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Civ Proc B Case Notes

Room Hire v Jeppe Street Mansions 1949 (3) SA 1155 (T)


The whole question as to whether a litigant is entitled to proceed by way of application or
action has been fully considered in Room Hire Co. (Pty.) Ltd. v. Jeppe Street Mansions (Pty.)
Ltd., 1949 (3) S.A.L.R. 1155 (T.P.D.), a case that all practitioners would do well to study.
Murray, A.J.P., summarised the position as follows: (1) By statute certain proceedings must
be brought on motion and the party against whom the probabilities lie in a dispute of facts is
entitled to ask that evidence be heard under Rule 9 (Transvaal). (There are similar rules in
other Provinces): see Mahomed v. Malk, 1930 T.P.D. 615. (2) Certain matters cannot be
heard on motion, e.g., matrimonial proceedings and illiquid claims for damages. (3) In all
other cases motion proceedings are permissible only if there is no real dispute between the
parties on any material question of fact. Here the applicant runs a risk in that it may be
shown that there is a real dispute, in which event he may be sent to trial, or the application
may be dismissed with costs if the court finds that he should have known that there would be
such a dispute. Bare denials by the respondent of the allegations in the petition do not per
se raise a dispute of facts. The learned Judge also criticised some of the dicta in the
judgments of Dowling, J., in Williams v. CIVIL PRACTICE AND PROCEDURE Tunstall, 1949
(3) S.A.L.R. 835 (T.P.D.), and Afrimeric Distributors (Pty.) Ltd. v. E. I. Rogoff (Pty.) Ltd., 1948
(1) S.A.L.R. 569 (W.L.D.). Hansa v. Dinbro Trust (Pty.) Ltd., 1949 (2) S.A.L.R. 513 (T.P.D.),
can also usefully be consulted on this topic.
The case was an appeal from a decision in the Witwatersrand Local Division by Neser J. Its
significance lies in the area of civil procedure, with its determination that the court
in application proceedings, where a material fact arises which cannot be resolved by viva
voce evidence, may either direct the parties to trial or dismiss the application with
costs..Ramsbottom J and Blackwell J concurred in the judgment of Murray AJP, who
reiterated that, except in interlocutory matters, it is undesirable to attempt to settle disputes
of fact solely on the probabilities disclosed in contradictory affidavits. Where no real dispute
of fact exists, there is no reason for incurring the delay and expense involved in a trial action:
Motion proceedings in such a case are generally recognised as permissible.
Where a dispute of fact is shown to exist, however, the court has a discretion as to the future
course of the proceedings. If the dispute of fact cannot properly be determined by viva
voce evidence under Rule 9,[2] the parties may be sent to trial in the ordinary way (either on
the affidavits as constituting the pleadings, or else with a direction that pleadings be filed);
otherwise the application may be dismissed with costs.

Industrial Development Corporation of South Africa v Sooliman and Others 2013 (5)
SA 603 (GSJ) just read it, only 30 paras
In this case the applicant applied urgently and ex parte to a high court for an interdict against
three of the respondents. The high court granted the order and thereafter the first and third
respondents applied to the court for its D reconsideration under Uniform Rule 6(12)(c). In
support of the application the first respondent filed an affidavit, in answer to what the
applicant had put before the court in asking for the interdict. To this answer the applicant filed
a reply, which the first respondent applied to strike out. It contended that a replying affidavit
was impermissible in this context. In issue was whether this was so. (Paragraph [4] at 604E
F.) E

The court held that, if a respondent who invoked the rule chose not to put up an answering
affidavit, then the applicant likewise had no need or opportunity to put up a reply. However, if
the respondent chose to file an answer, then the applicant could file a reply, which was
subject to the usual rules. (Paragraph [12] at 606J 607A.)

Rule 6(12) (c) application by a respondent for a reconsideration of an order taken urgently
and without notice to the respondent history of the controversy about whether further
affidavits may be filed by the aggrieved respondent and/or the applicant traversed purpose
of a reconsideration is a full ventilation of the dispute as if the initial hearing had complied
with the audi alterem partem principle and must be distinguished from a mere review of the
initial decision
Aggrieved respondent had filed an answer and had objected to the applicant filing a reply to
the answer.
Held:
(a) If a respondent who invokes Rule 6(12)(c) chooses not to put up an answering affidavit,
then the respondent likewise has no need, nor an opportunity, to put up a reply.
(b) If a respondent who invokes Rule 6(12)(c) chooses to file an answer, then the applicant
may file a reply, which is, obviously, subject the general rules and practice about not
introducing new matter illegitimately.

Mears v African Platinum Mines Ltd and Others (1) 1922 WLD 48 at 55;

It was strenuously argued that the directors in Johannesburg were keeping the applicant in
the dark in order to complete the deal behind his back and that Carlis and Houthakker at any
rate took bribes from Burch to put the deal through. It is clear that in none of the
communications that they made to the applicant did they tell him the nature of the
negotiations, whether it was for the sale of the property or the sale of shares. But that he
1922 WLD at Page 55
knew of the fact that negotiations were going on with Burch seems clear from Frames' letters
to him, and also the directors seemed to be genuinely anxious to get him to Johannesburg
during the negotiations. Why they could not write to him and give the full details it is difficult
to understand or even telegraph to him why he was wanted in Johannesburg. The answer
suggested is that they wanted him up in order to bribe him to agree, and had to conceal it in
their telegrams. But if that was the case why not tell him what the negotiations were if it was
known to them that that would bring him to Johannesburg. The main point I have to consider
is whether there is a prima facie case against Alexander that he knew of the defect in the
directors' meeting. I think it doubtful if the board knew of this, far less Alexander. The whole
of the case on the question of indemnity depends upon evidence of admissions alleged to
have been made by Carlis. This is hearsay evidence which would notes be admissible at the
final trial against Alexander. But it is contended that at the prima facie hearing such evidence
is admissible. It is true that evidence of information and belief is admitted in interlocutory
applications, I do not know that any rule has been laid down in these Courts as to the
limitation of this admission. In the English Courts such allegations are provided for by Rule of
Court Order 38, Rule 3. But even there the allegation is confined to an assertion of
information and belief and the source of information and ground of belief must be given. In
the case of an urgent application the party cannot be expected to set forth his evidence on
affidavit. "The Court does not admit as evidence that which is not evidence, but in order to
prevent irremediable injury, keep matters in statu quo and do justice on an interlocutory
application, the Court will act on information and belief. The Court of Appeal declined to
listen to an affidavit based on information and belief, but not stating the source and grounds
thereof. I invariably reject such an affidavit if it is challenged. Where, however, the source of
the information is stated practice, though possibly a somewhat loose practice, has been to
act on the affidavit in order to restrain irremediable injury and to make such order as may be
necessary to keep matters in statu quo." KEKEWICH, J., in Anthony, Birrell, Pearce & Co., In
re (1899, 2 Ch.D. 50 at pp. 52-53). In our practice I think the applicant must produce legal
evidence to show a prima facie case if his allegation
1922 WLD at Page 56

are denied by the respondent unless perhaps the balance of convenience is overwhelmingly
in his favour.
Grant-Dalton v Win and Others 1923 WLD 180 at 187. Just read. Not even 7 pages.
KRAUSE, J.: In this matter an application was made to me in Chambers on the 18th July,
and the applicant obtained a rule nisi calling upon the respondents Win and E. & S.
Laventhal to show cause, if any, on the 24th July, why E. & S. Laventhal should not he
interdicted from handing over to the said Win a certain promissory note for 50 and from
instructing the Standard Bank to pay out to the said Win the sum of 250 in terms of a,
banker's guarantee dated the 18th June, 1923, pending the result of an action to be
instituted against the said Win for the rescission of sale, etc., and also calling upon the
Standard Bank to show cause, if any, why it should not be restrained, pending such action,
from paying out the amount of such guarantee, the rule to operate as an interim interdict. It
should be mentioned that, some time previously, the present applicant, together with his
partner, a certain Kall, had obtained a similar rule, which was discharged by the Court on the
ground, that the Court was not satisfied on all the facts before it, that the applicant had made
out a sufficiently strong prima facie case to entitle him to avail himself of the extraordinary
remedy of a temporary interdict pending action. In that application Kall had made two
affidavits, one in support of the application and another for the respondent; in the latter he
retracted what he had said before, and gave his reasons for so doing. When the present
application came before me in Chambers some new facts were sworn to, and the affidavit of
Thomas H. Pratt was produced in support of applicant's allegations of fraud. Pratt seems to
be an interested party, as it was he who had given the banker's guarantee of 250. From the
records it would appear, that on the 19th June, 1923, the applicant and his partner Kall
entered into a deed of sale with the respondent Win, whereby they purchased from him for
the consideration therein set out, the goodwill, furniture, etc., of the business of a kaffir
eating house, which was being carried on by Win on Stand No. 2, 50, End Street,
Doornfontein. The deed of sale was drawn up, at the request of the parties, by the second
respondents E. & S. Laventhal. The sale was duly advertised in terms of the Registration of
Businesses Act, and other steps were being taken to complete the transfer in the name of
Dalton & Kall. The purchasers took possession of the business on the 21st June, and after
some two weeks of trade the conclusion
1923 WLD at Page 183
was arrived at that the monthly turnover, etc., could not and would not reach the figure
alleged tp have been represented to the purchasers by the seller. The purchaser, Dalton,
now states that it was on the strength of these false and fraudulent representations made to

him by the seller, that he was induced to enter into the agreement of sale, and that he
intends forthwith to institute an action for the rescission of the said sale and for damages.
Pending such action he prays for confirmation of the rule nisi obtained. The respondent Win
has filed an affidavit denying the allegations of fraud, and in this he is supported by the
affidavits of applicant's partner, Kall, and of one member of the firm of E. & S. Laventhal. It is
not necessary to consider the effect of these conflicting affidavits, and the other
circumstances in the case, in view of the grounds on which the Court, in the exercise of its
discretion refused confirmation of the rule. The granting of an interim interdict, pending
action, is an extraordinary remedy and the principles on which the Courts act have been set
out in a large number of cases. The procedure is derived from what is known in RomanDutch Law as "Mandament Poenaal." Van der Linden in his "Judicieele Practijck" (Deel 1, 2
Boek, XIX, Hoofdstuk par. 1 --- par. 9) and in his "Koopmans Handboek" (III, Boek 1, Deel IV,
Afdeling par. VI and par. VII), deals very fully with this remedy and says the following
requisites are necessary: 1. A clear right on the part of the complainant. If the right is
doubtful then the application must be refused. Where, however, the right is in the highest
degree probable and the Court is satisfied that irreparable injury is likely to be caused to the
applicant and no irreparable injury to the respondent, then, in its discretion, it may grant a
temporary interdict. 2. An injury actually committed or a well-grounded apprehension that
such injury will be committed by the respondent. If the latter should satisfy the Court that the
act in itself is no injury, or the apprehension is not well-grounded, or proves that there is no
fear that the act will be repeated, then the remedy will not be granted. 3. That there is no
other ordinary remedy whereby the complainant can be assisted with the same results. One
of the earliest cases in which these requisites were mentioned
1923 WLD at Page 184
and adopted is the case of Blackburn v Krohn (2, Searle 209) in 1855, and one of the latest
cases in which the Court applied them was the case of Setlogelo v Setlogelo 1914 AD 221.
INNES, J.A., on page 227, says: "The argument as to irreparable injury being a condition
precedent to the grant of an interdict is derived probably from a loose reading of the wellknown passage in Van der Linden's Institutes, where he enumerates the essentials for such
an application. The first, he says, is a clear right; the second is injury. But he does not say
that where the right is clear the injury feared must be irreparable. That element is only
introduced by him in cases where the right asserted by the applicant, though prima facie
established, is open to some doubt. In such cases, he says, the test must be applied
whether the continuance of the thing against which an interdict is sought would cause
irreparable injury to the applicant. If so, the better course is to grant the relief if the
discontinuance of the act complained of would not involve irreparable injury to the other

party. But, he certainly does not lay down the doctrine that where there is a clear right the
injury complained of must be irreparable in order to justify an application for an interdict." I
do not think that the learned Judge's paraphrase of Van der Linden's words is quite correct.
This author both in his Institutes and in his Judicieele Praktijk, says "is deszelfs vermeend
regt ongegrond" and "is reght twijffelachtig " then no mandament will be granted. He
continues, however, and says "Zoo egter de zaak, waartegen poenaal verzogt wordt, van
then aardt is, tat deszelfs voortgang voor den verzoeker onherstelbaar zoude wezen, terwijl
integendeel het nalaten van die daad aan de partije geen onherstelbaar nadeel zoude
toebrengen, behoort het Mandament Poenaal verleend, en aan den verzoeker gegeven to
worden, om zijn regt, het welk in allen gevalle de hoogste waarschijnkijkheid voor zich moet
hebben, in een volledigen Regtsgeding to behandelen." In his Judicieele Praktijk the words
"dat echter in allen gevalle apparent moet wezen" are used. I don't think therefore it is
correct to paraphrase these passages by saying "where the right asserted by the applicant,
though prim facie is established, is open to some doubt." I do not deem it necessary to
refer to the many cases intermediate
1923 WLD at Page 185
between 1855 and 1914, in which the principles of the Roman-Dutch Law have been
adopted and applied. As far as procedure is concerned, the form of the Order has, it is true,
approximated the English practice of granting, what is called, a rule nisi. As stated above,
the affidavits submitted to the Court were of a highly contradictory nature, and it would have
been impossible to say which side was speaking the truth, unless the witnesses appeared to
give evidence viv voce. I dealt, however, with the application on the assumption that a
prim facie, or what Van der Linden calls a case of "de hoogste waarschijnkijkheid" had
been made out, and held, that there was no such irreparable injury to the applicant, coupled
with an absence of irreparable injury to the respondent, as to justify the Court in granting the
extraordinary remedy of a temporary interdict pending action. The whole amount involved
was only 300. The respondent had parted with his business, furniture, fittings, etc., and the
applicant was in possession of everything. It was not alleged, that no profits were being
made, but only, that the turnover was not as great as represented and therefore the profits
could not be so large. The business had only been carried on by the applicant for a short
time --- certainly not long enough to justify any definite conclusions being arrived at in
respect of the turnover and profits. Furthermore, there was no evidence before the Court to
establish the essential of irreparable injury to the applicant, and there was evidence to show
that serious injury was being suffered by the respondent. An allegation of irreparable lass
and damage is set out in paragraph 19 of applicant's petition, and this is based on the
following statement of belief in paragraph 18: "Your petitioner Believes that the said first

respondent is a man of no means." There are no grounds given for this belief. The
respondent, in paragraph 10 of his replying affidavit, specifically meets this allegation as
follows: "Deponent emphatically denies paragraph 18 and says that he is well able to abide
by and perform any judgment which the Honourable Court may possibly grant against him in
connection with these proceedings, and deponent further says that he has no intention of
leaving the Union, but has every intention of immediately re-investing the money received in
this business in Johannesburg, and deponent further says, that he has been
1923 WLD at Page 186
hampered in concluding a fresh business deal in consequence of these applications."
Although the applicant had an opportunity of dealing with this allegation and supplementing
his former statement of belief, in the replying affidavits filed by him, he did not do so and the
uncontradicted statement of the respondent, as to his financial position, was the only
evidence before the Court on the question of the alleged irreparable loss and damage to the
applicant, leaving out of consideration for the moment the counterpart, namely, "absence of
irreparable damage to the respondent." In my opinion our rules of practice as to the
admissibility of, statements of "belief" and "information" in interlocutory motions do not
materially differ from the rules of practice in England. The rule of best evidence applies
equally in both countries, and I do not think the Court would be justified in ignoring that rules,
unless it is satisfied that it is absolutely necessary to do so in matters of great urgency and
for the purpose of preventing an injury or a threatened illegal invasion of rights. Generally
speaking, affidavits are to be confined to such facts as the witness is able of his own
knowledge to prove, except, as I have said, in interlocutory motions, in which statements as
to belief, with the grounds thereof, may be admitted. The grounds of the deponent's belief
must be stated so as to show that he has some reasonable and proper cause for making the
statement, and has not sworn merely to raise an issue. The Court of Appeal in England In re
Young Manufacturing Co., Ltd. (1900, 2 Ch. 753), held that an affidavit of information and
belief, not stating that the source of the information or belief, is irregular, and therefore
inadmissible as evidence, whether on an interlocutory or a final application; and a party or
solicitor attempting to use such an affidavit will do so at his peril as to costs. In this Court
WARD J. in the case of Mears v African Platinum Mines, Ltd., etc. 1922 WLD 48, laid down
rules similar to the above. See also Van Zijl's "Judicial Practice," vol. I., page 441. In future,
therefore, there can be no doubt as to what our practice is or should be. Applying the above
tests to this case, it will be seen, that there was no admissible evidence before the Court of
irreparable damage in accordance with the essentials laid down by Van der Linden. The
application was, in effect, an attempt to obtain the assistance

1923 WLD at Page 187


of the Court in relieving the complainant of part performance of his obligations under the
deed of sale. There was no act of the respondent which was causing irreparable damage to
the applicant, and there was prim facie satisfactory evidence before the Court that the
respondent was financially strong enough to refund the small amount which would be paid
over in terms of the contract, and that he was in turn suffering damage in consequence of
the non-fulfilment of the terms of the agreement. The ordinary remedy by action was, in my
opinion, the proper remedy available to the applicant. In these circumstances I came to the
conclusion that the rule should be discharged with costs, and ordered so accordingly,
Applicant's Attorney: P. Morris; Respondent's Attorneys: Raphaely & Gratus.

Swissborough Diamond Mines v Government RSA 1999 (2) SA 279 (W) at p. 323 324
As appears from the judgment in SA Neon Advertising (Pty) Ltd v Claude Neon Lights (SA)
Ltd 1968 (3) SA A 381 (W) and Maxwell and Another v Rosenberg and Others 1927 WLD 1,
the Court ordered additional discovery of documents by referring to the genus of the
documents. Although the genus may be wide, the documents are determinable within it. B A
notice in terms of Rule 35(3) is accordingly not limited to a specific document. The notice
may require production of any number of documents. Whilst a document need not be
described specifically within the notice, it must be described with sufficient accuracy to
enable it to be identified. This will occur where the document is described within a genus
enabling it to be identified. C It was further argued that it was incumbent upon a party
opposing an application in terms of Rule 35(7), on the basis that the documents which it is
required to produce are not relevant, to refer to the documents and set out what they
comprise of and to indicate why they are not relevant. This is what occurred in Continental
Ore D Construction v Highveld Steel & Vanadium Corporation Ltd (supra - see 601A--C). It
may be appropriate to do so in certain cases. No rule of general application can be laid
down. The present application is a trenchant example why no general rule can be laid down.
On one issue the parties are ad idem and that is the vastness of the documents in
possession of the first defendant to which the application relates. Assuming that the
documents E referred to in the Rule 35(3) notice are identifiable, the sheer volume of the
documents would, from a practical point of view, preclude the first defendant from dealing
with each one. Instead the first defendant has dealt with the issue of relevancy on another
basis. F The law relating to the content of affidavits generally It is trite law that in motion
proceedings the affidavits serve not only to place evidence before the Court but also to
define the issues between the parties. In so doing the issues between the parties are

identified. This is not only for G the benefit of the Court but also, and primarily, for the
parties. The parties must know the case that must be met and in respect of which they must
adduce evidence in the affidavits. In Hart v Pinetown Drive-Inn Cinema (Pty) Ltd 1972 (1) SA
464 (D) it was stated at 469C--E that 'where proceedings are brought by way of application,
the petition is not the equivalent of the declaration in proceedings H by way of action. What
might be sufficient in a declaration to foil an exception, would not necessarily, in a petition,
be sufficient to resist an objection that a case has not been adequately made out. The
petition takes the place not only of the declaration but also of the essential evidence which
would be led at a trial and if there are absent from the petition I such facts as would be
necessary for determination of the issue in the petitioner's favour, an objection that it does
not support the relief claimed is sound.' An applicant must accordingly raise the issues upon
which it would seek to rely in the founding affidavit. It must do so by defining the relevant
issues and by setting out the evidence upon which it relies to discharge J 1999 (2) SA p324
JOFFE J the onus of proof resting on it in respect thereof. As was held in Prokureursorde
van Transvaal v Kleynhans A 1995 (1) SA 839 (T) at 849B in regard to a constitutional issue:
'Dit is myns insiens vir die behoorlike ordening van die praktyk absoluut noodsaaklik dat
konstitusionele punte nie deur advokate as laaste debatspunt uit die mou geskud word maar
pertinent in die stukke as geskilpunt geopper word sodat B dit volledig uitgepluis kan word
deur die partye ten einde die Hof in staat te stel om dit behoorlik te bereg.' The dictum is not
only of application to constitutional issues - it applies to all issues. Nor is the dictum only of
application in the context of a founding affidavit - it applies equally to answering affidavits
and replying affidavits. C The more complex the dispute between the parties the greater
precision that is required in the formulation of the issues. See in regard to actions Imprefed
(Pty) Ltd v National Transport Commission 1993 (3) SA 94 (A) at 106--7. Although this
dictum relates to pleadings in an action it is equally applicable to affidavits in motion
proceedings. D The facts set out in the founding affidavit (and equally in the answering
affidavit and replying affidavit) must be set out simply, clearly and in chronological sequence
and without argumentative matter: see Reynolds NO v Mecklenberg (Pty) Ltd1996 (1) SA 75
(W) at 78I. A distinction is drawn between primary facts and secondary facts. 'Facts are
conveniently called primary when they are used as the basis for inference as to the
existence or non-existence E of further facts, which may be called, in relation to primary
facts, inferred or secondary facts.' See Willcox and Others v Commissioner for Inland
Revenue 1960 (4) SA 599 (A) at 602A. In the absence of the primary fact, the alleged
secondary fact is merely a conclusion of law. Radebe and Others v Eastern Transvaal
Development Board 1988 (2) SA 785 (A) at 793D. F Regard being had to the function of
affidavits, it is not open to an applicant or a respondent to merely annexe to its affidavit
documentation and to request the Court to have regard to it. What is required is the

identification of the portions thereof on which reliance is placed and an indication of the case
which is sought to be made out on the G strength thereof. If this were not so the essence of
our established practice would be destroyed. A party would not know what case must be
met. See Lipschitz and Schwarz NNO v Markowitz 1976 (3) SA 772 (W) at 775H and Port
Nolloth Municipality v Xahalisa and Others; Luwalala and Others v Port Nolloth Municipality
1991 (3) SA 98 (C) at 111B--C. H In Heckroodt NO v Gamiet 1959 (4) SA 244 (T) at 246A--C
and Van Rensburg v Van Rensburg en Andere 1963 (1) SA 505 (A) at 509E--510B, it was
held that a party in motion proceedings may advance legal argument in support of the relief
or defence claimed by it even where such arguments are not specifically mentioned in the
papers, provided they arise from the facts alleged. As was held in Cabinet for the Territory of
South West I Africa v Chikane and Another 1989 (1) SA 349 (A) at 360G, the principle is
clear but its application is not without difficulty. In Minister van Wet en Orde v Matshoba 1990
(1) SA 280 (A) at 285G it was held that this principle

Ganes & another v Telecom Namibia Ltd 2004 (3) SA 615 (SCA) at para 19;
[19] There is no merit in the contention that Oosthuizen AJ erred in finding that the
proceedings were duly authorised. In the founding affidavit filed on behalf of the respondent
Hanke said that he was duly authorised to depose to the affidavit. In his answering affidavit
the first appellant stated that he had no knowledge as to whether Hanke was duly authorised
to depose to the founding affidavit on behalf of the respondent, that he did not admit that
Hanke was so authorised and that he put the respondent to the proof thereof. In my view it is
irrelevant whether Hanke had been authorised to depose to the founding affidavit. The
deponent to an affidavit in motion proceedings need not be authorised by the party
concerned to depose to the affidavit. It is the institution of the proceedings and the
prosecution thereof which must be authorised. In the present case the proceedings were
instituted and prosecuted by a firm of attorneys purporting to act on behalf of the
respondent. In an affidavit filed together with the notice of motion a Mr Kurz stated that he
was a director in the firm of attorneys acting on behalf of the respondent and that such firm
of attorneys was duly appointed to represent the respondent. That statement has not been
challenged by the appellants. It must, therefore, be accepted that the institution of the
proceedings were duly authorised. In any event, rule 7 provides a procedure to be followed
by a respondent who wishes to challenge the authority of an attorney who instituted motion
proceedings on behalf of an applicant. The appellants did not avail themselves of the
procedure so provided. (See Eskom v Soweto City Council1992 (2) SA 703(W) at 705C-J.)

Creative Car Sound & another v Automobile Radio Dealers Association 1989 (Pty) Ltd
2007 (4) SA 546 (D) at para 34.
[33] In casu, the attorney has brought the rescission application in the name of the
applicants, and he deposed to the founding affidavit himself alleging that the applicants had
duly authorised him to do so. Under common law there is nothing which requires that the
applicant must be E an affected person only. It has been argued on behalf of the respondent
that, since the candidate attorney has not filed any confirmatory affidavit by the second
applicant stating that he was in fact duly authorised to depose to the founding affidavit, he
lacks locus standi to bring this application. F
[34] This question was settled in the Ganes case (supra) where in an affidavit filed together
with the notice of motion a Mr King stated that he was a director in the firm of attorneys
acting on behalf of the respondent and that such firm of attorneys was duly appointed to
represent the respondent. Such statement was not challenged by the appellants. At 624G H Streicher JA said: G
'In my view, it is irrelevant whether Hanke had been authorised to depose to the founding
affidavit. The deponent to an affidavit in motion proceedings need not be authorised by the
party concerned to depose to the affidavit. It is the institution of the proceedings and the
prosecution thereof which must be authorised. In the present case the proceedings were
instituted and prosecuted H by a firm of attorneys purporting to act on behalf of the
respondent.'

Firstrand Bank Ltd v Fillis 2010 (6) SA 565 (ECP). short, just read. Para 13 NB.
[13] The obligation to establish this authority only arises when the authority to prosecute the
process is challenged. In the present matter Attorneys Spilkins authority to prosecute the
action and the application for summary judgment has not been challenged and is
accordingly not in issue. What is contested is the authority of the deponent Freeborough to
depose to an affidavit. Accordingly the reasoning in the Pretoria City Council matter finds no
application in this matter. The challenge to the authority to depose to an affidavit is, in my
view, entirely misconceived. The same point was raised in the matter of Ganes and Another
v Telecom Namibia Ltd 2004 (3) SA 615 (SCA).In that matter Streicher JA disposed
succinctly of this argument at 624F-H where he said.

There is no merit in the contention that Oosthuizen AJ erred in finding that the proceedings
were duly authorised. In the founding affidavit filed on behalf of the respondent Hanke said
that he was duly authorised to depose to the affidavit. In his answering affidavit the first
appellant stated that he had no knowledge as to whether Hanke was duly authorised to
depose to the founding affidavit on behalf of the respondent, that he did not admit that
Hanke was so authorised and that he put the respondent to the proof thereof. In my view, it
is irrelevant whether Hanke had been authorised to depose to the founding affidavit. The
deponent to an affidavit in motion proceedings need not be authorised by the party
concerned to depose to the affidavit. It is the institution of the proceedings and the
prosecution thereof which must be authorised.
The deponent to the affidavit required in terms of rule 32(2) need not be authorized by the
plaintiff to depose to the affidavit.

Room Hire Co Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 1162.
I propose to set out, first, as I understand it, the general position in regard to the
permissibility of motion proceedings as opposed to trial actions. Two types of proceedings
may be mentioned, as falling outside the scope of this enquiry. (1) There are certain types of
proceeding (e.g., in connection with insolvency) in which by Statute motion proceedings are
specially authorised or directed: in these the matter must be decided upon affidavit and Rule
9 may be invoked, as shown in Mohamed v Malk (1930 TPD 615), to permit viva
voce evidence to be led in order to counteract any balance of probability appearing from
affidavits. (2) There are on the other hand certain classes of case (the instances given by
DOWLING, J., are matrimonial causes and illiquid claims for damages) in which motion
proceedings are not permissible at all. But between these two extremes there is an area in
which (as I see the position) according to recognised practice a choice between motion
proceedings and trial action is given according to whether there is or is not an absence of a
real dispute between the parties on any material question of fact. It is true that in Nel v
Abrams & Sloot (1911 TPD 24 at p. 29), WESSELS, J., stated that a settlement of the
dispute by means of trial action could be demanded where the law relied on by the applicant
is not clear: but in all the other cases to which we were referred the deciding factor is the
existence of a dispute as to fact, not as to law, and it is (with respect) difficult to appreciate
what greater advantages are derived by a judicial officer from viva voce evidence, than from
affidavits when he has to ascertain only the law to be applied. The practice has grown
particularly in this Province. It is more than probable that it is attributable to the absence
therein of any provision for summary judgment on prima facie proof by the claimant that his

debtor or opponent possesses no bona fide defence. Such provision does appear in the
Magistrates' Courts Act and Rules, and in the Rules of the Cape Provincial Division quoted
to this Court. The more expeditious and less expensive course of proceeding by motion was
recognised as permissible, apparently in the first instance in ejectment proceedings (vide
Frank v Ohlsson's Cape Breweries Ltd.
1949 (3) SA p1162
MURRAY AJP
(1924 AD 289)), and has been extended to other appropriate matters such as claims for
cancellation of sale (Cowley v Estate Loumeau (1925 AD 392)) and for money payments
(vide Afrimeric Distributors (Pty.), Ltd v E. I. Rogoff (1948 (1), S.A.L.R. 569)). In fact it is
difficult to see any reason why it should not be adopted generally in all classes of dispute
other than those specially excepted above. It is not a question of any difference of character
between the various kinds of claim which is being enforced, but a question of the proper
method of determination in each case of the facts upon which any claim depends. Inasmuch
as the ascertainment of the true facts is effected by the trial Judge on considerations not
only of probability but also of credibility of witnesses giving evidence viva voce, it has been
emphasised repeatedly that (except in interlocutory matters) it is undesirable to attempt to
settle disputes of fact solely on probabilities disclosed in contradictory affidavits, in disregard
of the additional advantages of viva voce evidence, and the tendency of resorting to
affidavits is deprecated inter alia by TINDALL, J., in Saperstein v Venter's Assignee (1929
TPD 14, P.H. A. 71). But where no real dispute of fact exists, there is no reason for the
incurrence of the delay and expense involved in a trial action and motion proceedings are
generally recognised as permissible.
It is obvious that a claimant who elects to proceed by motion runs the risk that a dispute of
fact may be shown to exist. In that event (as is indicated infra) the Court has a discretion as
to the future course of the proceedings. If it does not consider the case such that the dispute
of fact can properly be determined by calling viva voce evidence under Rule 9, the parties
may be sent to trial in the ordinary way, either on the affidavits as constituting the pleadings,
or with a direction that pleadings are to be filed. Or the application may even be dismissed
with costs, particularly when the applicant should have realised when launching his
application that a serious dispute of fact was bound to develop. It is certainly not proper that
an applicant should commence proceedings by motion with knowledge of the probability of a
protracted enquiry into disputed facts not capable of easy ascertainment, but in the hope of
inducing the Court to apply Rule 9 to what is essentially the subject of an ordinary trial
action.

The crucial question is always whether there is a real dispute of fact. That being so, and the
applicant being entitled in the absence
1949 (3) SA p1163
MURRAY AJP
of such dispute to secure relief by means of affidavit evidence, it does not appear that a
respondent is entitled to defeat the applicant merely by bare denials such as he might
employ in the pleadings of a trial action, for the sole purpose of forcing his opponent in the
witness box to undergo cross-examination. Nor is the respondent's mere allegation of the
existence of the dispute of fact conclusive of such existence.
'In every case the Court must examine the alleged dispute of fact and see whether in truth
there is a real issue of fact which cannot be satisfactorily determined without the aid of oral
evidence; if this is not done, the lessee, against whom the ejectment is sought, might be
able to raise fictitious issues of fact and thus delay the hearing of the matter to the prejudice
of the lessor.'

National Director of Public Prosecutions v Zuma 2009 (2) SA 277 (SCA) at para 26.
[26] Motion proceedings, unless concerned with interim relief, are all about the resolution of
legal issues based on common cause facts. Unless the circumstances are special they
cannot be used to resolve factual issues because they are not designed to determine
probabilities. It is well established under the Plascon-Evans rule that where in motion
proceedings disputes of fact arise on the affidavits, a final order can be granted only if the
facts averred in the applicant's (Mr Zumas) affidavits, which have been admitted by the
respondent (the NDPP), together with the facts alleged by the latter, justify such order. It may
be different if the respondents version consists of bald or uncreditworthy denials, raises
fictitious disputes of fact, is palpably implausible, far-fetched or so clearly untenable that the
court is justified in rejecting them merely on the papers.13 The court below did not have
regard to these propositions and instead decided the case on probabilities without rejecting
the NDPPs version.14

The rule in: Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623
(A) at 634E-635D.
The E appellant nevertheless sought a final interdict, together with ancillary relief, on the
papers and without resort to oral evidence. In such a case the general rule was stated by

VAN WYK J (with whom DE VILLIERS JP and ROSENOW J concurred) in Stellenbosch


Farmers' Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA 234 (C) at 235E - G, to be:
"... where there is a dispute as to the facts a final F interdict should only be granted in
notice of motion proceedings if the facts as stated by the respondents together with the
admitted facts in the applicant's affidavits justify such an order... Where it is clear that facts,
though not formally admitted, cannot be denied, they must be regarded as admitted."
This rule has been referred to several times by this Court (see Burnkloof Caterers (Pty) Ltd v
Horseshoe Caterers (Green Point) G (Pty) Ltd 1976 (2) SA 930 (A) at 938A - B; Tamarillo
(Pty) Ltd v B N Aitkin (Pty) Ltd 1982 (1) SA 398 (A) at 430 - 1; Associated South African
Bakeries (Pty) Ltd v Oryx & Vereinigte Bckereien (Pty) Ltd en Andere 1982 (3) SA 893
(A) at 923G - 924D). It seems to me, however, that this formulation of the H general rule,
and particularly the second sentence thereof, requires some clarification and, perhaps,
qualification. It is correct that, where in proceedings on notice of motion disputes of fact have
arisen on the affidavits, a final order, whether it be an interdict or some other form of relief,
may be granted if those facts averred in the applicant's affidavits which have been admitted
by the respondent, together with the facts I alleged by the respondent, justify such an order.
The power of the Court to give such final relief on the papers before it is, however, not
confined to such a situation. In certain instances the denial by respondent of a fact alleged
by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact (see
in this regard Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155
(T) at 1163 - 5; Da Mata v Otto NO 1972 (3) SA 858
1984 (3) SA p635
CORBETT JA
(A) at 882D - H). If in such a case the respondent has not A availed himself of his right to
apply for the deponents concerned to be called for cross-examination under Rule 6 (5) (g) of
the Uniform Rules of Court (cf Petersen v Cuthbert & Co Ltd 1945 AD 420 at 428; Room
Hire case supra at 1164) and the Court is satisfied as to the inherent credibility of the
applicant's factual averment, it may proceed on the basis of the correctness thereof and
include this fact among those upon B which it determines whether the applicant is entitled to
the final relief which he seeks (see eg Rikhoto v East Rand Administration Board and
Another 1983 (4) SA 278 (W) at 283E - H). Moreover, there may be exceptions to this
general rule, as, for example, where the allegations or denials of the respondent C are so
far-fetched or clearly untenable that the Court is justified in rejecting them merely on the
papers

(see

the

remarks

Bakeries case, supra at 924A).

of

BOTHA

AJA

in

the Associated

South

African

From the papers in this case it appears that as a result of various transactions, the details of
which are not relevant, appellant acquired from other companies, whose assets now
vest D in appellant, the rights to various trading styles, including "the Plascon Parthenon
Paint Company", the "Crown Asbestos Paint Company" and "Crown Cebestos" and also the
registered trade mark "Micatex". The latter was legally assigned to appellant on 3 January
1979 with effect from 15 November 1978.

Santino Publishers v Waylite Marketing 2010 (2) SA 53 (GSJ) - downloaded note


Pountas Trustee v Lahanas 1924 WLD 67 at 68.
KRAUSE, J.: In this matter, the applicant in his capacity as trustee in the insolvent estate of
Emanuel Pountas, applied to the Court in December last for a temporary interdict restraining
1924 WLD at Page 68
the respondent from parting with certain property and furniture, which she had acquired from
the wife of the insolvent, pending an action to be instituted by the trustee against the
respondent for the re-transfer of the property and the re-delivery of the furniture which she is
alleged to have bought from Mrs. Pountas.
I think it has been laid down in this Court repeatedly, that an applicant must stand or fall by
his petition and the facts alleged therein, and that, although sometimes it is permissible to
supplement the allegations contained in the petition, still the main foundation of the
application is the allegation of facts stated therein, because those are the facts which the
respondent is called upon either to affirm or deny.
In this matter the facts as stated by the applicant are shortly as follows: Some time in 1911,
the insolvent Pountas, according to the documents before the Court, sold up his business in
South Africa and proceeded to Greece. His statement is, that he left South Africa with the
intention of remaining in his own country. On arriving in Greece he met his present wife, who
was then a young woman, and married her. It appears that she had a sister who was living in
South Africa, who is the present respondent. Pountas eventually returned to South Africa
after having spent some six months in Greece, where he bought certain merchandise for the
purpose of re-starting his business in Johannesburg. Since his return in 1911 until the
present day he has been living in Johannesburg with his wife. In October, 1922, he was
declared insolvent. Now the property which is the subject of the transaction which has been
attacked, was acquired or bought some time in 1911 in the name of Mrs. Pountas. The price
of this property was paid off in instalments. It would also appear that the plans which were

confirmed by the municipality for the purpose of erecting a building on the stand which was
bought, were presented in the name of Mrs. Pountas. Evidently the instalments were fully
paid up somewhere in 1919, because it was in July, 1919, that transfer of the property was
passed to Mrs. Pountas. In October, 1922, as I have stated, Pountas was declared insolvent.
In January, 1922, some nine or ten months, therefore, before the actual insolvency of
Pountas, Mrs. Pountas (according to her statement) desired to leave, and before leaving she
decided to sell her property. The property was eventually sold by her to the respondent in
this case. For the reasons stated by her she altered her mind and decided not to leave and
re-occupied
1924 WLD at Page 69
the house and took over the furniture as tenant of her sister, the respondent. According to
the documents before the Court, the refit of the premises was paid to the respondent until
October, 1922; the date of the insolvency of Pountas.

John Rodericks Motors Ltd v Viljoen 1958 (3) SA 575 (O) at 579D.
The fact that this ground was not relied on in the petition places the respondent in the
position that he has not been able to reply thereto. He may have a perfectly innocent
explanation for this alleged misrepresentation which might even show that there was no
misrepresentation at all. Apart from that, however, there is no allegation by applicant that this
was a material misrepresentation and E one which induced the contract and that he was
relying on it as a ground for relief in the main action.

Union Finance Holdings Ltd v IS Mirk Office Machines II (Pty) Ltd 2001 (4) SA 842 (T)
The parties had agreed that only the points in limine raised by the respondents would be
argued. The first point related to the applicants locus standi to bring the application, and the
second was that the cause of action made out in the applicants replying affidavit differed
from that in the founding affidavit. The Court began with the latter point.
Held, that in the applicants founding affidavit it alleges that its right to collect debts arose
from a cession. However, in the replying affidavit it conceded that it had ceded the debts to
other institutions, but argued that a residual right to collect the debts existed. Thus, the
applicant was seeking to introduce a new cause of action. The application fell to be
dismissed on this point alone.

Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek 2009 (5) SA (1) SCA, esp. at
paras [31]-[33]
[31] So too in South Africa, the summary judgment procedure was not intended to shut (a
defendant) out from defending, unless it was very clear indeed that he had no case in the
action. It was intended to prevent sham defences from defeating the rights of parties by
delay, and at the same time causing great loss to plaintiffs who were endeavouring to
enforce their rights.17

[32] The rationale for summary judgment proceedings is impeccable. The procedure is not
intended to deprive a defendant with a triable issue or a sustainable defence of her/his day
in court. After almost a century of successful application in our courts, summary judgment
proceedings can hardly continue to be described as extraordinary. Our courts, both of first
instance and at appellate level, have during that time rightly been trusted to ensure that a
defendant with a triable issue is not shut out. In the Maharaj case at 425G-426E, Corbett JA,
was keen to ensure first, an examination of whether there has been sufficient disclosure by a
defendant of the nature and grounds of his defence and the facts upon which it is founded.
The second consideration is that the defence so disclosed must be both bona fide and good
in law. A court which is satisfied that this threshold has been crossed is then bound to refuse
summary judgment. Corbett JA also warned against requiring of a defendant the precision
apposite to pleadings. However, the learned judge was equally astute to ensure that
recalcitrant debtors pay what is due to a creditor.

