INDEX1

EDITORIAL

UNREPORTED CASES

SOUTH AFRICAN LAW REPORTS SEPTEMBER 2014

SOUTH AFRICAN CRIMINAL LAW REPORTS SEPTEMBER 2014

All SOUTH AFRICAN LAW REPORTS SEPTEMBER 2014

EDITORIAL

LEGAL PRACTICE ACT, 28 0F 2014

The long awaited Legal Practice Act is now official. I am indebted to Adv Cassim Moosa for a concise explanation:1.    The aim of the Act is “To provide a legislative framework for the transformation and restructuring of the legal profession in line with constitutional imperatives so as to facilitate and enhance an independent legal profession that broadly reflects  the diversity and demographics of the Republic; to provide for the establishment, powers and functions of a single South African Legal Practice Council and Provincial Councils in order to regulate the affairs of legal practitioners and to set  norms and standards; to provide for the admission and enrolment of legal practitioners; to regulate the professional conduct of legal practitioners so as to ensure accountable conduct; to provide for the establishment of an Office of a Legal Services Ombud and for the appointment, powers and functions of a Legal Services Ombud; to provide for a Legal Practitioners’ Fidelity Fund and a Board of Control for the Fidelity Fund; to provide for the establishment, powers and functions of a National Forum on the Legal Profession; and to provide for matters connected therewith". 2.         The Act comes into operation as follows:

            "Chapter 10 comes into operation on a date fixed by the President by proclamation in the Gazette;

            Chapter 2 comes into operation three years after the date of commencement of Chapter 10 or on any earlier date fixed by the President by proclamation in the Gazette;

1 A reminder that these Legal Notes are my summaries of all reported cases as are set out in the Index. In other words where I refer to the June 2012 SACR , you will find summaries of all the cases in that book. It is for private use only. It is only an indication as to what was reported, a tool to help you to see if there is a case that you can use!

LEGAL NOTES VOL 10/2014

Compiled by: Adv Matthew Klein

        The remaining provisions of this Act come into operation on a date, after the commencement of Chapter 2, fixed by the President by proclamation in the Gazette.”

So, cheers!! Well done so far, a step in the right direction but not in force yet.Yes there are concerns.What should you and I do as members of the National Bar?

1) We should have a brainstorm about the Act2) We should look at possible pitfalls3) We should look encourage people we know who obtained an LLB to be admitted as advocates! And to join our Bar, we offer part time pupillage consisting of assignments and an open book exam. (I have an attorney who charges a reasonable rate for admissions in Gauteng) Existing rights will not be taken away, once admitted you have rights.

UNREPORTED CASE

RH v DE (594/2013) [2014] ZASCA 133 (25 September 2014)

Divorce-Delictual claim for damages based on adultery between defendant and plaintiff’s wife on the law as it stands. Award rightly made for contumelia – but award for loss of consortium not justified – consideration of whether the action should be maintained as part of our law – concluded that its continued existence no longer justified.

Per Judge Brand

On appeal from: North Gauteng High Court, Pretoria (LI Vorster AJ sitting as court of first instance):

“As has become customary in matters of this kind, damages were claimed under two headings: (a) contumelia and (b) loss of consortium. In the court a quo, LI Vorster AJ awarded damages under both headings, but in a composite amount of R75 000, together with interest and costs on the high court scale. The present appeal against that order is with the leave of this court.”

“The background facts that turned out to be relevant appear from what follows. The plaintiff and Ms H were high school friends. They were married on 30 April 2005 when he was 26 and she 25. Two children were born of their marriage, a daughter in May 2006 and a son in October 2008. On 23 March 2010 Ms H left the common home and cohabitation between her and the plaintiff ceased, never to be resumed again. In June 2010 Ms H instituted action for an order of divorce which was eventually granted in September 2011. On 15 April 2009 Ms H started employment with a company where she met the defendant, who was the managing director of an affiliated concern operating from the same building. The defendant and Ms H, who both testified at the trial, admitted that they became romantically involved, but this only happened, so they said, after Ms H left the common home on 23 March 2010. They also admitted that they subsequently entered into an adulterous relationship,

but this only started, so they said, on 17 July 2010. That was after Ms H had instituted action for divorce and the plaintiff had filed his plea in that action in which he admitted that the marriage had irretrievably broken down.”

“The plaintiff’s case, by contrast, was that the adulterous relationship must have started much earlier; that he had a happy marriage until the commencement of that relationship, which was the cause of Ms H leaving the common home on 23 March 2010. In answer to these allegations Ms H contended that there were serious problems in the marriage which started shortly before the birth of their son in October 2008. As a result, she testified, she went for marriage counselling in August 2009, but that, in spite of her efforts, the marriage kept on deteriorating until it finally broke down in March 2010. This deterioration and breakdown of the marriage, she said, had nothing to do with the relationship between her and the defendant. Despite the narrow ambit of the real issues, the trial ran for eight days. The record of evidence alone exceeded 800 pages with a further 400 pages of pleadings and documents. The parties succeeded in building this substantial record by an endless debate on when the marriage between the plaintiff and Ms H became unhappy and the heavily disputed reasons for that unhappiness, seemingly with little regard for the relevance of these debates to the outcome of the case.”

“The present existence of the action cannot be doubted. After it had been explicitly recognised by this court for the first time in Viviers v Kilian 1927 AD 449, that recognition had been confirmed on several occasions (see for example Foulds v Smith 1950 (1) SA 1 (A); Bruwer v Joubert 1966 (3) SA 334 (A) at 337). Its continued existence was pertinently raised by way of exception in Wiese v Moolman 2009 (3) SA 122 (T). In that case Du Plessis J held, after an in-depth consideration, that the action should be maintained. In this matter, Vorster AJ not only held himself bound, but found himself in complete agreement with the decision in the Wiese case. The question raised now is whether that case was rightly decided.”

“The boni mores of society or the legal convictions of the community, which in effect constitute expressions of considerations of legal and public policy, are of particular significance in determining wrongfulness, which is an essential element of delictual liability in our law, both under the lex Aquilia and the actio iniuriarum.”I

“In view of the clear and consistent recognition of the private law action for adultery by this court, its origin is of significance in one respect only, namely that in England, which is its country of origin, the action for adultery against a third party, or ‘criminal conversation’ as it was called, has since been abolished by legislation in terms of the Law Reform (Miscellaneous Provisions) Act 1970.” 

“But the question is: if the protection of marriage is one of its main goals, is the action successful in achieving that goal?”

“The conclusion I arrive at is that in the light of the changing mores of our society, the delictual action based on adultery of the innocent spouse has become outdated and can no longer be sustained; that the time for its abolition has come. In the light of this conclusion I find it unnecessary to consider the further contention advanced by some of our academic authors (see for example M Carnelley ‘One Hundred Years of Adultery’ supra at 199-201) which was subscribed to by the defendant in argument, that the continued existence of the action is in conflict with our

constitutional norms. Suffice it to say that there could well be merit in some of these arguments.”

“Finally, and in order to avoid confusion:

(a) My finding is that the action derived from the actio iniuriarum and based on adultery, which afforded the innocent spouse a claim for both contumelia and loss of consortium, is no longer wrongful in the sense that it attracts liability and is thus no longer available as part of our law.

(b) I make no comment on the other actions based on the actio iniuriarum which relate or are connected to the institution of marriage, such as the action for abduction, enticement and harbouring of someone’s spouse. I leave the sustainability of their continued existence as the subject of consideration for another day.

(c) I also make no comment on the continued existence of the claim against a third party, based on adultery, for the patrimonial harm suffered by the innocent spouse through the loss of consortium of the adulterous spouse, which would include, for example, the loss of supervision over the household and children (see for example Viviers v Kilian supra at 455). This may well afford the innocent spouse a claim under the lex Aquillia (see for example Media 24 Ltd v SA Taxi Securitisation (Pty) Ltd (Avusa Media Ltd & others as amici curiae) 2011 (5) SA 329 (SCA para 7).

[42] What remains are issues of costs. As to the costs of appeal, it appears to me that, even if we were to retain the action of adultery, the defendant would still have been at least partially, yet substantially successful on appeal because the award for loss of consortium should not have been made by the court a quo. In any event, he would therefore be entitled to these costs. But in the high court, the plaintiff would have been entitled to a costs order in his favour if we were to maintain the law as it stands. In the circumstances where we have now shifted the goal posts on appeal, I believe it would be fair to order that each party should pay his own costs in the high court.

[43] In the event:

1 The appeal is upheld with costs, including the costs of two counsel.

2 The order of the high court is set aside and replaced with the following:

‘Plaintiff’s action is dismissed. Each party to pay his own costs.’

SA LAW REPORTS SEPTEMBER 2014

THUNDER CATS INVESTMENTS 92 (PTY) LTD AND ANOTHER v NKONJANE ECONOMIC PROSPECTING & INVESTMENT (PTY) LTD AND OTHERS 2014 (5) SA 1 (SCA) 

Company — Winding-up — Grounds — Just and equitable to do so — Solvent company — No fixed category of circumstances in which solvent company may be wound up on just and equitable ground — Breakdown in relationship between shareholders rendering company dysfunctional — Just and equitable to wind up — Companies Act 71 of 2008, s 81(1)(d)(iii).The first respondent, Nkonjane (Pty) Ltd was — despite its solvency — liquidated  by the high court on the just-and-equitable ground in s 81(1)(d)(iii) of the Companies Act 71 of 2008 because of the irretrievable breakdown in the relationship between Nkonjane's shareholders, namely the appellants and the second and third respondents. The respondents wanted to sell their shares in Nkonjane but were prevented from doing so by the other shareholders. They claimed that the resulting lack of trust rendered Nkonjane dysfunctional, justifying its winding-up. The question that arose in an appeal to the Supreme Court of Appeal was the scope of s 81(1)(d)(iii): was the import of the words 'just and equitable' in subparagraph (iii) wide, as it had been under s 344(h) of the old Companies Act 71 of 1973 or limited by subparagraphs (i) and (ii) so as to preclude all other grounds of deadlock? There were conflicting high-court judgments on this issue.  Held: The 'just and equitable' ground in s 81(1)(d)(iii) retained its wide scope: it should not be interpreted so as to include only matters similar to the other grounds stated in s 81(1). The examples of 'deadlock' in subparagraphs (i) and (ii), namely where either the board or the shareholders were deadlocked, were examples only, and not exhaustive so as to limit subparagraph (iii). It could be otherwise just and equitable to wind up, and there was no fixed category of circumstances which could provide a basis for a winding-up of solvent companies on the just-and-equitable ground. Here the breakdown in the relationship between its shareholders rendered Nkonjane dysfunctional, and the high court therefore correctly found that it was just and equitable for it to be wound up. Appeal dismissed.

ABSA BANK LTD v MKHIZE AND TWO SIMILAR CASES 2014 (5) SA 16 (SCA) 

Appeal — Appealability — Postponement of proceedings pending re-enrolment — Applications for default judgments postponed to afford plaintiff opportunity to take further steps deemed necessary by court under s 129(1) of NCA before matters could be re-enrolled — Order not appealable — National Credit Act 34 of 2005, s 129(1). Applications for default judgments in three similar matters were postponed by the high court in order to afford the plaintiff (Absa) an opportunity to take the further steps under s 129(1) of the National Credit Act deemed necessary by the court before the matters could be re-enrolled. At issue was the appealability of the order.The majority held that it amounted to no more than a direction from the high court, before the main action could be entered into, as to the manner in which the matter should proceed. All that had occurred was that, not being satisfied with the service effected by Absa, the court had directed that certain further steps be taken. It did not amount to a refusal of default judgment, nor did it directly bear upon or dispose of any of the issues in the main action, thus could not be said to be tantamount to a dismissal of Absa's action. It followed therefore that, as the order was not one having the effect of a final judgment, the court lacked jurisdiction to entertain the appeal. Appeal accordingly struck from the roll with costs. The minority was of the view that the effect of the order was to impose obligations on Absa that had a definite bearing

on the relief sought. It was those parts of the order and the refusal to grant the relief sought until those obligations were met, that were appealable. The appeal would nevertheless have been dismissed. PEZULA PRIVATE ESTATE (PTY) LTD v METELERKAMP AND ANOTHER 2014 (5) SA 37 (SCA)  Prescription — Acquisitive prescription — Praedial servitudes — Nec precario — Adverse use required — Owner must have right to prevent use before G acquisitive prescription can run — Claimant had permission to use road — Owner had no right to interfere — No adverse use — No acquisition of right of way by prescription — Prescription Act 68 of 1969, s 6. The high court had declared that Metelerkamp had via prescription acquired a servitude of right of way over seaside land belonging to Pezula (the P property). Henderson, the owner of adjoining land, had built the road pursuant to a 1940 agreement with the former owner of the P property, Geo Parkes. Later the road was used by both Metelerkamp (to get to his land) and the general public (to get to the beach). In 2000 Pezula purchased the P property from Geo Parkes; in 2004 Henderson sold his land to Pezula; and in 2006 Pezula closed the road. IMetelerkamp argued that he had acquired the servitude because he had for over 30 years openly used the road as if he had a servitude of way over the P property. He said that 'the general public as well as owners of properties that are situated on the beach have been exercising a right of way over [the P] property as long as I can remember' and had done so 'independently from Mr Henderson'. In an appeal to the SCA — Held: The requirement of nec precario — the absence of a grant on request — was subsumed into s 6 of the Prescription Act 69 of 1969 by the requirement that the potential acquirer of the servitude had to act as if he were entitled to exercise the servitudal right, a notion that was in conflict with consent, which was subject to revocation by the grantor. In other words, there had to be adverse use in the sense that the owner had the legal right to prevent it.Here evidence established that Henderson had, since 1940 at the latest, been entitled to control the use of the road by the public, including Metelerkamp. This was with the consent of Geo Parkes, who did not, contrary to the finding of the high court, retain any control over the road. Since Geo Parkes was not entitled to interfere with use of the road by its users, including Metelerkamp, Metelerkamp's use would not have been adverse (ie nec precario). Therefore prescription could not run in respect of Metelerkamp's use of the road. Appeal upheld.

AFRICAN NATIONAL CONGRESS v DEMOCRATIC ALLIANCE AND ANOTHER 2014 (5) SA 44 (EC)  Election law — Electoral irregularities — Complaints — Publishing false statements or allegations with intention to influence conduct or outcome of election — Fair comment as defence — Not sustainable where statement not recognisable as commentary and facts commented on not true — Electoral Act 73 of 1998, s 89(2)(c) and sch 2, item 9(1)(b)(ii).

