The law reports – August 2024

August 1st, 2024
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May [2024] 2 All South African Law Reports (pp 315 – 637); June [2024] 2 All South African Law Reports (pp 639 – 927); Judgments Online (JOL) – May, June 2024
This column discusses judgments as and when they are published in the South African Law Reports, the All South African Law Reports, the South African Criminal Law Reports and the Butterworths Constitutional 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:

GJ: Gauteng Division, Johannesburg
GP: Gauteng Division, Pretoria
LCC: Land Claims Court
NCK: Northern Cape, Kimberley
NWM: Northern Cape, Mahikeng
SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town

Civil procedure

Appeal against order compelling delivery of r 53 record: In Murray and Others NNO v Ntombela and Others [2024] 2 All SA 342 (SCA), the appellants were joint liquidators of a close corporation (Phehla Umsebenzi) in liquidation. The respondents (a married couple) allegedly purchased immovable property from Phehla Umsebenzi for R 2,5 million but transfer was not effected into their names. The liquidators decided to sell the property at auction instead of transferring it to the respondents. The respondents obtained a court order staying the auction sale pending a review application to set aside the liquidators’ decision.

The issues faced by the court were whether the liquidators’ decision was subject to review under r 53 of the Uniform Rules of Court, whether the liquidators could invoke 6(5)(d)(iii) to question the legal competence of the review application before filing the record under r 53(1)(b) and whether specific performance could be ordered against liquidators to transfer the property, which would negate the concursus creditorum principle.

The High Court ruled in favour of the respondents, stating that the liquidators’ r 6(5)(d)(iii) notice was premature as the respondents had not yet exercised their right to supplement the founding affidavit under r 53(4) after receiving the record. On appeal, the majority of the court dismissed the appeal, holding that once the court’s jurisdiction for review proceedings is established, the reach of r 53 becomes unavoidable, and the liquidators must produce the record before challenging the legal competence of the review application.

 

An application for summary judgment may now only be brought after a defendant’s plea in an action had been filed as opposed to after notice of intention to defend was given: In ABSA Bank Ltd v Saunderson [2024] 2 All SA 364 (NCK), the plaintiff applied for summary judgment against the defendant, seeking payment plus interest on three claims. The defendant opposed the application, arguing that the plaintiff’s supporting affidavit went beyond what is expected in a summary judgment application by discussing the validity of the defendant’s plea and attaching additional documents, creating a ‘mini-trial’.

The court discussed the interpretation and application of r 32 of the Uniform Rules of Court regarding the requirements for a supporting affidavit in a summary judgment application and whether the plaintiff’s supporting affidavit, by addressing the defendant’s plea and attaching additional documents, exceeded the permissible scope of a summary judgment application.

The court adopted a more liberal approach, allowing the plaintiff to provide additional evidence and documents in the supporting affidavit to substantiate why the defendant’s defences did not raise triable issues, as long as it did not delve into the merits of the case. The court found that the defendant’s defences, based largely on the National Credit Act 34 of 2005, did not raise bona fide defences. Summary judgment was granted in favour of the plaintiff.

 

Court’s discretion in an application to reopen matter must be exercised judicially and on consideration of all relevant factors and is a matter of fairness to both parties: The applicant (AD Trade) obtained an arbitration award against the Republic of Guinea and sued Guinea, its Central Bank, Standard Bank, and the South African Reserve Bank for payment. Standard Bank did not defend the action but delivered a discovery affidavit. AD Trade requested further particulars from Standard Bank, which Standard Bank refused to provide, leading to an application to compel. Standard Bank sought to strike out portions of AD Trade’s replying affidavit and later sought to introduce further material.

In AD Trade Belgium SPRL Private Limited v Central Bank of Guinea and Others and related matters [2024] 2 All SA 806 (GP), the court discussed whether Standard Bank should be allowed to reopen the matter and introduce further material, whether portions of AD Trade’s replying affidavit should be struck out for introducing new matter and whether Standard Bank should be compelled to provide further particulars requested by AD Trade under r 21 of the Uniform Rules of Court.

