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.
ECB: Eastern Cape Division, Bhisho
GJ: Gauteng Local Division, Johannesburg
GP: Gauteng Division, Pretoria
ML: Mpumalanga Local Seat, Middelburg
SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town
The test for appeals to the SCA: This appealability test was the topic in TWK Agriculture Holdings (Pty) Ltd v Hoogveld Boerderybeleggings (Pty) Ltd and Others 2023 (5) SA 163 (SCA), in which the SCA dealt with the test to be used to determine whether a lower court’s decision could be taken on appeal specifically to the SCA. The facts were that the respondents were shareholders in the appellant, TWK Agri. The respondents, having dissented in respect of the adoption by TWK Agri of a resolution to amend its memorandum of incorporation, sought to exercise their appraisal rights under s 164 of the Companies Act 71 of 2008. To this end, they requested TWK Agri to pay them the fair value of the shares. Unhappy with TWK Agri’s fair-value offer, the appellants approached the ML for an order directing TWK Agri to revise it. But TWK Agri raised various exceptions to the effect that the respondents’ particulars of claim lacked the averments necessary to sustain a cause of action, that is, to secure an appraisal remedy. The single judge first hearing the matter upheld the exceptions but, on appeal, they were dismissed by a Full Court of the ML. TWK Agri was then granted special leave to appeal to the SCA. The SCA raised with the parties the appealability of the Full Court’s order dismissing the exceptions: It had long been the rule, affirmed in recent SCA authority, that a dismissal of an exception (save an exception to a court’s jurisdiction) was not appealable because it did not finally dispose of the issue raised by the exception. TWK Agri argued that this rule was not immutable and that, ultimately, appealability was determined by the general standard of the interests of justice, which would hold the dismissal of the exception to be appealable.
In its judgment, the SCA referred to the traditional test for appealability set out in Zweni v Minister of Law and Order 1993 (1) SA 523 (A), according to which judgments and orders were appealable only if their effect was final, defined the parties’ rights, and disposed of a substantial portion of the relief claimed. The SCA rejected TWK Agri’s argument that the appealability test had been ‘subsumed’ under the remit of the interests of justice. It ruled that the doctrine of finality was still the central principle to be considered when deciding whether a matter was appealable to the SCA. While it acknowledged that there might well be some matters that went beyond Zweni or required an exception to its precepts, it the SCA nevertheless stressed that any deviation had to be clearly defined and justified to provide ascertainable standards consistent with the rule of law. The SCA accordingly held that the doctrine of finality meant that the dismissal of an exception was still not an appealable order.
The SCA, therefore, concluded that the order of the Full Court of the ML dismissing the exceptions raised by the appellant was not appealable, that the appeal was, therefore, not properly before it, and would be struck from the roll.
What constitutes ‘exceptional circumstances’ for the uplifting suspension of orders under appeal: Road Accident Fund v Newnet Properties (Pty) Ltd t/a Sunshine Hospital and Another 2023 (5) SA 289 (GP) concerned an automatic appeal, under s 18(4) Superior Courts Act 10 of 2013, to a Full Bench of the GP (Moshoana J, Malungana AJ and Skosana AJ). The appeal was against the court a quo’s s 18(1) order. That section provides that ‘unless the court under exceptional circumstances orders otherwise’, the operation and execution of a decision ‘which is the subject of an application for leave to appeal or an appeal, is suspended pending the decision of the application or appeal’. Section 18(4) then provides for an automatic right of appeal when the court orders ‘otherwise’ and uplifts suspension under a 18(1).
The respondent (Newnet) had obtained a money judgment against the Road Accident Fund (RAF) in the GP relating to non-payment for service rendered. With the RAF’s application for leave to appeal (to the Constitutional Court) still pending, Newnet applied under s 18(1) to execute the judgment. The court accepted that exceptional circumstances existed to order the enforcement of the order, such as the RAF’s statutory obligation to pay for services and the physical well-being of patients in Newnet’s care affected by the RAF’s non-payment. The court also considered that the RAF had an emaciated prospects of success on appeal, and that this served as an exceptional circumstance to justify ordering ‘otherwise’.
The Full Bench of the GP held the presence of exceptional circumstances was fact dependent. The exceptional circumstances had to specifically relate to the applicant itself, and the applicant had to produce evidence demonstrating that it was facing difficulties because of the suspension of the decision. The fact that an appellant had poor prospects of success on appeal was not, by itself, constituted an exceptional circumstance that would allow deviation from the default position and the upliftment of the suspension. Even in the absence of prospects of success, a court was entitled to consider a s 18(3) application and/or 18(4) appeal.