[33] Having regard to its purpose and its proper application, summary judgment proceedings
only hold terrors and are drastic for a defendant who has no defence. Perhaps the time has
come to discard these labels and to concentrate rather on the proper application of the rule,
as set out with customary clarity and elegance by Corbett JA in the Maharaj case at 425G426E.
An interesting case presented itself in Joob Joob Investments (Pty) Ltd v Stocks Mavundla
Zek Joint Venture 2009 (5) SA 1 (SCA). Summary judgment was granted to the respondent
in respect of a claim for payment based on four interim certificates issued by the principal
agent for work completed as per the schedule of works. The court of first instance, referring
to Randcom (Natal) (Pty) Ltd v Florida Twin Estates (Pty Ltd 1973 (4) SA 181 (D) at 183-4 (a
final payment certificate is treated as a liquid document), held that a similar reasoning

applied to an interim certificate, because the certificate embodies an obligation on the part of
the appellant to pay the amount contained therein (at 10E-G). The Supreme Court of Appeal
confirmed this view, and held that it applied to all the certificates in question. The judgment
cannot be faulted. As the law stands, payment certificates are regarded as liquid documents,
and will also found a claim for provisional sentence if the principal agent (usually the
architect) in issuing the certificate, acted on behalf of the owner (see DE van Loggerenberg
& P Farlam Erasmus Superior Court Practice (loose-leaf) B1-65). In this instance, clause 5.1
of the building contract 'warrants that the principal agent has full authority and obligation to
act' in terms of the agreement, and clause 5.3 provided that only this agent could bind the
owner. The court's observations regarding the summary judgment procedure are interesting.
It noted that the rationale for summary judgment proceedings is 'impeccable' (at 11 H): the
procedure is not intended to deprive a defendant with a triable issue or a sustainable
defence of a day in court, but is intended to prevent sham defences from defeating the rights
of parties by delay and causing loss to plaintiffs. The court held that after almost a 121
ANNUAL SURVEY OF SA LAW century of successful application in our courts, this
procedure could hardly continue to be described as 'extraordinary' or 'drastic', and that the
time has come to discard these labels and concentrate on the proper application of the rule
(at 12A-D). The impact of the National Credit Act on summary judgment proceedings is
illustrated in Standard Bank of South Africa v Van Vuuren 2009 (5) SA 557 (T). The court
held that the summons suffered from an irregularity that affected its validity (at 5611).
Section 129(1)(b) provides that a credit provider may not commence any legal proceedings
to enforce the credit agreement in respect of which the consumer is in default before giving
notice to the consumer in writing of the default. This is a mandatory requirement, and
although the summons in the present matter contained a reference to such notice, the notice
was handed to a sheriff who affixed it to the main gate of certain premises. It turned out that
it was attached to the main gate of a property other than the mortgaged property, and
accordingly there was no evidence that the notice reached the respondent. The court
consequently held that this was a bona fide defence, and dismissed the application for
summary judgment (at 562C-D).

Rees v Investec Bank 2014 (4) SA 220 (SCA);


In this case a bank sued sureties for repayment of loans made to certain debtors. When the
sureties gave notice of intention to defend, the bank applied for H summary judgment. A
bank employee made the supporting affidavit. In issue was whether she had sufficient

personal knowledge of the matter in order to 'swear positively to the facts verifying the cause
of action and the amount . . . claimed' (Uniform Rule 32(2)).
Held: Where an applicant for summary judgment was a corporation, the deponent to its
affidavit did not need to have first-hand knowledge of every I fact comprising its cause of
action: the deponent could rely for its knowledge on documents in the corporation's
possession. Here the deponent a recoveries officer had had sufficient personal
knowledge to swear positively to the facts. She had acquired her knowledge on a perusal of
the documents relevant to the action, and had personally corresponded with the sureties'
attorneys on the debtors' delinquent accounts, later writing them J letters of demand, and
receiving from them responses setting out the
2014 (4) SA p221
sureties' defences. It was unimportant that she had not signed the A certificates of
indebtedness sent to the sureties, and that she had not been present when the suretyship
agreements were concluded.

In summary judgment proceedings in the high court, the respondent sued the appellant in
his capacity as trustee of a trust.
The respondents claims were based on an agreement which it had entered into with 12
principal debtors (all of which were companies). The appellant and the trust were alleged to
be sureties for the indebtedness of the principal debtor in each of the claims. The
respondent pleaded that either a default judgment had been taken against the relevant
principal debtors or that the principal debtors had been wound up.
The application for summary judgment was supported by an affidavit by the respondents
recoveries officer. Although the appellant challenged the authority of the deponent to depose
to the affidavit, summary judgment was granted in respect of 13 of the 14 claims.
On appeal, the primary contention persisted with on behalf of the appellants was that the
recoveries officer was not a person who could swear positively to the facts as envisaged in
rule 32(2) of the Uniform Rules of Court.
Held that rule 32(2) provides that the plaintiffs notice of application for summary judgment
shall be accompanied by an affidavit made by himself or by any other person who can swear
positively to the facts verifying the cause of action and the amount, if any, claimed and
stating that in his opinion there is no bona fide defence to the action and that notice of
intention to defend has been delivered solely for the purpose of delay. The recoveries officer

relied on the information at her disposal which she obtained in the course of her duties, to
swear positively to the contents of her affidavit. It was not necessary for the recoveries
officer to have signed the certificates of indebtedness or to have been present when the
suretyship agreements were concluded. Whether or not to grant summary judgment is a
fact-based enquiry. Many summary judgment applications are brought by financial
institutions and large corporations. First-hand knowledge of every fact cannot and should not
be required of the official who deposes to the affidavit on behalf of such financial institutions
and large corporations. It was clear that the recoveries officer had acquired her knowledge
from documents under her control. She thus had the requisite knowledge in terms of rule
32(2).
On the other hand, the appellants affidavit was replete with conjecture and speculation for
which no factual foundation was advanced.
Unable to find that the court below had erred in granting summary judgment, the present
court dismissed the appeal.

Firstrand Bank v Huganel Trust 2012 (3) SA 167 (WCC) (pragmatic approach);
In applications for summary judgment by corporate plaintiffs commercial H pragmatism may
dictate that first-hand knowledge of every fact should not be required of the deponent. Each
case must be assessed on the papers, with the nature of the defence being crucial.
Sometimes further knowledge beyond an examination of the relevant documentation would
be required from the deponent, for example where such knowledge is relevant to the
contractual relationship as alleged by the defendant, and the defendant's I version, if
proved, would constitute an adequate defence to the claim. (At 177B E.)
Applying the above principles the court held that the deponent's averment of sufficient
knowledge fell short of the requirements of rule 32(2) where: (1) the deponent was a
litigation administrator at the plaintiff bank's Sandton branch; (2) the agreements on which
the claim was based were concluded J
2012 (3) SA p168
A in Stellenbosch with another representative of the bank; and (3) the defendant was
disputing the terms of the said agreements. (At 177J 178B.)
Arising from a loan agreement, the plaintiff sued the defendants for payment and interest.
The defendants entered an appearance to defend and the plaintiff applied for summary
judgment.

In a point in limine, the defendants contended that the application for summary judgment
was defective because the deponent to the affidavit filed in support thereof was a person
who could not swear positively to the facts and verify the cause of action and the amount
claimed.
Held Rule 32(2) of Uniform Rules of Court requires an affidavit in support of an application
for summary judgment be made by any person who can swear positively to the fact verifying
the cause of action in the amount it claimed. The person who deposed to the affidavit on
behalf of the plaintiff was employed by the plaintiff as a litigation administrator. The
defendants submitted that personal knowledge is not invariably to be equated with a reading
of relevant documents as provided to the deponent.
Having regard to case law, the Court drew three important points. While summary judgment
is an order which will prevent a defendant from having his day in court, there are many
cases where the plaintiff is entitled to relief on the basis that ex facie the papers which have
been filed, there is no justification for concluding that opposition can be regarded as anything
other than a delaying tactic. Excessive formalism should be eschewed. Hence, the
substance of the dispute together with the purpose of summary judgment needs to be taken
into account during the evaluation of the papers which have been placed before court in
order to determine whether the summary form of relief should be justified. Each case must
be assessed on the facts which were placed before the Court, and the nature of the defence
becomes the starting point.
The gist of the defence in this case showed that the deponent to the supporting affidavit
could not have personal knowledge of all the facts.
Summary judgment was thus refused.

Absa Bank v Le Roux 2014 (1) SA 475 (WCC) (stricter approach). Just read.
The officer of a corporate entity may rely on data messages for his personal knowledge in
deposing to an affidavit in support of summary judgment. (Uniform Rule 32(2) and s 15(4) of
the Electronic Communications and Transactions Act 25 of 2002.) (Paragraphs [15] and [19]
[20] at 482E G and 484E 485H.)

Moraitis v De Canha 1984 (1) SA 420 (W).

In Moraitis v De Canha 1984 (1) SA 420 (W) the court dealt with various objections in limine
to provisional sentence proceedings, one of which was that the bills of exchange in question
were, by virtue of endorsements on the face of the instruments, insufficiently liquid to CIVIL
PROCEDURE ,. l support provisional sentence. The court, with reference to Rich v
Lagerwey 1974 (4) SA 748 (A) at 754, held that in a case such as this reference in a
document to another document (a written agreement), albeit admitted and produced
by the defendants, cannot turn the first-mentioned document which is illiquid into one
which is liquid, unless that other document is expressly incorporated into the former
and thereby becomes part of it (at 428). A written acknowledgment of debt which
makes no provision for the amount of monthly instalments due in terms of the
agreement does not possess the liquidity required to sustain provisional sentence:
Leyland South Africa (Py) Ltd v Booysen & Clark Motors (Py) Ltd 1984 (3) SA 480 (W) at
482, referring to Patel v Adam 1977 (2) SA 653 (A) at 666-7 for the general principle of the
law of contract that an agreement of this type is void for uncertainty and incapable of
being enforced in a court of law. If payment is subject to a condition not stated in the
document in question itself, it seems that liquidity may in certain circumstances even
be assumed: GATXFuller (Pry) Ltd v Trade & Project Management Services (Py) Ltd t/a
TPMS (Projects) (Pry) Ltd 1984 (3) SA 38 (W) at 45. Would the liquidity of an
acknowledgement of debt be destroyed if it purports to bind two parties jointly and
severally, but only one of them signs it? If the acknowledgement of debt is prima facie
incomplete, so that it cannot found a cause of action against the sole signatory, it is
not a liquid document: extrinsic evidence of the intention of the parties would be
required to resolve the question: Just It (Pty) Ltd v Phillips 1984 (3) SA 922 (C) (referring
to Rich v Lagerwey 1974 (4) SA 748 (A), Wollach v Barclays National Bank Ltd 1983 (2) SA
543 (A)). InJachris (Pty) Ltd v Fourie 1984 (4) SA 501 (T) it was held, first, that before a
defendant can be held personally liable in provisional sentence proceedings under s
50(3) of the Companies Act 61 of 1973 it must be established that the defendant
signed the cheque on behalf of a company. This fact did not emerge ex facie the
cheque in question. Secondly, as far as provisional sentence is concerned, the
defendant's liability under s 21 (a) of the Bills of Exchange Act 34 of 1964 depends on
whether he signed the cheque in a trade or assumed name. This, too, did not appear
ex facie the cheque. On both these grounds, therefore, the claim was held not liquid.
Provisional sentence was accordingly refused. Where the document sued on is a liquid
document, the issue may be one of identification of the beneficiary under the
document as the plaintiff. In Karoo Vleisbeurs Bpk v Nortje 1984 (2) SA 31 (T) it was
held that where the difference between the plaintiff's name and the description of the
payee is slight provisional sentence can be granted. 'Where the difference is so great,

however, that it can only. IU ANNUAL SURVEY OF SA LAW be cleared up by extrinsic


evidence the plaintiff should not make use of the extraordinary remedy of provisional
sentence and he is referred to an illiquid action, even if he makes the allegation that
the cheques concerned are made out in his favour and this averment is not denied by
the defendant' (at 32F). In provisional sentence proceedings where service of the summons
is effected in another province and the provisions of s 27 of the Supreme Court Act 59 of
1959 are applicable, the 21-day period is computed in terms of the provisions of s 4 of the
Interpretation Act 33 of 1957 and not in terms of 'court days' as defined in rule I of the
Uniform Rules of Court: Rossouw and Prinsloo v Potgieter 1984 (2) SA 603 (T) at 604.
Volkskas v Scott 1981 (2) SA 471 (E)
WHOLE JUDGMEN: SMALBERGER J: The plaintiff seeks provisional sentence on two
deeds of D suretyship furnished by the defendant to the plaintiff in respect of the
indebtedness of one Athel Hockey Scott to the plaintiff. In each deed the defendant's
undertaking is in respect of an unspecified amount of money, the only qualification being that
his liability under the first deed is limited to R3 000, and under the second to R6 000. In view
of the E decisions in Barclarys Bank DCO v Van der Vyver 1970 (4) SA 294 (E); Barclays
Western Bank Ltd v Pretorius 1979 (3) SA 637 (N) and Wollach v Barclays National Bank
Ltd 1980 (4) SA 133 (C) the deeds of suretyship are not liquid documents and can therefore
not form the basis of provisional sentence. I am satisfied that any reservations to the
contrary which I F may have expressed in Western Bank Ltd v West 1977 (1) SA 240 (E) at
242D were not justified. The plaintiff's claim for provisional sentence is accordingly refused.
Plaintiff's Attorneys: W J Olckers & Son.

Rich v Lagerwey 1974 (4) SA 748 (A). - get better note


In Rich v Lagerwey 1974 (4) SA 748 (AD) Wessels JA considered the question of documents
on which provisional sentence can be granted, including what is a simple condition. He also
considered 4U ANNUAL SURVEY OF SA LAW the circumstances under which the court can
hear oral evidence, having regard to the provisions of rule 8(7), and said: '[I]t is not the type
of transaction which determines whether the related document signed by the debtor is one
upon which provisional sentence may properly be granted. If the document in question,
upon a proper construction thereof, evidences by its terms, and without resort to
extrinsic evidence thereto, is an unconditional acknowledgment of indebtedness in an
ascertained amount of money, the payment of which is due to the creditor, it is one
upon which provisional sentence may properly be granted. As to this, however, it is

appropriate to refer briefly to certain modifications of basic rules governing provisional


sentence practice, which have over the years become sanctioned by the courts. This
development has resulted in a somewhat different approach to the question whether or not
any particular document is to be regarded as liquid for the purposes of provisional sentence
procedure, and to the related question of permissible resort to extrinsic evidence' (at 754-5).
The learned judge said further (at 760): 'If regard is had to the history of provisional sentence
practice and procedure, I am of the opinion that it was never intended to serve as a weapon
in terrorem in the hands of a creditor.' In the actual case the document on which provisional
sentence was claimed was a deed of sale which imposed obligations on both seller and
purchaser. The court came to the conclusion that it was not a liquid document on which
provisional sentence procedure was competent.

Allied Holdings Ltd v Myerson 1948 (2) SA 961 (W) at 967-968


It is important to note that there are two kinds of onus in a provisional sentence case. There
is first of all the onus in the provisional sentence proceedings themselves and then there is
the onus in the principal case. The rule is that provisional sentence will be granted unless
the Court is satisfied that the probabilities are that the defendant will succeed in the principal
case. If, in the provisional sentence case, the Court considers that there is no balance of
probabilities in favour of either party in any principal case that may eventuate, then the law,
as I understand it, requires the Court to grant provisional sentence. In this enquiry, however,
the question as to where the onus lies in the principal case is relevant, because it is one of
the circumstances which will go to decide the probabilities in the principal case. There may
be cases in which in the principal case the onus is on the plaintiff and in other cases
the onus may be on the defendant, and where the onus lies may have a considerable
bearing on the question as to what are the probabilities of success in such ultimate principal
1948 (2) SA p967
PRICE J
case. If the Court considers that in the principal case the probabilities of success are equally
balanced, then I think the authorities concur in laying down that provisional sentence must
be granted. These principals emerge from an examination of the cases of Golub v
Rachaelson (1925, W.L.D. 188); Inglestone v Pereira (1939, W.L.D. 55); Batten & Co. Ltd v
Levinson (1939, W.L.D. 364); Morris & Berman v Cowan (2) (1940, W.L.D. 33) and Coetzer v
Krause (1942 OPD 122).

Although in the principal case the onus may sometimes be on the plaintiff, the above
authorities and others, which are too numerous to mention, seem to me to concur (in
spite of a passage here and there which may seem to support a different contention)
in establishing the principle, that in the provisional sentence case itself the onus is
always on the defendant to show that there is a balance of probabilities in his favour,
and that if he is unable to do so then the Court must grant provisional sentence
against him. If this rule did not exist the form of procedure which we call provisional
sentence would be almost, if not quite, useless. Provisional sentence is an extraordinary
remedy whereby a plaintiff, armed with a liquid document, can obtain a speedy judgment. If
the rule were that he could not get judgment unless he could show a balance of probabilities
in his favour then provisional procedure would be worthless to him. He would be in the same
position as if he were bringing an ordinary action.
The whole point about provisional sentence is that it gives a plaintiff, who is provided with a
liquid document, an advantage over his opponent. The advantage is that he is entitled to
judgment even if there is a dispute of fact, unless the defendant can show that the
probabilities of success in the main action or in the principal case are against the plaintiff.
The matter has been somewhat confused by passages in some of the authorities which say
that the primary onus, even in a provisional sentence case, is on the plaintiff. This only
means that there are certain issues which the plaintiff has to prove if these issues are put in
dispute. Initially the plaintiff has to prove nothing. He merely alleges in the summons that he
is the holder of a liquid document which the defendant has signed and he hands in the
document. He is then entitled to judgment. But if the defendant disputes any of the
allegations in the plaintiff's summons, for instance, if he denies his signature, then
the onus is on the plaintiff to prove that the defendant did sign that document.
Similarly if ex facie the
1948 (2) SA p968
PRICE J
document some condition has to be fulfilled before the plaintiff is entitled to payment,
the plaintiff must, in his summons, allege fulfilment of that condition, and if the
defendant denies that the condition has been fulfilled, the plaintiff must prove that he
has performed the condition before he is entitled to judgment. But it is only in this
sense that there is an onus on a plaintiff in a provisional sentence case. He only has
to prove those things which it is necessary for him to allege in his summons if they
are disputed. When his document is, on the face of it, an unconditional promise to

pay, all he need do is to produce the document with the defendant's signature upon it.
(See Inglestone v Pereira (1939, W.L.D. 55).)
It is recognised, of course, that a liquid document, which, on the face of it, speaks
unequivocally, must have the story of a transaction behind it, and that an investigation into
that story may show that the defendant is not liable in terms of the liquid document; but
once we go behind the liquid document the onus is on the defendant to show that if
evidence were heard the probabilities are that he would succeed. The defendant in the
present case has tried to ignore the form of a document, and, going behind the document, to
argue on the transaction. He says, in effect, 'It is true that I have signed this unconditional
promise to pay, but I have done so for a particular reason. It was because I agreed to pay
the purchase price of some goods which the supplier had undertaken to consign to me.
Therefore, the Court must treat the matter as if it were an action for the purchase price of
these goods with an onus on the plaintiff to prove that his contract had been properly
performed'. That is a fair statement of the defendant's argument and I think it is completely
wrong. It is wrong, I think, because it entirely ignores the fact that the plaintiff is armed with a
Bill of Exchange, and it assumes that a plaintiff armed with a Bill of Exchange is in no
stronger a position than he would be in if he were suing on a contract of sale. The plaintiff
does not rely, in a provisional sentence case, even when armed with a Bill of Exchange, on
the presumption raised by sec. 28 (1) of the Bills of Exchange Act which is that every holder
of a Bill of Exchange is presumed to be a holder for value. He does not need to rely upon
that presumption because the rules of provisional sentence completely cover and protect
him. Inglestone v Pereira (1939, W.L.D. 55) is a good illustration of the application of this
rule. The Bills of Exchange Act had no bearing on that case,
1948 (2) SA p969
PRICE J
because it was an action on two bonds, and it was common cause that the bonds had been
passed before the debtor had received any consideration other than a mere promise. In this
respect the case was similar to the present. In applying the principles of provisional
sentence, however, the learned Judge who decided that case held that it was quite irrelevant
whether the consideration had already passed when the documents were executed, or
whether the documents were executed in respect of a promise which was to be performed in
the future because the documents embodied an unconditional promise to pay, and it was for
the defendant to show on a balance of probabilities a failure of consideration.

Twee Jonge Gezellen (Pty) Ltd v The Land Bank 2011 (3) SA 1 (CC).
In Twee Jonge Gezellen (Pty) Ltd and Another v Land and Agricultural Development Bank of
South Africa t/a The Land Bank, and Another 2011 (3) SA 1 (CC), Mr K, a director of the first
applicant, signed an acknowledgment of debt in his personal capacity and on behalf of the
applicant in favour of the respondent. The acknowledgment of debt contained, inter alia, an
undertaking by the applicants to pay the debt by way of agreed instalments and a recordal of
their consent that failure to pay any instalment on due date would render the balance of the
debt immediately due and payable. The respondents issued summons against the
applicants, and the applicants in defence contended that the amount claimed was incorrect
due to an oral agreement between the parties and that the respondent had undertaken to
afford the applicants an extension of time to pay the agreed debt. At some stage after the
filing of a replying affidavit the applicants 169 ANNUALSURVEY OFSA LAW obtained leave
of the High Court to file additional papers in order to challenge the constitutionality of the
provisional sentence procedure. The applicants were unsuccessful in the High Court and the
Supreme Court of Appeal in their application for leave to appeal, hence the application for
leave to appeal to the Constitutional Court. Having found that the applicants satisfied the two
preconditions for granting leave (that the case raised a constitutional matter and that it was
in the interests of justice to grant leave) (paras [3]-[4]), the court then analysed the
constitutional challenge in respect of the right to equality before the law and equal protection
and benefit of the law (ss 9 and 34 of the Constitution, respectively). It should be pointed out
that the applicants before the Constitutional Court no longer sought the abolition of
provisional sentence and Uniform Rule 8 in their entirety (having conceded the procedure's
important commercial purpose) (para [29]), and contended only that a court should have a
discretion to refuse provisional sentence, even where the defendant failed to show that the
probabilities of success in the principal case were in his or her favour (para [30]). The court
first considered the question whether the procedure limited the right of access to courts
under section 34. As the procedure does not allow a defendant to enter into the principal
case unless the defendant has satisfied the amount of the judgment and taxed costs, the
question essentially thus was whether the absence of a discretion to permit such a
defendant to enter into the principal case where the defendant could not pay the sum
claimed and the probabilities were evenly balanced, rendered the procedure unconstitutional
(para [34]). In testing the respondent's contention that the procedure is constitutionally
sound, the court pointed out that section 34 not only requires a public hearing, but a fair
public hearing. This is not the case in all instances (para [41]) as it is a reality that a
defendant with a solid defence may possibly find the barrier created by the provisional
sentence procedure insurmountable, for example where the defendant is unable to establish

a defence on balance by way of affidavit without the help of oral evidence or crossexamination of the opponent witnesses. The prospect of success will in such an instance be
regarded as evenly balanced and provisional sentence will be granted, whereupon the
defendant must pay the full amount to enter into the principal case. If unable to do so, the
judgment

becomes

final

despite

the

fact

that

the

defendant

170

CIVIL AND

CONSTITUTIONAL PROCEDURE AND JURISDICTION never had the opportunity properly


to present a defence which the court predicted to have an equal chance of succeeding (para
[42]). So, despite having had an equal chance of winning, the procedure effectively deprived
the defendant of that chance. However, it has always been recognized that a court has a
discretion to refuse provisional sentence if strictly circumscribed circumstances exist (paras
[44]-[45] and [48]-[49]). The court consequently held that the procedure constituted a
limitation on a defendant's right to a fair hearing (para [50]) (and was ultimately (para [78])
declared to be inconsistent with the Constitution and invalid to the extent that it did not give
courts the discretion to refuse provisional sentence) where - '(a) the nature of the defence
raised does not allow the defendant to show a balance of success in his or her favour,
without the benefit of oral evidence; (b) the defendant is unable to satisfy the judgment debt;
and (c) outside 'special circumstances'. the court has no discretion to refuse provisional
sentence.' As this conclusion rendered an enquiry in respect of a defendant's right under
section 9 unnecessary, the court proceeded to investigate whether the limitation of a
defendant's right under section 34 was justifiable in terms of section 36 of the Constitution
(para [52]). (Section 36 provides that rights in the Bill of Rights may be limited only if
reasonable and justifiable 'in an open and democratic society based on human dignity,
equality and freedom'.) This query requires a balancing exercise (para [54]) in which the
extent of the limitation of the right is weighed up against the purpose, importance and effect
of the infringing means. The court accepted the commercial importance of the provisional
sentence procedure as well as the fact that it serves to exclude unmeritorious defences (and
in so doing renders scarce resources available for the resolution of real disputes) (paras
[57]-[58]). The court held that although the procedure without doubt achieves its purpose,
and that the restriction of the court's discretion to 'special circumstances' would contribute to
its purpose, the remedy goes too far to protect the plaintiffs interests when it fails to afford
the court a discretion to refuse provisional sentence 'where the result may be patently unfair
to the defendant' (para [64]). The court consequently held that there was 'no appropriate
justification' for the limitation to the right of access to courts that the absence of discretion as
described above entails. The court finally held that the procedure would be 171
ANNUALSURVEY OFSA LAW rendered constitutionally consistent if the common law were
developed as required by the Constitution to provide the court with discretion to refuse
provisional sentence only where the defendant can demonstrate the following circumstances

(para [66]): '(a) an ability to satisfy the judgment debt; (b) an even balance of prospects of
success in the main case on the papers; and (c) a reasonable prospect that oral evidence
may tip the balance of prospective success in his or her favour.' When the common law is
developed by the Constitutional Court in a particular case such as in the present instance,
the case is ordinarily required to be referred back to the High Court for reconsideration in the
light of the development. However, since in this instance it was evident that the change in
the common law could have no influence on the outcome of this case (the case clearly falling
outside the ambit of the required circumstances set out above), the court simply ordered that
the above declaration of invalidity did not affect any claim for provisional sentence that was
finally determined (paras [73]-[76], and [78]). The applicants were ordered to pay the costs of
the first respondent.

Heroldt v Wills 2013 (2) SA 530 (GSJ), esp. at paras [30] to [43]
[30] What is to be done? The first two requirements for an interdict set out in Setlogelo v
Setlogelo79 have comfortably been satisfied. Insofar as an F interdict is concerned, the
applicant has a clear right to his privacy and the protection of his reputation. The applicant
has indeed been defamed. What of the question of whether there is 'the absence of similar
protection by any other ordinary remedy'? The respondent has drawn attention to the fact
that, previously, the applicant, via his attorney, threatened to institute an action to claim
damages. The respondent G suggests that, if she is found to have defamed the applicant,
his proper remedy is damages.
2013 (2) SA p544
Willis J
A [31] It is in respect of the remedy where infringements of privacy take place in the social
media that the common law needs to develop. The social media form a subset of the
electronic media, but are not co-extensive with it: the social media are all part of the
electronic media, but not all the electronic media are social media. The electronic
media B were almost certainly beyond the imagination of the court whenSetlogelo v
Setlogelo was decided in 1914. Not only can items be posted and travel on the electronic
media at a click on a computer, in a moment, in an instant, in the twinkling of an eye, but
also they can, with similar facility, be removed therefrom. This can also be done at minimal
cost. The C situation is qualitatively different from the scenario where newspapers have
been or are about to be printed in hard copy and distributed. The law has to take into
account changing realities, not only technologically, but also socially, or else it will lose

credibility in the eyes of the people. Without credibility, law loses legitimacy. If law loses
legitimacy, it loses acceptance. If it loses acceptance, it loses obedience. It is imperative
that D the courts respond appropriately to changing times, acting cautiously and with
wisdom.
[32] Louis Brandeis, a former justice of the Supreme Court of the United States of America,
together with his professional partner in a Boston law firm, Samuel Warren, wrote an article
in 1890 in the E Harvard Law Review in which they argued that '(p)olitical, social and
economic changes entail the recognition of new rights, and the common-law, in its eternal
youth, grows to meet the demands of society'. 80
[33] In the case of Financial Mail (Pty) Ltd and Others v Sage Holdings Ltd and Another81
Corbett CJ said:
F

'(I)n a case of the publication in the press of private facts about a person, the person's

interest in preventing the public disclosure of such facts must be weighed against the
interest of the public, if any, to be informed about such facts.' 82
[34] The historical reluctance of the courts to interdict publication in the G media has its
roots, not only in issues relating to technology and economics that arise from 'stopping the
press', but also a concern about the social consequences of stopping the free flow of news
and information. This concern about the 'chilling effect' of court orders on freedom of
expression has been manifested in the case of National Media Ltd and Others v
Bogoshi H 83 recently decided in the SCA.
[35] Although major news items such as tsunamis, the outbreaks of war and the elections of
presidents may travel through the social media, the social media are not primarily news
media. As the founder of Facebook
2013 (2) SA p545
Willis J
said, it is all about being 'social'. The electronic media are laden with A news media. The
social media are qualitatively different from the electronic news media. Such important news
as may travel through the social media will, in most instances, be widely and readily
available in the news media as well. Attitudes by the courts to the removal of items from the
social media may be justifiably different in the case of the news B media, even where the
news media appear in electronic rather than print form. As Lior Jacob Strahilivetz has
pointed out in his publication, A Social-Network Theory of Privacy, 84 mathematical and

sociological analysis shows that the effect of publication is much dependent on its context
within the actual media.
[36] As an instrument for spreading love, friendship, fun and laughter C around the world,
Facebook is incontestably a force for good. As the learned authors Grimmelmann and Roos
have pointed out, however, Facebook is fraught with dangers, especially in the field of
privacy. 85

Grimmelmann,

although

sceptical

about

the

efficacy

of

many

other D instruments (including legislation) to address the dangers of Facebook, believes


that appropriate interventions by the courts can have a positive effect on the use of
Facebook. 86
[37] As was said by both the Constitutional Court in S v Mamabolo E (E TV and Others
Intervening); 87 and the SCA in National Media Ltd and Others v Bogoshi; 88 and Van der
Berg v Coopers & Lybrand Trust (Pty) Ltd and Others, 89 resolving the tensions between
every human being's constitutionally enshrined rights to freedom of expression and to
dignitas is all about balance. In the case of Le Roux and Others v Dey (Freedom of
Expression Institute and Restorative Justice Centre as Amici Curiae)90 the F Constitutional
Court emphasised the need to take into account the context in which a publication
occurs. 91
[38] The respondent has contended that the applicant could have approached Facebook,
reported the abuse, and asked for the posting to G be blocked. Her counsel, Ms Van
Aswegen, submitted that, as a subscriber, the applicant must know of Facebook's data
policies, and of the fact that he can report abuse to Facebook. There is nothing before me to
assure me that Facebook would comply with such a request. Grimmelmann argues that it is
better for the courts to focus on users, rather than Facebook itself, if intrusions on privacy
are effectively to be H
2013 (2) SA p546
Willis J
A curbed. 92 I agree: if one wants to stop wrongdoing, it is best to act against the
wrongdoers themselves.
[39] As is to be expected of a case that was decided in 1914 on so vital a legal issue as the
obtaining of an interdict and which has been affirmed B consistently since then, the question
of what is meant by 'the absence of similar protection by any other ordinary remedy'
in Setlogelo v Setlogelo has been much considered. 93 As Colin Prest notes, Van der
Linden used the words 'geen ander gewoon middle . . . waar door men met het zelfde gevolg
kan geholpen worden'; and 'geen ander ordinair middle . . . waar door men met het zelfde

effect kan geholpen worden'. 94 C (Koopmans Handboek (Institutes) 3.1.4.7 andJudicieele


Practijcq 2.19.1.) In the circumstances of this case, I am satisfied that, by issuing an interdict
that the respondent is to remove the posting, the court will be providing a remedy for which
there is no other by which the applicant with the same effect 'kan geholpen worden'.
Besides, the interdict which I propose to make will resolve the issue without the needless
expense, drama, trauma D and delay that are likely to accompany an action for damages in
a case such as this.
[40] Although judges learn to be adept at reading tea leaves, they are seldom good at gazing
meaningfully into crystal balls. For this reason E I shall not go so far as 'interdicting and
restraining the respondent from posting any information pertaining to the applicant on
Facebook or any other social media'. I have no way of knowing for certain that there will be
no circumstances in the future that may justify publication about the applicant.
F [41] It seems that the relief which has been sought, which relates to placing the
respondent under arrest if she fails to comply with the court's order, is ancillary to the making
of a continuing order of prohibition on postings in the social media. In any event, I shall also
not go so far as making an order, at this stage, that, in the event that the respondent
fails G to comply with the court's order, the respondent then be placed under arrest for noncompliance for a period of 30 days or any other period. At the moment I have no way of
knowing whether or not the respondent may become incapable of complying with the court's
order. Besides, it is unseemly for the courts to wield their authority with a sledgehammer.
Everyone knows that life can be made uncomfortable for those who do H not comply with
court orders.
[42] I am not sure that it falls within the competence of the sheriff of Randburg to remove the
postings should the respondent fail to do so. At
2013 (2) SA p547
Willis J
this stage I shall make no order in this regard, but the applicant is A welcome to approach
me again on this issue should it become necessary.
[43] Those who make postings about others on the social media would be well advised to
remove such postings immediately upon the request of an offended party. It will seldom be
worth contesting one's obligation to B do so. After all, the social media are about building
friendships around the world, rather than offending fellow human beings. Affirming bonds of
affinity is what being 'social' is all about.

Savage v Sisters of the Holy Cross 2015 (6) SA 1 (WCC)


The first respondent intended transferring property to the third respondent. The applicants
sought to interdict the transfer pending an application to be brought by them. The
applicants were tenants of six houses on the property, and had lived there for many years.
Their forebears had lived on the property for multiple generations as guests of the Catholic
Church (represented by the second respondent), and later, the applicants occupied the
property as tenants of the first respondent.
According to the applicants, they feared that should the transfer proceed, the third
respondent might evict them, leaving them destitute. They contended further that the first
respondent had not complied with canon law governing the Catholic Church, regarding the
sale of church property.
In response, the first respondent distinguished itself from the second respondent. It
described itself as a public benefit organisation focused on education. It alleged that should
it not sell the property, its work as a public benefit organisation would suffer.
Held The applicants were required to establish the requirements for a final
interdict, viz a clear right, infringement of such right and the absence of a suitable
alternative remedy.
A serious factual dispute existed regarding the extent of the applicants rights in the
property.
The Court found that the requirements referred to above had been established by the
applicants. It held that the balance of convenience favoured granting an interim interdict. It
ordered the first respondent to provide a report on the property. The applicants were directed
to institute action to determine the factual disputes which were found to exist.

Setlogelo v Setlogelo 1914 AD 221, at 227 just read.


So far as the merits are concerned the matter is very clear. The requisites for the right to
claim an interdict are well known; a clear right, injury actually committed or reasonably
apprehended, and the absence of similar protection by any other ordinary remedy.
Now the right of the applicant is perfectly clear. He is a possessor; he is in actual occupation
of the land and holds it for himself. And he is entitled to be protected against any person who
against his will forcibly ousts him from such possesion. True, the law does not allow him to

buy land, or to lease it, or to take transfer of it. But it does not forbid him from occupying it,
more especially as it would seem to have devolved upon him by way of inheritance. It would
indeed be a remarkable state of things if a native could be deprived of his right of occupation
of land which he had honestly come by at the instance of any person who took a fancy to it,
merely because he was not and could not become the registered owner. And yet that would
be the result of the order appealed from if it were allowed to stand.
But it was urged that in any event no irreparable injury had been sustained. That was not
the ground upon which the learned judge based his refusal; but in any event it is not a
ground which can avail the respondent in this case. The argument as to irreparable
injury being a condition precedent to the grant of an interdict is derived probably from
a loose reading in the well-known passage in Van der Linden's Institutes where he
enumerates the essentials for such an application. The first, he says, is a clear right;
the second is injury. But he does not say that where the right is clear the injury feared
must be irreparable. That element is only introduced by him in cases where the right
asserted by the applicant, though prima facie established, is open to some doubt.
In such cases he says the test must be applied whether the continuance of the thing
against which an interdict is sought would cause irreparable injury to the applicant. If
so, the better cairse, is to grant the relief if the discontinuance of the act complained
of would not irreparable injury to the other party: Van der Linden, Inst. (3, 1, 4, 7). But
he certainly does not lay down the doctrine that where there is a clear right the injury
complained of must be irreparable in order to justify an application an interdict.
I was not suggested during the argument that the other requisites for an interdict were not
present, and I agree that the
1914 AD at Page 228
appeal should succeed and the order be made in the terms stated by the Chief Justice.
Fey v van der Westhuizen 2005 (2) SA 236 (C).
DISSIPATION OF ASSETS BY TRUSTEES In Fey NO v Van der Westhuizen and others
2005 (2) SA 236 (C) a sequestration had been granted on the ground that an insolvent had
unlawfully obtained funds from his employer over several years and that the employer was a
creditor in respect of such funds. The applicant trustee contended that the funds fell within
the insolvent estate and had to accrue to it. This was opposed on the basis that the applicant
had not established the requirements for an anti-dissipation order. The court held that it had
been correctly argued that the present case involved a quasi-vindicatory claim and the
applicant was therefore not required to show an intention to dissipate (at 249D-E). The case

was distinguishable from Knox D'Arcy Limited & others vJamieson & others 1966 (4) SA 348
(A) in that the claim in the instant matter was quasiproprietary or quasi-vindicatory, whereas
the claim in Knox D'Arcy 4vo ANNUAL SURVEY OF SA LAW was a general claim for
damages (at 249D). The court was satisfied on the facts that there was no alternative
remedy to the antidissipation order sought to counter the potential for irreparable harm (at
250H-251A). The court accordingly confirmed a rule nisi, which had previously been issued
in favour of the trustee, prohibiting the dissipation of assets held in trust, by the trustees of a
trust, pending the institution of proceedings by the trustee for delivery of assets from the trust
into the insolvent estate.

International Trade Administration Commission v SCAW South Africa (Pty) Ltd 2012
(4) SA 618 (CC) at paras. [46] to [59].
Appealability of the interim order
1

Looming large in this case is the fact that the target of the appeal has assumed the
form of an interim order. That is indeed a relevant and important but, again, not a
determinative consideration in ascertaining where the interests of justice reside. The
respondent, SCAW, set much store by the contention that the interim order does not
have a final effect and thus that it is not in the interests of justice to grant leave to
appeal. In contrast, ITAC and Bridon UK contend that the interdict is of a kind that has a
final effect and is accordingly appealable. In order to decide these conflicting
contentions, I first set out the test for appealability and then ask the question whether
the interim interdict is susceptible to an appeal.

The test for appealability


1

The question whether an appeal against a decision of the High Court may lie directly to
this Court is governed by section 167(6)(b)44 of the Constitution read with Rule
19.45 The constitutionally prescribed standard is whether it is in the interests of justice
for this Court to hear an appeal. In Khumalo and Others v Holomisa46 this Court held
that it is not a jurisdictional requirement for an appeal to this Court that the matter must
involve a judgment or order within the meaning of section 20(1) of the Supreme Court
Act.47 However, the Court pointed out that it will not often be in the interests of justice for
this Court to entertain appeals against interlocutory rulings which do not have a final
effect on the dispute between the parties.48

The same point was made again in Minister of Health and Others v Treatment Action
Campaign and Others (No 1) 49 (TAC(1)):

The policy considerations that underlie the non-appealability of interim


execution orders in terms of s 20 of the Supreme Court Act, are also relevant
to the decision whether it is in the interests of justice to grant an application
for leave to appeal to this Court against an interim execution
order.50(Footnotes omitted.)

In this sense, the jurisprudence of the Supreme Court of Appeal on whether a


judgment or order is appealable remains an important consideration in assessing
where the interests of justice lie. An authoritative restatement of the jurisprudence is to
be found in Zweni v Minister of Law and Order51 which has laid down that the decision
must be final in effect and not open to alteration by the court of first instance; it must be
definitive of the rights of the parties; and lastly, it must have the effect of disposing of at
least a substantial portion of the relief claimed in the main proceedings. On these
general principles the Supreme Court of Appeal has often held that the grant of an
interim interdict is not susceptible to an appeal.52

The policy considerations53 that underlie these principles are self-evident. Courts are
loath to encourage wasteful use of judicial resources and of legal costs by allowing
appeals against interim orders that have no final effect and that are susceptible to
reconsideration by a court a quo when final relief is determined. Also allowing appeals
at an interlocutory stage would lead to piecemeal adjudication and delay the final
determination of disputes.