The court exercised its discretion in managing the proceedings, allowing the introduction of relevant evidence while preventing the introduction of new material at a late stage, and compelling Standard Bank to provide the necessary particulars as a non-partisan litigant. Standard Bank’s application to reopen and introduce further material was dismissed due to failure to identify and describe the supplementary submissions. The application to strike out portions of AD Trade’s replying affidavit was dismissed, as the impugned paragraphs did not introduce new material. Standard Bank was ordered to furnish the further particulars requested by AD Trade, as the information was relevant and necessary for trial preparation under r 21.

 

Execution of order pending appeal: FS Mining Wash Plant (Pty) Ltd v V-Flow SA (Pty) Ltd and Another [2024] 2 All SA 849 (NWM) involved a dispute between FS Mining, the owner of a property, and V-Flow, the lessee of the property for chrome washing operations. On 13 March 2024, V-Flow took possession of the property and locked out FS Mining’s employees. In March 2024, a rule nisi was issued, directing V-Flow and Mavimbela to restore FS Mining’s undisturbed possession of the property. If they refused, the Sheriff would be authorised to seize and restore possession to FS Mining.

The court found that both parties should have access to the property, as per their contract. The court rejected FS Mining’s argument that the burden was on V-Flow to show why the rule nisi should not be confirmed. Instead, FS Mining had to establish the requirements for a final interdict, which it did. The rule nisi was confirmed, entitling FS Mining to regain possession. As V-Flow appealed the spoliation order, s 18 of the Superior Courts Act 10 of 2013 applied, granting V-Flow an automatic right to appeal to a higher court.

 

Power of court to vary trust provisions: Janse De Wit and Others v De Wit NO and Others [2024] JOL 64098 (WCC) essentially involved a dispute between one of three trustees (the first applicant) in a family trust, supported by two of her children who were beneficiaries of the trust, and the two other trustees. The applicants sought the termination of the trust and for a third party (Mr Bester) to be appointed as a receiver for the purposes of holding, dealing with, and giving effect to the distribution of the property of the trust to the beneficiaries.

Joubert AJ sets out the provisions of s 13 of the Trust Property Control Act 57 of 1988, which deals with the power of the court to vary trust provisions (para 8). The first question was whether the offending provision brought about unforeseen consequences (the first jurisdictional requirement) and only if that was found to be the case, did the second question arise, namely whether the provision hampered the achievement of the objects of the founder, prejudiced the interests of the beneficiaries or conflicts with the public interest (the second jurisdictional requirement). A case was not made out for intervention in terms of s 13 of the Act. Even if that conclusion was wrong, the court did not believe that termination of the trust would be appropriate relief.

 

Summary judgment application: The plaintiff in SB Guarantee Company (RF) (Pty) Ltd v Botes [2024] 2 All SA 529 (GP), entered into a guarantee agreement in 2015 with a bank to guarantee the obligations of the bank’s home loan debtors. In 2016, the defendant obtained a
R 1,44 million home loan from the bank, secured by the plaintiff’s guarantee and the defendant’s indemnity to the plaintiff. When the defendant defaulted, the bank called on the plaintiff to pay under the guarantee. The plaintiff then applied for summary judgment against the defendant to recover the amount owed.

The defendant raised various defences, including jurisdiction and alleged non-compliance with the National Credit Act 34 of 2005. However, the court found the defences lacked merit and did not constitute bona fide triable issues.

Regarding declaring the defendant’s immovable property executable, the court held that the substantial debt owed and the property being the only tangible security justified such an order. It rejected arguments that this would violate the defendant’s rights, finding no less invasive avenues available to the plaintiff.

Consequently, the court granted summary judgment in favour of the plaintiff.

