November 2020 (6) South African Law Reports (pp 1 – 324)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.
CC: Constitutional Court
GJ: Gauteng Local Division, Johannesburg
GP: Gauteng Division, Pretoria
SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town
The right of an unmarried father to register a child’s birth in absence of the mother: Section 9(1) of the Births and Death Registration Act 51 of 1992 (the Act) provides for the notification of the birth of any child ‘born alive’; and s 9(2) that this notification is ‘[s]ubject to the provisions of section 10’. Section 10 deals with the notification of the birth of a child born out of wedlock, and makes the exercise by an unmarried father of his right under s 9(1) contingent on either the mother’s presence (s 10(1)(b)) or her consent (s 10(2)).
In Centre for Child Law v Director-General: Department of Home Affairs and Others 2020 (6) SA 199 (ECG) a Full Bench concluded that s 10 implicitly barred an unmarried father of a child born out of wedlock from giving notice of the child’s birth under his surname if the mother was absent. The ECG, per Rugunanan J (Revelas J and Mapoma AJ concurring) ruled that this was discriminatory not only against the father of a child born out of wedlock but also against the child born out of wedlock. In an unmarried father’s case, the discrimination was on the basis of marital status, directly violating his right to equality (in s 9(3) of the Constitution). Where the child was born out of wedlock, the discrimination was on arbitrary grounds because it had the effect that, absent the mother’s cooperation, the child – who had a legitimate claim to a nationality from birth – could be denied a birth certificate.
The court accordingly declared s 10 of the Act inconsistent with the Constitution and invalid to the extent that it did not allow an unmarried father to register the birth of his child in the absence of the child’s mother. The court ordered a reading-in or substitution as the appropriate remedy to expunge the bar presented by s 10 and to provide a mechanism for a child born out of wedlock to be notified in the surname of their father where the mother was absent.
Independent candidates’ right to contest provincial and national elections: In New Nation Movement NPC and Others v President of the Republic of South Africa and Others 2020 (6) SA 257 (CC), the CC considered whether the failure of Electoral Act 73 of 1989 to make provision for independent candidates to contest provincial and national elections – namely, making access to political office possible only through membership of political parties – rendered the Act constitutionally invalid insofar as it unjustifiably limited the constitutional rights to freedom of association (s 18); and to ‘stand for public office and, if elected, to hold office’ (s 19(3)(b)).
In the main judgment the CC, per Madlanga J (Cameron J, Jafta J, Khampepe J, Mothapo AJ, Mhlantla J, Theron J and Victor AJ concurring), pointed out that, at best, s 19(3)(b) was neutral, as it did not say that when an adult citizen wanted to exercise the right they had to do so through a political party. He found the relevance of the right to freedom of association in determining the content of s 19(3)(b) in the principle of harmonious interpretation; the provision had to be interpreted to avoid conflict with the right of freedom of association. The CC summarised the issue before court as being whether such conflict would arise if s 19(3)(b) were interpreted to mean that adult citizens who intended to stand for and hold political office would be prevented from doing so without forming or joining a political party.
The CC ruled that conflict did arise because, if it was a fundamental right for individuals to freely associate with anyone, it would equally be their fundamental right to associate with no one. For the state to force individuals to associate when they did not want to, would limit the right to freedom of association. An individual’s choice not to associate at all – a negative right not to be compelled to associate – was, therefore, also protected by s 18. Conflict would, therefore, arise if s 19(3)(b) were read to restrict standing for and holding political office by requiring the forming or joining of a political party – namely, a denial of the right to freedom of association. Such a reading would also be in conflict with the constitutional rights of freedom of conscience (s 15(1)) and to dignity (s 10). Section 19(3)(b) accordingly had to be interpreted in a way that was consonant with s 18 and did not lead to a denial of the right to freedom of association.
The CC concluded that the Electoral Act was unconstitutional to the extent that it made it impossible for candidates to stand for political office without being members of political parties. The CC gave Parliament 24 months to remedy the defect.
