The law reports – June 2023

June 1st, 2023
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April [2023] 2 All South African Law Reports (pp 1 – 296); March – April 2023 Judgments Online

 

Abbreviations:

GJ: Gauteng Local Division, Johannesburg
GP: Gauteng Division, Pretoria
KZP: KwaZulu-Natal Division, Pietermaritz­­­burg
MM: Mpumalanga Division, (Main Seat) Mbombela
SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town

Civil procedure

Failure to promote effective disposal of litigation – special costs order: The question addressed by the court in Hlatshwayo v Road Accident Fund and a related matter [2023] JOL 57405 (MM) was whether it is appropriate to make a special order as to costs against a party or its attorney, for failure to attend a pre-trial conference or failing to a material degree to promote the effective disposal of the litigation.

The two cases before the court involved claims for compensation against the Road Accident Fund (RAF) and were settled on the date of trial or partly settled close to the date of trial contrary to Forms A and A3 of the Practice Directive of the Division. Form A3 is used as a trial readiness certification form. It provides that ‘should the matter be settled on the date of trial, parties run the risk of punitive costs order, or forfeiture of a day fee, against any person responsible for the late settlement of the matter and any such costs order may include payment out of own pocket by whoever is responsible for the late settlement including claim handlers and/or attorneys for the parties.’

The management judge may at a case management conference, make any order as to costs, including an order de bonis propriis against the parties’ legal representatives or any other person whose conduct has unreasonably frustrated the objective of the judicial case management process. Any failure by a party to adhere to the principles of r 37A may be penalised by way of an adverse costs order. The purpose of r 37A is to ensure efficient case management.

Section 24(5) of the Road Accident Fund Act 56 of 1996 entitles the RAF to object to the validity of the claim within 60 days on receipt of the lodgement of such a claim. In terms of s 24(6)(a), no claim shall be enforceable by legal proceedings commenced by a summons served on the RAF or an agent before the expiry of 120 days from the date on which the claim was delivered to the RAF. The power of the RAF to commence, conduct, or to defend legal proceedings in connection with claims lodged against it must be resorted to sparingly.

The drafters of r 37 and r 37A saw meaningful pre-trial conferences and judicial case management conferences as important tools to alleviate congested trial rolls. Examining the measures currently in place to avoid the problem of cases against the RAF being finalised in court in the absence of the RAF, the court found the RAF’s policy in the handling of litigation not to further the interests of justice by alleviating congested trial rolls and addressing the problems, which cause delays in the finalisation of cases as contemplated in r 37A(2)(a). The unsatisfactory handling of the two cases led to adverse costs orders being made against the Chief Executive Officer and the Board of the RAF.

 

Effect of appointment of curator ad litem on prescription of claim of a person suffering from mental incapacity: The Shoprite Checkers (Pty) Ltd v Mafate [2023] JOL 57792 (SCA) case raised two issues:

  • Does the appointment of a curator ad litem to person with mental incapacity have the effect that the relevant impediment referred to in s 13(1) of the Prescription Act 68 of 1969 ceases to exist?
  • Whether a curator appointed for a person with a mental or intellectual disability, disorder or incapacity is, apart from relying on s 13(1)(a), precluded from invoking s 12 of the Prescription Act in circumstances where he or she and the person under curatorship did not have knowledge of the identity of the debtor and the facts from which the debt arose because the person under curatorship was severely injured and suffered mental incapacity as a result of the alleged negligence of an employee, whose employer is sought to be held vicariously liable for the ensuing damages.

In February 2017, the respondent (Mr Mafate) was appointed as curator ad litem of Ms Mkhwanazi who sustained injury in the course of her employment with the appellant (Shoprite Holdings), leaving her permanently mentally incapacitated. Mr Mafate instituted action for damages in his representative capacity, against the entity which he believed bore liability as owner of the store. When two special pleas to the claim were raised, he withdrew the action, and instituted fresh proceedings, in October 2018, against the appellant (Shoprite Checkers). Shoprite Checkers filed a special plea of prescription, asserting that the claim had prescribed. In replication, Mr Mafate claimed that prescription began to run only from when he became aware of the true identity of the debtor in July 2017. The High Court’s dismissal of the special plea of prescription led to an appeal.