Applying the law to the facts, the Full Bench of the GP concluded that Newnet had failed to show exceptional circumstances to justify dislodging the default position. Its claim was purely contractual and did not implicate RAF’s statutory obligation to pay compensation, nor did the ‘physical well-being of the patients’ play any pivotal role. Financial problems were not rare, different or out of the ordinary. Newnet also failed to prove on a balance of probabilities that the RAF would not suffer any irreparable harm. The appeal was accordingly upheld, and the impugned order replaced with an order that the application to uplift the suspension was dismissed with costs.
An application for business rescue of a company that had already been finally wound up: In Forty Squares (Pty) Ltd and Another v Noris Fresh Produce (Pty) Ltd t/a Golden Harvest (in Liq) and Others 2023 (5) SA 249 (WCC), the WCC (per Gamble J) heard an application by the first applicant, Forty Squares, for an order under s 131 of the Companies Act 71 of 2008 placing the first respondent, Noris, which traded as Golden Harvest, in business rescue. Forty Squares was Golden Harvest’s shareholder. Crucially, Golden Harvest was at the time of the application already in liquidation, a final winding-up order having already been obtained in the WCC.
Golden Harvest had operated a large wholesale fruit distribution business at its premises in Cape Town and Johannesburg, but had run into financial difficulties, which led to a cash-flow crisis and a default on payments to its suppliers. One such supplier was the seventh respondent, Capespan, which was owed some R 1,4 million and which had launched the winding-up proceedings against Golden Harvest. Golden Harvest’s liabilities purportedly exceeded
R 136 million.
In the subsequent business rescue application, the business rescue plan proposed the introduction of post-commencement finance (PCF) of R 20 million, to be contributed by Forty Squares, which it, in turn, intended to borrow. The proposed plan was to be of three years’ duration and would purportedly give creditors a dividend of 30 cents in the Rand. The application was opposed by the liquidators of Golden Harvest (the second and eighth respondents), as well Capespan and another intervening creditor.
The WCC confirmed previous authority to the effect that a company that had been finally wound up could be the subject of a business rescue application. The WCC stressed, however, that a court must in such a scenario first be satisfied that there was a realistic prospect of the company being returned to profitability before it would grant the order. This would avoid sending a hopelessly insolvent company with little prospect of commercial rehabilitation through a process of business rescue, only for its winding-up to be later resumed, after an unnecessary waste of time and resources to the prejudice of the waiting creditors.
The WCC held that the facts did not indicate that the prospects of Golden Harvest being returned to solvency and commercial viability would radically improve by placing it in business rescue. These facts included that Golden Harvest’s major creditors had indicated that they would not vote in favour of the business rescue plan; that Golden Harvest had ceased trading; that it had suffered severe reputational damage in the marketplace due to its inability to pay suppliers; that the PCF was unlikely to be sufficient to put Golden Harvest back into solvency; and that the three-year duration of the proposed plan defeated the ‘quick-fix solution’ of business rescue.
The WCC accordingly ruled that the application for business rescue had to be dismissed.
Compensation order may only be made by a trial court, not by a court on appeal: In S v De Villiers 2023 (2) SACR 221 (SCA) the appellant, an accountant, pleaded guilty in the regional court to stealing from an elderly long-standing client of his practice. The court imposed a sentence of seven years’ imprisonment, of which three years were suspended. Despite the complainant having expressed the wish during sentencing proceedings to be repaid the stolen money, no such order was made.
In an appeal to the full court of the FB some nine years after his conviction, the appellant was granted leave to present further evidence of his changed circumstances. He testified that he was now 60 years old, had been economically active and a law-abiding citizen, had assisted the community in positive ways and had saved sufficient money to repay his erstwhile client. His appeal against sentence was dismissed, but a compensation order under s 300(1) of the Criminal Procedure Act 51 of 1977 for repayment of the stolen money was added by the court.
In a further appeal to the SCA on the narrow aspect of the additional order, Mothle JA (Zondi JA, Nhlangelula AJA and Siwendu AJA concurring), examined s 300(1) and found that, properly interpreted, only the court that convicted the person could make such an award. The one made by the FB, therefore, had to be set aside. This nevertheless left the evidence admitted by the full court still intact but not available to the trial court. The SCA, therefore, remitted the matter to the regional court for sentencing afresh, with the proviso that it also consider the further evidence admitted by the full court.
Section 93ter(1) of the Magistrates’ Courts Act 32 of 1944 – duty of magistrate where accused legally represented: In Director of Public Prosecutions, KwaZulu-Natal v Pillay 2023 (2) SACR 254 (SCA) the KZP set aside a conviction and sentence for murder by the regional court on grounds that the peremptory provisions of s 93ter(1) of the Magistrates’ Courts Act had not been satisfied. The regional court had proceeded without assessors. Before the trial commenced, the request to do so was brought by the accused’s legal representatives. The KZP was of the view that this was insufficient.