See also:
Several general principles of intellectual property law applied, judgment of the GJ substantially reversed on appeal to the SCA: In Quad Africa Energy (Pty) Ltd v The Sugarless Co (Pty) Ltd and Another 2020 (6) SA 90 (SCA) the SCA dealt with a dispute between an Australian Company (the respondent), a maker of sugar-free confectionary, and its local distributor (the appellant). The respondent’s product came in packaging with a large letter ‘S’ printed in a circle above the word SUGARLESS in capital letters on a black background. It had a South African trademark registration for the S sugarless logo in class 30 covering confectionery.
When the relationship between the parties ended, the appellant started selling its own competing product in similar packaging, with an inverted ‘S’, removed the circle around it and replaced SUGARLESS with SUGARLEAN, also in capital letters. The respondent then sued the appellant in the GJ, claiming infringement of its trademark registration for its label, passing-off and infringement of copyright in the packaging. It also claimed counterfeiting. The GJ found in favour of the respondent on all aspects, granting it both interdictory and declaratory relief.
Turning to the SCA, the appellant appealed against the finding of copyright infringement in the packaging, passing off and counterfeiting, based on its new and future packaging.
The SCA, per Ponnan JA (Wallis JA, Makgoka, JA, Schippers JA and Mbotha JA concurring) ruled, as to whether there had to be a disclaimer against the word ‘sugarless’, that the term ‘sugarless’ was inherently incapable of distinguishing one person’s confectionery goods from another’s and that no amount of use of a purely descriptive term could make it distinctive. Since descriptive terms like ‘sugarless’ or ‘sugarless confectionary’ could not function as trademarks, and no amount of use could make it distinctive for trademark purposes, the SCA entered a disclaimer of exclusive rights to the word ‘sugarless’.
The SCA then dealt with the alleged copyright infringement. The SCA pointed out that the issue hinged on whether the appellant’s artwork on the new packaging was an adaptation of the respondent’s work, namely, a transformation of the work so that the original was still recognisable. The respondent’s contention that the use of a ‘senior’ work to create a ‘junior’ work constituted making an adaptation of the senior work was incorrect: The mere fact that prior work had been used did not mean that the subsequent work was to be considered an adaptation, and thus an infringement. The actual creative composition had to be similar, not just the idea. Since there was not a substantial degree of correspondence between the packaging, it could not be said that the appellant availed itself of a great deal of the skills and industry that had gone into the respondent’s packaging. The SCA accordingly ruled on copyright that, since there was no objective similarity, the GJ’s decision on the matter was wrong.
Moving on to passing-off, the SCA pointed out that the appellant’s packaging was not calculated to deceive. The main similarity was the use of the colour black and fruit or other devices. But, there was nothing wrong with that, given the many confectionery products in the market that utilised black and the obviously non-distinctive nature of the devices. The SCA concluded that there were sufficient dissimilarities between the packaging – which would be apparent and obvious to any customer – to hold that there was no reasonable likelihood of confusion between the two.
In dealing with trademark infringement, the SCA ruled that the ‘SUGARLESS’ and ‘SUGARLEAN’ marks were visually, phonetically and aurally different. In any event, when descriptive terms are used as trademarks, courts will accept comparatively small differences as sufficient to avert confusion. In any event, a measure of confusion was acceptable.
The SCA then held, as to counterfeiting, that the GJ did not consider all the requirements for counterfeiting. These were more extensive than those for copyright or trademark infringement. To counterfeit meant to make an imitation of something in order to deceive. Since neither the claim of breach of copyright nor that of trademark infringement was made out, there had also been no counterfeiting.
The appellant thus succeeded on all substantive aspects of its appeal against the order in the GJ.
Whether a ‘reach stacker’ is a ‘motor vehicle’ in terms of the Road Accident Fund Act 56 of 1996: In Road Accident Fund v Mbele 2020 (6) SA 118 (SCA), Mrs Mbele’s husband, a stevedore, was knocked over at his workplace, Cape Town Harbour, by a ‘reach stacker’, and later succumbed to his injuries. Stackers are engine-driven machines designed to lift, manoeuvre and stack ship containers, and this one was 12 metres long, four metres wide, and weighed over 70 tonnes.
