The Law Reports – January/February 2025

February 1st, 2025
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November 2024 (6) South African Law Reports (pp 1–335); November 2024 (2) South African Criminal Law Reports (pp 443–551)
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 Local Division, Johannesburg
GP: Gauteng Division, Pretoria
NWM: North West High Court, Mahfikeng
SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town

Criminal law

Crude language warning for presiding officers in sexual-offence cases: In S v Griqua 2024 (2) SACR 475 (NWM), an appeal against a sentence of life imprisonment imposed for rape, the NWM (per Reddy J) expressed disquiet in respect of the language used by the magistrate during the proceedings. It highlighted the use of the word ‘rounds’ to denote the number of times that the appellant raped the complainant, and, in respect of the appellant, that he took the complainant to his ‘slaughterhouse’. Crude terminology was also used to describe the appellant’s behaviour. The court noted that such utterances had no place in our courtrooms. They were unfortunate, unacceptable and completely unnecessary, and that an accused’s respect and dignity should never be compromised, notwithstanding the stage of the criminal process. The magistrate, however, had correctly found that there were no substantial and compelling circumstances, and the sentence was ultimately confirmed.

 

Courts to desist from making awards outside of s 300 of the Criminal Procedure Act 51 of 1977 (CPA): The second respondent in Executive Mayor, City of Cape Town v Director of Public Prosecutions, Western Cape and Another 2024 (2) SACR 487 (WCC), was the accused in a case in the WCC, where he was charged with having murdered his wife. At the end of sentence proceedings, the WCC ordered, among other things, that –

  • the patrimonial benefits of the marriage between the accused and the deceased be forfeited by the accused in favour of their minor child;
  • Cape Town’s Mayor had to ensure that a trust be established for the benefit of the child; and
  • the Premier of the Eastern Cape had to trace the remains of the deceased.

In an appeal to a Full Court, the Mayor sought to have the WCC’s orders set aside. In upholding the appeal, the WCC (per Allie J) found that a criminal court was not empowered under s 300 of the CPA to award compensation to anyone but the victim of the crime. A criminal court was, therefore, not entitled to award immovable property to a minor child whose mother had been murdered by his father. It was in any event a recognised common-law principle that a murderer could not benefit under the will of the deceased or the laws of intestacy. The court a quo was in any event not empowered to order the mayor to set up a trust or to direct the premier to trace the remains of the deceased. The WCC Full Court, therefore, ruled the court a quo’s orders ultra vires and void.

Other criminal cases

Apart from the cases referred to above, the November 2024 South African Criminal Law Reports also contained cases dealing with –

  • delays in the submission of the record in review proceedings;
  • admissibility of ballistics reports;
  • assessment of psychological evidence;
  • jurisdiction of the High Court;
  • mental state of accused in trials; and
  • use of the bail record in a subsequent trial.
Customary law

Is it lawful to agree to conclude a civil marriage out of community of property after a valid customary marriage in community? In 2011, JM and VC concluded a monogamous customary marriage. Since they did not also conclude an antenuptial agreement, the marriage was by default in community of property (COP). In 2019, they signed a so-called ‘antenuptial contract’ which provided that the civil marriage they would be concluding would be out of community of property (OCOP) and subject to the accrual system. Subsequently, in 2021, they entered into the contemplated civil marriage. Their relationship subsequently broke down, with the plaintiff suing for divorce.

In a special case for adjudication under r 33(1) of the Uniform Rules of Court, reported as JM v VC and Others 2024 (6) SA 235 (GP), the GP considered –

(1) whether an agreement to conclude an OCOP civil marriage of property after a COP customary marriage was valid; and

(2) the constitutionality of s 10(2) of the Recognition of Customary Marriages Act 120 of 1998 (the Recognition Act), insofar as it allowed for spouses in a monogamous customary marriage to change their matrimonial property regime from COP to OCOP without judicial oversight and to the prejudice of the economically weaker spouse.

The GP ruled, as to (1), that the customary marriage was not terminated but replaced by the civil marriage. When customary spouses conclude a contract for the adoption of a different matrimonial property regime in a contemplated civil marriage, judicial oversight was required to ensure that the rights of the financially weaker spouse were not prejudiced. To this end, s 21 of the Matrimonial Property Act 88 of 1984 (MPA) required the parties to apply to a High Court for leave to change their matrimonial property regime. Such a contract was not an antenuptial contract, but a postnuptial contract for the change of the parties’ matrimonial property system. Since JV and VC’s contract was concluded without leave of the court required by s 21 of the MPA, it was invalid.