Shortly before the 2014 general election, the Democratic Alliance (the DA) had sent out a text message by bulk short-message service (the SMS) to over 1,5 million recipients advising them that the Public Protector's report on public spending towards a security upgrade at President Zuma's homestead (the Nkandla report) '[showed] how Zuma stole your money to build his R246m home'. The ANC, claiming that the Nkandla report contained no such finding and therefore its dissemination amounted to the publication of false information and allegations in contravention of the Electoral Act 73 of 1998 and the Electoral Code, brought an urgent application to restrain its E dissemination and compel its retraction. The high court, dismissing the application, found that — while it was so that the Nkandla report did not show that President Zuma stole money to build his home — having regard to the law and the principles of fair comment, that was a view that a fair reader of the SMS would entertain if he or she had regard to the Public Protector's report. On appeal the Electoral Court —Held: The ANC based its case on the question of contravention of the Act and the Code. In the circumstances and on a proper interpretation of the relevant provisions, the conclusion was unavoidable that the factual claim made by the DA was clearly false and inaccurate, and that s 89(2) of the Act and item 9(1)(b) of the Code were contravened.The DA's defence of fair comment was not sustainable. While every person had the right to express an opinion honestly and fairly on a matter of public interest, there were three essentials of the defence of fair comment: it must appear to be recognisable to the ordinary reasonable person as a comment (and not a statement of fact); it must be fair (ie honest in the sense of being a genuine expression of opinion relevant to the facts commented upon); and the facts commented upon must be true, accurately stated and relate to matters of public interest. The SMS fell short of this test:   •   It was not projected as an expression of opinion — it did not state as a comment that the conclusion the reader would come to when reading the SMS together with the Nkandla report, was that President Zuma stole the money to build his home; it contained a factual assertion that the Nkandla report 'shows how Zuma stole your money to build his R246m home'.    •   This statement was clearly false. In fact, rather than attributing the excessive costs of the Nkandla project to President Zuma, the report focused on systemic failures and the 'need for a proper policy regime regulating security measures at the private residences of the President, Deputy President, Minister, and Deputy of Defence'. THEMBANI WHOLESALERS (PTY) LTD v SEPTEMBER AND ANOTHER 2014 (5) SA 51 (ECG)  Court — High court — Jurisdiction — Eastern Cape — As main seat of Eastern Cape Division, Grahamstown court having jurisdiction over entire Eastern Cape Province — Local seats (Bhisho, Mthatha and Port Elizabeth) having concurrent jurisdiction over their respective areas — Litigants may choose to proceed in Grahamstown rather than local seat but judge may order that matter be removed to local seat on grounds of convenience.

The Eastern Cape Division, Grahamstown (ECG) is the main seat of the Eastern Cape High Court, and has jurisdiction over the entire Eastern Cape Province. The local divisions at Bhisho, Mthatha and Port Elizabeth have concurrent jurisdiction

over their respective areas. Litigants may choose to proceed in Grahamstown rather than in a local division with jurisdiction, but the judge may order that the matter be removed to the local division on grounds of convenience.

SOLIDARITY AND ANOTHER v PUBLIC HEALTH AND WELFARE SECTORAL BARGAINING COUNCIL AND OTHERS 2014 (5) SA 59 (SCA)  Public service — Employee — Dismissal — Discharge — Deemed discharge on ground that employee had assumed other employment without permission while still in service of employer — Employee securing alternative employment while suspended on allegations of misconduct — Not 'absenting himself from official duties without permission' — No deemed discharge — Public Service Act, Proc 103 of 1994, s 17(5)(a). Kotze, an employee of the Department of Health, Free State, was placed on precautionary suspension pending investigation into allegations of misconduct levelled against him. While on suspension he secured temporary alternative employment without the permission of his employer. He was notified that he was as a consequence deemed to have been discharged from the public service in terms of s 17(5)(a)(ii) of the Public Service Act Proc 103 of 1994. A dispute lodged with the bargaining council culminated in arbitration. There the commissioner held that the council had no jurisdiction to hear the matter as a deemed discharge did not constitute a dismissal. Represented by his trade union, Solidarity, Kotze instituted proceedings in the Labour Court (LC) to review and set aside the award. This application was dismissed. A later appeal to the Labour Appeal Court (LAC) was also dismissed with the majority finding that he had absented himself from work without authorisation by assuming other employment, thereby subjecting his contract to termination by operation of the law. On appeal to the Supreme Court of Appeal, Kotze's principal contention was that s 17(5)(a) was not applicable as his employer had failed to prove that he had absented himself from his official duties as contemplated by that section.Held: Section 17(5)(a)(ii) only applied to an employee who 'absented himself or herself from his or her official duties without permission' as intended in s 17(5)(a)(i). In the present matter Kotze was indeed absent from duty, but, having been suspended, he was absent at his employer's behest. And, not having been assigned alternative duties for the duration of his suspension, he had no duties. Logically therefore, he could not conceivably have 'absented himself from his official duties'. Section 17(5)(a)(ii) was therefore H not of application. Appeal upheld and matter remitted for arbitration. MINISTER OF DEFENCE AND MILITARY VETERANS v MOTAU AND OTHERS 2014 (5) SA 69 (CC)  Administrative law — Administrative action — What constitutes — Dismissal of members of Armscor board — Such is executive action — Promotion of C Administrative Justice Act 3 of 2000; Armaments Corporation of South Africa Limited Act 51 of 2003, s 8(c).Administrative law — Administrative action — What constitutes — Exercise of an administrative power — But not exercise of an executive power — Test to determine

nature of power — Promotion of Administrative Justice Act 3 of 2000, s 1; Constitution, s 85(2). Defence force — Armscor — Board of directors — Armscor Act giving minister power to dismiss directors — Armscor Act applying with Companies Act — Minister obliged to follow procedure in Companies Act — Armaments Corporation of South Africa Limited Act 51 of 2003, s 8(c); Companies Act 71 of 2008, s 71.  In this case the Minister of Defence and Military Veterans terminated Maomela Motau and Refiloe Mokoena's membership of Armscor's board of directors in terms of s 8(c) of the Armscor Act. (Armscor is the Armaments Corporation of South Africa (SOC) Ltd and the Armscor Act is the Armaments Corporation of South Africa Ltd Act 51 of 2003.) The section provides that 'a member of the Board must vacate office if his or her services are terminated by the minister on good cause shown'.In response the pair applied to a high court to set aside the decision on grounds in the Promotion of Administrative Justice Act 3 of 2000 (PAJA) (error of law, procedural unfairness, ulterior motive and irrationality); and by reason of the minister's failure to show 'good cause' as required by s 8(c). This caused the minister to appeal directly to the Constitutional Court. There the first issue was whether the dismissal decision was executive or administrative action. PAJA excludes from the definition of administrative action, and from its review ambit, the exercise of executive powers and H functions (s 1). Such powers include developing and implementing national policy and performing executive functions provided in national legislation (ss 85(2)(b) and (e) of the Constitution). However, PAJA's definition of administrative action includes the executive power of implementing national legislation (s 85(2)(a) of the Constitution), which has been held ordinarily to constitute administrative action. Thus determining the nature of the dismissal power was necessary to deciding whether it was administrative action. In this regard a power most closely related to formulating policy was likely to be executive, while a power most closely related to applying policy was likely to be administrative. Pointers in making this determination were the source of the power; constraints imposed on its exercise; and whether it was appropriate to subject its exercise to the more rigorous standard of administrative law review. Here the dismissal power was more executive than administrative in nature. This because it was an adjunct of the power to make defence policy; it was a high-level power; and the minister was afforded a broad discretion in exercising it. It constituted performance of an executive function (s 85(2)(e) of the Constitution), rather than implementation of national legislation (s 85(2)(a)), and was thus not administrative action, and not subject to review under PAJA. The second issue was whether the minister had good cause to terminate the services of Motau and Mokoena (s 8(c) of the Armscor Act). The court held that she had and that it was constituted of the Armscor board's delays in entering into service-level agreements with the Department of Defence, and by the board's failure to complete procurement projects timeously. The minister had also had justification to single out Motau and Mokoena for dismissal. The third issue was whether the minister's decision was rational: whether her exercise of the dismissal power related rationally to the purpose of that power. The court held that her decision was rational because there was a rational link between dismissing Motau and Mokoena and addressing the failures of Armscor. The fourth issue was whether there were any procedural constraints on the minister's exercise of the s 8(c) power. The court held that there were — the minister had to comply with the procedure for removal of directors in ss 71(1) and (2) of the Companies Act 71 of 2008: that Act provided the

process and the Armscor Act the substantive criterion for removal of members of the Armscor board. Here, though, the minister had failed to comply with the Companies Act and so had acted unlawfully. But in the exceptional circumstances of the case it would not be just and equitable to set aside the minister's decision and to reinstate Motau and Mokoena. It would be sufficient to declare that the minister's conduct was unlawful and to draw her attention to the proper procedure to be followed in making such dismissal decisions. By contrast, the minority would have upheld the decision of the high court and dismissed the appeal. In its view the minister's decision was administrative action; the minister ought to have heard Motau and Mokoena before making it; and her failure to do so rendered the decision procedurally unfair and required it to be set aside. NGQUKUMBA v MINISTER OF SAFETY AND SECURITY AND OTHERS 2014 (5) SA 112 (CC)  Spoliation — Mandament van spolie — When available — Police unlawfully seizing C motor vehicle with falsified or mutilated engine or chassis number — Possible to possess such vehicle with 'lawful cause' — Order for return of vehicle pending enquiry into facts surrounding possession competent — National Road Traffic Act 93 of 1996, ss 68(6)(b) and 89(1).Road — Traffic offences — Possession, without lawful cause, of vehicle bearing falsified or mutilated engine or chassis number — Possible to possess such  vehicle with 'lawful cause' — Vehicle unlawfully seized by police to be returned before enquiry into lawfulness of possession may be held — So ordered — National Road Traffic Act 93 of 1996, ss 68(6)(b) and 89(1). Section 68(6)(b) of the National Road Traffic Act 93 of 1996 (the Act) prohibits E the possession 'without lawful cause' of a motor vehicle of which the engine or chassis number has been falsified or mutilated, and under s 89(1) it is an offence to contravene or not to comply with any 'direction, condition, demand, determination, requirement, term or request' under the Act. The Supreme Court of Appeal had held that these sections of the Act precluded an order in spoliation proceedings for the restoration of possession of such motor vehicle when, as in the present case, it was unlawfully seized by the police. In an application for leave to appeal and an appeal against that decision, the Constitutional Court —Held: The premise of the SCA's finding that possession of a tampered-with vehicle would always be unlawful was wrong because it was possible to have a 'lawful cause' for the possession of such a vehicle. In casu applicant's possession of the vehicle pursuant to its return in terms of a court order would be only unlawful if it were established that he did not have lawful cause to possess it, but since an enquiry into the facts surrounding the applicant's possession could not be held in spoliation proceedings, the police first had to restore possession. So ordered. KALIL NO AND OTHERS v MANGAUNG METROPOLITAN MUNICIPALITY AND OTHERS 2014 (5) SA 123 (SCA)  Local authority — Rates — Imposition — Differential rates — Levying of different rates for different categories of property — Commercial, industrial and business properties may be assessed at higher rate than residential properties, provided principle of legality adhered to — Municipality entitled to levy business rates 3,8

times as high as residential rates — Local Government: Municipal Property Rates Act 6 of 2004, s 19(1)(b).Local authority — Powers and duties — Duty of officials in public-interest litigation — Must not frustrate enforcement of constitutional rights by members of public — Obstructive conduct of state officials criticised — Adverse costs order made.  The appellants relied on the principle of legality to challenge the municipality's decision to increase rates on business property so that business property owners would pay 3,8 times as much as residential property owners. The appellants relied on a judgment in the SAPOA case for their argument that the adoption of the budget approving the increase was unlawful because the ratio between the proposed business rates and residential rates exceeded the statutory limit. They also argued that the required community participation did not occur, a point that the municipality conceded on appeal.Held: Southwood AJA's conclusion in SAPOA that s 19(1)(b) prohibited the imposition of higher rates on non-residential than on residential property was (1) obiter dictum; (2) not supported by the majority; (3) not backed by full argument; and (4) clearly wrong. Section 19(1)(b) did not provide that a rate on non-residential properties could not exceed that imposed on residential properties, nor did the applicable regulations prescribe a ratio between residential and business and commercial property. What they did instead was to prescribe a ratio between residential and certain non-business categories of property. Besides, business, commercial and industrial have always — and for good reason — been rated at a higher level than residential properties, and an intention to alter this principle was improbable. Hence the municipality's imposition of a higher rate on business properties was not contrary to the principle of legality.Although the appeal would nevertheless be dismissed on the community-participation issue, costs would go against the municipality because of the obstructionist conduct of its officials. DENGETENGE HOLDINGS (PTY) LTD v SOUTHERN SPHERE MINING & DEVELOPMENT CO LTD AND OTHERS 2014 (5) SA 138 (CC)  Administrative law — Administrative action — Review — Domestic remedies — Duty to exhaust domestic remedies before instituting legal action — Duty absolute except where court grants exemption — Cannot be waived by administrative functionary.Minerals and petroleum — Administrative decisions — Internal appeals and access to courts — Duty to exhaust internal remedies before approaching court for review — Cannot be waived by administrative functionaries — Mineral and Petroleum Resources Development Act 28 of 2002, s 96(3). Dengetenge applied for leave to appeal to the Constitutional Court against (1) the SCA's refusal to condone the late delivery of its heads of argument and (2) the high court's earlier decision — on Southern Sphere's application — to rescind the granting of prospecting rights to it by the Minister of Mineral Resources. Southern Sphere had approached the high court for various orders against the minister, various state functionaries, and rival mining companies, one of which was Dengetenge. The central issue before the Constitutional Court was the effect of Southern Sphere's failure to exhaust its internal appeals against the state before

approaching the high court. The state conceded in the high court that its decisions to award the various prospecting rights were the result of administrative blunders and requested the high court to decide the parties' claims and counter-claims. During the trial counsel for Dengetenge admitted that its prospecting permit was in fact unlawful. The high court accordingly granted Southern Sphere's application but did not deal with its failure to exhaust its internal appeals.In an appeal to the SCA Dengetenge argued that it was not competent for the high court to entertain the review application before Southern Sphere had exhausted its internal remedies as required by s 96 of the MPRDA read with s 7 of the Promotion of Administrative Justice Act 3 of 2000. But the appeal lapsed because Dengetenge failed to file its heads of argument in time. The SCA found that this breach of the court's rules was so flagrant that condonation would not be granted. Dengetenge approached the Constitutional Court for leave to appeal against the decisions of both courts.Main judgment (per Zondo J, with Mogoeng CJ concurring): The SCA's refusal to condone did not preclude Dengetenge from seeking leave to appeal against the high court judgment. Leave would be granted but the appeal dismissed due to Dengetenge's above-mentioned concession. As to Dengetenge's argument that Southern Sphere should have exhausted its internal remedies: The remedy-exhaustion requirement in s 96 of the MPRDA was there for the benefit of the state, and its functionaries were A entitled to waive it by asking the court to decide the matter, in which case there would be no obligation on the litigant to do so. In the present case, therefore, the minister's request that the court determine the competing claims disposed of Southern Sphere's obligation to exhaust the available internal remedies. Majority judgment (per Jafta J, with Moseneke DCJ, Madlanga J, Nkabinde J, B Skweyiya J and Mhlantla AJ concurring): The order proposed in the main judgment would stand, but for different reasons. As to the internal-remedy issue: The promulgation of PAJA made it compulsory for aggrieved parties to exhaust internal remedies before approaching a court for review unless they were exempted from this duty by a competent court. The corollary was that the (peremptory) remedy-exhaustion requirement in s 96 of the MPRDA could not be waived by administrative functionaries. They were bound to consider the aggrieved party's internal appeals. In the present case the high court would, in view of Dengetenge's concession on unlawfulness, have granted exemption had Southern Sphere applied for it. Therefore a remittal to the high court would serve no purpose other than granting an exemption which was already justified on record, which was insufficient reason to do so. Dissenting judgment (per Froneman J, with Cameron J and Van der Westhuizen J concurring): Leave to appeal should be denied because of Dengetenge's flagrant disregard of court processes. VISSER SITRUS (PTY) LTD v GOEDE HOOP SITRUS (PTY) LTD AND OTHERS 2014 (5) SA 179 (WCC)  Company — Oppressive conduct — What constitutes — Directors' decision taken in terms of company constitution and meeting standard of conduct in s 76 which prejudices shareholder — Exceptional circumstances required for decision to cause 'unfair' prejudice within meaning of s 163 — Companies  Act 71 of 2008, ss 76 and 163.

