The Law Reports – December 2021

December 1st, 2021
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October [2021] 4 All South African Law Reports (pp 1 – 319); October 2021 (10) Butterworths Constitutional Law Reports (pp 1087 – 1201)

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:

CC: Constitutional Court

GP: Gauteng Division, Pretoria

ECG: Eastern Cape Division, Grahamstown

KZD: KwaZulu-Natal Local Division, Durban

LC: Labour Court

LAC: Labour Appeal Court

SCA: Supreme Court of Appeal

WCC: Western Cape Division, Cape Town

Building contract

Dispute resolution by adjudication: In Zingwazi Contractors CC v Eastern Cape Department of Human Settlements and Others [2021] 4 All SA 299 (ECG), a building contract was concluded between Zingwazi and the first respondent (the Department), wherein Zingwazi was to provide a community centre in the Eastern Cape. The contract provided for dispute resolution by way of settlement, adjudication, arbitration, and mediation. A determination by the adjudicator would be immediately binding on and implemented by the parties. If dissatisfied with the determination, either party could give notice of dissatisfaction to the other party and to the adjudicator within ten days of receipt of the determination and refer the dispute to arbitration. The determination would remain in force and continue to be implemented until overturned by an arbitration award. The Rules of Adjudication of the eighth respondent provided in r 6.1.4, that the adjudicator’s written determination would be binding on the parties until overturned or varied through arbitration.

When a dispute arose between the parties, the tenth respondent as adjudicator, decided in favour of Zingwazi, for payment by the Department of the sum of R 12 657 815,80. The Department was dissatisfied with the determination and elected to refer the matter to arbitration and did not pay in terms of the determination. Zingwazi instituted motion proceedings against the first to seventh respondents for an order directing them to prosecute the arbitration proceedings to finality and to pay in terms of the adjudicator’s determination. An order was subsequently made by agreement in terms of which Zingwazi’s relief was granted but was suspended pending the determination and finalisation of a counterapplication by the second respondent (the MEC). If the counterapplication was dismissed, the suspension was to terminate within two days of such dismissal.

In the counterapplication, the MEC sought declarations of invalidity against two clauses in the contract and r 6.1.4. Relying on the right to a fair public hearing in terms of s 34 of the Constitution, it was argued that the impugned provisions conflicted with the rule that a judgment is usually suspended pending an appeal or review; and that the adjudication process did not adhere to the principles of natural justice.

The immediate enforceability of the adjudicator’s decision did not prevent an aggrieved party from proceeding to arbitration where a fair hearing would be afforded. Confirming the efficacy of adjudication as a dispute resolution process, the court stated that the voluntary nature thereof ensured against a contractual term being unfairly weighted in favour of only one of the parties. None of the grounds raised by the MEC in support of the contention that the Adjudication Rules conflicted with s 34 of the Constitution were found to be sustainable.

Finally, the court addressed the MEC’s contention that the Construction Industry Development Board and the Minister of Public Works should have been joined in the counterapplication. Highlighting the nature of the dispute, the court found neither of those parties to have a direct interest in the matter. The counterapplication was thus dismissed.

Civil procedure

Delictual damages arising from conduct of lessor which resulted in demise of lessee’s business: In Brentmark (Pty) Ltd and Another v Puma Energy South Africa (Pty) Ltd [2021] 4 All SA 106 (WCC), a service station operated by the first plaintiff (Brentmark) sold petroleum products supplied to it by the defendant (Puma). An adjoining convenience store was operated by the second plaintiff (OK). The premises on which the plaintiffs’ businesses were conducted was leased for the owner (Caledonian) by a company (Brent Oil) from which Brentmark sub-leased the property. Brent Oil later changed its name to Puma. The convenience store business was conducted by OK in terms of a further sub-lease the ‘BrentOK sub-lease’ concluded between it and Brentmark. Brent Oil (and subsequently Puma) was not a party to the BrentOK sub-lease, while OK was not a party to the dealer agreement or the Brentmark sub-lease.