As to (2), the GP stressed the differentiation inherent in the legislative protection awarded specifically to spouses in monogamous civil marriages. Section 10(2) of the Recognition Act, by stripping such protection from parties to monogamous indigenous marriages, was unfairly discriminatory in the sense intended in s 9(1) of the Constitution. And the contract for the change of the matrimonial property regime constituted, to the extent that it allowed parties like JM to deal with immovable property (and accrued retirement benefits) as they wished, an arbitrary deprivation of VC’s property as intended in s 25(1) of the Constitution. The GP thus found s 10(2) of the Recognition Act to be unconstitutional.

Execution pending appeal

The correct approach in applications for immediate execution pending appeal: A security company, Tyte Security Services, supplied security services to the Western Cape Provincial Government. The WCC subsequently set aside the governing 24-month contract. The province issued fresh bids and eventually entered into a similar contract with Royal Security (the Royal contract). Tyte then applied to the WCC for an order setting aside the Royal contract. In the interim, it obtained an award allowing it to continue offering security services to the province.

In the review, the WCC (per Gamble J and Wille J) upheld the province’s decision to award the tender to Royal, whereon Royal obtained an order under s 18 of the Superior Courts Act 10 of 2013 for the immediate implementation of the WCC’s order. Tyte, relying on s 18(4)(ii), in turn appealed the latter order to the SCA.

In a judgment reported as Tyte Security Services CC v Western Cape Provincial Government and Others 2024 (6) SA 175 (SCA), the SCA rejected Tyte’s argument that it was up to a party seeking immediate execution to establish three self-standing requirements. Rather, a court faced with such an application had to conduct an overarching inquiry as to whether there were exceptional circumstances calling for immediate execution. The inquiry into presence of irreparable harm could well be subsumed into this overall investigation. Provided the court satisfied itself in respect of exceptional circumstances and irreparable harm, it was not required to do so in a formulaic or hierarchical fashion. Contrary to Tyte’s argument, the consideration of irreparable harm on either side should not be considered as isolated inquiries.

The SCA concluded that exceptional circumstances calling for the immediate implementation of the order in favour of Royal existed. Tyte had had the full benefit of its two-year contract despite its rescission, whereas Royal had lost the benefit of at least a year of its contract. The SCA accordingly made an order dismissing Tyte’s application.

Financial institutions

Old Mutual’s appeal in Fidentia saga upheld by SCA – it did not owe Living Hands a duty of care: In July 2022, Siwendu J of the GJ ruled that Old Mutual was liable for the loss suffered by the Living Hands Umbrella Trust when Mr J Arthur Brown’s Fidentia Holdings Group (Fidentia) gained control of and stole most of the R1,2 billion portfolio Living Hands’ forerunner had administered on behalf of more than 52 000 widows and orphans of deceased mineworkers. The GJ found that Old Mutual had breached the duty of care it owed the trust when it enabled Fidentia to steal the funds. That duty of care, according to the GJ, resided in s 71 of the Collective Investment Schemes Control Act 45 of 2002, which duty outranked the contractual duties it owed to the trust administrator. Under
s 71, portfolio assets were trust property that had to dealt with in the best interests of investors.

Old Mutual appealed to the SCA. It argued that s 71 did not mean that financial institutions should be required either to compensate beneficiaries whose interests the principal had failed to protect or to question duly authorised instructions from their clients.

In its judgment, reported as Old Mutual Unit Trust Managers Ltd v Living Hands (Pty) Ltd and Others 2024 (6) SA 85 (SCA), the SCA (per Schippers JA) ruled in favour of Old Mutual that s 71 did not overshadow its contractual relationship with its client, Living Hands. The SCA found, besides that Old Mutual did not owe Living Hands or its beneficiaries a direct statutory duty under s 71, that Living Hands had failed to show that Old Mutual’s omissions were wrongful in delict. The SCA pointed out in this regard that to allow a claim against Old Mutual, which had acted as per its contractual obligations, would go against the legal convictions of the community and public policy. Nor had Old Mutual been negligent: it could not have foreseen that the funds would be misappropriated in the way that they were. Lastly, the factual cause of the loss was not Old Mutual’s conduct but the fraud perpetrated by
J Arthur Brown and his cabal.

The SCA accordingly upheld the appeal and set aside the GJ’s order, replacing it with one dismissing Living Hands’ claim.