After Zweni, the Supreme Court of Appeal has recognised that the general rule against
piecemeal appeals could conflict with the interests of justice in a particular case. Howie
P, writing for a unanimous court in S v Western Areas,54 was required to decide, in an
application for leave to appeal in a criminal matter, whether the dismissal of an
objection to an indictment was appealable in terms of section 21(1) of the Supreme
Court Act.55 After surveying its case law on the appealability of a judgment or order in

civil and criminal cases and after referring to the interests of justice test set by this
Court in Khumalo v Holomisa,56 he concluded that the general principles enunciated
in Zweni57 are neither exhaustive nor cast in stone. He further held that:

[I]t would accord with the obligation imposed by s 39(2) of the Constitution to
construe the word decision in s 21(1) of the Supreme Court Act to include a
judicial pronouncement in criminal proceedings that is not appealable on
the Zweni test but one which the interests of justice require should
nevertheless be subject to an appeal before termination of such proceedings.
The scope which this extended meaning could have in civil proceedings is
unnecessary to decide. It need hardly be said that what the interests of
justice require depends on the facts of each particular case.58 (Emphasis
added.)

More recently, in Philani-Ma-Afrika v Mailula,59 the Supreme Court of Appeal had to


decide whether an order of the High Court which puts an eviction order into operation
pending an appeal was appealable. In a unanimous judgment by Farlam JA, the Court
held that the execution order was susceptible to appeal. It reasoned that it is clear from
cases such as S v Western Areas60 that what is of paramount importance in deciding
whether a judgment is appealable is the interests of justice.61 (Emphasis added.)

As we have seen, the Supreme Court of Appeal has adapted the general principles on
the appealability of interim orders, in my respectful view, correctly so, to accord with the
equitable and the more context-sensitive standard of the interests of justice, favoured
by our Constitution. In any event, the Zweni requirements on when a decision may be
appealed against were never without qualification. For instance, it has been correctly
held that in determining whether an interim order may be appealed against regard must
be had to the effect of the order rather than its mere appellation or form.62 In Metlika
Trading Ltd and Others v Commissioner, South African Revenue Service63 the Court
held, correctly so, that where an interim order is intended to have an immediate effect
and will not be reconsidered on the same facts in the main proceedings it will generally
be final in effect.

Lastly, when we decide what is in the interests of justice, we will have to keep in mind
what this Court said in Machele and Others v Mailula and Others.64 In that case, the
Court had to decide whether to grant leave to appeal against an order of the High Court
authorising execution of an eviction order pending an appeal. In granting leave to
appeal, Skweyiya J, relying on what this Court held in TAC (1),65 reaffirmed the
importance of irreparable harm as a factor in assessing whether to hear an appeal
against an interim order, albeit an order of execution:

The primary consideration in determining whether it is in the interests of


justice for a litigant to be granted leave to appeal against an interim order of
execution is, therefore, whether irreparable harm would result if leave to
appeal is not granted.66

I am alive to the fact that unlike in TAC (1) and in Machele, here we are not dealing with
an interim order of execution but an interim order against the exercise of statutory
power. Even so, the question whether an interim order may result in irreparable harm if
leave to appeal is not granted is an important but not the sole requirement for granting
leave to appeal. The test of irreparable harm must take its place alongside other
important and relevant considerations that speak to what is in the interests of justice,
such as the kind and importance of the constitutional issue raised; whether there are
prospects of success; whether the decision, although interlocutory, has a final effect;
and whether irreparable harm will result if leave to appeal is not granted. It bears
repetition that what is in the interests of justice will depend on a careful evaluation of all
the relevant considerations in a particular case.67

Is the interim interdict appealable?


1

SCAW submitted that the interim interdict is not appealable because it is not finally
dispositive of the issues in dispute. That however, is not the test. It is not a requirement
that the interim relief should be dispositive of all the issues in dispute before it becomes
appealable. It is sufficient if the order disposes of at least a substantial portion of the
relief claimed in the main proceedings.68 Also, it is adequate if the interim order is
intended to and does have an immediate effect and is not susceptible to be
reconsidered on the same facts in the main proceedings.69

As I see it, the immediate consequence of the order is that it is final and causes
irreparable harm. First, the order maintains the existing anti-dumping duty where it
would otherwise have ended either by operation of the law, on ITACs version of the
lawful lifespan of the anti-dumping duties, or as a result of ITACs decision to
recommend that the duty end on completion of the review. In effect, the court order
instantly stopped the sunset review, prevented its completion and precluded the
exercise of any ministerial discretion that is dependent on ITACs recommendation
arising from the sunset review.

Second, every import of the subject product of Bridon UK is liable to bear a 42.1% duty
and that will continue until a court decision on the pending review. The duty is not
refundable at the end of the pending review even if ITAC were to succeed in the review.
In addition, Bridon UK correctly argues that the existing anti-dumping duty is of such a
high order that it effectively excludes its goods from domestic markets and from the
SACU markets. So, while existing anti-dumping duties remain in place, Bridon UK
products remain expensive or unaffordable and that must lead to loss of sales.
Similarly, whilst the interdict is in force neither the two Ministers nor ITAC will be free to
perform their statutory obligations related to the existing anti-dumping duty. Whatever
the outcome of the review, the order has irreparable consequences and an immediate
and final effect in the sense stated in Metlika Trading.

Regent Insurance Co Ltd v Maseko 2000 (3) SA 983 (W)


Appeal against dismissal of special plea raised by appellant in court a quo. The respondent
had lodged a claim in terms of its insurance policy with the appellant after a motor vehicle
accident. The appellant raised a special plea based on the fact that respondent had not
instituted legal action within 90 days of repudiation of the claim as set out in
the insurance policy. Held, that the magistrate had simply dismissed the special plea
without providing reasons therefor. The court referred to the Magistrates Court Rules;
rule 51(8)(a) which required reasons to be provided. It was therefore necessary for the
court to reconsider the evidence on appeal. The evidence showed that the respondent had
not proved that the parties had agreed to the extension of the period for institution of action.
The special plea was therefore upheld and the claim dismissed.

Moloi and others v Minister for Justice and Constitutional Development 2010 (2) SACR
78 (CC) as an example of a failed attempt to leapfrog from the Mag Court to the CC.
Applicants, all sentenced prisoners convicted of dealing in drugs in contravention of the
Drugs and Drug Trafficking Act 140 of 1992, brought an urgent application for direct access
to the Constitutional Court. The application concerned the validity of their convictions and
sentences. All of them had been by convicted and sentenced by magistrates courts in
Kempton Park, Gauteng.
Section 21 of the Act created certain presumptions relating to dealing in drugs. These
provided that if certain factual situations are proved, a presumption is triggered that the
accused dealt in the drug in question, until the contrary is proved. However, all of the
Page 498 2010 (5) BCLR 497 (CC)
presumptions contained in section 21(1) of the Act have previously been declared
unconstitutional. Notwithstanding the fact that these provisions were struck down
prosecutors in the magistrates courts in Kempton Park continued in drug-dealing cases to
frame charge sheets that referred to the presumptions contained in section 21 of the Act.
Applicants contended that they were charged with and convicted of dealing in drugs in terms
of the provisions of the Act which had been declared unconstitutional and that in
consequence their right to a fair trial had been violated. Their convictions and sentences,
they contended, fell to be set aside because they were charged with contravening provisions
that were invalid.
The Constitutional Court issued directions to the various magistrates who had presided over
Applicants respective criminal trials requiring them to furnish reports on (a) whether a
presumption in section 21 of the Act had been relied upon in convicting Applicants; and (b)
ifsection 21 of the Act had not been relied upon, why the charge sheet had not been
amended. Each of the magistrates stated that they had not relied on the presumptions
contained in section 21 of the Act in convicting Applicants. The magistrates confirmed that
the charge sheets had not been amended but pointed out that section 86(4) of the Criminal
Procedure Act 51 of 1977 provided that the fact that a charge is not amended as provided in
this section, shall not, unless the court refuses to allow the amendment, affect the validity of
the proceedings thereunder.
The Court held that, in the light of the constitutional right to a fair trial and the right to be
presumed innocent until proven guilty, the question whether an accused person was
prejudiced by a defective charge sheet raised an important constitutional issue. Applicants
had

reasonable

prospects

of

success

in

seeking

the

setting

aside

of

their

convictions. Section 86(1) of the Criminal Procedure Act authorised a criminal court to
amend at any time before judgment any conceivable defect in the charge provided the
accused would not be prejudiced thereby.
Section 86(4) indeed provided that even if the charge were not amended, the proceedings
based on the defective charge might nevertheless remain valid. However, the question was
whether section 86(4) could be invoked if the accused might be prejudiced by an
amendment not having been made.
Whether the accused might be so prejudiced was dependent upon the facts of each case.
Prejudice, actual or potential, would always exist unless it could be established that the
defence or response of the accused person would have remained exactly the same had the
State amended the charge.
The question whether an accused person had been prejudiced by a defective charge in the
proper conduct of his or her case spoke to the fairness of the trial. Section 35(3)(a) of the
Constitution guaranteed every accused person the right to a fair trial which included the right
to be informed of the charge with sufficient detail to answer it and the warranty to be
presumed innocent until proven guilty. Whether Applicants were afforded a fair trial was
dependent, inter alia, upon the competence of the charge on which they were convicted. In
at least two instances High Courts had held that a charge based in part on the presumption
in section 21 of the Act which had been declared invalid was incompetent and that the
conviction could not, even on a plea of guilty, be valid. The fact that the trial courts in
casu may not have relied upon any invalid presumption for the convictions made no
difference. Applicants complaint raised important constitutional issues on whether they had
been afforded a fair trial within the meaning of section 35(3) of the Constitution. The question
whether they had been adequately informed of the charges they were to face as required
by section 35(3)(a) of the Constitution entailed, inter alia, a construction of section 86 and in
particular of section 86(4) of the Criminal Procedure Act in the light of the fair trial rights
entrenched in the Constitution. The application also raised the question of whether a
reference to the invalid presumption of dealing in drugs
Page 499 2010 (5) BCLR 497 (CC)
rendered the charge incompetent and the ensuing conviction vulnerable. The question
resolved into whether the right to a fair trial would be infringed if the charge sheet invoked
invalid statutory presumptions on dealing in drugs; whether this would be the case, even
where the accused had pleaded guilty and even where the accused person had furnished a
written explanation in support of a guilty plea. A further question was whether in order to
exercise the right to a fair trial it was necessary for the accused person to be informed of the

precise provisions of the Act upon which the State intended to rely. A further question was
whether it would be permissible for the prosecution to leave it to the accused to speculate on
the exact statutory provisions upon which the State intended to rely. The Court accordingly
concluded that the case presented an important constitutional issue. However, it would not
be in the interests of justice to grant the application for direct access because it was
undesirable that the Constitutional Court should sit as a court of first and last instance in a
matter that did not fall within its exclusive jurisdiction. The power to grant litigants direct
access outside the Courts exclusive competence was a power that was rarely exercised,
particularly where a High Court had jurisdiction in constitutional matters such as the matter in
casu. The views of the High Court on criminal justice matters that might arise on appeal
would be of assistance to the Constitutional Court, should the matter reach the Court again.
Nothing was likely to prevent the High Court from urgently considering the appeal. It would
therefore not be in the interests of justice to bypass the High Court and grant the application
for direct access.
The Court dismissed the application for direct access.
The Court noted that the only explanation proffered by the State for the irregular formulation
of the charge sheets attributed it to probable error and oversight. The Court remarked that
the seemingly endemic practice of framing charge sheets in this manner, more than a
decade after the offending presumptions were declared invalid was a cause for concern.
The Court also directed the Registrar to send a copy of its judgment to the head office of
Legal Aid, Johannesburg, the Law Society of the Northern Provinces and to the Society of
Advocates, Johannesburg, with a request to consider whether any of their members would
be prepared to represent Applicants, should they wish to appeal against their convictions.

Ufudo Estate Agents v Rakel (Pty) Ltd (on Jackal) for a brief discussion of this; see
also:
IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE DIVISION EAST LONDON
CASE NO: EL 737/08
ECD 3037/08
Delivered: 24 July 2013

In the matter between:

UFUDO ESTATE AGENTS CC


t/a REMAX SUNSHINE COAST

Plaintiff/Respondent

and

RAKEL (PTY) LTD

Defendant/Applicant

____________________________________________________________________
LEAVE TO APPEAL
____________________________________________________________________
MAGEZA AJ

[1]

On the relatively few occasions during which I have had to hear argument in respect

of applications for leave to appeal, I must say I have not been particularly occasioned much
ambivalence in granting such leave and have done so immediately pursuant to argument
having been heard. This matter stands on quite a different footing in that, not only is the law
clear on the issues under discussion but more importantly, the pertinent factual history
convincingly lends itself to the cautions pointed out in our case law and authorities
concerning both the requirement for the sufficiency of the reason(s) explaining the
withdrawal sought and the imperative to avoid an injustice and prejudice occasioned the
other party consequent upon such withdrawal.

[2]

Having heard Mr Schultz for applicant and Mr Brooks for the respondent on this

application for leave to appeal, I remain unconvinced that applicant sufficiently explained
itself in its papers and am persuaded by respondent that it will suffer prejudice not capable of
mitigation through either an award of costs or similar relief. I say so taking full cognizance of
the argument made by Mr Schultz on behalf of applicant that this decision has the
consequence of possibly closing the door on applicant (as defendant) in the relevant

material respects, something that I appreciate, on tortured consideration, must yield to the
rights that respondent (as plaintiff) must be allowed.

[3]

Having heard the application on 19 October 2011 and handed down judgment on 8

November 2011, the application for leave itself was before me on 18 June 2013. In my
principal judgment after having considered the matter, I came to the conclusion reached
having also accepted, inter alia, that:

Plaintiff points out that if Defendant were to be allowed to amend its plea, this would
necessitate the joinder of a third party to the proceedings and this would needless to
say cause it severe financial prejudice and obstruct the Plaintiffs right to have its
case timeously disposed of. It furthermore asserts that the Defendants application is
a delaying tactic and an attempt to prevent it from obtaining justice. Plaintiff also
points that any claim against Lutge has now prescribed.

[4]

In order to succeed in the application for leave to appeal, applicant must show

that there is a reasonable prospect of success on appeal. see Pharmaceutical


Society of South Africa v Tshabalala - Msimang 2005 (3) SA 238 (SCA) at para 40. I am
also alive to the precaution that where a Court decides to refuse leave to appeal, it is
not necessary for it to give reasons why it does so as the reasons for its findings will
have already been set out in its judgment. Indeed the authorities say such a course
ought to be discouraged. see Mphahlele v First National Bank of SA Ltd 1999 (2) SA
667 (KH) (199 (3) BCLR 253) and (Beyers v Elf Regters van die Grondwetlike Hof 2002
(6) SA 630 at 635 paras [4] and [5].

[5]

Suffice to repeat only this that the basis on which the applicant brought the

application for the withdrawal of the admissions made in its plea and the reasons for
the refusal of that application by this Court are in my view sufficiently set out in the
judgment. The law pertinent thereto is stated, discussed and applied.

[6]

Applicant also seeks leave to appeal the order of costs granted on an attorney

and client scale. Mr Schultz argued that the order was made without the parties being

invited to argue the issue of costs on this scale. In paragraphs (6) to (10) of my
judgment I deal with what I characterize as the applicants failure to give a logical,
coherent and candid explanation as to what the meetings were precisely concerned
with and what decisions were arrived at thereanent. Applicant wholesomely failed to
address itself to the specifics of the discussions around the matters it was required to
sufficiently explain, that is, how the contentious issues in the meetings referred to
were resolved. The applicant avoided pinning itself to even moderate detail and
resorted instead when unable to do so by attempting to detach itself from those
discussions. I remain needless to say left with a negative impression in respect of the
basis on which the application was brought; the passage of time between the making
of the admission and the application; the timing thereof coming as it did after a pretrial where the issue was not raised and the trial itself, as all suggestive of an effort to,
inter alia, buy time. That is to say nothing of the applicants knowledge of the setting
in of prescription against Lutge as stated by Respondent. All these are tantamount to
an abuse of the processes of this Court and the Court has a judicial discretion in such
circumstances to express its rebuke and if necessary, to make such an order. see
Commissioner for SARS v Hawker Air Services (Pty) Ltd: 2005 (5) SA 283 (T);
Lourenco v Ferela (Pty) Ltd (No1) 1998 (3) SA 281 (T); Rhino Hotel and Resort (Pty) Ltd
v Forbes 2000 (1) SA 1180 (W).

[7]

The application for leave to appeal is therefore refused.

___________

MAGEZA AJ

18 JULY 2013

NUMSA v Jumbo Products CC 1996 (4) SA 735 (A)


Rule 3(5) of the Appellate Division Rules provides, in respect of an application for leave to
appeal, that every such application 'shall furnish succinctly and fairly all such
information as may be necessary to enable the Court to decide whether such leave J
1996 (4) SA p736
A ought to be granted . . .'. An application for leave to appeal in which it is merely averred
that the issues of fact and law set out in detail in the parties' heads of argument submitted
before judgment in the trial Court, and annexed to the application for leave to appeal, are
such that there is a reasonable prospect that the Appellate Division might uphold an
appeal is not good enough. It does not indicate in what way and why it is contended
that the Court a quo erred, either in its findings of fact or its conclusions of law or its
application of the law to the facts, and the mere reference to the parties' B heads of
argument in the trial Court is unacceptable for two reasons. Firstly, those heads of
argument do not deal with the judgment as such, but merely advance pre-judgment
submissions. Secondly, the petition itself should set forth succinctly and fairly the
petitioner's case. It should not place the onus on the Court to glean the case from the
heads of argument and other supporting documents. It may well be that contentions
advanced in heads of argument prior to judgment become irrelevant, or C redundant or
unfounded by reason of the judgment; and equally the judgment may raise new issues which
have to be dealt with. (At 739D-H.)
Commenting that there was a current tendency for petitions for leave to appeal to be
prepared in the above 'lazy' way, the Court indicated that it wished its remarks to be
taken as a general direction as to the proper drafting of a petition for leave to appeal.
(At 739H.)

Radio Pretoria v Chairperson, ICASA 2005 (4) SA 319 (CC), and


In 1995 Radio Pretoria had been given a temporary one-year licence to conduct business as
a community radio station and broadcaster. In 1996, 1997 and 1998, further one-year
Page 232 2005 (3) BCLR 231 (CC)
licences were granted to it. When Radio Pretoria applied for its fifth consecutive temporary
licence for the period 30 April 1999 to 29 April 2000, a dispute arose with the IBA concerning
signal distribution licences for twelve relay stations. After negotiations a licence was issued
in terms of which Radio Pretoria could continue broadcasting via one transmitter and also
through twelve signal distribution stations. In February 2000 Radio Pretoria applied for a

temporary community sound broadcasting and signal distribution licence to continue as


a radiobroadcaster for the period 30 April 2000 to 29 April 2001 on the same terms and
conditions as had applied in the previous year. A committee of three ICASA members was
appointed

to

deal

with

the

application.

The

committee

conducted

hearing

and Radio Pretoria made oral and written representations. Radio Pretoria was also asked to
address further questions that had arisen, including the question of community involvement
in the election of its board of directors and its stated strict policy of employing only BoereAfrikaners. Radio Pretoria responded, contending that it acted in accordance with its articles
of association and that it had done all it could to actively encourage the communities it
served to become members. It defended its employment practices by stating that such were
necessary to preserve its cultural and overall identity. The application for a temporary licence
was then refused. The reasons for the refusal included the fact that, in terms
of Radio Pretoria s articles of association, not every member of the community it served was
entitled to become a member, and that, as only persons nominated or appointed by the
board of directors by majority vote could become members, for all practical purposes
membership of Radio Pretoria was restricted to those persons invited by the Board to
become members. This form of governance was undemocratic and in contravention of
section 32(3) of the Broadcasting Act 4 of 1999. A licencee had to be managed and
controlled by a board that was democratically elected from members of the community in the
licensed geographical area. The policy of employing Boere-Afrikaners only amounted
to discrimination against other persons on the basis of race, ethnic or social origin,
colour,

religion,

belief,

culture

and

language.

The ICASA then

advised Radio Pretoria that it was to terminate its broadcasting services within thirty days
after receiving the reasons for the refusal. Radio Pretoria applied to the Pretoria High Court
to have the decision by ICASA reviewed and set aside and to have the matter remitted
to ICASA for reconsideration. The review application failed. The judgment was reported
as Radio Pretoria v Chairman, Independent Communications Authority of South Africa and
Another 2003 (4) BCLR 421 (T). Radio Pretoria launched an appeal to the Supreme Court of
Appeal against that judgment.
Radio Pretoria had, however, submitted an application for a four-year licence during March
1998. This was refused by the ICASA on 30 September 2003, that is to say, approximately
seven months after the judgment by the TPD dismissing the review application. The fouryear licence application had not been a feature of the review application at all. The
review application had been restricted to the refusal of the temporary licence. In May
2004 ICASA supplied Radio Pretoria with reasons for the refusal of the four-year licence
application. ICASA informed Radio Pretoria that, in the light of the decision, it was required
to terminate its broadcasting activities by midnight on 23 June 2004. Radio Pretoria later

launched an application for interim relief pending the outcome of a proposed review
of the refusal of the four-year licence application.
Radio Pretoria pursued an appeal to the Supreme Court of Appeal against the judgment
dismissing the earlier application to review the refusal of a temporary licence. It pointed out
in its papers that the reasons offered by [ICASA] for refusing the [Radio Pretoria s]
application for a four-year community broadcasting licence, were substantially the same as
those presently under attack and to be considered by this . . . Court. However, the reasons
for ICASA s refusal were not formally placed before the Court.
Radio Pretoria contended that a decision by the Supreme Court of Appeal would not be moot
because it would involve an interpretation of section 32(3) of the Broadcasting Authority Act
and on the correctness of ICASA s refusal in respect of the Radio Pretoria s
Page 233 2005 (3) BCLR 231 (CC)
employment practice. Such would be useful as a guide for the court reviewing ICASA s
decision in respect of the four-year licence application. It would also be useful to other
broadcasters who might experience similar problems.
The Supreme Court of Appeal held that the question of a temporary licence was no
longer a live issue. That question was moot. A decision on that question would not
resolve the issues between the parties. It would not impact on Radio Pretoria s ability
to continue broadcasting until the litigation concerning the refusal of the four-year
licence application had been finally resolved. The appeal thus fell to be dismissed in
terms of section 21A(1) of the Supreme Court Act 59 of 1959. Section 21A(1) provides:
When at the hearing of any civil appeal . . . the issues are of such a nature that the
judgment or order sought will have no practical effect or result, the appeal may be
dismissed on this ground alone.
A judgment by the Supreme Court of Appeal on Radio Pretoria s appeal would have no
practical effect.
The appeal before the Supreme Court of Appeal was limited to the decision on the
temporary licence for the year ending April 2001. There could be no practical purpose
to which a decision on the temporary licence could now be put. Radio Pretoria had
argued that a decision on the constitutional issues related to the temporary licence
would serve a useful purpose for the broadcasting industry and wider community.
The Court observed that while there may indeed be instances where it would be in the
interests of justice for the Constitutional Court to decide a constitutional matter for
the benefit of the broader public or to achieve legal certainty or other public purpose,
even if the decision was of no practical value to the litigants themselves, this was not
such

case.

Even

if

the

issue

of

temporary

licence

was

favourably

decided, Radio Pretoria would not be in a position to carry on broadcasting and the

disputes between the parties on the four-year licence would remain unresolved until
the decision was reviewed or otherwise changed.

Coin Security v SANUSO 2001 (2) SA 872 (SCA).


Prior to making its order, the Court requested the parties to address the question of whether
the appeal and any order made thereon would have any practical effect in terms of the
Supreme Court Act 59 of 1959, section 21A. Having heard argument, the Court dismissed
the appeal, providing its reasons therefor.
Held, that the dispute between the parties, which led to the institution of legal action,
was an industrial one which had since been resolved. The Court was being asked to
confirm a rule which would interdict acts committed in the course of that dispute.
Clearly, this would have no practical effect.

Section 21A was the reason for dismissing the appeal in Coin Security Group (Pty) Ltd v SA
National Union for Security Officers 2001 (2) SA 872 (SCA). The court confirmed that
general precedent value (namely the value of a judgment for other parties who may face
similar disputes) was not a 'practical effect' for the purposes of the section, and did not
deprive a moot point of its practical futility inter partes (paras 9 and 10). There remained a
discretion, and where a party might influence its own conduct as a result of the appeal, the
court might exercise its discretion against application of the section - if the dispute to be
determined on appeal can in some real sense be described as a 'live issue' (paras 7 and 8).
It is submitted that even what may be called 'subjective precedent value' (i e the value for
one of the parties of a judgment in regulating its own future conduct) should not affect the
practical futility inter partes of an appeal, a principle enunciated in the English authority to
which the court referred with approval (para 7). Elements of an approach allowing 'subjective
precedent value' to constitute practical value had apparently been endorsed in NatalRugby
Union v Gould 1999 (1) SA 432 (SCA). This led to an attempt on the part of the appellant in
Coin Security to contend for continued practical value in pure objective precedent value for
future purposes. The court's answer made it clear that value as pure objective precedent
would not suffice, but did not make it clear whether subjective precedent value independent
of any effect on the dispute between the parties at issue could yield a discretionary
relaxation of the rule. It is submitted that the correct approach would be to decline to
hear an appeal, except in exceptional cases, if the outcome would have value for one
party only - i e in its own future conduct, or in disputes with others, without having any

practical value for the other party to the dispute. The court has not finally pronounced on
this issue.
S v Mngoma 2009 (2) SACR 447 (E)
sentence imposed by the trial court was found to be inappropriately lenient and increased on
appeal, but its finding in the context of a crime of passion that substantial and compelling
circumstances existed to justify a departure from the minimum sentence was confirmed.
The respondent had been convicted in the High Court of murder and sentenced to five years'
imprisonment in terms of s 276(1)(i) of the Criminal Procedure Act 51 of 1977. The State
then applied, under s 316B, for leave to appeal against this sentence on the grounds that it
was too lenient. Leave

D was granted for an appeal to the full bench, which heard the

appeal, upheld it, and imposed a sentence of 12 years' imprisonment. It subsequently


emerged, however, that the full bench had had no jurisdiction to hear the appeal, s
316B specifically requiring that appeals by the State against sentence were to be
heard by the Supreme Court of Appeal. The decision of the full bench was, therefore, a
nullity. In addition, both it and the trial

E court were functus officio and could not set aside

their own orders. This meant, on the one hand, that the matter could not be brought before
the Supreme Court of Appeal, because the required leave had not been given; and, on the
other, that the respondent might suffer prejudice if he were detained for longer than he
should be by reason of an invalid warrant.
Held, that the only sensible course to follow was for the court that had heard the appeal to
make an order remitting the matter to the trial judge, enabling

F him to make the order that

should have been made in the first place. This was, in any event, the order that the court
would have made if the irregularity had been brought to its attention at the hearing of the
appeal. The trial judge would then be in a position to reconsider the matter, allowing it to run
its ordinary course. (Paragraph [5] at 448hj.)
Order giving leave to appeal to full bench set aside. Matter remitted to trial court

G for

appeal application to be disposed of afresh.


Womens Legal Centre Trust v President of RSA 2009 (6) SA 94 (CC).
The Constitutional Court today ruled that applications challenging the legislative
programme and duties of the government should not be brought directly to the Court,
but must first be lodged in the High Court and go through the ordinary judicial
processes before reaching the Court. The Court dismissed an application by the
Womens Legal Centre (the Centre) which sought an order to oblige the President, the
Ministers for Justice and Constitutional Development and for Home Affairs, and the principal
office-bearers of Parliament to enact legislation regulating Muslim marriages. On 20 May

2009 the Constitutional Court heard an application for direct access to the Court. The
Centres case was that the President and Parliament failed to fulfil constitutional obligations
because no legislation has been passed recognising and regulating marriages concluded
under Islamic law. This failure, the Centre argued, violates numerous rights protected in the
Bill of Rights. The Court dealt with a preliminary point only whether the Centre could bring
its case as a direct access application. It heard argument on two narrow questions. First, did
the obligations the Centre sought to enforce fall within the exclusive-access provision
of the Constitution (which provides that Only the Constitutional Court may decide
that Parliament or the President has failed to fulfil a constitutional obligation)?
Second, if the obligations do not fall within that provision, should the Court anyhow
hear the Centres case directly? The Courts judgment accordingly does not decide
whether Parliament may be under an obligation to enact legislation to recognise Muslim
marriages. Nor does it consider whether such legislation would be consistent with the
equality, dignity, freedom of religion or other provisions of the Bill of Rights. Writing for a
unanimous Court, Cameron J held that the exclusive-access provision of the
Constitution, section 167(4)(e), focuses on specific agents it mentions only the
President and Parliament. By contrast, the obligation to enact legislation to fulfil the
rights in the Bill of Rights falls on a wide range of constitutional actors. These include
the Cabinet, organs of state, independent institutions under Chapter 9 of the
Constitution, Parliament and the President. The obligation does not fall on the
President and Parliament alone. For this reason, the obligation to enact such
legislation, if it exists, can be considered by the High Courts. It does not fall within
this Courts exclusive jurisdiction. Cameron J also found that the Centres case
should first be considered by the High Court and possibly later by the Supreme Court
of Appeal. The Constitutional Court seldom grants direct access outside its exclusive
jurisdiction. To hear the Centres case directly, bypassing the ordinary processes of
litigation, would mean that this Court would hear and determine the application as a
court of first and final instance. Since the Centres case involved controversial issues of
wide public interest in respect of which many parties might wish to have say, and could
require findings about factual issues and expert evidence, this was not in the interests of
justice.
Kruger v President of RSA 2009 (1) SA 417 (CC)
In Kruger v President of the Republic of South Africa & others 2009 (1) SA 417 (CC), the
court reiterated that it will exercise its discretion to grant direct access only in
exceptional circumstances, and when it is in the interests of justice according to the
facts of each case. In this case the court granted direct access to the Road Accident

Fund, inter alia, because the victims of accidents were obviously prejudiced by the
uncertainty surrounding the validity of the provisions of the Road Accident Fund
Amendment Act 19 of 2005. (This Act purported to bring certain sections into
operation by a certain date.) In two applications relating to the right of every citizen to
vote in an election, the question of direct access was also considered. Both
applications were brought on an urgent basis shortly before the general elections,
and concerned the exclusion from voting of certain categories of South African
citizens living abroad. To this end the applicants sought orders declaring certain
sections of the Electoral Act 73 of 1998 invalid to pave the way for them and others
similarly situated to cast their votes abroad in the election. Both applications were
heard together.
Arun Property Development (Pty) Ltd v City of Cape Town 2015 (2) SA 584 (CC).
The Land Use Planning Ordinance 15 of 1985 (Cape) (LUPO) requires of a local authority
in the Western Cape to undertake land use planning and to adopt a structure plan. The
structure

plan

should

provide

framework

within

which

land

use

planning

and development by the private sector is to take place.


Appellant

(Arun)

purchased

a property which

it

intended

to

use

for

residential development. Arun was then informed by municipal officials that no application for
rezoning and subdivision of the property for a township development would be approved
unless the layout plans of the proposed development made due allowance for a planned
future road infrastructure. This meant that any approval for rezoning and subdivision would
depend on whether the intended development accorded with existing planning protocols.
The structure plan earlier adopted by the then Cape provincial authorities envisaged primary
roads which would run over the property.
Arun applied to the City for permission to subdivide the property in order to undertake the
intended residential development. The application took into account the local authoritys
envisaged road infrastructure. Approval was granted. The approval included confirmation of
the rezoning of specified portions of the property to public streets as well as conditions for
the design of the road infrastructure. Although section 42(2) of LUPO allows for the
imposition of conditions relating to the cession of land without compensation, the approvals
did not set a condition that the portions of the planned primary roads that would run over
the property had to be ceded to the City at no cost. Arun adopted the stance that the land
reserved by the structure plan for the future construction of roads was in excess of
the normal needs arising from the development, and because LUPO provides that
land on which public streets or public places will be built vests in the local authority

without compensation, Arun was entitled to compensation for the vested public land
which exceeded the normal needs of the development. The City contended
that Arun was not entitled to compensation.
Arun instituted action against the City claiming compensation. It pleaded that its approved
subdivision plans had to provide for portions of excess land which did not arise out of the
normal needs of the residential development of the property, and that the City should pay
compensation for it. The High Court found for Arun. It held that all the land reserved for
public roads, including any land in excess of the development s needs, had vested in
the City, and that Arun was entitled to compensation for the excess land, such compensation
to be calculated in terms of the Expropriation Act 63 of 1975. The City appealed to the
Supreme Court of Appeal which upheld the appeal, holding that Arun was not entitled to
compensation for the excess land.
Arun then approached the Constitutional Court and was granted leave to appeal against
the decision of the SCA.
The Constitutional Court upheld the appeal. The Court held that section 28 of LUPO had to
be read in a manner that supported and recognised the legislative object of planned, orderly
and public-oriented land use and development within a local authority. With the rezoning of
land use and subdivision of land in order to develop it into a township public streets and
public spaces arose. Those properly vested in the public authority without compensation
because they were integral to the development. However, the provision went further. It
vested also the ownership of a developers excess land, if any, in a local authority. That
vesting

of

ownership

beyond

the

reasonable,

normal

needs

of

subdivisional development constituted a legislative acquisition of the developers land


without compensation. It occurred by operation of law after confirmation of the subdivision.
The compulsory taking away of the excess land without compensation was not properly
related to the purpose of developing a township with adequate public roads and spaces. The
vesting of excess land in the local authority in the course of a township development may be
beneficial to regional roads and other public needs; but that was not an adequate or
compelling public consideration why the local authority should acquire the excess land from
the developer for no compensation. The provision had to be given a meaning that was at
peace with section 25(2) of the Constitution. The excess land therefore attracted
compensation.
The Constitutional Court set aside the order of the Supreme Court of Appeal and reinstated
the High Court order in amended form. It declared that the excess land had vested in
the City in terms of LUPO and that Arun was entitled to compensation in respect of the
excess land, such compensation to be calculated in accordance with the provisions of the
Expropriation Act 63 of 1975.

Pepkor Retirement Fund v Financial Services Board 2003 (6) SA 38 (SCA).


The question on appeal was whether a functionary empowered by legislation to make a
decision in the public interest, has locus standi to have that decision reviewed in a court of
law and set aside. Linked to this was the question of whether a material mistake of fact
should be a ground of review of such a decision. The decision in question related to the
certifying of pension fund transfers, and the approval of a transfer of an amount from the first
appellant pension fund to the second appellant (the employer). When the respondents
discovered that the transfer was unlawful, and the decisions based on misstatements, it
applied for the setting aside of the decisions. Their locus standi to bring the application was
challenged by the appellants.
Held, that the argument that section 14(1) of the Pension Funds Act 24 of 1956 did not
specifically give the registrar the right to apply to court to have a certificate wrongly granted
by him set aside was erroneous. Due to the requirements of the section, the registrar was
duty bound to make an application like the present one if prejudiced. The only aspect, in
which the respondents lacked locus standi, was with regard to the transfer of the amount
from the fund as referred to above. This was the only point on which the appeal was upheld.
In Pepcor Retirement Fund & another v Financial Services Board & another 2003 (6) SA 38
(SCA) the Registrar of Pension Funds ('the Registrar') granted certain certificates in terms of
s 14(1) of the Pension Funds Act 24 of 1956 ('the Act'). These certificates were granted in
respect of the Pepkor Retirement Fund ('the Fund') and authorized the transfer of R9,2
million from the Fund to three 'daughter' funds. The three 'daughter' funds were formed
following an unbundling of the Fund into the three 'daughter' funds. The three 'daughter'
funds were also pension funds registered under the Act. The unbundling was brought about
by a series of transfers of business in terms of s 14(1) of the Act. Before granting the
approvals for the transfers of the Fund's business in terms of s 14(1) of the Act, the Registrar
requested that certain information be furnished to him by the actuary of the Fund. The
information pertained to the funding levels of the Fund. It only later appeared that the
information provided by the actuary contained serious misstatements. As a result, the
Registrar had been misled on facts material to his decision in allowing the transfers of
business between the different funds. The Fund was later liquidated. The chief
actuary of the Financial Services Board ('FSB') subsequently discovered the initial
misstatements by the Fund's actuary and the consequent unauthorized transfer of the
R9,2 million. The FSB and the Registrar instituted proceedings in the court a quo to
review and set aside the approvals and the transfers made under s 14(1) of the Act,

and to direct the Fund to repay the R9,2 million to the liquidator of the Fund. The Fund
challenged the locus standi of both the Registrar and the FSB to bring the
proceedings. In the court a quo the locus standi of both the Registrar and the FSB was
confirmed: see Financial Services Board & another v De Wet NO & others 2002 (3) SA 525
(C). On appeal, Cloete JA, delivering the judgment of the Supreme Court of Appeal, dealt
first with the locus standi of the Registrar. FINANCIAL INSTITUTIONS AND STOCK
EXCIL(NGES 0?5 He held that if an administrative act had been performed irregularly, as
was the case here, the Registrar was not only entitled but also bound to raise the matter in a
court of law (para 10). He further pointed out that it was clear that the Act was passed to
provide for the regulation and supervision of pension funds. The Registrar had to fulfil the
supervisory function. It was therefore unthinkable that if after the permission for the transfer
of funds had been granted, the Registrar were to realize that there had not been proper
compliance with s 14(1) of the Act, he could not approach the court to have it set aside
(paras 11 and 13). The underlying purpose of the Act is that the general public interest
requires that pension funds be operated fairly, properly and successfully. It is the duty of the
Registrar to ensure that this purpose is achieved (para 14). Further, so CloeteJA reasoned,
the Registrar has locus standi in terms of s 6A(l)(b) of the Financial Institutions (Investment
of Funds) Act 39 of 1984 to compel the Fund to claim the repayment of the R9,2 million and
to cease contraventions of the provisions of the Act (paras 17 and 18). Secondly, Cloete JA
dealt with the locus standi of the FSB. He held that it was clear from the provisions of s 3(a)
of the Financial Service Board Act 97 of 1990 (FSB Act), read with the definition of the term
'financial institution' in s 1, that the FSB was indeed empowered to supervise the exercise of
control over the activities of the Fund and the 'daughter' funds (para 19). The question that
remained was whether the power conferred upon the FSB by s 3(a) of the FSB Act
included the power to seek judicial review of the Registrar's decisions on transfers of
business when the FSB considered such decisions to be invalid. Cloete JA decided
that the FSB had indeed locus standi to institute proceedings for judicial review of
decisions of the Registrar under the Pension Funds Act. The FSB itself, however, was
not empowered to review and set aside such decisions by the Registrar. The same
duty that the Registrar had in respect of decisions incorrectly taken by him also attached to
the FSB in respect of incorrect decisions taken by the Registrar. It is important to note that
Cloete JA drew a crucial distinction between the locus standi of the FSB to bring review
proceedings before the court and its (the FSB's) right to institute proceedings for the
recovery of the R9,2 million. The court was at pains to emphasize that the FSB did not have
the right to institute proceedings for the recovery of the R9,2 million. That was the function of
the Registrar. Where the Registrar failed to do his duty in this regard, the FSB had the right
to institute review proceedings for the failure of the Registrar to exercise his functions

properly, or even to approach the court for a mandamus compelling the Registrar to recover
the money (para 25). Thus the FSB had the locus standi to approach the court to review the
decision by the Registrar to grant the s 14(1)(e) certificates and to set those certificates and
the Fund transfers consequent on them aside. But the FSB had no locus standi itself to seek
an order that the money be repaid (para 26). As far as the actual legal basis for the claim for
repayment of the money was concerned, Cloete JA held that the Registrar's claim was not in
the nature of a condictio but rather a right ex lege to approach the court to order a
repayment. But where the Fund itself sought a repayment its claim would have been based
on a condictio (para 27). Cloete JA further held that a material mistake of fact, like that
in the present case where the Registrar exercised his powers incorrectly because of
the wrong information supplied to him, could be a basis on which a court could
review an administrative decision. A functionary such as the Registrar has to exercise
powers properly, that is, on the basis of true facts. In the present case it did not happen and
therefore the Registrar's decision was justifiably taken on review (para 47). Suffice it to
mention for purpose of the present discussion that CloeteJA cautioned that recognition of
material mistake of fact as a potential ground of review - as had happened here - has its
dangers. He expressed the caveat that a party should not be allowed to misuse such ground
to blur or eliminate the important distinction between two distinct forms of relief: appeal and
review (para 48). Cloete JA accordingly dismissed the appeal against the setting aside on
review of the s 14(1)(e) certificates and the resultant transfers of money from the Fund to the
'daughter' funds, and from the 'daughter' funds to the defined contribution funds. But the
appeal against the order granted at the suit of the FSB for repayment of the R9,2 million was
upheld (paras 52 and 54). The case is discussed in the chapter on Administrative Law.
Khumalo and another v MEC for Education, Kwazulu-Natal 2014 (5) SA 579 (CC) at
paras [42]-[52].

