March [2024] 1 All South African Law Reports (pp 615 – 898); April [2024] 2 All South African Law Reports (pp 1 – 314); Judgments online – February, March 2024| 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
ECP: Eastern Cape Local Division, Gqeberha
GJ: Gauteng Local Division, Johannesburg
GP: Gauteng Division, Pretoria
KZP: KwaZulu-Natal Division, Pietermaritzburg
SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town
Test for bias: A reasonable suspicion of bias is tested against the perception of a reasonable, objective and informed person: The first respondent (Sterea) owned immovable property, which had to be rezoned from ‘Single Residential’ to ‘Local Business’, to allow the second respondent (SNH) to use the property for office purposes. A rezoning application was made to the first appellant, the City of Cape Town.
The City’s Northern District Plan (NDP) was intended to guide spatial development processes in the relevant area. A rezoning had to be considered under s 99 of the City of Cape Town Municipal By-Law of 2015. The third appellant (the MPT) refused the application on the grounds that the proposed land use was not considered desirable and a deviation from the NDP was not justified. The second appellant dismissed an appeal against the refusal of the application. Sterea and SNH successfully applied for review, and the present appeal resulted in City of Cape Town and Others v Sterea Digital CC and Another [2024] 1 All SA 680 (WCC).
The issues on appeal were whether the court a quo had erred in finding that, as contended by the respondents –
The court held that the court a quo erred in not fully respecting the decision-makers’ discretion to refuse to rezone the property. Instead of limiting the inquiry to the regularity of the two decisions, the court focused on their correctness, which was not permissible on review and constituted a misdirection. Whether an administrator was biased is a question of fact and a reasonable suspicion of bias is tested against the perception of a reasonable, objective and informed person.
The court found that Sterea and SNH had failed to prove that both decision-makers failed to take into account relevant considerations; slavishly followed the NDP without applying their minds; and that the proceedings before the second and third appellants were procedurally unfair.
Declaratory relief: The appellants in Pasiya and Others v Lithemba Mining (Pty) Ltd and Others [2024] 1 All SA 626 (SCA) approached the High Court seeking to declare unlawful and set aside a 2009 loan agreement between the first and 11th respondent and associated shareholding changes in the first respondent. The High Court dismissed the application, leading to this appeal. The respondents argued the loan was lawful, properly authorised by the board and shareholders, and obtained to meet cash obligations. They denied the loan led to unlawful share dilution. The legal issues were whether the High Court erred in dismissing the declaratory relief based on misapplying the test for such relief, and whether costs should have been awarded on a punitive scale. In terms of s 21(1)(c) of the Superior Courts Act 10 of 2013, a High Court may, in its discretion, and at the instance of any interested person, inquire into and determine any existing, future, or contingent right obligation, notwithstanding that such person cannot claim any relief consequential on the determination. An applicant who seeks declaratory relief must satisfy the court that he is a person interested in an existing, future or contingent right or obligation and if the court is satisfied on that point, it must decide whether the case is a proper one for the exercise of the discretion conferred on it. The court held the High Court did not misdirect itself on the facts or law in exercising discretion to deny declaratory relief. To the extent the High Court failed to address the merits, the court now did so. It found the undisputed facts showed the loan agreement was lawfully concluded and repaid, the shareholding changes were properly authorised, and dividends paid accordingly. The loan and authorisations complied with the Companies Act 61 of 1973. The court dismissed the appeal, upholding the High Court’s denial of declaratory relief. The loan agreement and associated acts were lawful and authorised. The High Court did not err in its discretionary application of the declaratory relief test.
Exception to particulars of claim: The plaintiff in Saleh v South African Reserve Bank and Another [2024] 2 All SA 222 (WCC) sued the South African Reserve Bank (SARB) after SARB issued a forfeiture notice seizing the plaintiff’s bank funds per the Exchange Control Regulations of 1961. The plaintiff alleged the forfeiture was unlawful and violated its rights to the funds. It argued the forfeiture should be overturned under reg 22D(b) and the Currency and Exchanges Act 9 of 1933 as it was based on a mistaken suspicion of exchange control contraventions. The plaintiff claimed the relevant transactions were by a separate entity. SARB raised an exception that the particulars of claim lacked averments to sustain a cause of action. The plaintiff contended the exception failed to comply with rule 23(3) of the Uniform Rules of Court by not clearly stating grounds and was bad in law on the merits. Rule 23(3) requires clear, concise grounds for an exception. It found SARB had not explicitly stated grounds for insufficiency of the plaintiff’s facts. In assessing a cause of action, the court rejected the plaintiff’s objections. It reasoned mere possession of funds can warrant forfeiture on reasonable suspicion of exchange control breaches encompassing beneficiaries, not just contraveners. The plaintiff’s facts did not support the law relied on. The court per Andrew AJ upheld SARB’s exception due to the plaintiff failing to establish a valid cause of action. However, it allowed the plaintiff to amend its particulars of claim.