Dissatisfied with the allegedly onerous terms of the dealer agreement and Puma’s refusal to revise such terms, Brentmark entered into a sale agreement in respect of the service station and OK in turn sold the convenience store. In terms of the Brentmark sub-lease, Puma’s consent was needed for the sale of the filling station. Its refusal to furnish consent was alleged by Brentmark to constitute a breach of contract, and Brentmark gave notice of cancellation of the agreement. However, subsequent discussions between the parties led to the termination of the agreement being postponed until 31 January 2019. According to Brentmark, Puma took certain commercial steps that ultimately led to the demise of its filling-station business, forcing it to close the filling-station business. The convenience store business of OK was similarly forced to close. The plaintiffs sued Puma for damages for breach of contract.

Puma filed a notice in terms of r 23(1) raising an exception to the particulars of claim, averring that they were both vague and embarrassing, and/or lacked averments necessary to sustain their causes of action.

Gamble J held that in order to succeed with the exception, Puma had to persuade the court that on every interpretation, which OK’s claims against it could reasonably bear, no cause of action was disclosed. It also had to show that the claims were bad in law.

The exception related to delictual damages for pure economic loss occasioned to a plaintiff by a defendant whose causal negligence has allegedly resulted in such loss. Puma contended that OK had failed to make out a case that Puma’s breach of the dealer agreement with Brentmark, a contract to which it claimed OK was a stranger, was wrongful to the extent that Puma should be held liable to OK for damages in delict.

The court held that in a case such as the present, where there was no established legal precedent for the claim asserted by OK, the court would be required to consider whether the claim so advanced met the relevant policy considerations such as indeterminate liability, blameworthiness, and vulnerability to risk. The court found the alleged conduct of Puma to fall short of the standards of decency and fairness that informs the substantive law of contract and did not measure up to the behaviour to be expected of a party in its position.

The exception was dismissed.

Class action

Nature of opt-out class action: Certification of an opt-out class action was sought by the applicants in Stellenbosch University Law Clinic and Others v Lifestyle Direct Group International (Pty) Ltd and Others [2021] 4 All SA 219 (WCC), who were seeking to end alleged fraudulent conduct by the respondents. The applicants alleged that the respondents targeted consumers needing loans, duped them into concluding unwanted contracts for legal services, and deducted unauthorised amounts from their bank accounts.

Two applications by non-parties to the suit were brought for leave to intervene, and for admission as amicus curiae.

The admission to proceedings of an amicus curiae is governed by r 16A of the Uniform Rules, as well as the court’s inherent jurisdiction to regulate its own process. Ultimately, the discretion to admit an amicus is taken in the interests of justice. The party seeking such admission succeeded in this matter.

The court referred to the benefits and representative nature of class actions. A class action does not require every member of the class to have an identical cause of action or to seek identical relief. It is sufficient that there be some issues of fact, or some issues of law (or a combination thereof) that are common to all members of the class and can appropriately be determined in one action. The court was satisfied that the interests of justice warranted certification in this case.

The type of class action sought was an ‘opt-out’ action. Such a class action automatically binds members of the class to the class action and the outcome of the litigation unless the individual class members take steps to opt out of the class action. The court held that the present matter was suited to an opt-out class action.

The court granted the applicants’ request for the appointment of a ‘special master’ to attend to the administration of the class action, including the verification of claims, the disbursement of payments and the management of any surplus amounts.

Constitutional and administrative law

Direct reliance on provisions of Constitution for exercise of right: In March 2019, the second respondent (the Good Party) in Electoral Commission of South Africa v Democratic Alliance and Others [2021] 4 All SA 52 (SCA) lodged a complaint with the Electoral Commission of South Africa, alleging that the first respondent, the Democratic Alliance (the DA), had contravened s 89(2) of the Electoral Act 73 of 1998 and item 9(1)(b) of the Code in the run up to the national and provincial elections held on 8 May 2019 by publishing false information with the intention of influencing the outcome of an election, and false and defamatory allegations concerning the Good Party leader, Ms Patricia De Lille.