[42] There is no prescribed time limit for launching a review under section 158(1)(h) of the
LRA. The Labour Court Rules further prescribe no time limits for bringing review
applications. Under other provisions of the LRA, the time limits in which litigants or
complainants are required to bring their disputes are strictly circumscribed.25 The importance
of resolving labour disputes in good time is thus central to the LRA framework. It is generally
understood that proceedings under section 158(1)(h) must be launched within a reasonable
time. In some instances, in the context of the LRA, the courts have held a reasonable time to
be about six weeks.26

[43] Previously, section 39 of the PSA stipulated a 12-month prescription period in which a
claimant could bring an action against the state for any act or omission made in terms of the
Act.27 The time limit was subsequently repealed by section 2(1) of the Institution of Legal
Proceedings Against Certain Organs of State Act28 (Repealing Act). At all relevant times, the
PSA thus prescribed no time limits for reviews of conduct in terms of the Act.

[44] But what do we make of the Legislatures decision to remove these time limits? Does
this mean that litigants are not constrained by any requirement to act timeously? In my
view, the Legislatures decision to remove the 12-month prescription period opens the
actions of public functionaries in terms of the PSA to ongoing scrutiny and
transparency. Bearing in mind the purpose of the Repealing Act,29 the repeal of section 39
allows that an applicant cannot automatically be non-suited on the basis of a delay.
Nevertheless, it is a long-standing rule that a legality review must be initiated without
undue delay and that courts have the power (as part of their inherent30 jurisdiction to
regulate their own proceedings) to refuse a review application in the face of an undue
delay in initiating proceedings31 or to overlook the delay. This discretion is not openended and must be informed by the values of the Constitution. However, because there are
no express, legislated time periods in which the MEC was required to bring her application,
there is no requirement that a formal application for condonation needs to have been
brought.

[45] In the previous section it was explained that the rule of law is a founding value of the
Constitution, and that state functionaries are enjoined to uphold and protect it, inter alia by
seeking the redress of their departments unlawful decisions. Because of these
fundamental commitments, a court should be slow to allow procedural obstacles to
prevent it from looking into a challenge to the lawfulness of an exercise of public
power. But that does not mean that the Constitution has dispensed with the basic
procedural requirement that review proceedings are to be brought without undue delay or
with a courts discretion to overlook a delay.

[46] Section 237 of the Constitution provides:

All constitutional obligations must be performed diligently and without delay.

Section 237 acknowledges the significance of timeous compliance with constitutional


prescripts. 32 It elevates expeditious and diligent compliance with constitutional duties
to an obligation in itself. The principle is thus a requirement of legality.

[47] This requirement is based on sound judicial policy that includes an understanding of the
strong public interest in both certainty and finality33. People may base their actions on the
assumption of the lawfulness of a particular decision and the undoing of the decision
threatens a myriad of consequent actions.

[48] In addition, it is important to understand that the passage of a considerable length of


time may weaken the ability of a court to assess an instance of unlawfulness on the facts.
The clarity and accuracy of decision-makers memories are bound to decline with time.
Documents and evidence may be lost, or destroyed when no longer required to be kept in
archives. Thus the very purpose of a court undertaking the review is potentially
undermined where, at the cause of a lengthy delay, its ability to evaluate fully an
allegation of illegality is impaired.

[49] In Gqwetha34 the majority of the Supreme Court of Appeal held that an assessment of a
plea of undue delay involves examining: (1) whether the delay is unreasonable or undue (a
factual enquiry upon which a value judgment is made in the light of all the relevant
circumstances); 35 and if so (2) whether the courts discretion should be exercised to
overlook the delay and nevertheless entertain the application.36

[50] In terms of the first leg of the enquiry, any explanation offered for the delay is
considered.37 We know in the present matter that the MEC has made no attempt to explain
why she was idle for so long. Considering the typically short time frames for challenges
to decisions in the context of labour law, the MECs delay of about 20 months, if taken
from the time of the receipt of the Task Team Report, is significant in itself.
Furthermore, in the absence of any explanation, the delay is unreasonable.

[51] The fact that the MEC has elected not to account for the delay, despite having had the
opportunity to do so at multiple stages in the litigation, can only lead one to infer that she
either had no reason at all or that she was not able to be honest as to her real reasons. Had
the matter been brought by a private litigant, this aspect of the test might weigh less heavily.

However, given that the MEC is responsible for the decision, that she is obliged to act
expeditiously in fulfilling her constitutional obligations, 38 and that she should have within her
control the relevant resources to establish the unlawfulness of the decision she impugns, the
unreasonableness of the unexplained delay is serious.

[52] But should we nevertheless overlook the unreasonable delay? On this leg of the
test, the majority in Gqwetha held that the delay cannot be evaluated in a vacuum but
must be assessed with reference to its potential to prejudice the affected parties39 and
having regard to the possible consequences of setting aside the impugned
decision.40 In the context of public-sector employment, the value of security for
employees41 and in mitigating the arguably inherent inequality of the workplace42 must
be kept in mind.
Dumani v Nair and another 2013 (2) SA 274 (SCA).
The appellant was a magistrate who was on suspension. At a disciplinary enquiry presided
over by the first respondent, the appellant was found guilty on three counts of misconduct
relating to sexual harassment. The first respondent recommended to second respondent
(the Magistrates Commission) that the appellant be removed from office as a magistrate as
contemplated in section 13 of the Magistrates Act 90 of 1993. When the Magistrates
Commission accepted the first respondents recommendation, the appellant instituted
proceedings in the High Court to review and set aside the first respondents findings.
The dismissal of that application led to the present appeal.
Held The enquiry before the first respondent was whether, on a balance of probabilities,
the appellant was guilty of misconduct. The appellants allegation that the complainants had
conspired against him was rejected by the Court. The common element in the evidence of
the three complainants was that the appellant had touched them inappropriately. In the
absence of a conspiracy, the cumulative effect of their evidence was to render the denial by
the appellant less probable. The enquiry before the present Court was not whether the first
respondent was correct in his conclusion that the appellant was guilty on three of the
charges, but whether the first respondents decision was so unreasonable that no
reasonable person could have reached it.
One of the grounds of review relied upon by the appellant was that the presiding officer
had acted arbitrarily. That was linked to the main enquiry in that the first respondent would
have acted arbitrarily if it were to be found that his finding of guilt on the part of the appellant
could not be justified on the acceptable evidence.

Finding that the grounds of review had not been established, the Court concluded that a
reasonable person in the position of the first respondent on the evidence disclosed in the
record and applying the correct test in law, could have reached the conclusion that the
appellant was guilty of the three counts of misconduct of which he was convicted. The
appeal was, accordingly, dismissed.
In a concurring judgment, it was stated that the appellants argument that the first
respondent committed a material misdirection of fact that entitled the High Court and the
present Court to review the convictions and consider the matter afresh, required a
consideration of the parameters of material error of fact as a ground of review. The Court
highlighted the distinction between a review and an appeal, and pointed out that the
appellants arguments regarding an alleged misdirection by the first respondent in evaluating
the evidence did not constitute grounds for review.

Firestone v Gentiruco 1977 (4) SA 298 (A) at 307C-G


Counsel for Firestone utlimately conceded that, and rightly C desisted from pressing the
prayer for clarification, for this exception is clearly inapplicable.
(iii) The Court may correct a clerical, arithmetical or other error in it judgment or order
so as to give effect to its true intention (see, for example, Wessels & Co. v De Beer, 1919
AD 172; Randfontein Estates Ltd. v Robinson, 1921 AD 515 D at p. 520; the West
Rand case, supra at pp. 186 - 7). This exception is confined to the mere correction of an
error in expressing the judgment or order; it does not extend to altering its intended
sense or substance. KOTZ, J.A., made this distinction manifestly clear in the West
Rand case, supra at pp. 186 - 7, when, with reference to the old authorities, he said:
"The Court can, however, declare and interpret its own order or E sentence, and
likewise correct the wording of it, by substituting more accurate or intelligent
language so long as the sense and substance of the sentence are in no way affected
by such correction; for to interpret or correct is held not to be equivalent to altering or
amending a definitive sentence once pronounced."
Again, this exception is inapplicable in the present proceedings since neither the T.P.D. nor
this court committed F any error in expressing its relevant orders; those orders reflected
respectively the intention of each Court. The error related to the sense or substance of the
relevant orders due to the T.P.D.'s erroneously assuming, and this Court's erroneously
affirming, that the Fourth Schedule does prescribe a tariff for counsel's fees.

(iv) Where counsel has argued the merits and not the costs of a G case (which
nowadays often happens since the question of costs may depend upon the ultimate
decision on the merits), but the Court, in granting judgment, also makes an order
concerning the costs, it may thereafter correct, alter or supplement that order
(see Estate Garlick's case, supra, 1934 AD 499). The reason is (see pp. 503 - 5) that in such
a case the Court is H always regarded as having made its original order "with the implied
understanding" that it is open to the mulcted party (or perhaps any party "aggrieved" by the
order - see p. 505) to be subsequently heard on the appropriate order as to costs.

Government of the Republic of Zimbabwe v Fick and others 2013 (5) SA 325 (CC) at
paras [85]-[86]
Rescission
1

At common law the requirements for rescission of a default judgment are twofold.
First, the applicant must furnish a reasonable and satisfactory explanation for its
default. Second, it must show that on the merits it has a bona fide defence which
prima facie carries some prospect of success.89Proof of these requirements is taken
as showing that there is sufficient cause for an order to be rescinded. A failure to meet
one of them may result in refusal of the request to rescind.

In Chetty Miller JA formulated the test in these terms:

It is not sufficient if only one of these two requirements is met; for


obvious reasons a party showing no prospect of success on the merits will fail
in an application for rescission of a default judgment against him, no matter
how reasonable and convincing the explanation of his default. And ordered
judicial process would be negated if, on the other hand, a party who could
offer no explanation of his default other than his disdain of the Rules was
nevertheless permitted to have a judgment against him rescinded on the
ground that he had reasonable prospects of success on the merits. The
reason for my saying that the appellants application for rescission fails on its
own demerits is that I am unable to find in his lengthy founding affidavit, or
elsewhere in the papers, any reasonable or satisfactory explanation of his
default and total failure to offer any opposition whatever to the confirmation on
16 September 1980 of the rule nisi issued on 22 April 1980

Scholtz v Merryweather 2014 (6) SA 90 (WCC) at paras [11]-[19].


RESCISSION UNDER THE COMMON LAW
11. Scholtzs application is brought, not in terms of Rule 31(2)(b), but under the
common law. This Court has inherent powers of rescission under the common law
provided that good or sufficient cause therefor has been shown by an applicant.
[1]
12. Our Courts have often said that the phrase good cause defies comprehensive
definition: since it involves the exercise of a judicial discretion, it requires a flexible
approach involving broad principles of justice and fairness, and a consideration of all
the relevant facts and circumstances of the case as a whole.[2]
13. In practice, however, there have traditionally been two requirements which an applicant
is generally expected to establish to succeed in a rescission application, viz. a reasonable
explanation by the applicant for the default, and a bona fide defence which has some
prospects of success.[3]
14. The cases referred to above pre-date our constitutional jurisprudence. More recently, in
considering the approach to be taken, the Constitutional Court in Fick[4] confirmed the
traditional approach adopted, for instance, in Chetty at 765D-F It is not sufficient if only one of these two requires is met; for obvious reasons a party
showing no prospect of success on the merits will fail in an application for rescission of a
default judgment against him, no matter how reasonable and convincing the explanation of
his default. An ordered judicial process would be negated if, on the other hand, a party who
could offer no explanation of his default other than his disdain of the Rules was nevertheless
permitted to have a judgment against him rescinded on the ground that he had reasonable
prospects of success on the merits. The reason for my saying that the appellants
application for rescission fails on its own demerits is that I am unable to find in his lengthy
founding affidavit, or elsewhere in the papers, any reasonable or satisfactory explanation of
his default and total failure to offer any opposition whatever to the confirmation on 16
September 1980 of the rule nisi issued on 22 April 1980.
15. Jaftha J accepted in Fick[5] the approach adopted by the Supreme Court of Appeal
in Colyn[6] that in appropriate cases an unsatisfactory explanation furnished by an

applicant for rescission may be compensated for by good prospects of success on


the merits. Jaftha J accepted too the summation by Jones AJA in Colyn[7] of the common
law approach to which I have already referred. Consideration of that passage, however,
reveals a third factor:
With that as the underlying approach the Courts generally expect an applicant to show
good cause (a) by giving a reasonable explanation of his default; (b) by showing that
his application is made bona fide; and (c) by showing that he has a bona fide defence
to the plaintiffs claim which prima facie has some prospect of success (Grant v Plumbers
(Pty) Limited 1949 (2) SA 470 (O) at 476, HDS Construction (Pty) Limited v Wait 1979 (2)
SA 298 (E) at 300F-301C, Chetty v Law Society, Transvaal 1985 (2) SA 756 (A) at 764I765F).
So, in this matter, Scholtz must also prove that his application is bona fide.
16. A further consideration which has arisen more recently is the question of wilful default.
In Harris[8] Moseneke J (as he then was) observed at 529E para [6], with reference
to Silber that the phrases sufficient cause (which embraces the common law approach to
rescission) and good cause (which is what Rule 31(2)(b) requires) are synonymous.He
went on to discuss wilful default as follows:
The absence of wilful default does not appear to be an express requirement under Rule
31(2)(b) or under the common law. It is, however, clear law that an enquiry whether
sufficient cause has been shown is inextricably linked to or dependent upon whether the
applicant acted in wilful disregard of Court rules, processes and time limits. While wilful
default may not be an absolute or independent ground for refusal of a rescission application,
a display of wilful neglect or deliberate default in preventing judgment being entered would
sorely co-exist with sufficient cause.
17. But Moseneke J was of the view that the existence of wilful default did not place a
complete bar on an application for rescission:
[9] A decision freely taken to refrain from filing a notice to defend or a plea or from
appearing, ordinarily will weigh heavily against an applicant required to establish sufficient
cause. However, I do not agree that once wilful default is shown the applicant is barred; that
he or she is then never entitled to relief by way of rescission as he or she as acquiesced.
The Courts discretion in deciding whether sufficient cause has been established must not

be unduly restricted. In my view, the mental element of the default, whatever description in
bears, should be one of the several elements which the Court must weigh in determining
whether sufficient or good cause has been shown to exist. In the words of Jones J in De
Witts Auto Body Repairs (Pty) Limited v Fedgen Insurance Co. Limited 1994 (4) SA 705 (E)
at 708G, the wilful or negligent or blameless nature of the defendants default now
becomes one of the various considerations which the courts will take into account in the
exercise of their discretion to determine whether or not good cause is shown.
18. Rather, Moseneke J found that the court is enjoined to consider the various criteria
conjointly and effectively perform a balancing exercise in coming to a decision that is just
and fair in the circumstances. He concluded thus:
[10] A steady body of judicial authorities has held that a court seized with an application for
rescission of judgment should not, in determining whether good or sufficient cause has been
proven, look at the adequacy or otherwise of the explanation of the default or failure in
isolation.
Instead, the explanation, be it good, bad or indifferent, must be considered in the light of the
nature of the defence, which is an important consideration, and in the light of all the facts
and circumstances of the case as a whole.
De Witts Auto Body Repairs (Pty) Limited v Fedgen Insurance Co. Limited (supra) at 711D.
[11] In amplifying the nature of the preferable approach in an application for rescission of
judgment, I can do no better than quote Jones J with whose dicta I am respectfully in
agreement:
An application for rescission is never simply an enquiry whether or not to penalise a party
for failure to follow the rules and procedures laid down for civil proceeding in our courts. The
question is, rather, whether or not the explanation for the default and any accompanying
conduct by the defaulter, be it wilful or negligent or otherwise, gives rise to the probable
inference that there is no bona fide defence and hence that the application for rescission is
not bona fide. The magistrates discretion to rescind the judgments of his court is therefore
primarily designed to enable him to do justice between the parties. He should exercise that
discretion by balancing the interests of the parties . He should also do his best to
advance the good administration of justice. In the present context this involves weighing the
need, on the one hand, to uphold the judgments of the courts which are properly taken in

accordance with accepted procedures and, on the other hand, the need to prevent the
possible injustice of a judgment being executed where it should never have been taken in
the first place, particularly where it is taken in a partys absence without evidence and
without his defence having been raised and heard.
19. Harris was referred to with approval in general terms by Jaftha J in his judgment
in Fick in which he disagreed with the majority of the Court on the merits of that matter.
There is nothing in either his judgment or that of the Chief Justice for the majority to suggest
that Moseneke Js approach inHarris was wrong[9] and, given that counsel on both sides in
this matter relied unreservedly on Harris, I do not know of any reason not to follow the
approach suggested by Moseneke J in paragraph [11] thereof.

National Pride Trading 452 v Media 24 2010 (6) SA 587 (ECP).


Under Uniform Rule 42(1)(a), an order or judgment erroneously sought or granted in the
absence of a party affected by it may be 1 1b ANNUAL SURVEY OF SA LAW rescinded.
National Pride Trading 452 (Pty) Ltd v Media 24 Ltd 2010 (6) SA 587 (ECP) is a case in
point. The respondent instituted application proceedings against the applicant, claiming
ejectment of the latter from a building. Although the applicant opposed the application, it
failed to file an answering affidavit and did not appear at the hearing. The court accordingly
granted an ejectment order. The applicant later applied for the rescission of this order. The
question before the court was whether, in the absence of any defence raised to the
ejectment application, the order may be rescinded under Uniform Rule 42(1)(a). (In the
absence of a defence, it is common cause that the common law does not apply.) However,
from the facts it appeared that the notice of set down was never served on the applicant, and
accordingly there clearly was non-compliance with the rules of practice of the particular
division of the High Court. This fact was not brought to the attention of the presiding judge in
the court below and the order was granted. As a prescribed procedure was not followed, a
procedural error occurred. It follows that the order was 'erroneously sought and erroneously
granted' within the meaning of rule 42(1)(a) (para [42]). There are two matters of importance
here. In the first instance, the court clearly held that the requirements of rule 42 are set by
the wording of the rule itself and are not imported from the common law. The common-law
requirement of 'sufficient cause' is not a requirement under rule 2(1)(a) (para [54]), but is
actually peculiar to applications for rescission of default judgments (see also Lodhi 2
Properties Investments CC and Another v Bondev Developments (Pty) Ltd 2007 (6) SA 87
(SCA) para [27], where the Supreme Court of Appeal stated that the existence or non-

existence of a defence on the merits is an 'irrelevant consideration' under rule 42(1)(a)).


Secondly, the court held that there was also a policy consideration as to why it was not
required that an applicant show a bona fide defence under this rule: 'Any order or judgment
made against a party in his absence, due to an error not attributable to him, is such a
profound intervention in his right to a fair trial and right to be heard, that, for this reason
alone, the judgment or order should be set aside without further ado' (para [56]).
Mncora v Butters [2013] 3 All SA 330 (ECP).

REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA


(EASTERN CAPE, PORT ELIZABETH)

Case No: 881/2008

In the matter between:


NOMSA VIRGINIA MNCORA ..............................................................Applicant/Plaintiff
and
ANDREW KINLOCH BUTTERS ................................................Respondent/Defendant

AND

Case No: 3055/2010


In the matter between:
ANDREW KINLOCH BUTTERS .....................................................Respondent/Plaintiff

and
NOMSA VIRGINIA MNCORA ........................................................Applicant/ Defendant
Coram: Chetty, J
Date Heard: 2 April 2013
Date Delivered: 23 April 2013
Summary: Practice Judgments and orders Correction, alteration or amendment of
Courts own judgment Court entitled to do so to give effect to its true intention
Nature of matter: Application for amendment of Courts own judgment
Order: Patent error must accordingly be corrected, so was this order

________________________________________________________________
JUDGMENT
________________________________________________________________
Chetty, J
[1] This application has been precipitated by a personality trait akin to that of the main
character, Ebenezer Scrooge, the curmudgeon, in Charles Dickens tale, A Christmas Carol.
Since this matter first served before me, it has ventured, unsuccessfully, first, to the
Supreme Court of Appeal, and, thence, to the Constitutional Court. The principal issue in this
application, as in the preceding litigation, is money, or, more precisely, the unwillingness to
share it. The respondent contends that the subject matter of the universal partnership I found
to have been established between himself and the applicant is confined to assets acquired
by the parties during a defined period i.e. 1998 to December 2007, and not, as contended
for by the applicant, from 1988 to December 2007. Henceforth I shall refer to the parties as
referred to in my earlier judgment, viz plaintiff and defendant,

[2] In order to place this application in proper perspective, it is apposite to consider the
precise nature of a universal partnership. In his treatise, Law of Partnership1,Professor J.J
Henning, with reference to eminent authority, described it as follows: -

In Roman and Roman-Dutch law universal partnerships were


distinguished into two kinds: first, those of all present and future
property, termed societates omnium bonorum or societates
universorum bonorum and, second, those extending only to
everything acquired from every kind of commerce, referred to
associetates universorum quae ex quaestu veniunt.

South African law accommodates partnerships of all sorts satisfying


the applicable requirements. The distinction between the archetype
of universal partnership, the societas omnium bonorum, and the
partnership in all commercial undertakings, namely the societas
universorum quae ex quaestu veniunt, is still relevant. This is
particularly so since the question whether, in which instances and to
which extent universal partnerships of all property were and are
recognised in South African law, has not always been free from
doubt.

The partnership of all present and future property is the oldest and
most comprehensive form of universal partnership. Thus when the
term universal partnership is used without qualification, it is usually
a reference to this kind of universal partnership.

According to one definition the partnership omnium


bonorum (or universorum bonorum) is that by which the contracting
parties agree to put in common all their property, both present and
future. It covers all their acquisitions whether from commercial
undertakings or otherwise. According to Pothier, all the property of
each of the partners at the time of entering in the partnership
becomes from that moment the common property of the partnership,
without formal transfer. Every asset is included in this partnership

which comes to each of the partners under any title, even by way of
succession, gift or legacy. There is no exception to this, except what
comes to one of the partners on condition that it will not fall into the
partnership, or what has been acquired by criminal or dishonest
means. Such a partnership is liable for all the debts of each of the
partners due at the time of entering into the partnership, as also for
the debts which each of the partners is compelled to incur during the
partnership, both for himself and for his wife and family. This,
however, does not extend to waste of money in gambling, fines or
penalties on account of crime.

The societas omnium bonorum is probably the oldest and certainly


the most comprehensive form of consensual societas. Having its
origin in the ancientconsortium of sui heredes, it retained much of the
nature and character of the earlier societas fractum. Rules in the
texts initially applicable to all societas, notably
the beneficium competentiae, were long applied only to this form.
(emphasis added)

[3] In my judgment I found that the three essentialiae of a universal partnership, the societas
universorum bonorum, formulated by Pothier, and referred to in Muhlmann v Muhlmann2,
had been established, and awarded the plaintiff an amount equal to 30% of the defendants
net asset value as at 1 January 2008. The ratio for that finding appears clearly from the
following factual findings in the judgment, to wit: -

[24] . . . Although the plaintiff played no direct role in the growth and
expansion of the business per se, her contribution to the partnership
was, in my view, not inconsequential. The evidence establishes that
the object of the partnership was to provide for the household.
Although the plaintiff worked for short periods during the couples
cohabitation, there is no evidence to suggest that she applied her
earnings for herself. In the formative years of the business, the

plaintiff lived frugally and was content with the R1000, 00 weekly
contributions made by the defendant. She devoted all her time and
energy in caring for the children, and, during weekends, for the
defendant himself. As the children grew up, her care for them was
akin to full time employment. She not only ferried them to and from
school but transported them to their extra-curricular activities.

[25] It must be recalled that during the subsistence of her


cohabitation the children, whom she was required to care for and
look after, increased in number. Her contribution in that sphere was
immeasurable and the clear impression gained from her testimony is
that she applied herself fully, not only to the childrens well being, but
the defendants, as well. Her evidence that she implemented a
dietary regime for the defendant for health reasons, given his weight
gain, was never challenged and provides clear proof that her
overriding concern was the well being of the family unit. Some point
was made during the plaintiffs cross-examination that many, if not
all, the household chores were performed by the domestic help. The
fact that the plaintiff had full time, weekday help is, in my view,
entirely irrelevant. Given her circumstances, in effect, a full time
single mother to four children, she needed all the help she could get.

[26] Commercial reality dictated that the business be opened in


Grahamstown but the common home continued to be in Port
Elizabeth. There was no guarantee that the business would succeed.
The plaintiffs undisputed evidence was that the choice of
Grahamstown, as the location of the business, was a joint decision
and the probabilities favour the plaintiffs version that the business
should be carried on for their joint benefit. The object was clearly to
make a profit. The acquisition of, firstly, the home in Overbaakens
and thereafter the common home demonstrates that the object of
starting the business was to provide for their livelihood and comfort
and the education of their children. The enrolment of the children at
St Georges, St Andrews and Parsons Hill schools respectively, bear
testimony to the fact that the profit was never intended to benefit the
defendant alone. Although he eventually purchased a home in
Grahamstown, it was used only during the week while he managed

the business, weekends were routinely spent with the plaintiff and the
children in Port Elizabeth. On those occasions they shopped
together, dined out, and, as recounted earlier, holidayed extensively,
all of which was enjoyed on the profits generated by the business.

[4] On appeal, the majority, in upholding the finding that the plaintiff had established the
requisites for a universal partnership, dealt with the defendants counter argument as follows:
-

[26] What the defendant's contention amounts to is that it must be


inferred from the conduct of the parties that, though they intended to
share the benefits of their joint contribution, the defendant would
retain the surplus income and accumulate assets only for himself.
From the plaintiff's viewpoint that intent would be quite remarkable. It
would mean that she intended to contribute her everything for almost
20 years to assist the defendant in acquiring assets for himself only;
that in her old age she would be entirely dependent for her very
existence on the benevolence of the defendant towards her.

[27] It is true that, according to the defendant's ipse dixit during


his testimony, he indeed intended to keep everything he acquired for
himself to the entire exclusion of the plaintiff. But I believe there is
more than one reason why this court is not bound by the defendant's
self-serving ipse dixit. Firstly, it is clear from his testimony that the
defendant would say virtually anything that advanced his cause.
Secondly, when evaluating the conduct of the parties, the court is
entitled to proceed from the premise that they were dealing with one
another in good faith (see eg South African Forestry Co Ltd v York
Timbers Ltd2005 (3) SA 323 (SCA) ([2004] 4 All SA 168) para 32).
This must particularly be so where the parties lived together in an
intimate relationship in which they shared their most personal

interests for almost 20 years. An unexpressed mental reservation on


the part of the defendant, that he was willing to share in the benefits
derived from the plaintiff's contribution, but not in the surplus fruits of
his own, would not, in my view, satisfy the dictates of good faith.
Finally there is the plaintiff's own appraisal of the defendant's
conduct, namely, that he was willing to share everything. Absent
any statements to her in cross-examination that her appraisal was
mistaken or unsubstantiated, it must, in my view, be accepted as
reasonable and well founded. Hence I agree with the court a quo that
the plaintiff had succeeded in establishing Pothier's second
requirement for a partnership.

[5] It is explicit, both from my judgment and the majority judgment in the Supreme Court of
Appeal, that the universal partnership endured for approximately 20 years. The submission
now advanced, that the Hi-Tech business is specifically excluded from the universal
partnership, is spurious as a matter of law, the universal partnership comprises all
present and future property3. However, in light of the submissions advanced on behalf of
the defendant relating to the year date in both the plaintiffs prayer and my order, it is
necessary to deal herewith.

[6] Notwithstanding the clear and unambiguous findings in my judgment, the plaintiff has
been compelled to launch this application pursuant to the provisions of Rule 42 (1) (b) for a
variation of paragraph 1 of the order by deleting the date 1998 and its substitution by the
year date 1988. The general principle is that once a court has pronounced a final judgment
or order, it itself has no authority to correct, alter or supplement it. There are of course a
number of exceptions to this general rule and one specifically relied upon by the plaintiff is
that the year date in the order is a patent error. As pointed out by Harms J.A, with reference
to earlier authority, in Thompson v South African Broadcasting Corporation4: -

. . . there appears to be a misunderstanding about the power of a


Court to amend or supplement its findings in contradistinction to its
orders. The correct position was spelt out in Firestone South Africa
(Pty) Ltd v Gentiruco AG 1977 (4) SA 298 (A) at 307C - G:
'The Court may correct a clerical, arithmetical or other error in its
judgment or order so as to give effect to its true intention. . . . This
exception is confined to the mere correction of an error in expressing
the judgment or order; it does not extend to altering its intended
sense or substance. Kotz JA made this distinction manifestly clear
in [West Rand Estates Ltd v New Zealand Insurance Co Ltd 1926 AD
173 at 186 - 7], when, with reference to the old authorities, he said:
''The Court can, however, declare and interpret its own order
or sentence, and likewise correct the wording of it, by substituting
more accurate or intelligent language so long as the sense and
substance of the sentence are in no way affected by such correction;
for to interpret or correct is held not to be equivalent to altering or
amending a definitive sentence once pronounced.'' '
And in S v Wells1990 (1) SA 816 (A) at 820C - F the matter was
dealt with in these words:
'The more enlightened approach, however, permits a judicial officer to
change, amend or supplement his pronounced judgment, provided
that the sense or substance of his judgment is not affected thereby
(tenore substantiae perseverante). . . . According to Voet a Judge
may also, on the same day, after the pronouncement of his judgment
add (supplere) to it all remaining matters which relate to
the consequences of what he has already decided but which are still
missing from his judgment. He may also explain (explicare) what has
been obscurely stated in his judgment and thus correct (emendare)
the wording of the record provided that the tenor of the judgment is
preserved.'

[7] The defendants response to the plaintiffs contention that the year date in paragraph 1 of
the order is a patent error is rather ambivalent. On the one hand, the submission was made
that the defendant of course has no direct knowledge of what gave rise to the
insertion of the date 1998 and, on the other, it contends that the order, with minor
exceptions, merely mirrored the relief sought in prayer 1 of claim A to the amended
particulars of claim. Mr Buchanan submitted that even on the assumption that the
aforestated prayer in the relief sought by the plaintiff contained a typographical error, the
mistake was unilateral the defendant and his then legal representatives were unaware of
the error, and had conducted their case on an acceptance of the correctness of the
allegations made by the plaintiff and the form of the relief sought.

[8] He relied in this regard on the depositions by the defendants erstwhile attorney and
counsel. In response to plaintiffs then counsels (Mr Mullins) evidence in his supporting
affidavit that the reference to the year date 1998 was a typographical error, Mr Huxtable and
Mr de la Harpe stated as follows respectively: -

(Mr Huxtable)
6. I confirm that Advocate de la Harpe and myself after a careful
consideration of the pleadings came to the conclusion that
the Plaintiffs claim was based on a tacit agreement of
partnership, the date of which coincides with the date of
the agreement to marry.

(Mr de la Harpe)
7. In all these consultations Plaintiffs Particulars of Claim were
considered carefully. On my advice it was concluded that
what was sought to be advanced was a claim founded
upon a tacit agreement of partnership which coincided with
an agreement to marry during 1998.

8. Never was it considered, having regard to that which was pleaded,


that the case sought to be advanced by Plaintiff was that
immediately the parties became intimate, during 1988, that
an express agreement was concluded or that facts and
circumstances existed such as to justify the conclusion
that a tacit agreement of partnership was concluded.

9. In essence my understanding of Plaintiffs case was that which


was to be understood on a plain and obvious meaning of
the effect of that which was pleaded, no more and no
less.

[9] The difficulty I have in accepting the correctness of these averments arise from the trial
particulars furnished by the plaintiff wherein she made the following allegations: -

2.3 For nineteen years the Plaintiff contributed all her time and
labour to the common household and to making it a family
home for the parties and their two minor children.

4.2 In setting up a common home, having children, living together,


acquiring assets and remaining together for nineteen
years the parties tacitly agreed to the establishment of a
partnership.
4.3 The Plaintiff acquired her personal belongings and a few
household items during the nineteen years in which the
parties were together.

and

5.2 During 1990/1992 the Plaintiff worked as a receptionist for the


Department of Education earning R2, 500.00 per month.
She contributed her entire income to the
partnership. (emphasis added)

[10] One of the purposes which trial particulars serve, is to inform the other side, with greater
precision, the case the one party intends to prove in order to enable his/her opponent to
prepare accordingly. The plaintiff, in clear and unambiguous language, informed the
defendant that the universal partnership endured for nineteen years. Neither the defendant
nor his legal advisors could therefore have been under any illusion that any lesser period i.e.
from the date they became engaged, was intended. During her oral testimony, portions of
which I paraphrased and reproduced in paragraph [3] hereinbefore, the plaintiff specifically
stated that the universal partnership commenced at the inception of their cohabitation and
endured until the termination of their relationship. The cross-examination was directed to
disprove the plaintiffs testimony. There was no suggestion made that the universal
partnership endured merely since their engagement. The defendants case, as presented
and persisted with, not only at trial, but moreover on appeal to the Supreme Court of Appeal,
and, in the application for leave to appeal to the Constitutional Court, was that the plaintiff
had failed to establish the existence of a universal partnership between them, caedit questio.

[11] It will be gleaned from the aforegoing and in the reproduced extracts of my judgment
detailing the plaintiffs chronological account of the inception and duration of the universal
partnership, that the year date, 1998, in the order, was a patent typographical error. Its
substitution, by the year date 1988, does not change the sense or substance of the
judgment it merely preserves its tenor. The patent error must accordingly be corrected.

[12] In the result therefore the following orders will issue

1.

Paragraph 1 of the order is amended by the deletion of the year date 1998 and its
substitution by the year date 1988.

2.

The defendant is ordered to pay the costs of this application.

Road Accident Fund v Mouton 2003 (5) SA 212 (W).


In April 2002, a Judge had awarded attorney and own client costs against the first applicant
(the fund) and fined the second applicant, G an employee of the Fund, for contempt of
Court. The applicants brought an application to rescind these orders in terms of Rule 42(1)
(c) of the Uniform Rules of Court, ie on the basis that the order had been granted as a result
of a mistake common to the parties. The April order had been made subsequent to an order
by Mlambo J which sought to enable a curatrix ad litem to accept a settlement offer made by
the fund. The settlement provided, H inter alia, that the fund would provide a certificate in
terms of s 17 of the Road Accident Fund Act 56 of 1996. When the certificate did not
materialise, the first respondent instituted contempt proceedings which culminated in the
April order. The order made by Mlambo J had not, however, made the settlement an order of
Court and, accordingly, there had been no foundation for the contempt I proceedings. It was
obvious that the applicants and the first respondent were under the impression that the
settlement had been made an order of Court.
As far as the costs of the rescission application itself were concerned, the applicants asked
that the first respondent be ordered to pay the costs de bonis propriis on an attorney and
own client basis. The rescission application J
2003 (5) SA p213
had been preceded by a letter from the applicants' attorneys spelling out the legal
position, A offering not to seek costs if the matter was not opposed and warning that a
punitive costs order would be sought should the first respondent choose to oppose the
matter. Not only did the first respondent choose to oppose the matter, but he employed the
services of two senior counsel for that purpose.

Held, on the facts, that the orders against the present applicants had been granted as a
result of a mistake common to the B parties, as contemplated in Rule 42(1)(c). (Paragraph
[12] at 215I/J.)
Held, further, that, where at least a substantial part of an order made by a Court was due to
a common mistake of the parties and the order was indivisible, the entire order could be set
aside in terms of Rule 42(1)(c). The orders made in April 2002 against the applicants
rescinded. (Paragraphs [13] and [22] at 216C and 217H.) C
Held, further, that the opposition to the rescission application had not been unreasonable.
The first respondent was acting in the capacity as curator of a patient's property and was
called upon to defend that patient's interests. It was true that the first respondent had made
a fundamental error in the founding affidavit which had led to the April order, but that error
had not been D noticed by the applicants, their attorneys and counsel and the presiding
Judge. The rescission application was necessary to correct the mistake. The first respondent
should not have to pay the costs of the rescission proceedings or the costs of opposition in
his personal capacity. The fact that the first respondent had a personal interest in the
contempt proceedings and the present E proceedings in that he acted as his own attorney
did not in itself serve as a basis for an order that he pay the costs of the present
proceedings de bonis propriis. (Paragraphs [19], [20] and [21] at 217B/C - C and E - G/H.)

Harris v ABSA Bank Ltd t/a Volkskas 2006 (4) SA 527 (T) at paras [6]-[11].
[6] The common law requires 'sufficient cause' to be shown D before a default judgment
may be set aside. Rule 31(2)(b) of the Uniform Rules of Court requires 'good cause' to be
established before the rescission of a default judgment may be granted. The phrases 'good
cause' and 'sufficient cause' are synonymous and interchangeable. See Silber v Ozen
Wholesalers (Pty) Ltd 1954 (2) SA 345 (A) at 352H - 353A. The absence of 'wilful
default' E does not appear to be an express requirement under Rule 31(2)(b) or under the
common law. It is, however, clear law that an enquiry whether sufficient cause has been
shown is inextricably linked to or dependent upon whether the applicant acted in wilful
disregard of Court rules, processes and time limits. While wilful default may not be an
absolute or independent ground for refusal of F a rescission application, a display of wilful
neglect or deliberate default in preventing judgment being entered would sorely co-exist with
sufficient cause.

[7] In Neuman (Pvt) Ltd v Marks 1960 (2) SA 170 (SR) Murray CJ suggested that wilful
default is characterised by indifference as to what the consequences would be rather than
of G wilfulness to accept them. In this regard he states:
'A defendant may be most unwilling to suffer a judgment to be entered against him and the
consequences of such a judgment are such that he cannot in fact be indifferent to them,
particularly if (as in the present case) he has placed a plea and counterclaim on record. The
true test, to my mind, is whether the default is a deliberate H one - ie when a defendant with
full knowledge of the set down and of the risks attendant on his default, freely takes a
decision to refrain from appearing.'
(At 173A.) In Maujean t/a Audio Video Agencies v Standard Bank of SA Ltd 1994 (3) SA 801
(C) King J followed the ratio in Neuman v Marks (supra) and observed that: I
'More specifically in the context of a default judgment ''wilful'' connotes deliberateness in
the sense of knowledge of the action and of the consequences, its legal consequences and
a conscious and freely taken decision to refrain from giving notice of intention to defend,
whatever the motivation for this conduct might be.' J
2006 (4) SA p530
MOSENEKE J
(At 803H - I.) A
[8] Before an applicant in a rescission of judgment application can be said to be in 'wilful
default' he or she must bear knowledge of the action brought against him or her and of the
steps required to avoid the default. Such an applicant must deliberately, being free to do so,
fail or omit to take the step which would avoid the default and must appreciate the legal
consequences of his or her actions. B
[9] A decision freely taken to refrain from filing a notice to defend or a plea or from
appearing, ordinarily will weigh heavily against an applicant required to establish sufficient
cause. However, I do not agree that once wilful default is shown the applicant is
barred; C that he or she is then never entitled to relief by way of rescission as he or she has
acquiesced. The Court's discretion in deciding whether sufficient cause has been
established must not be unduly restricted. In my view, the mental element of the default,
whatever description it bears, should be one of the several elements which the court must
weigh in determining whether sufficient or good cause has been shown to D exist. In the
words of Jones J in De Witts Auto Body Repairs (Pty) Ltd v Fedgen Insurance Co Ltd 1994
(4) SA 705 (E) at 708G,

'. . . the wilful or negligent or blameless nature of the defendant's default now becomes one
of the various considerations which the courts will take into account in the exercise of
their E discretion to determine whether or not good cause is shown'.
Also see HDS Construction (Pty) Ltd v Wait 1979 (2) SA 298 (E) at 300G - 301E.
[10] A steady body of judicial authorities has held that a court seized with an application for
rescission of judgment should not, in F determining whether good or sufficient cause has
been proven, look at the adequacy or otherwise of the explanation of the default or failure in
isolation.
'Instead, the explanation, be it good, bad, or indifferent, must be considered in the light of
the nature of the defence, which is an G important consideration, and in the light of all the
facts and circumstances of the case as a whole.'
De Witts Auto Body Repairs (Pty) Ltd v Fedgen Insurance Co Ltd (supra) at 711D.
[11] In amplifying the nature of the preferable approach in an application for rescission of
judgment, I can do no better than quote Jones J with whose dicta I am in respectful
agreement: H
'An application for rescission is never simply an enquiry whether or not to penalise a party
for failure to follow the rules and procedures laid down for civil proceeding in our courts. The
question is, rather, whether or not the explanation for the default and any accompanying
conduct by the defaulter, be it wilful or negligent or otherwise, gives rise to the probable
inference that there is no I bona fide defence and hence that the application for rescission is
not bona fide. The magistrate's discretion to rescind the judgments of his court is therefore
primarily designed to enable him to do justice between the parties. He should exercise that
discretion by balancing the interests of the parties. . . . He should also do his best to
advance the good administration of justice. In the present context this involves weighing the
need, on the one hand, to uphold the judgments of the courts which J
2006 (4) SA p531
MOSENEKE J
are properly taken in accordance with accepted procedures and, on the other hand, the
need to A prevent the possible injustice of a judgment being executed where it should never
have been taken in the first place, particularly where it is taken in a party's absence without
evidence and without his defence having been raised and heard.'