Insolvency

Cross-border insolvency: An application by a foreign trustee to be recognised in South Africa for purpose of removing a surplus in insolvent’s SA estate to his foreign estate

In Wagner NO v Gijsbers NO and Others 2024 (6) SA 296 (WCC) the applicant (Mr Wagner) had been appointed in terms of Austrian law as official receiver (trustee) of the insolvent estate of a Mr Scheer (the third respondent). Scheer had assets in South Africa, and his South African estate had been sequestrated. The first and second respondents were its trustees. Wagner applied to the WCC for an order of recognition of his Austrian appointment in South Africa, to enable him to remove any surplus funds left in the South Africa estate to the Austrian estate. Scheer opposed the relief, arguing that, because most of his assets were in Austria, and the process there was at an advanced stage, the principle of convenience dictated that his Austrian estate should be finalised before proceedings relating to a South African surplus were determined. He also argued that where a foreign insolvent’s estate was also sequestrated in South Africa, a court was blocked from granting a recognition order by s 116(1) of the Insolvency Act 24 of 1936. Section 116(1) required the master to deposit any surplus in the estate into the Guardian’s Fund, and, after rehabilitation, to pay it out to the insolvent. The question for the WCC was whether, based on considerations of comity, convenience and equity, it should recognise Wagner for the purpose of removing surplus funds to Austria for the benefit of Scheer’s creditors there.

The WCC (per De Wet AJ) ruled that it would be convenient and equitable to recognise Wagner and to allow the removal of Scheer’s assets. The surplus in Scheer’s South Africa estate could then be used for the benefit of his Austrian creditors, with no prejudice to any of his South Africa creditors. Section 116, properly interpreted, meant that the funds remaining after final distribution by the South Africa trustees did not constitute a ‘surplus’ as intended in s 116(1), for there would be no surplus in the South Africa estate while there were unpaid creditors overseas. In the result, the WCC ordered the recognition in South Africa of Wagner’s appointment as official receiver under Austrian law, for purposes of removal for the benefit of the Austrian creditors, of surplus funds remaining in Scheer’s South Africa estate.

Interdicts

Test for the appealability of interdicts confirmed: Vresthena, a corporate entity, was the owner of several units in a retail park run as a sectional title scheme. The scheme’s body corporate, which was obliged to pay for the electricity supplied to the units, had entered into a direct electricity supply agreement with Tshwane City. But the body corporate regularly failed to pay the bills, which prompted Tshwane to disconnect the electricity supply to the park. Vresthena then brought an application in the GP for two-part relief. In part A it sought immediate interdictory relief in the form of orders for the restoration of electricity supply and directing Tshwane to reconsider its application for a separate electricity connection for its properties in the park. In part B it sought the review of any decision rejecting its reconsideration application. The GP ruled in favour of Vresthena, ordering the restoration of the electricity supply to the park pending the review of any decision by Tshwane to refuse the reconsideration application.

In an appeal by Tshwane, reported as Tshwane City v Vresthena (Pty) Ltd and Others 2024 (6) SA 159 (SCA), the SCA ruled, on the preliminary point of the appealability of the GP’s interim order, that the test was whether it was in the interests of justice to allow an appeal. The SCA acknowledged the continued importance and applicability of the traditional requirements for appealability, namely that the decision had to be final in effect and not susceptible to alteration by the court that granted the order; definitive of the rights of the parties; and have the effect of disposing of at least a substantial portion of the relief claimed in the main proceedings. But, said the SCA, these considerations might sometimes have to yield to the interests of justice, which could render an interim order appealable even in absence of the traditional requirements. Here, the GP’s order, though interim, was in fact final in effect and hence appealable.

The SCA went on to point out that the GP was wrong on the merits. Vresthena and the other unit owners had no right to receive electricity if the body corporate was not paying for it under its contract with Tshwane. Tshwane’s obligation to provide electricity to its residents was a reciprocal one, and it was entitled to implement debt-collection measures if it was not paid. Since this meant that Vresthena did not meet the requirements for an interdict, it was wrongly granted by the GP. The SCA accordingly upheld Tshwane’s appeal.

Shipping

Oil tanker blaze fallout: Greek shipping tycoon fingered in SA associated-ship arrest proceedings: In August 2020, the Indian Oil Corporation chartered Porto Emporios Shipping for the carriage of 270 000 tonnes (two million barrels) of crude oil on Porto’s vessel, the Panama-registered and Greek-owned New Diamond, from Kuwait to India. On 3 September 2020, New Diamond caught fire near Sri Lanka’s coast. A joint effort by Indian and Sri Lankan firefighters extinguished the blaze by 11 September.

