council on Higher Education and Training that the applicant’s four-year LLB degree was on par with that from public universities. There was, therefore, no rational link between the impugned provision and the government purpose it sought to achieve through differentiation. For that reason, the impugned provision limited the provisions of s 9(1) (equality provisions) of the Constitution.

Labour law

Reinstatement is primary remedy for substantively unfair dismissal: The facts in South African Commercial, Catering and Allied Workers Union and Others v Woolworths (Pty) Ltd 2019 (3) SA 362 (CC); 2019 (3) BCLR 412 (CC) were that until 2002 the respondent, Woolworths, employed its employees on a full-time basis, which gave them better benefits. However, it was decided in that year that in future all its employees would be employed on flexible working hour basis (flexi-timers) resulting in reduced benefits. In 2012 the respondent started converting full-time workers to flexi-time workers, which resulted in the majority of its employees opting for early retirement or voluntary severance while others agreed to become flexi-timers. Nevertheless, some employees, including the present applicants, insisted on remaining full-time workers. After negotiations the applicants agreed to become flexi-timers to be paid at the rate of full-time workers. The respondent mistakenly understood their stance to be that they insisted on remaining full-time workers and accordingly retrenched them for operational reasons, namely because of the employer’s economic, technological, structural or similar needs as provided for in s 189A(19) of the Labour Relations Act 66 1995 (the LRA). The respondent did not consider the alternatives of employing the applicants as full-time workers on reduced benefits, the effect of natural attrition and/or wage freezes. The first applicant trade union, the South African Commercial, Catering and Allied Workers Union (SACCAWU), in its name and on behalf of its affected members instituted proceedings in the LC for reinstatement of the applicants due to their alleged substantively and procedurally unfair dismissal. The CC held that the dismissal was both substantively and procedurally unfair and accordingly reinstated them. On appeal to the LAC, reinstatement was changed to 12 months’ remuneration, the court having been persuaded by the respondent’s argument that the applicants’ positions were no longer available.

The CC granted leave to appeal and upheld the appeal with no order as to costs. Reading a unanimous judgment of the court, Khampepe J held that the dismissal of individual applicants was substantively unfair as the respondent failed to prove that it complied with s 189A(19)(b) or (c) of the LRA by considering all possible alternatives before retrenching them. In other words, the respondent failed to show that the retrenchments were operationally justifiable on rational grounds or that it properly considered alternatives to retrenchments. In view of the finding on substantive unfairness there was no need for the court to engage on the issue of procedural unfairness.

In regard to the remedy to be granted, the court held that it was axiomatic that reinstatement was the primary remedy that the LRA afforded employees whose dismissal was found to be substantively unfair. Employees who were reinstated would resume their employment on the same terms and conditions, which prevailed at the time of the dismissal. Reinstatement had to be ordered when a dismissal was found to be substantively unfair unless one of the exceptions set out in s 193(2) applied, namely –

  • that the affected employees did not wish to continue working for the employer;
  • the employment relationship had deteriorated to such a degree that continued employment was rendered intolerable;
  • it was no longer reasonably practicable for the employees to return to the position that they previously filled; or
  • that the dismissal was found to be procedurally unfair only.

None of the exceptions were applicable in the present case.

The respondent had not shown that reinstatement was not reasonably practicable. Therefore, the LC was correct in ordering reinstatement with retrospective effect to the date of dismissal. That being the case the court had to revive the contracts of employment, which existed between the applicants and the respondent at the time of the dismissal, that being done on the basis that as soon as possible after the judgment had been handed down the parties would resume the consultation process which ended when the dismissal took place.        

Land reform

Power of the LCC to determine or approve compensation upon expropriation of land: In terms of s 22(1)(b) of the Restitution of Land Rights Act 22 of 1994 (the LRA) the LCC has power to determine or approve compensation payable in respect of land owned by or in the possession of a private person on expropriation or acquisition of such land in terms of the LRA. However, in terms of s 12(1)(a) of the Property Valuation Act 17 of 2014 (the PVA) whenever a property has been identified for purposes of land reform, it must be valued by the Office of the Valuer-General.

The issue in Moloto Commmunity v Minister of Rural Development and Land Reform and Others 2019 (3) SA 523 (LCC) was ‘just and equitable’ compensation to be paid. There the first defendant, the minister, made certain offers to landowners (second to 17th defendants), which were rejected as inadequate. To resolve the issue the parties agreed that the LCC would determine compensation payable by the minister. By consent, the agreement was made an order of court on 24 May 2018. At the hearing of the matter on a later date it was indicated that the minister intended to make an application to set aside the court order granted on 24 May 2018 so that determination of compensation could be done by the Office of the Valuer-General. However, no such application was made, but at the hearing of the matter counsel handed-in a ‘Notice of Motion’ accompanied by attachments, which showed values to the affected properties as determined by the Valuer-General. There was nothing new in the valuations as they were the already rejected offers previously made by the minister. It was submitted on behalf of the minister that the Notice of Motion had ‘overtaken’ the court order granted on 24 May 2018 and that the PVA ousted the jurisdiction of the LCC to determine or approve compensation payable.

