May 2024 (3) South African Law Reports (pp 1–320); May 2024 (1) South African Criminal Law Reports (pp 447–560)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.
CC: Constitutional Court
GJ: Gauteng Local Division, Johannesburg
GP: Gauteng Division, Pretoria
SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town
International child abduction: The proper application of the art 13(b) Hague Convention defence to the return of an unlawfully retained child: The parties in Ad Hoc Central Authority, South Africa and Another v Koch NO and Another 2024 (3) SA 249 (CC) were a child, her mother, her father, her maternal aunt and the Ad Hoc Central Authority for South Africa (CASA), an entity established under the Hague Convention on the Civil Aspects of International Child Abduction, 1980.
The parents, who were not married, were resident in the United Kingdom (UK) when the child, E, was born. When E was two, her mother was diagnosed with cancer. Having exhausted treatment options in the UK, the trio in September 2019 travelled to South Africa (SA) to investigate the possibility of alternative treatment. While in SA, the relationship between the mother and father soured, and in October 2019 the father returned to the UK on the understanding that the mother and E would remain in SA while there was a prospect of successful treatment, failing which they would both return to the UK. In November 2019 the mother, who, as E’s primary caregiver since her birth, was deeply sceptical of the father’s ability to raise her, informed him that she wanted E to remain with her in SA and – in the event of her death – to live there with her aunt and maternal grandmother. The father, initially receptive to the idea that E would remain in SA as long as the mother was alive, balked when he found out that she wanted E to live there permanently.
In February 2020 the father, contending that E was being unlawfully retained in SA, approached the Central Authority for England and Wales (CAEW) – CASA’s UK counterpart – for its assistance in securing E’s return to the UK. On the direction of CAEW, CASA in July 2020 applied in the WCC for the return of E to the UK. The mother and aunt, as respondents, raised the harm or intolerability defence in art 13(b) of the Convention, arguing that removing E from her current, familiar, environment in SA would expose her to a grave risk of psychological harm and place her in an intolerable situation. To bolster her case, she pointed to the attachments E had formed in SA and to her father’s inability to care for her due to his alleged depression and alcohol abuse.
The mother died in December 2020, while the matter was still before the WCC. The WCC was not satisfied that the art 13(b) defence was established and ordered E’s return to the UK. The aunt obtained leave to appeal to the SCA, which upheld the appeal on the ground that the removal of E from her primary attachment figure, her aunt, would result in the harm or intolerability envisioned by art 13(b). It, therefore, ruled that E could remain in SA with her aunt.
The father sought leave to appeal to the CC, which was granted. The issue before the CC was whether the aunt had established the art 13(b) defence.
A majority of the CC (per Majiedt J) ruled that the aunt had not established the art 13(b) defence. The judgment emphasised the importance of the protective measures in place in the child’s home country, pointing out that the risk to E was mitigated by the extensive social support systems available to her in the UK. The judgment also stressed that aunt had to show harm exceeding that which would flow naturally from a court-ordered return, and that the disruptive consequences raised by her amounted to no more than that. The harm of a return would, therefore, not reach the degree of gravity required by art 13(b). The majority judgment stressed that E would, in fact, be harmed by the father’s absence from her life, which was not taken into consideration by the SCA. The majority judgment also criticised the SCA for ignoring the father’s parental rights, pointing out that E had a right to her father’s affection and care. It highlighted the fact that the risk of harm flowing from the separation of E from her aunt was the result of her wrongful retention in SA and the delay in the finalisation of the litigation.
The majority accordingly upheld the appeal against the SCA’s judgment and ordered that E be returned to the UK.
In a dissenting judgment Van Zyl AJ warned against a too narrow interpretation of art 13(b), which, he pointed out, set a high threshold by its use of the words ‘grave’ and ‘intolerable’ in relation to the risk and harm. The provenance of the harm, whether from a removal or a return, was immaterial. In the present case, while it was not disputed that E was habitually residing in the UK, she had spent most of her life in SA, had formed a primary attachment to her aunt, and had become settled here. Returning her to a person (her father) and environment (the UK) she had very little connection with would expose her to a grave risk of psychological harm. There was, on the other hand, no evidence that a failure to return her to the UK would cause her to suffer harm. Therefore, the purposes of the Convention would be best served by allowing her to remain in SA.
Unlawful arrest – the rationality of the means used: The plaintiffs in WSL and Another v Minister of Police and Others 2024 (1) SACR 546 (GJ) instituted action against the defendants for unlawful arrest and detention. They were arrested early on a Saturday morning and kept in the cells in poor conditions until the Monday morning, when they were released on bail without opposition by investigating officer or prosecutor. The charge against them was that they had abused and assaulted the second plaintiff’s minor children. The arrest was effected on the basis of a warrant of arrest issued at the instance of a prosecutor and authorised by a magistrate.