Mrs Mbele sued for loss of support under the Road Accident Fund Act 56 of 1996, but the Fund disputed liability on the ground that the stacker was not a ‘motor vehicle’ as defined in s 1 of the Act, thus excluding the claim from its ambit. Section 1 defines a ‘motor vehicle’ as a ‘vehicle designed for propulsion … on a road’.
It appeared that while the stacker had a normal Cape Town registration number, its weight and size prevented it from operating on public roads without appropriate escort, but in its day-to-day operations it did duty on both public and non-statutory roads within Cape Town Harbour.
When the matter came to the WCC, a single judge concluded that the stacker was not a motor vehicle as defined in s 1, but on appeal the Full Bench reversed the finding, ruling that the stacker was indeed a motor vehicle for the purposes of the RAF Act.
In a further appeal, the SCA per Zondi JA (Maya P, Plasket JA, Nicholls JA and Eksteen AJ concurring) restated the test to determine whether a vehicle was a ‘motor vehicle’ for the purposes of the Act, namely that if a reasonable person would conclude that driving the vehicle on a public road would be extraordinarily difficult and hazardous unless special precautions or adaptations were effected, then it was not a ‘motor vehicle’.
The SCA pointed out that design features such as lights, indicators, field of vision, hooter, maximum speed and engine output are considerations in deciding whether there is compliance with the definition. Since the stacker was designed and suitable for travelling on a road inside the port, it could not be said that driving it on a road used by pedestrians and other vehicles would be extraordinarily difficult or dangerous. The SCA concluded that the stacker was a ‘motor vehicle’ as defined in the Act and dismissed the appeal.
The permissibility of attachment by trustees of insolvent estate of insolvent’s pre-sequestration pension fund pay-out: The facts in M and Another v Murray NO and Others 2020 (6) SA 55 (SCA) were that the first appellant had received a pension pay out some two years before his sequestration, which he then gave to the appellants. This disposition was set aside by the GP on application by the trustees of his insolvent estate, on the basis that these were ‘collusive dealings before sequestration’ as contemplated in s 31 of the Insolvency Act 26 of 1934.
On appeal to the SCA, the principal issue whether a pension pay-out made before sequestration fell within the ambit of s 37B of the Pensions Fund Act 24 of 1956, which protects ‘the estate of anyone entitled to a pension benefit payable’ against attachment by a trustee of an insolvent estate (by deeming such benefit not to be part of the insolvent’s estate, subject to certain exceptions).
The SCA, per Mokgoka JA (Ponnan JA, Dambuza JA, Van der Merwe JA and Mbatha JA concurring), held that s 37B established an exception to the provisions of s 20(1)(a) of the Insolvency Act – one which only entailed that, while in the hands of a pension fund, the insolvent’s pension interest could not be attached by their trustee on the basis that it formed part of the insolvent’s assets. It protected only the pension benefit of a person whose estate was already sequestrated when they received a pension pay-out. Once the benefit was paid, the beneficiary ceased to be a ‘member’ of the pension fund, and the money ceased to be a ‘benefit’ as defined. And when payment of a benefit was made before sequestration, there was no insolvent estate or trustees to speak of. The SCA, therefore, concluded that s 37B did not extend protection beyond payment of the pension benefit. A benefit paid out to an insolvent before their estate was sequestrated, therefore, did not enjoy the protection provided in s 37B.
Execution against a property owned by a trust but inhabited, as primary residence, by a natural person: Rule 46 or 46A? In Investec Bank Ltd v Fraser NO and Others 2020 (6) SA 211 (GJ), the first respondent, Ms Fraser, opposed an application by the applicant bank for an order declaring the immovable property, which was her primary residence to be specially executable. This as a precursor to satisfying a monetary judgment granted against a trust, which owned the property, and was being held liable as a surety and co-principal debtor in an amount of R 13,24 million.
Ms Fraser based her opposition on the fact that she resided on the property with her two adult children, and that since the bank had failed to comply with r 46A of the Uniform Rules of Court, the application was fatally defective.