On good cause generally, see: Brangus Ranching v Plaaskem 2011 (3) SA 477 (KZP)
at para [19] and paras [28]-[30].
1

For rescission to be granted in terms of rule 31(2)(b) the appellant needs to establish
"good cause". In Saraiva Construction (Pty) Ltd v Zululand Electrical and Engineering
Wholesalers (Pty) Ltd 1975 (1) SA 612 (D), Howard J (as he then was) commented at
page 613 B-D that;
" In terms of Rule 31 (2) (b) the Court has a discretion to set aside a default
judgment upon good cause shown. The Rules contain no definition of good
cause but the Courts have provided one, in effect, by laying down certain
requirements which an applicant must comply with before he can be held to
have shown good cause or, what is practically synonymous, sufficient cause
for various kinds of procedural relief."

In terms of rule 32(2)(a) a Court may, upon good cause shown, rescind or set aside a
judgment which had been granted by default. This requirement was originally
introduced in 1936 and in regard thereto Schreiner JA remarked that .. applicant had
always been obliged to set out the reasons why he did not appear, as well as the
grounds of his defence, but it was only in 1936 by another amendment that the
application was required to be on affidavit. It seems clear that by introducing the words
'and if good cause be shown' the regulating authority was imposing upon the applicant
for rescission the burden of actually proving, as opposed to merely alleging, good
cause for rescission, such good cause including but not being limited to the existence
of a substantial defence (Silber v Ozen Wholesalers (Pty) Ltd 1954 (2) SA 345 (AD) at
352 F-G). The onus is upon the applicant for rescission to establish that such good
cause exists in the circumstances of each case (Silber v Ozen Wholesalers (supra) at
353G-H).

As pointed out by the Court below, in Colyn v Tiger Food Industries Ltd t/a Meadow
Feed Mills (Cape) 2003 (6) SA 1 (AD) at 9 E-F that .. the Courts generally expect an
applicant to show good cause (a) by giving a reasonable explanation of his default; (b)

by showing that his application is made bona fide; and (c) by showing that he has a
bona fide defence to the plaintiff's claim which prima facie has some prospect of
success.

However, the Courts have shied away from defining the concept of good cause. In the
early decision of Cairns Executors v Gaarn 1912 AD 181 at 186 Innes JA remarked
that It would be quite impossible to frame an exhaustive definition of what would
constitute sufficient cause to justify the grant of (an) indulgence. Any attempt to do so
would merely hamper the exercise of a discretion which the rules have purposely made
very extensive, and which it is highly desirable not to abridge. Those remarks have
since been echoed in many subsequent decisions. In Silber v Ozen Wholesalers
(supra) at 352 H 353A Schreiner JA remarked that The meaning of 'good cause' in
the present sub-rule, like that of the practically synonymous expression 'sufficient
cause' which was considered by this Court in Cairn's Executors v Gaarn, 1912 AD 181,
should not lightly be made the subject of further definition. For to do so may
inconveniently interfere with the application of the provision to cases not at present in
contemplation. In the light thereof James JP stated in Kritzinger v Northern Natal
Implement Co Ltd 1973 (4) SA 542 (N) at 546 A-C that A consideration of the various
cases on the subject of good cause shows that there is an understandable reluctance
to give the phrase a circumscribed and inelastic meaning and it is, I think, clear that
each case must stand on its own facts. It appears, however, to be generally accepted
that good cause cannot be held to be satisfied unless there is evidence not only of the
existence of a substantial defence but, in addition, of a bona fide desire by the applicant
to raise the defence if the application is granted.

Swart v ABSA Bank 2009 (5) SA 219 (C) and


In Swart v ABSA Bank Ltd 2009 (5) SA 219 (C), the applicant applied for the rescission of a
default judgment granted against him after failure to make mortgage payments. After the

default judgment had beu granted, he settled the debt and obtained the respondent's
consent to rescission of the judgment as he again wanted to secure credit (and a judgment
would impair his credit rating). The court correctly refused the application for the following
reasons: (a) the applicant did not comply with the common law: at common law the ground
relied on for the setting aside of the judgment must have existed at the date of the final
judgment. Consequently, some causal connection between the circumstances that gave rise
to the claim for rescission and judgment is required. In this instance it was held that the
applicant's need to obtain credit had nothing to do with his failure to pay his debt in the first
place and the subsequent judgment against him (at 221-2); (b) Uniform Rule 42 was not
applicable as none of the required grounds existed - there was no ambiguity, error, or
mistake in the judgment, and it had not been erroneously granted (at 222B-C); (c) Uniform
Rule 31(2)(b) was also not applicable as this rule provides for the setting aside of a judgment
granted in the absence of a defendant. The court agreed with Saphula v Nedcor Bank Ltd
1999 (2) SA 76 (W) at 78H-1, in which that court, in a case with similar facts, refused
rescission because it held that the applicants were seeking the court's participation in
falsifying a 'true perspective of the past', so that court records 118 CIVIL AND
CONSTITUTIONAL PROCEDURE AND JURISDICTION would create the false impression
that the person had no 'adverse default'. The applicant clearly did not meet the requirements
for rescission either under common law, or the rules of court.
Nedbank v Soneman 2013 (3) SA 526 (ECP).
The purpose of an application for rescission of a judgment is to restore the opportunity to
ventilate a real dispute. A judgment correctly sought and obtained cannot be rescinded on
the mere ground that the parties had D consented thereto, for this would amount to an
untenable falsification of the past. In the present case the applicant bank, by consent
between the parties, sought rescission of a default judgment granted in its favour against the
respondents so that the respondents' creditworthiness would be restored. The court, pointing
out that the courts have usually not regarded a person's creditworthiness as sufficient
reason for the rescission of a judgment by E consent of the parties, and that granting such
an application would set a dangerous precedent, refused to grant the application. The court
declined to follow a case in which it was held that the common law was sufficiently malleable
to erase a judgment that no longer served a useful purpose after it had been complied with
by the judgment debtor. (Paragraphs [16] [22] at 529F/G 530H.)

Khoza and others v Body Corporate of Ella Court 2014 (2) SA 112 (GSJ) (which
interprets Uniform Rule 49(11)).

There is, at common law, a substantive rule suspending the operation of an order D or
judgment upon the noting of an application for its rescission. Furthermore, even if there is no
substantive rule of law to that effect, the court, applying s 173 of the Constitution, and in
accordance with its common-law powers, is entitled to develop a procedural rule suspending
the operation of an order upon an application for rescission thereof. If there were no
common-law rule which suspended the operation of an order or judgment E upon an
application for its rescission, the common law would be severely lacking in that regard. An
applicant for a rescission of an order would be irreparably prejudiced if the order were
allowed to operate despite the application. Rule 49(11) of the Uniform Rules of Court does
not create substantive rule of law. It is accordingly fully operational and suspends the
operation of an order upon an application for rescission of the order. The F decision
in United Reflective Converters (Pty) Ltd v Levine 1988 (4) SA 460 (W) overruled.
(Paragraphs [25] [29] at 117I 118F.)

Jaftha v Schoeman 2005 (2) SA 140 (CC),


The case was brought by two women who had borrowed minimal sums of money (about 27
and 35 US dollars respectively), had been charged significant interest and fell behind on
their payments. This led to the sale and execution of their houses. The applicants argued
that legislation permitting the sale in execution of people's homes due to non-payment of
trifling debts removed their security of tenure and violated their right to access to adequate
housing recognized in section 26 of the Constitution. The law in question was sections 66(1)
(a) and 67 of the Magistrates' Courts Act 32 of 1944. According to the law, if the debtor failed
to appear before the court, the creditor could obtain default judgment. This judgment then
enabled the creditor to obtain an execution warrant, allowing a sale of the property. The
process of sale did not need to involve the Courts when the judgment was entered by
default.
The court recognised that if a recipient of a state housing subsidy, such as the two
applicants, lost ownership of their homes in this manner, they would be unable to obtain
other state-subsidised housing and would have no suitable alternative accommodation. The
Court also recognized that the right of access to adequate housing carried negative
obligations on the state not to interfere unjustifiably with any person's existing access to
adequate housing. Therefore the right did not just protect occupation of housing, but also
protected security of tenure, and therefore a deprivation of that security infringed on rights
protected under section 26. The Court, albeit implicitly, found that the negative obligation
under section 26 applied to everyone, and not just state bodies. The Court ordered that such

sales in execution could only be ordered with judicial oversight. It also listed factors that
could be considered in this oversight circumstances and amount of the debt, attempts to pay
off the debt, and financial situation of the parties.
Keywords: Jaftha v. Schoeman; Van Rooyen v. Stoltz 2005 (2) SA 140, Adequate, Standard,
Living, Right
Enforcement of the Decision and Outcomes:
Section 66 of Magistrates' Courts Act has still not been amended: it does not provide for
judicial intervention when the assets (i.e. movable property) of the debtor are not sufficient to
cover the debt. However, the courts have followed the precedent set by the Jaftha judgment
to make their decisions in similar cases. As a consequence, South African Courts now have
to oversee sales of homes due to debt.
Groups involved in the case:
Legal Resources Centre
Significance of the Case:
In Jaftha, the court developed the nature of the right of access to adequate housing, stating
that a limitation on security of tenure will always have to be justified. As specified in the
enforcement section, this Judgment is now a precedent followed by South African Courts in
similar cases[1]. It must be noted that in such cases, the protection provided by article 26
Constitution only applies when the immovable property constitutes "adequate housing", that
is, when the debtor may become homeless if his property is executed.[2]
The appellants in two cases had had their homes sold in execution for debts of R250 and R190
respectively. The appellants applied in the High Court for orders setting aside the sales and
executions, and interdicting two of the respondents from taking transfer of their homes. The basis of
the applications was that the sale-in-execution process was unconstitutional.
The High Court dismissed their argument, finding that the applicants could either vacate the premises
or remain in occupation. If they chose to stay, the new owners would have to evict them according to
in terms of the Prevention of Illegal Eviction and Unlawful Occupation of Land Act and UOLA.
Argument[edit]
On appeal, the applicants claimed
that their constitutional right to adequate housing[2] was being infringed;

that the state and private parties should not interfere with this right; and
that certain assets of a debtor should be protected against execution, because without them it would be
unduly difficult for the debtor to survive, or would render him permanently homeless.
They argued that words should be read into section 67 of the MCA to prohibit sales in execution
against houses below a particular minimum value.
The court held that section 26 of the Constitution, guaranteeing the right to housing, needed to be read
as a whole. It considered section 26(3), which stated that eviction would not occur without an order of
court considering all of the circumstances relevant to the case. Read as a whole, the provision was in
place to ensure that the state was striving to provide adequate access to housing for all and refraining
from permitting people to be removed unless such could be justified.
Any measure that permitted a person to be deprived of existing access to adequate housing, the court
found, may be a justifiable limitation of the section-26 right, in terms of the limitation clause of the
Constitution.[3]
The court also considered that the advantage that attached to a creditor who sought execution may be
greatly outweighed by the immense prejudice and hardship caused to the debtor.
Section 66(1)(a) of the MCA was so broad, the court found, that it permitted sales in execution of
immovable property without judicial intervention, even where they were unjustifiable. This meant that
the scheme was overbroad and unconstitutional. To remedy this, the provision was to be read as if the
words "a court, after consideration of all relevant circumstances, may order execution" appeared
before the words "against the immovable property of the other party."

Mkhize v Umvoti Municipality 2012 (1) SA 1 (SCA)


Mr and Mrs M purchased an undeveloped property on which they thereafter built a house.
Mrs M died and her interest in the property passed to Mr M. At no stage did Mr and Mrs M
live in the house on the property. Mr M owned another property where the couple lived, and
where Mr M continued to reside after her death. The property was occupied by other
persons. Mr M fell into arrears with the rates and other charges due to the municipality.
Judgment was taken against him in a magistrates court. Execution against movables would
not satisfy the judgment, and the sheriff rendered a nulla bona return. Thereafter, in terms of
section 66(1)(a) of the Magistrates Courts Act 32 of 1944 a warrant of execution against the
immovable property was issued. The property was attached and sold in execution. One C
purchased the property at the sale in execution. C then sold the property to Mr and Mrs D,

who took transfer. The property became the home of Mr and Mrs D. They effected
improvements and mortgaged the property to a bank. The sale in execution was completed
before the Constitutional Court gave its judgment in Jaftha v Schoeman and Others; Van
Rooyen v Stoltz and Others 2005 (1) BCLR 78 (CC). In Jaftha, the Constitutional Court
declared that section 66(1)(a) was unconstitutional and invalid in certain respects, and that
to remedy its defect it was to be read as though the words a court, after consideration of all
relevant circumstances, may order execution appeared before the words against the
immovable property of the party.
Mr M brought an action in the High Court seeking an order declaring that the sale in
execution of his property was void and passed no valid title in the property to C and
ultimately to Mr and Mrs D. He contended, relying on Jaftha, that the warrant of execution
had been issued without the requisite judicial oversight. The High Court rejected this
contention. It held that the order made by the Constitutional Court in Jaftha should be
construed as applying only when the immovable property in respect of which execution is
sought is the debtor's home. The order in Jaftha was ambiguous because it was capable of
two constructions, that is, as being applicable to all cases of execution against immovable
property, and as being applicable only to execution against immovable property infringing the
debtors right of access to adequate housing in terms of section 26(1) of the Constitution.
Because the order was wide and affected also sales in execution which did not suffer from
any constitutional defect, it should be construed as applying only to cases where the
immovable property in respect of which execution is sought is the debtors home. The order
made in Jaftha should be read as: The failure to provide judicial oversight over sales in
execution against immovable property constituting the homes of judgment debtors in section
66(1)(a) of the Magistrates Courts Act 32 of 1944 is declared to be unconstitutional and
invalid. There had been no interference with Mr Ms right of access to adequate housing.
The High Courts judgment has been reported as Mkhize v Umvoti Municipality and Others
[2011] 1 All SA 144 (KZP).
Mr M (Appellant) appealed against that decision to the Supreme Court of Appeal.
The Supreme Court of Appeal found that Appellants right to adequate housing had not been
engaged or compromised. The immovable property concerned was not Appellants home,
nor was it suggested that he did not have access to adequate housing. The High Court was
therefore correct in its ultimate conclusion. Accordingly, the appeal had to fail.
The Supreme Court of Appeal pointed out, however, that the only way to determine whether
the right to adequate housing had been compromised was to require judicial oversight in all

cases of execution against immovable property on a case-by-case basis. This oversight was
required also in the absence of formal opposition and where the debtor was in default or
where he or she was ignorant of his or her rights. Seen from that perspective, the order in
Jaftha was neither ambiguous nor too wide. But it did not follow that the absence of judicial
oversight would render the procedures followed and the subsequent sale in execution invalid
in all cases. The purpose of the judicial oversight ordered in Jaftha was to protect the right to
adequate housing. Where, as was the situation in casu, the right to adequate housing was
not engaged, invalidity did not necessarily follow. This was so because the judgment and
subsequent sale in execution stood until set aside. Appellant had not brought an application
to rescind the default judgment entered against him. The order made in Jaftha was aimed at
preventing the infringement of the right to adequate housing. This was the sole purpose of
requiring judicial oversight in all cases of execution against immovable property. Rule 46 of
the Uniform Rules, as amended, was consistent with the order in Jaftha construed in that
manner.

Standard Bank v Bekker 2011 (6) SA 111 (WCC).


Since it had, due to conflicting judgments and an amendment to rule 46 of the Uniform
Rules, become unclear what information a bondholder had to place before a court to enable
it to decide whether to grant a writ of attachment and sale in execution of a judgment
debtor's home, the court had asked counsel representing the bondholders in five
applications for C default judgment against mortgagors to formulate specific questions for
the court to address. The following questions were submitted:
1. What were the 'relevant circumstances' to which a court had to have regard before
ordering execution against mortgaged property specially hypothecated to satisfy the debt
secured by such mortgage?
2. By whom did such circumstances have to be pleaded?
3. Did the new rule 46(1) have the effect of setting up any substantive D requirement on
the part of the plaintiff in order to obtain the relief sought?
The court answered as follows:
1. Although no definitive answer could be given to this question, relevant circumstances
included evidence of an infringement of constitutional E rights or an abuse of process, as
well as evidence in support of any contention by the bondholder that an alleged or
demonstrated infringement was justifiable.

2. Allegations that execution against the hypothecated property would infringe the
judgment debtor's constitutional rights or that the application for a writ of execution to issue
was an abuse had, in principle, to F be pleaded by the judgment debtor, and any rebutting
allegations by the bondholder.
3. The amended rule 46(1)(a) did not give rise to new substantive obligations on
bondholders seeking orders for execution against the hypothecated property. The proviso
made it clear that execution against the judgment debtor's primary residence (home)
entailed a G potential infringement of the right to housing and could therefore occur only
under judicial oversight (also where it was sought after excussion of the judgment debtor's
movable property). As far as procedural requirements were concerned, bondholders had
apart from special requirements relating to proceedings instituted in terms of the NCA,* and
those set out in the practice note in the Saunderson case to comply H with the following
guidelines:
(a) Where a declaration of special executability was sought ancillary to the judgment in
the money claim, the bondholder had to indicate in the summons whether or not execution
was being sought against the judgment debtor's home. If the bondholder was unable to do
so because of lack of knowledge, that had to be stated in the summons.
I

(b) Where the bondholder was able to state that the property was not the debtor's

home, the matter had, where possible, to be disposed


2011 (6) SA p113
of via the registrar. In such cases the bondholder had to submit to A the registrar an
affidavit confirming the fact that the property was not the debtor's home.
(c) Where the property might be the debtor's home, and the secured debt was
repayable in periodic instalments, it could be to the advantage of the bondholder to assist
the court by stating the amount of arrears; and where this was relatively low, by
stating B why it was resorting to direct realisation of the security.
(Paragraphs [4] and [27] [30] at 116B 117B and 127D 129H.)

ABSA Bank v Murray 2004 (2) SA 15 (C) and Nduna v ABSA Bank 2004 (4) SA 453 (C)
The matters of ABSA Bank Ltd v Murray 3V4x ANNUAL SURVEY OF SA LAW and another
2004 (2) SA 15 (C) and Nduna v ABSA Bank Ltd and others 2004 (4) SA 453 (C) both raised
the hoary spectre of mortgage bond defaulters who hold over after purchase of their

properties by the mortgagor bank that had so horrified the court in ABSA Bank Ltd v Amod
[1999] 2 All SA 423 (W) (see 2001 Annual Survey 451). In each case the unlawful occupiers
received short shrift from the court, again rendering the fears of Amod illusory. For these
ABSA clients, at least, there proved to be no today, tomorrow, together. But the routes to
these similar results were markedly different. In Murray's case the bank had purchased the
mortgaged property at a public auction pursuant to the sequestration of the respondents in
terms of s 83(8) of the Insolvency Act 24 of 1936. This, the court held, did not amount to 'a
sale of execution' as intended in s 4(7) of PIE, for 'the property was sold by the mortgagor
privately, exercising the rights reserved to it in terms of the Insolvency Act', with the result
that it had to show that it was just and equitable to evict the respondents on account of their
continued unlawful occupation of the property, taking into account their personal
circumstances (paras 27-8). Binns-Ward AJ noted that what was just and equitable
'unambiguously' involved a substantive component for a number of reasons. Pre-eminent
among these are the requirements of s 26(3) of the Constitution (para 17). Secondly, the
'relevant circumstances' listed in ss 4(6) and 4(7) of PIE made it plain that these could
'impinge on the property owner's common-law right to obtain possession of the property, to
the extent that considerations of justness and equity demand (para 18). In short, the
requirements listed in PIE could, if satisfied, provide a valid substantive defence to an
eviction application (para 19). He then considered more closely the nature of the test that he
was required to apply in order to determine whether it would be just and equitable to grant
the order sought by the bank. His analysis led him to the conclusion that it involved the
exercise of a wide discretion to balance the proprietary rights of landowners with the less
tangible, but no less important, rights of the occupiers to human dignity and access to
housing provided by the State, where relevant (para 21). He further noted that exercising
such discretion was not confined only to the immediate circumstances of the litigants but
also involved the taking into account the socio-economic setting within which each was
situated. Hence the overall interests of the housing finance industry, as well as the
CONSTITUTIONAL PROTECTION AND LAND REFORM 395 socio-economic context of the
occupants, particularly with regard to the local authority's obligations to provide housing to its
poor inhabitants, are also relevant considerations for the court to weigh in the exercise of its
discretion (paras 22-3). For this reason, a proper report to the court by the relevant local
authority in terms of the provisions of s 4(2) of PIE is to be regarded as the norm and not the
exception in all eviction cases (paras 41-2). In this case, however, the court was able to
dispense with such a report and finalize the matter without the delay and cost that would
have been occasioned by calling for one (para 43). Despite the comprehensive analysis that
Binns-Ward AJ devoted to the nature of the discretion he was required to exercise and the
relevant considerations, he found none that moved him in favour of the respondents in the

instant case (para 44). He was satisfied that the respondents' interests were adequately
catered for by the giving of a suitable period of notice before allowing the eviction to be
carried out. This was strengthened by the fact that the respondents had been aware, for over
a year, that the bank desired them to vacate the premises, within which time other
arrangements could have been made to secure suitable alternative accommodation (paras
45-8). The sole issue in Nduna's case was the competence of a magistrate's court to issue
an eviction order in terms of the provisions of PIE on motion proceedings. The respondent
against whom an eviction order had been granted in the magistrate's court challenged this
procedure on review to the full bench of the Cape High Court, contending, in essence, that
such a procedure was contrary to the magistrate's court's powers in terms of s 29(1)(b) of
the Magistrates' Courts Act 32 of 1944. Hlophe JP made short work of this argument, holding
that the provisions of PIE were clear and express in granting such competence to the
magistrate's court, although not granted by the Magistrates' Courts Act itself. In any event, s
4(1) of PIE made its provisions applicable 'notwithstanding anything to the contrary
contained in any law or the common law' (paras 8-9). Moreover, to hold otherwise would
render worthless, in cases such as the present, the right of a litigant to approach the
magistrate's court on an urgent basis, as provided for in s 5 of PIE (para 11). The review was
accordingly dismissed with costs.

Louw v Riverside Ranches 2001 (2) SA 963 (NC)


Section 63 of the Magistrates' Courts Act 32 of 1944 is applicable C not only in cases where
the judgment creditor has taken no steps to execute within three years of the taking of
judgment. It is applicable also to cases where the judgment creditor initially did take steps in
execution, but thereafter waited for longer than three years before taking further steps.
Accordingly, where a judgment creditor, D who took steps to execute in respect of property
which had been declared executable in the judgment, delays for more than three years
before taking further steps in execution and fails to obtain an order authorising such steps in
terms of s 63, it is appropriate to grant an interdict against him which forbids him from taking
such steps before he has complied with the provisions of s 63. (At 967C - I and 968B - C,
paraphrased.)
When a judgment creditor who has obtained a judgment in the High Court E for the
payment of an amount of money desires to utilise the procedure in s 65M of the Act, ie to
render the judgment enforceable 'as if it were a judgment lawfully given in [a magistrate's
court] in favour of the judgment creditor', and the judgment creditor is obliged to obtain a
prior order in terms of s 63 which authorises execution against property, the judgment

creditor is entitled to F approach the magistrate's court for that order. (At 968C - F,
paraphrased.)

September v Nedcor Bank 2005 (1) SA 500 (C).


The first respondent had obtained default judgment against the appellants. The appellants
immovable property (which the first respondent had had as security) was attached, but this
attachment lapsed. The first respondent sought to have the property re-attached, but the
appellants argued that, as a preferent claim for rates existed against the property, it could
not, in terms of the clear provisions of the Magistrates Courts Act 32 of 1944 (the Act), be
re-attached.
Held On the face of it, section 66(4) and (5) of the Act is clear and unambiguous. However,
it was clear from the research of the history of this section that errors had been made in the
drafting thereof contrary to the recorded intention of Parliament, the effect of the
amendments was that only attachments of immovable properties which are subject to other
preferent claims lapse after 12 months, and the intervention of a court was only necessary
when it was sought to extend the 12 month period of an attachment.
In the circumstances and in the view of the obvious mistakes by the draftsmen, the
amendments should be restrictively interpreted so as to change the existing law as little as
possible and should not be interpreted in a manner which would preclude a creditor to reattach property which is the subject of some other preferent claim.
Appeal dismissed with costs.

Bafana Finance Mabopane v Makwakwa 2006 (4) SA 581 (SCA).


On appeal, the question was whether a clause in a money-lending contract was valid, where
the clause provided for the debtor to waive his statutory right to apply to a magistrates court
for an order placing his estate under administration. Such right is conferred on a debtor, in
terms of section 74(1) of the Magistrates Courts Act 32 of 1944, if he is unable immediately
to pay the amount of a judgment obtained against him or to meet his financial obligations
and has insufficient assets capable of attachment to satisfy the debt. The effect of the order
is to reschedule payment of the debtors debts under the direction of an administrator.
Held that the question was whether, in the circumstances of the case, the respondent was
permitted to waive his right to apply to a Magistrates Court for his estate to be placed under

administration depended in the main on the overall purpose of the section. The court found
that the main purpose of section 74 is to protect debtors with small estates. It was enacted
as a form of debt relief and protection for low-income debtors who have fallen on difficult
times. The public interest requires not only that this class of people be protected, but that
creditors are able to recover their debts in the orderly manner that the administrator permits.
A creditor may not circumvent an administration order. The court therefore struck down the
offending contractual clause and dismissed the appeal.

Stander v Erasmus 2011 (2) SA 320 (GNP)


Under s 74E of the Magistrates' Courts Act 32 of 1944 the appointment of an administrator of
an estate is to be done by the court, and the court may also relieve an administrator of his
appointment, on good cause shown. The practice, of establishing juristic persons to
administer such files, raises concern because the juristic persons have not been appointed
by the court. D The interests of the debtors and creditors are of paramount importance, and
if payments are received by persons not appointed by the court, these interests will be
compromised. (Paragraphs [19] [22] at 324D F.

Zwarts v Thulo (02/2010) [2010] ZANWHC 9 (3 June 2010), and


NORTH WEST HIGH COURT, MAFIKENG

CASE NUMBER: 02/2010

In the matter between:


BENADE MICHIEL ZWARTS APPELLANT
and
MOTSHEGWA EVODIA THULO RESPONDENT
LANDMAN J & MATLAPENG AJ

DATE OF HEARING 14 MAY 2010

DATE OF JUDGMENT 03 JUNE 2010

FOR THE APPELLANT J.H.F PISTOR SC


FOR THE RESPONDENT NO APPEARNANCE

JUDGMENT

MATLAPENG AJ

Introduction

[1] Appellant, lodged an appeal in this Court against the decision of a magistrate to rescind
an administration order granted in terms of section 74Q (1) of the Magistrates' Court Act 32
of 1944, as well as an adverse costs order granted against him. The Respondent did not file
any opposition. She filed a notice to abide by this Court's decision.

Factual Background

[2] For the sake of convenience I will use the appellation that was used in the court a quo. In
that court the Appellant was the Respondent and the Respondent was the Applicant. The
facts in this matter are straightforward and most of them common cause.

[3] Sometime in 2000, the Applicant's estate was placed under administration in terms of
section 74 (1) of the Magistrates' Court Act. The Respondent was the administrator of the
estate. On 26 August 2009 the Applicant lodged an application for rescission of the order.
She was assisted by an attorney.

[4] In the application she claimed that it would be in the interest of the creditors if the
administration order was set aside as there was a good cause for doing so. She mentioned
the following as constituting good cause for the court to rescind the administration order:
a) her financial circumstances have changed;
b) the creditors were only being paid on trimonthly basis and if the order was rescinded, she
would be able to pay them on a month to month basis; and
c) not all the money she paid over to the administrator was for the benefit of creditors as the
administrator had to deduct administration costs and this decreased the amount that the
creditors ultimately received.

[5] The Applicant, when applying to be placed under administration, had disclosed six
creditors to the court. A further two (creditors) were listed and added after the administration
order was granted. However, at the time of the application for rescission, the Applicant cited
as a second Respondent "all Creditors" and proof was provided that only two creditors were
notified of the application by registered post.

[6] The Respondent being the administrator opposed the application. He stated that the
Applicant did not show that any good cause existed for the rescission of the administration
order. He further raised a point in limine in the Magistrate Court which point in limine was
pursued in this Court. Several points were also raised in this appeal but because of the view
that I take of this matter, I do not think it is necessary to examine them. I will restrict myself to
the point in limine.

Point in limine

[7] The point in limine that was raised by the Respondent is that not all persons who have a
substantial interest in the application namely the creditors, were informed of the application.
In this Court, the argument was further developed and clarified, the submission being that
there was a non-joinder in that, the Applicant failed to cite all creditors individually and by
name. Further, the Applicant's failed to serve the process in terms of Rule 9(3) of the
Magistrate Court Rules. The Applicant relied on writing letters to the creditors informing them
of the application and the writing of letters is not an acceptable form of service of court
process and cannot be seen as being in terms of the Rules of the Magistrates' Court. Lastly,
in case it being found that the Applicant was entitled to rely on such letters, she failed to
prove that the letters were sent to all creditors.

[8] In terms of rule 9(1) of the Magistrates' Court Rules a party requiring service of any
process, notice or other documents to be made by the Sheriff shall deliver such to the
Sheriff. Rule 9 (3) (a)-(f) regulates how such services shall be effected. The authors
Erasmus & Van Loggerenberg in the book Jones & BuckleThe Civil Practice of the
Magistrates' Courts in South Africa Volume 2 The Rules are of the view that all processes
mentioned in rule 9 (3) refer to court processes. Service of any other document which, is not
a court process has to be done in terms of rule 9 (11). Rule 9 (11) makes provision for
service of a document which is not a process of the court to be delivered by hand or by
registered post.

[9] By way of background I believe it is apposite to refer to s 74 A (5) of the Magistrates'


Court Act which provides:
"The debtor shall lodge an application for an administration order and the statement referred
to in subsection (1) with the clerk of the court and shall deliver to each of his creditors, at

least 3 days before the date appointed for the hearing, personally or by registered post a
copy of such application and statement on which shall appear the case number which the
original application was filed".
(My emphasis.)

[10] The process of administration orders was initiated as a means of debt relief to people
who are overwhelmed by debt and whose estate is so small in that the costs of
sequestration proceedings will swallow it. This is done in order to assist a debtor during
financial difficulties without going through the route of sequestration. See Fortuin v Various
Creditors 2004 (2) SA 570 (C), African Bank Ltd v Jacobs 2006 (3) SA 364 (C), Bafana
Finance Mabopane v Makwakwa and Another [2006] ZASCA 46; 2006 (4) SA 581 (SCA).

[11] An application for an administration order is undoubtedly a court process as it is a step


by which an action is initiated and or instituted. However, the service thereof is not subject to
the prescripts of rule 9 (3). That this is so, is clear from the wording of s 74 A (5) which
regulates the manner in which creditors are to be informed of the application for an
administration order namely personal delivery of documents or by registered post.

The current application by the applicant is the reopening of an existing case in terms of s
74Q(1). This section is silent on the procedure to be followed in as far as it relates to the
notification of interested parties. There is nothing to suggest that the same procedure laid
down in s 74A(5) should not apply when reopening the proceedings in terms of s 74Q(1).
This is further strengthened by the use of the word "notify" (and the manner of notification in
the said section) and not "serve" which is a deliberate choice of words to denote that is not a
similar process.

[12] Because of the underlying reasons for the existence of administration order mechanism,
I am of the view that it was not the intention of the legislature that the processes in

administration orders should be served in the usual context mentioned in Rule 9 (3) of the
Magistrates' Court Rules. To do so would, in my view, defeat the very purpose of the
existence of administration orders namely, debt relief. The service of the process through the
sheriff would not ameliorate the already precarious financial position of the debtor but would
exarcebate it through the addition of further costs.

[13] There was no reason why the creditors were cited as second respondents in the
Applicant's

application

for

rescission.

Although

they

have

an

interest

in

the

matter qua creditors, they were never parties to the initial application for administration order
and in my view, they only had to be notified in the same manner as when the application was
initiated namely by personal delivery or by registered letters as interested parties and not as
co-respondents. I venture to say that their being cited as co-respondents can be ascribed to
nothing else but ineptitude on the part of a person who was drawing the papers.

[14] Having regard to the application, it is clear that the court a quo was not provided with
proof that all eight creditors were informed of the reopening of the application. Despite this
lacuna in the Applicant's case being pointed to the court, it still came to the conclusion that
the creditors were informed about the application and they failed to note their opposition to it
and thus the point in limine had no merit. I hold a different view. Nothing in the applicant's
application supports the notion that all creditors were informed. What is clear is that
notification was sent to only two of them. Therefore the failure by other creditors to note their
opposition cannot be described to their consent or even apathy to the application but
ignorance of its existence. The finding by the learned Magistrate cannot be correct and has
to be set aside.
Adverse Court Order

[15] A further aspect that arose in the lower court was the award of costs against the
Respondent de bonis propriis. An adverse costs order is one of the hazards of litigation. In
the normal cause of events, a losing litigant will be ordered to pay the costs of successful

one on a party and party scale. However, it does happen that on some occasions the
attorney for the losing party is ordered to pay the costs of the other party de bonis
propiis. The award of this costs order is not made normally and it is except as a show of the
court's displeasure with the losing party's attorney.

[16] This order is not made in vacuo. There has to be serious conduct on the part of the
attorney that warrants such an adverse order. The courts have over the years taken the
following to warrant such an order and, of course, this does not represent a numerus
clausus namely: dishonesty, willfulness, negligence of a serious degree, a claim or defence
that is found to be vexatious, frivolous and totally without substance or hopeless from the
onset. See in this instance Waar v Louw 1977 (3) SA 297 (O), Page v Absa Bank Ltd 2000
(2) SA 661 (ECD), South African Liquor Traders' Association and Others v
Chairperson, Gauteng Liquor Board and Others 2009 (1) SA 565 (CC).

There was nothing in the Respondent's conduct of the case that could have warranted the
court's wrath and displeasure. The Respondent was within his rights to oppose the
application. There was a valid point that he raised in his opposition. I am of the view that the
adverse court order granted against him should not stand and must be set aside.

Order

In the circumstances the following order is made:

1) The appeal is upheld and judgment of the Magistrate is set aside and replaced with the
following:
a) Appellant has failed to notify all the creditors of her intention to rescind the administration
order.
b) The application is postponed sine die to enable her to do so.
c) Costs to be costs in the administration.

In this Court the Respondent did not persue the issue of costs and therefore I do not make
any award relating to costs.

DI MATLAPENG

ACTING JUDGE OF THE HIGH COURT

I agree

AA LANDMAN
JUDGE OF THE HIGH COURT

Dlamini v Maharaj (3260/10) [2010] ZAKZPHC 27 (8 June 2010)

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Dlamini v Maharaj (3260/10) [2010] ZAKZPHC 27 (8 June 2010)


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IN THE HIGH COURT OF SOUTH AFRICA


KWAZULU-NATAL HIGH COURT
PIETERMARITZBURG CASE NO.3260/10

In the matter between

NOKUTHULA CYNTHIA DLAMINI Applicant/Plaintiff


and

YUGANDRIE MAHARAJ Respondent/Defendant

Bookmark/s

JUDGMENT
Delivered : 8 June 2010

WALLIS J.

[1] Yugandrie Maharaj practises as an attorney under the name Yugandrie Maharaj and
Associates. Ms Nokuthula Dlamini became her client when she sought her advice on how to
deal with a number of creditors. As a result of that advice on 1 July 2003 an administration
order was made in respect of Ms Dlamini in terms of s 74(1) of the Magistrates Courts Act
32 of 1944 (the MCA). Ms Maharaj was appointed as administrator in terms of that order.
The administration order was rescinded in terms of s 74(q) of the MCA on 24 February 2009.
The present dispute relates to the fees charged by Ms Maharaj for her services both as an
attorney and as administrator.

[2] The dispute over Ms Maharajs fees arose because of Ms Dlaminis assertion that by
September 2008 she had made sufficient payments to Ms Maharaj as her administrator to
settle all her debts. By contrast Ms Maharaj contended that Ms Dlamini had stopped making
payments in terms of the administration order and therefore that its continuance was
prejudicial to her creditors. Ms Dlaminis new attorneys accordingly set proceedings in train
to secure that Ms Maharaj produce bills of costs in respect of her services and to have these
taxed. In the result she has tendered eighteen bills of costs in respect of her services as an
attorney in respect of the application for an administration order in terms of s 74 of the MCA
and eighteen further bills relating to her services as administrator in terms of s 74L of the
MCA. The taxing master taxed these bills, but Ms Dlamini was dissatisfied with the result.
She accordingly sought a review of taxation under Rule 35(1) of the rules promulgated under
the MCA. The magistrate upheld her objections and it is Ms Maharajs turn to be dissatisfied.
She has accordingly required the magistrate to state a case for determination by a judge in
terms of rule 35(5). That is what is before me.

[3] There are broadly speaking two issues to be decided. Both relate to the bills of costs
rendered in respect of the application for an administration order. These fall into two
categories. The first bill concerns the initial application and the second to eighteenth bills
related to services rendered during the course of the administration. In respect of the first of
the bills Ms Dlamini contends that a number of charges have been raised that are not
permitted in terms of the tariff or are covered by items that have been allowed elsewhere
and that these should be disallowed. In respect of the second to eighteenth bills she
contends that they relate in their entirety to work performed by Ms Maharaj in her capacity as
an administrator and are therefore not recoverable separately as legal costs, because Ms
Maharaj is confined to charging fees in accordance with the provisions of and constraints in
s 74L of the MCA. These two issues are distinct and need to be addressed separately.

[4] The tariff of fees relating to applications under s 74 is specified in Part III of Table B in
Annexure 2 to the MCA. It is headed General provisions in respect of proceedings in terms
of section 74 of the Act. There are two preliminary paragraphs to which I will revert in
dealing with the second question and a tariff of nine items, the first six of which relate to
matters concerning the application itself and the remaining three to the provision of
information and documents to creditors and to correspondence and attendances. Item one
also refers to attendances and correspondence and item three to attendances. The
implication of these references will be dealt with below.

[5] The challenges raised by Ms Dlamini in respect of the first bill were expressed as follows:
SECTION 74 BILL 1:
1. Items 3 to 43
In terms of item 1 of the tariff in respect of proceedings in terms of Section 74 of the Act, the
instructions fee includes the necessary perusal of summonses, demands etc. and
ascertaining the amount of assets and liabilities including all attendances and
correspondences necessary in connection therewith. Items 3 to 43 should be taxed off as
they are included in the instructions fee (item 1 of the bill).
2. Items 45 to 53; 63; 65 to 75; 79; 81 to 82
In terms of the item 3 of the tariff in respect of proceedings in terms of Section 74 of the Act,
the fee for drawing the application includes all annexures thereto and all attendances

excluding attendance at court. Items 45 to 53; 63; 65 to 75; 79; 81 to 82 should be taxed off
because they are attendances as described in item 3 of the tariff.
3. Item 96
There is no provision for consultation fees in the tariff in respect of proceedings in terms of
Section 74 of the Act. Item 96 should therefore be taxed off.

[6] The magistrate upheld each of these objections. The question is whether she was correct
in doing so. Item 1 in the first bill is a fee for taking instructions on 15 April 2003. It is not
clear what instructions are referred to as item 2 separately covers a consultation with Ms
Dlamini on the same day. According to the details furnished in that item what happened was:
Consultation with client Perused her payslip and obtained copy of her ID asked client to
get updated balances from creditors Advised client to surrender her Sanlam policies and
then settle her debts client wants us to call all her creditors for settlement balance client
wants to think about this consult and she will call us informed client of various
options available to her and her advantages and disadvantages of placing her Estate under
administration. One hr 30 mins R67.00 per 15 mins.
In the light of the separate charge for this consultation it is unclear to what the instruction
fee relates. However that fee has been allowed and it would not be correct to allow a further
charge for any matter forming part of the process of obtaining instructions. It is against that
background that I turn to consider items 3 to 43.