While most of New Diamond’s cargo was eventually transhipped, some was lost. As a result of the incident, Indian Oil suffered damages of over R1,3 billion, which it sought to recoup from Porto by way of arbitration proceedings in India. Indian Oil’s claim, which was based on Porto’s alleged breach of its obligations under the bill of lading and charterparty, alternatively on the negligence of its captain, was partially secured through its protection and indemnity club. To obtain additional security, Indian Oil in May 2022 successfully petitioned the KZD ex parte for an associated-ship arrest, under s 3(6) read with s 3(7) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (ARJA), of the bulk carrier New Endeavor.

As proof for its allegation that New Endeavour was an associated ship of New Diamond, Indian Oil submitted evidence, in the form of investigative reports attached to its founding affidavit, that showed that New Diamond, New Endeavour, and another vessel arrested in South Africa as part of the security, New Elly, though registered in the names of different ship-owning companies, were part of a Greek family shipping empire headed by one A. The reports asserted that ultimate control of all three ships was in the hands of A, alternatively in those of A ‘and his children’. The KZD found, on the evidence in the reports, that New Endeavor and New Diamond were indeed associated ships by virtue of their control by A, and that it did not matter whether A exercised that control by himself as head of the family or together with his children.

The reports were compiled by Kennedys, a London shipping-law firm, and Gray Page, a specialist maritime and aviation consulting company. South African admiralty courts by virtue of s 6(3) of the ARJA, were entitled to ‘receive as evidence statements which would otherwise be inadmissible … hearsay’.

When the KZD in December 2022 denied New Endeavor’s application for reconsideration of the arrest under r 6(12)(c) of the Uniform Rules of Court, New Endeavor and its owners launched an appeal to the SCA. It was reported as MV New Endeavor and Others v Indian Oil Corporation Ltd 2024 (6) SA 64 (SCA).

They appellants argued that, by asserting alternative sources of control, Indian Oil failed to prove a single locus of control and, therefore, to establish association on a balance of probabilities. They argued that r 6(12)(c) did not oblige them to file an answering affidavit to Indian Oil’s arguments on association because they were entitled to argue on the application papers alone that no case had been made out for any relief.

It was not disputed that Indian Oil had a maritime claim and had, besides association, proved the other requirements for an arrest under s 5(3) of ARJA (a prima facie case and a genuine and reasonable need for security). For its part, Indian Oil argued that it never deviated from its central allegation, namely that there was at all material times a single source of control, which could be either or A and his children.

The SCA (per Mbatha JA and Seegobin AJA) ruled that the primary question was whether Indian Oil had established the required association between New Diamond and New Endeavor via the information contained in the reports. Association would be established if the companies that owned the ships were controlled by the same person, the level of control required being control over the overall destiny or fate of the company. The SCA found that, while the appellants’ contention in respect of r 6(12) was in line with recent SCA precedent, the information provided in the reports submitted by Indian Oil showed that A was indeed the single repository of common control of both New Endeavor and New Diamond, thereby establishing association. The extent to which A was assisted by his children was irrelevant: family control, prevalent in the shipping industry, was sufficient. Indian Oil’s alternative manner of pleading arose out of understandable caution. The SCA concluded that, ultimately, the appellants’ failure to controvert Indian Oil’s evidence was sufficient to tip the balance in its favour. It accordingly dismissed the appeal with costs.

Tax

Income tax: qualifying requirements for a ‘foreign business establishment’: Coronation Investment Management SA (Pty) Ltd v Commissioner, South African Revenue Service 2024 (6) SA 310 (CC) concerned the requirements for qualifying as a ‘foreign business establishment’ (FBE) as contemplated in s 9D(1)(a)(i) – (v) of the Income Tax Act 58 of 1962. More particularly at issue was the requirement that the FBE must be where the ‘primary operations’ of the business was based.

Section 9D(1) deals with the taxation of locally resident taxpayers on their income earned abroad, and s 9D(2) provides for the imputation of the net income of a controlled foreign company (CFC) to a South African resident company holding participation rights in such CFC. However, s 9D(9)(b) excludes from this imputation the net income a CFC derives from a FBE of that CFC. The taxpayer, Coronation Investment Management SA (Pty) Ltd (CIMSA), was the holding company for the Coronation Group, registered and tax resident in South Africa. CIMSA had various subsidiaries, locally and abroad, that operated in the sphere of fund and investment management. It was the 100% (indirect) holding company of Coronation Global Fund Managers (Ireland) Ltd (CGFM), registered and tax-resident in Ireland. CGFM did not conduct investment trading activities, because it was not licensed to do so. Instead, it contracted with specialist investment managers (licensed under a different licensing regime) to conduct investment trading activities, namely, it outsourced these activities.

