INDEX1

SOUTH AFRICAN LAW REPORTS OCTOBER 2014

SOUTH AFRICAN CRIMINAL LAW REPORTS OCTOBER 2014

All SOUTH AFRICAN LAW REPORTS OCTOBER 2014

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

LEGAL NOTES VOL 11/2014

Compiled by: Adv Matthew Klein

SALR OCTOBER 2014

SAVOI AND OTHERS v NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS AND ANOTHER 2014 (5) SA 317 (CC) 

Constitutional law — Human rights — Protection — Standing to enforce — Abstract challenge to constitutionality of legislation — Though not negating C standing, applicant to show that challenged provision prima facie unconstitutional.

Constitutional law — Legislation — Validity — Prevention of Organised Crime Act 121 of 1998, s 2(1) — Definitions of 'pattern of racketeering activity' and 'enterprise' not unconstitutional — Nor phrase 'ought reasonably to have known'. 

Criminal law — Statutory offences — Organised crime — Racketeering — Ambit of offence — Concept of 'pattern of racketeering activity' aimed at ongoing and varied nature of organised crime, not at individual underlying offences — Definition of offence of racketeering not void for vagueness — Prevention of Organised Crime Act 121 of 1998, s 2(1). 

Criminal law — Statutory offences — Organised crime — Racketeering — Mens rea — Negligence — Negligence standard appropriate to offence of racketeering — Phrase 'ought reasonably to have known' not void for vagueness or unconstitutional — Prevention of Organised Crime Act 121 of 1998, s 2(1).The applicants were charged in the Pietermaritzburg Division with racketeering offences under s 2 of the Prevention of Organised Crime Act 121 of 1998 (POCA). The court stayed the prosecution when the applicants challenged the constitutionality of the offences they were being charged with. They argued that POCA's definitions of a 'pattern of racketeering activity' and 'enterprise' were, respectively, vague and overbroad. They also argued that s 2(2) of POCA violated fair-trial rights by allowing courts to consider otherwise inadmissible evidence such as hearsay, similar fact evidence and evidence of previous convictions. Lastly they argued that the entire ch 2 of POCA was unconstitutional because it operated retrospectively. The respondents replied that the applicants' failure to place a particular set of facts before the court made their challenge a purely abstract or hypothetical one.The Pietermaritzburg Division dismissed applicants' challenges and instead declared s 2(1) unconstitutional to the extent that it contained the words 'ought reasonably to have known', which the court held to be unintelligible and vague to the point of unconstitutionality. In an appeal the Constitutional Court held —On the abstraction of applicants' challenge: Though the applicants had standing to challenge the constitutionality of the charges against them, the abstract nature of their challenge meant that they bore the heavy onus of showing that the challenged provisions were prima facie unconstitutional. On the vagueness of the charges: There was no vagueness. The concept of participation in a 'pattern of racketeering activity' was aimed at the modus operandi of organised crime, at the multifarious ways in which it manifested itself. To attack the definition by isolating individual offences, forming an opinion on how relatively minor they were, and then concluding that they were incompatible with the notion of organised crime, was to ignore how organised crime worked. And although

'enterprise' covered a wide spectrum, overbreadth was not a self-standing ground of statutory invalidity. On the procedural challenge: It wrongly assumed that the admission of F otherwise inadmissible evidence would always result in an automatically unfair trial. It might, but the unfairness would stem from a failure by the court concerned to use the filter in s 2(2) in a constitutionally compliant manner. But since the applicants had brought an abstract challenge, this issue did not arise in the present case. On retrospectivity: POCA criminalised current conduct relating to a past 'pattern of racketeering activity', not individual offences committed pre-POCA or even a pattern of racketeering activity that predated POCA. Organised crime had an ongoing mode of operation, and there was nothing unconstitutional about looking at past conduct to determine an existing pattern of ongoing criminality. On the high court's order of invalidity: The words 'ought reasonably to have known' — which imported a negligence standard — were suited to the offences in question. The language was not vague but captured the idea of negligence, and the element of subjectivity it imported was consonant with the interests of justice. Moreover, the order of invalidity was made on a case I the respondents were never called upon to meet. Hence the high court's order of invalidity would be rescinded.