[7] Item 3 was a telephone call to Sanlam to obtain the surrender values for the insurance
policies. This call proved fruitless, as Ms Maharaj did not have the policy numbers. Item 16
was a phone call to Ms Dlamini to get this information and item 18 is the return call in which
she was told that Ms Dlamini could not locate the documents. Items 4 to 15 and 17 relate to
phone calls to and from various creditors and item 19 is a report to Ms Dlamini on what had
been ascertained. Clearly all these items reflect attempts to ascertain Ms Dlaminis assets
and liabilities and were attendances consequent upon that exercise. So were the letters sent
to various creditors on 13 May and reflected in item 34, which letters required updated
balances and reference numbers. According to item 1 of the tariff the fee allowed for taking
instructions includes ascertaining the amount of assets and liabilities and includes all
attendances and correspondence necessary in connection therewith. Accordingly these

items could not be charged for separately from the fee for taking instructions and they were
properly disallowed.

[8] Items 20 to 26 reflect communications between Ms Maharaj and Ms Dlamini culminating


in the decision to apply for an administration order. The first three are telephone calls to
arrange the conference that took place on 8 May 2003, at which Ms Dlamini indicated that
she wished to apply for an administration order. She confirmed that instruction in a telephone
call on 9 May and, in turn, Ms Maharaj wrote to her on the same day confirming that she had
received the instruction. On 13 May 2003 Ms Dlamini again telephoned Ms Maharaj telling
her to contact her creditors and advise them that she was applying for an administration
order. Taken as a whole all these attendances relate to the process of obtaining instructions
to make the application for an administration order. They therefore all fall under the heading
of taking instructions and could not be charged separately. They were properly disallowed.

[9] Items 27 to 33 reflect telephone calls to creditors to inform them that an application for an
administration order would be made. The magistrate did not deal separately with these items
but disallowed items 3 to 43 collectively as being part of item 1 in the tariff. Whether that is
correct, however, depends upon the proper construction of item 1. The difficulty in construing
item 1 relates to the words including all attendances and correspondence necessary in
connection therewith. Those words are capable of being read as qualifying either everything
that precedes them or only qualifying the perusal of documents and the task of ascertaining
the amount of the clients assets and liabilities.

[10] The problem can be illustrated by recasting the section slightly. It can either read:
Instructions to apply for administration order (including the necessary perusal of
summonses, demands, etc and ascertaining the amount of assets and liabilities) including all
attendances and correspondence necessary in connection therewith.
or it can read:
Instructions to apply for administration order: including the necessary perusal of
summonses, demands, etc and ascertaining the amount of assets and liabilities, including all
attendances and correspondence necessary in connection therewith.

Grammatically the latter construction is the more probable. However it is also the less
sensible construction. I can see no good reason why attendances and correspondence
relating to the perusal of summonses, demands and other documents and ascertaining the
amount of assets and liabilities should be covered by the item but attendances and
correspondence necessary in connection with obtaining instructions to apply for the
administration order should be excluded. Indeed it is difficult to see how those could be
excluded as it would be necessary for the attorney to attend upon the client in order to obtain
those instructions. Whilst instructions might be given orally in consultation or telephonically
or in writing each would involve an attendance upon the client and that attendance would be
the most essential in the entire process of taking instructions. In my view therefore the first of
the two possible constructions is to be preferred and item 1 is to be construed as covering
the taking of instructions including all attendances and correspondence necessary in
connection therewith.

[11] In relation to items 27 to 33 therefore the question is whether informing Ms Dlaminis


creditors of her intention to apply for an administration order was an attendance necessary in
connection with the taking of instructions to apply for that order. In my view it was. The
magistrate was accordingly correct to disallow these items.

[12] Items 38 to 40 and 42 relate to attempts by Ms Maharaj to check the balances owing to
Nedcor and item 41 relates to similar further attempts in respect of other creditors. For the
reasons set out in paragraph 7 they were correctly disallowed.

[13] The second set of items objected to in respect of the first bill of costs were items 45 to
53, 63, 65 to 75, 79 and 81 to 82. They all relate to telephone calls between Ms Maharaj and
Ms Dlamini and between Ms Maharaj and various creditors. The basis upon which they were
challenged was that these attendances related to the drawing of the application and were
therefore covered by item 3 of the tariff. That is correct in regard to item 45, which was a
telephone call to arrange for the client to come and sign the documents for the application.
Items 46 to 53 however have nothing to do with the drawing of the application and are
accordingly not attendances relating to that. As to the other items they occurred after the
application had been prepared and the founding affidavit had been sworn. They cannot
therefore be attendances relating to the drawing of the application. Accordingly they should
not have been disallowed on this ground.

[14] Item 96 is the last challenged item under the first head. The magistrate disallowed it and
no grounds have been set forth in the stated case or in the written submissions to me for
reinstating it. There was accordingly no reason to disturb the magistrates finding.

[15] To summarise in respect of the first issue, the magistrates decision is upheld in relation
to items 3 to 43, 45 and 96 and is set aside in regard to items 46 to 53, 63, 65 to 75, 79 and
81 to 82. The latter items are reinstated in the first bill of costs in respect of the application
under s 74. The effect of this is to increase the costs allowed by R275.00, with a consequent
adjustment in respect of drawing fees and attending taxation.

[16] I turn then to deal with the second issue. With the exception of the first item on the
second bill in respect of s 74 proceedings every item on the remaining seventeen bills is
objected to on the basis that each one falls in the category of expenses and remuneration
in s 74L(1)(a) of the MCA. Expenses and remuneration are limited in s 74L(2) to 12.5% of
the money actually received from Ms Dlamini for distribution. As separate bills of costs have
been taxed and allowed in respect of that 12.5% it is contended that no further charges may
properly be raised by Ms Maharaj.

[17] The charges raised in these seventeen bills are all of the following type. First there are
attendances on telephone calls from creditors enquiring about payments and the progress of
the process of administration. Second there are telephone calls and letters to creditors
directed at keeping them informed. Third there are consultations, both telephonic and face to
face, with Ms Dlamini about the process of administration.

[18] The contentions on behalf of Ms Maharaj were set out initially in an affidavit to which
she deposed. The relevant portions read as follows:
13. It is respectfully submitted that the only authority pertaining to the question of what legal
costs can be claimed by an attorney-administrator is that of AFRICAN BANK LTD v WEINER
AND OTHERS 2005(4) SA 363 (SCA).

(a) The abovementioned case focused however only on an interpretation of Section 74L(1)
(b). A reading of the judgment makes it clear in that the Court very often used the phrase
for the purposes of s 74L(1)(b).
(b) By the same token the Court held that an attorney who is appointed as an administrator
acts in the capacity of an attorney throughout.
(c) There is nothing in the Act prohibiting an administrator to appoint an attorney in
circumstances other than that envisaged by Section 74L(1)(b). It can surely not be said to
have been the legislatures intention that if a non-legal administrator instructs an attorney to
for instance give an opinion on certain aspects of the administration which aspects do not
deal with any default or disappearance of the debtor. It would not make sense to in such a
case deny the administrator his/her costs.
(d) It is therefore respectfully submitted that two principles emerge from the above case,
namely:
(i) An administrator is entitled to act as an attorney (and of course likewise);
(ii) An attorney-administrator is entitled to claim legal costs.

14. The second question this Honourable Review and Judicial Officer has to decide is
therefore to what legal expenses an administrator is entitled. It is respectfully submitted that
such legal costs are not limited to reasonable costs where there is a default but to general
legal work done to the benefit of the administration. There were various consultations,
letters and telephone calls that were part of the legal work done that were necessary to
conduct the distribution and administer the Applicants estate. What is reasonable or not
should obviously be established by way of taxation.

[19] It is not entirely clear from the magistrates reasons and the stated case how the
argument proceeded before her. The focus appears to have been on the judgment in African
Bank Limited v Weiner and Others1 and the effect of s 74L(1)(b) of the MCA. However that is
a red herring. That sub-section deals not with the entitlement of the administrator to charge
and recover fees and expenses, but to a separate entitlement to retain a small sum (R30.00)
from each distribution to be held as a reserve against the possibility of the debtor
disappearing and this occasioning costs to the administrator. That is factually not the

situation in the present case and s 74L(1)(b) therefore has no bearing on the present
problem.

[20] The real issue is whether an administrator who is also an attorney is entitled to be paid
anything more than the amount provided in s 74L(2) for their services. That section provides
that:
The expenses and remuneration mentioned in sub-section (1)(a) shall not exceed 12.5% of
the amount of collected monies received
S 74L(1)(a) provides that:
An administrator may, before making a distribution:
(a) deduct from the money collected his necessary expenses and their remuneration
determined in accordance with the tariff prescribed in the Rules.
Accordingly the 12.5% cap in ss (2) relates to the necessary expenses and remuneration to
which an administrator is entitled under s 74L(1)(a).

[21] That takes one to the tariff. Some confusion is occasioned by paragraph 1, which
provides that:
The following fees shall be allowed in addition to those laid down in the Tariff to this Part
(a) all necessary disbursements incurred in connection with the proceedings.
(b) In addition to the fees stated below, the administrator shall be entitled to a fee of 10% on
each instalment collected for the redemption of capital and costs.
This gives the impression that an administrator is entitled to recover under three heads,
namely, disbursements, payment in respect of any item falling under the appended tariff,
which includes attendances and correspondence, and fees. The items in the disputed
seventeen bills are all items relating to attendances and correspondence. For some
unexplained reason, whilst item 9 provides that these should be charged for at a rate of
R11.00 where the attendances involved consultations with Ms Dlamini they are charged at a
rate of R67.00 per fifteen minutes. It is not, however, necessary to explore the reasons for
this in any detail.

[22] The fact that the tariff appears to contemplate payment being made under three heads
was considered by the Supreme Court of Appeal in Weiner NO v Broekhysen2. Cameron JA
who gave the judgment of the court said the following:
[23] The problem in reconciling Part III with s 74L is this. Section 74L(1) gives an
administrator an entitlement to necessary expenses and a remuneration determined in
accordance with the prescribed tariff, while s 74L(2) states that the expenses and
remuneration mentioned in ss (1)(a) shall not exceed 12.5 % of the amount of collected
monies received. But Part III appears to contemplate recovery for the items expressly
specified under the tariff, plus necessary disbursements, plus in addition to the tariff fees, a
fee of 10% on each instalment collected. This led the administrator to contend that he was
entitled to a 10% fee on collections over and above his necessary expenses and the
allowances specified under the tariff. In effect, the administrator contended while the statute
caps his expenses and tariff items at 12.5 % of monies collected, his 10 % allowance is
additional to that.
[24] The creditor, contended conversely, that the 10 % fee Part III allows must be reckoned
as part of the 12.5% cap s 74L(2) imposes.

[23] Cameron JA pointed out that the difficulty arose from the fact that Part III seemed to
create three heads of recovery, namely (i) tariff fees; (ii) necessary disbursements; and (iii)
and an additional 10 % fee, while s 74L contemplated only necessary expenses and
remuneration with a total being limited to a 12.5 % cap. He held that as a matter of
interpretation the tariff needed to be reconciled with the terms of the authorising statute and
came to the following conclusion:
[26] I therefore conclude that the creditors contentions must prevail, and Part III must be
read as subordinating the administrators entitlement to a 10 % fee on monies collected to
the 12.5 % total cap the statute lays down. Put differently, the tariff referred to in s 74L(1) is
Part III in its entirety, and not just the nine item list headed tariff.

[24] It follows that an administrator is entitled to raise charges for her or his services in
respect of each relevant item in the tariff. In practice this will predominantly relate to
attendances and correspondence under item 9. Over and above that they may charge for
necessary disbursements, such as the cost of making telephone calls. Finally they may add
a fee of 10 % of the amount of each instalment collected for distribution. Overall, however,

the total charge may not exceed 12.5 % of that amount. Of course, it will be rare for the
amount of the administrators disbursements, plus their charges for the tariff items to be
equal to or less than 2.5 % of the amount of each instalment, and in that event the full 10 %
will not be recoverable. One can either view that situation as being one where the 10 % fee
is diminished or where there is an under-recovery in respect of disbursements and tariff
items. Those are but two sides of the same coin. However that is the necessary effect of a
statutory cap on the amount that an administrator may recover in respect of their services.

[25] It is unhelpful in this regard for Ms Maharaj to contend that she is both an administrator
and an attorney and to draw attention to those passages in the SCA judgment in African
Bank Limited v Weiner where the court pointed out that an attorney appointed as an
administrator does not thereby cease to be an attorney or dispense with professional
functions. Thus Cameron JA said:
[21] It is obvious that an attorney who is appointed as an administrator in terms of s 74E(1)
acts in the capacity of an attorney throughout. He or she does not dispense with professional
functions or duties at any point in the administration. The attorney-administrator takes both
the benefits and the burdens of a practitioners professional position and responsibilities.
However that proposition related to legal work undertaken in the circumstances
contemplated in s 74L(1)(b), that is, in circumstances where the administrator incurs costs
as a result of the debtors default or disappearance. Similarly, where in paragraph [34] of that
judgment Cameron JA again refers to the attorney appointed as an administrator acting in a
professional capacity throughout, he is doing so in the context of a claim to recover the costs
of the application for an administration order. That has nothing to do with the situation during
the administration when the attorney is acting as an administrator.

[26] The work reflected in the seventeen disputed bills, which involves responding to queries
from creditors, providing information to creditors and discussions with Ms Dlamini about the
implementation of the administration order, was all work that Ms Maharaj was obliged to
perform in her capacity as administrator. She is wrong to suggest that they constitute
general legal work done to the benefit of the administration. The proposition can be tested
quite simply. Had Ms Maharaj not been an attorney she would still have been required, as
part of the task of administration, to attend to these matters. She cannot, by virtue of her
status as an attorney, convert them into legal work that is separate from the work of
administration and for which additional fees can be charged.

[27] In the written submissions before me it was suggested, on the strength of African Bank
Limited v Weiner, that there is a distinction to be drawn between expenses and remuneration
on the one hand and costs on the other. However, that distinction is the distinction between
what is recoverable under s 74L(1(a) and the costs that may be incurred under s 74L(1)(b).
As I have mentioned the latter section is not applicable in the present case.

[28] The attorneys representing Ms Maharaj were alive to the case of Weiner NO v
Broekhysen. As I understand their contention in paragraph 11(c) of their submissions, they
suggest that there may be an entitlement on the part of Ms Maharaj to recover certain items
as legal costs for the period of the administration prior to that judgment being delivered. In
other words the suggestion is that the judgment altered what was then thought to be the
position and should only be prospective in its operation. There is no merit in that submission.
The judgment authoritatively interpreted s 74L and it is that interpretation that I must apply in
these proceedings.

[29] Bar item 1 in the second of the seventeen disputed bills all of the items contained in
those bills relate to work done by Ms Maharaj pursuant to the administration order. She is
not entitled to claim remuneration for that work over and above the remuneration under
s 74L(1)(a) which is subject to the 12.5 % limit in s 74L(2). Her claims in regard to that
amount were the subject of the eighteen separate bills, which have been taxed and are not
in dispute before me. It follows that the magistrate was correct in disallowing these items.

[30] In the result I make the following orders:


1. The review succeeds in respect of items 46 to 53, 63, 65 to 75, 79 and 81 to 82 of the first
s 74 bill of costs. Those items are to be re- instated in the taxation of the bill and the drawing
fees and fee for attending taxation are to be adjusted accordingly.
2. In respect of all other items in the first bill and bills 2 to 18 the magistrates decision is
upheld.
3. In view of the limited success that Ms Maharaj has had in these proceedings it is
appropriate that she pay Ms Dlaminis costs consequent thereupon.

APPLICANTS ATTORNEYS JON WHITE ATTORNEYS


RESPONDENTS ATTORNEYS CHETTY ASMAL & MAHARAJ ATTORNEYS

African Bank v Jacobs 2006 (3) SA 364 (C)


There is no need for a distribution account in an administration order under s 74 of the
Magistrates' Courts Act 32 of 1944 where there has in fact not been any payment to
creditors and where there is no money available for distribution, either because nothing was
received or the amounts received left nothing over after legal expenses I and expenses
mentioned in s 74J(4). A creditor has a spectrum of remedies in the event that a distribution
account is not lodged. He may require expenses and remuneration to be taxed by the clerk
of the court, and can inspect free of charge the administrator's list of all moneys received.
This would inform him quickly and cheaply as to whether a distribution is due. (At 368B C.) J

Weiner v Broekhysen 2003 (4) SA 301 (SCA)


The appellant had, in terms of s 74(1) of the Magistrates' Courts Act 32 of 1944 (the Act),
been appointed the administrator in the estate of a married couple who were unable to meet
their financial Gobligations. The order granted in terms of s 74(1) of the Act, however, gave
rise to a dispute between the appellant and the respondent, the couple's biggest creditor.
The dispute had its roots in the powers and duties of a professional administrator and the
conflicting interests of an administrator and a creditor in how an administration order was
executed and the benefits derived therefrom. H
The respondent had initially objected to the size of the monthly contribution tendered in the
application for the administration order, thinking it too small. He had accordingly dispatched
an attorney to the court, who had arranged with the administrator before the matter was
heard that the amount would be increased to R1 130. The administrator handed a draft order
to the magistrate, which was made an order of Icourt, with certain amendments. The first
part of the order gave rise to an objection from the respondent and the resultant dispute. The
offending portion provided that: (1) the appellant be appointed the administrator and that the
couple pay him the amount of R1 130 per month from the end of May for pro rata distribution
among the creditors; (2) the first distribution would be for J

2003 (4) SA p302


payment to the administrator up to the end of August, subject to the administrator's A right
to delay distribution if, in his opinion, there was insufficient money to cover all costs and still
make a viable distribution; (3) thereafter, each subsequent distribution would be in respect of
every three payments received by the administrator; (4) the costs of the application for
administration would be costs in the administration and that the administrator would be
entitled to deduct such costs from the money paid to him in terms of the order, before
calculating and B effecting the first distribution; and (5) before effecting a distribution, the
administrator may also deduct costs in respect of ss 74L, 74M and paras 1(a) and (b) of the
General Provisions to the Tariff for s 74 of the Act.
The magistrate had deleted components (2) - (5) of the original order. On appeal to the Cape
Provincial Division, the deletion of components (2) and (3) was confirmed. Component (4)
was considered either Cunexceptionable as being in accord with the provisions of s 74O of
the Act or for that reason superfluous and therefore also subject to deletion. In respect to
component (5) it was held that 'costs' had a narrow signification and that the application of
the term in relation to the remuneration to be deducted in terms of s 74L(1)(a) as well as the
additional fees provided for by para 1(b) of D the General Provision in respect of
Proceedings in terms of s 74 of the Act (Part III of Annexure 2 to the Rules of the
Magistrates' Courts) was clearly inappropriate, as was the reference to s 74M. That
component was therefore deleted. The appellant appealed against this order.
The creditor objected to the order granted as, it was alleged, it differed materially from that to
which his attorney had consented on his behalf, and was therefore obtained without his
consent. It also Econflicted with the provisions of the Act. The creditor's complaint about
component (2) was that it made the first distribution subject to the administrator's power to
delay it indefinitely and therefore violated the basic scheme of the statute. Counsel for the
respondent submitted that component (4) did not accord entirely with s 74O. It was pointed
out that the costs of applying for the order, which were recoverable under s 74O, differed
from the costs of F the actual administration, which were dealt with in s 74L. Section 74O,
however, did not entitle an administrator simply to deduct his application costs from the
payments made by the debtors, although they would be a first charge against the money
controlled by him. Section 74J(5) required the administrator to complete a distribution form
which made provision for the deduction of only s 74L administration costs. G No express
mention was made of s 74O application costs, although provision was made for 'other
payments' to be made during the administration, which would necessarily encompass s 74O
application costs.

The seemingly uncontentious content of component (5) was complicated by the fact that the
appellant and the respondent adopted diametrically opposing views on the interpretation of s
74L and the H costs it licensed. The Court a quo had held in addition that the word 'costs' as
it appeared in component (5) was inappropriate, since s 74L and the general provisions of
the tariff did not contemplate 'compensation for the expense of litigation incurred'. The
problem with reconciling Part III with s 74L was that s 74L(1) gave an administrator an
entitlement to necessary expenses and a remuneration determined in accordance with the
prescribed tariff, while I s 74L(2) stated that the 'expenses and remuneration mentioned in
ss (1)(a) shall not exceed 12% of the amount of collected money received'. Part III, however,
appeared to contemplate recovery of the items expressly specified under the tariff, plus
necessary disbursements, plus tariff fees and a fee of 10% on each instalment collected.
The administrator contended, therefore, that he J
2003 (4) SA p303
was entitled to a 10% fee on collections over and above his necessary expenses and the
allowances specified under the tariff, A ie that while the statute capped his expenses and
tariff items at 12% of the money collected, his 10% allowance was additional to that. The
respondent contended that the 10% fee Part III allowed had to be reckoned as part of the
12% limit s 74L(2) imposed. The interpretation favoured would have a direct impact on
creditors' recovery. B
Held, that it was plain from s 74J(1) that the court granting an administration order had, in
general, to require the administrator to effect distributions to creditors 'at least once every
three months'. This was the position by default. Deviation was licensed only where the
creditors agreed or the court ordered otherwise. The only basis for deviation available in the
present matter was by order of the magistrate. Such an order could be sought only
for C reasons disclosed in the application served on the creditors. The present original
application gave no indication that the distributions were contemplated on any basis other
than at least once every three months. The order granting the administrator the 'right' to
delay distribution was accordingly inappropriate on the ground of absence of notice to the
creditors. (Paragraphs [12] - [14] at 309C - F and 310A - B.) D
Held, further, that, unless otherwise agreed or ordered, the Act contemplated that debtors
under administration had to make regular payments which were to be converted into regular
distributions to the creditors. Component (3) of the order made distributions subject to
receipt by the administrator of three payments from the debtors. This was regardless of
whether the debtors paid regularly or not. The Legislature had intended in s 74J(1) to make

the distribution of money E received from debtors time- and not event-related. Component
(3) was therefore also unacceptable. (Paragraph [17] at 311B - D.)
Held, further, with regard to component (4), that it was undesirable that the administrator
should have been granted an order that he could deduct his s 74O costs where he was also
given the power to delay distribution indefinitely. The offending portions of the order F had,
however, already been excised and it followed that the Court a quo's conclusion that
component (4) accorded with the Act was correct. (Paragraph [18] at 312B - D.)
Held, further, with regard to component (5), that s 74L made no mention of a 'fee'. The
drafters of the Rules must therefore be assumed, in referring in Part III to a 10% fee, to have
acted within the s 74L power to determine a remuneration in accordance G with a tariff
prescribed in the Rules. That provision was the sole source of any power to determine a 'fee'
in Part III. But s 74L(2) expressly stated that same remuneration, together with expenses, to
be subject to a maximum 12% of the money collected. Part III therefore had to be read as
subordinating the administrator's entitlement to a 10% fee on money collected to the 12%
limit provided for in the statute. To the extent H that component (5) of the original order
could be read as securing to the administrator any recovery in excess of 12% of the money
collected, it was unacceptable and had to be excised. (Paragraphs [25] and [26] at 314D/E H.) Appeal dismissed.
The decision in the Cape Provincial Division in Weiner NO v Broekhuysen 2001 (2) SA 716
confirmed.

African Bank v Weiner 2005 (4) SA 363 (SCA).


Section 74 of the Magistrate's Courts Act 32 of 1944 established a system of courtsupervised debt administration for debtors with liabilities of less than R50 000. The resultant
statutory restructuring of a debtors debts usually occurs at the cost of an additional burden
on the debtors income, namely the administrators fees. This resulted in a clash between
the interests of creditors such as the appellant bank (which wants payment of the debt as
fast as possible), and the first respondent administrator (whose fees prolong payment of the
debt).
Held: That the main question in this case was whether, when a debtor under administration
defaults or disappears, section 74L(2) offers an avenue for recovery of costs beyond
expenses and remuneration, and if so to what extent. More particularly, the question was
whether the 12.5% cap in section 74L(2) covers the costs envisaged in section 74L(1)(b).

The bank contended that the section 74L(2) cap limited all recovery by an administrator,
from whatever source, to 12.5% of the amount of collected moneys. The court rejected this
submission.
The next question was whether the administrator is entitled to levy a collection fee under
section 65 and its associated provisions and claim it as a cost under section 74L. The court
ruled that no such entitlement exists.
The bank's appeal succeeded

Hillhouse v Stott 1990 (4) SA 580 (W) at 582-585.


Leveson J: These three applications for sequestration came before this Court during the
course of the current week and the same question was E raised in each of them. Argument
was addressed to me by MrWaner in the first matter of Hillhouse v Stott and counsel in the
remaining two matters (respectively Mr Meyer and Miss Abelman ) adopted his argument,
supplementing where they deemed necessary.
The papers in each application do not disclose any material assets in F the estates, other
than a sum of money deposited in a bank or building society for the purpose of being taken
by the trustee on his appointment and, so it is said, for distribution by him to creditors. In this
respect these applications differ from others which came before me during the week, where
it was contended that household furniture or motor cars owned by the insolvent or even the
net equity in immovable property (the difference between the amount outstanding on the
mortgage G bond and the creditor's estimated value of the property) would realise sufficient
funds to constitute advantage to creditors.
The respondent, Stott, has deposited R5000 to be vested in due course in the trustee,
while in the second case of Freban Investments (Pty) Ltd H v Itzkin, the respondent has
deposited the amount of R8000. However, it is also alleged that he is owed R2000 in
gambling debts, payable to him by virtue of his calling as a bookmaker. Nothing is said as to
the prospect of recovering those debts, but, having regard to their nature, it is questionable
whether any recovery will be made at all. In the third case, that of Botha v Botha, the sum of
R6000 has been deposited I by the respondent.
Some creditors have issued summons against the respondents. In each instance the act of
insolvency falls within the provisions of s 8(g) of the Insolvency Act 24 of 1936, the
respondents having given notice in writing that they are unable to pay their debts. It requires
no great ingenuity on the facts disclosed in each of the applications to conclude J that the

1990 (4) SA p582


LEVESON J
A respondents are anxious to be sequestrated, that the granting of the orders will bring
them welcome relief from their misery, and that, in the words of Nicholas J, as he then was,
in Klemrock (Pty) Ltd v De Klerk and Another 1973 (3) SA 925 (W), in each instance the
application is a 'friendly sequestration'.
B

The question for consideration is whether the requirement of s 10(c) of the Act, namely

that sequestration must be shown to be to the advantage of creditors, is satisfied merely by


proof that the value of the debtor's assets exceeds the minimum of R5000 apparently
considered necessary to cover the costs of sequestration and of administration of C the
insolvent estate. In view of the wide divergence of opinion held by practitioners on the
subject, I do not think that I need apologise for re-stating the principles that have been
established by the Courts. When this question was raised by me the answer given by
counsel was that the position was governed by Rule J5 of the Practice Manual applicable in
the Transvaal. The Rule reads: D
'No advantage to creditors is regarded as being shown unless it is demonstrated that the
respondent is possessed of assets exceeding R5000 in value, unless there are special
circumstances which would make sequestration advantageous to creditors. These must fully
appear. This figure of R5000 will probably be modified from time to time. This will be done by
notice from the Registrar to the professions on the authority E of the Judge-President.'
It is to be noted that the rule is expressed in the negative. It was contended that the rule
means that if the debtor is possessed of assets exceeding a value of R5000, advantage to
creditors is automatically shown. There is some dispute in regard to this proposition. The
opposite F view is that the possession of assets worth R5000 is merely a factor in the
determination of advantage to creditors. I do not have to resolve that dispute. The rules of
the Practice Manual do not have the force of law and certainly cannot be said to have
amended the statute. In determining whether advantage to creditors has been shown in my
opinion G the Court must have regard only to such considerations as were contemplated by
the Legislature.
The amount of R5000 was designated in the rule because the author of the rule had seen
the section as requiring that the costs of sequestration and administration should at least be
covered so that no Hcontribution was required from creditors. He had made enquiries of the
Master of the Supreme Court, from whom it was established that in current times such costs
in the most straightforward and uncomplicated estates seldom fell below R5000. It was

therefore thought that so long as no contribution from creditors was likely to be required that
would be sufficient to establish advantage to creditors. It is this approach I which must be
questioned.
Mr Waner, who appeared for the applicant, Hillhouse, submitted that where the only asset
in the estate was cash in the amount of R5000, the only cost of administration would be the
remuneration of the trustee and the Master's fee, and that the total would not exceed R250.
The balance, he contended, would be distributed by way of dividend to the creditors
1990 (4) SA p583
LEVESON J
A and that distribution would constitute the advantage to creditors. The amount is made up
as follows, according to tariff B pursuant to s 63 of the Act:

Trustees' fees at 1% of money in the estate:

R50

Master's fees:

R100

B Postage and petties, including stamps:

Total:

R100

R250

In my opinion, apart from the taxed costs of sequestration, two factors have been
overlooked by Mr Waner. The first is the proviso appearing at the foot of the tariff, viz that the
total remuneration of a trustee is not to be less than R750. The second is that in terms of s
63 the Master may increase the remuneration when good cause is shown. C Some time has
elapsed since the amounts in tariff B were fixed. The erosion in the value of money since, in
my opinion, would constitute sufficient cause for the Master to permit an increase in the
remuneration within the meaning of the section. In my opinion, the Master would increase

the remuneration in order to compensate the D trustee for the work performed by him and to
cover him for his expenses in various respects, eg for the taking of legal advice, preparing,
printing and posting reports of progress to creditors, notifying them of the dates and places
of meetings, the cost of advertising such meetings in the Government Gazette, and in
newspapers in both official languages, searching for further assets and conducting
investigations and so forth. E By way of example, it will suffice for me to mention that in
some matters I have seen accounts from newspapers requiring payment of as much as
R400 for the cost of publication of ordinary orders of Court. It is in fact with these factors in
mind that the view has been formed that the cost of administration is rarely likely to fall below
R5000.
F

On the assumption that the first R5000 of any deposit is to be consumed by the costs of

administration, the question must be asked what remains to establish that there is
advantage to creditors. It should be added that in the Hillhouse case, argued by
Mr Waner the total indebtedness is R270000. If, therefore, the whole amount of R5000 were
to be made available for distribution to creditors, the dividend to be Greceived by them
would amount to 1,85 cents in the rand. A dividend of that amount, in my opinion, is
negligible.
In earlier days it was suggested that the fact that the value of the debtor's estate is so low
that there will not be sufficient funds to cover the costs of administration is generally
sufficient proof that Hsequestration would not benefit creditors. See Carr v Kruger 1913 EDL
56; Grobler v Grobler 1913 EDL 449; Kerbel v Chames 1925 WLD 72; Trade Discount Co v
Steele 1949 (4) SA 121 (O). It is, perhaps, the views expressed in cases such as these that
have led many practitioners to believe that once there are assets sufficient to defray the
costs of I administration advantage to creditors is shown. That, as will be seen shortly, is not
a sound approach.
Section 10(c) of the Insolvency Act reads as follows:
'If the Court to which the petition for the sequestration of the estate of a debtor has been
presented, is of opinion that prima facie
(a)
J

...
(b) ...

1990 (4) SA p584


LEVESON J

(c) there is reason to believe that it will be to the advantage of creditors of the debtor if

his estate is sequestrated,


it may make an order sequestrating the estate of the debtor provisionally.'
The question as to what degree of proof is necessary to satisfy the requirement of the
section has been considered in a number of cases. In Meskin & Co v Friedman 1948 (2) SA
555 (W) Roper J said at 558: B
'Sections 10 and 12 of the Insolvency Act 24 of 1936, cast upon a petitioning creditor
the onus of showing, not merely that the debtor has committed an act of insolvency or is
insolvent, but also that there is "reason to believe" that sequestration will be to the
advantage of creditors. Under s 10, which sets out the powers of the Court to which the
petition for sequestration is first presented, it is only necessary C that the Court shall be of
the opinion that prima facie there is such "reason to believe". Under s 12, which deals with
the position when the rule nisi comes up for confirmation, the Court may make a final order
of sequestration if it "is satisfied" that there is such reason to believe. The phrase "reason to
believe", used as it is in both these sections, indicates that it is not necessary, either at the
first or at the final hearing, for the creditor to induce in the mind of the Court a positive view
that sequestration will be to the financial advantage of creditors. D At the final hearing,
though the Court must be "satisfied", it is not to be satisfied that sequestration will be to the
advantage of creditors, but only that there is reason to believe that it will be so.'
Later, at 559, the learned Judge said:
E 'In my opinion, the facts put before the Court must satisfy it that there is a reasonable
prospect - not necessarily a likelihood, but a prospect which is not too remote - that some
pecuniary benefit will result to creditors. It is not necessary to prove that the insolvent has
any assets. Even if there are none at all, but there are reasons for thinking that as a result of
enquiry under the Act some may be revealed or recovered for the benefit of creditors, that is
sufficient.'
F The learned Judge then proceeded to quote the cases relied upon by him for that
conclusion, and those too will be found at p 559 of the report.
In attempting to gauge the degree of proof required, in my opinion it is important to look at
the differences in the language used by the Legislature in ss 6 and 10 of the Act. Section 6
deals with the Gsurrender of his estate by the debtor. In this instance the Court must
actually be satisfied that sequestration will be to the advantage of creditors. In terms of s 10
the Court must only have reason to believe that there is advantage to creditors. The reason

for the difference is not far to seek. A debtor knows his own business and can adduce facts
to show advantage to creditors. A creditor, on the other hand, is seldom in H the happy
position of being in possession of sufficient facts relating to the debtor's assets as to be able
to furnish details to the Court. This, of course, is not the position in cases such as the
present, ie friendly sequestrations, where the creditors are capable of obtaining full details
from the respondents. Yet, despite this advantage the paucity of fact in the papers in these
three matters cannot be too I heavily stressed. At any event, reference must be had
to Amod v Khan 1947 (2) SA 432 (N), where Hathorn JP said at 438:
'A debtor knows all about his own affairs and can easily prove the advantage of the
creditors. On the other hand, the creditor has normally little knowledge of the exact position
of the debtor; he probably does not know what creditors he has, nor the amounts he owes,
nor the assets he possesses. Consequently, it is difficult for him to provide J satisfactory
proof that the sequestration of the debtor's estate will
1990 (4) SA p585
LEVESON J
A be to the advantage of the creditors. Yet that is what the Insolvency Act, 1916,
demanded. The various Courts in South Africa, recognising the creditor's difficulty - and here
I speak in a very general way - were inclined to accept, as proof, very little evidence that
sequestration would be to the advantage of the creditors. The Legislature knowing this, and
knowing also that the advantage of the creditors is, and always has been, a consideration of
great importance in relation to the question whether a debtor's estate should
be B sequestrated, altered the position in 1936, and made it much easier than it had been
for the creditor to make a case in relation to the benefit of the creditors.'
It follows that less proof is required in the case of sequestration by a creditor.
C

To return to the proposition made by Roper J in the Meskin case supra, the Court need

not be satisfied that there will be advantage to creditors, only that there is reason to believe
that that will be so. That in turn, in my opinion, leads to the conclusion that the expression
'reason to believe' means 'good reason to believe'. The belief itself must be rational or
reasonable and, in my opinion, to come to such a belief, the Court must be furnished with
sufficient facts to support it. D Cf London Estates (Pty) Ltd v Nair 1957 (3) SA 591 (D) at
592 - 3; United Democratic Front and Another v Acting Chief Magistrate, Johannesburg 1987
(1) SA 413 (W) at 421; Minister of Law and Order and Others v Hurley and Another 1986 (3)
SA 568 (A). In a broad sense it seems proper to say, on the basis of the cases, that
'advantage to creditors' ought E to have some bearing on the question as to whether the

granting of the application would secure some useful purpose. I express it thus because, as
Roper J has shown in the Meskin case, there need not always be immediate financial
benefit. It is sufficient if it be shown that investigation and inquiry under the relevant
provisions of the Act might F unearth assets, thereby benefiting creditors. But for cases
such as the present where the only question is to what extent creditors can benefit from the
moneys known to be available (there being no other assets), I think it proper to adopt the
test of Seligson AJ in Epstein v Epstein 1987 (4) SA 606 (C) at 609:
'The correct test to be applied is whether the facts placed before the G Court show that
there is a reasonable prospect - not necessarily a likelihood, but a prospect which is not too
remote - that some not negligible pecuniary benefit will result to creditors.'
Because the present applications are friendly sequestrations, this Court is enjoined, on the
authority of what was said by Nicholas J in H the Klemrock case, to scrutinise the
applications with particular care so as to protect the interests of creditors. In the early days of
the Act, where it is clear that the object of the applicant was solely to secure for the debtor
relief from his debts, the Court would refuse the order.Wepener v Ericson 1926 WLD 81. The
same object, viz to bring relief to the debtor, is sought to be achieved in many friendly
sequestrations.
I

Is there anything in the facts of the present three cases to take them out of this

category? As already mentioned, in the Stott case the cash moneys available amount to the
sum of R5000 and the total indebtedness is R270000. In the Itzkin case the cash moneys
amount to the sum of R8000. There is reference to a further doubtful amount of R2000
in J respect of the claim for gambling debts; a total for present purposes of

Ex Parte Kroese and another 2015 (1) SA 405 (NWM).


The issue in this case was whether the protections in s 82(6) of the C Insolvency Act 24 of
1936 could be waived. Sections 82(1) and 82(6) provide as follows:
'(1) Subject to the provisions of sections eighty-three and ninety the trustee of an insolvent
estate shall, as soon as he is authorised to do so at the second meeting of the creditors of
that estate, sell all the property in that estate in such manner and upon such conditions as
the creditors may direct . . . . D
...

(6) From the sale of the movable property shall be excepted the wearing apparel and
bedding of the insolvent and the whole or such part of his household furniture, and tools and
other essential means of subsistence as the creditors, or if no creditor has proved a claim
against E the estate, as the Master may determine and the insolvent shall be allowed to
retain, for his own use any property so excepted from the sale.'
The applicants, the Kroeses, sought to waive the protections in order to increase the value of
their realisable assets this in order to demonstrate advantage to their creditors if they
were sequestrated.
The court held, though, that such a waiver was impermissible: the protections F had been
enacted for the benefit of both debtors and the public, and there was authority that
provisions of this nature could not be waived. (Paragraphs [30], [37], [44], [56], [63] and [67]
at 410J 411D, 412D, 413I 414B, 416H I, 417H I and 418E.)
Semble: The creditors' (or master's) discretion to except property from sale must be
exercised reasonably. (Paragraph [34] at 411I J.) G

Ex Parte Ford and two similar cases 2009 (3) SA 376 (WCC).
The court dealt with three separate unopposed applications for the voluntary surrender of the
respective applicants.
Held that the papers showed that most of the indebtedness of the applicants arose from
credit agreements as contemplated in the National Credit Act 34 of 2005. The court
highlighted the extreme over-indebtedness of the applicants, by comparing their
indebtedness to their income.
As one of the aims of the Act is to avoid the reckless extension of credit, the court
questioned how the applicants came to be extended credit way beyond what they could
afford.
The court noted the applicants' reluctance to make use of the system of debt administration
provided in the Act. It refused the applications, pointing out that the advantage to creditors
would be minimal.
(WCC), three debtors applied for voluntary surrender of their estates under the Insolvency
Act 24 of 1936. A substantial portion of their debt, which was disproportionately high in
relation to their income, arose from credit agreements as defined by the National Credit Act.
The court held (para [3]) that the possibility of reckless credit, which is discouraged by the

National CreditAct (s 3(c)(ii)), was present. The court (para [9]) referred to its powers in
terms of section 85 and pointed out that an evaluation by a debt counsellor could lead to the
suspension or setting aside of a credit agreement if credit was granted recklessly. Because
section 85 was drafted with a wide ambit and explicitly includes any court proceedings,
counsel's argument (para [11]) that section 85 is not applicable in proceedings for voluntary
surrender under the Insolvency Act was rejected by Binns-Ward AJ who held (para [12]) that
the proceedings under section 85 are not limited to credit agreements. Before opting to
surrender their estates under the Insolvency Act, insolvents, according to Binns-Ward AJ
(para [14]), will be well advised to rely on the special remedies under the National Credit Act
in instances where credit agreements are the principal source of their financial misfortune.
These special remedies entail the disallowance of the recovery of reckless credit, the
ranking and suspension of accrued interest thereon and proper debtcounselling. In
exercising its discretion not to grant an order for voluntary surrender, the court took into
account (para [18]) the extent to which the debtors were able to obtain credit from financial
institutions, their failure to explain why they did not make use of the above special remedies
under the National Credit Act and the marginal monetary advantage to their creditors. The
argument that it is for the applicants to choose the form of relief that suits their convenience
by mechanically and superficially complying 1021 ANNUAL SURVEY OF SA LAW with the
requirements under the Insolvency Act is, according to the court (para [19]), misdirected,
especially where the grant of a selected remedy is discretionary (Ex Parte Hayes 1970 (4)
SA 94 (NC)). Public policy furthermore requires (para [20]) that the rights of responsible
credit providers must have preference over those that are reckless and, as far as possible,
enjoy full satisfaction of their financial claims against debtors. In conclusion the court held
(para [21]) that there is a consonance between the objects of the relevant provisions of the
National Credit Act and the Insolvency Act, that is, not to deprive creditors of their claims but
merely to regulate the manner and extent of their payment. On the incomplete facts
disclosed, the court held that the machinery of the National Credit Act is the more
appropriate mechanism to be used in casu and refused the voluntary surrender applications.
C van Heerden and A Boraine in an article 'The interaction between the debt relief measures
in the National Credit Act 34 of 2005 and aspects of insolvency law' 2009 (12) 3 PELJ 22
investigated debt relief under the National Credit Act in relation to the Insolvency Act. They
rightly emphasised the following aspects. First, unlike insolvency law, the National Credit Act
is not based on a concursus creditorum that entails a collective debt settlement procedure,
but operates on the principle of extension or restructuring of payments to settle debts.
Second, section 2(7) of the National Credit Act stipulates that no provisions under the
National Credit Act are to be construed as limiting, amending, repealing or otherwise altering
any provision of any other Act, except where it is specifically set out in, or necessarily implied

by the National Credit Act. In none of the sections of the National Credit Act is there any
specific mention of the Insolvency Act in this regard. Third, Schedule 1 of the National Credit
Act, which sets out the rules on conflicting legislation, is silent on any direct or indirect
conflicting provision relating to debt review and debt restructuring vis-6-vis the Insolvency
Act. Fourth, if there were any overriding conflicting provisions in this regard, the National
Credit Act would have expressly stated so in Schedule 1. Fifth, from the amendment of
section 84 of the Insolvency Act as per Schedule 2 of the National Credit Act, it is clear that
the Legislature was aware of the Insolvency Act and did not consider it. They came to the
conclusion that it was not the Legislature's intention to oust the application of insolvency law
directly or by necessary implication in such a manner that a pending debt review, debt
restructuring order, or agreement is a bar to seques- 1022 LAW OF PURCHASE AND SALE
tration. However, they submitted that in the light of Ford (if it stands) the National Credit Act
will in future significantly influence insolvency proceedings.