Ms De Lille was a former member of the DA. In guidelines prepared for campaigners of the DA, it was stated that Ms De Lille had been fired because she was involved in all sorts of wrongdoing in the City of Cape Town. It was that and related statements, which grounded the Good Party’s complaint. The Commission found that the DA had contravened item 9(1)(b) of the Electoral Code of Conduct and ordered it to issue a public apology. DA launched an application in the Electoral Court to review and set aside the Commission’s decision. The court held that the Commission’s power to adjudicate disputes was limited to the mechanics of an election, and it had no power to adjudicate an issue, which was not administrative in nature. It was thus concluded that decisions of the Commission were invalid and had to be set aside, which led to the present appeal.

The court as per Schippers JA (Maya P, Zondi JA, Goosen and Sutherland AJJA concurring) held that the Commission erred in submitting that s 190(1) and (2) of the Constitution, in terms of which it was enjoined to manage elections and was granted additional powers prescribed by national legislation, gave it the power to determine a complaint concerning a breach of the Code and to take remedial action. It had made its finding against the DA in terms of s 5(1)(o) of the Electoral Commission Act 51 of 1996. A decision deliberately and consciously taken under the wrong statutory provision cannot be validated by the existence of another statutory provision authorising that action. In any event, none of the provisions relied on grounded the power to make a finding that the Code had been contravened or to take remedial action under it. Secondly, the Commission was precluded from relying directly on the Constitution by the principle of subsidiarity. Where legislation has been enacted to give effect to a constitutional right, a litigant must either rely on that legislation or challenge its constitutionality. It cannot bypass legislation and rely directly on the right.

The principle of legality, an aspect of the rule of law, requires that a body exercising a public power must act within the powers lawfully conferred on it. The Commission violated that principle when it decided that the DA had breached the Code.

Costs in Labour Courts

Rule of practice that costs follow the result does not apply in labour matters: In National Union of Mineworkers obo Masha and Others v Samancor Limited (Eastern Chromes Mines) and Others 2021 (10) BCLR 1191 (CC), the applicant, the National Union of Mineworkers, acting on behalf of five of its members, employed by the first respondent, Samancor Ltd (Eastern Chromes Mines) sought leave to appeal to the CC against a judgment and order of the Labour Appeal Court (LAC).

The employee applicants were charged with insubordination, found guilty at a disciplinary inquiry, and dismissed. The charge of insubordination was based on an allegation that the employee applicants had disobeyed instructions to install certain safety measures before resuming actual mining work. They referred a dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). They alleged that the employer had been inconsistent in disciplining them in that one of them, Ms Maseko, had not been charged along with the others until the applicant complained. Once charged, Ms Maseko and another employee were not dismissed. The CCMA arbitrator found that there had been an unjustifiable differentiation in the treatment of the employees, holding that the dismissal was unfair and awarded reinstatement. First respondent challenged the award on review to the Labour Court (LC). The LC found that the misconduct charged had not been proven and dismissed the review application, making no order as to costs. On appeal, the LAC held that the LC failed to consider the actual issue, which was whether there had been inconsistency of discipline. The LAC held that on the evidence Ms Maseko’s acquittal was appropriate. It found that the employees’ complaint of inconsistent application of discipline was thus founded on an incorrect premise. As the employees had been aware of the rules, dismissal was an appropriate sanction, given the seriousness of the misconduct. The LAC set aside the LC’s order. It held that the dismissal was procedurally and substantively fair and ordered the applicant to pay the costs incurred both in the LC and the LAC.

The CC held that the LAC’s finding that there was no inconsistency of discipline was unassailable. The court held that, given the nature of the mining industry and its often-unsafe conditions, the disregard of the instructions that had been given was a serious matter and dismissal was an appropriate sanction. The application for leave to appeal against the dismissal fell to be dismissed. In relation to costs, however, the LAC had erred in awarding costs against applicant. Where such an order was made, reasons had to be provided. The LAC had failed to provide reasons. This was compounded by the fact that the LAC substituted the order of the LC on costs and issued a costs order against the applicants where the LC had not done so. The LAC had erred in departing from the general rule that losing parties in labour matters should not be ordered to pay the successful parties’ costs, unless there were reasons warranting the imposition of a costs order. The LAC had not exercised its discretion judicially. The CC was thus entitled to interfere. The appeal on costs was upheld and the costs orders set aside.