Company — Oppressive conduct — What constitutes — Directors' decision to refuse to register transfer of shares — Decision taken in terms of company constitution — Directors complying with their fiduciary duties — Decision not unfairly prejudicial within meaning of s 163 — Companies Act 71 of 2008, ss 76 and 163. Company — Directors and officers — Director — Fiduciary duty — Duty to act in best interests of company — Ambit — Companies Act 71 of 2008, s 76.Company — Directors and officers — Director — Fiduciary duty — Duty to act for proper purpose — Ambit — Companies Act 71 of 2008, s 76.  In this case Visser Sitrus (Pty) Ltd (Visser) sought to transfer its shares in Goede Hoop Sitrus (Pty) Ltd (Goede Hoop) to Mouton Sitrus. However Goede Hoop's board refused to approve the transfer and this caused Visser to approach a high court. There it sought an order amending Goede Hoop's memorandum of incorporation insofar as it dealt with transfers of shares. The clauses in question provided that a shareholder required the approval of the board in order to transfer shares and that the board could decline to register a transfer without giving any reasons. Visser sought changes obliging the board to give reasons.Held, that a memo could quite validly permit a board to not give reasons for  refusing to transfer shares. Visser also sought an order compelling Goede Hoop to register the transfer of shares in terms of s 163 of the Companies Act 71 of 2008. That section allows a shareholder to apply to a court for relief if an act of the company has had a result that is unfairly prejudicial to it. It allows the court, in determining the application, to make any order it considers fit. Visser based its s 163 claim on the alleged breach by Goede Hoop's directors of their s 76 fiduciary duties. (Section 76 provides inter alia that a director must act in good faith and for a proper purpose and in the best interests of the company.) Visser's submissions raised this question: if directors exercise a power given to them by the company constitution, and meet the standard of conduct in s 76, can a shareholder prejudiced by the decision complain that it unfairly prejudices him?Held, that the circumstances would have to be exceptional for a decision taken in accordance with s 76 to cause unfair prejudice in terms of s 163. Had then Goede Hoop's directors complied with their fiduciary duties in s 76? Visser did not allege an absence of good faith but alleged a failure to act for a proper purpose and in the best interests of the company. Held, as to the duty to act in the best interests of the company, that it was not objective, in the sense of allowing a court to determine what was objectively in the best interests of the company. What it required was that the directors take reasonably diligent steps to become informed about the matter; that they subjectively believe their decision to be in the best interests of the company; and that their belief should have a rational basis (s 76(4)). The rationality criterion was objective, but more easily satisfied than a test of whether a decision was objectively in the best interests of a company.  As to the duty to act for a proper purpose, it was objective: one had to determine the actual purpose the power was exercised for; the purpose the power was conferred for; and whether the actual purpose fell within the intended purpose. Held, applying the law, that the directors had acted in the best interests of the company by refusing to register the transfer of shares: they had been sufficiently informed; had subjectively believed the decision was in the best interests of the company; and had acted rationally.

They had also acted for a proper purpose. The actual purpose of refusing transfer had been to prevent Mouton Sitrus increasing its shareholding, where this was believed to be against the best interests of the company. This actual purpose echoed the intended purpose of the provision. Accordingly, s 76's standards having been met, the refusal to approve the transfer was lawful. This however left the question whether the refusal was nonetheless unfairly prejudicial to Visser. Held, that it was not: Visser had not established an informal arrangement which invariably allowed shareholders to transfer their shares to other shareholders; nor had it proven a legitimate expectation that the directors would not exercise their power to refuse a transfer; and there was no authority of a shareholder obtaining unfair-prejudice type relief where the directors had exercised their power to refuse a transfer in accordance with their fiduciary duties. The application was consequently dismissed.

DIRECTOR-GENERAL, DEPARTMENT OF HOME AFFAIRS AND OTHERS v DEKOBA 2014 (5) SA 206 (SCA)  Immigration — Asylum seeker — Application for asylum — Application rejected and appeal made — Appeal disposed of on basis that asylum seeker failing to appear — Asylum seeker in fact attending hearing but case not reached — Decision to dispose of appeal void — Asylum seeker retaining status and entitlement to asylum-seeker permit — Refugees Act 130 of 1998, ss 21 – 22 and 24. D came to South Africa from the Democratic Republic of Congo and applied to a Refugee Reception Officer for asylum. The officer issued her with an asylum-seeker permit but her application was ultimately rejected by a Refugee Status Determination Officer. She appealed against the decision to the Refugee Appeal Board and appeared for the hearing at the appointed place on the designated date. There she waited for her appeal to be called but it was in the end not reached, and an official of the Department of Home Affairs told her it would be dealt with on a later date. In the meantime the Department extended her permit and continued to do so at intervals as she awaited her appeal.This continued for two and a half years until a day when she appeared at the Refugee Reception Office to renew her permit and was instead arrested as an illegal immigrant. At the same time her permit was confiscated and she was served a document reflecting that her appeal had been dismissed owing to her not appearing at the hearing.Ultimately D applied to a high court for reissue of her permit and this relief was granted, but the Director-General of the Department of Home Affairs and the other respondents appealed to the Supreme Court of Appeal.Held: On an examination of the record, D had in fact attended the appeal but had not been called, and the decision to dispose of the appeal on the basis that she was absent was ineffective. Given this, the appeal remained pending and D remained an asylum seeker with entitlements to an asylum-seeker permit and to have that permit extended until completion of the appeal or later proceedings. The proper order in the circumstances was the restoration of her permit and that it should remain valid until conclusion of the appeal or subsequent proceedings. KEYTER NO v VAN DER MEULEN AND ANOTHER NNO 2014 (5) SA 215 (ECG) 

Administration of estates — Executor — Rights, powers and duties — Cession — Executor may cede rights of estate to third parties. An executor of a deceased estate may cede a right of the estate to a third party. 

MTN INTERNATIONAL (MAURITIUS) LTD v COMMISSIONER, SOUTH AFRICAN REVENUE SERVICE 2014 (5) SA 225 (SCA)  Revenue — Income tax — Assessment — Validity — Revised assessment not rendered invalid by error in fixing due date — Income Tax Act 58 of 1962, s 1.  The South African Revenue Service (SARS) raised a revised assessment in which the relevant SARS official fixed the 'due date' on the IT40 form as one day prior to the day on which the assessment was actually raised. This, the taxpayer unsuccessfully contended in the high court, was 'so irregular that the additional tax assessment stands to be set aside on this basis alone'. In an appeal the Supreme Court of appeal —Held: Neither the failure to specify a due date nor the fixing of an incorrect due date would invalidate an assessment (or revised assessment). Appeal dismissed.

COMMISSIONER, SOUTH AFRICAN REVENUE SERVICE v PRETORIA EAST MOTORS (PTY) LTD 2014 (5) SA 231 (SCA)  Revenue — Assessment to tax — Additional assessment — Taxpayer's rights — Taxpayer entitled to additional assessments being raised in administratively fair manner — This only achieved when based on proper grounds for believing additional value-added tax or income tax owing. Revenue — Assessment to tax — Additional assessment — Appeals — Burden of proof — Commissioner obliged to set out grounds for raising disputed additional assessment so as to enable taxpayer to discharge burden of proof. In the taxpayer's appeal against a tax court decision which had upheld certain additional assessments for value-added tax (VAT) and income tax that the taxpayer had objected to, the Supreme Court of Appeal (apart from making findings on the various substantive issues in dispute) considered the proper approach for the South African Revenue Service (SARS) to follow in auditing taxpayers and raising additional assessments; and in opposing appeals. It held —   •   The approach of the SARS official in the present case — not familiarising herself with the taxpayer's accounting system but taking the view that if she did not understand something she was free to raise an additional assessment and leave it to the taxpayer to prove in due course at the hearing before the tax court that she was wrong — was fallacious. The raising of an additional assessment must be based on proper grounds for believing that, in the case of VAT, there had been an under-declaration of supplies and hence of output tax, or an unjustified deduction of input tax. In the case of income tax it must be based on proper grounds for believing that there was undeclared income or a claim for a deduction or allowance that was unjustified. It was only in this way that SARS could engage the taxpayer in an administratively fair manner, as it was obliged to do. It was also the only basis upon

which it could, as it must, provide grounds for raising the assessment to which the taxpayer must then respond by demonstrating that the assessment was wrong. •   While the onus was on the taxpayer to show on a preponderance of probability that the decisions of SARS against which it appealed were wrong, SARS was not free to simply adopt a supine attitude but was obliged (throughout the assessment process leading up to the appeal, and the appeal itself) to indicate clearly what matters and which documents were in dispute, so that the taxpayer knew what was needed to present its case in discharging the onus of proof resting on it. Everything depended upon the nature of the dispute between the parties as defined by the grounds of assessment and the grounds of appeal. SARS was bound before the appeal to set out the grounds for the disputed assessments and the taxpayer was obliged to respond with the grounds of appeal, so delineating the disputes between the parties.

BORBET SOUTH AFRICA (PTY) LTD AND OTHERS v NELSON MANDELA BAY MUNICIPALITY 2014 (5) SA 256 (ECP)  Local authority — Finance — Budgets — Approval — Where public participation in adoption of budget inadequate — Legality — Constitutional and statutory framework dealing with budget approval examined — Nature and extent of obligations on municipalities to ensure public participation in process considered — Applicable principles in assessing compliance with such obligations set out — Court concluding municipality falling short of requirements — Not in interests of justice to undo budget process — Court instead ordering compliance with public-participation obligations in preparation and tabling of future budgets. The applicants were five large corporations and ratepayers in the respondent's metropolitan area and substantial consumers of services from the municipality. They sought an order declaring the municipal budget determining rates, tariffs and surcharges on tariffs for the financial year 2011/2012 unlawful and of no force and effect. Their main challenge was founded on the inadequacy of the public-participation process in the adoption of the budget, and the contention that the respondent had consequently failed to meet its constitutional and statutory requirements in this regard. The respondent argued that the steps taken, which included the holding of public meetings and publication of the budget, were sufficient in the circumstances.The court examined the constitutional and statutory framework dealing with the process of budget approval and considered the nature and extent of the respondent's obligations to ensure public participation in its decision-making. The principles applicable in determining whether there had been compliance with such obligations were set out and the various phases in the process of preparing and adopting the budget were then assessed against this background. It was held that in the context of local government more was required than public meetings and the publication of information, with the court ultimately concluding that the steps taken, objectively considered and viewed in their entirety, did not meet the requirements for effective public participation in the budget process. As to the appropriate remedy: to undo the budget process some years after the event would have given rise to significant disruption and uncertainty, and would not have been in the interests of justice. The respondent was instead ordered to comply with, inter alia, the relevant

statutory provisions when it prepared and tabled an annual budget for consideration and adoption in the future. PLAASKEM (PTY) LTD v NIPPON AFRICA CHEMICALS (PTY) LTD 2014 (5) SA 287 (SCA)  Contract — Duration — Unspecified duration — Whether contract terminable on reasonable notice — Matter of construction, having regard to express terms of contract and surrounding circumstances — Unlikely that parties would intend to be bound in perpetuity where contract requiring them to form and maintain close working relationship — Tacit term allowing for termination on reasonable notice would be imported. The present case deals with the terminability of a contract of unspecified duration. It holds that a tacit term allowing termination on reasonable notice may be imported into such a contract. Whether this would be done depended on the express terms of the contract and the surrounding circumstances, including the nature of the relationship between the parties. If the contract required a close working relationship between the parties, commercial reality would suggest an intention not to be bound in perpetuity. In such cases a tacit term allowing for termination on reasonable notice would be imported in the interests of commercial efficacy.