COMMISSIONER, SOUTH AFRICAN REVENUE SERVICE v MOBILE TELEPHONE NETWORKS HOLDINGS (PTY) LTD 2014 (5) SA 366 (SCA

Revenue — Income tax — Deductions — Audit fees — Apportionment of where C incurred with dual purpose of which only one qualifying as deduction — Basis for apportionment — Guidelines set out — Apportionment to be fair and reasonable in circumstances of each case — Income Tax Act 58 of 1962, s 11(a) read with ss 23(f) and (g). The taxpayer, a holding company and itself a wholly owned subsidiary, claimed D the expenses it had incurred in respect of statutory audits for each of the 2001 to 2004 years of assessment as deductions under s 11(a) of the Income Tax Act 58 of 1962. This, for each year, from income earned solely from dividends it had received from its subsidiaries and, to a much lesser extent, from interest earned on intergroup loans.The Commissioner for the South African Revenue Service (SARS) disallowed the deductions insofar as they related to exempt dividend income and, using the ratios between (taxable) interest income and the total income earned for each period as the basis for its apportionment, allowed deductions of between 2% and 6% of the total audit fees. On appeal the tax court held that a 50/50 ratio was appropriate. In a further appeal a full bench of the high court allowed a deduction of 94% of the audit fees, that being the ratio contended for by the taxpayer as reflecting auditing time spent on calculating the interest portion of income. On appeal to the Supreme Court of Appeal,Held: Apportionment was a question of fact that depended on what was fair and reasonable in the particular circumstances of the case. Given the predominant role played by taxpayer's equity and dividend operations as opposed to its far more limited income-earning operations, any apportionment must be heavily weighted in favour of the disallowance of the deduction. On the facts a 50/50 apportionment of the audit fees was far too generous to the taxpayer. In all the circumstances it would

be fair and reasonable that only 10% of the audit fees claimed by the taxpayer for each of the tax years in H question should be allowed.

MTSHABE v LAW SOCIETY OF THE CAPE OF GOOD HOPE 2014 (5) SA 376 (ECM)  Attorney — Admission and enrolment — Readmission — Applicant attorney struck from roll after imposition of direct imprisonment on various counts of fraud — Seeking readmission after release on parole — Contrary to public policy to readmit person in such position — Application refused — Attorneys Act 53 of 1979, s 15(3)(a). The applicant's name was struck from the roll of attorneys at the instance of the Law Society after he was convicted on various counts of fraud and sentenced to eight years' imprisonment. After release on parole he sought, in an unopposed application, readmission as an attorney in terms of s 15(3)(a) of the Attorneys Act. *  The fundamental question was whether such a person could be readmitted and re-enrolled as an attorney.Held: Parole was a mechanism by which an offender may be conditionally reintegrated into society as part of the process of rehabilitation which correctional facilities sought to ensure. Central to the concept was the idea that the offender was in the process of being reintegrated into society. The status of a parolee was not the equivalent of one who had been unconditionally released from prison as having served his or her sentence of imprisonment and it seemed wholly contrary to public policy that a person in that position could be regarded as being a 'fit and proper person' to be admitted as a legal practitioner. Although it seemed to be an absolute bar to readmission it was not needed to decide such, mindful that there might well be circumstances in which a person was on parole for an offence which did not ipso facto render him unfit to hold office as an attorney. In casu, taking into account the nature of the offence for which the applicant was convicted and the reasons for him having been struck off the roll of attorneys, his status as a parolee precluded his readmission.

NEDBANK LTD v THOMPSON AND ANOTHER 2014 (5) SA 392 (GJ)  Credit agreement — Consumer credit agreement — Debt rearrangement — Default on by consumer — To be interpreted as excluding minor, unwitting and excusable defaults — National Credit Act 34 of 2005, ss 2(1), 3 and 88(3)(b)(ii).Credit agreement — Consumer credit agreement — Debt rearrangement — Default on by consumer — Resulting from errors by payment-distribution agency in making payment to credit provider — Unless payment distribution agency appointed as consumer's agent, resulting incorrect payment not constituting default by consumer as contemplated in National Credit Act 34 of 2005, s 88(3)(b)(ii).Credit agreement — Consumer credit agreement — Debt review — Role of payment distribution agency — Administrative appointment by debt counsellor over which consumer having no control — National Payment Systems Act not creating relationship of agency between consumer and payment distribution agency — National Payment Systems Act 78 of 1998, s 7.