Family law and persons

Existence of marriage where alleged wedding ceremony did not fulfil legal requirements: The plaintiff in Botha v Steyn [2021] 4 All SA 87 (KZD) instituted action seeking a decree of divorce against the defendant, as well as payments of R 100 000 per month and half of the nett value of the defendant’s estate.

Having met and become engaged in 2005, the parties resided together, travelling between London and South Africa (SA). In 2007, they hosted a ceremony which was meant to be a wedding ceremony. Guests were flown from SA to London at the defendant’s expense and the parties exchanged rings at the ceremony. However, the wedding was not registered as there was insufficient time to obtain a marriage licence. On their return to SA, the parties cohabited as husband and wife until December 2007 when the marriage began floundering. By 2009 the relationship had ended permanently, and in 2014 the plaintiff started the litigation in this matter by issuing summons against the defendant.

The evidence of an English solicitor, consulted by the defendant on discovering the problem regarding obtaining of a marriage licence, testified that he had advised the defendant that the ceremony could proceed as a ‘blessing ceremony’. He also stated that he had been requested by the parties after the ceremony, to draw up an agreement regulating their cohabitation as they were not married. The plaintiff was said to have been aware of the legal status of the relationship at that point. The defendant also called an expert in English law as a witness. Her testimony was that the absence of a marriage licence meant that there was no marriage. The court’s only task was to determine whether there had been a valid marriage. It found the plaintiff to be a poor witness who failed to prove that she had been married to the defendant.

The court was satisfied that there was never a marriage contracted between the plaintiff and the defendant and, therefore, there could be no talk of a decree of divorce. The plaintiff was always aware that there never was a marriage existing between her and the defendant as the prerequisites for a marriage in English law had not been met. She knew that the ceremony had no legal effect and that they would need to undertake another ceremony in terms of the marriage laws of SA if they were to be validly married.

It was held by Hadebe J that the defendant had made an overwhelming case for the dismissal of the plaintiff’s action with costs, which costs should be granted at a punitive scale.

Financial services regulation

Nature and requirements of reconsideration application: The second respondent, the Prudential Authority issued a direction in terms of s 83 of the Banks Act 94 of 1990 against the applicant and a close corporation in which he was sole member. It was common cause that during 2010, the applicant joined an illegal pyramid scheme.

In Mwale v Financial Services and Another [2021] 4 All SA 167 (GP), the applicant applied to the Financial Services Tribunal for a reconsideration of the decision of the Authority. The Tribunal’s dismissal of his application led to the present application for review of that decision. The grounds of review were that the Tribunal’s decision was influenced by a material error of law; that the decision was unreasonable and irrational; and that the Tribunal (and specifically the chairman) was biased.

A reconsideration application must be made in accordance with the Tribunal Rules, must contain full particulars of the grounds on which the application is based and must be drafted to conform as far as possible to a standard form.

A reconsideration application constitutes an internal remedy as contemplated in s 7(2) of the Promotion of Administrative Justice Act 3 of 2000. The court had regard to the Authority’s reasons to determine whether the Tribunal correctly dismissed the reconsideration application. The Authority had found that the pyramid scheme in which the applicant had participated had conducted the business of a bank in contravention of the Banks Act, and the Tribunal could not fault that finding. Arguing that the Tribunal had materially erred in its interpretation of ‘the business of a bank’, the applicant alleged that his involvement in the pyramid scheme was not a regular feature of his business practice. The Tribunal held that the acceptance of money from members of the public by the applicants, was a regular feature of the scheme, and was satisfied on the facts that the applicants conducted the business of a bank. The court agreed with the Tribunal’s evaluation of the facts and the conclusion reached.

For the applicant to establish bias by the Tribunal, he had to show that he (as the person who apprehended bias) and the apprehension itself were reasonable. He failed to discharge the onus on him in that regard. The application was dismissed with costs.

Property

Eviction order: The respondents in Davidan v Polovin NO and Others [2021] 4 All SA 37 (SCA) were trustees in a trust, which owned a house in which the appellant and her partner had resided together. In September 2019, the High Court granted an order in terms of s 4 of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998, evicting the appellant and all those who occupied through or under her, from the property. According to the appellant, she and her partner had entered into an oral agreement with the trust, allowing them to occupy the property. After the death of her partner, the appellant was requested to enter into a formal lease agreement with the trust. Her refusal led to the trustees obtaining an eviction order against her.