Stratford v Investec Bank 2015 (3) SA 1 (CC)


The first respondent applied for the sequestration of the estate of the first and second
appellants, arising from the first appellants indebtedness in terms of a number of suretyship
agreements. On the notice of motion and the founding affidavit being filed on the first two
appellants, they were asked whether they had a domestic employee. They stated that they
did, but disclosed the name of only one of their three domestic employees. A copy of the
petition for the identified domestic worker was left, without the first two appellants being told
to bring it to the attention of the domestic worker. The domestic employees (the third to fifth
appellants) together with their employers launched a counter-application joining the
Minister of Labour and the Minister of Justice and seeking an order declaring that section
9(4A) of the Insolvency Act 24 of 1936 was unconstitutional in that it indirectly discriminates
against domestic employees; and that the failure to notify them of the sequestration
proceedings, amounted to a breach of their constitutional right to fair labour practices and
the right of access to courts. They submitted that had they been given prior notice of the
provisional sequestration proceedings, they would have sought legal assistance and
opposed the application.
The high court rejected the constitutional challenge, and the Supreme Court of Appeal
dismissed the appellants application for leave to appeal for lack of prospects of success.
That led to the application for leave to appeal in the present Court.

Held that in determining whether section 9(4A) includes domestic employees, the Court had
to be guided by the Constitution. The interpretation which best promoted the spirit, purport
and objects of the Bill of Rights was one in terms of which the word employees in section
9(4A) of the Insolvency Act includes domestic employees. It was held to be compulsory to
furnish the petition on employees and the petition must be made available in a manner
reasonably likely to make it accessible to the employees. Finding that that there are
instances where a provisional sequestration order may be granted despite failure to furnish
notice, as the purpose of the provision is not to provide a technical defence to debtors, the
Court held that the petition had been made available in a manner that was reasonably likely
to become accessible to the domestic employees in this case.
The Court also rejected the submission of the first two appellants that a final sequestration
order should not have been granted because there was no advantage to creditors.
The appeal was dismissed.

Esterhuizen v Swanepoel 2004 (4) SA 89 (W)


The judgment in Esterhuizen v Swanepoel and Sixteen Other Cases 2004 (4) SA 89 (W)
once again dealt with applications for provisional or final sequestration orders where the
question arose whether the applications possessed the nature of friendly sequestrations.
After reviewing numerous authorities on the subject, the court concluded that the concern in
such matters is whether there has been such collusion between the applicant and the debtor
that the sole object of the application is to assist the debtor in acquiring relief from his
creditors. There was a risk that co-operation could tend towards collusion. Accordingly,
courts must be scrupulous in ensuring that assistance in friendly sequestrations does not
conceal abuse. A friendly petitioner should therefore supply the court with sufficiently
detailed evidence that it does indeed have a claim against the debtor. The court is obliged to
ensure that an alleged act of insolvency is not designed or manipulated or used for some
purpose other than the genuine notification of an inability to pay a debt. It follows that
applications for final orders should not be treated any differently from applications for
provisional orders. The application of s 26(1)(b), the content of which is set out above, was
considered in Reynolds & others NNO v Mercantile Bank Ltd 2004 (5) 220 (SCA). In the
court a quo Reynolds and his colleagues, the liquidators of Duchini Company, which had
been placed in final liquidation on 27 July 1999, sued Mercantile Bank for two amounts they
alleged were dispositions to the bank not for value within the scope of s 26(1)(b). The court a
quo found in favour of Mercantile Bank. The liquidator of Duchini Company appealed to the

Supreme Court of Appeal. The amounts had been made by two cheques which had been
0330 ANNUAL SURVEY OF SA LAW crossed and marked 'not transferable', the one dated
22 October 1998, and the other dated 19 January 1999, drawn by Duchini Company on its
account in FNB Bank in favour of Mercantile Bank. The cheques were signed by one
Makrides, managing director of Duchini Company, and by one Delyannis, its financial
director. Makrides deposited the cheques on the day they were drawn to the credit of the
account that Mercantile Bank had at a particular branch of Standard Bank. On each day
Makrides faxed a copy of the relevant deposit slip to Mercantile Bank with a note that the
deposit was for his account, which was in respect of a loan by the bank to him. On the day of
each deposit Mercantile Bank credited the amount to Makrides's account with it, resulting in
a corresponding reduction of his debt to the bank. Mercantile Bank had an account with that
branch of Standard Bank for the convenience of its clients, since it had no branch itself
there. Account holders of Mercantile Bank who wished to make a deposit with it in the area
would deposit the amount into Mercantile Bank's account with Standard Bank and notify
Mercantile Bank of the account with it to be credited. On the dates Makrides had deposited
the two cheques, Duchini Company was not indebted to Mercantile Bank. The amount of
cash cheques was debited to the loan account of Makrides in the books of Duchini
Company. All these payments and credits took place within two years of the winding up of
Duchini Company. The Supreme Court of Appeal held that the payments were clearly
dispositions under the definition of it in the Insolvency Act. The only question was whether
they had been made to Mercantile Bank or Makrides. The deposit of the two cheques to the
account of Mercantile Bank at Standard Bank, it held, gave Mercantile Bank an immediate
benefit - a claim it obtained against its bank, Standard Bank, to honour the transfer of the
amount of cheques deposited to the account. No question of intention arises under s 26(1)
(b). It was clear that Mercantile Bank benefited from the dispositions: a credit to its account
with Standard Bank it could immediately use, and the ability to reduce the debt owed by
Makrides to it by the amount of the two deposits making use of the transfer to the credit of its
account at the Standard Bank, which was not merely a conduit but the banker of Mercantile
Bank with all the usual consequences. The court rejected out of hand Mercantile Bank's
submission that the cheques were not intended to be payments to that bank INSOLVENCY
LAW 537 but were intended to be for the benefit of Makrides in reduction of his debt to
Mercantile Bank. 'In essence, leaving aside the mechanics employed, Duchini paid
Makrides' debt to the defendant' [Mercantile Bank] (para 11). The two amounts were thus
dispositions without value
De Beer v Coverdale

MAGEZA AJ

[1]

On the relatively few occasions during which I have had to hear argument in

respect of applications for leave to appeal, I must say I have not been particularly
occasioned much ambivalence in granting such leave and have done so immediately
pursuant to argument having been heard. This matter stands on quite a different
footing in that, not only is the law clear on the issues under discussion but more
importantly, the pertinent factual history convincingly lends itself to the cautions
pointed out in our case law and authorities concerning both the requirement for the
sufficiency of the reason(s) explaining the withdrawal sought and the imperative to
avoid an injustice and prejudice occasioned the other party consequent upon such
withdrawal.
[2]

Having heard Mr Schultz for applicant and Mr Brooks for the respondent on

this application for leave to appeal, I remain unconvinced that applicant sufficiently
explained itself in its papers and am persuaded by respondent that it will suffer
prejudice not capable of mitigation through either an award of costs or similar relief. I
say so taking full cognizance of the argument made by Mr Schultz on behalf of
applicant that this decision has the consequence of possibly closing the door on
applicant (as defendant) in the relevant material respects, something that I
appreciate, on tortured consideration, must yield to the rights that respondent (as
plaintiff) must be allowed.
[3]

Having heard the application on 19 October 2011 and handed down judgment

on 8 November 2011, the application for leave itself was before me on 18 June 2013.
In my principal judgment after having considered the matter, I came to the conclusion
reached having also accepted, inter alia, that:
Plaintiff points out that if Defendant were to be allowed to amend its plea, this
would necessitate the joinder of a third party to the proceedings and this
would needless to say cause it severe financial prejudice and obstruct the
Plaintiffs right to have its case timeously disposed of. It furthermore asserts
that the Defendants application is a delaying tactic and an attempt to prevent
it from obtaining justice. Plaintiff also points that any claim against Lutge has
now prescribed.

[4]

In order to succeed in the application for leave to appeal, applicant must show

that there is a reasonable prospect of success on appeal. see Pharmaceutical


Society of South Africa v Tshabalala - Msimang 2005 (3) SA 238 (SCA) at para 40. I
am also alive to the precaution that where a Court decides to refuse leave to appeal,
it is not necessary for it to give reasons why it does so as the reasons for its findings
will have already been set out in its judgment. Indeed the authorities say such a
course ought to be discouraged. see Mphahlele v First National Bank of SA Ltd
1999 (2) SA 667 (KH) (199 (3) BCLR 253) and (Beyers v Elf Regters van die
Grondwetlike Hof 2002 (6) SA 630 at 635 paras [4] and [5].
[5]

Suffice to repeat only this that the basis on which the applicant brought the

application for the withdrawal of the admissions made in its plea and the reasons for
the refusal of that application by this Court are in my view sufficiently set out in the
judgment. The law pertinent thereto is stated, discussed and applied.
[6]

Applicant also seeks leave to appeal the order of costs granted on an attorney

and client scale. Mr Schultz argued that the order was made without the parties
being invited to argue the issue of costs on this scale. In paragraphs (6) to (10) of my
judgment I deal with what I characterize as the applicants failure to give a logical,
coherent and candid explanation as to what the meetings were precisely concerned
with and what decisions were arrived at thereanent. Applicant wholesomely failed to
address itself to the specifics of the discussions around the matters it was required to
sufficiently explain, that is, how the contentious issues in the meetings referred to
were resolved. The applicant avoided pinning itself to even moderate detail and
resorted instead when unable to do so by attempting to detach itself from those
discussions. I remain needless to say left with a negative impression in respect of
the basis on which the application was brought; the passage of time between the
making of the admission and the application; the timing thereof coming as it did after
a pre-trial where the issue was not raised and the trial itself, as all suggestive of an
effort to, inter alia, buy time. That is to say nothing of the applicants knowledge of
the setting in of prescription against Lutge as stated by Respondent. All these are
tantamount to an abuse of the processes of this Court and the Court has a judicial
discretion in such circumstances to express its rebuke and if necessary, to make

such an order. see Commissioner for SARS v Hawker Air Services (Pty) Ltd: 2005
(5) SA 283 (T); Lourenco v Ferela (Pty) Ltd (No1) 1998 (3) SA 281 (T); Rhino Hotel
and Resort (Pty) Ltd v Forbes 2000 (1) SA 1180 (W).
[7]

The application for leave to appeal is therefore refused.

Le Roux v Viana 2008 (2) SA 173 (SCA)).


The first three appellants were former directors of certain companies in liquidation. The
second to fifth respondents who were the joint liquidators of the companies in liquidation
applied in terms of section 69(2) for a warrant authorising the sheriff to attach, remove and
hand over to them all books, documents and movables belonging to the companies in
liquidation contained in a computer hard drive belonging to the fourth appellant, a company
of which the first appellant was director.
One of the issues raised on appeal was whether the books and documents belonging to the
companies in liquidation and recorded on the hard drive could be regarded as those
contemplated in section 69 and therefore susceptible to seizure in terms of that section.
According to the appellants, section 69 does not contemplate the seizure of property, the
ownership of which rests in a party other than the insolvent estate and that the section
cannot be invoked for the purpose of seizing information relating to the insolvent estate in
circumstances in which that information is not recorded in paper or tangible form. Thus, it
was contended that the hard drive and the books and documents of the companies in
liquidation recorded therein were beyond the ambit of section 69.
Held Section 69(3) aims at securing the seizure of property, books and documents relating
to the insolvent estate wherever they may be. The warrant issued in this case did not
authorise the seizure of the entire hard drive of the fourth appellants computer, as the
magistrate was aware that the other information on the hard drive was confidential.
It was clear that the books and documents stored on the hard drive and targeted by the
warrant related to the financial and business affairs of the companies in liquidation.
Therefore, irrespective of the form they were in, they were clearly within the contemplation
of section 69 and were susceptible to seizure under a warrant in terms of that section. The
warrant was accordingly valid.
The appeal was dismissed with costs.

Gazit Properties v Botha 2012 (2) SA 306 (SCA).


The respondents were joint liquidators of a company which had conducted business as a
bridging financier in respect of fixed property transactions. In that regard it borrowed money
from members of the general public as investors and lent same out for the financing of
transfer costs or estate agents commission or bridging finance in respect of fixed property
transactions, prior to the registration of transfers. The appellant was one such investor,
having lent and advanced a total sum of R5 million to the company (hereinafter referred to
as Malokiba). Written loan agreements were concluded between the appellant and
Malokiba in respect of this money. In terms thereof the appellant was to receive interest on
the capital loan monthly and the agreements would remain in force for an indefinite period,
subject to cancellation by any party after the expiry of three months. The appellant did
exercise its right of cancellation and the full capital and interest were paid by Malokiba. The
amount in issue in this case was in respect of payments made by Malokiba within the sixmonth period preceding its liquidation. The appellant admitted that immediately after every
payment, Malokibas liabilities exceeded its assets; that every payment had the effect of
preferring the appellant as a creditor above Malokibas other creditors; and that every
payment to the appellant constituted an alienation of its assets by Malokiba. The parties also
agreed that Malokiba did not intend to prefer the appellant above other creditors in making
these payments and that the only issue which the court had to determine related to the
liquidators claim under section 29(1) of the Insolvency Act 24 of 1936 and the question was
whether the payments to the appellant were made in the ordinary course of business.
Held that section 29(1) provides that dispositions of property made by a debtor less than six
months before the sequestration of his estate which results in the preferring of one of his
creditors above another, may be set aside by the court if immediately after the making of
such disposition the liabilities of the debtor exceeded the value of his assets, unless the
person in whose favour the disposition was made proves that the disposition was made in
the ordinary course of business and that it was not intended thereby to prefer one creditor
above another. The appellant alleged that the payments made by Malokiba were loan
repayments made in the ordinary course of business. However, the respondents contended
that as Malokibas business was tainted with illegality, the payments were not made in
Malokibas ordinary course of business. In that regard, the respondents alleged that
Malokiba had contravened section 11(1) of the Banks Act 94 of 1990 in that it procured loans
from the general public to be lent out further, without being registered as a bank. In
accepting the respondents arguments in respect of the fundamental contamination of the
transaction whereby Malokiba repaid the loans to the appellant, the court a quo erred.
Concentrating on the tainted nature of Malokibas general business model was to misapply

the provisions of section 29(1). What the section requires is a close scrutiny of the
dispositions itself, viewed against the background of its causa.
In terms of the general test of what constitutes a disposition in the ordinary course of
business, one first has to have regard to the nature of the obligation in terms of which the
disposition or payment was made.
The appellant bore the onus of proving that the payments had been made by Malokiba in the
ordinary course of its business. While the respondents relied on the fact that in accepting
deposits from the general public and lending same out to others, Malokiba had conducted
the business of a bank in contravention of section 11(1) of the Banks Act and that this some
way or other tainted the loan agreements, the fact that Malokiba did contravene the Act did
not mean that the loan agreements were not normal agreements.
Even assuming that the loans were void through illegality, the money had to be repaid by the
company on demand. This was not a case where the par delictum-rule could find any
application. No evidence was tendered that the investors, and in particular the appellant,
knew that Malokibas business was illegal.
The Court summarised its conclusions as being that Malokiba had duly complied with its
contractual obligation to repay the loans to the appellant, which had become due when the
appellant cancelled the loan agreements. The tainted nature of Malokibas business was
irrelevant to the fact that such repayment was made in Malokibas ordinary course of
business. The high court therefore erred in upholding the liquidators claim in terms of
section 29(1) of the Insolvency Act. The appeal was accordingly upheld.

Venter v Volkskas 1973 (3) SA 175 (T)


Whether a disposition was made with the intention of preferring one creditor above another
within the meaning of section 30 (1) of Act 24 of 1936, as amended, is in each case a
question of fact which can be established either with direct evidence or by inference from the
circumstances in which the disposition was made. Being a question of intention, it involves a
subjective assessment of the debtor's action in Ghaving made the disposition. In the
absence or direct evidence of an intention to prefer one creditor above another, it must
generally speaking be proved that the debtor contemplated sequestration before an
inference can be drawn that he made the disposition with the intention to prefer the creditor
to whom the disposition was made, above another. It is not sufficient that the circumstances
show that the debtor should have realised that the effect of the disposition would be to

disturb the H proper distribution of his assets in the event of the sequestration of his estate.
They must show that he as a fact intended it to have that effect.
In an appeal from a decision in a magistrate's court dismissing with costs a claim under and
by virtue of the provisions of section 30 (1) of Act 24 of 1936, as amended, for the setting
aside of a disposition as an undue preference, it appeared that the magistrate had called the
insolvent as a witness under section 32 (2) of the Act.
Held, that in order to establish that the debtor was insolvent the creditor had to show the
liabilities of the debtor, fairly estimated, exceeded the assets fairly valued, and that this was
a matter which had to be determined objectively.
1973 (3) SA p176
BOSHOFF J
Held, further, as the appellant had failed to establish that the insolvent's liabilities exceeded
his assets at the relevant date, that the appeal had to be dismissed

Wildlife and Environmental Society of South Africa v MEC for Economic Affairs,
Environment and Tourism, Eastern Cape 2005 (6) SA 123 (E) at 132133.
be heard on issues which have now become moot and are no longer of any consequence
to the parties or A indeed anyone else. The costs of such a proceeding would greatly
exceed those which the parties have incurred pursuant to the application for leave to
appeal.'
See too Ex parte Gauteng Provincial Legislature: In re Dispute Concerning The
Constitutionality of Certain Provisions of the Gauteng School Education Bill of 1995 1996 (3)
SA 165 (CC) (1996 (4) BCLR 537) at para [36]. B
I would refer finally to Nzimande v Nzimande and Another 2005 (1) SA 83 (W). In that matter
the litigants had sought to test the validity of certain documents based on the implementation
and application of a statute which had important socio-economic consequences. In para [75]
Jajbhay J stated as follows: C
'Such persons should not be discouraged from doing so by the risk of having to pay the
costs of their adversaries, if the Court takes a view which is different from the view taken by
the appellant. However, this does not mean that such litigant can be completely protected
from that risk. The Court may, in its discretion direct that they pay the costs of their

adversaries if, for example, the grounds of attack on the impugned statute are frivolous or
vexatious or they have acted from D improper motives or there are other circumstances
which make it in the interests of justice to direct such costs should be paid by the losing
party.'
Mr Eksteen referred further to the provisions of s 32(2) of NEMA, which provide as
follows: E
'A court may decide not to award costs against a person who, or group of persons which,
fails to secure the relief sought in respect of any breach or threatened breach of any
provision including a principle of this Act or any other statutory provision concerned with the
protection of the environment or the use of natural resources if the court is of the opinion that
the person or group of persons acted reasonably out of a concern for the public interest or in
the interest of protecting the environment and had made due efforts to use other means
reasonably available for obtaining the relief sought.' F
In Silvermine Valley Coalition v Sybrand van der Spuy Boerderye and Others 2002 (1) SA
478 (C) the following was stated at 491I with regard to s 32(2):
'This section confers a discretion on the Court with regard to costs. Even without this
section, costs would be in the Court's G discretion but the judicial exercise of the Court's
ordinary discretion of costs is now made subject to certain further guiding principles
contained in the legislation. Section 32(2) frees the Court from the fetter of ordinary
principles on the basis of compliance with certain conditions.' H
At 493D the learned Judge stated further as follows:
'(I)t seems to me that NGOs should not have unnecessary obstacles placed in their way
when they act in a manner designed to hold the State and indeed the private community
accountable to the constitutional commitments of our new society, which includes the
protection of the environment.' I
Mr Eksteen submitted that the phrase 'fails to secure the relief sought' was sufficiently widely
worded as to include a case such as the present where the application was withdrawn. I am
satisfied, despite the submissions of Mr Swanepoel to the contrary, that
Mr Eksteen's submission is correct. It is not difficult to envisage a situation where, for
instance, an applicant which has acted reasonably in launching an J
2005 (6) SA p133
PICKERING J

application is driven to withdraw it in order to save costs because of facts emerging for
the A first time from a respondent's answering affidavit or because the relief originally
sought is no longer necessary or obtainable because of developments occurring after the
application had already been launched. It would be neither fair nor logical, in my view, to
exclude such an applicant from the protection afforded by s 32(2) and thereby to oblige an
applicant, seeking to rely on the provisions of s 32(2), B to continue with an application
which it has now ascertained to be futile merely in order to retain the protection of the
section.
Bearing the above principles as to the award of costs in mind I turn to consider the issues
remaining in dispute, namely, whether in launching the application applicant acted
reasonably and whether it made due efforts to use other means available to obtain the
relief C sought. It is not in dispute that applicant brought the present application in the public
interest and in the interest of protecting the environment.
It is also not in dispute in the present matter that applicant is South Africa's oldest and
largest non-governmental membership-based D environmental organisation. Its purpose
and vision, as described by it, is to campaign for a South Africa that is wisely managed by all
to ensure long-term environmental sustainability. To this end the applicant 'promotes public
participation in caring for the earth and the consequent well-being of its inhabitants'.
According to applicant it thus seeks to give practical effect to the rights contained in s 24 of
the Constitution Act 108 of 1996 and in NEMA. Its opposition to the E proposed construction
of the incinerator was motivated solely by a concern that the incinerator had the potential to
produce harmful toxic emissions that might impact negatively and severely on the
environment and human health.
It is common cause that third respondent's tanning process does F produce various toxic
emissions and forms of waste. Indeed, during 2001, one of third respondent's neighbours
launched an application in this Court seeking to force the Department of Economic Affairs
and Tourism, Eastern Cape to take steps to curtail the emissions of hydrogen sulphide from
third respondent's premises. An order was in due course granted by Leach J directing the
Department to investigate, evaluate and assess the impact of gases emitted from
the G tannery and to take such further steps as might be necessary in the light of such
investigation, evaluation and assessment so as to ensure that third respondent consistently
complied with, inter alia, the provisions of NEMA. The judgment of Leach J, although
delivered on 30 November 2001, was eventually only reported in 2004 as Hichange
Investments (Pty) Ltd v Cape Produce Co (Pty) H Ltd t/a Pelts Products, and Others 2004
(2) SA 393 (E).

According to the factory manager of third respondent, Mr Howard, third respondent was at
that stage already acutely aware of the need to curtail toxic emissions and had been in the
process of changing its previous system to a new waste collection system. According to
Howard the application for the installation and operation of the I incinerator represented the
culmination of this process which is aimed at drastically reducing the solid waste and
emissions produced by the plant. The only emission which is relevant to the present
application is that of hexavalent chromium and the dispute between the parties on the merits
related to J

EP Property Projects v Registrar of Deeds, Cape Town 2014 (1) SA 141 (WCC).
An arbitration award may be published in a manner agreed upon between the parties (or
their representatives) and the arbitrator, for example by email. Strict compliance with the
publication requirements of s 25(1) of the E Arbitration Act 42 of 1965 is not required for the
award to be valid, as long as the award was delivered in the manner agreed upon.
(Paragraphs [50] [51] at 155G 156D.)
In the present case Marais was a losing party in arbitration proceedings involving the
ownership of land. He concluded an agreement with Naidoo under F which Naidoo would
fund review or appeal proceedings in return for part ownership of the property in the event of
success in the envisaged litigation. Marais ceded to Naidoo his interest in the litigation so
that those proceedings would be pursued by Naidoo in Marais' name. Naidoo was joined as
a party to the resulting proceedings, and the issue was whether she would, as funder of the
proceedings, be liable for an adverse costs order. G
Held: English and other common-law authorities hold that the court's discretion in respect of
costs would not be exercised against 'pure funders' with no personal interest in the litigation,
ie those who did not stand to benefit from it, were not funding it as a matter of business, and
did not seek to control its course. In such cases priority was usually given to the public
interest

in

the

funded

party

getting

access

to

justice

over

that

of

the

unsuccessful H unfunded party recovering its costs. But if the non-party not merely funded
the proceedings but also substantially controlled or benefited from them, justice woud
require that, if the proceedings fail, it pay the successful party's costs. As the 'real party' it
was not so much facilitating access to justice as gaining access to it for its own purposes.
(Paragraph [75] at 162C H.)

The position in our law should be that a non-party funder of litigation such as I Naidoo should
be potentially liable, at the discretion of the court, for an adverse costs order made against
the nominal party. (Paragraph [79] at 163F G.)
The following considerations led to the conclusion that Naidoo should be held jointly and
severally liable for any adverse costs order granted against Marais: J
2014 (1) SA p142
A

Naidoo was the 'real party' to the litigation. She was not merely a funder but had

acquired a personal interest in the litigation, was in full control of it, and stood to benefit
financially if the nominal party (Marais) was ultimately successful.
Since Naidoo was not a mere commercial funder of litigation, the potential chilling effect
of an adverse costs order on commercial third-party B funding would not be a factor.
In taking over the litigation Naidoo was associating herself with and funding the
promotion and defence of conduct which she knew to be fraudulent and mala fide.
(Paragraphs [71], [79] and [82] [89] at 161B C, 163F G and 163I 164B.)

ABSA Bank v Robb 2013 (3) SA 619 (GSJ);


In July 2011, the respondent, a debt counsellor performing statutory functions in terms of the
National Credit Act 34 of 2005, acting in terms of section 86 of the Act, brought an
application for debt review in relation to two consumers. The application was made against
21 credit-providers with whom the consumers had entered into credit agreements. The
appellants opposed the application principally on the ground that the respondents
determination that the consumers were over-indebted was incorrect because it was based
on an erroneous application of Regulation 24 read with the Guidelines published by the
National Credit Regulator for assessing over-indebtedness.
A day before the hearing of the matter, the respondent withdrew the application but refused
to pay the appellants costs. The Magistrate refused the appellants application for costs,
stating that the Court could not order the respondent to pay the costs of the abortive
application since her conduct was not portrayed or in any other manner evident as mala
fide.
Appealing against that decision, the appellants contended that the Magistrate had applied an
incorrect test in considering the order as to costs in circumstances where the application was

withdrawn at the last moment, and that had the correct test been applied the respondent
would have been ordered to pay the appellants costs.
Held that the appeal concerned the circumstances in which costs may be awarded against a
statutory functionary.
Rule 27(3) of the Magistrates Courts Rules deals, among other things, with the withdrawal
by an applicant of an application. In terms of the rule, an application for costs may be made
where a party withdrawing a matter does not tender costs. a party who withdraws an action
or application or who abandons a defence is in the same position as an unsuccessful litigant,
and therefore the other party is ordinarily entitled to costs. A departure from the principle that
costs must be awarded to the party which has been put to the expense of defending
withdrawn proceedings, is only warranted in exceptional circumstances. Although courts will
not readily interfere with costs orders on appeal, they will do so in cases of misdirection or
irregularity. In this case, the magistrate, in considering the issue of costs, applied the
incorrect test. He failed to give consideration to whether exceptional circumstances existed
to deprive the appellants of their costs. The misdirection warranted interference with the
exercise of discretion in relation to the question of costs. The appeal was upheld and the
magistrates order replaced with one in terms of which the respondent was ordered to pay
the costs of the application for debt review.

Coetzee v National Commissioner of Police 2011 (2) SA 227 (GNP).


Costs de bonis propriis were also considered in Coetzee v National Commissioner of Police
and Others 2011 (2) SA 227 (GNP). This matter was also brought as an urgent application
for the release of the applicant on the basis that the arrest was unlawful. In this instance the
applicant refused to stop when a Metro Police officer indicated that he should do so, and in
turn indicated that he would drive to the nearest police station. He was later forced to stop by
several Metro Police vehicles, was arrested without being told the reason for the arrest and
taken to the Pretoria West Police Station. There bail was refused. The court held that
particular officers on duty at the police station should not have allowed the arrest and should
have avoided the infringements of the rights of the applicant. It also held that the Metro
Policeman responsible for the arrest acted completely outside his authority and acted
unlawfully in arresting the applicant. Consequently, those who attempted to justify these
actions should carry the costs of the applicant (para [101]). The court further held that such
costs were in the discretion of the court, and that it could (and subsequently did), upon
consideration of the facts of this particular case and to avoid having the taxpayer pay, order

that costs be paid by the officials identified de bonis propriis on the scale of attorney and
client (paras [104]-[106]). Only in the event of these officials not being able to pay the costs
after all possible execution steps have been taken, shall the first and second respondents
pay the costs (para [105]). It is trite that costs are awarded to a successful party in order to
indemnify such party for the expense incurred for having been unjustly compelled to either
initiate or defend litigation, as the case may be (Texas Co (SA) Ltd v Cape Town Municipality
1926 AD 467 at 488-9). Consequently, a costs order serves as a refund of expenses actually
incurred.

Merber v Merber 1948 (1) SA 446 (A),


A trial Court is entitled to deprive a successful party of his costs if (1) he has brought about
the litigation or (2) he has done something connected with the institution or the conduct of
the suit calculated to occasion unnecessary litigation and expense or (3) he has done some
wrongful act in the course of the transaction of which the plaintiff complains.
When a successful party has been deprived of his costs in the trial Court, an Appeal Court
will enquire whether there were any grounds for departing from the general rule - that a
successful party is entitled to his costs - and if there are no such grounds, then ordinarily it
will interfere. But when the general rule has been followed, the appellant must first show that
there were grounds for departing from the rule and, if there are such grounds, that the trial
Judge in refusing to depart from the rule, has either failed to take such grounds into
consideration or has acted arbitrarily in not giving effect to them by depriving the successful
party of his costs.
In an action by the appellant for a decree of divorce based on adultery, the trial Court
granted absolution from the instance with costs. In an appeal, appellant contended that the
respondent's conduct had been such as to have justified a belief in the plaintiff's mind that
adultery had been committed and that she should therefore not have been ordered to pay
her husband's costs. It appeared that the trial Judge had taken into consideration the facts
which the appellant contended entitled her to an order depriving the respondent of his costs.
1948 (1) SA p447
GREENBERG JA
Held, as the trial Judge had exercised a judicial discretion in holding that the facts did not
warrant the belief claimed by the appellant, that the trial Judge's order should stand.

The decision in the Durban and Coast Local Division of Merber v Merber (1947 (2) S.A.L.R.
703), confirmed.

Equity Aviation Services v CCMA 2009 (1) SA 390 (CC) at para [58].
As to the matter of costs, counsel on behalf of Equity contended that Mr Mawelele should
pay his own costs. In effect, this argument suggests that a successful litigant will be
burdened with the costs occasioned by an unsuccessful review application and appeal. The
argument has no merit. Mr Mawelele has had to suffer at the instance of Equity. He waited
for almost six years for the dismissal dispute to be finalised. Although he was reinstated on 1
July 2007, he has not received payment for the period during which he was unemployed. In
my view, considerations of the interests of justice and fairness dictate that Equity should pay
Mr Maweleles costs on the appeal to this Court.
Kazungula Irrigation Co Ltd v Minister of Lands and Natural Resources 1974 (4) SA
482 (RA).
The powers of the Appellate Division in terms of the Land Acquisition Act, 80 of 1971 (R), in
appeals under section 15 thereof from the compensation court, are virtually the same as
those conferred on it in respect of appeals from inferior G tribunals by the provisions of
section 8 of the High Court Act, 22 of 1964 (R), as amended, and the approach of the
Appellate Division (S.A.) in the case of Estate Marks v Pretoria City Council, 1969 (3) SA
227 (AD), should be followed.
In a case where there is an ample sufficiency of recent sales of comparable properties on
which to base a proper valuation of the property in dispute, there may well be good reason
for rejecting evidence of mere offers simply on the application of the best evidence rule.
Where, however, there is a marked paucity of recent sales of comparable properties, then
the H court should admit evidence of offers for lack of better evidence of value, and the
question then becomes merely one of the weight to be attached thereto.
The object of introducing the proviso to section 14 (1) of the Act, to the effect that the court
shall not award costs to a claimant who has submitted a claim which is not a reasonable
one, was to provide a curb on the making of grossly exaggerated claims in an endeavour to
persuade the Government to offer more than the land is worth. In deciding whether or not a
claim is "reasonable", it is not enough merely to enquire whether it was excessive having
regard to the sum eventually awarded. The court has to have regard to all the surrounding
circumstances.

1974 (4) SA p483


LEWIS AJP
Thus, where the dispute involved the true market value of game farms, as opposed to
agricultural or cattle farms, which was virtually res nova in Rhodesia, and there was an
extreme paucity of comparable sales of such properties which made the task very difficult
indeed, and the claimants had engaged the services of an expert to undertake such task and
had relied on his valuations in making their claims,
Held, that the claims were not "unreasonable" within the A meaning of section 14 (1) of the
Act and that the compensation court should not have deprived the claimants of their costs.
Held, further, that the appeal succeeded with costs and that the amounts awarded by the
compensation court should be increased by specified amounts in each case, averaging 19,1
per cent.

First Consolidated Leasing and Finance v Marthinus 1979 (4) SA 363 (NC).
In First Consolidated Leasing & Finance Corporation Ltd v Marthinus t/a Noordkaap
Ingenieurs 1979 (4) SA 363 (NC) the applicant, a finance corporation, sought to attach a
certain machine which had been purchased and paid for by the respondent. The applicant
relied on a putative contract of lease which afforded efficacy to the applicant as 'owner and
lessor' only if estoppel came into play. The court held that, since complicated issues had to
be investigated and since the applicant had applied on motion despite his knowledge that his
ownership was disputed, the motion proceedings could not succeed.

Indigo Sky Gems (Pty) Ltd v Johnston 1998 NR 152 (HC) and the other cases referred
to therein, - not a fuck - It is trite law that punitive Costs would only be awarded in

exceptional circumstances and where the conduct of a litigant warrants such an


award as a mark of disapproval by a Court.

Antares International Ltd v Louw Coetzee & Malan Inc 2014 (1) SA 172 (WCC) at paras
[64]-[65]
64. Although 1 intend to refuse the application, 1 do not think in the peculiar circumstances
of this case that LCM should be granted costs against the applicants. Although in the event
the applicants have failed to establish their own right to obtain relief, their application has

brought to the court's attention a threatened violation of an attachment authorised by an


earlier order of this court. LCM had no right to sell or threaten to sell the aircraft. Given that
LCM's unlawful conduct precipitated the application and that this judgment is likely to have a
salutary effect in reminding LCM and the sheriff of their respective rights and duties, I think it
would be just that the parlies bear their own costs.
65. I thus make the following order:

(a) The application is dismissed.


(b) The parties are lo bear their own costs, including all costs reserved in the earlier orders
made in this application.
(c) The registrar is directed to bring this judgment to the attention of the sheriff so that the
latter may take such steps as he considers appropriate to ensure that the helicopters
attached under this court's order of 10 June 2010 remain under his effective attachment.

Rustenburg Gearbox Centre v Geldmaak Motors 2003 (5) SA 468 (T)


The appellant had successfully been sued for damages by the respondent. It now sought to
amend its notice of motion for condonation for late filing of its appeal. It further sought
condonation for non-compliance with rule 51(4) of the Magistrates' Court Rules for the late
filing of its notice for reinstatement of the appeal and also for the late filing of its heads of
argument.
Held, that the appellant's papers were submitted in a piecemeal fashion. The papers were in
a shambles and there was an incomplete index. Under such conditions it was not possible to
hear the application or the appeal.
In an application for condonation for the failure to comply with the Rules of Court relating to
appeals it is not sufficient for the applicant (where the prospects of success on appeal are
relevant) simply to submit that it has good prospects of success on appeal. What is required
is that the deponent should set forth briefly and B succinctly the essential information that
would enable the Court of appeal to assess the applicant's/appellant's prospects of success.
A bald submission unsupported by any factual averments is not good enough to discern
what the prospects of success are. (At 471B - C.)

The legal principles (relating to application for condonation for failure to comply with the
relevant Rules of Court in appeals) C pronounced by the erstwhile Appellate Division and its
successor, the Supreme Court of Appeal, apply equally to appeals prosecuted in the High
Court. (At 471F/G - G.)
In refusing the present application for condonation for the appellant's failure to comply with
certain Rules of Court, the Court ordered the appellant and/or its attorneys to pay the
respondent's D costs on the scale as between attorney and client where the Court found
that there had been a gross non-compliance with the Rules and where the Court of appeal
had been burdened by the unnecessary proliferation of paper in various applications for
condonation and the amendment of the notice of motion in the application for condonation.
The Court held that the administration of justice had been impeded thereby, apart from the
fact that it had amounted to discourtesy to the Court. (At 472B - C and E.)

Standard Bank v Hunkydory Investments (No 2) 2010 (1) SA 634 (WCC)).


Plaintiff, a bank, sought summary judgment against Defendant, a company, on the strength
of four mortgage bonds. An order was sought declaring the hypothecated property
executable.
Because one of Defendants grounds of opposition involved an attack on the constitutionality
of certain provisions of the National Credit Act 34 of 2005 (the NCA), the joinder of the
National Credit Regulator (NCR) and the Minister of Trade and Industry (the Minister) was
ordered. The constitutional challenge was that it was unconstitutional for the NCA to exclude
juristic persons from its ambit in the manner set out in its sections 4(1)(a) and 4(1)(b). It was
contended that the differentiation drawn in the NCA between natural and juristic persons was
discriminatory and irrational. The Court observed that precisely the same challenge had
been launched in an earlier case and had been rejected. The Court in the earlier had refused
leave to appeal, which refusal was confirmed by the Supreme Court of Appeal and
subsequently by the Constitutional Court, both of those courts finding that there were no
reasonable prospects of success. Accordingly, the constitutional challenge had to fail in the
instant case as well.
The Court noted that in the summary judgment proceedings the NCR and the Minister had
filed affidavits in opposition to the constitutional challenge. As the instant proceedings merely
concerned an application for summary judgment, those affidavits ought not to have been

filed at that stage. The summary procedure laid down in rule 32 permits no evidence beyond
the plaintiffs confirmatory affidavit (rule 32(2)) and the defendants opposing affidavit (rule
32(3)(b)). If parties with an interest in a constitutional challenge foreshadowed in the
defendants opposing affidavit could file affidavits, then fairness would dictate that the
defendant could respond thereto, and the whole procedure would assume an altogether
different character from the summary procedure permitted by rule 32. If the court rejected
the constitutional challenge on the defendants own papers and granted summary judgment,
the interested parties would suffer no prejudice. If summary judgment were refused, the
interested parties could then be heard at the trial itself. The refusal of summary judgment on
the strength of a constitutional challenge would not involve any declaration of constitutional
invalidity. The court would merely be permitting the defendant to pursue the challenge by the
appropriate procedure in the main case. Accordingly, if interested parties wished to be heard
at the stage of summary judgment, their contribution should be confined to making legal
submissions on the papers filed in accordance with rule 32. Such parties could
Page 376 2010 (4) BCLR 374 (WCC)
argue, for example, that on the defendants own papers the point is without merit and should
not be allowed to go forward, thereby saving them the costs of further proceedings.
The Defendant had also raised a defence based on a contention that the mortgage bonds
were not binding on it because the passing of the bonds constituted disposals as
contemplated in section 228 of the Companies Act 61 of 1973 and because shareholder
resolutions as required by that section had not been procured. Section 228 provides, inter
alia:
1.