The GJ pointed out that the means used to effect an arrest in the execution of a warrant had to be rationally connected to the objects of arrest and not be arbitrary. In circumstances where both the arresting officer and the prosecutor had confirmed that neither plaintiff was a flight risk, and that they had dutifully attended court on previous occasions before the same charge was withdrawn, there was no urgency. The only reason advanced as to why the plaintiffs were so arrested was that it was due to police ‘workload’. The police had clearly failed to consider any less restrictive means to procure the attendance of the plaintiffs at court and were in violation of both their obligations in terms of s 13 of the South African Police Service Act 68 of 1995 and the plaintiffs’ constitutional rights to dignity and freedom and security of the person. The Minister was accordingly ordered to pay the plaintiffs’ damages for their unlawful arrest and detention.
Business rescue – the cancellation of a lease by a business practitioner where company in business rescue is the landlord: In Knoop NO and Another v Pillay and Others 2024 (3) SA 116 (GJ) the first applicant, a business rescue practitioner (BRP), applied for eviction of the first to fourth respondents (Mr Pillay and others) from three properties owned by the second applicant, the company in business rescue.
The BRP claimed that this was necessary to market and sell the properties as part of the business rescue. Mr Pillay, the only respondent to file an answering affidavit, relying on a lease he entered into with a director of the company prior to it being placed into business rescue, replied that there was no need to cancel the lease in order for the BRP’s objective – the sale of the properties – to go ahead.
Mr Pillay further argued that, since the BRP was not relying on the terms of the lease to evict him, the BRP could only rely on s 136(2) of the Companies Act 71 of 2008, but that the BRP did not meet the requirements of ‘just and reasonable circumstances’ laid down in the provision (under it, a BRP may ask a court to ‘cancel, on any terms that are just and reasonable in the circumstances, any obligation of the company’ arising ‘under an agreement to which the company was a party at the commencement of the business rescue proceedings’).
The GJ (per Manoim J) held that a fair reading of s 128(1)(b)(ii) – which empowered a BRP to restructure a company in manner that would yield a better return for creditors and shareholders than liquidation – included the power to evict persons from the property with a view to marketing and selling the property, if this would result in a better return to creditors or shareholders.
As to the application of s 136(2)(b), the GJ reasoned that while the effect of cancellation on the sanctity of contract was a consideration to keep in mind in interpreting the discretion in terms of the section, it was not the only one. The purpose of business rescue and its impact on the various stakeholders was also a consideration. The BRP provided a proper explanation for why the respondents should be evicted, namely, to be able to sell the property and thus realise the most optimal price. This objective was more likely to be achieved in the absence of a tenant who enjoyed the benefit of a lease that made no commercial sense for any owner of the properties to have entered into. Accordingly, the relief sought was granted.
Acceleration clause – reliance on pari passu with cancellation: Friedman, a director and the chief executive office of Urban, a private company, had guaranteed the debt Urban owed Standard Bank under a loan facility agreement (LFA). The guaranteed obligations included all present and future indebtedness by Urban to Standard Bank, up to R110 million. Friedman undertook to pay Standard Bank whenever Urban failed to pay any amount or to perform any obligation as borrower under the LFA. Default on the LFA was defined as a default on the guarantee. The LFA contained an acceleration clause providing that if Urban defaulted, Standard Bank could require Urban to repay the entire outstanding amount. Subsequently Standard Bank, citing defaults by Urban, cancelled the LFA and invoked the acceleration clause. It proceeded to apply for judgment against Friedman. Friedman’s defence was that by ‘electing’ to cancel, Standard Bank had forfeited the right to rely on the acceleration clause. In a judgment reported as Standard Bank of South Africa Ltd v Friedman 2024 (3) SA 171 (WCC), the WCC ruled that while parties to a contract cannot invoke contractual rights after its cancellation, there was nothing to preclude them from exercising their rights simultaneously with cancellation. Here, Standard Bank sought to invoke its right to acceleration at the same time as cancellation, which it was entitled to do under the acceleration clause, which itself incorporated the right of cancellation. Friedman’s view that acceleration and cancellation could not take place simultaneously placed form over substance. The WCC accordingly ordered Friedman to pay Standard Bank the R110 million he owed under the guarantee, together with interest and costs.
Public policy – enforcing a contract for the proceeds of unregulated boxing contests: In Tikbox League (Pty) Ltd and Others v Du Toit and Others 2024 (3) SA 198 (GP), the GP was confronted with a dispute between the directors of the Tikbox League (Pty) Ltd, an entity involved in the hosting of boxing matches between feuding social media stars who had made a name for themselves on TikTok, a social media platform. The dispute between the directors was about the proceeds from the fights. The GP (per Le Grange AJ) focussed on the lawfulness of Tikbox’s business (motto: ‘unleash your inner warrior with Tikbox’). Tikbox promised to ‘make a lasting impact on mental health’ by inviting TikTokers ‘to engage in a 3-round boxing spectacle that transcends the digital façade’.