The LCC held that the court order dated 24 May 2018 remained binding and had not been negated by the contents of the Notice of Motion handed up at the hearing. The minister was ordered to pay costs on a punitive scale because of the many postponements, delays and failures to comply with various directives.

Canca AJ held that once a claim for restitution of a right in land, instituted in terms of the LRA, had been referred to the LCC for adjudication, that claim was subject to the court’s jurisdiction. In such an instance the court also had the power to determine or approve the compensation payable to the owner whose property was the subject of such a claim on expropriation or acquisition by the state. In the present case, the fact that the issue of the determination of the amount of just and equitable compensation payable by the minister would be left to the court, absent agreement between the parties, was also recorded in the minutes of a pre-trial conference held thereafter. There could, therefore, be no doubt that in the light of the court order and contents of a subsequent pre-trial conference, the amount of the just and equitable compensation would be determined by the LCC.

Unless a court order had been set aside or rescinded, it remained valid and binding on all the parties. Having failed to set aside the court order of 24 May 2018, it was not up to the minister to contend that her hands were tied by the provisions of the PVA. The mere fact that the Valuer-General was empowered by the PVA to determine the compensation did not, without more, oust the jurisdiction of the LCC to do so. Had that been the intention of the legislature, it would have done so in specific terms or by implication.    

Sale of land

Effect of late recordal of instalment sale agreement: In Amardien and Others v Registrar of Deeds and Others 2019 (3) SA 341 (CC); 2019 (2) BCLR 193 (CC) the applicants, Amardien and others, were beneficiaries of a low-cost housing subsidy scheme who received financial assistance by way of a state subsidy from the fifth respondent, the Cape Town Community Housing Company (the company) to buy houses from it. In terms of s 20(1)(a) of the Alienation of Land Act 68 of 1981 (the ALA) the company, as a seller, was required to record the instalment sale agreements with the first respondent, the Registrar of Deeds. Failure to record the sale had the result that no person would, by virtue of the deed of alienation, receive any consideration until the recording had been effected, which provision was found in s 26(1) of the ALA. The company did not record the instalment sale agreements but contrary to the section started receiving instalments from the applicants. When the latter fell into arrears, the company sent them letters demanding payment, without specifying the amount of arrears and threatening cancellation of the contracts if there was no payment within ten days. It was only at a much later date, some ten years after conclusion of the instalment sale agreements, that the agreements were registered with the Registrar of Deeds. Thereafter, the company terminated the agreements and sold the properties to a third party, the S & N Trust (the Trust). Furthermore, the company caused the Registrar to cancel the recordal of the instalment sale agreements and have the properties transferred to the trustees of the Trust.

The applicants challenged the validity of cancellation of the instalment sale agreements by the company and cancellation of recordal of same by the Registrar. The WCC per Binns-Ward J dismissed the claims. After unsuccessfully petitioning the SCA for leave to appeal, the applicants approached the CC where leave to appeal was granted and the appeal upheld with costs to be paid by the company.

Reading a unanimous judgment of the court Mhlantla J held that the company was obliged to record the instalment sale agreements with the Registrar of Deeds within 90 days of their conclusion but failed to do so timeously, only doing so after more than ten years. The effect of late recordal of the agreements was clear, namely that payment made under the agreements were not due and payable and, therefore, the applicants were not in arrears as contended by the company. For the period that the agreements remained unrecorded, no fault could be imputed to the purchasers for not paying the instalments. Moreover, the s 129 of the National Credit Act 34 of 2005 notices served on the applicants advising that they were in arrears with payment of instalments were defective as they did not indicate the amount of the arrears. It followed that the s 129 notices were premature and invalid. They could not, therefore, form a basis for cancellation of the instalment sale agreements. The effect thereof was that the subsequent cancellation of the recording of the agreements by the Registrar, premised on valid cancellation thereof by the company, was also invalid.

Other cases

Apart from the cases and material dealt with or referred to above the material under review also contained cases dealing with: Actuarial surplus of a pension fund, admission of advocates, application for mining and prospecting rights, community schemes ombud, construction of fibre optic network, formation of tacit agreement, interim interdict preventing payment of pension benefits, interpretation of construction agreement, interpretation of professional indemnity insurance, interpretation of replacement-value clause in insurance contract, leave to continue proceedings on behalf of company, locus standi to sue on contract, no separation of decree of divorce from forfeiture of benefits in divorce proceedings, organised crime and sentencing, parol evidence rule, professional misconduct by attorney, removal of liquidator from office, refusal to effect transfer after sale of municipal land, review and setting aside of administrative action, review of conduct of own officials by state, submission of labour and social plan by holder of mining right, treatment of evidence of accomplice, writ of summons in rem and warrant of arrest of ship.

This article was first published in De Rebus in 2019 (Aug) DR 22.