The GJ, per Lapan AJ, analysed the rules and relevant case law and concluded that all the constitutional considerations required to be taken into account for the protection of judgment debtors, applied to individuals and natural persons only. The provisions of r 46A were not applicable to the trust as owner of the property. The GJ accordingly ruled that the bank had been correct to proceed in terms of r 46 to obtain execution against its immovable property.
Deactivation of biometric access to residential estate: In Bill v Waterfall Estate Homeowners Association NPC and Another 2020 (6) SA 145 (GJ) the applicant had taken cession of the rights in a 99-year lease of a property on a residential estate. In so doing, and having become a party to the agreement, the applicant automatically became a member of first respondent, the estate’s homeowners’ association, and subject to its memorandum of incorporation and the estate’s rules.
The estate’s rules required the applicant to start building on the property within a certain time, and when he failed to, he became liable to pay certain monetary penalties, which he disputed. Ultimately, and apparently in an attempt to induce the applicant to pay, the first respondent deactivated the applicant’s biometric access to the estate, but not, however, to his property. The first respondent also barred the applicant’s builders from the estate.
In response the applicant approached the GJ under the mandament van spolie for the restoration of his and his builders’ biometric access to the estate. The GJ, per Southwood AJ, found that the applicant’s biometric access to the estate, as well as that of his contractors, were entitlements incidental to the applicant’s possession of the property. Since the applicant’s peaceful and undisturbed quasi-possession of these rights of access were unlawfully disturbed, it was entitled to the mandament.
Apart from the cases and material dealt with or referred to above, the material under review also contained cases dealing with –
Gideon Pienaar BA LLB (Stell) is a Senior Editor, Joshua Mendelsohn BA LLB (UCT) LLM (Cornell), Johan Botha BA LLB (Stell) and Simon Pietersen BBusSc LLB (UCT) are editors at Juta and Company in Cape Town.
December [2020] 4 All South African Law Reports (pp 613 – 917); December 2020 (12) Butterworths Constitutional Law Reports (pp 1419 – 1546)CC: Constitutional Court
ECG: Eastern Cape Division, Grahamstown
GJ: Gauteng Local Division, Johannesburg
KZP: KwaZulu-Natal Division, Pietermaritzburg
SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town
Requirements for interim interdict: The Public Protector (PP) sought an interim interdict preventing, in particular, the Speaker of the National Assembly (the Speaker) from taking any further steps in a process in the National Assembly that could result in the PP’s impeachment in terms of the provisions of s 194 of the Constitution. The PP in Public Protector v Speaker of the National Assembly and Others 2020 (12) BCLR 1491 (WCC); [2020] 4 All SA 776 (WCC) also sought to have the newly adopted rules in terms of which the process was to be conducted, set aside.
The Speaker and the Democratic Alliance (DA) opposed the relief sought on the ground that the provisions of s 194 of the Constitution are the ultimate mechanism for the accountability of office bearers of Chapter 9 Institutions, and provide for the National Assembly to remove any such office bearers on the basis provided therein.
It was held by Saldanha J (Steyn and Samela JJ concurring) that the PP is one of several state institutions established under ch 9 of the Constitution, and is subject to oversight by the National Assembly. The National Assembly is required by s 57(1) of the Constitution to create mechanisms for overseeing Organs of State and to make rules, which define and give meaning to the grounds of removal for office bearers of Chapter 9 Institutions.
Contrary to the PP’s argument, the court endorsed the test as described in the case of National Treasury and Others v Opposition to Urban Tolling Alliance and Others 2012 (11) BCLR 1148 (CC) (the OUTA test), where it was stated that in the absence of mala fides, an application for an interdict restraining the exercise of statutory powers is not readily granted. The applicant must, therefore, establish the clearest of cases for such an interdict to be granted. In an effort to meet the OUTA test, the PP levelled several allegations of mala fides against the Speaker and the DA. The court stated that the DA was fully entitled as a member of the National Assembly to engage the office of the Speaker with a request to initiate an impeachment process against the PP. Any member in the National Assembly may do so if they have cause in terms of s 194 of the Constitution and the new rules to move for the removal of any office bearer of a Chapter 9 Institution. The court rejected the allegations of mala fides.