The respondent consumers (the Thompsons) fell behind with their payments under a debt review order which included their mortgage bond obligations to the applicant credit provider (the bank). The 'default' was caused by the debt-counsellor-appointed payment distribution agency (the PDA) erroneously deducting a payment from the Thompsons' contribution before paying the creditors.The bank invoked s 88(3)(b)(ii) of the National Credit Act 34 of 2005 (the NCA) to obtain judgment against the Thompsons for the outstanding balance of their mortgage bond obligations together with interest, and an order declaring the immovable property concerned specially executable. This subsection provides that if 'the consumer defaults on any obligation in terms of a re-arrangement agreed between the consumer and credit providers, or ordered by a court or the Tribunal', the credit provider may (subject to ss 86(9) and 86(10) of the NCA) enforce the credit agreement concerned. At the time that the bank brought their application, the net shortfall owing to the bank was only R440,91. The court, dismissing the application Held: The appointment of the PDA by the debt counsellor was an administrative one over which the consumer had no control. Section 7 of the National Payment System Act 78 of 1998 did not create an agency relationship between the PDA and the consumer. In the absence of an agreement between the PDA and the consumer that the former would act as the latter's agent, it I could not be held that the PDA in question acted as the agent of the consumer and that its actions or inactions would bind the consumer. Accordingly the 'default' was not a default by the Thompsons, and the requirements of s 88(3)(b)(ii) were not met. But even if this were the wrong conclusion, ss 2(1) and s 3 of the NCA required J the word 'defaults' in s 88(3)(b)(ii) to be interpreted to exclude minor, unwitting and excusable defaults of the nature which occurred here, with A the result that for that reason too the requirements of s 88(3) had not been met.

AVONMORE SUPERMARKET CC v VENTER 2014 (5) SA 399 (SCA)  Delict — Elements — Negligence — What constitutes — Failure to dry supermarket floor after routine cleaning. In this case Venter slipped on the damp floor of Avonmore Supermarket CC's supermarket and injured herself. At the time, the supermarket's cleaner was involved in routine cleaning. This involved him placing a warning sign in a given area, mopping in the vicinity of the sign, and then, before the floor was dry, moving the sign to another area and continuing mopping there. Venter sued Avonmore in delict for her damages and succeeded in a high court. Avonmore then appealed to the Supreme Court of Appeal (SCA). In issue there was whether Avonmore had been negligent, specifically, whether Avonmore had taken reasonable steps to prevent the harm. The SCA held that Avonmore had not: the cleaner ought to have ensured that the area was dry before moving on; and routine cleaning ought not to have been conducted during a busy period (in this case lunchtime on a weekday). Accordingly the SCA held that the high court had correctly found that Avonmore had been negligent and dismissed the appeal. HYPROP INVESTMENTS LTD AND OTHERS v NSC CARRIERS AND FORWARDING CC AND OTHERS 2014 (5) SA 406 (SCA) 

Estoppel — Res judicata — Issue estoppel — Operation — Plea not permitted where it would bind litigant to inappropriate findings of prior court. The Supreme Court of Appeal (SCA) in this case had to consider whether to reverse a high court's dismissal of a plea of res judicata.The facts were that a company leased property to a corporation. The company later cancelled the leases when the corporation failed to pay the rent. The company then applied to a high court for orders confirming the cancellation, ejecting the corporation, and for payment of the rental. The corporation's defence was that the leases had been induced by fraudulent misrepresentations by the company. The court dismissed the defence, holding that the leases precluded reliance on the misrepresentations, and that they were a fabrication, and it granted the relief. The corporation applied for leave to appeal but the court refused, and when the corporation applied to the SCA for leave to appeal, it was also refused. Later on, the corporation instituted an action against the company for damages caused by the misrepresentations, and the company pleaded res judicata in the form of issue estoppel. The court dismissed the plea, holding it would be unfair to unsuit the corporation on findings made on the papers alone. The company applied to the court for leave to appeal to the SCA, which the court granted. The SCA dismissed the appeal, holding that it would be unfair to allow issue estoppel in the circumstances. To do so would bind the corporation to the inappropriate findings of the motion court that there was no fraud, and that the lease precluded reliance on fraudulent misrepresentations. MV BULK JOYANCE ELSTEAD LTD v MV BULK JOYANCE AND OTHERS 2014 (5) SA 414 (KZD)  Shipping — Admiralty law — Maritime claim — Enforcement — Action in rem — Arrest — Associated ship arrest — Whether ship 'associated ship' — Common control — Proof — Ambit of enquiry — Consequences of incorrect finding  — Admiralty Jurisdiction Regulation Act 105 of 1983, s 3(7)(a)(iii).Shipping — Admiralty law — Admiralty practice — Evidence — Hearsay — Statements and allegations in trade journals and on websites constituting admissible evidence on control of associated ship — But weight to be attached thereto in discretion of court — Admiralty Jurisdiction Regulation Act 105 of 1983, s 6(3). In proceedings by its owner (the second respondent) for the setting-aside of the arrest of the Bulk Joyance, the court had to decide whether it was an 'associated ship' in relation to three other ships. This entailed an investigation into whether the four ships were ultimately controlled by the same entity: see s 3(7)(a)(iii) and 3(7)(b)(ii) of the Admiralty Jurisdiction Regulation Act 105 of 1983 (AJRA). In particular, the court had to consider the alleged control of one group of Chinese companies, Logistics, by another, HNA. For their submission that HNA controlled Logistics — and hence all four ships — the arresting creditors relied, among other things, on the following: Logistics' shareholding structure; foreign proceedings in which HNA's control of Logistics was not denied;statements on company websites and in trade journals allegedly indicating that Logistics was one of HNA's mainstays;HNA's alleged power of sanction over Logistics; Logistics' alleged financial reliance on HNA. 