Constitutional and administrative law

Judicial review – time limit imposed by s 7(1) of Promotion of Administrative Justice Act 3 of 2000 (PAJA): Van der Vyver Transport (Pty) Ltd v Minister of Labour and Others [2024] 2 All SA 581 (WCC) concerned an employer’s (appellant) dissatisfaction with the tariff of assessment applied by the Director-General (DG) under the Compensation for Occupational Injuries and Diseases Act 130 of 1994. The appellant instituted a review application under PAJA, which the respondents opposed as being brought outside the 180-day period prescribed by PAJA, without an application for extension.

The court a quo dismissed the application, finding an unreasonable delay, failure to provide a satisfactory explanation, and failure to exhaust internal remedies. On appeal, the majority held that proceedings for judicial review under PAJA must be instituted within 180 days or accompanied by an extension application under s 9(2). Failure to bring an extension application is fatal.

The appellant’s application was brought outside the 180-day period, and no extension application was made. This alone warranted dismissal. Even if an extension application was considered, the interests of justice did not favour granting an extension due to the delay and failure to exhaust internal remedies.

In a dissenting judgment, it was held that the context, absence of prejudice, importance of the case, and apparent merit demonstrated that the interests of justice required granting condonation. It was also stated that no internal remedies were available.

The majority dismissed the appeal, finding the application was time-barred and internal remedies were not exhausted.

Corporate and commercial

Business rescue plan: The court in Reiscor Two (Pty) Ltd t/a Bootleggers v Anheuser-Busch Inbev Africa (Pty) Ltd and Others and a related matter [2024] 2 All SA 902 (GJ) had to decide on an application by business rescue practitioners to set aside a creditors’ vote rejecting the company’s business rescue plan, and a counter-application by a creditor for the company’s liquidation.

The key issue was whether the business rescue plan would yield a better return for creditors than liquidation. The plan envisaged winding down operations and realising the business to maximise creditor returns compared to liquidation, without compromising creditor claims.

The creditors voted against the plan, citing concerns about lack of supporting facts, unreliable property valuation, uncertainty around debt recovery, non-disclosure of business sale details, and need for further investigations.

However, the court, per Opperman J, found that if the creditors had genuine concerns, they should have raised them earlier or proposed amendments. The business rescue practitioners fulfilled their statutory obligations and attempted cooperation. The creditors’ remedy for distrust was to remove the practitioners, not investigate them.

The court upheld that the creditors’ vote was inappropriate and set it aside, while dismissing the liquidation application.

Criminal law and procedure

Applicability of prescribed minimum sentence provisions: The respondent in Director of Public Prosecutions, KwaZulu-Natal, Pietermaritzburg v Ndlovu [2024] 2 All SA 315 (SCA) was convicted of rape under the Criminal Law (Sexual Offences and Related Matters) Amendment Act 32 of 2007 and kidnapping. He was initially sentenced to life imprisonment for rape under s 51(1) of the Criminal Law Amendment Act. However, on appeal, the High Court relied on the SCA’s decision in Mahlase v S (SCA) (unreported case no 255/13, 29-11-2013) (Lewis, Tshiqi and Theron JJA) to set aside the life sentence, substituting it with 15 years’ imprisonment. In Mahlase, it was held that the prescribed minimum life sentence for rape did not apply where only one alleged perpetrator was before the court when the victim was raped by multiple people.

The Director of Public Prosecutions appealed against the reduced sentence. The SCA emphasised the importance of precedent and stare decisis but noted its competence to overturn its own clearly wrong decisions. Examining Mahlase, the court found it read words into s 51(1) contrary to principles of contextual interpretation, diminishing the section’s effectiveness and the overarching object of the Criminal Law Amendment Act.

Applying principles of statutory interpretation to s 51(1) and part I of schedule 2, the court held that a life sentence must ordinarily be imposed for rape convictions. To the extent Mahlase required proving ‘other rape incidents’ before invoking s 51(1), it was clearly wrong.

Consequently, the appeal was upheld, and the respondent’s original life sentence for rape was reinstated by overturning the erroneous interpretation in Mahlase.