The relevant sections of the Prescription Act were set out per Petse AP as the outcome of the appeal turned on the proper interpretation of those sections and restates principles of statutory interpretation.

Rejecting Shoprite Checkers’ argument that the impediment standing in the path of Ms Mkhwanazi instituting action ceased to exist on appointment of Mr Mafate, the court concluded that as Ms Mkhwanazi still suffered from mental incapacity, the impediment persisted. The completion of the relevant period of prescription would not occur for as long as the impediment persisted.

The appeal was dismissed with costs.

 

Exceptions to claims – sufficiency of particularity with which plaintiffs’ allegations should be pleaded: The plaintiffs’ claims in Tongaat Hulett Ltd and Others v Staude and Others [2023] JOL 57406 (KZP) arose from events during the second defendant’s employment as chief financial officer of the first plaintiff (Tongaat Hulett). It was alleged that second defendant authorised inaccurate financial statements of Tongaat Hulett. The plaintiffs’ causes of action included alleged breach of fiduciary duties, unjust enrichment, breach of (employment) contract, fraudulent or negligent misrepresentation, and as regards delinquency, a contravention of provisions of the Companies Act 71 of 2008.

The second defendant raised various exceptions to the claims – mainly in relation to the particularity with which the categories of alleged misconduct and collective irregularities were pleaded. The court listed facta probanda, or facts required to be proved, to find a valid claim against the defendants in respect of each of the aforesaid causes of action. While considering each exception, the court discussed standards of directors’ conduct as set out in s 76(2)(a) of the Companies Act.

The debate centred around the sufficiency of the particularity with which the allegations should be pleaded by the plaintiffs. The plaintiffs contended that the second defendant had, in many instances, characterised statements in the particulars of claim as conclusions, when they were allegations pleaded as fact, which had to be accepted as true for the purposes of determining the exceptions. As a general principle, that contention was correct, if what is alleged is truly a statement of fact rather than a conclusion or inference drawn in respect of facts, which will need to be established to justify the conclusion asserted.

 

Leave to file supplementary affidavit: The applicant in Ecolab (Pty) Ltd v Mabra Construction (Pty) Ltd in re Mabra Construction (Pty) Ltd v Ecolab (Pty) Ltd (Leave to Supplement) [2023] JOL 57941 (GP) sought leave of the court to file a supplementary affidavit. The relevant legal principles referred to by Nel AJ was r 6(5)(e) of the Uniform Rules of Court, which states that a court may, in its discretion, permit the filing of further affidavits. A further affidavit should only be allowed in exceptional circumstances taking into regard all the facts that are relevant to the issues in dispute. The exceptional circumstances would exist if new or unexpected evidence was recorded in a replying affidavit, or relevant factual evidence occurred or only came to the knowledge of the party seeking leave to file a further affidavit, after it had already filed its answering affidavit. The court must weigh up fairness to parties if a further affidavit is allowed, and potential prejudice to any of the parties if the further affidavit is allowed or not allowed. A party seeking leave to file a further affidavit must provide a satisfactory explanation as to why the facts sought to be put before the court in the further affidavit had not been included in the earlier affidavits.

The court was satisfied that leave should be granted for filing a supplementary affidavit, to ensure that all facts that might be relevant, were placed before the court tasked with determining the main application.

The court granted leave to file the supplementary affidavit to the applicant and reserved costs until the main application was heard.