PRINSLOO NO AND OTHERS v GOLDEX 15 (PTY) LTD AND ANOTHER 2014 (5) SA 297 (SCA)  Estoppel — Res judicata — Issue estoppel — Operation — Plea may not be upheld where it will cause unfairness.  In this case a trust sold a farm to Goldex. Goldex later purported to cancel the sale on the basis of an alleged fraudulent misrepresentation prior to the sale by the trust's representative, a Mr Prinsloo.The trust then applied to a court to compel Goldex to perform. Goldex in its answering affidavit set out the details of the misrepresentation. The court's finding was that Prinsloo had made the fraudulent misrepresentation and it dismissed the trust's application.Thereafter the trust applied to the court for leave to appeal, but was refused, and it subsequently applied to the Supreme Court of Appeal (SCA) for leave to appeal, but was again refused.Sometime later Goldex and a Mr Scheepers brought an action against the trust and Prinsloo in his personal capacity. It was for delictual damages suffered as a result of Prinsloo's fraudulent misrepresentation while representing the trust. In their particulars of claim Goldex and Scheepers alleged that Prinsloo had made the fraudulent misrepresentation. The trust and Prinsloo denied this allegation in their plea. Goldex and Scheepers replicated that, given the motion court's finding of fraudulent misrepresentation, the exceptio rei judicata estopped the trust and Prinsloo from denying the allegation. The court upheld Goldex and Scheepers' contention and the trust and Prinsloo appealed to the SCA. The question in the SCA was whether to endorse the high court's decision.Held, that the requirements of res judicata were that the cause of action, relief and parties be the same in the earlier and later proceedings. However, the requirements of same cause and same relief could be dispensed with where the same issue had been finally decided in the previous proceeding — the form of res judicata known as

issue estoppel. A plea of issue estoppel could only be permitted though if it would not cause unfairness in the later proceeding. Here, the relief claimed differed in the application and the action. Yet the issue decided in the application — whether Prinsloo had made a fraudulent misrepresentation — was the same as in the action, as were the parties (at least insofar as the trust was concerned). However, even though the requirements of issue estoppel were present, it would be unfair to uphold the plea and to bind the trust to the motion court's finding. This was because the motion court had failed to properly investigate the allegation of fraud before coming to the conclusion of its existence, and because the trust had had no opportunity to challenge the finding in an appeal. Accordingly the appeal was upheld and the plea of res judicata dismissed. ANTONIE v NOBLE LAND (PTY) LTD 2014 (5) SA 307 (GJ)  Cession — Cession of claim after litis contestatio — Not possible while order for security for costs against cedent still enforceable. An application had been launched by the trustee of an insolvent estate against the respondent, Noble, for payment of an amount plus interests and costs allegedly owing to the insolvent estate in terms of a settlement agreement between the insolvent estate, Noble, the insolvent and two other parties. Noble was then granted an order for the provision of security for costs by the trustee. The effect was to stay the proceedings until the order was complied with. Later the present applicant (Antonie) applied for an order that she be substituted as the applicant in the proceedings instituted by the trustee on the ground that she and the trustee had concluded a written agreement under which the trustee ceded to Antonie all entitlement to the main claim against Noble. This cession agreement had been concluded after litis contestatio in the main application. Noble opposed the substitution because of the potential prejudice it might suffer if the substitution were granted without an additional costs order, particularly in regard to the costs already incurred in the various legal proceedings instituted prior to the E present application.Held: Cession of a claim after litis contestatio terminated the proceedings instituted by the cedent, and the substitution of the cessionary as the new plaintiff or applicant, had to be regarded as the institution of new proceedings. In the present case this would result in a bad debtor in respect of costs (the insolvent estate) being substituted by a potentially more creditworthy debtor (Antonie, assuming she was not insolvent). The substitution would hence benefit rather than prejudice Noble with regard to any future costs order granted in its favour. This benefit did not, however, apply to the pre-substitution costs incurred by Noble. Whichever way the matter was looked at, the hands of the court were tied while the security for costs order was in force: the court could not issue an order that was irreconcilable with the order of security for costs. There would be no further adjudication of the application while the security for costs order was still valid and enforceable. No order made.   VAN ZYL v ENGELBRECHT NO 2014 (5) SA 312 (FB)  Company — Business rescue — Liquidation proceedings already initiated — Such suspended by business rescue application — Scope of suspensive provision — Action by liquidator for recovery of debts owed by director of company covered —

Costs incurred by liquidator after business rescue application to stand over pending its finalisation — Companies Act 71 of C 2008, s 131(6). The liquidator of a company sued a director for the company's debts. * The director raised a special plea of prescription and applied for separation of the trial issues and payment of associated costs. A few days later an application to place the company under business rescue was made. Then more papers were filed in respect of the separation application, which was ultimately settled by agreement. Who was liable for the attendant costs? Since liquidation proceedings are — in terms of s 131(6) of the Companies Act 71 of 2008 — suspended by an application for business rescue, the question was whether the liquidator's action against the director qualified as a step in the liquidation proceedings. The liquidator argued that he could not under s 131(6) be held liable for costs incurred after the business rescue application. The director argued that s 136(1) did not suspend proceedings, such as the liquidator's action against him, that were for the benefit of the company.Held: The liquidator's action was a claim for the recovery of a debt due to the company and therefore qualified as a step in the liquidation process that was hit by s 131(6). Suspension of the liquidation proceedings entailed the suspension of the office of the liquidator. The director's contention, that claims for the company were exempt from s 131(6) because they stood to benefit the company and, as such, served to resuscitate it, was without merit because the legislature would have said as much. Therefore steps taken by the liquidator after a business rescue application lacked legal consequence, although they could be ratified by him — or possibly the business rescue practitioner — at the end of the suspension period. In the light of the above the costs in the separation application had to stand over until the business rescue application was finalised.

SA CRIMINAL LAW REPORTS SEPTEMBER 2014

S v MACRAE AND ANOTHER 2014 (2) SACR 215 (SCA) Prosecuting authority — Prosecutor — Conduct of — It needed to be stressed that duty of prosecutors was not to secure conviction at all costs or to defend convictions once obtained but duty was to see that so far as possible justice was done. The two appellants are husband and wife who operated a game lodge and had a zoo licence which entitled them to keep wild animals. They were approached by two nature conservation officials to take custody of a baboon, which had earlier been seized by a police officer in terms of a search warrant, at the request of the officials. They agreed thereto. The nature conservation officials gave them a document headed 'Certificate of Handover' in respect of the baboon. The following day a more senior official in the Nature Conservation Department advised the two officials that they had acted incorrectly in handing over the baboon and ordered them to recover it. This was said to be in accordance with treasury instructions. They approached the appellants and requested them to hand over the baboon but the appellants refused. Approximately a week later two nature conservation officers, three armed police officials and a representative of a group that dealt with elephants descended on the lodge and demanded the return of the baboon. As a result of the ensuing confrontation when the appellants resisted handing over the baboon, they were

charged with three counts: obstructing/defeating the administration of justice by refusing to hand over the baboon, ordering the officials to leave the premises, and refusing to disclose the whereabouts of the baboon. The second count directed at the second appellant was one of attempted obstructing/defeating the administration of justice by refusing to hand over the baboon and grabbing the keys of the police vehicle and refusing to give them back. Thirdly, they were both charged with the theft of the baboon. The magistrate found them guilty on all three charges and imposed suspended sentences. An appeal to the high court failed and they appealed further with the leave of the Supreme Court of Appeal. The treasury instructions on which the nature conservation officials relied were at no stage ever produced at the trial or on appeal.Held, that, as all three charges depended on the failure to hand over the baboon, there had been an improper duplication of convictions. Held, further, that, even if the appellants were obliged to hand over the baboon, on the evidence their refusal had been entirely bona fide and based on their belief that subject to the outcome of the trial against the person in whose possession the baboon had been found, the baboon was theirs. That conclusion sufficed to exclude the possibility of their having acted with any criminal intent and justified their acquittal on all the charges. Held, further, that the appellants were not represented at the trial and the magistrate had not explained the purposes of cross-examination or drawn their attention to the need to put to witnesses where their version of events differed from that of the witnesses. Furthermore, the magistrate had prevented the appellants from advancing their defence properly by not allowing them to introduce documents that they required for their defence. The magistrate had also entered the arena by questioning the first appellant at length. These grounds were sufficient for the appeals to succeed. Held, further, that it was inexplicable that the concession by counsel for the state at the hearing of the appeal that the appellants had not had a fair trial was not made at the outset of the appeal or by the representative for the state in the high court. Instead, the office of the Director of Public Prosecutions had not only pursued the prosecution but had also defended the conviction in the high court and resisted further leave to appeal being granted. It needed to be stressed that the duty of prosecutors was not to secure a conviction at all costs or to defend convictions once obtained. Their duty was to see that so far as possible justice was done. The appeals were accordingly upheld. VAN VUUREN v MINISTER OF CORRECTIONAL SERVICES 2014 (2) SACR 227 (GP) Prisoner — Parole — Release on — Requirements for release — Decision of Minister of Correctional Services — Reviewability of — Conflicting reports of two psychiatrists on whether 20 years after prisoner's incarceration, he still suffered from antisocial personality disorder and that his prospects of rehabilitation were nil — Minister required joint report from two psychiatrists and order to this effect granted. The applicant applied for an order reviewing and setting aside the decision of the respondent refusing to release him on parole. He had been convicted and sentenced to death in November 1992 for murder and robbery with aggravating circumstances. Subsequent to the abolition of the death penalty, the applicant's sentences were

commuted to life imprisonment in September 2000 and antedated to November 1992. The question of when the applicant could be considered for parole was settled in 2010 when the Constitutional Court held that he could be considered for placement on parole in terms of the policy that applied in November 1992 when he was sentenced, namely 10 years after he was incarcerated. In April 2011 the respondent refused a request for parole. In April 2012 the Correctional Supervision and Parole Board recommended that the applicant had to serve more of his imprisonment and undergo further psychiatric intervention before being placed on parole. The respondent, having regard to this recommendation, decided not to place him on parole. In seeking the review of this decision, the applicant contended that the respondent had failed to comply with earlier court orders to the effect that a full psychiatric report be obtained dealing with the evidence of the psychiatrist who had testified at the trial. Counsel for the respondent contended that the respondent had applied her mind to the relevant aspects, inter alia, the nature and seriousness of the crimes; the remarks made by the trial court when sentencing the applicant; the diagnosis of the three psychiatrists who observed the applicant for a period of 30 days in the course of the trial; their conclusion that he had been suffering from antisocial personality disorder; the evidence of a psychiatrist who said that the applicant's crime prognosis was poor and that his prospects of rehabilitation were nil; and a further report from a psychiatrist who said that the applicant was a psychopath with antisocial personality disorder.Held, that the court had at its disposal two conflicting reports of psychiatrists who differed on the question whether, 20 years after the diagnosis of the applicant's antisocial personality disorder, he still had that condition, and because of the seriousness of the matter, a joint report on the applicant by the two doctors ought to be procured to enable the respondent to produce a well-informed decision. Held, further, that the decision of the respondent did not deserve to be reviewed and set aside and that it would be in the interests of justice to give the respondent an opportunity to properly deal with the matter. A well- motivated report had to be procured from the two psychiatrists. Machinery be set in motion to obtain such a joint report and that the respondent be ordered to consider the applicant for placement on parole within 30 days of the court's order.

S v KHOZA 2014 (2) SACR 236 (GJ) Appeal — Leave to appeal — From dismissal of petition to high court — Condonation for late filing of appeal — When granted — Incomplete and unsatisfactory explanation of reasons for delay — Application for condonation refused.Appeal — Special entry in terms of s 317 of Criminal Procedure Act 51 of 1977 — Procedure restricted to trials in high court and not applicable in lower courts. The appellant was convicted in 2007 of two counts of robbery with aggravating circumstances and escaping from custody and was sentenced in the same year to an effective 25 years' imprisonment. The regional magistrate who tried the appellant refused leave to appeal against the conviction and sentence. He then petitioned the Judge President of the then Transvaal Provincial Division for leave to appeal but this was refused by the present court in June 2009. In 2013 he launched the present proceedings in which he now sought leave to appeal to the Supreme Court of Appeal

against the dismissal of the petition for leave to appeal. He also applied for condonation for the late filing of the application and contended, in support of his application for condonation and by way of an explanation for the delay, that he had lost confidence in the legal representative who had assisted him during the trial and in the petition proceedings in the high court and that he lacked the funds to appoint a new representative. His friends and relatives had eventually managed to raise the necessary funds during December 2012 that had enabled him to instruct the attorneys of record. In addition the appellant applied for a special entry and for leave to appeal based on the special entry in terms of the provisions of s 317 of the Criminal Procedure Act 51 of 1977 in respect of alleged irregularities during the trial.Held, that the appellant had omitted to explain fully and satisfactorily what steps he had taken to prosecute the present application since the petition for leave to appeal had been dismissed by the court in June 2009. In addition there was a further unexplained delay from the time that the necessary funds were allegedly accumulated, to the time of the filing of the present application, namely on 18 September 2013. There was also no intimation regarding any steps he had taken to seek legal representation from institutions such as Legal Aid South Africa which did not charge fees. For these reasons the appellant had not made out a case for condonation to be granted. Held, further, as regards the special entry, that the clear and unambiguous wording of s 317 of the CPA made it plain that a special entry was only applied in criminal trials before a high court. The mere allegation of an irregularity in the regional court clearly did not present the appellant with any automatic entitlement to an appeal (without leave thereto from the lower court or by way of petition), or a review. No failure of justice had resulted from what he contended to be the irregularities. The application was accordingly dismissed.

S v TRICHART 2014 (2) SACR 245 (GJ) Sentence — Habitual criminal — Declaration as in terms of s 286 of Criminal Procedure Act 51 of 1977 — When declaration should be made — Only after all facts carefully scrutinised — Crimes must have been committed out of habit and of such nature society required protection from offender for at least seven years — Court still retained discretion not to declare habitual criminal — Long list of previous convictions did not automatically result in declaration — Necessary to give careful attention to nature of actual crime for which accused convicted.Sentence — Pre-sentence report — Importance of — Courts to take such reports seriously and give rational, albeit brief, reasons for rejecting recommendations contained therein — Probation officers, who were officers of court and who compiled these reports, performed valuable task, one that was of huge assistance to judicial officers. The appellant was convicted in a magistrates' court of the theft from a supermarket of a block of cheese to the value of R66. His list of previous convictions indicated that he had 13 previous convictions for crimes of dishonesty. The matter was then transferred to the regional court, by which stage the appellant was legally represented, and information was supplied to the court that he was 39 years old, had two dependants, and skilled as an upholsterer. The prosecutor requested that the appellant be declared a habitual criminal in terms of s 286 of the Criminal Procedure Act 51 of 1977. The matter was then postponed for a probation officer's report. When

the matter came before the court again, it was placed on record that the appellant was a drug addict and the probation officer held the view that sending the appellant to prison was not in the interests of either the appellant or society. She stated that sending him for treatment for his drug addiction served both his and society's interests. She was available at the hearing, approached the magistrate for direction but he referred her to the prosecutor and the representative of the appellant. They took the view that they had no questions for her and accordingly decided to excuse her from further participation in the hearing. The magistrate did not believe it necessary to intervene and did not query any aspect of her report or raise any questions with her. Both the state and the appellant agreed that the magistrate should accept the report and make his decision on the basis of its contents. The magistrate took note of the facts in the probation officer's report, namely that the appellant was unemployed at the time of the offence and eked out a living collecting scrap metal. He dismissed her recommendation that he should be sent for drug rehabilitation and made patronising remarks about her alleged inexperience and idealism. The magistrate's view was that the appellant's drug dependency could end simply by him curbing his desire for drugs.Held, that it was important for courts to take the reports of probation officers seriously and to give rational, even if only brief, reasons for rejecting the recommendations contained in those reports. The probation officers, who were officers of every court established under the Magistrates' Courts Act 32 of 1944 and who compiled these reports, performed a valuable task, one that was of huge assistance to judicial officers. The roles performed by the two enjoyed a symbiotic relationship. Judicial officers considered factors such as the interests of the convicted individual, the nature and gravity of the crimes and the interests of society. In considering the interests of the individual, the judicial officer receives invaluable information gathered by the probation officer and has the benefit of the probation officer's expertise regarding the psychosocial and other conditions and circumstances concerning the offender. Held, further, that for the magistrate to conclude that it was for the appellant to 'curb his behaviour', was to fail to give due recognition to the severity of the appellant's problem of drug dependency. The probation officer's opinion was that it was so severe that it could only be addressed by 'professional intervention'. Not only did the magistrate disregard the report and its recommendation but he drew a conclusion that was the complete antithesis of that of the probation officer. This was done without having any regard to the evidence upon which the probation officer drew her conclusion and without having any evidence to the contrary before him. The magistrate had accordingly committed a material irregularity by irrationally dismissing the report. Held, further, that the courts had emphasised that a declaration as a habitual criminal should only result after all the facts had been carefully scrutinised. The crimes had to have been committed out of habit and had to have been of such a nature that society required protection from the offender for a period of at least seven years. Even if these two requirements had been met, the court still retained a discretion not to declare the offender a habitual criminal where this would be inappropriate. Therefore a long list of previous convictions did not automatically result in the offender being declared an habitual criminal. It was also necessary to give careful attention to the nature of the actual crime for which the accused had been convicted. It had to be noted that such a declaration could lead to an unduly harsh punishment for a minor misdemeanour.