Whether a company which passes a resolution permitting another entity to initiate and defend legal proceedings, can then institute proceedings in its own name: In Goodfind Properties (Pty) Ltd v Kennedy and Others [2024] 1 All SA 751 (WCC), the applicant (Goodfind) sought the eviction of the first to third respondents from certain property by virtue of their alleged unlawful occupation.
The main basis on which the first to third respondents opposed the application was that of Goodfind’s locus standi. The lease agreement in terms of which the respondents occupied the property had been concluded with the entity (Communicare) from which Goodfind took transfer in 2019. The particulars of claim alleged that the property was transferred from Communicare to Goodfind, thereby ceding all the former’s rights in terms of the lease agreement to Goodfind, and that Goodfind had passed a resolution permitting Communicare to initiate and defend legal proceedings. The respondents contend that Goodfind divested itself of the right to litigate on its own behalf, and consequently had no standing to institute proceedings in its own name. Goodfind responded with the allegation that it was permitted, by a delegation of authority by Communicare, to bring the present application.
In casu, there was no evidence that Goodfind was reinvested with authority as alleged by it. There did not appear to be a resolution taken by Goodfind to revest the power to litigate in itself. Such delegation as was permitted extended only to litigating collections matters. Goodfind had not demonstrated locus standi to bring the application, which therefore, fell to be dismissed on that ground alone. Nevertheless, it was necessary to also deal with the further grounds of objection raised by the respondents.
The first respondent contended for a tacit term in the lease agreement, to the effect that increases in her rent would not exceed the social grant she received. To give the lease such a construction would entirely ignore the rights of Goodfind, and Communicare, to conduct their business, which, while providing housing to low and medium income earners, could not be conducted at a loss.
The eviction application could not be granted as the personal circumstances of the respondents were unknown. The application was dismissed.
Constitutional and administrative law
Failure by Department of Home Affairs to follow just administrative procedures: To address fraudulently obtained IDs in South Africa, the Department of Home Affairs (DHA) engaged in ‘ID blocking’ – pre-emptively blocking suspicious identity numbers before investigating citizenship/residency status. This prejudiced bona fide citizens/residents along with illegal immigrants. The applicants in P[…] P[…] M[…] and Others v Minister of Home Affairs and Another (Children’s Institute as Amicus Curiae) [2024] 1 All SA 847 (GP) sought review of DHA’s practice of marking and automatically blocking IDs without notifying affected individuals. ID blocking prevented accessing passports, voting, healthcare, education, bank accounts, etcetera. DHA contended ID marking and blocking was legally valid and critical to safeguard the population register. It claimed no alternative existed to address ID fraud and theft risks. The court held the conduct constituted administrative action under Promotion of Administrative Justice Act 3 of 2000. The key issues were the practice’s constitutional validity and fashioning a just remedy given DHA conceded no fair process preceded blocking. The court ruled that per the Constitution, decisions to seize/cancel IDs and residency must adhere to administrative justice principles. While marking suspicious IDs was permissible, the problem was subsequent blocking without procedural fairness. Absent a constitutional challenge to the Identification Act 68 of 1997, blocking could not be declared unconditionally invalid. Individual circumstances must be considered. Principles of justice require notice, a hearing, reasons, and review mechanisms before adverse decisions. The court, per Van der Schyff J concluded that in the absence of legislation, and without final decisions on status or fair process for individuals, the blanket blocking practice was unjust administrative action. While ID fraud risks were acknowledged, the Constitution mandated adherence to administrative justice.
Corporate and commercial
Interpretation and repudiation of contract: The plaintiff Propco, a Jersey company in RCOG Propco 1 Ltd v Welfit Oddy (Pty) Ltd [2024] 2 All SA 163 (ECP) claimed damages for breach of contract against the South African defendant Welfit Oddy, a manufacturer of stainless steel containers. Welfit had a relationship with United Kingdom company GEM, making containers ordered by GEM. In 2018, GEM was restructured with Propco becoming owner of the containers but GEM remaining manager and lessor. Despite a new master purchase agreement (MPA) between Propco and Welfit, GEM continued as the main contact. Disputes arose in 2019 regarding non-payment for containers supplied under eight individual agreements made under the MPA. Welfit considered Propco’s subsequent denial of GEM’s authority to order containers as repudiation of the MPA and agreements. The legal issues were whether binding individual agreements were concluded, if either party’s conduct constituted repudiation of the MPA, or any of the individual agreements, and if so, what consequences flowed from that. The court upheld Welfit’s estoppel argument that Propco should have advised if GEM lacked authority. It found the individual agreements were binding based on agreement requirements. Propco’s conduct repudiated all but three agreements, accepted by Welfit who elected to enforce them. However, by selling the containers, Welfit could not deliver them so could not claim damages. The court held Propco established entitlement to repayment of the claimed amount. Despite finding binding agreements, Welfit’s inability to deliver the containers on Propco’s repudiation precluded its counterclaim for damages.