The PP relied on alleged invalidity of the new rules on various grounds to establish her prima facie right to an interim interdict. She relied on fairness in most of her challenge to the rules, and raised the common law principles of natural justice of audi alteram partem and nemo sua iudex in causa sua protections, as well as what she referred to as the procedural irrationality in both the content and procedures envisaged under the new rules. Examining each of the contentions raised by the PP, the court found none of the grounds relied on to be sustainable, with the result that no prima facie right to the relief sought was established. The court was also not satisfied that the remaining requirements for an interim interdict had been met.
Dismissing the application for an interim interdict, the court ordered the PP to pay the costs of the Speaker and the DA.
Misappropriation of economic opportunity: In Modise and Another v Tladi Holdings (Pty) Ltd [2020] 4 All SA 670 (SCA) the first appellant (Modise) was identified by a fellow businessman (Sandler) as a key player in an intended electrical conglomerate, which would seek to do business with state-owned entities and municipalities in the energy sector. Sandler held a majority interest in an electrical company (Muvoni), which would need to comply with Black Economic Empowerment (BEE) requirements to become eligible to exploit whatever opportunities might become available.
Modise joined Muvoni’s board on 1 December 2004 and was appointed as Director and Chairman of the respondent (Tladi) on 14 December 2004.
One of the opportunities, which Sandler identified as worth pursuing concerned a company (ARB), which was a major supplier of electrical equipment to Muvoni. Modise denied that Sandler had mentioned the ARB opportunity. In any event, in 2005, when ARB needed a new BEE partner, Modise and his company (Batsomi Power) were offered the same deal that Sandler had identified as the ARB opportunity for Tladi. Modise accepted the offer.
That led to the present litigation, in which the High Court found that the appellants had misappropriated a corporate opportunity to buy shares in ARB, which opportunity properly belonged to Tladi. The court also dismissed the appellants’ special plea of prescription in respect of the claim against Batsomi Power.
The court, per Cachalia JA (Nicholls, Wallis JJA; Ledwaba and Matojane AJJA concurring) held that directors have an overarching and paramount fiduciary duty to exercise their powers in good faith and in the best interests of the company. Directors may not place themselves in positions of conflicts of interest or duty (the ‘no-conflict rule’); may not make secret profits (the ‘no-profit rule’); or acquire economic opportunities for themselves (the ‘corporate opportunity rule’) that properly belong to the company. The latter was the most relevant to the present case. Modise not only failed to disclose the approach made to him by ARB, but also concealed the fact that he was pursuing the opportunity in his own interest. The court rejected all the submissions made by Modise.
With regard to Batsomi Power (the second appellant) it was contended that the claim had prescribed and also that the case against it – being a separate legal entity – to account to Tladi, was not made. The court a quo dismissed both contentions. On appeal, the court found that the claim against Batsomi Power was not part of the original cause of action, but was based on an entirely different cause of action and the prescriptive period had run. Accordingly, Batsomi Power’s appeal against the court a quo’s finding on prescription was upheld. Modise’s appeal was, however, dismissed.
Powers of the Public Protector (PP): In Government Employees Medical Scheme and Others v Public Protector of the Republic of South Africa and Others [2020] 4 All SA 629 (SCA), the first appellant, the Government Employees Medical Scheme (GEMS) was a medical scheme, involved in a dispute with Mr Ngwato. He lodged a complaint with the Registrar of Medical Schemes.
Instead of exercising his right of a further appeal to the Appeal Board of the Council, Mr Ngwato lodged a complaint with the PP, making various allegations against GEMS and the Government Pensions Administration Agency (GPAA). Well over a year later, GEMS received an e-mail from the office of the PP, stating that although it had found the complaint to be unsubstantiated and closed the file. Mr Ngwato had applied for review of that decision. GEMS was requested to attend a meeting at the office of the PP, to discuss certain issues raised in the complaint.