Constitutional and administrative law

Tenders – whether decision by institution of higher learning to cancel tender relating to provision of student accommodation constituted administrative action: In Ma-Afrika Hotels (Pty) Ltd v Cape Peninsula University of Technology [2023] 1 All SA 731 (WCC) after selling its property to the respondent (the Cape Peninsula University of Technology (CPUT)), the applicant (Ma-Afrika) rented the premises from the CPUT, and the CPUT compensated it for providing and administering the accommodation for its students on the property. When the time approached for Ma-Afrika’s lease to expire through effluxion of time, the CPUT advertised a request for proposals in respect of the future administration of the property. Ma-Afrika was one of two entities who submitted a tender. The CPUT decided to award the contract to the other entity (Baobab) but it was subsequently discovered that it had not met the qualifying criteria for the tender contract. The CPUT cancelled the tender and put out a fresh tender invitation. Ma-Afrika had by then applied to court for an interdict against implementation of the tender award. It nonetheless submitted a new bid but reserved its alleged rights in the cancelled tender process. It then brought another application seeking to review the CPUT’s decisions to cancel that process, and not to award the tender to it. The review application was brought in terms of s 6 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA).

An application for judicial review in terms of PAJA is tenable only if the impugned decision (or failure to make a decision) constituted administrative action. The CPUT disputed that its decisions in relation to the procurement of a new service provider constituted administrative action within the meaning of the term in the Act. It also denied that it was an ‘Organ of State’ as defined in the Act. Examining the nature of the impugned decision, the court held that the provision of student accommodation and matters closely related thereto fell within the public sphere. The CPUT was an institution that performed the public function of providing higher education. It was created for that purpose by the national government and its operation was substantially subsidised from the National Revenue Fund. It was thus an Organ of State as defined in s 239 of the Constitution. Its contracting for the provision of student accommodation similarly fell within its public functioning. Furthermore, its decision to cancel the tender was also administrative action within the meaning of PAJA and was susceptible to being challenged in terms of s 6 of the Act.

The specific grounds of review were –

  • that the CPUT had failed to make a decision to award the tender to Ma-Afrika after rescinding the award to Baobab;
  • that the CPUT had failed to comply with reg 13 of the Preferential Procurement Regulations, 2017; and
  • that the decision not to award the tender to Ma-Afrika after it rescinded the award to Baobab was not rationally related to the information before it as Ma-Afrika’s tender satisfied all the mandatory requirements in the tender invitation.

None of those submissions was sustainable. The court emphasised that Ma-Afrika did not have a right to be awarded the contract when the award to the successful candidate was rescinded. Provided that it acted reasonably in the circumstances, the CPUT was entitled to opt to cancel the tender and proceed with the intended procurement in terms of a fresh procedure. The application was dismissed.

Contract

Credit agreement – National Credit Act 34 of 2005 (NCA) – compromise arising from earlier unlawful agreements not sustainable: In CSB v DJ [2023] JOL 57843 (WCC), the appellant signed an acknowledgment of debt in favour of the respondent, in an amount of R 2,5 million, based on amounts advanced to him by the respondent. When the respondent instituted action for payment, appellant queried whether the respondent had been registered as a credit provider in terms of the NCA at the time of the conclusion of the relevant agreements, and whether respondent had conducted a credit assessment of him, prior thereto.

Section 89(2)(d) of the NCA provides that a credit agreement is unlawful if, at the time when the agreement was ‘made’ the credit provider was unregistered, in circumstances where the NCA requires that they be registered, and if a credit provider concludes a credit agreement with a consumer without a credit assessment having been performed this may constitute the provision of reckless credit, which is liable to be set aside by a court.

At common law a contract which is unlawful is generally considered to be void ab initio and of no effect, as it is a nullity, and cannot be enforced. The court discussed novation and compromise, stating that the proposition that a compromise is not affected by the invalidity of an earlier causa because it is a self-standing agreement, does not reflect the current state of our law. The appeal was upheld.