Notwithstanding anything contained in its memorandum or articles, the directors of


a company shall not have the power, save by a special resolution of its members, to
dispose of

1.

(a)

2.

the whole or the greater part of the undertaking of the company; or

3.

(b)

4.

the whole or the greater part of the assets of the company.

The deponent to the affidavit resisting summary judgment alleged that Defendant had two
trusts as its shareholders. He was the trustee of one of the trusts, namely the Castille Trust.
Neither he nor the Castille Trust received notice of a general meeting to approve the

registration of the mortgage bonds. He alleged that the companys only substantial asset
was the hypothecated property, which was a residential property. This defence raised two
questions: (1) Did section 228 apply to the registration of mortgage bonds over a companys
main asset (a legal question)? (2) Was the necessary shareholder approval given (a factual
question)?
In respect of the legal question, the Court set out its reasons for holding that the words
dispose of in section 228(1) of the Companies Act could not be interpreted so widely as to
be given a meaning that could include hypothecation of the main asset of the company.
In respect of the factual question, Defendant approached the case on the basis that the
mere technical assertion that the Castille Trust never received notice of a general meeting
was sufficient to establish a bona fide defence of non-compliance with section 228. In an
affidavit resisting summary judgment Defendant in its disclosure of a bona fide defence and
the material facts of the defence was required to allege that at least one of the two
shareholders did not know of and approve the registration of the bonds. Such an allegation
was lacking. The deponent to the affidavit merely stated that the Castille Trust did not
receive notice of a general meeting. He did not state that he or the Castille Trust did not
know and approve of the registration of the bonds. Nor did he say anything about the other
trusts state of mind. This was insufficient to establish non-compliance with section 228, even
were section 228 applicable in casu.
In the affidavit resisting summary judgment it was also stated that the deponent and his
family lived in the house on the hypothecated property and that his brother and family also
lived there from time to time. He stated that if summary judgment were to be granted and the
property declared executable he would lose his family home. Section 26 of the Constitution
accords to everyone the right to have access to adequate housing. In this regard the Court
pointed out that section 26 of the Constitution enshrines a right of access to adequate
housing, not a right to continue living in the house of ones choice even though one cannot
afford it. The property in question in casu was worth approximately R3 million. Since the
indebtedness to the Plaintiff was about R2.1 million, there should be a residue available to
Defendant of some R900 000. In the absence of more detailed information, which Defendant
had chosen not to proffer, it was impossible to say that the granting of summary judgment
would violate anybodys constitutional rights. Furthermore, it had not been disclosed by what
arrangement these families occupied a house belonging to a company of which two trusts
were shareholders. If there were a valid lease with the company, a sale in execution would
not necessarily result in their having to vacate the dwelling. No case had been made out with
reference to the considerations arising from section 26.

Page 377 2010 (4) BCLR 374 (WCC)


The Court granted judgment against Defendant for payment of the outstanding balance
together with interest, and declared the hypothecated property to be executable for such
amount.

Aircraft Completions Centre v Rossouw [2003] 3 All SA 617 (W) at 541?? (Sure he
meant 677)
As a matter of law, there is no difference between an order to pay costs as between attorney
and client and costs taxed as between attorney and own client.

Rath v Rees 2007 (1) SA 99 (C).


In Madzunye v Road Accident Fund 2007 (1) SA 159 (SCA), the censurable conduct was on
the part of the respondent for acting unreasonably and irresponsibly by opposing the appeal;
in Rath v Fees 2007 (1) SA 99 (C), the court held that the applicant abused the procedure by
bringing the application with the ulterior motive of acquiring a preview of material that the
respondent would have been called upon to discover in the ordinary course of his proposed
action for defamation. General dissatisfaction was expressed with the manner in which the
application was brought and executed in Audio Vehicle Systems v Whitfield 2007 (1) SA 434
(C). In both the latter instances the court awarded costs on what is known as the attorneyand-ownclient scale. The justification of such orders is questionable, as appears from
AAAloy Foundry (Pty) Ltd v Titaco Projects (Pty) Ltd 2000 (1) SA 649 (SCA).

MEC for Economic Affairs v Kruisenga 2008 (6) SA 264 (Ck)


in MEC for Economic Affairs, Environment and Tourism v Kruisenga & another 2008 (6) SA
264 (Ck), the court expressed its disapproval of an attorney's conduct by awarding costs on
the attorney-and-client scale. In this instance, the State Attorney had through his conduct
tacitly given the assurance that he was acting with the required authority, knowing that not to
be the case.

Waar v Louw 1977 (3) SA 297 (O)


The circumstances in which an award of costs de bonis propriis may be made against an
attorney were the subject of comment by M T Steyn J in Waar v Louw 1977 (3) SA 297 (0) at
304. The award of such costs, the learned judge said, was based on the idea that an
attorney should be made to pay for his mistakes. This was consistent with the fact that the
attorney's profession was a learned profession requiring great skill from its members. It thus
followed that a client should not necessarily be expected to bear the costs incurred as a
result of his attorney's negligence. On the other hand, the learned judge observed, the
practice of law was often an 'irritating' ('tergende') discipline and even the most skilful
attorney might make mistakes which incurred unnecessary costs. Although the profession
ought to maintain strict standards in this regard, attorneys should not be demoralized by too
strict an approach (what the learned judge called 'te veel sweepklappery'). Accordingly, he
concluded, costs de bonis propriis should be awarded only in reasonably serious
circumstances as, for example, where dishonesty, wilfulness or negligence of a serious
degree ('oneerlikheid, moedswilligheid of nalatigheid van 'n ernstige graad') had been
displayed.

SA Liquor Traders Association v Gauteng Liquor Board 2009 (1) SA 565 (CC) at paras
[46]-[54]
Costs
[46]

I turn now to consider the question of costs. I consider first the question of the costs of litigation in th

The applicants have successfully pursued constitutional relief in this Court and there is no reason wh
[47]

The question arises, however, as to the scale on which such a costs order should be made. The ap
and his officials conducted the litigation both in the High Court and in this Court until after the Court
some of the fault for that conduct is to be laid at the door of the third respondents attorneys, as I

conduct as well. His legal advisers were in possession of many of the documents and failed to take a
properly. The MEC must be responsible for the conduct of his legal advisers.
[48]

A court will ordinarily show its displeasure at the manner in which a litigant has conducted himself d
As Tindall JA remarked:

The true explanation of awards of attorney and client costs not expressly authorised by
Statute seems to be that, by reason of special considerations arising either from the

circumstances which give rise to the action or from the conduct of the losing party, the court
in a particular case considers it just, by means of such an order, to ensure more effectually
than it can do by means of a judgment for party and party costs that the successful party will
not be out of pocket in respect of the expense caused to him by the litigation.[16]
[49]

The MEC, as an organ of state, bears a special obligation to ensure that the work of courts is not

relief in respect of a provision in a statute which is clearly vague on its own terms and therefore inco

the manner in which the litigation has been approached by the MEC and, in particular, his legal rep

the State Attorney. In all these circumstances, this is an appropriate matter for costs to be awarded a

The conduct of the State Attorney


[50]

The final issue to be considered relates to the wasted costs of the hearing on 2 March 2006. It will b

State Attorney on behalf of the MEC despite the State Attorneys having been asked to be present

State Attorney failed to inform its client of a specific request from this Court to the MEC (in direction

matter. The affidavit lodged on behalf of the individual attorney handling the matter indicates that s
considering it to be an update.
[51]

It is clear from both the affidavit and the argument tendered on behalf of the State Attorney in

inexperienced in constitutional litigation. It does not appear from her affidavit that she sought a sup

indicating what system exists in the State Attorneys office for the supervision of junior members of s
[52]

The result is both unfortunate and serious. It is unfortunate because the effect in this case was to gi

provincial government, was not interested in assisting this Court in resolving important constitutio

because as a matter of common practice it is the State Attorney who is briefed by the government w

assist the work of courts, a lapse of this sort in the State Attorneys office gives cause for grave conc
[53]

In my view, such a lapse called for an explanation to be tendered by a senior attorney in the office

forthcoming from the State Attorneys office should have been from a young, inexperienced atto

explanation that the young attorney gave for not responding to correspondence from this Court ref
also reflects on her superiors who have evidently left her inadequately supervised and trained.
[54]

An order of costs de bonis propriis is made against attorneys where a court is satisfied that there h

costs being made as a mark of the courts displeasure. [18] An attorney is an officer of the court and
Filing correspondence from the Constitutional Court without first reading it constitutes negligence

already related to establish that this is an appropriate case for an order of costs de bonis propriis on

the office of the State Attorney, not personally against the attorney concerned. This Courts disple

Pretoria whose systems of training and supervision appear to be woefully inadequate.

Tasima v Department of Transport 2013 (4) SA 134 (GNP).


Tasima and the DoT were involved in a contractual dispute. They eventually E agreed on a
draft order that was made an interim order of the high court. Tasima, having concluded that
the DoT wasn't complying with the interim order, launched an application asking for an order
declaring the DoT and its director-general (DG) (the second respondent) to be in contempt
and committing the DG to prison. In the same application Tasima also asked the court to
direct the DoT to grant certain 'necessary' authorisations and F approvals. The respondents,
represented throughout by Ms L of the Office of the State Attorney, Pretoria, failed to deliver
answering affidavits. The high court dismissed the contempt application on the grounds that
the interim order was not a proper mandamus and that mala fides were in any event not
proved.
Tasima was granted leave to appeal to a full bench and requested an expedited G date of
hearing. Tasima's attorneys, acting on the court's instructions, emailed Ms L for her
comments on an expedited hearing. No response to this or several related emails was
forthcoming. On the expedited date the respondents applied for a postponement. In her
affidavits to the application for postponement Ms L alleged that the expedited hearing had
been arranged by Tasima's attorneys to her exclusion, and falsely insinuated that H they had
misled the court into believing that the arrangements had taken place with the consent of the
respondents. She subsequently conceded that she had not read the emails addressed to her
by Tasima's attorneys. She blamed her lack of preparation on the 'dysfunctional' condition of
the office of the state attorney and the failure of Tasima's counsel to directly arrange an
appeal date with the DoT's counsel.
I Held: Ms L's handling of the matter was wholly unprofessional and grievously prejudicial to
the administration of justice. Moreover, the dysfunctionality she referred to tended to show
that the Office of the State Attorney, Pretoria, was unable to comply with its constitutional
and statutory obligations. The impugned conduct, established from Ms L's own affidavits,
had destroyed any basis for good cause for the postponement of the J appeal, which would
be denied. The present judgment would be forwarded
2013 (4) SA p135
to the Minister of Justice, the Parliamentary Portfolio Committee for A Justice, and the Law
Society of the Northern Provinces, with a request that the Law Society investigate the

conduct of Ms L and the office of the state attorney as disclosed in the judgment. In view of
her deplorable behaviour, and in particular the misguided attack on the probity of Tasima's
representatives, a costs order de bonis propriis would also be made against Ms L.
(Paragraphs [32], [36] [37], [41] [43] and [73] at 142H I, 144B E, B 145B G and
152C F.)
As to the merits of the appeal: The interim order did no more than to record the terms of the
agreement between Tasima and the DoT. It was thus not a direction by the court to
implement the agreement on pain of contempt. In any event, the interim order merely
echoed the obligations contained in the agreement between the parties, and thus did not
identify the DoT's C obligations to the court with the specificity required for non-compliance
to be visited with committal for contempt. Although Tasima would thus be unsuccessful in its
appeal on the contempt issue, it was nevertheless entitled to the requested order directing
the DoT to provide the 'necessary' authorisations and approvals. Appeal upheld in part.
(Paragraphs [46], [54], [58] and [71] [72] at 145J 146D, 147I J, 148H 149A and 151H
152C.) D

Conradie v Smit 1966 (3) SA 368 (A).


Under her will the testatrix had bequeathed a farm as follows: '(a) To my daughter E . . . four
hundred and forty-seven morgen of the farm Ouersgift . . . with the necessary improvements
thereon. (b) To my son J the remainder of the farm Ouersgift.' One of the co-executors had
refused to give transfer to the daughter of that portion of the farm on which the
improvements were: the other executor had supported the claim of the daughter and had not
entered an appearance to defend the action brought by the daughter. It appears from the
evidence that at the time of the execution of the will there were appurtenances on the farm
which consisted of a dwelling house which was then occupied, a shed and a kraal. Now
there were only ruins
1966 (3) SA p369
left. A trial Court had given judgment in favour of the daughter and had ordered the executor
and the son, who was a co-defendant, to pay the costs of the action and that the executor
had to pay his portion of the
costs de bonis propriis. Prior to the appeal against this judgment the executor had died.
Held, that the word 'verbetering' (improvement) had reference to the homestead. Held,
further, that the bequest was clear and that a division could be made with certainty.

Held, further, that the Court would not interfere with the exercise of the trial Court's discretion
in regard to the order as to costs.
The question whether the one executor could act as defendant without his co-executor,
without leave of the Court having been granted, raised but not decided.
The decision in the Orange Free State in Smit v Conradie and Others, confirmed.
bequeathed (a) to her daughter 447 morgen of a named farm 'with the necessary
improvements thereon'; and (b) to her son the remainder ('restant') of the farm. The extent of
the whole farm was in fact some 847 morgen. It was contended that the bequest was void
for uncertainty. The evidence was that at the time of the execution of the will there was a
dwelling with a telephone on the northern part of the farm, and a small borehole adjoining.
This dwelling was occupied by tenants, and when the testatrix died had become completely
dilapidated. Although there was some degree of uncertainty about the bequest, in that it was
not stated how the 447 morgen was to be defined, it was nevertheless held that the bequest
was sufficiently certain. The parties were agreed that the dividing line had to be from east to
west. Reference was made to a passage in Jarman on Wills, 8th ed. (1951), p. 478, that
where a bequest comprises a definite portion of a larger quantity, it is not invalid despite the
testator's omission to point out the specific part which is to form the portion, and the legatee
is given a choice. It is not clear, however, whether this refers to two already defined portions.
As Van Blerk J.A. points out (at 376), before there can be a remainder, a portion of the
property must first be cut off. (It may be mentioned that the expression 'restant' is a very
familiar one in conveyancing in South Africa.) A division with sufficient certainty to comply
with the provisions of the will could be made (the daughter receiving a portion, 447 morgen
in extent, on which the improvements stood 248 ANNUAL SURVEY OF S.A. LAW when the
will was executed). Accordingly it was held that the decision of the court of first instance
should stand, in terms of which a plan showing a portion on the northern side of the farm, of
an area as prescribed by the will, was approved and the daughter entitled to receive transfer
of it. A difference of opinion between the executors had arisen, one co-executor not disputing
the daughter's claim and therefore not defending the case. Reference was made (at 374) to
authorities which indicated that one executor is not permitted to defend without the
concurrence of his co-executor, except by leave of the court. Van Blerk J.A. said that this
appeared to be the correct position, but it was unnecessary for the purposes of the present
case to decide the point. The special ruling of the Court (at 377) as to costs against the
executor who had defended the proceedings (really arising as a result of the fiduciary
position of an executor) should be noted.

Boyce v Bloem 1960 (3) SA 855 (T)


Where there has been a personal release of one of a number of co-debtors in solidum, the
debt is extinguished as to the part of the person to whom the discharge was given and the
others remain bound for the remainder. Whether the release is gratuitous or for
consideration, and whether the consideration is the full amount afterwards found to be due,
or a lesser or greater amount, the nexus between the released debtor and the creditor
disappears. The joint liability of the other co-debtors is C reduced as a result of the
compromise, by at least the whole amount of the released debtor's proportionate share, and
if the amount paid by the latter is greater than that share, then by that amount, because the
common creditor has received such sum on account of the total debt and is not entitled to
claim from the other co-creditors more than the balance.
Trustees are liable severally and in solidum for loss arising out of negligence or breach of
trust. It is no excuse for a person who by D virtue of his office is required to make enquiry, to
allege ignorance, and he who ought to know is just as much in culpa as he who knows, and
he who neglects to know that which he ought to know is not to be excused. A trustee does
not entitle himself to relief by proving that he has acted reasonably and honestly - he must
show that in all the circumstances he ought fairly to be excused, and the bad advice of
attorneys is no defence. In determining the degree of care required of a trustee, all the
circumstances of the particular case must be taken into account.
E Where the beneficiary under a trust has established negligence on the part of the
defendant trustees causing loss, the Court must make an assessment of damages even if
such assessment is not capable of calculation with mathematical certainty; and where he
has established that they acted negligently and unreasonably, it is proper that they should be
mulcted in costs de bonis propriis to the extent to which he has succeeded in his claims.

Naidoo v Matlala NO 2012 (1) SA 143 (GNP).


Naidoo and another v Matlala and others 2012 (1) SA 125 (GNP), illustrates the type of
conduct that is penalised by a costs order on the attorney-and-client scale. In this instance,
the first respondent, an attorney, opposed an application for the rescission of a sequestration
order while he: (a) clearly knew he had no bona fide defence and persisted in such
opposition; (b) did not dispute certain allegations, specifically that he had told deliberate
untruths; did not reply to numerous letters which substantially protracted the dispute and
contravened rule 89.23 of the Attorneys Rules; and (c) was vexatious in opposing the matter

(para [16]). The court ordered him to pay the costs of the applicant in his personal capacity
on the scale as between attorney and client (para [ 18]).

EMS Belting Co v Lloyd 1983 (1) SA 641 (E)


There are sound reasons for not granting the costs of an interdict pendente lite to a
successful applicant in the absence of exceptional circumstances. While it can be said that
such an applicant has achieved substantial success, such success is of a limited and
temporary nature, often based upon a balance of convenience, and even despite a serious
dispute of F facts on the papers. It is implicit in an order granting a temporary interdict that
such order, and the relief consequent thereon, will fall away should the applicant be
unsuccessful in the trial. It would, in such a case, be unjust to compel the defendant in the
trial to bear the costs of an interdict to which the plaintiff may subsequently be shown to
have been not entitled.
The Court found that the aforegoing considerations remained applicable even where there
had been a prayer for costs against G the defendant, and the defendant had not specifically
argued that costs should be reserved or made costs in the cause. An order to which a litigant
is not entitled and which is not based on accepted principles, should not be allowed to stand
merely because his opponent, whether by oversight or otherwise, does not object thereto. It
is of course otherwise if the opponent specifically consents to a particular order.
The various costs orders which may be made where a party enjoys H partial success on
appeal also discussed.

Knox D'Arcy Ltd v Jamieson 1996 (4) SA 348 (A) at 380-381.


Costs in the Court below
When discharging the rule nisi Stegmann ordered the petitioners to pay the C respondents'
costs. This order was attacked before us. On behalf of the petitioners it was contended that
the costs should have stood over for determination at the trial. The same contention was
advanced in Goldsmid's case supra at 446. There the Court said:
'When an application for an interim interdict is refused, the general rule is to refuse it with
costs. There may, however, be circumstances which would justify D a Court in not granting
costs against the applicant, but in allowing costs to abide the result of the action if it be
instituted within a certain period. But those circumstances are exceptional. . . .'

The petitioners referred us further to the Full Bench decision of EMS Belting Co of SA (Pty)
Ltd and Others v Lloyd and Another 1983 (1) SA 641 (E). That case dealt with the grant of an
interim interdict. In such a case, it was held at 644H, there E are sound reasons for not
granting the costs pendente lite to a successful applicant in the absence of exceptional
circumstances. The passage continues (at 644H):
'While it can be said that such an applicant has achieved substantial success, such
success is of a limited and temporary nature, often based upon a balance of convenience,
and even despite a serious dispute of facts on the papers. It is implicit in an order granting a
temporary interdict that such order, and the F relief consequent thereon, will fall away
should the applicant be unsuccessful in the trial. It would, in such a case, be unjust to
compel the defendant in the trial to bear the costs of an interdict to which the plaintiff may
subsequently be G shown to have been not entitled.'
The position of a successful respondent, it seems to me, is essentially different, particularly
in a case like the present. The respondents have successfully resisted an application for an
interdict. Whatever happens at the trial, this situation will not be H reversed. And even
though the trial might show that certain aspects of the petitioners' case was stronger than
disclosed by the papers before us, many of the features relied upon by the Judge below, and
by us, for refusing an interdict will not as such be issues at the trial, and need not be
reconsidered. I consider therefore that the order for costs in the Court a quowas correct.
Conclusion I
For the reasons set out above I conclude (a) that the order of the Court below was a
'judgment or order' in terms of the Supreme Court Act, but (b) that leave to appeal was
correctly refused on the ground that the petitioners have no reasonable prospect of success
on appeal. This conclusion should normally result in a costs order in favour of the J
1996 (4) SA p381
E M GROSSKOPF JA
A respondents. Mr Cohen argued that such an order should be granted on the attorney and
client scale. I do not agree. An order for attorney-client costs might have been appropriate in
the Court below - the Judge a quo refused it, and his decision was not taken on appeal.
There was, however, nothing in the nature of the appeal or its prosecution which would
warrant a departure from the ordinary costs order. B
Order

The petition for leave to appeal is dismissed with costs, including the costs of the application
to lead further evidence and the costs pertaining to the appeal itself. The costs of two
counsel are to be allowed throughout. C
Nestadt JA, F H Grosskopf JA, Harms JA and Scott JA concurred.

Hennie de Beer Game Lodge v Waterbok Bosveld Plaas 2010 (5) SA 124 (CC),
The Court, in a review of the taxation by the Taxing Master of the Constitutional Court of
Respondents bills of costs in an unsuccessful application for leave to appeal, reiterated the
principles it had previously laid down guiding the review of a taxation in the Constitutional
Court. These are:
(a)
Costs are awarded to a successful party to indemnify it for the expense to which it has been
put through having been unjustly compelled either to initiate or defend litigation.
(b)
A moderating balance must be struck which affords the innocent party adequate
indemnification, but within reasonable bounds.
(c)
The Taxing Master must strike this equitable balance correctly in the light of all the
circumstances of the case.
Page 452 2010 (5) BCLR 451 (CC)
(d)
An overall balance between the interests of the parties should be maintained.
(e)
The Taxing Master should be guided by the general precept that the fees allowed constitute
reasonable remuneration for necessary work properly done.
(f)
The Court will not interfere with a ruling made by the Taxing Master merely because its view
differs from his or hers, but only when it is satisfied that the Taxing Masters view differs so
materially from its own that it should be held to vitiate the ruling.

The Court held that an additional principle is that where the fee charged is time-related, the
amount of time actually spent in preparing an appeal cannot be decisive in determining the
reasonableness, between party and party, of a fee for that particular work. Such a method of
calculation, namely so much per hour, placed a premium on slow and inefficient work and
resulted in a fee being charged which could be totally out of proportion to the value of the
services actually rendered.
Counsel had billed R129 504 for 71 hours work on the affidavit resisting leave to appeal but
allowed a discount of ten hours. His total fee for the affidavit was therefore R111 264 for 61
discounted hours. The Taxing Master allowed the full discounted time billed of 61 hours, but
taxed down counsels fee per hour from over R1 800 to R1 200. The total fee allowed for the
affidavit was therefore reduced to R73 200. The unsuccessful party objected to this fee on
the basis that, in view of the prior application to the Supreme Court of Appeal and the Full
Court appeal that preceded the application for leave to appeal to the Constitutional Court,
counsels fees were excessive. The same counsel had been employed from the inception of
the proceedings and had charged extensive hours on preparing the initial urgent application,
on preparing a replying affidavit in the urgent application, on preparing heads of argument
for the Full Court, on preparing for the appeal, and on attending to the Full Court appeal. The
same facts and arguments presented themselves during all the preceding court proceedings
in which counsel was involved, rendering a further 61 hours for the affidavit in the
Constitutional Court unreasonable.
The Court found that a fee based on twenty hours at R1 200 per hour would provide
adequate and reasonable remuneration for the work. Anything more would fail to strike the
moderating balance required by the Court.
The Court set aside the Taxing Masters allocatur for the relevant items in the bill of costs,
and allowed a total of 20 hours at R1 200 per hour in its stead.
COSTS Litigation concerning the constitutional right to the restitution of rights in land has
been held to be in the nature of constitutional litigation, and accordingly the State ordinarily
has to pay the costs if it lost (Quinella Trading (Pty) Ltd and Others v Minister of Rural
Development and Others 2010 (4) SA 308 (LCC) (para [35])). In Hennie de Beer Game
Lodge CC v Waterbok Bosveld Plaas CC and Another 2010 (5) SA 124 (CC), the court
reviewed a taxation in which the taxing master of the Constitutional Court allowed counsel's
fees totalling 61 hours for drafting a 62-page affidavit resisting leave to appeal. Essentially,
the applicant's complaint was that the same facts and arguments presented themselves
during all the preceding court proceedings in which counsel was involved, thus rendering a
further 61 hours for the affidavit in the Constitutional Court unreasonable. The court held that

to the general principles guiding the review of a taxation in the Constitutional Court
(President of the Republic of South Africa and Others v Gauteng Lions Rugby Union and
Another 2002 (2) SA 64 (CC)) should be added the principle that time charged is not
decisive when one has to determine the reasonableness between parties of a fee for work.
The reason is that time alone would 'put a premium on slow and inefficient work, and would
conduce to the charging of fees wholly out of proportion to the value of the services
rendered' (para [9]). An objective assessment of the features of the case is accordingly
crucial. Having done this, the court then held that counsel had already traversed the principal
issues in three previous courts, and that the impugned affidavit was largely a rehearsal of
issues already well aired in these courts. The taxing master had accordingly erred in
allowing the 61 hours (para [13]). As taxation should afford reasonable remuneration for
work necessarily and properly done, the court held that twenty hours did this more than
adequately, and would strike the 'moderating balance' that the Constitutional Court requires
(para [15]). The relevant items of the taxing master's allocator were consequently set aside
and replaced with the said twenty hours.

Ronald Bobroff & Partners v De La Guerre 2014 (3) SA 134 (CC)


Today the Constitutional Court delivered judgment in respect of two applications for leave to
appeal that relate to the same issue, namely the constitutionality of the Contingency Fees
Act (Act). At issue was whether it is justifiable for legal practitioners to charge contingency
fees outside of what the Act provides. Part of the debate related to whether the Legislatures
non-regulation of agreements concluded by lay persons, where one party undertakes to
promote litigation financially or otherwise in return for a share in the proceeds, was rational.
At common law legal practitioners were not allowed to charge their clients a fee calculated
as a percentage of the proceeds that the clients might be awarded in litigation. The Act
changed this by regulating the percentage chargeable on a contingency basis and the
circumstances in which these fees can be charged. Notwithstanding the provisions of the
Act, certain Law Societies made provision, in their rules, for members to charge in excess of
the percentages prescribed by the Act. Bobroff and Partners (Bobroff) was one of the firms
which charged more than the Act permitted in accordance with the rules of its professional
association. In particular, Ms De La Guerre was charged 30% as a contingency fee, instead
of the maximum of 25% allowed under the Act. After being awarded damages in litigation,
Ms De La Guerre challenged the excess charge at the North Gauteng High Court, Pretoria
(High Court). The South African Association of Personal Injury Lawyers (Personal Injury
Lawyers) also brought an application challenging the constitutionality of the Act as a whole,

in the alternative, certain sections of it. Both cases were heard simultaneously by the Full
Bench of the High Court. The High Court found in favour of Ms De La Guerre in her
application and upheld the constitutionality of the Act. Both the High Court and the Supreme
Court of Appeal refused to grant leave to appeal. In the Constitutional Court, the Personal
Injury Lawyers and Bobroff applied for leave to appeal along largely the same lines as they
argued in the High Court. Ms De La Guerre, the Minister of Justice and Constitutional
Development and the Road Accident Fund all opposed the applications for leave. The
Constitutional Court unanimously found that the Legislatures decision to regulate
contingency fee agreements in respect of only legal practitioners was not irrational. The
Court held that the fact that regulation for lay persons may also be wise does not mean that
the regulation of legal practitioners specifically should be regarded as unwise. Thus, the
Court found no merit to the challenge as a whole. In respect of the challenge to particular
provisions of the Act, the Court held that this was a challenge based on a limitation to
fundamental rights. The Court found that the matter concerns the right of access to justice by
legal practitioners clients and not a right of the legal practitioners. Since there was no
evidence showing that the rights of their clients had been infringed, this challenge was
rejected. The application for leave to appeal was dismissed with costs.
De La Guerre v Ronald Bobroff & Partners Inc (22645/2011) [2013] ZAGPPHC 33 (13
February 2013) (on SAFLII)
The applicant sustained injury in a motor vehicle accident in 2005. She thereafter consulted
the first respondent and was advised that it would accept instructions from her on a
contingency basis. The agreement stated that the applicant would pay a fixed 30% plus VAT
of the damages recovered. She was thereafter advised by her present attorney that the
agreement was illegal, invalid and unenforceable as it did not comply with the Contingency
Fees Act 66 of 1997 ("the Act), and that she had also probably been overcharged.
Held that contingency fee agreements between a litigant and his attorney were unlawful at
common law. At common law a legal practitioner was only entitled to a reasonable fee for
work actually done. For the agreement relied upon by the respondent to be valid, it therefore
had to fall within the ambit of the Act. The Court found that the agreement entered did not
comply with the Act for the reasons set out in the founding affidavit. The agreement was
accordingly invalid.
The Court expressed its disapproval of the first respondents conduct by granting a punitive
costs order against it.

Ndlovu v Minister of Home Affairs 2011 (2) SA 621 (KZD) at paras [1]-[4];
[1] This is a recusal application. It arises in one of 252 cases in which I heard argument on
15, 27 and 29 September 2010. The application for recusal was brought on 26 November
2010. Whilst it relates to only one of the 252 cases it has been brought by way of a test case
on the basis that if it succeeds I will also recuse myself in the other cases. The
circumstances giving rise to the application are the following.

[2] On 21 April 2010 I delivered the Eighth Victoria and Griffiths Mxenge lecture at the
University of KwaZulu-Natal. My theme was Ordinary Justice for Ordinary People and in the
course of the lecture I looked at various elements of the legal system that provide obstacles
to ordinary people obtaining justice from the courts, both criminal and civil. In dealing with
lawyers I proffered some criticism that they benefit from delays and suggested that the
current system of remunerating legal practitioners provides a perverse incentive 1to delay by
paying them on a basis that does not encourage bringing matters to a conclusion. I drew
attention to the reasons why this is so and suggested that it would be a fruitful topic for
interdisciplinary research involving the law and economics faculties of our universities to see
if it would be possible to align the fee charging practices of litigation lawyers with the
interests of ordinary people in having cases disposed of timeously and at reasonable cost.

[3] The lecture then went on as follows:


While on the topic of fees we should beware of following the example of those jurisdictions
where contingency fees are the major source of revenue for plaintiffs lawyers. It is no
coincidence that those are the most litigious societies on the planet. And you must not
believe the explanation that this affords access to justice for those who could not otherwise
afford it. If it does, that is a mere by-product of what is described by lawyers in the corridors
of the courts as drumming up trade. Once again a well-meaning endeavour to assist those
who cannot afford legal services provides a perverse incentive for lawyers to profit. This
takes a variety of forms. It occurred in our own local courts in relation to cases on behalf of
persons claiming social security grants. There was a natural sympathy for the applicants that
disguised what was really happening, which was that governmental inefficiency was
exploited to provide a not inconsiderable source of revenue to the legal practitioner riding the
bandwagon. Let me mention briefly what happened when the court put an end to this by
introducing a practice directive governing such cases. A year later I was asked to reconsider
that practice directive but the evidence led before me showed unequivocally that people

having grievances about social security grants were having their problems resolved quicker
by following the directive than they had by pursuing legal proceedings. And of course the
taxpayer was being saved vast sums in legal fees.
This is an inevitable consequence of a system of contingency fees. Lawyers will seek out
potentially vulnerable targets and then find litigants to pursue them. The litigants hope to
benefit from an award and the lawyer hopes to take as much as possible by way of
contingency fees. How many smokers really benefited from the enormous settlements
negotiated in litigation against the tobacco industry in the United States? Every lawyer
involved did, and the extent of the benefit was enormous. I, and many colleagues, listened
amazed at a presentation at an International Bar Association Conference a few years ago by
one of the lead firms in that litigation, which even before the payment of the settlement sum
paid every employee of a large firm of attorneys a bonus from the proceeds. And yes, I do
mean every employee clerks, messengers, janitors and telephonists. And this was done
before the partners took their cut. The pattern we have encountered here in regard to social
security and home affairs cases is currently being repeated in the United Kingdom in cases
involving claims against housing authorities where the claims are modest but the lawyers
fees are much greater. We need to cry out that there is a vast difference between providing
access to justice and the enrichment of lawyers. Whilst I am not in principle opposed to
some system of contingency fees it requires safeguards to prevent its exploitation by those
who see in it an opportunity to enrich themselves by gaming the system.

[4] This lecture was published in part 3 of the 2010 South African Law Journal2 at the
suggestion of a member of staff of the UKZN law faculty. Other than minor grammatical
changes it was published in the form prepared for delivery at the lecture. It is this publication
and particularly the passage that I have quoted in extenso that gives rise to the application
for my recusal. In order to explain why that is so it is necessary to trace a little of the history
of the present home affairs applications.

Tjatji v Road Accident Fund 2013 (2) SA 632 (GSJ);


In each of three actions that had been set down for trial the parties wished to have the terms
of an offer of settlement made an order of court. In each instance the plaintiff's legal
representative acted on a contingency fee basis in terms of a contingency fee agreement.
When it transpired that these were invalid for non-compliance with the requirements of the
Contingency Fees Act H 66 of 1997 (the Act), the parties purported to enter into new

contingency fee agreements. The plaintiffs contended that, since the Act was silent as to
when and at what stage of the proceedings a contingency fee agreement may be entered
into, it was thus permissible to enter into such agreement at any stage of the proceedings,
as long as success, or what the parties consider to be success, had yet to be achieved.
I Held: Although the Act did not stipulate when a contingency fee agreement may be entered
into, there were textual indications that such an agreement had to be entered into at a
sufficiently early stage of the proceedings so as to enable the requirements of the Act to be
complied with. What constituted a sufficiently early stage of the proceedings was a question
of fact. Much would depend on the nature of the proceedings and whether, when
the J contingency fee agreement was entered into, it was reasonably possible to
2013 (2) SA p633
comply with the prescripts laid down in the Act. In each of the present cases A the new fee
agreements were only entered into after the legal practitioners concerned had commenced
to act on a contingency basis and when disbursements had already been incurred. This was
contrary to the provisions of ss (3)(2) and (3)(4) of the Act, which required that legal
practitioners may not act on a contingency basis unless they had signed a B written
agreement to that effect, and had delivered a copy thereof to the client upon the date on
which such agreement was signed. There were also no indications in the affidavits filed of
record that the matters set out in s 3(3)(b) of the Act had been complied with before the new
contingency fee agreements were entered into, as it should have been for legal practitioners
to become entitled to act on contingency. (Paragraphs [15], [17], [19] and [23] at 636H
637B, 637C/D, 638F I and 639F H.) C
Held, further: On the face of it the new contingency fee agreements appeared to be valid, as
the prescribed form of agreement had been used. In substance, however, they were invalid,
as a result of the failure by the parties to observe the requirements of the Act. Despite not
stating so expressly, the Act undoubtedly visited non-compliance with invalidity. In addition,
the D intention in entering into the new contingency fee agreement in each case was to
retrospectively validate the contingency fee agreements that were entered into in violation of
the Act. This could not be done. It was trite that an agreement which was a nullity could not
be rectified so as to become a valid contract. (Paragraphs [21], [24] and [25] at 639B D,
639H 640A/B.) E

Levenson v Fluxmans Inc 2015 (3) SA 361 (GJ).

Mr Levenson concluded a contingency fee agreement (the CFA) with Fluxmans Inc in
respect of a Road Accident Fund claim. The agreement specified that E Fluxmans would
charge a fixed fee of 22,5% of the amount recovered. On 13 May 2012 the RAF settled the
claim for R4,8 million, of which Fluxmans retained R1,1 million in fees under the CFA.
Believing the fees to be excessive, Levenson immediately queried them, but was informed
by Fluxmans that they were 'reasonable'. Later, in April 2014, having heard about the
outlawing of 'common-law' CFAs in Ronald Bobroff & Partners Inc v De la Guerre and
Another 2014 (3) SA 134 (CC), Levenson wrote to F Fluxmans stating that he wanted the
fees reviewed because the CFA did not comply with the Contingency Fees Act 66 of 1997
(the Act). When Fluxmans demurred, Levenson applied for an order declaring the CFA
invalid and directing Fluxmans refund him R845 000 of the fees charged. Fluxmans, though
conceding that the CFA did not comply with the formalities prescribed by the Act, argued that
Levenson's claim had been G extinguished by prescription because he failed to take action
within three years after he received Fluxmans' statement of account in respect of the fees.
Although s 12(3) of the Prescription Act 68 of 1969 provides that prescription does not begin
to run until the creditor has knowledge of the identity of the H debtor and the facts giving rise
to the debt, Fluxmans argued that ignorance of the legal position was no impediment to the
running of prescription. This argument was based on the dictum in Claasen v Bester 2012
(2) SA 404 (SCA) that 'knowledge of legal conclusions is not required before prescription
begins to run'.
Held: The invalidity of common-law CFAs was a fact and not a 'legal conclusion'. Before April
2014 Levenson merely suspected or believed that the fees I charged by Fluxmans were
excessive, which could not be equated with 'knowledge' and was insufficient for prescription
to begin running. He only acquired knowledge of the facts from which the debt arose when
he became aware of De la Guerre in April 2014. Section 12(3) of the Prescription Act was,
moreover, aimed at negligent inaction, and Levenson's ignorance was due to Fluxmans'
unprofessional failure to inform him that the CFA was J
2015 (3) SA p362
A invalid and unenforceable. In the circumstances Fluxmans' plea of prescription would fail.
Agreement rescinded and the quantum of the claim referred to trial. (Paragraphs [15] and
[17] [19] at 366C F and 367G 368A.)

Wanderers Club v Boyes-Moffat 2012 (3) SA 641 (GSJ).

However, in Wanderers Club v Boyes-Mofat and another 2012 (3) SA 641 (GSJ), the court
disagreed with this reasoning (despite it having been adopted in the same division in Davies
v Chairman, Committee of the Johannesburg Stock Exchange 1991 (4) SA 43 (W) 57F-H),
and did not regard itself bound by it. Instead, the court argued that the general principle
regarding the awarding of costs, namely that it is entirely a matter for the discretion of the
court, is well settled: this discretion is to be exercised judicially upon a consideration of the
facts of each case, and is in essence a matter of fairness to both sides (643H-J). Relying on
De Naamloze Vennootschap Alintex v Von Gerlach 1958 (1) SA 13 (T), which enumerated as
relevant considerations for the granting of the costs of two counsel, the length of the hearing
of the argument; the importance of questions of principle or of law involved; and the number
of authorities cited, the court held that the complexity of the issues to be determined at the
trial was another factor to be considered, but that the present application revealed nothing
out of the ordinary, nor any legal or factual complexity. It was also not argued that the
employment of two counsel was a wise and reasonable precaution, and consequently held
that there was no justification for allowing costs of two counsel (644C-F). It is submitted that
this decision will probably be criticised as it disturbs the status quo, and is supported: the
exercise of judicial discretion implies the consideration of facts on a case by case basis, and
the bald acceptance that two counsel 'must' be allowed (as per Davis), seems to be at
variance with this discretion.

Fluxmans Inc v Lithos Corporation 2015 (2) SA 295 (GJ).


A firm of attorneys sued its former client (and its director) for the outstanding balance of its
agreed fee and fees disbursed to counsel, including an agreed G collapse fee. The
defendants disputed liability on various grounds, including that the advocates' collapse fees
were unreasonable. A complaint had previously been lodged with the Bar Council and a fee
tribunal duly appointed, from which the defendants had subsequently withdrawn
participation. The tribunal had nevertheless proceeded with the enquiry, finding that the fees
charged were in order and dismissing the complaint. H
The court discussed the nature of collapse fees and how the reasonableness of such was to
be determined. In this regard the South African Bar's Code of Professional Conduct, rulings
of the Johannesburg Bar, direction from the fees committee and outcome of the
aforementioned Bar Council enquiry were examined. (Paragraphs [82] [93] at 315E
318D.)

Ultimately the court could not find any fault with the findings and approach of I the tribunal to
the question, holding that some deference was in any event due to the professional body's
view on the question of reasonableness of fees. Ordinarily the court was not to be asked, at
first instance, to decide
2015 (2) SA p296
A whether the fees of counsel were reasonable: such was the task of the regulator body,
whose decisions were subject to review by a court. (Paragraphs [99] [100] at 319G J.)
In the circumstances the court concluded that there was no basis upon which to find that the
counsel had breached the Bar Rules or overreached their clients and the collapse fees were
accordingly reasonable. (Paragraph [101] B at 320A B.)