The South African Revenue Service (SARS) took the view that, because CGFM’s had outsourced the primary functions of its business, it did not meet the requirements of an FBE, and accordingly assessed CIMSA’s tax for the 2012 tax year to include in its income an amount equal to the net income of CGFM. SARS’s assessment was successfully challenged by CIMSA in the tax court, but the SCA subsequently upheld its appeal. The SCA reasoned that to qualify for the exemption under s 9D, the essential operations of a business must be conducted within the jurisdiction in respect of which exemption was sought. It understood the primary operations of CGFM’s business to be investment management and held that since CGFM had outsourced these, it did not conduct its primary operations in Ireland.

The CC granted SARS leave to appeal and set aside the SCA’s order. The CC held that the rationale behind the enactment of s 9D (as expressed in the relevant Treasury Explanation) was competitiveness abroad for controlled foreign companies, while also requiring that ‘the location of the business establishment must additionally contain further economic substance’. And, in determining whether CGFM’s operations in Ireland had the requisite economic substance to qualify for the tax exemption in s 9D, a distinction had to be drawn between fund management and investment management.

Managing a collective investment fund involved the governance of and ultimate responsibility for all regulatory, legal and other investor-related aspects of a collective investment fund. Investment trading, on the other hand, entailed professionally and expertly allocating the funds invested in a collective investment fund. The ultimate effect of the SCA’s erroneous approach was that CGFM’s primary business was found to be that which it calculatedly chose not to do and was by law not able to do, namely investment management trading. It was the latter that had been delegated/outsourced, as CGFM was legally entitled to do. To hold, as the SCA did, that in doing so CGFM had ‘outsourced’ its core function and was thus not conducting the business of a management company, was fallacious. Its day-to-day operations from its Dublin office in pursuit of these management functions met the ‘economic substance’ requirements of the FBE definition. It had a fixed place of business which was suitably staffed and equipped to conduct the primary operations of its business. The CC accordingly concluded that the tax court was correct in holding that CGFM qualified for a tax exemption.

Other cases

Apart from the cases referred to above, the November 2024 South African Law Reports 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.


November [2024] 4 All South African Law Reports (pp 333 – 636); December [2024] 4 All South African Law Reports (pp 637 – 921)
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

ECB: Eastern Cape High Court, Bhisho
FB: Free State Division, Bloemfontein
GJ: Gauteng Division, Johannesburg
GP: Gauteng Division, Pretoria
NCK: Northern Cape Division, Kimberly
NWM: North West Division, Mahikeng
SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town

Civil procedure

Application for order of contempt of court: Having been previously married, the parties in McMaster v McMaster [2024] 4 All SA 854 (FB) were divorced in May 2022. A deed of settlement, made an order of court, stipulated that each party would deliver a sworn statement with full particulars of their estates, along with discovery affidavits and documentary proof of assets and liabilities, within 30 days. Although the applicant complied, the respondent did not. The applicant issued an application to compel compliance, which was withdrawn after the respondent delivered the affidavits. However, the documents provided were incomplete. Despite notices and a court order to comply with the r 35(3) and r 35(6) notices, the respondent failed to properly comply. The applicant brought an application for an order of contempt. The court held that to establish contempt, the requirements are –

  • existence of a court order;
  • service or knowledge of the order;
  • non-compliance with its terms; and
  • wilful and mala fide non-compliance.

Once the first three elements are established, a presumption of contempt exists unless the respondent creates reasonable doubt. The respondent failed to discharge the evidential burden, contradicting his claim of compliance. He was committed to imprisonment for three weeks, suspended for a year, on condition of complying with the order within 30 days.

 

Default judgment – application for rescission: Matjhabeng Local Municipality v Down Touch Investments (Pty) Ltd and Another [2024] 4 All SA 827 (FB) involved an application by the municipality for the rescission and setting aside of a court order granted by default on 19 October 2023, requiring the municipality to pay the first respondent (Down Touch) an amount of R 4 282 564,51 plus interest. Down Touch had completed work for the municipality and submitted invoices for payment, which the municipality did not dispute but failed to pay, leading to Down Touch obtaining the court order. While the municipality became aware of the judgment debt on 31 October 2023, the notice of motion for the rescission application was only filed on 7 December 2023. The court held that in rescission applications, it should not scrutinise the defence too closely as long as there appears to be sufficient reasons for allowing the defendant to present their defence. The court must balance the individual’s right to access the court and have their dispute resolved fairly against the facts that led to the default judgment. The explanation for the default must be reasonable, and the default should not be wilful or an attempt to delay justice. The court rejected the municipality’s contentions, finding that service was properly effected, the relevant Act did not apply, and the res judicata doctrine was inapplicable. As none of the defences were sustainable, the application was dismissed.