In an appeal by the Director of Public Prosecutions to the SCA, Goosen JA (Dambuza ADP, Mothle JA and Matojane JA concurring) found that the KZP had erred in accepting as principle that the presiding officer was obliged to address an accused person directly, and explain the ambit and effect of the section, without reference to their legal representative. The magistrate was only required to bring the provisions to the attention of an accused person and establish whether such person wished to proceed without assessors. Where he or she was legally represented, the obligation was of a different character, and carried out in the light of the accused having exercised his or her right to such. This encompassed the right to have any plea tendered vicariously by the legal representative. The appeal was ultimately upheld, and the conviction and sentence reinstated.
Other criminal cases
Apart from the cases discussed above, the material under review also contained criminal cases dealing with –
Detention of refugees under s 34 of the Immigration Act 13 of 2002: In Abraham v Minister of Home Affairs and Another 2023 (5) SA 178 (GJ) three illegal foreigners had been arrested and detained by the authorities pending deportation under s 34 of the Immigration Act. While in detention they stated that they wanted to apply for asylum, but they were not released to enable them to do so. They then unsuccessfully applied to the GJ for an order for their release. In a successful appeal to a Full Bench (Sutherland DJP, Wilson J and Dodson AJ), the court ruled that the lawfulness of detention under s 34 was extinguished when the detainee expressed a desire to apply for asylum – at which point the Refugees Act 130 of 1998, not the Immigration Act, governed the situation and the detainee was entitled to be immediately released. The Full Bench accordingly substituted the earlier order with an order for the release of the three foreigners.
Extent of oversight by the Judicial Service Commission – are retired judges covered? In Seriti and Another v Judicial Service Commission and Others 2023 (5) SA 304 (GJ), Sutherland DJP (Wepener J and Molahlehi J concurring) dealt with the question whether the Judicial Service Commission could institute proceedings against certain now-retired judges for their conduct during service as commissioners of the Arms Procurement Commission for the period 1997 – 1999, when they were still active judges. Section 7(1)(g) of the Judicial Service Commission Act 9 of 1994 (JSC Act) apparently extended the JSC’s jurisdiction to judges who had been ‘discharged from active service’, but the applicants (two of the implicated judges) argued that this was unconstitutional because under
s 176(2) of the Constitution a ‘discharged’ judge ceased to be one. Sutherland DJP disagreed with the applicants, ruling that the Constitution was not the sole source of regulation of the judiciary, it being clear from s 180 of the Constitution that national legislation like the JSC Act could also do so. Sutherland DJP found that s 7(1)(g) constituted a permissible extrapolation of the applicable provisions of the Constitution, in particular s 176(2), which did not exhaustively define the concept ‘judge’. Sutherland DJP accordingly dismissed the applicants’ request for an order declaring s 7(1)(g) unconstitutional.
Payment in kind and the ‘public healthcare defence’: This defence was the subject of Mashinini v MEC for Health, Gauteng 2023 (5) SA 137 (SCA). In May 2014, Mashinini (the appellant) was the victim of botched surgery at the Tambo Memorial Hospital, a public hospital under the aegis of the Gauteng Member of the Executive Council (MEC) for Health (the respondent). During the operation she sustained an arterial injury that required further surgery and treatment to fix. In January 2017, she sued the MEC for negligence out of the GJ, claiming, among other things, future medical expenses of R 880 000. In response, the MEC raised the so-called ‘public healthcare defence’, under which claims against the state for future medical expenses could be satisfied by an undertaking by the government to provide medical treatment in public hospitals instead of financial compensation. Such an order, the MEC claimed would be in the interests of justice because the savings would make more resources available for the government to fulfil its healthcare obligations.
While the public healthcare defence was contrary to the common-law principle that compensation in delictual damages be paid in money, the GJ (per Adams J) nevertheless allowed it in the light of its reading of the decision in MSM obo KBM v MEC for Health, Gauteng 2020 (2) SA 567 (GJ), in which the GJ – according to the GJ – had developed the common law to make way for the defence. The GJ accordingly granted the MEC’s petition for an order directing her (the MEC) to ensure that Mashinini received the medical services she required at a public hospital ‘at the same or better level of service than in the healthcare sector’.
Mashinini, contending that public healthcare services were unsuited to her purposes and that Adams J had erred in holding that MSM had developed the common law to allow compensation in kind, appealed to the SCA. Mashinini’s main objection to public hospitals was that, except in emergency situations, there were long waiting periods at the casualty sections, where patients were attended to on a first-come, first-served basis.