In the circumstances, the court set aside the declaration of the appellant as an habitual criminal and sentenced him to a period equivalent to the periodthat he had already served and ordered that he be detained at a rehabilitation centre for a period of three months for the treatment of his drug dependency, which period could be extended upon application to the court.

S v NDLANZI 2014 (2) SACR 256 (SCA)

Trial — Irregularity in — What constitutes — Appellant contending on appeal that his advocate had not carried out his instructions properly and had put incorrect version of defence to witnesses — If proved, it would have been case of serious misconduct by attorney and advocate — In absence of any supporting evidence and in circumstances of case where appellant had allowed strategy until end of state's case, must have consented to it — No irregularity having occurred.

Murder — Mens rea — Intention to kill — Dolus eventualis — Motor vehicle accident — Driver of taxi in central city peak hour traffic mounting pavement and colliding with pedestrian who died as result — Any right-minded person would have foreseen possibility of death of pedestrian and driver possessed the requisite subjective intent for murder — However, on evidence of case, driver had taken risk which he thought would not materialise and second element of dolus eventualis not established. The appellant was convicted in a regional court of murder in that, whilst driving a taxi in the city centre in peak hour traffic, he had collided with a newspaper stall on the pavement and knocked over the deceased who was walking on the pavement. The appellant's taxi then collided with a stop sign and reversed and while doing so, drove over the deceased who had fallen to the ground. At the trial the appellant pleaded not guilty and when the state attempted to introduce the appellant's warning statement, his counsel objected and a trial-within-a-trial was held. The court ruled that the statement had been freely and voluntarily made and his counsel then indicated that he wished to take that decision on review. The trial was postponed and when the case resumed the appellant had a new lawyer who told the court that the mandate of the previous legal team had been terminated as it had not conducted the trial in accordance with the appellant's instructions in that counsel had cross-examined witnesses in a manner suggesting that he denied being the driver of the vehicle in question. Despite counsel's suggestions to the magistrate that in the circumstances he should recuse himself, the magistrate declined to do so and continued with the trial. On appeal, counsel for the appellant contended that the appellant had not had a fair trial because of the manner in which his defence was conducted. Counsel also contested the magistrate's finding that the appellant had dolus eventualis in respect of the murder.

Held, that the appellant's allegations concerning the conduct of the trial, although unsupported by evidence, were very serious and warranted serious consideration as, if they were true, they might justify the conclusion that he had not had a fair trial. It was however significant that neither his erstwhile attorney nor advocate was given an opportunity to respond to the allegations and he himself could offer no explanation why he had permitted his counsel to pursue the incorrect strategy right until the end of the state's case. The appellant had had more than enough time

during the trial to raise an objection to the manner in which his trial was conducted, if he had any, and quite inexplicably he had failed to do that. Held, further, that the appellant's legal representatives would have been guilty of A very serious professional misconduct which could have led to disciplinary proceedings against them by their professional bodies and one could not on the mere say-so of the appellant and without more, conclude that both would have taken such a serious risk. Because of this it had to be concluded that the appellant had consented to the trial strategy, alternatively that he had acquiesced in it. There was no merit in that ground of appeal.  Held, further, as to the conviction for murder, any person with a modicum of intelligence would have appreciated that driving a motor vehicle onto the pavement in the prevailing circumstances of the case raised the possibility that a collision with a pedestrian would occur with fatal consequences. Any right-minded person would have foreseen the possibility of the death of a pedestrian and on the evidence there was no basis for concluding that the appellant did not possess the requisite subjective intent in accordance with this standard. Held, however, on the evidence, the appellant believed that he would be able to avoid colliding with pedestrians on the pavement by turning to the right back onto the road. Consequently it could not be inferred that it was immaterial to the appellant whether he collided with a pedestrian on the pavement. It could also reasonably be inferred that he may have thought that a collision with a pedestrian, which he had subjectively foreseen, would not actually occur. In other words, the appellant had taken a risk which he thought would not materialise. The second element of dolus eventualis was accordingly not established on the evidence. The appellant had not acted as a reasonable driver and his negligence had led to the death of the deceased. The conviction was accordingly altered to one of culpable homicide and the sentence was adjusted in accordance with the lesser conviction.

JONKER v MANAGER, GALI THEMBANI/JJ SERFONTEIN SCHOOL AND OTHERS 2014 (2) SACR 269 (ECG) Children — Child and youth care centre — Transfer of child in need of care — Consultation and ratification of such transfer required in terms of ss 171(1) and (4) of Children's Act 38 of 2005, respectively — Children's Act 38 of 2005, s 171(1) and (4). The applicant applied for an interdict to prevent the respondents from relocating children in need of care and protection from the first respondent to the newly built child and youth care centre at Bhisho. The applicant also sought an order that the respondents be ordered to ensure that the first respondent be kept open as a functioning, secure school for children in need of care and protection who had been placed there by order of the children's court. The first respondent was run as a youth care facility and retained two programmes accommodating both children in need of care as well as children in conflict with the law. These were separate programmes housed in residentially separate buildings. All the children in need of care at the first respondent had been placed there by order of the children's court.Held, that if a child had been placed in the care of a child and youth care centre following upon an order of the court in terms of the Children's Act 38 of 2005 or s 29 or ch 10 of the Child Justice Act 75 of 2008, then in terms of s 167(1)(b) of the Children's Act, such child was in 'alternative care'. In terms of s 171(1) the provincial

head of social development may, by order in writing, transfer a child in alternative care from the child and youth care centre in whose care that child has been placed to any other child and youth care centre. Held, further, that s 171(4) provided for a certain measure of consultation prior to such order being issued. Furthermore, s 171(6)(b) provided that no order in terms of ss (1) may be carried out without ratification by a children's court if the child were transferred from the care of a child and youth care centre to a 'secure or more restrictive child and youth care centre'. As it was common cause that no consultative process had been embarked upon and that the children's court, far from ratifying the transfer, was unaware thereof it was clear that the proposed relocation of the children in need of care to the Bhisho facility was unlawful. Held, further, as regards the order that sought to keep the first respondent open, that courts were ill-suited to adjudicate upon issues where court orders could have multiple social and economic consequences for the community. The Constitution contemplated a more restrained and focused role for the courts, namely, to require the state to take measures to meet its constitutional obligations and to subject the reasonableness of these measures to evaluation. This relief could accordingly not be granted. S v GOLIATH 2014 (2) SACR 290 (ECG)  Juvenile offenders — Sentence — Committal to child and youth care centre — Centre in question becoming dysfunctional after committal of accused — Court that sentenced accused functus officio and alternative sentence to be imposed after setting-aside of original sentence on review — Child Justice Act 75 of 2008, s 76(1). The juvenile accused in this matter was convicted in a regional court sitting as a child justice court as defined in the Child Justice Act 75 of 2008 (the Act), of two counts of rape and was sentenced in terms of s 76(1) of the Act to compulsory residence at the Bhisho Special Care Child and Youth Care Centre. After he had been detained there for a while, the resident magistrate became concerned at reports as to what was happening at the Bhisho facility and he paid an unannounced visit where he discovered that there was no proper supervision of the inmates and security officials were afraid of the children. The facility was, in short, totally dysfunctional. As a result of this, he launched an urgent application in the high court, Bhisho, calling on the officials and bodies responsible for the running of the facility to account for the whereabouts and safety of the children entrusted to the facility. Following upon this, the facility was closed down and the children that were detained there were transferred in the meantime to other facilities. The urgent application came before the court on a number of occasions and in terms of an implementation plan that was made an order of court by agreement between the various parties the courts that sentenced the individual accused were to consider the imposition of alternative sentences. In the case of the present accused the matter came before the original magistrate who was of the opinion that he was functus officio and accordingly submitted the matter on review. At the request of the court the deputy director of public prosecutions furnished an opinion in which it was suggested that the regional magistrate was incorrect in believing that he was functus officio as the matter could be disposed of by the regional magistrate in terms of s 76(4)(e) of the Act as it was clear from the founding affidavit in the urgent application that the Bhisho facility was

no longer providing the requisite programmes and was accordingly not a child and youth care centre as envisaged by the Act.Held, that it was not in dispute that the Bhisho facility was built at tremendous cost as a high security facility in terms of the applicable legislation in order to cater for children in conflict with the law and that it commenced functioning as such in terms of that legislation. The fact that it thereafter became dysfunctional, lamentable as that may be, could not alter the facility's statutory status as a child and youth care centre. Furthermore there was no evidence to the effect that at the time when the present accused was admitted to the facility it was already dysfunctional and that therefore he had never been admitted to such a centre. Held, further, that s 76(4)(d) was enacted in order to cater for the type of situation that arose when a child languished in a prison or other place of detention for longer than a month whilst awaiting transfer to a child and youth care centre. If it appeared in the course of the presiding officer's enquiry that the child had not been admitted to the centre within the preceding month then the presiding officer was enjoined, in terms of s 76(4)(e), to hold an enquiry and to take appropriate action, which could include the imposition of an alternative sentence. Other than in those circumstances, once a child sentenced to compulsory residence in a child and youth care centre had been admitted to such a centre, the court which sentenced that child became functus officio. Held, further, that the regional magistrate in the present matter was indeed functus officio and the sentence imposed had to be set aside and the case remitted to the regional magistrate for sentencing afresh.

S v MATHE 2014 (2) SACR 298 (KZD) Murder — Sentence — Provisions of s 51(2)(a) of Criminal Law Amendment Act 105 of 1997 applicable — Accused shooting his partner who had shortly before terminated their relationship — Number of mitigating circumstances present and accused of good character, asset to his community and candidate for rehabilitation — Substantial and compelling circumstances present justifying a lesser sentence than 15 years' imprisonment — Ten years' imprisonment imposed. The accused, a correctional services official, was found guilty on his written plea of guilty and statement in terms of s 112(2) of the CPA of attempting to murder a fellow employee and of murdering the woman with whom he was in an intimate relationship and who was the mother of his child. The evidence indicated that the accused had become emotional about the deceased's infidelity and her relationship with a colleague of his. When she disclosed over the telephone to the accused that she was leaving him he was highly upset and the following day he visited the deceased at the school where she taught and requested that she return with him to his home. She agreed and they travelled together in a taxi. During the journey he noticed that she was sending messages and he suspected that the messages were to her new lover. When he alighted from the taxi at his destination he noticed three of his colleagues emerging from nearby trees who pointed firearms at him and demanded that he hand over his service firearm. (His colleagues were aware of the tension between the two.) He refused to do so and when they tried to grab the firearm he retreated towards the taxi that was now moving off and shots were fired at him. He returned fire and jumped into the taxi. He had been shot in the foot and began to shoot several times at the deceased who was sitting at the back of the taxi. He

ordered the passengers to bend down so that they did not get hurt. Whilst shooting at the deceased, he shot the complainant on the attempted murder count. In considering sentence,Held, that, whilst it could be accepted that the accused was clearly emotional about the infidelity of the deceased and clearly found repugnant the thought that the deceased and his colleague might be free to pursue a love relationship, no diminished criminal responsibility had been established.  Held, further, that the fact that he had pleaded guilty was of little moment in the circumstances as he had been caught red-handed with a number of eyewitnesses present. It did, however, count for something that he did not unduly burden the state with the need to prove the charges. He had expressed remorse and attempted to make some recompense. To that had to be added the significant good character evidence and his personal circumstances. He had been a stable, productive member of the community and engaged in uplifting actions over a long period of time. He had supported family and community members and wished to support his child by the deceased. He was a candidate for rehabilitation. Held, further, that it was an aggravating factor that whilst he was able to control his actions he had treated a defenceless woman as a chattel who existed purely for his own benefit. He had not accorded to her dignity of choice concerning her life. Held, further, that the aggravating features of the crime of which the accused had E been convicted, the need for deterrence and retribution and the interests of society that women should be able to make free and unfettered choices without fearing reprisal, had to be weighed against the mitigating factors arising from the emotional disintegration and other personal circumstances of the accused. In addition, since he was a candidate for rehabilitation, it was in the interests of society that he be allowed to once more become a productive member of society after having served a sentence of imprisonment. If the court were to impose the minimum prescribed sentence of 15 years' imprisonment, an injustice would result; therefore there were substantial and compelling circumstances as envisaged by s 51(3) of the Criminal Law Amendment Act 105 of 1997. In the circumstances the accused was sentenced to three years' imprisonment in respect of the attempted murder count and to 10 years' imprisonment in respect of the murder count and the two sentences were ordered to run concurrently.

S v PISTORIUS 2014 (2) SACR 314 (SCA) Evidence — Assessment of — Differences between versions of state witnesses — Contradictions per se did not necessarily lead to rejection of witness's evidence — Essential that proper weight be given to them and bearing on other evidence — Discrepancy between evidence of doctor and complainant on events that had happened few years prior to doctor giving evidence — Cognisance to be taken of fact that doctors operate in busy conditions. The appellant was convicted in a regional magistrates' court of crimen injuria and assault with intent to do grievous bodily harm and was sentenced to a fine of R5000 or 12 months' imprisonment, half of which was suspended. An appeal to the high court was dismissed as was an application for leave to appeal. The present appeal, only against the conviction, was with the special leave of the court. The evidence at the trial was that the appellant came across the complainant on his farm the day after Christmas and asked what he was doing there. When the complainant replied

that he was a security officer employed by the construction company that was doing work on the farm but stated that he had no identification on him, the appellant swore at him using a racist epithet, assaulted him, and chased him off his farm. The complainant was a single witness but his evidence was confirmed to a certain extent by the medical doctor who examined him after the incident. Significantly, however, the doctor did not confirm that he had stitched up the complainant's wounds, as the complainant testified in his evidence. The appellant's evidence that he had not sworn at the complainant or assaulted him was confirmed by the evidence of two men who had been in his company at the time. On appeal the appellant's counsel attacked the finding of the magistrate who had accepted the complainant's evidence despite it having been contradicted by the medical evidence.Held, that the magistrate was alive to the important fact that the complainant was a single witness and that there was a contradiction between his evidence and that of the doctor but he held that it would be unfair to criticise the complainant on this as he had never been confronted with the doctor's report so that he could have had an opportunity to reply to or explain it. Furthermore, given the known fact that doctors were generally busy, it was possible he had seen many patients during the intervening years between the medical examination and his testimony and it was understandable that he might not have remembered the incident particularly in the absence of the J88 form which would have contained the photographs and could possibly have shed some light on the complainant's injuries. The fact that the doctor could not recall the open wounds did not necessarily mean that the complainant was lying. Held, further, that in any event it was trite that contradictions per se did not necessarily lead to the rejection of a witness's evidence. It was essential that proper weight be accorded to the number, nature, importance and their bearing on the other evidence. The inconsistency was not so serious as to detract from the veracity and reliability of the complainant's version. Held, further, that it was a time-honoured principle that once a trial court had A made credibility findings, an appeal court should be deferential and slow to interfere with those findings unless it was convinced on a conspectus of the evidence that the trial court was clearly wrong. Absent any positive finding that the magistrate was wrong, the court was not at liberty to interfere with his findings. Held, further, that it was true that the magistrate had not specifically pointed to any contradictions in the defence version but it was clear that in analysing and evaluating the evidence, he considered the inherent probabilities of the case and found it highly improbable that the complainant, after being confronted about his unwelcome presence on the farm and being ordered to leave, which he purportedly did peacefully and without an altercation or fight, would some few hours later lay a charge against the appellant. The appeal was accordingly dismissed.