 

Requirements for prosecution of appeals: The court addressed the formal requirements for prosecuting an appeal and the appellant’s non-compliance with these requirements. The court in Bojosinyane v Maroga and Others [2024] 4 All SA 378 (NWM) summarised the peremptory procedural steps for prosecuting an appeal, including delivering the notice of appeal within a specified timeframe, applying for a hearing date, filing necessary documents (power of attorney, record on appeal, index, and relevant papers), and providing security for the respondent’s costs. If these steps are not taken, the appeal is deemed to have lapsed under r 49(6)(a). An appellant whose appeal has lapsed must apply to the court to reinstate or resurrect the appeal under r 49(6)(b). In this case, the appellant failed to file a power of attorney, provide security, and timeously deliver the appeal record. As a result, the appeal was deemed to have lapsed, and the appellant did not apply for reinstatement. Consequently, there was no appeal for the court to adjudicate. Additionally, the court noted that even if the appeal could be adjudicated, the relief requested was moot since the appellant’s fixed-term contract had expired, and there were no interests of justice considerations to overlook the mootness. Ultimately, the appeal was struck from the roll with costs due to the appellant’s non-compliance with the formal requirements for prosecuting an appeal and the mootness of the relief sought.

Contract

Agreement to provide funding for sale agreement: In September 2019, the first plaintiff (AZC) and a third party (Jasco) in African Zaibatsu Corporation Ltd and Another v Industrial Development Corporation of South Africa Ltd [2024] 4 All SA 739 (GJ) concluded a sale agreement for AZC to acquire Jasco’s electrical business as a going concern. A material condition was that AZC would secure funding from the defendant (IDC) to pay the purchase price by 30 November 2019. The agreement allowed AZC to take over management before determining the purchase price, which would be based on audited financial statements using a formula considering assets and liabilities. After conducting due diligence, the IDC agreed to provide funding, with security requirements including registering a special notarial bond (SNC) over the business assets. AZC alleged that the IDC instructed its attorney to withhold registering the SNC to allow a review of the Jasco business, causing Jasco to cancel the sale agreement. The IDC relayed the review outcome to AZC after Jasco’s cancellation. AZC claimed damages for the IDC’s alleged breach and repudiation. The court held that AZC bore the onus to prove the IDC’s repudiation, exhibiting a deliberate and unequivocal intention not to be bound by the loan agreement. Delaying the SNC registration during the review was not unreasonable, as the review might change the asset value and security required. The IDC did not express an unequivocal termination or refusal to be bound but was prepared to advance a loan commensurate with the revised value. The evidence showed changed trading circumstances, and it would not be commercially sound to compel the IDC to provide funds exceeding the business’s value or that AZC could not repay. Jasco might have terminated due to the reduced valuation and purchase price. The plaintiffs’ claim was dismissed.

Costs

Reconsideration of costs post-judgment: In his capacity as curator ad litem for a person who suffered a severe head injury in a motor vehicle accident, the appellant in Du Toit NO obo Nkuna v Road Accident Fund [2024] 4 All SA 476 (NCK) sought reconsideration of costs to recoup irrecoverable costs (attorney and client costs) from the date he made a ‘Calderbank offer’ to the respondent (the Fund). The court’s refusal to grant a special costs order led to this appeal, with the appellant arguing the Fund’s failure to engage meaningfully in settlement discussions warranted a punitive costs order. The appellant issued summons for damages in 2010, with the Fund conceding liability in 2017. A settlement proposal was made in September 2020, followed by a Calderbank offer in October 2020. The trial proceeded in November 2020, resulting in an award slightly exceeding the Calderbank offer, with party and party costs granted. The court held that reconsideration of costs after judgment based on a secret offer to settle or a Calderbank offer is available in South African jurisprudence, akin to r 34 of the Uniform Rules of Court for defendants. The Calderbank principle allows a party to reserve the right to use a without prejudice settlement offer to seek indemnity costs, serving the public interest to conserve resources on unnecessary litigation. While the rules do not provide for reconsideration of costs pursuant to a Calderbank offer by a plaintiff, r 34(12) allows reconsideration if the court was unaware of a defendant’s offer when deciding costs. The Fund’s conduct demonstrated an imprudent refusal to respond to the appellant’s reasonable Calderbank offer made at least six weeks before trial. The unreasonable refusal to accede to a secret offer to settle is grounds for awarding special costs on an attorney and client scale. The court below erred in its finding, and the appeal was upheld.