The jurisdictional requirement to trigger an eviction under the Act is that the person sought to be evicted must be an unlawful occupier within the meaning of the Act at the time when the eviction proceedings were launched. Section 1 of the Act defines an unlawful occupier as ‘a person who occupies land without the express or tacit consent of the owner or person in charge or without any other right in law to occupy such land’. Consent is defined as ‘the express or tacit consent, whether in writing or otherwise, of the owner or person in charge to the occupation by the occupier of the land in question’.

The key question was whether the appellant enjoyed a right of occupation. The first inquiry was whether the appellant had the necessary express or tacit consent to reside on the property owned by the trust. In other words, it had to be established whether the oral agreement had been proved. After establishing that the appellant had the necessary consent, the court considered whether the appellant’s right to occupy was lawfully terminated. The appellant relied on the oral agreement with the previous trustee in support of her allegation of consent having been obtained to occupy the property. The trust would have been obliged to comply with the terms of that agreement before it could terminate the appellant’s right of residence. The underlying basis for the termination had to be legal, for example, the expiration of the lease or a material breach of the terms of the agreement. There was no suggestion that the oral agreement was terminated.

The majority of the court concluded that the appellant was not an unlawful occupier in terms of the Act. The eviction order was not justified, and the appeal was upheld with costs.

In a dissenting judgment, it was stated that the appellant did not have consent or any other right to occupy the property and, therefore, the trustees had no obligation to terminate her right of residence. The eviction order was viewed as just and equitable.

Trade (customs and excise)

Claim for refund of fuel levy by mining company: In the course of its coal mining operations, Glencore, the appellant in Commissioner for the South African Revenue Service v Glencore Operations SA (Pty) Ltd [2021] 4 All SA 14 (SCA) used vehicles and equipment requiring diesel fuel. In terms of the Customs and Excise Act 91 of 1964, diesel attracted a fuel levy. Glencore’s claims for a refund of the fuel levy were disallowed by the appellant (the Commissioner) on the ground that Glencore did not use the diesel in primary production activities in mining as contemplated in Note 6(f)(ii) and (iii) of Part 3 of sch 6 to the Act. The High Court upheld Glencore’s appeal, leading to the Commissioner appealing to the present court.

The court, as per Petse DP, held that the primary issue for decision on appeal was whether the mining operations in relation to which diesel refunds were claimed by Glencore had been carried on for own primary production in mining as contemplated in Note 6(f)(ii) and (iii) of Part 3 of sch 6 to the Act and, therefore, qualified for a refund of levies as asserted by Glencore. A related, but subsidiary issue, was whether the list of activities set out in Note 6(f)(iii) of Part 3 of sch 6 to the Act, which qualify as own primary production activities in mining was exhaustive. The answer to that question turned solely on the interpretation of the word ‘include’ in Note 6(f)(iii) in light of the underlying purpose to which the fuel rebates were directed.

The appeal hinged on the proper interpretation of the expression located in Note 6(f)(ii)(aa) of Part 3 to sch 6, namely ‘own primary production activities in mining’. The court set out the principles of statutory interpretation, and applying such rules, concluded that Glencore’s activities underlying the fuel levy rebate claims did not constitute primary production activities in mining.

On the related question, it was held that the long list of inclusions in Note 6(f)(iii) of Part 3 of sch 6 served to carefully circumscribe the ambit of the activities in respect of which rebate refunds could be claimed under the relevant item, thereby dispelling any notion that the list of inclusions was open-ended.

The High Court’s order was set aside and the appeal upheld.

Other cases

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

  • allocations of fishing quotas in terms of Marine Living Resources Act 18 of 1998;
  • appeal against setting aside of indictment;
  • class action in non-Bill of Rights cases;
  • derivative misconduct of employees;
  • development of common law with ‘due regard to spirit, purport and objects’ of fundamental rights provisions;
  • duty of Parliament and provincial legislatures to facilitate public involvement in legislative processes; and
  • provisional sentence or order.

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

This article was first published in De Rebus in 2021 (Dec) DR 27.

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