SEPTEMBER 2014 ALL SA PART ONE

Director-General: Department of Home Affairs and others v Dekoba [2014] 3 All SA 529 (SCA)

Immigration law – Refugee seeking asylum – Refusal of asylum-seeker’s permit – Decision by Refugee Status Determination Officer in terms of section 24(3)(c) of

Refugees Act 130 of 1998 taken on appeal to Refugee Appeal Board – Dismissal of appeal based on failure of asylum-seeker to attend appeal hearing – Where appeal was never called, dismissal of appeal a nullity – Respondent retaining her status as refugee as well as her entitlement to a temporary asylum seeker permit.

The respondent was a Congolese female who came to South Africa as a refugee, seeking asylum. She was granted an asylum-seeker’s permit issued in terms ofsection 22 of the Refugees Act 130 of 1998. After her application for asylum was refused, she was arrested and treated as an illegal immigrant to be deported in terms of the Immigration Act 13 of 2002. She appealed against this decision to the Refugee Appeal Board (the “Board”) and in the meantime her permit was extended. She contended that she remained an asylum-seeker entitled to the restoration of her permit and the protection of the Refugees Act, whereas the first appellant maintained that she lost that status and become an illegal immigrant subject to deportation if representations made on her behalf in terms of the Immigration Act were unsuccessful.

Held – The dismissal of the respondent’s appeal was based on her failure to attend the hearing. However, the evidence established that the respondent had regularly attended the appropriate place to which she had been directed by immigration officials to have her permit renewed. The Court found it inconceivable, that on the date of her appeal, the respondent would have not pitched up for the hearing. It accepted instead, the respondent’s evidence that she and her husband had gone, on the date of the appeal, to the refugee reception office cited in the notice of appeal, and had then been directed by an official to go to the offices of the Department of Home Affairs. There they waited all day in a queue but, along with a number of others waiting there for the same purpose, the respondent was not called in for her appeal. At the end of the day, the waiting asylum-seekers were told that their appeals would be dealt with on a later date and in the meantime their permits were extended for three months and stamped to reflect this. At regular intervals of either three or six months thereafter she returned to the refugee reception office and her permit was further extended. Accepting that evidence, the Court held that the respondent had not received the appeal that she was entitled to. The dismissal of her appeal based on non-attendance was therefore void. The appeal being incomplete, the respondent remained an applicant for asylum, entitled to an asylum-seeker’s permit.

The Court ordered that the respondent’s existing permit be restored to her, and that such permit would remain valid while the appeal process was completed.

The judgment was concluded with a commentary on the unacceptable handling of the present matter by government officials.The appeal was dismissed.

Pangarker v Botha and another [2014] 3 All SA 538 (SCA)

Civil procedure – Failure by court to postpone hearing mero motu, and proceeding in absence of party – Whether amounting to gross irregularity – History of postponements and competing right of opposing party to have matter brought to finality justifying refusal of postponement.

Civil procedure – Review of divorce proceedings – Postponements – Where a postponement is sought, it is determined at the court’s discretion, and a party

seeking a postponement must demonstrate a full and satisfactory explanation of the circumstances underlying the indulgence.

The divorce proceedings between the respondents came before the appellant as acting magistrate. A divorce order was granted together with an order for the partial forfeiture of the benefits of the marriage. The first respondent launched an application in the High Court, to review and set aside the proceedings and the judgment. Granting the review of the divorce proceedings, the High Court ordered that the matter be referred back to the regional court for trial de novo before a regional magistrate other than the appellant. The appellant and the first respondent were ordered to pay the second respondent’s costs jointly and severally on the scale as between party and party. Furthermore, they had to bear their own costs in the review application. The present appeal was against that decision.

Held – The first issue for determination was whether the appellant had committed a gross irregularity by not postponing the trial mero motu and proceeding with the trial in the absence of the first respondent when she was aware that the attorney he wished to engage was not available on the days allocated for the hearing. The first respondent alleged that his rights to be heard and to be afforded a fair trial were violated. The second issue was whether, in the event that the latter constituted a gross irregularity, the appellant should be held liable for the costs of the review application in her personal capacity.

The High Court’s granting of the review application was based on its view that the appellant should have mero motu postponed the matter to enable the first respondent to obtain a legal representative of his own choice and that failure to do so resulted in him not getting a fair trial. On appeal, it was accordingly necessary to determine whether a failure to consider a postponement mero motu constituted a gross irregularity sufficient to ground a review application. Section 24 of the Supreme Court Act 59 of 1959 outlines the grounds upon which the proceedings of inferior courts may be brought under review before a provincial division. In terms thereof, the grounds of review of proceedings of inferior courts include an interest in the cause, bias, malice or the commission of an offence on the part of the presiding judicial officer, and gross irregularity in the proceedings. Rule 31(1) of the Magistrates’ Court Rules provides that the trial of an action or the hearing of an application or matter may be adjourned or postponed by consent of the parties or by the court, either on application or request or of its own motion. Where a postponement is sought, it is determined at the court’s discretion. A party seeking a postponement must demonstrate a full and satisfactory explanation of the circumstances’ grounding the indulgence.

The question of whether the appellant was obliged to postpone the trial mero motu after refusing the recusal application required the court to consider any prejudice suffered by the parties, the history of the proceedings, the first respondent’s numerous struggles with his legal representation and the circumstances and competing rights of the second respondent. The Court found that the appellant’s approach was appropriate in the circumstances. She was faced with a trial that had already been postponed three times to accommodate the first respondent, and the second respondent clearly wished to achieve finality. She considered what was fair to both parties, including the possibility of a postponement, and decided that the matter should proceed. The record showed that she deliberated

properly before reaching that decision. Her conduct could not be faulted. The judgment of the High Court in finding that the failure to postpone the trial constituted a gross irregularity was not supported by the facts. It failed to attach any weight to the competing right of the second respondent to have the dispute settled swiftly, and did not take into account the history of postponements in the matter. The first respondent’s right to legal representation had to be considered against that backdrop. He had ample time to secure himself a legal representative who was both well-apprised of the dispute and available to attend the court proceedings, but failed to do so.

Upholding the appeal, the Court replaced the High Court order with one dismissing the review application.

Solidarity and another v Public Health & Welfare Sectoral Bargaining Council and others [2014] 3 All SA 550 (SCA)

Labour law – Dismissal – Existence of – Deemed discharge from public service, in terms of section 17(5)(a)(ii) of the Public Service Act 103 of 1994 – Applicability to situation where employee assumes alternative employment during period of suspension – Employer failing to prove that employee had absented himself from his official duties as contemplated by section 17(5)(a)(ii), as during period of suspension, employee had no duties.

In July 2007, the second appellant (the “employee”) was placed on suspension by the third respondent (the “employer”), pending the finalisation of an investigation into allegations of misconduct levelled against him. Whilst under suspension, the employee, without having first obtained the permission of the employer, secured employment with another employer. As a result, the employer informed him that he was discharged from service in terms of section 17(5)(a)(ii) read in conjunction with section 30(b) of the Public Service Act 103 of 1994. The employee referred a dispute to the first respondent, and the matter proceeded to arbitration before the second respondent. The latter concluded that, provided the requirements are satisfied, the employment contract terminates by operation of law. As such termination was triggered by the occurrence of an event and was not based on an employer’s decision, there was no dismissal as contemplated by section 186 of the Labour Relations Act66 of 1995. The arbitrator, accordingly, concluded that the bargaining council lacked jurisdiction to hear the matter as a deemed dismissal does not constitute a dismissal for purposes of the Labour Relations Act.

The employee approached the Labour Court for the review of the arbitrator’s decision. That court confirmed the correctness of the arbitrator’s decision, as did the Labour Appeal Court. The further appeal against the judgment of the Labour Appeal Court was with the special leave of the present Court.

Held – The arbitrator’s conclusion flowed from his having found that the employee had not discharged the onus resting upon him of proving that he had been dismissed – it being found that his employment had been terminated by operation of law. The employee’s argument was that section 17(5)(a) of the Public Service Act did not find application inasmuch as the employer had failed to prove that the employee had absented himself from his official duties as contemplated by that section. The section only finds application to an employee who absents himself from his official duties

without permission. The Labour Appeal Court’s decision was based on the premise that the employee was absent from duty without permission when he accepted outside work. That was incorrect. The employee was indeed absent from duty. But, having been suspended, he was absent at his employer’s behest. Not having been assigned alternative duties, for the duration of his suspension he had no duties. The employee’s suspension relieved him of his obligation to render his services to the employer – his only obligation in return for his salary being to make himself available should his suspension be lifted.

The arbitrator’s conclusion and also the conclusions by the Labour Court and Labour Appeal Court that the council lacked jurisdiction could not be sustained. The appeal was upheld, and the arbitration award was reviewed and set aside. The matter was remitted to the first respondent for arbitration of the dispute.

Evaluations Enhanced Property Appraisals (Pty) Ltd v Buffalo City Metropolitan Municipality and others [2014] 3 All SA 560 (ECG)

Administrative law – Award of tender – Application for review – Failure by applicant to first exhaust its internal appeal remedy under section 62 of the Local Government: Municipal Systems Act 32 of 2000 as it was obliged to do by section 7(2)(b) of the Promotion of Administrative Justice Act 3 of 2000 – Review application not capable of being entertained, and court was required to dismiss application with costs rather than postpone matter to allow for exhausting of internal remedies.

In 2012, the first respondent (“the municipality”) invited tenders for the compilation and maintenance of the general valuation roll and asset register of all municipal properties. The applicant and second respondent each submitted tenders. The municipality awarded the contract to the second respondent. As unsuccessful tenderer, the applicant instituted review proceedings against the respondents. It also claimed certain ancillary relief such as the delivery of certain tender documents, the reasons for the award of the tender, and an interim interdict restraining the award of the tender and the conclusion of the contract.

In the court a quo, only a point in limine was argued, regarding whether or not the applicant was entitled to a review of the award where it had not exhausted its internal appeal remedy under section 62 of the Local Government: Municipal Systems Act 32 of 2000 (“the Systems Act”). The court directed the applicant to proceed with its appeal within 7 days, and postponed the review application pending the outcome of the appeal.

Appealing against that order, the respondents contended that the review application should have been dismissed with costs on the basis that on the common cause facts the applicant had not first exhausted its internal appeal remedy under section 62 of the Systems Act as it was obliged to do by section 7(2)(b) of the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”). The respondents argued that although section 7(2)(b) of PAJA obliges a court to direct the person concerned to first exhaust internal remedies before instituting review proceedings, the 21-day time period within which to institute the internal appeal procedure as provided for by section 62(1) of the Systems Act had long since lapsed and because section 62 does not make provision for the condonation of such time period, it was not possible for the applicant to comply with such directive.

The applicant cross-appealed against the costs order only, contending that the failure by the court a quo to make a costs order should be replaced by an order directing the respondent to pay its costs.

Held – The issues before the Court were whether the court a quo was correct in directing the applicant to first proceed with its internal appeal remedy; whether the courta quo was correct in postponing the review proceedings and not dismissing the application for want of compliance with section 7(2) of PAJA; and whether the court a quowas correct in making no costs order.

The applicable legislative provisions relevant to this case were sections 32 and 33 of the Constitution which deal with access to information and the right to fair administrative action respectively; sections 5 and 7 of PAJA which respectively deal with the duty to furnish reasons for administrative decisions and the procedure for judicial review; and section 62 of the Systems Act, which regulates internal appeals from administrative decisions taken by a municipality. The application of the facts of this case to the legislation referred to involved the interpretation of the various statutes and their provisions.

The applicant argued that its right of appeal under section 62(1) of the Systems Act never arose as section 62 requires “notification” of the decision, which notification, it was argued, would have to be in writing for it to constitute fair administrative action. It was argued further that because it is not possible to prepare the notice of appeal before being furnished with adequate and written reasons for the decision, section 62(1) by necessary implication also required the administrator to furnish written reasons for the decision to the affected person simultaneously with the delivery of the written “notification” of the decision. It was common cause that the municipality neither gave written notification of its decision to the applicant, nor did it give reasons for such award to the applicant. The Court disagreed with the applicant’s submissions. It began by confirming the principle that it is impermissible for a litigant to found a cause of action directly on the Constitution, where legislation has been enacted to give effect to the relevant constitutional rights. The right to fair administrative action must therefore be accessed through PAJA. Neither section 33 of the Constitution which creates the right to fair administrative action, nor the provisions of PAJA, prescribe by whom, when and in what manner the notification of the decision must be given to the person affected, or that when such notification is given, it must also be accompanied by reasons. Section 33(2) merely stipulates that the affected person has the right to be given written reasons for the decision. Although it was clear that the applicant had been notified of the decision, it never requested reasons from the municipality.

Section 7 of PAJA establishes the need to first exhaust internal remedies before a court is approached to review administrative action. The court a quo was, therefore, obliged to direct the applicant to first exhaust internal remedies. The court  a quo also misdirected itself in postponing the review proceedings, as it should have dismissed the review application with costs. The applicant was held liable for the costs of the proceedings in the court a quo, and the costs on appeal.

Gateway Properties (Pty) Ltd v Bright Idea Projects 249 CC and another[2014] 3 All SA 577 (KZP)

Civil procedure – Motion proceedings – Disputes of fact – Principles – A real, genuine and bona fide dispute of fact can exist only where the court is satisfied that the party who purports to raise the dispute has in his affidavit seriously and unambiguously addressed the fact said to be disputed.

Contract – Lease agreement – Suspensive condition – Court considered the main purpose for which the premises were being leased – First respondent was frustrated in its efforts to obtain the requisite licences and clearances to conduct business from the premises and it did not do so – Inasmuch as the agreement came into effect on its signing, the second respondent’s obligations were suspended until such time as the condition was fulfilled and as that did not happen, the agreement was null and void ab initio.

In August 2011, the parties in this matter entered into a lease agreement in terms of which the appellant let to the first respondent a portion of the premises consisting of a service station, forecourt and convenience store. The second respondent signed the agreement in his representative capacity and in his capacity as surety and co-principal debtor for the payment of all rentals and the performance of all obligations of the first respondent arising out of the said agreement.