Family law and persons

Parent and child – relocation with child: The case involved unmarried parties with a child (L), aged eight. The applicant father in RH v NM [2024] 2 All SA 504 (WCC) sought to permanently relocate L to Australia where he resided, while the respondent mother opposed this and counter-applied to relocate L to France.

The court, per Joubert AJ, emphasised that the child’s best interests are paramount per s 28(2) of the Constitution. While the mother had previously frustrated the father’s contact with L, the court did not accept the Family Advocate’s recommendation for L to first relocate to Australia for a year, as this would not serve L’s best interests.

Instead, the court accepted the mother’s proposal that L relocate to Australia for a year once he turns 13, if he desires to do so and certain conditions are met, including a relocation plan, maintenance agreement, and therapeutic support. The court found this fair, sensible, and in L’s best interests.

The father’s application was dismissed, and the mother was granted leave to permanently relocate L to France, subject to the above arrangement. The court detailed the parties’ rights and obligations going forward.

Insolvency

Liquidation application and the effect of withdrawal of application: The first and second applicants were creditors of Tariomix and obtained a provisional liquidation order against the company. In Botes and Others v Tariomix (Pty) Ltd t/a Forever Diamonds and Gold and Others [2024] 2 All SA 830 (NWM), the court had to decide whether Tariomix or other interested parties made a case against making the provisional liquidation order final. The first and second applicants delivered a notice of withdrawal after Tariomix was placed under provisional liquidation. Other affected creditors intervened as applicants, seeking to be the future liquidating creditors.

The issues before the court were whether a notice of withdrawal by the original liquidating creditors can terminate the liquidation proceedings after a provisional liquidation order has been granted, the status and rights of intervening creditors in such a case and the effect of a provisional liquidation order on the legal status of the company.

The court held that once a provisional liquidation order is granted, the withdrawal of the application by the original liquidating creditors cannot automatically collapse the provisional order or the proceedings. The court has an obligation to determine whether there is cause for granting a final liquidation order, regardless of the withdrawal by the original applicants. The withdrawal application by the first and second applicants was defective as they did not tender costs or obtain consent/leave from other parties. The withdrawal application was dismissed, allowing the court to proceed with determining whether to make the provisional liquidation order final, with the intervening creditors as applicants.

Insurance

Life insurance policy – claim for specific performance: The plaintiff Ncube v Liberty Group Limited [2024] 2 All SA 861 (GJ) was the policyholder of a life insurance policy with the defendant (Liberty) over the life of the insured (Mr Mhlanzi). After Mr Mhlanzi’s death in 2017, the plaintiff claimed the life cover benefit, but Liberty failed to pay. Liberty pleaded that the plaintiff was only entitled to payment if not a person of interest in the ongoing police investigation into Mr Mhlanzi’s murder. The plaintiff sued for specific performance of the insurance contract.

Prior to trial, the plaintiff’s application for summary judgment was dismissed. In its plea, Liberty sought a stay of proceedings pending the final police determination and inquest results. The court held that a stay is only granted in exceptional cases and exercised sparingly. There is no rule staying civil proceedings where a criminal prosecution is pending. A stay requires an element of state compulsion impacting the accused’s right to silence, which was not present. Granting a stay to allow Liberty to establish an unpleaded, speculative defence was not in the interests of justice.

Regarding the main action, the plaintiff proved the necessary facts to claim under the policy, while Liberty failed to plead any policy provisions or facts supporting an exception to liability. Liberty conceded its plea disclosed no defence. The court ordered Liberty to pay out under the policy. Liberty’s vexatious opposition after the dismissed summary judgment application attracted an attorney-and-client costs order against it.