The SCA (per Zondi JA in a unanimous judgment) ruled that Adams J had indeed misconstrued MSM, which did not develop the common law to provide for the implementation of the public healthcare defence, the issue before that court having been only whether the state had discharged its evidential burden to show that the costs of private healthcare were not reasonable because a specific state hospital was as able as any private hospital to provide the required care. By tendering the services in question, the state had consented to the order, thereby reducing the monetary award in line with existing delictual principles.
The SCA went on to point out that because Mashinini had discharged the onus of proving her future medical expenses of R 880 000, the MEC, having pleaded the public healthcare defence, was saddled with an evidentiary burden to show that state hospitals could indeed render the required services. But since the MEC was unable to provide any evidence that medical services of the same or of an acceptably high standard would be available at no cost or for less than that claimed by Mashinini, the MEC’s public healthcare defence had to be dismissed. The SCA accordingly upheld Mashinini’s appeal, ruling that the R 880 000 for future medical expenses should have been awarded and amending Adams J’s order to reflect this.
A mine-owner’s obligation to keep on pumping out water from mine after cessation of operations: In Ezulwini Mining Co (Pty) Ltd v Minister of Mineral Resources and Energy and Others 2023 (5) SA 112 (SCA) the facts were that Ezulwini had ceased its operations at its mine and wanted to stop pumping groundwater out of it. When the government refused permission, it asked the GJ for a declarator that it could stop without government permission. The application was opposed by the respondent minister and the owner of an adjacent mine, which feared that water from the Ezulwini mine would flood its mine and endanger its workers. Other respondents were the Minister of Environment, Forestry and Fisheries, the Minister of Water and Sanitation, and an official of the provincial Department of Mineral Resources.
The GJ took the respondents’ side, declaring that Ezulwini had to keep on pumping until the first respondent minister issued it a closure certificate or sufficient time had elapsed according to environmental legislation. Ezulwini appealed unsuccessfully to the SCA, which agreed with the GJ that Ezulwini was obliged to keep on pumping until authorised to stop or until the required time had elapsed.
In coming to its conclusion, the SCA emphasised the obvious impact the sudden cessation of water extraction would have on the mine’s immediate and adjacent underground environment, including the voids above the mine, the extent of which would require time to be adequately assessed. The SCA, therefore, dismissed the appeal.
Knowledge of debt in a delictual claim for wrongful arrest and detention: Minister of Police v Zamani 2023 (5) SA 263 (ECB) concerned an appeal to a Full Bench of the Eastern Cape Local Division, Bhisho (Van Zyl DJP, Majiki J and Stretch J), against the trial court’s dismissal of a special plea of prescription placed before it for separate adjudication. This was in an action in delict for damages that had been instituted by Mr Zamani arising out of his alleged unlawful arrest and detention.
Section 12(3) of the Prescription Act 68 of 1969 provides that ‘[a] debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the facts from which the debt arises: Provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care’. Mr Zamani, relying on this section, claimed that he did not know that he might have a claim for compensation against the defendant, or that his arrest was unlawful, until he had heard about such claims on a radio programme and thereafter consulted an attorney. It was not disputed that Mr Zamani knew the identity of the arresting officer, or that a period of more than three years had elapsed between his arrest and release from custody, and the time when he instituted his claim. The trial court found that the defendant had failed to prove that the plaintiff’s claim had prescribed by not placing any evidence before it as to why this was the case.
The ECB Full Bench held that s 12(3) did not envisage that a plaintiff must have had knowledge that the conduct of the police was unlawful or that he had a legal right to bring a claim against the defendant. The nature of ‘the facts from which the debt arises’ in s 12(3) were facts that were material to the debt, that is, necessary for a plaintiff to prove to support a claim. Knowledge that the conduct of the debtor was wrongful or negligent – a legal conclusion and not a fact – was not required before prescription commenced to run, nor was knowledge of the full extent of his or her legal remedies and what the full legal implications of the known facts were.
The information Mr Zamani obtained from the radio program was no more than a realisation that he may have a claim against the policeman who arrested him, as opposed to the material facts relating to his arrest and detention that he would need to prove to establish the liability of the defendant.
The full extent of the plaintiff’s cause of action was, therefore, complete and the debt became due when he was released from detention. There was nothing that prevented him from giving instructions to an attorney to institute proceedings. That the plaintiff may not have known what his legal rights were, did not delay the running of prescription. Section 12(3) did not require the creditor to have knowledge of any right to sue the debtor. In the result, the plaintiff’s claim had become prescribed, and the appeal was upheld.
Apart from the cases discussed above, the material under review also contained cases dealing with –
Gideon Pienaar BA LLB (Stell) is a Senior Editor, Joshua Mendelsohn BA LLB (UCT) LLM (Cornell), Johan Botha BA LLB (Stell) and Simon Pietersen BBusSc LLB (UCT) are editors at Juta and Company in Cape Town.
This article was first published in De Rebus in 2023 (Nov) DR 24.