Evidence

Convictions based on DNA evidence: The appellant in Kgatlhane v S [2024] 4 All SA 542 (NWM) was convicted on four counts of rape and two counts of robbery with aggravating circumstances and sentenced to life imprisonment. He appealed against his convictions and sentences. On five counts, the complainants could not identify the attacker, and the appellant’s conviction was based on DNA evidence. The appellant appealed, arguing that the DNA sample used to identify him was not proven to be his. The court found that the DNA evidence taken from the appellant was not compared to the samples from the complainants. The trial court erred in accepting that DNA evidence linked the appellant to those five charges. The appeal against conviction and sentence on those counts was upheld. The remaining count related to a rape charge. The appellant contended that the trial court misdirected itself by finding the complainant credible, failing to apply the cautionary rule for a single witness, and that the sexual intercourse was consensual. Regarding the sentence, the appellant argued his personal circumstances justified departing from the minimum sentence, his lengthy pre-trial custody, and the lack of grievous bodily injuries. The court found no reason to overturn the trial court’s factual findings or sentence. The complainant’s evidence was truthful, clear, and satisfactory. The personal circumstances cited by the appellant were insufficient to depart from the minimum sentence. The trial court considered the pre-trial custody, and the sentence was not strikingly disparate. The appeal against conviction and sentence on the remaining count was dismissed.

Interpretation of Statutes

Court’s approach to statutory interpretation: On sustaining a spinal injury in a motor vehicle collision, the appellant in Gore v Rand Mutual Assurance Company Ltd [2024] 4 All SA 510 (GJ) was rendered a quadriplegic who would be wheelchair-bound for life and declared totally and permanently disabled. The respondent was the entity licensed to assess and pay claims for compensation related to occupational injuries or diseases in the mining sector under the Compensation for Occupational Injuries and Diseases Act 130 of 1993 (COIDA). In 1996, a claim was lodged on behalf of the appellant for compensation under COIDA, leading to an award. In 2012, the respondent reviewed the award at the appellant’s instance, resulting in increased compensation (the revised award). However, a subsequent review in 2014 led to a reduced award. The central issue was whether the respondent correctly applied s 51 of COIDA, which deals with compensation for permanent disablement of employees in training or under 26 years old, in determining the appellant’s earnings when making the reduced award. Section 51 states that such a person’s ‘earnings shall be calculated on the basis of the earnings to which a recently qualified person or a person in the same occupation, trade or profession with five years more experience than the employee would have been entitled at the time of the accident, whichever calculation is more favourable to the employee.’ The tribunal dismissed the appellant’s objection, leading to this appeal. The court held that statutory provisions must be interpreted in a manner that gives effect to the spirit, purport, and object of the Bill of Rights, preferring an interpretation consistent with the rights in the Bill of Rights. Section 51 was enacted to ensure adequate social insurance for young, vulnerable employees who become permanently disabled early in their careers. The appellant, being under the age of 26 and in training, fell within this category. The court found that the respondent should have considered the earnings of four different proxies, as outlined in the judgment, to determine the appellant’s compensation within the mining engineering profession and applied the most favourable outcome. The tribunal misinterpreted s 51, and the appeal was upheld, reinstating the respondent’s revised award with retrospective effect.

Personal injury/delict

Claim for damages arising from injury from being pushed from a moving train: The plaintiff in Cloete v Passenger Rail Agency of South Africa (“PRASA”) [2024] 4 All SA 391 (WCC) claimed damages from PRASA for injuries sustained when allegedly pushed from a moving train carriage. The claim was based on PRASA’s alleged failure to take reasonable steps to ensure the plaintiff’s safety, which PRASA denied. The court held that the plaintiff bore the onus to establish his case on a balance of probabilities. Despite alleged inconsistencies, the court found the plaintiff’s version credible, corroborated by independent evidence, and favouring the conclusion that the train doors had not closed properly before departure. The plaintiff was deemed a reliable witness who provided a clear, logical, and chronological account of the incident. The court determined that PRASA owed a legal duty to ensure passenger safety arising from the carrier-passenger relationship and public law obligations. Precedents established that a train departing with open doors constituted negligence and a breach of this duty. The plaintiff successfully proved PRASA’s negligent omission was closely connected to his harm. PRASA’s defense of contributory negligence failed as it did not provide evidence establishing the plaintiff’s negligence and its causal connection to the damages. Consequently, the plaintiff’s claim was upheld on the merits.