Held: The court would be guided in this matter by the judgment in MV Heavy Metal: Belfry Marine Ltd v Palm Base Maritime SDN BHD1999 (3) SA 1083 (SCA). In that case it was held that the words 'directly or indirectly' were intended to broaden the concept of 'power to control' and that proof of either direct (de jure) or indirect (de facto) control would suffice to bring s 3(7) into operation. As to the evidence of control tendered by the arresting creditors: Logistics' shareholding structure did not prove majority ownership — and hence direct control — of Logistics by HNA.The foreign court had dealt with a substantially different case and hence the inference that HNA controlled Logistics because it was not denied in those proceedings was not warranted.Although the evidence of control found on the company websites and in the trade journals was admissible under AJRA s 6(3), its truth was not established.The fact that a minority shareholder might exert great influence on a company did not necessarily mean that it controlled its destiny.HNA's funding of Logistics did not prove that it controlled Logistics' destiny. In assessing whether the creditors had proved the required degree of indirect control the court had to bear in mind that an incorrect finding would result in the attachment of an asset belonging to a party unrelated to the debtor. Although the evidence presented by the arresting creditors was sufficient to generate a great deal of suspicion that control was in the hands of HNA, this was not enough to discharge the onus of establishing indirect control. Arrest set aside.

EX PARTE SNOOKE 2014 (5) SA 426 (FB)  Insolvency — Rehabilitation — Creditors — Proof of claims — Late proof of claims — Where creditor not given opportunity to make informed decision whether or not to prove claim, appropriate to postpone application for rehabilitation pending special meeting for late proof of claims — Insolvency Act 24 of 1936, ss 44(1) and 124(3).Insolvency — Rehabilitation — Security — Requirement that it be furnished three weeks prior to application for rehabilitation — Where brought sooner, non-compliance may be cured by postponing application to allow period to run out — Insolvency Act 24 of 1936, s 125.Insolvency — Costs — Voluntary surrender or sequestration order to be understood as limiting attorney's fees and expenses to those stated in application — Trustee may not consent to taxation of attorney's bill of costs if costs to be taxed exceeding costs stated in application.Insolvency — Trustee — Trustee's report — Requirements — To place reasonable creditor in position to make informed decision on whether or not to prove claim.Insolvency — Trustee — Rights and obligations — May not consent to taxation of attorney's bill of costs if costs to be taxed exceeding alleged costs relied upon in application for voluntary surrender or sequestration. When Mr Snooke's creditors did not prove any claims against his insolvent estate, he applied for his rehabilitation under s 124(3) of the Insolvency Act 24 of 1936 (the Act). The application had been set down for 13 March 2014, less than three weeks after furnishing the registrar with security for payment of costs as required by s 125 of the Act. On that day the court postponed the matter for the trustees and the master to address the court's concerns that the creditors had not been given sufficient opportunity to make informed decisions on whether or not to prove claims. A further issue arose from Mr Snooke's application for voluntary surrender stating