The agreement was subject to the fulfilment of a suspensive condition requiring the respondent to obtain the necessary site and retail licences. The first respondent obtained the site licences, but was prevented from starting business due to the refusal of consent by the Fire Department due to inadequate safety installations on the property. During that time, the first respondent did not pay rental, leading to a demand by the appellant for arrear payments.

An application was made to the High Court for the eviction of the respondents from the premises, and for payment of arrear rental. The respondents raised two primary defences. The first was that the first respondent was never given delivery and vacant occupation of the premises from inception of the agreement in that the keys to the premises were never handed to it by the applicant. The second was that the agreement was subject to the suspensive condition referred to above, and that despite being issued with the site and retail licences, the first respondent was unable to commence its business operations on the premises due to the fact that the premises were found by the Fire Department to be unsuitable for the selling of petroleum fuel. The present appeal was against the dismissal of the application.

Held – Having regard to the fact that the agreement under consideration was one for letting and hiring, according to the common law the use to which the leased premises is to be put was of real and substantial importance. Considering the main purpose for which the premises were being leased, the provisions of the suspensive clause had to be interpreted to mean that if for whatever reason the first respondent was unable to obtain the requisite licences and clearances from the relevant authorities from inception, the agreement would be null and void ab initio. As referred to above, the first respondent was frustrated in its efforts to obtain the requisite licences and clearances to conduct business from the premises and it did not do so. Essentially it did not receive any usage whatsoever. Thus, inasmuch as the agreement came into effect on its signing, the second respondent’s obligations were suspended until such time as the condition was fulfilled. That did not happen, which rendered the agreement null and void ab initio.

The first respondent strongly disputed that it was given possession and occupation of the premises from inception of the agreement. Anticipating the possibility of a dispute of fact existing, the Court set out the principles that generally guide a court when faced with genuine disputes of fact in motion proceedings. However, it found no genuine dispute of fact to exist, as on the applicant’s own version, the keys to the premises were never handed to the first respondent.

The appeal was dismissed with costs.

Navigator Property Investments (Pty) Ltd v Silver Lakes Crossing Shopping Centre (Pty) Ltd and others [2014] 3 All SA 591 (WCC)

Company law – Application for winding up of company – Unbreakable deadlock amongst company directors – Companies Act 71 of 2008 – Section 81(1)(d)(i) – Section specifically lists unbreakable deadlock in the management of the company, and shareholders as a ground for winding up of a solvent company – Provision in shareholders’ agreement that deadlock shall not constitute a ground for winding up regarded as pro non scripto as it was in conflict with the provisions of the Act.

Company law – Dispute involving company – Jurisdiction – Companies Act 71 of 2008 – Section 23(3)(b) – Section provides that if a company has more than one office, it must register its principal office.

Company law – Winding-up application – Unbreakable deadlock amongst company directors – Whether deadlock between the directors of company was of such a nature that it prejudiced the company, and whether it was just and equitable that a winding-up order be granted – As a conclusion of law, justice, and equity, court was satisfied that it was just and equitable that the company fell to be wound up in terms of section 81(1)(d)(iii) of the Companies Act 71 of 2008.

The applicant sought the winding up of the first respondent on the ground that the directors were deadlocked in the management of the company, and the shareholders were unable to break the deadlock with the result that the company’s business could not be conducted in the interest of creditors. Alternatively, the applicant sought an order placing the first respondent under business rescue proceedings. Accordingly, the applicant contended that it was just and equitable that the first respondent be wound up. The applicant owned 50% of the issued share capital in the first respondent. The latter was a joint venture between the applicant and a trust.

The third to seventh respondents raised three points in limine. The first amounted to a challenge to the present Court’s jurisdiction to adjudicate this matter as the first respondent’s principal place of business was in Gauteng. Secondly, the respondents averred that the deadlock existing between the directors of the company was not a ground for winding up in terms of section 81(1)(d) of the Companies Act 71 of 2008. The shareholders’ agreement, on which reliance was placed in support of the second objection, provided that any deadlock shall not constitute a ground for the winding-up of the company. The third point was that the alternative relief sought by the applicant, namely, that the first respondent be placed under business rescue was inappropriate as the first respondent was not in financial distress. The main reason advanced by the respondents for opposing this application was that the winding up

of the first respondent on the basis of deadlock on the part of the directors was unjustified. According to the respondents, notwithstanding the deadlock between the directors, the first respondent functioned normally and profitably on a day-to-day basis.

Held – The Court deemed it appropriate to first address the objection relating to its jurisdiction, as, if the point was well-taken, it would be dispositive of the application. The main thrust of the contention was that in terms of section 23(3) of the Companies Act, a company must continuously maintain one office in South Africa and must register the address of its offices or its principal office if it has more than one office. The first respondent’s principal place of business was in Gauteng. While the Act requires that the registered office must be the company’s only office, it was clear that the registered office was not the company’s only office. Section 23(3)(b) provides that if a company has more than one office, it must register its principal office. It, therefore, had to be determined on the papers where the principal office of the respondent was. The facts showed that the first respondent had registered the incorrect office as its principal office. The respondents had to bear the consequences thereof, and the jurisdictional point had to fail.

The second point in limine raised by the respondents was premised on the fact that clause 13 of the shareholder’s agreement concluded between the trust and the applicant specifically provided that deadlock shall not constitute a ground for winding up. However, section 81(1)(d)(i) of the Act specifically lists unbreakable deadlock in the management of the company, and shareholders as a ground for winding up of a solvent company. The applicant contended that the provisions of the shareholder’s agreement, to the extent that they were in conflict with the provisions of the Act, had to be regarded as pro non scripto. Parties are free to contract as they choose, subject to limits which may be imposed by common and statutory law. The Court held that the Legislature could not have intended the parties to contract contrary to a statutory provision. The clause was declared pro non scripto. The second objection thus also failed.

The remaining preliminary points were considered with the merits.

The question for determination was whether the deadlock between the directors of the first respondent was of such a nature that it prejudiced the company, and whether it was just and equitable that a winding-up order be granted. The winding-up application was brought in terms of section 81(1)(d)(iii) of the Act. Section 81(1)(d)(iii) postulates a broad conclusion of law, justice and equity as a ground for winding-up.

The Court emphasised the importance and need for properly constituted board meetings to address the business of the company. The effect of the third and sixth respondents’ refusal to attend board meetings had impacted negatively on the business of the first respondent.

As a conclusion of law, justice, and equity, the Court was satisfied that it was just and equitable that the first respondent fell to be wound up in terms of section 81(1)(d)(iii) of the Act. Ngobeni v Unknown Occupier and others [2014] 3 All SA 612 (WCC)

Property – Ownership and possession of property – Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 – Section 4 – Court must

serve written and effective notice of the proceedings on the unlawful occupier and the municipality having jurisdiction – Argument that provisions of section 4 are peremptory – Court emphasised that despite the fact that the relevant section has been held to be peremptory, not every deviation from the strict form renders the process of court void.

Property – Rei vindicatio – Ownership and possession of property – Onus of proof – An owner, in claiming restoration of possession to the property, need only allege and prove that he is the owner and that the defendant is holding the res, and the defendant then bears the onus of alleging and establishing any right to continue to hold against the owner.

The applicant owned property which he considered his residence. When he had to move to another province for work, he entered into an oral agreement with a certain person, for the latter to live in and take care of the property. After the applicant’s retrenchment some years later, he returned to the property, and found the respondents residing there. The person who had the applicant’s consent to live there had died, and the respondents had come to live on the property while attending the deceased’s funeral. According to the applicant, the respondents had no right in law to occupy the property, but when asked to leave, they allegedly became aggressive. The present application was for the ejectment of the respondents.

The respondents admitted that the applicant was the owner of the property. They alleged that they were the daughter and son-in-law of the deceased who had been living on the property. According to the respondents, the deceased had contracted orally with the applicant, advancing the applicant R6 000 to purchase the property, on the understanding that the applicant would later transfer the property to the deceased. The applicant had in fact handed over the title deeds to the deceased, and such title deeds were currently in the daughter’s possession. The respondents alleged further, that they had renovated the property to the extent that it was currently valued at R180 000.

In response to the respondents’ allegations, the applicant denied that he had entered into an agreement to transfer the property to the deceased, and stated that he had left some of his personal documents on the property, which was how the respondents had obtained possession of the title deeds.

Held – At common law, possession of a property rightfully lies with the owner thereof, and no third party may withhold it from the owner unless he has vested in some right enforceable against the owner. The owner, in claiming restoration of possession to the property, need only allege and prove that he is the owner and that the defendant is holding the res. The defendant then bears the onus of alleging and establishing any right to continue to hold against the owner.

The respondents contended that the applicant was required, but failed, to comply with the procedure set out in the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998. Arguing that the provisions of section 4 of the Act are peremptory, the respondents argued that the applicant was required to obtain leave from the court to serve a notice in terms of section 4(3) on the respondents. The Court held that it was common cause that a notice in terms of section 4(2) had been issued by the court. However, the respondents submitted that the service of the notice was defective as it was not served by the Sheriff as

required in rule 4. However, the Court found the respondents’ submissions to be misplaced, as the notice contemplated was not the same as the processes referred to in rule 4. What the Court emphasised as significant was the fact that the respondents did receive the section 4(2) notice. Despite the fact that the relevant section has been held to be peremptory, not every deviation from the strict form renders the process of court void.

Reverting to the issue of onus referred to above, the Court confirmed that the respondent needed to merely assert his ownership, for the onus of proof to shift to the respondents in respect of the lawfulness of their occupation of the property. The version advanced by the respondents amounted to hearsay, with no corroboration. As far as their reliance on an enrichment lien was concerned, to succeed with the right of retention they had to show that they had an enrichment action as against the applicant. They had to prove the right of retention which they alleged. Their evidence was regarded as scant in that regard. They needed to have made the necessary allegations regarding the extent to which they had been impoverished and the applicant had been enriched. Ultimately, the respondents established no basis for any right to occupy the property. The eviction order was thus granted.

Pickard v Stein and others [2014] 3 All SA 631 (GJ)

Property – Servitudes – A servitude may be cancelled by abandonment – Abandonment or waiver may be inferred as having tacitly come about through the conduct of the parties – Where owner of dominant tenement allowed wall to be built in breach of the servitudinal restrictions, the servitude was regarded as having been abandoned.

Property – Servitudes – Praedial servitude – Requirement of utility – A praedial servitude is not validly created unless it provides a distinct benefit or advantage to the dominant tenement – If the utility that a praedial servitude previously provided to the dominant tenement has permanently ceased, the servitude itself will become extinguished.

The applicant (“Pickard”) and first respondent (“Stein”) were neighbours. Against the title deed of each of their properties was registered a praedial servitude of light in favour of Stein’s property. In terms of the servitude, the owner of Pickard’s property was precluded from erecting any structures or planting any vegetation exceeding 0.91 metres in height, or erecting any fence on the servitude area other than a diamond mesh wire fence not exceeding 1,22 metres in height. The servitude area consisted of a strip of land, 17,32m long and 6,3m wide, along part of their common boundary. Notwithstanding the servitude of light in favour of her property, Stein and her predecessors in title grew trees and shrubs (or allowed them to grow) along and just inside the boundary of her property over the years, the height of which was estimated to be somewhere between 5,5 and 10 metres.

Pickard sub-divided his property, creating a new erf which then shared the boundary with Stein’s property. The new property was sold to the second respondent (“Beira”). At the time of the sale, Pickard omitted to mention the existence of the servitude to Beira, mentioning it for the first time when Beira was laying the foundations for the house he intended building on the property. As a result of his oversight, Pickard agreed to pay any costs occasioned in procuring the cancellation

of the servitude. Negotiations commenced with Stein, in that regard. However, Stein ultimately refused to cancel the servitude.

The present application concerned whether the praedial servitude of light had been abandoned or had fallen away because it no longer had any utility. Pickard argued that on the common cause facts, Stein abandoned the servitude unilaterally by allowing the trees and shrubs to grow along the boundary and by not objecting to the building of a wall along the boundary; alternatively, in requesting the erection of a wall on the boundary, Stein consensually or unilaterally abandoned the servitude; alternatively, under the conditions that nowadays prevail in urban areas in Johannesburg, the utility of the servitude of light had fallen away on account of the modern demand for security and privacy, and for that reason the servitude itself had fallen away.

Held – The requirement of utility, ie that a praedial servitude is not validly created unless it provides a distinct benefit or advantage to the dominant tenement, is well-established. Less clear is whether the corollary of that principle also forms part of our law, ie that if the benefit or advantage which a servitude previously provided to the dominant tenement falls away, the servitude goes with it. The Court examined the authorities, and the scant case law available, and concluded that if the utility that a praedial servitude previously provided to the dominant tenement has permanently ceased, the servitude itself will become extinguished. It then had to be determined whether the utility of the servitude of light in this case had permanently ceased. Such a finding was not justified on the evidence.

A servitude may also be cancelled by abandonment – either express or tacit. It will be tacit where it is inferred from the conduct of the dominant and servient property owners. The Court emphasised the requirement that waiver operated bilaterally. Considering whether Pickard had satisfied the onus of proving that Stein had abandoned the servitude registered in favour of her property, the Court held that the requirement that waiver operates bilaterally excluded the notion of a unilateral abandonment or waiver of the servitude as contended for on behalf of Pickard. However, abandonment or waiver could still be inferred as having tacitly come about through the conduct of the parties. The main conduct relied upon was Stein’s allowing of vegetation on the boundary to grow to a height which exceeded the servitude restriction, and the construction of a boundary wall in excess of the permissible height. The Court was not persuaded that by allowing the trees and shrubs to grow, Stein had abandoned the servitude. However, in giving Pickard and Beira the right to build the wall, Stein abandoned her servitudinal rights.

Although the applicant sought relief in the form of a rule nisi, the Court deemed it more appropriate to grant final relief in the matter. It was declared that the servitude of light had been abandoned by the first respondent, as owner of the dominant tenement, and the registration of the said servitude in the deeds of transfer was cancelled.

SEPTEMBER 2014 ALL SA PART TWO

Africast (Pty) Ltd v Pangbourne Properties Ltd [2014] 3 All SA 653 (SCA) This is the appeal from the South Gauteng High Court, Johannesburg, against the finding of

Sutherland J (sitting as a court of first instance) in the case of Africast (Pty) Ltd v Pangbourne Properties Ltd reported at [2013] 2 All SA 574 (GSJ) – Ed.

Contract – Authority of signatories – Ex post ratification – Consequences – Upon ratification of an act, the obligation incurred by the act is dated at the time of the conclusion of the act not at the time of the ratification.

Contract – Suspensive condition – Effect of – A contract containing a suspensive condition is enforceable immediately upon its conclusion but some of the obligations are postponed pending fulfilment of the suspensive condition – If the condition is fulfilled the contract is deemed to have existed ex tunc and if the condition is not fulfilled, then no contract came into existence.