Claim for medical negligence damages: In MEC of Health and Social Development of the Gauteng Provincial Government v FBM [2024] JOL 63390 (SCA), an appeal was brought against the High Court’s overturning of a judgment of the trial court, which had held that the appellant (MEC) was liable for damages suffered by the respondent, and her child (L) as a result of a brain injury which was found to have been sustained during L’s birth.
Dambuza AP and Nicholls JA identified the primary questions on appeal as whether the medical staff at a public hospital were negligent in the care and treatment of the respondent, and whether such negligence caused the consequent medical condition from which L presently suffered. The court set out the reasons for the conclusion reached by the full court, that the standard of care afforded to the respondent was sub-standard, could not be sustained. Finding that the respondent had not established negligence on the part of the hospital staff and the MEC, the court upheld the appeal.
Determination of quantum of damages in personal injury claim: The plaintiff in Badenhorst v Municipality of Thabazimbi [2023] JOL 62362 (GP) was driving in his vehicle when suddenly a piece of rock flung up by a municipal worker’s grass cutting trailer penetrated his right eye, causing permanent blindness in that eye. He sued the defendant municipality for damages suffered as a result his injury. The court was called on to determine quantum and in particular, the issues of past and future medical and related expenses, as well as past and future loss of earnings, and the defendant’s application for absolution from the instance in that regard.
Joyini AJ refers to rule 39(6) and the circumstances in which absolution from the instance will be granted. The plaintiff had to make out a prima facie case to survive absolution. The judgment explains the court’s approach to expert testimony. The plaintiff’s evidence was credible and as such, he had discharged the onus of proving the loss on a preponderance of probabilities. Thus, at the close of the plaintiff’s case, the court concluded that the plaintiff had made out more than just a prima facie case on which a court, applying its mind reasonably, could or might find for him. The defendant’s application for absolution from the instance consequently failed. In awarding costs to the plaintiff, the court described its approach to costs orders. The total award of damages made was R 8 904 556.46, plus interest.
Divorce legal principles applicable to rule 43 applications: The parties in JK v ESK [2024] 1 All SA 775 (WCC) married in 2012 out of community of property with accrual. They had two minor children but were no longer cohabiting. The applicant had previously worked but became a stay-at-home mother by agreement, making her financially dependent on the respondent. In this rule 43 application, the applicant sought spousal and child maintenance pendente lite. The issue was whether interim maintenance should be ordered and the quantum thereof.
The court, per Pillay AJ set out the applicable legal principles. Rule 43 allows speedy, affordable interim relief in divorce cases until a properly informed final decision. Interim maintenance depends on the standard of living, needs and respondent’s ability to pay. The court must also consider gender realities and children’s best interests as required by s 28(2) of the Constitution.
The respondent invoked the unclean hands doctrine based on the applicant’s alleged social media posts harming his reputation. However, the court found this did not preclude interim relief in light of the principles governing maintenance applications. The court ordered reduced interim spousal and child maintenance after considering the appropriate factors. It held unclean hands did not bar interim relief given the purpose of rule 43 and constitutional principles prioritising children’s interests. An order in the applicant’s favour was granted.
Entitlement of refugees to remain in country while seeking asylum: In Lembore and Others v Minister of Home Affairs and Others [2024] 2 All SA 113 (GJ), the applicants were nationals of Ethiopia and Somalia. Having been arrested and detained for allegedly entering and staying in South Africa in contravention of the Immigration Act 13 of 2002, they sought an interdict preventing the respondents from detaining, prosecuting and deporting them until their status had been lawfully determined in terms of the Refugees Act 130 of 1998. They also sought declarators that their continuing detention was unlawful and that, in terms of s 2 of the Refugees Act, they were entitled to remain lawfully in South Africa. They submitted that the question was whether the respondents had the authority to detain illegal foreigners. It was argued that the CC’s decision in Ashebo v Minister of Home Affairs and Others 2024 (2) BCLR 217 (CC) was wrongly decided and that the court should instead follow a full court decision in Abraham v Minister of Home Affairs and Another and related matters [2023] JOL 58336 (GJ). The argument was that the CC was wrong not to consider and follow the full court’s decision, and that even the CC is bound by the principle of stare decisis.