Legal practice

Legal Aid’s conduct, viewed against its mandate of procuring legal services to indigent communities to enable them to bring their claims for restitution of land rights, pointed to its obligation to pay attorneys in land claim for work done: In M Magigaba Inc Attorneys and Another v Legal Aid South Africa and Others [2024] 2 All SA 407 (LCC), the applicants brought an urgent application against Legal Aid and its chief executive officer for payment of legal fees and disbursements, including amounts due to counsel. The applicants continued to represent the Kwalindile Community in ongoing land claim court hearings after Legal Aid took over the management of legal assistance in such cases. Legal Aid refused to pay the fees and disbursements claimed by the applicants since 1 January 2022, and challenged the court’s jurisdiction.

The court discussed whether the applicants were entitled to charge fees or incur disbursements for work performed before being accredited with Legal Aid, whether Legal Aid was entitled to withhold accreditation from the applicants and the court’s jurisdiction to determine the applicants’ entitlement to payment and Legal Aid’s obligations under the Restitution of Land Rights Act 22 of 1994.

The court confirmed its jurisdiction, as the dispute arose from the exercise of the Chief Land Claims Commissioner’s power under s 29(4) of the Restitution of Land Rights Act to arrange legal representation. The court found that Legal Aid, as a statutorily created institution, was obliged to fulfil its mandate of procuring legal services for indigent communities in land claim cases. The court noted that Legal Aid had never terminated the applicants’ mandate, appointed another legal representative, or informed the applicants that their invoices would not be paid.

Local government

Refusal of application for departure from scheme: The applicant in Walker v City of Cape Town and Others [2024] 2 All SA 612 (WCC) required departures from the City’s Development Management Scheme (DMS) to regularise an existing outhouse on her property and remove restrictive title deed conditions limiting the property to a single dwelling without the City’s consent. She applied to allow two dwellings and domestic worker accommodation.

The City’s Municipal Planning Tribunal (MPT) granted the departures and removed certain title deed restrictions. However, the Appeal Authority partially overturned this decision following an appeal by the third respondent. The applicant sought review of the Appeal Authority’s decision.

The applicant argued the Appeal Authority erroneously focused on the past instead of future use of the property, committed errors of law and fact by relying on her perceived subjective intention, and its decision was irrational as it removed a favourable title deed restriction, leaving her worse off.

The court found merit in the applicant’s challenge. Authorities establish the City’s duty was to objectively consider compliance with zoning and building regulations, not the applicant’s subjective intention, which was wrongly considered. The Appeal Authority also incorrectly assumed the application was for three Airbnb dwellings instead of two dwellings and staff quarters. While potential misuse was a concern, the solution was tightening protective conditions, not denial.

The Appeal Authority further wrongly claimed insufficient information was provided when the requested information was irrelevant. Removing one title deed condition was also found to be irrational.

Consequently, the Appeal Authority’s decision upholding the third respondent’s appeal was reviewed and set aside entirely. The matter was remitted to the Appeal Authority for reconsideration.

Tax

Taxpayer’s right to representation: Poulter v Commissioner for the South African Revenue Service [2024] 2 All SA 876 (WCC) involved an appeal against a Tax Court decision confirming the appellant’s taxable income assessment for 2018 and ordering her to pay the Commissioner’s costs. The Tax Court made the orders without hearing the appellant or her father, Mr Van der Merwe, who sought to represent her as her authorised representative but was denied as a non-legal practitioner.

On appeal, the appellant argued that the Tax Court erred in holding that Mr Van der Merwe could not appear on her behalf and in granting a ‘default judgment’ without considering the evidence.

The court held that s 33 of the Legal Practice Act 28 of 2014, prohibiting non-legal practitioners from appearing in court, applies only to ‘courts of law’. The Tax Court, functioning as an administrative tribunal under the Tax Administration Act 28 of 2011, does not qualify as a ‘court of law’ under s 166 of the Constitution.

Therefore, the court concluded that a taxpayer is entitled to be represented by a lay representative before the Tax Court and upheld the appeal.

Other cases

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

Merilyn Rowena Kader LLB (Unisa) is a Legal Editor at LexisNexis in Durban.

This article was first published in De Rebus in 2024 (August) DR 46.

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