 

Fire damage caused to property: In November 2018, a fire broke out at the plaintiff’s business premises when an employee was using a grinder. The plaintiff’s employees attempted to extinguish the fire with fire extinguishers while waiting for the fire department. However, there was an interruption in the water supply in the area, and when the fire brigade arrived, they could not connect to the fire hydrants due to the lack of water. A water tanker was called, but the water was quickly depleted without fully extinguishing the fire. When the tanker left to refill, the fire reignited and spread, causing extensive damage to the plaintiff’s premises and property. The plaintiff in Cobra Towing CC v
Mangaung Metropolitan Municipality and Others
[2024] 4 All SA 423 (FB)
sued the municipality and related parties (the defendants) for damages, alleging that the sole cause of the fire’s spread and continuation was the municipality’s failure to supply water to the area. The plaintiff claimed that if there had been sufficient water supply, the system installed by the municipality would have suppressed and extinguished the fire with limited damage. The defendants disputed the allegations of negligent and wrongful conduct and raised the issue of contributory negligence. The court found that the plaintiff could not be held contributorily negligent based on the evidence regarding its fire-fighting equipment and the actions of its employees. The court then examined the wrongfulness of the defendants’ conduct. It was established that the municipality had a duty to ensure a water supply to residents and businesses in the area, as per the Constitution and the Local Government: Municipal Systems Act 32 of 2000. The defendants did not plead any grounds of justification, such as lack of resources or statutory authority, which they would have had to prove if raised. The court ruled that the plaintiff discharged its burden of proving the elements of wrongfulness and negligence. The municipality should have foreseen the possibility of damage due to the extended water interruption and taken reasonable steps to prevent it. On a balance of probabilities, the municipality’s wrongful and negligent omission caused the plaintiff’s damages, and the municipality was held liable for payment to the plaintiff.

 

Unlawful arrest and detention: In February 2016, the plaintiff in Duvel v Minister of Police [2024] 4 All SA 784 (GJ) was arrested and detained by the second defendant and other members of the South African Police Service (SAPS), acting within their employment scope. He was charged with theft, money laundering, and fraud. The trial was struck off the roll due to an unreasonable delay in its completion. The plaintiff claimed damages against the first to third defendants for contumelia, deprivation of bodily freedom, liberty, discomfort, and infringement of his good name, reputation, and standing in the community, totalling R 500 000 due to his unlawful arrest and detention. Against the third to fifth defendants, he alleged malicious prosecution and claimed damages for the same reasons, totalling another R 500 000. Additionally, he sought damages from all defendants for past loss of earnings (R 359 925) and future loss of earnings (R 2 455 047). The court found that the warrant of arrest was invalid, and the arresting officer was grossly negligent in executing his duties, causing the plaintiff’s unlawful arrest. The prosecution against the plaintiff was instituted without reasonable and probable cause, infringing on his rights. The first, second, and fifth defendants were liable for the loss and damage suffered by the plaintiff due to his unlawful arrest, detention, and the claims made under the actio iniuriarum and Aquilian action.

Property

Purchaser of housing interest in a retirement scheme: Herold Gie and Broadhead Incorporated v Harris NO and Others [2024] 4 All SA 333 (SCA) involved six consolidated actions related to the cancellation of life rights agreements by purchasers with a developer for suites in a retirement hotel. The purchasers had authorised the appellant (HGB) to release the purchase price funds held in trust to the developer, which HGB did. Subsequently, the purchasers cancelled the agreements, alleging non-compliance with statutory requirements, and demanded refunds of the purchase prices. The developer became insolvent, and the purchasers lodged claims with the insolvent estate’s trustees and received dividends. The purchasers then instituted proceedings against HGB, claiming refunds of the purchase prices under s 6(4) of the Housing Development Schemes for Retired Persons Act 65 of 1988 (HDSA). This section entitled purchasers to refunds of purchase prices held in a legal practitioner’s trust account on the developer’s insolvency. HGB argued that s 6(4) did not apply as they had already released the funds to the developer. The court interpreted s 6(4) within the context of s 6, which restricted the developer’s entitlement to the purchase price until compliance with certain requirements. The court held that s 6(4) was limited to instances where the developer became insolvent while the purchase price was still in the practitioner’s trust account. Since HGB had already released the funds to the developer, s 6(4) did not apply, and the appeal was upheld.

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 2025 (Jan/Feb) DR 56.

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