The respondent’s business involved the acquisition and letting of commercial property. The appellant was a company within a group, and was involved in property investment and development. After negotiating about the development of commercial property, the parties’ representatives agreed on the terms of a contract for the building of commercial premises by the appellant, and for the letting of those premises to tenants and for the cession of the rights under the leases to the respondent. The respondent needed to pay the purchase price for the improved properties to the appellant only on transfer of the properties and cession of the leases. The agreement, signed on 11 April 2007, was subject to a suspensive condition that the respondent give written notice of the approval by its board of directors, within seven working days of the conclusion of the contract. On 20 April 2007, the respondent’s board of directors signed a written resolution approving the agreement. Although that was verbally communicated to the appellant, written approval was only furnished on 25 April 2007, after the stipulated seven-day period. The question on appeal was whether the contract lapsed because of the non-fulfilment of the suspensive condition. Some 18 months after the signing of the agreement, the respondent decided that the condition had not been fulfilled within the stipulated period, and that it was, accordingly, not bound by the contract. By then, the buildings had been constructed by the appellant.

Regarding the respondent’s decision as a repudiation of the contract, the appellant cancelled and sued for damages for breach of contract. The High Court held that the condition had not been fulfilled timeously; that the respondent was not bound by the contract and that the appellant was, accordingly, not entitled to damages. The appellant appealed against that decision.

Held – A contract containing a suspensive condition is enforceable immediately upon its conclusion but some of the obligations are postponed pending fulfilment of the suspensive condition. If the condition is fulfilled, the contract is deemed to have existed ex tunc. If the condition is not fulfilled, then no contract came into existence.

Although the appellant’s case raised a dispute as to whether the signatories were authorised to sign the agreement, the Court found that the signatories did have the relevant authority. Upon signature of the agreement an inchoate agreement came into being, pending the fulfilment of the suspensive condition. The agreement was thus concluded upon signature on 11 April 2007. The terms of the suspensive condition were not met, with the result that the contractual relationship between the parties lapsed due to non-fulfilment of the suspensive condition.

Regarding the appellant’s suggestion that the lack of authority on the part of the signatories was ratified on 20 April 2007, the Court stated the following: if the decision taken by the respondent’s board on 20 April 2007 constituted ex post ratification of what the signatories had done, then the contract would have been enforceable from the time of signature on 11 April 2007. Upon ratification of an act, the obligation incurred by the act is dated at the time of the conclusion of the act not at the time of the ratification. The appeal was dismissed by the majority of the court.

In the minority judgment, it was held that the critical question was when the contract became binding, subject to the suspensive condition. The judge held that since neither party was bound until there had been approval by the respondent’s board, it would be stretching the ordinary meaning of the words used to find that all that was intended was that negotiations were concluded, although the contract would not be binding. Therefore, in the minority view, the High Court erred in its interpretation of the provision in question. It was stated that the contract was concluded only when the respondent’s board approved it on 20 April 2007, and on 25 April, when written notification of the approval was given to the appellant, it ceased to be conditional. The minority judge would have upheld the appeal.

Fintech (Pty) Ltd v Awake Solutions (Pty) Ltd and others [2014] 3 All SA 664 (SCA)Company law – Winding up of company – Deregistration of company whilst under liquidation – Validity of – Deregistration incompetent as the effect of a winding-up order is to establish a concursus creditorum, and the company therefore remains in existence, albeit in liquidation, until its affairs have been completely wound up.

The first respondent (“Awake Solutions”) had concluded a co-operation agreement with the fourth respondent (“Altron”) in 2002. In February 2004, the appellant (“Fintech”), in terms of a sale and assignment agreement it concluded with Altron, acquired and assumed Altron’s rights and obligations under the co-operation agreement. In April 2008, Awake Solutions was placed under provisional liquidation, and the fifth and sixth respondents were duly appointed as joint provisional liquidators. Upon becoming aware of the provisional liquidation of Awake Solutions, Fintech terminated the co-operation agreement. The provisional liquidation order was set aside on 26 October 2010 on application by the second respondent, and Awake Solutions was consequently discharged from liquidation as from that date.

In March 2011, Awake Solutions instituted action against Fintech and Altron for payment of sums of money and disclosure of certain information relating to the co-operation agreement. The amount initially claimed was paid in terms of a settlement agreement, but when Awake Solutions filed a notice to amend so as to claim a further amount, Fintech opposed the matter. However, judgment was granted in favour of Awake Solutions. Fintech then discovered that Awake Solutions was finally deregistered on 16 July 2010, and contended in the court below that the court orders obtained by Awake Solutions were a nullity and of no force and effect as the company was deregistered at the time with the result that it had no legal status when the orders were granted. The present appeal was against the dismissal of Fintech’s application.

Held – The effect of deregistration is that it puts an end to the existence of the company. In the present case, Awake Solutions was finally deregistered on 16 July

2010, more than two years after a final winding-up order was made against it. The effect of a winding-up order is to establish a concursus creditorum, and the company therefore remains in existence, albeit in liquidation, until its affairs have been completely wound up. The final deregistration of Awake Solutions on 16 July 2010 was incompetent. The continued existence of Awake Solutions, in liquidation, resulting as it did from an order of court, could not be trumped by the deregistration, which was an administrative act. To that extent, the deregistration of Awake Solutions was unlawful and invalid and susceptible to being set aside on review. But the deregistration no longer existed because the process of deregistration had been cancelled and Awake Solutions’ name had been restored to the companies register. There was thus no administrative act of deregistration that could be set aside. The Court concluded that at the time relevant to this case, Awake Solutions was vested with corporate status and could receive the payments made to it through its nominees.

The appeal was dismissed with costs.

Vhembe District Municipality v Stewarts & Lloyds Trading (Booysens) (Pty) Ltd and another [2014] 3 All SA 675 (SCA)

Administrative law – Actions against organs of State – Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002 – Section 3(1) – Section provides that no legal proceedings for the recovery of a debt may be instituted against an organ of State without written notice being given and the organ of State in question consenting in writing to the institution of such legal proceedings – Where claim was not a debt as envisaged in the Act, no notice was required.

Civil procedure – Action against municipality – Service of summons – Local Government: Municipal Systems Act 32 of 2000 – Section 115(3) – Section provides that any legal process is effectively and sufficiently served on a municipality when it is delivered to the municipal manager or a person in attendance at the municipal manager’s office.

Civil procedure – Default judgment – Rescission application – Uniform Rules of Court – Rule 31(2)(b) provides that a defendant may within 20 days after he has knowledge of a judgment, apply to court upon notice to the plaintiff to set aside such judgment and the court may, upon good cause shown, set aside the default judgment as it deems fit – Applicant failing to give reasonable explanation for default and show existence of bona fide defence.

The first respondent had instituted action against the appellant municipality for payment. The appellant failed to enter an appearance to defend, and the first respondent obtained judgment by default. It then obtained a writ of execution which the second respondent (“the Sheriff”) served on the legal advisor of the municipality at the same address as he had served the summons. When the appellant failed to satisfy the writ, the Sheriff proceeded to place certain of the appellant’s movable assets under attachment. That prompted the appellant to apply to the High Court for the rescission of the default judgment. The dismissal of the application led to the present appeal.

The municipal manager contended that there had not been proper service of the summons on the appellant in terms of the Uniform Rules of Court as the summons had not been brought to his attention; that there was non-compliance with the provisions of section 115(3) of the Local Government: Municipal Systems Act 32 of 2000; and that the appellant had a bona fide defence to the first respondent’s claim.

Held – Rule 31(2)(b) provides that a defendant may within 20 days after he has knowledge of a judgment, apply to court upon notice to the plaintiff to set aside such judgment and the court may, upon good cause shown, set aside the default judgment as it deems fit. Therefore, an applicant must show good cause in order to succeed. It may do that by giving a reasonable explanation for default; by showing that the application is made bona fide; and by showing a bona fide defence to the plaintiff's claim which prima facie has some prospect of success.

As the first two arguments raised by the appellant covered common ground, the Court considered them together. The contentions had to be assessed against the municipal manager’s admission that the summons reflected the appellant’s official stamp of receipt, and that the summons was served at the same address where the writ was subsequently served, which was referred to as the appellant’s “proper address”. The municipal manager merely alleged that the person on whom the summons was allegedly served was not listed as one of the employees of the appellant. The first respondent’s challenge that it was unlikely that an impostor would be occupying a desk at the appellant’s principal place of business and receiving legal documents on behalf of the appellant met with no response. The Court noted the appellant’s failure to disclose the identity of the person who was authorised to accept service of legal process on behalf of the appellant or who was entrusted with the official receipt date stamp of the appellant, as well as any information regarding systems it had in place to ensure that important correspondence, in particular court processes, were brought to the attention of the appropriate person within the establishment of the appellant. Section 115(3) of the Local Government: Municipal Systems Act provides that any legal process is effectively and sufficiently served on a municipality when it is delivered to the municipal manager or a person in attendance at the municipal manager’s office. The Court consequently confirmed the High Court’s conclusion that there had been proper service on the appellant.

The Court then considered the appellant’s contention that the first respondent should have been non-suited on account of its alleged failure to comply with the provisions of the Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002. Section 3(1) of that Act provides that no legal proceedings for the recovery of a debt may be instituted against an organ of State without written notice being given and the organ of State in question consenting in writing to the institution of such legal proceedings. The High Court found that the first respondent’s claim was not a debt as envisaged in the Act, and that it was, accordingly, not required to give notice as required by section 3 of the Act.

The appellant’s final contention was that it had a bona fide defence to the first respondent’s claim. The Court agreed with the High Court that the appellant’s response to the allegations in the particulars of claim lacked candour and amounted to nothing more than a bare denial that the amount claimed was owing. The unsubstantiated averments in the municipal manager’s affidavit were wholly inadequate to support the appellant’s assertion that it had a bona fide defence to the first respondent’s claim. The appeal was dismissed with costs.

Grainco (Pty) Ltd v Van der Merwe and others [2014] 3 All SA 683 (WCC)

Business – Sale of business – Implied prohibition against diminishing goodwill – Court found that because the express restraint in casu was wider than the implied prohibition and thus not inconsistent with it, the implied prohibition was not excluded – Benefit of the implied prohibition passed to the applicant upon the sale of the business to the latter –Implied prohibition only bound the seller of the goodwill, and the first and second respondents were not bound by the implied prohibition.

The first and second respondents established an agricultural trading and logistics business in May 2000 through a company referred to in the papers as Old GrainCo. In February 2007, Old GrainCo sold its business and all its assets to a third party, which immediately on-sold the business and assets to the applicant. The first and second respondents were both appointed as directors of the applicant. They signed a restraint of trade agreement with Old GrainCo, undertaking not to engage in certain conduct. The restraint formed part of their contracts of employment with the applicant. The applicant came under increasing financial strain in 2012, and the possibility of retrenchments loomed. There was a dispute between the parties as to who initiated the first respondent’s termination of employment, but he began his own venture. Several other employees (including the second respondent) then also resigned and joined the first respondent’s new trading venture (the third respondent).

In the present application, the applicant sought to restrain the respondents from soliciting its customers, passing off the third respondent as being associated with the applicant, unlawfully interfering in the applicant’s contractual relations and publishing injurious falsehoods. As the restraints had lapsed, the applicant did not place reliance on those agreements.

Held – The applicant argued that the seller of a business inclusive of its goodwill is subject to an implied prohibition not to diminish the goodwill by canvassing the customers of the sold business and that in the present case the operation of the implied prohibition was not excluded by the restraints, and continued in force despite the fact that the restraints had expired. The Court held that it would ordinarily have found that the express restraint agreement excluded the operation of the implied prohibition relied upon by the applicant. However, the Court was bound by case law to the contrary, which it suggested should be reconsidered. The Court was therefore compelled to find that, because the express restraint in the present case was wider than the implied prohibition and thus not inconsistent with it, the implied prohibition was not excluded. The benefit of the implied prohibition passed to the applicant upon the sale of the business to the latter. However, the implied prohibition only bound the seller of the goodwill, namely Old GrainCo. The first and second respondents were not bound by the implied prohibition. They were permissibly subjected to an express restraint but that restraint expired in June 2012. But for the latter finding, the Court would have granted an interdict but in more limited form than claimed. As the matter stood, the relief sought by the applicant could not be granted. The application was dismissed with costs.

Thembani Wholesalers (Pty) Ltd v September and another [2014] 3 All SA 722 (ECG)

Civil procedure – High Court divisions – Jurisdiction – Eastern Cape High Court, Grahamstown – Extent of – Superior Courts Act 10 of 2013 – Legislative intent – Local seats of a division enjoying concurrent jurisdiction with main seat of the division.

Civil procedure – Summary judgment – A defendant, in resisting an application for summary judgment, must disclose the defences relied upon on affidavit – Defences raised from bar not capable of being upheld.

In an opposed application for summary judgment, the defence raised was one of jurisdiction. The principal place of business of both parties to the lis was specified in the particulars of claim as an area over which the Eastern Cape High Court, Mthatha, exercised jurisdiction. However, the present Court was specially constituted pursuant to the provisions of section 14(1)(a) of the Superior Courts Act 10 of 2013 (“the Act”), to primarily determine whether the Eastern Cape High Court, Grahamstown, had the requisite jurisdiction to adjudicate upon the application.

Held – Section 6 of the Act established the nine divisions of the High Court and identified the main seat of each division. Section 21 provides that a division has jurisdiction over all persons residing or being in, and in relation to all causes arising and all offences triable within, its area of jurisdiction and all other matters of which it may according to law take cognisance. The provision has given rise to conflicting statutory interpretations. It was submitted for the defendants that the words “a division” in section 21 refers to a local seat within the division and not the division itself, and there could not be concurrent jurisdiction between the main and local seats of the division in non-appeal matters. The plaintiff, on the other hand, argued that the section was unambiguous. The Court referred to the transitional arrangements embodied in section 50 of the Act, the meaning of which was clear and unambiguous. It provided that the local seats of the division, identified as the Eastern Cape High Courts, Bhisho, Mthatha and Port Elizabeth, were endowed with concurrent jurisdiction over smaller areas than that enjoyed by the main seat. The division’s area of jurisdiction, conferred by section 21, comprised the entire Province of the Eastern Cape. A local seat, therefore, could not be endowed with original territorial jurisdiction when the Act itself merely vested it with concurrent jurisdiction. Section 27 provides the machinery for the removal of a matter to another court on application. However, there was nothing to preclude a judge, sitting as a court of first instance in the Eastern Cape High Court, Grahamstown, from mero motu concluding that, notwithstanding the court having original territorial jurisdiction, the balance of convenience dictated that the matter properly be heard at a particular local seat and order that it be so removed.

Several other defences were raised from the bar, but a defendant, in resisting an application for summary judgment, must disclose the defences relied upon on affidavit. Those defences could not be relied upon in this case.

The only defences raised which required consideration was that pertinently raised in opposition and the issue relating to authority. However, the Court found no merit in the said defences.

As the defendants failed to disclose a bona fide defence to the plaintiff’s claim, an order for summary judgment had to follow.

Although costs would normally follow the result, the Court decided that the defendants should not be mulcted with costs in a matter which served before this Court as a test case on the issue of jurisdiction. Each party was, therefore, ordered to bear its own costs.

end