Criminal law and proceedings

Discovery of material which might incriminate in parallel criminal proceedings: The applicant in MTN (Pty) Ltd v Madzonga and Others [2023] JOL 58026 (GJ) sought to compel discovery of a range of documents relating to its action in a case of fraud against the respondents. Second respondent, Ms Nxusani, resisted the application on the ground that the documents sought were not relevant to the issues in the main action, and that the documents might, if disclosed, tend to incriminate her and her firm in parallel criminal proceedings arising from the same facts underlying MTN’s cause of action in this case.

Wilson J summarily dismissed the first objection. Regarding the second objection, the question was how far, if at all, the privilege against self-incrimination extends beyond precluding compulsion of testimony, into the terrain of forcing an accused person to disclose, or help generate, documentary evidence that might incriminate him. The question had to be answered on an interpretation of s 35(3)(j) of the Constitution. The court held: ‘In the absence of an express statutory limitation on the right against self-incrimination in this context, I do not think that I can allow MTN in this case to secure by means of civil discovery proceedings evidence that may clearly tend to incriminate the second and third respondents if it is produced in the criminal proceedings currently pending against them. That would be at odds with the fundaments of section 35.’

The application was dismissed.

Delict

Development of common law in medical negligence case involving the ‘once and for all’ rule: In a medical negligence claim, the defendant (Member of the Executive Council (MEC)) in TN obo BN v Member of the Executive Council for Health, Eastern Cape [2023] JOL 57735 (ECB) pleaded a novel combination of remedies (referred to as the ‘DZ defences’ (see Member of the Executive Council for Health and Social Development, Gauteng v DZ obo WZ (Member of the Executive Council for Health, Eastern Cape and Another as Amici Curiae) 2017 (12) BCLR 1528 (CC))) not falling within the common law rules, which required an assessment of such damages in monetary terms on a once and for all basis. It was contended that instead of draining the public healthcare system of a massive lump-sum award for potential future medical care that plaintiff’s child may or may not ultimately use, the defendant wished to provide such care to him as and when he needed it, if not by the department directly, then paid for in the private sector as the need therefor arose.

Griffiths J considered whether the common law should be developed to accommodate the defendant’s remedies.

In claims for compensation, which arise out of delict, the plaintiff must claim in a single action all damages already sustained, or expected to arise in the future, insofar as they are based on a single cause of action (the ‘once and for all’ rule).

The court concluded that a case had been made out for the development of the common law as set out in the proposed draft order. It was further found that the defendant had established that the hospitals concerned were able to provide the relevant services and supplies at the required standard.

 

Liability for loss caused in business e-mail compromise case: The first and second respondents had given the appellant in Hartog v Daly and Others [2023] 2 All SA 156 (GJ) an oral mandate to act as conveyancer to transfer their immovable property should it be sold. After the sale of the property, the appellant was to pay some of the proceeds into the third respondent’s bank account. The money was never received into the third respondent’s account but was paid into a Standard Bank account opened in the name of a fraudster and was stolen. The dispute between the parties concerned who should be held liable for the loss, which was caused through ‘business e-mail compromise’ (BEC). The appellant contended that the respondents were liable as the mandate had a tacit term requiring the respondents to exercise the utmost caution when instructing the appellant to make payment, and to do all that was reasonably possible to ensure the integrity of the e-mails addressed to the appellant and keep and maintain their data security. Strydom J embarked on a discussion of tacit terms and considered when a tacit term will be imputed in a contract and whether a factual dispute arose on the question concerning the imputation of a tacit term. The court stated that mere allegation of the existence of a tacit term on the papers of the appellant and the denial thereof by the respondents does not create a factual dispute in itself. The alleged tacit term never became part of the mandate agreement, and the appellant breached the mandate agreement by not making payment of the proceeds of the sale into the third respondent’s account, therefore, remaining responsible for such payment. The case against the bank was also not established. The appeal was dismissed.

Family law

Enforceability of variation of divorce order regarding payment of pension interest to non-member spouse: The question before the court in CNN v NN [2023] JOL 58028 (GJ) was whether the court could vary a divorce settlement agreement by replacing the statutorily recognised and defined phrase ‘pension interest’ with the phrase ‘accrued pension benefit’ which is not defined in the Divorce Act 70 of 1979. It had to be determined whether such an order could be enforced.