In response, GEMS explained that despite its membership consisting of government employees, it was a private medical scheme and not an Organ of State, nor a public entity, nor falling within any sphere of government. It challenged the jurisdiction of the PP over the matter.
On 24 April 2018, two subpoenas were purportedly issued under s 7(4)(a) of the Public Protector Act 23 of 1994 and were served on GEMS’ legal advisor and the second appellant, the Principal Officer of GEMS. They were required to appear in person before the PP on 18 May 2018, as also, to produce a list of specified documents.
GEMS approached the High Court for declaratory relief in its jurisdictional challenge against the PP. The court found for the PP, stating that even though GEMS was not a government or an Organ of State, it performed a public function in terms of national legislation and its functions were public in nature. The present appeal thus ensued.
It was held by Ponnan JA (Mbha, Zondi JJA; Goosen and Mabindla-Boqwana AJJA concurring) that s 6(5)(b) of the Public Protector Act allows the PP to investigate any alleged abuse or unjustifiable exercise of power or unfair, capricious, discourteous or other improper conduct by a person performing a function connected with their employment by a public institution or entity. The PP was unable to bring herself within the ambit of the section. Furthermore, the nature of the complaint and the nature of the power exercised by GEMS, meant that the jurisdictional preconditions for an investigation in terms of ss 6(4) and (5) had not been met. The PP accordingly did not have the statutory power to investigate the complaint.
The appeal thus succeeded.
Investments procured from clients by lawyer working as consultant for law firm: In Stols v Garlicke and Bousfield (PKF (Durban) Incorporated and Others as third parties) [2020] 4 All SA 850 (KZP) a consultant (Cowan) for the defendant law firm Garlicke and Bousfield (G&B) committed suicide in November 2010 after admitting to having committed fraud and misrepresented facts to G&B’s directors by inducing them to authorise certain fraudulent transactions. The firm was faced with numerous enquiries from people claiming to be G&B clients, enquiring as to the whereabouts of their funds, which they claimed Cowan had invested with G&B. The investors alleged that Cowan had been running a bridging finance business on behalf of G&B for its clients who required short-term finance. The plaintiff (Stols) was one such person. He claimed to have made two investments totalling an amount of R 7,5 million, and demanded payment from G&B.
When his demand was not met, Stols sued G&B for payment. In its plea, G&B admitted that Cowan was an executive consultant and practising attorney at G&B, and that he had caused an amount of R 2 million to be paid into its trust account, but denied that Cowan was authorised to conclude any such contract on its behalf. Garlicke and Bousfield further alleged that Cowan had entered into such contract for his own dishonest and illegal purposes. However, Stols claimed that G&B was estopped from denying Cowan’s authority to enter into the contract based on their representations which led him to believe that Cowan was part of the firm, and the firm’s awareness that Cowan was conducting a bridging finance business as part of his practice housed in G&B’s offices. Stols also relied on the assurances allegedly given to him by a director (Ramsay) of the firm regarding the propriety of the scheme run by Cowan. Ramsay denied those allegations.
A serious dispute of fact existed between the versions of Stols and Ramsay, and that dispute had to be resolved in order to deal effectively with the issues for determination. The court, per Mnguni J, found that Stols’ version was to be preferred, cementing the fact that Ramsay had not discouraged Stols against the investments.
The first of the main issue to be decided was whether the contract on which Stols sued was illegal. Garlicke and Bousfield purported to place reliance on various cases in support of its contention that the underlying contract was illegal. However, the court distinguished those cases, which all dealt with unlawful pyramid schemes. The scheme operated by Cowan was one involving the provision of bridging finance, which was not unlawful. There was, therefore, no reason why Stols’ claim could not be validly based upon the contract in question.
The next question was whether Cowan was authorised to sign the letter of undertaking, and if he was not, whether G&B was estopped from relying on the absence of authority. Garlicke and Bousfield contended that Cowan did not have the authority to represent it when concluding any agreement binding on the firm, and in particular, to issue letters of undertaking. The evidence showed that Cowan operated his bridging finance scheme as an executive consultant of G&B, with an office in G&B’s premises. Importantly, G&B also allowed him to use its trust account for payments in connection with the scheme and to earn commission for the benefit of G&B in relation to the bridging finance transactions. That was sufficient to create the appearance of authority.