The GP stressed that said spectacle was centred on what amounted to unlawful and criminal conduct, namely the assault (the ‘intentional application of force to the body of another’). While the unlawfulness of such conduct could be negated by lawful consent in the case of certain sports, the requirements were that the intention of the participants should not be to inflict serious injuries and that the rules should be designed to prevent them. Lawful sports were subject to regulation aimed at mitigating potential harm to competitors and to informed consent to risk by the participants. In the case of the Tikbox League, however, the absence of regulation and the instrinsically dangerous nature of the contests negated the possibility of lawful consent. The boxing contests and the contracts under which they were organised were contra bonos mores. The GJ, therefore, dismissed the matter. It also ordered the referral of the matter to the Companies and Intellectual Property Commission for an investigation into the lawfulness of the Tikbox’s purpose and to the National Prosecuting Authority for it to consider whether crimes were committed by anyone mentioned in the judgment.
The lawfulness of the former State President’s appointment of various Directors of Public Prosecution: In Mncwabe v President of the Republic of South Africa and Others 2024 (1) SACR 447 (CC) the applicants were appointed as provincial Directors of Public Prosecution (DPPs) by the former State President shortly before he left office. Their appointments were then revoked by the new State President. The then National Director of Public Prosecutions (NDPP) had personally notified the applicants of their appointment after coming into possession of the relevant Presidential Minutes.
Aggrieved by the withdrawal of the appointments, the applicants approached the GP for the review and setting-aside of the decisions to appoint. The matter turned on whether initial decisions were reversible. The GP dismissed the applications on the ground that the functus officio principle did not apply and, absent public notification, the decision to appoint was not final. Therefore, the former President or his successor still had the right to change his mind regarding the appointments. The SCA similarly dismissed applications for leave to appeal.
The matter went to the CC for resolution. The CC (per Majiedt J for the majority) agreed with the GJ, but on different grounds. He found that personal notification of the appointments by the NDPP was indeed sufficient for compliance with relevant provisions (s 13(1)(a)) of the National Prosecuting Authority Act 32 of 1998. Power of appointment, however, was vested in the President, and the NDPP had no such authority, either direct or implied. Therefore, in the absence of a direct instruction to make the notification on behalf of the President, the NDPP had no authority to finalise the appointments. The appointments were, therefore inchoate, and the new President was entitled to appoint his own choice of candidates.
Apart from the cases referred to above, the May 2024 Criminal Reports also contained cases dealing with –
The power of the Registrar of the High Court to grant default judgment in National Credit Act matters: Nedbank Ltd v Mashaba and Other Similar Matters 2024 (3) SA 155 (GJ) dealt with the High Court Registrar’s power under r 31(5) to grant default judgment extended to matters falling under the ambit of the National Credit Act 34 of 2005 (the NCA). Section 130 of the NCA, headed ‘Debt procedures in a court’, provided in subs (3) that ‘in any proceedings commenced in a court in respect of a credit agreement to which this Act applies, the court may determine the matter only if the court is satisfied [that the condition set out in paras (a) to (c) were met]’. Did the reference here to ‘the court’ disqualify the registrar from granting default judgment in NCA matters? There were conflicting judgments on this point. The GJ (per Gilbert AJ), faced with various applications on the unopposed motion roll for default judgment brought by a common applicant, Nedbank Ltd, arising from instalment sale agreements subject to the NCA, adjourned proceedings to allow Nedbank to prepare argument on the point. If the registrar could not grant default judgment in NCA matters, the applications were appropriately enrolled in open court. If, on the other hand, the registrar could do so, then consideration had to be given to whether the registrar should have been approached instead of the court.
The GJ’s view was that the registrar could readily perform the sort of ‘oversight’ required by s 130(3). Therefore, the registrar was permitted to consider NCA default judgment applications where they fell within the ambit of r 31(5). This would not undermine the purposes of the NCA or prejudice the banking industry. Therefore, applicants seeking default judgment in NCA matters should as a rule first approach the registrar. Should they approach open court directly, they had to provide good reasons for doing so. And, should a registrar refer an NCA matter to open court, he or she had to provide a sufficient explanation for doing so.
The GJ, therefore, removed the matters before it from the roll to allow Nedbank Ltd to approach the registrar in terms of r 31(5)(a).
The jurisdiction of regional magistrates’ courts in divorce matters and ‘any question arising therefrom’: CC v GC 2024 (3) SA 109 (WCC) concerned the issue of whether a counterclaim in divorce action constituted a question ‘arising’ from divorce for the purposes of s 29(1B) of the Magistrates’ Courts Act 32 of 1944. Section 29(1B) provides for regional magistrates’ courts to ‘have jurisdiction to hear and determine suits … relating to divorce between persons and to decide on any question arising therefrom’.