that the administration and sequestration cost would be R20 000 while eventually the taxed sequestration costs alone were a little over twice that amount.Held: As to non-compliance with s 125, by the time the matter was heard (24 April 2014) the three-week period had run its course and the non-compliance cured. As to proving their claims, it could not be disregarded that the creditors had not received proper notice of the second meeting of creditors. Moreover, a reasonable creditor reading the trustees' report would not have been able to I make an informed decision on whether or not to prove a claim. Bearing in mind the court's wide discretion in granting rehabilitation orders, it was appropriate to instruct the remaining trustee to convene a special meeting of creditors for the late proof of their claims (in line with the proviso to s 44(1) of the Act), and to postpone the application for rehabilitation to give them an opportunity to do so. As to the costs issue, a voluntary surrender or sequestration order was made A on the assumption that the attorneys' fees and expenses were to be limited to those stated in the application. The order must therefore be understood to contain such a limitation. No trustee shall in future consent to taxation of an attorney's bill of costs if it appeared that the costs to be taxed would be more than the alleged costs relied upon in an application for voluntary surrender or sequestration. GRAINCO (PTY) LTD v VAN DER MERWE AND OTHERS 2014 (5) SA 444 (WCC)  Sale — Business — Business and goodwill sold — Implied prohibition on canvassing customers — Scope — Effect of express restraint on competition on implied prohibition.Contract — Terms — Implied and tacit terms — Implied term — Contract for sale of business with goodwill — Implied prohibition on canvassing customers — Scope — Effect on implied prohibition of express restraint on competition. In issue in this case was whether the respondents were bound by an implied prohibition against canvassing customers.Its facts were that Van der Merwe and Kitshoff formed a company (Old GrainCo) which established a grain-trading business. Old GrainCo ultimately sold the business and its goodwill to BKB Ltd. Under the sale agreement Old GrainCo, Van der Merwe and Kitshoff bound themselves for five years to not compete with BKB or to canvass any of its customers.BKB immediately on-sold the business and goodwill to the applicant GrainCo (Pty) Ltd (New GrainCo). The sale agreement included a cession of all of BKB's rights in respect of the business to New GrainCo. New GrainCo then employed Van der Merwe and Kitshoff. Their employment agreements incorporated the restraints in the Old GrainCo – BKB sale agreement.More than five years later Van der Merwe resigned and formed Perdigon (Pty) Ltd which established a grain-trading business. Thereafter Kitshoff resigned from New GrainCo and Perdigon employed him.A few months on New GrainCo applied to a high court to interdict Van der Merwe, Kitshoff and Perdigon from canvassing the customers of its business. It relied on a term the law implies into a contract to sell a business with its goodwill: that the seller may not later canvass persons who were customers of the business at the time of the sale (the implied prohibition). The court considered the following:Could New GrainCo enforce the implied prohibition?

It could: BKB had ceded its right to enforce the prohibition to New GrainCo. The scope of the implied prohibitionThe prohibition applied only to the seller of the business and its goodwill. It prohibited the seller from canvassing persons who were customers at the date of the sale and persons who had been customers prior to the sale. It did not prohibit from canvassing those persons who had been customers before the sale: who did not intend to resume trading with the business; who were unlikely to resume trading with the business; or whom the buyer had chosen to stop trading with. And the prohibition did not bar the seller from canvassing persons who became customers of the business after the sale. A person was a customer if the business supplied goods or services to it for consideration. Furthermore, the prohibition only prevented a seller from canvassing a A customer — it did not prevent a seller from dealing with a customer. Thus if a seller had unlawfully canvassed a customer and had commenced dealing with him, the buyer's remedy would be to sue for damages for breach of the prohibition, not to interdict the seller dealing with the customer. Lastly, the law on the duration of the prohibition was uncertain. The prohibition might be perpetual; or alternate policy considerations might determine its permissible duration in individual cases. The effect of an express restraint on competition on the implied prohibitionThere was Appellate Division authority that an express restraint on competition would not exclude the implied prohibition, even where the express restraint included within its scope a prohibition against canvassing customers. This might warrant reconsideration: where buyer and seller agreed to an express restraint of a specified period, they could be taken to have exhaustively regulated the protection they intended the buyer to have. Ultimately the court concluded that the implied prohibition was not excluded from the Old GrainCo – BKB sale agreement, and that BKB ceded the right to enforce it to New GrainCo. The prohibition bound only the seller of the business with its goodwill — Old GrainCo — and not Van der Merwe or Kitshoff (or plainly Perdigon). And Van der Merwe and Kitshoff only began to compete with New GrainCo after the expiry of the express restraints. The court accordingly dismissed New GrainCo's interdict application.