The applicants’ case was grounded on the non-refoulement provision in s 2 of the Refugees Act, which outlaws the deportation of any asylum seeker or refugee to their country of origin or any country, if to do so would expose them to persecution. The court noted that the detention of a foreign national for illegal entry and stay in South Africa in contravention of the Immigration Act is lawful and does not violate s 2 of the Refugees Act. The mere expression of an intention to apply for asylum does not trigger the protections in s 2 of the Refugees Act until good cause for the illegal entry and stay is shown.
By the time Ashebo was decided, the statutory regime had changed following amendments introduced to strengthen the control measures regarding persons who entered South Africa illegally. The amendments provided that anyone, especially asylum seekers, who entered the country illegally could be arrested and detained and should they wish to apply for asylum, would be required to show good cause for their illegal entry and stay before being allowed to apply for asylum.
On the issue of stare decisis, the court found that the CC’s judgment in Ashebo was binding authority. Concluding that the applicants had failed to make out a case to interdict the respondents from detaining and prosecuting them, the court dismissed the application.
Tax administration
Compliance with requests made under s 46 of the Tax Administration Act 28 of 2011: The applicant (SARS) in Commissioner for the South African Revenue Service v J Company [2024] JOL 63295 (WCC) sought an order compelling the respondent taxpayer to comply with its obligation to respond fully to requests directed to it in terms of s 46 of the Tax Administration Act. SARS contended that in seeking unredacted documentation, it was lawfully exercising its powers in terms of s 46. Kusevitsky J sets out the provisions of s 46.
The question was whether SARS was entitled to demand, without more, the unredacted information from the documents already provided and which did not relate to the taxpayer but rather to its clients and suppliers – and consequently did not fall within the definition of ‘relevant material’. If found to be material, then the court had to ascertain whether there had been non-compliance by SARS in determining an ‘objectively identifiable class of taxpayers’ as required in s 46(1) and (2)(a) and as a result, whether the request was a fishing expedition.
The relief sought was found to have been established by SARS, and the taxpayer was ordered to comply with the request.
Appointment of king by the President in terms of the Traditional and Khoi-San Leadership Act 3 of 2019: After the death of King Goodwill Zwelithini kaBhekuzulu (the late Isilo), the appellant queen had sought a declaratory order stating that she was married to the late Isilo in terms of civil law. The High Court’s dismissal of that application led to an appeal in Bhekuzulu and Others v President of the Republic of South Africa and Others and a related matter [2024] 1 All SA 662 (GP).
Mbatha JA in Zulu v Mathe and Others [2024] JOL 63514 (SCA) referred to the jurisdictional facts for declaratory relief, the doctrine of ripeness, and s 21(1)(c) of the Superior Courts Act 10 of 2013; and explained how the court’s discretion must be exercised. The appellant queen had not demonstrated any tangible and justifiable advantage in relation to her position, with reference to an existing future or contingent legal right or obligation, which would flow from the grant of the declaratory order sought. The High Court had, therefore, properly exercised its discretion in refusing to grant the declaratory relief sought. The appeal was dismissed.
Determination of capital beneficiaries of family trust: The applicants were trustees in a family trust established by their father (the deceased). In Schoonhoven NO and Others v Schoonhoven and Others [2024] 2 All SA 250 (KZP), they sought declaratory relief that the trustees were entitled to determine the capital beneficiaries of the trust on its termination from the list of potential capital beneficiaries set out in the trust deed. They contended that the trustees had to determine who met the trust deed definition of a capital beneficiary and who were to be capital beneficiaries of the proceeds of the trust assets on the trust’s termination. The first respondent, however, maintained that the deceased had determined the formula for the distribution of the trust fund in his will, in terms of which all the capital beneficiaries would be entitled to share equally when the trust vested.
The court found that the relief sought by the applicants had a direct bearing on the interpretation of very specific clauses of the trust deed, which had to be read in conjunction with the deceased’s will, and in particular with regard to how the trust funds would be distributed among the capital beneficiaries when the trust terminated. The trustees were empowered to at all times deal with the trust property in their sole discretion, and to do whatever they deemed necessary to control the trust property for the best benefit of the beneficiaries. The court referred to the relevant clauses which provided that on termination of the trust, the trust fund would be transferred to the beneficiaries. If directives had been made, the trust fund was to be divided in accordance with those directives. In the absence of directives, the trust fund was to be divided equally among the capital beneficiaries. The rights and wishes of the deceased were specifically given effect to.
The trust deed was very specific regarding the election or choosing of income beneficiaries. However, the trust deed was silent on who was entitled to or required to appoint the capital beneficiaries. The court declined to import meanings into the trust deed to make it better or more acceptable. The application was dismissed with costs.
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 2024 (June) DR 28.