The WCC (per Hofmeyr AJ) considered this issue on appeal from the regional magistrate’s court, which had dismissed CC’s special plea to GC’s second counterclaim of approximately R1,7 million, namely that it exceeded the monetary jurisdiction of the regional magistrate’s court and so should be dismissed.
The counterclaim was based on an agreement that GC allegedly entered into with CC in 2011, that she would be entrusted with the administration of his financial affairs and would attend to the administration thereof. In doing so, she was inter alia required to collect rentals due to him. It was alleged that she breached their contract when she held on to moneys instead of transferring it to GC.
The GJ (per Hofmeyr AJ, Mantame J concurring) interpreted the phrase ‘any question arising therefrom’ as forging a link between the subject (divorces) and the questions associated with it: To fall within the ambit of the regional magistrate’s court’s jurisdiction, therefore, the issue raised would have to arise from a divorce. It was held that the relevant question in the divorce was whether there was a breakdown of the relationship, but that the question that arose in the counterclaim was a different one: whether CC was liable to pay damages to GC in an amount of R1,7 million – a question that did not arise from the divorce proceedings. The special plea ought, Hofmeyr AJ concluded, therefore, have been upheld.
Benefits received by spouse who ceased to be member of fund after institution but before finalisation of divorce: A husband quit his job the day after his wife, to whom he was married in community of property, instituted divorce proceedings. The wife claimed 50% of his pension benefits of R1,7 million. The husband quibbled, quoting the settlement agreement as incorporated in the divorce order, according to which the 50/50 division of pension benefits had to be calculated at the date of divorce, by which time he was no longer a member. The matter came before the GP by way of a stated case, reported as MM v OM 2024 (3) SA 133 (GP). The GP ruled in favour of the wife, pointing out that s 7(7)(a) of the Divorce Act 70 of 1979 automatically vested the husband’s pension interest in the joint estate on the institution of divorce proceedings. The GJ accordingly ordered the husband to pay the wife 50% of the R1,7 million.
The principle of finality and the court’s powers under r 42: Absa Bank, having sued several persons for R19 million, obtained default judgment against one of them, Prinsloo. When Absa subsequently abandoned the default judgment, Prinsloo argued that the judgment had – despite its abandonment – disposed of Absa’s entire suit. Absa then applied to the GJ under r 42(1)(a) of the Uniform Rules of Court for the rescission of the default judgment. The application was opposed by Prinsloo and the other defendants, who argued that the court was functus officio and Absa’s entire action res judicata. In its judgment, reported as Absa Bank Ltd v Prinsloo Familie Trust and Others 2024 (3) SA 80 (GJ), the GJ (per Farber AJ) ruled that abandonment –
The GJ pointed out that while finality applied once judgment was entered, it was always open to a party to argue that res judicata should, in the prevailing circumstances, be relaxed. If the court agreed, finality would not have been reached and the court would not be considered functus officio.
The GJ opted to relax res judicata in the interests of justice for Absa, which had no alternative remedy against Prinsloo. The GJ emphasised that Absa’s claim against the other defendants was, in any event, still alive because they fell short of the idem actor requirement for res judicata. The GJ accordingly found that it was not functus officio, that the default judgment was not final, and that the action could proceed in the ordinary course.
Was the June 2022 suspension of the Public Protector by the President in order? In Democratic Alliance and Another v Public Protector and Others 2024 (3) SA 1 (CC) one of the issues before the CC was whether the State President’s June 2022 decision to suspend the Public Protector – who was at the time investigating him about the notorious Phala Phala cash-in-sofa incident – was biased and contrary to s 96(2)(b) of the Constitution in that he (the President) had exposed himself to a conflict of interest between his official responsibilities and private interests. The matter had reached the CC via appeals by the President and the Democratic Alliance against decisions of the WCC, which had found that the President had breached s 96(2)(b). The CC (per Maya DCJ in a unanimous judgment) found that the President did not stand to benefit from his decision. The suspension was precautionary, and the mere fact that the Public Protector was investigating the President could not create a reasonable apprehension of bias or expose him to a risk of conflict between his official responsibilities and private interests. Nor did the evidence show that the President had acted in a manner which exposed him to a situation involving the risk of a conflict between his official responsibilities and private interests. The WCC had mistakenly isolated certain events while overlooking critical evidence that convincingly showed that the Public Protector’s suspension was long in the making. There was no exposure on the President’s part to the risk envisaged in s 96(2)(b), and hence also no need to decide the issue of bias. The CC accordingly ruled that the appeals had to succeed.
Apart from the cases referred to above, the March 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.
This article was first published in De Rebus in 2024 (July) DR 30.