Marumoagae AJ confirmed that variation of divorce orders is permitted in terms of s 7(1) of the Divorce Act and a settlement agreement signed by divorcing parties that prescribes that the pension fund in which one of the spouses is an active member should pay to the non-member spouse a portion of the member’s pension interest will be enforceable should the agreement be made an order of court. In this case, neither the court nor the applicant was aware at the time the divorce order was granted that the respondent had already exited his fund. The amendment sought would thus be unenforceable considering the current legal framework. The non-member spouses’ access to their member spouse’s benefits is dependent, first on divorce, and secondly, on whether member spouses are active in their funds, even though these benefits are still held by such funds.

The application was dismissed.

 

Right of non-biological parental figure to have contact with child: In Part A of his application, the appellant in RC v HSC [2023] JOL 58109 (GJ) had sought to have a clinical psychologist appointed to conduct an assessment and provide a recommendation as to whether it would be in the best interests of the minor child (B) for the appellant to be awarded rights of contact and care in terms of s 23 of the Children’s Act 38 of 2005. The appellant was not B’s biological father but had formed a close bond with the child during his relationship with the respondent, who was B’s mother. Pending the finalisation of Part B, appellant sought contact with B.

Opperman J emphasised that the best interests of the child must be paramount, as provided in s 9 of the Children’s Act. The respondent’s summary termination of appellant’s contact with B was not in the child’s best interests. Departing from the opinion of the court below, the court stated that the High Court can, as upper guardian of all children and in the best interests of a child, grant joint guardianship without finding that the existing guardian is unsuitable. Absence of a biological link with a child is not a bar to an application in terms of s 23 of the Act, subject to the best interests of the child standard. Section 7 of the Act deals with the best interests of a child standard. The court restated the principle that where the welfare of a minor is at stake, a court should be slow to determine the facts by way of the usual opposed motion approach.

The appeal was upheld.

 

Validity of marriage certificate in customary marriage: In Mgenge v Mokoena and Another [2023] JOL 58107 (GJ) the applicant sought an order cancelling the marriage certificate recording that her son (the deceased) and the first respondent had entered into a customary marriage. The first respondent and the deceased were in a relationship for several years prior to his death, they were parents of a minor child and cohabited in their home. The first respondent procured a marriage certificate a few weeks after the death of the deceased. The applicant stated that as mother of the deceased, she had not consented to his marriage, and was unaware of the existence thereof. She sought an order to cancel the marriage based on the allegations that the intended negotiations between the first respondent and the deceased were never concluded and that the certificate incorrectly records that the deceased and first respondent were married in accordance with customary law.

This matter concerns a challenge to the validity of a marriage certificate that was registered under the provisions of the Recognition of Customary Marriages Act 120 of 1998.

Rome AJ confirmed that the requirements for the conclusion of a valid customary marriage are contained in s 3 of the Recognition of Customary Marriages Act and set out such requirements.

A marriage certificate stands as prima facie proof of the marriage and a judicial officer must accept the contents of the certificate unless they are convinced that they are not to be relied on. The applicant’s contentions did not suffice to cast any doubt on the validity of the marriage certificate.

The application was dismissed.

Other cases

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

  • application to expand genetic link requirement in s 294 of the Children’s Act 38 of 2005;
  • court orders in irregular proceedings;
  • enforceability of variation of divorce order regarding payment of pension interest to non-member spouse;
  • entitlement of accused to present new facts to reapply for bail;
  • eviction application based on breach of lease;
  • lawfulness of financing of ‘on the road’ fee in vehicle finance credit agreements;
  • lawfulness of removal of trustee in family trust;
  • renewal of visas pending processing of application for asylum;
  • repudiation of claim for compensation arising from fire damage; and
  • requirements for granting of summary judgment.

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

This article was first published in De Rebus in 2023 (June) DR 22.

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