The court was satisfied that Stols had established that he acted to his detriment as a result of the representations made to him, and that he had proved his claim to hold G&B to its contract of deposit, concluded through Cowan. Judgment was granted in his favour.
Pension fund – decision to amend rule governing calculation of actuarial interest of members: In December 2014, the first respondent, the Government Employees Pension Fund (GEPF) took a decision to amend the fund rule governing the calculation of actuarial interest of members. The decision was made, relying only on an actuarial valuation report, thus, without prior consultation with the first appellant, the Public Servants Association of South Africa (PSA) or any of the employee organisations prescribed by the rules. The appellants contended that the GEPF, in acting as it did, offended against the principle of legality.
It was held in Public Servants Association of South Africa and Others v Government Employees Pension Fund and Others [2020] 4 All SA 710 (SCA) that the challenge to the decision in this case was based on a failure to comply with the rules of the GEPF, which were mandated by the Pension Funds Act 24 of 1956. It was, in essence, a legality challenge. The delay in launching the review application had to be addressed first, as it would determine whether the other questions were required to be addressed. Delay, and whether it should in the circumstances of a particular case be condoned, must be considered in a legality review. In respect of a legality review, the application must be initiated without undue delay and courts have the discretion to refuse a review application in the face of an undue delay or to overlook the delay. In considering whether the delay should be overlooked, a court will have regard to the delay and the attendant circumstances. On a conspectus of all the circumstances, including potential prejudice and having regard to the prospects of success on the merits, the court held that the delay should be overlooked or excused.
On the merits, the court per Navsa JA (Saldulker, Schippers, Dlodlo JJA and Goosen AJA concurring) confirmed that the required consultation had to precede the decision and had to take the form prescribed by the rules. The court also disagreed that the failure by the GEPF to consult beforehand could be cured by its belated attempts to invoke the bargaining council as a forum through which, it was contended on behalf of the GEPF, the same result could be achieved. The rule was clear about the sequence of events: Consultation had to occur first, followed by a decision. The rules prescribed a specific consultative process before arriving at a decision. It had to be followed. It was not followed and consequently the GEPF’s decision was flawed and liable to be set aside.
The appeal was upheld with costs.
Gross misconduct: In South African Legal Practice Council v Bobotyana [2020] 4 All SA 827 (ECG). The respondent (Bobotyana) was an attorney consulted by a client to facilitate the purchase of immovable property. More than R 2 million was paid to the respondent by the client, to purchase the property. The applicant, the Legal Practice Council, sought to strike the name of Bobotyana off the roll of attorneys, as well as prayers for ancillary relief.
The application, having been launched after 1 November 2018, had to be adjudicated in terms of the Legal Practice Act 28 of 2014, although the conduct of Bobotyana had to be adjudged in accordance with the law as it stood at the time that it took place, namely before the repeal of the Attorneys Act 53 of 1979 and when the rules of the previous Law Society were still applicable. The Legal Practice Act, like the Attorneys Act, requires that a person be fit and proper in order to practise as either an attorney or an advocate.
The Law Society which was the watchdog of the profession, at the time, attempted to investigate the complaint against Bobotyana, but he refused to cooperate. Nevertheless, the court, per Kroon AJ (Beshe J concurring) found that the admitted facts revealed how Bobotyana systematically plundered his trust account in an exercise in theft and fraud. The numerous incidences of misappropriation of trust funds justified the conclusion that Bobotyana was not a fit and proper person to continue practising as an attorney.
The respondent’s name was struck from the roll of attorneys.
Claim for damages sustained as a result of a dog attack: In December 2013, while on a visit to a day camp under the control of the appellant (the City), the first respondent (Fatiema) was attacked by a pitbull owned by the second respondent (Quinton). The dog had been brought to the camp by the third respondent (Dylan).
Fatiema sustained serious physical injuries as a result of the attack, and developed post-traumatic stress disorder. She instituted action against the City in the High Court, claiming damages sustained as a result of the attack by the dog. The action was based on the alleged negligent breach of a legal duty to ensure the safety of visitors to the camp. The City defended the action and served third party notices, in terms of r 13 of the Uniform Rules of Court, on Quinton and Dylan, claiming an indemnity from them in relation to any damages that might be awarded against it.
While admitting that it owed the public utilising the facility a duty of care, the City denied liability to Fatiema, stating that it had complied with its duty by taking reasonable precautionary steps to keep the facility safe and it pointed to the fact that the dog was brought onto the premises unlawfully by a third party.
The High Court in City of Cape Town v Carelse and Others [2020] 4 All SA 613 (SCA) found that the City was liable for Fatiema’s proven damages, and that Quinton was liable to compensate the City for 50% of those damages. The present judgment was on the City’s application for leave to appeal. The primary question was whether there would be reasonable prospects of success.
The High Court had regard to the fundamental principle that allegedly negligent conduct in the form of an omission is not prima facie wrongful. Wrongfulness depended on the existence of a legal duty.
In seeking leave to appeal, the City stated that the court had erred in determining both wrongfulness and negligence against it and that there was a reasonable prospect of success in that regard. It also argued that the case raised pertinent questions in relation to liability of a municipality for the unlawful conduct of third parties.
The court, per Navsa JA (Dlodlo, Mocumie JJA; Eksteen and Poyo-Dlwati AJJA concurring) held that the evidence established that the City was aware of the potential dangers that dogs presented at the facility. It had signs prominently displayed at the main entrance, warning the public. While the main entrance was manned by officials, the camp’s officials were aware that dogs entered the facility, either on their own or led by owners at a weak point in the camp’s fence – away from the main entrance. The officials did nothing to man that weak point. In those circumstances, the High Court correctly found against the City, and there were no prospects of success on appeal. The application for leave to appeal was dismissed.
Sale of property – right of pre-emption: In Aarifah Security Services CC v Jakoita Properties (Pty) Ltd and Others [2020] 4 All SA 730 (GJ) the first respondent (Jakoita) as owner of a commercial building, marketed it for sale in 2017. The applicant (Aarifah) was a potential purchaser but ended up executing a lease as tenant of a portion of the building in September 2017. The lease contained a right of pre-emption in favour of Aarifah. In December 2017, Jakoita executed a deed of sale as seller with the second respondent (Nu-Line) as purchaser. It had informed Aarifah of an offer to purchase received from Nu-Line, and given it the opportunity to exercise the right of first refusal. According to the respondents, Aarifah had not exercised its right under clause 18 within 48 hours as required.
The dispute between the parties concerned the validity of an asserted exercise by Aarifah of a pre-emptive right, or right of first refusal, in respect of the purchase of the immovable property. The matter was in particular, concerned with the formal manner in which such a right is to be exercised, and when it can be said to have been exercised.
Snyckers AJ held that the first important aspect of a right of pre-emption, as opposed to an option proper, is that, unlike an option, it is an enforceable right with respect to a sale despite the absence of any determination of the price or terms on which it is to be exercised. South African law currently holds that a distinction should be made between the covenant embodying the pre-emptive right, and acts that turn it into an agreement of sale between the grantor and the grantee. The covenant embodying the pre-emptive right, even in respect of the sale of land, need not comply with the formalities. It is binding if it is proved as a contract deliberately concluded, conferring a personal right. The only way in which the pre-emptive right can become an agreement of sale between grantor and grantee is if both execute it in writing, in compliance with the formalities. The holder may enforce its pre-emptive right by submitting an offer that complies with the formalities if it were accepted, and compelling the grantor to countersign it, or having the registrar or some other official authorised to countersign if the grantor fails to do so, in the event that the grantor fails to countersign the holder’s offer.
Applying the law to the facts, the court concluded that Aarifah did not exercise its right of pre-emption in terms of the relevant clause of the lease agreement.
Apart from the cases and material dealt with or referred to 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 2021 (Jan/Feb) DR 28.