ATHOLL DEVELOPMENTS (PTY) LTD v VALUATION APPEAL BOARD, JOHANNESBURG, AND ANOTHER 2014 (5) SA 485 (GJ)  Local authority — Rates — Valuations — Property subject to registered lease — Local authority may levy rates by focusing on (1) value of immovable property plus improvements or (2) value of lease — No room for argument that lease, by encumbering property, reducing its rateable value. Local authority — Rates — Valuations — Valuation appeal board — Powers — On appeal against decision of valuer — May consider valuation de novo — Not restricted to approach adopted by valuer or decision by municipality to assign value to class of property — Local Government: Municipal Rates Act 6 of 2004, s 57(a).  This case deals with:  municipal valuations of properties subject to registered 99-year leases;the powers of the valuation appeal board in appeals against decisions of the municipal valuer.Atholl was granted 99-year leases by the owner of two erven in llovo, Johannesburg. The leases gave Atholl business rights to build and operate a hotel on the erven, and stated that Atholl would be responsible for the payment of the municipal rates levied

by the city (the second respondent). The matter came to a head when the municipal valuer — at the behest of the city — increased the valuation of the erven from R11,7 million to more than R460 million. Unaware of the leases, and acting in line with municipal F policy, the municipal valuer based his valuation on the combined value of the erven and the improvements on them. (A later valuation, based on rental income, came in at R385 million.) The increased valuation had drastic implications for Atholl's rates, and it appealed to the valuation appeal board, arguing that the valuation roll should reflect only the value of the erven and ignore the value of the rights registered against them. The board focused instead on the value of the leases, assessing them at a combined R308 million. In doing so the board accepted Atholl's argument that the erven had to have two separate values assigned to them, one for the lease and one for the land itself. The present case is a review of the board's decision.Held: The erven and the hotel were physically inseparable, and the fact that Atholl owned the business rights but not the erven themselves was immaterial for the purposes of determining the applicable rates. It was up to the municipality to decide whether it wished to (1) assign values to rights such as leases and impose rates on them; or (2) value the property including the structures built on it, and impose rates on the property as a whole regardless of whether rights in it had been dispensed with. The municipality I preferred the latter method and the valuer committed no error in following it. The board, which had wide powers on appeal and could consider thematter de novo, likewise committed no reviewable error of law in focusing instead on the leases. But the board's failure to identify the criteria it used to attach values to the leases rendered its decision unreasonable and reviewable. Had the board focused, as it should have, on the value of the erven and the buildings on them, it would have arrived at an assessment that was fair to all concerned. Also, Atholl's argument that the leases should be valued separately because they reduced the market value of the erven was fallacious. The hotel had substantially increased the value of the erven, and the leases, being private treaties between the owner and Atholl, could not be used to reduce this value to the detriment of the public purse. Matter referred back to the board for reconsideration.   MANOK FAMILY TRUST v BLUE HORISON INVESTMENTS 10 (PTY) LTD AND OTHERS 2014 (5) SA 503 (SCA)  Land — Land reform — Restitution — Claim for restitution of right in land — Regional commissioner reopening investigation after rejecting land claim because criteria for acceptance not met — Not empowered by Act to do so — Initial decision therefore final and commissioner thereafter functus officio — Restitution of Land Rights Act 22 of 1994, s 11(4). The regional land claims commissioner rejected a claim lodged by the Manok family for the restoration of a right in a particular farm in terms of s 11(4) of the Restitution of Land Rights Act 22 of 1994 (the Act) — the grounds being that the acceptance criteria set out in s 11(1) of the Act had not been met. After being approached by a representative of the family and after involvement of the provincial government, the claims process was revived. The first and second respondents approached the Land Claims Court seeking an order setting aside the reinstatement and ancillary relief. The court found in their favour holding that the commissioner, having initially decided to reject the claim, was functus officio, and consequently could not reverse his initial

decision. The family took the matter on appeal to the Supreme Court of Appeal questioning, inter alia, the interpretation of the relevant provisions of the Act.Held: The regional commissioner had the power, conferred by the Act (s 11A), to change his or her original decision that the criteria set out in s 11(1) had been met. But the Act made no provision for a reversal of a decision taken in terms of s 11(4) that the criteria set out in paras (a), (b) and (c) of s 11(1) had not been met, thereby, in effect, declining to process the claim any further. In the absence of such a provision, the decision, though not a dismissal of a claim, was final. The commissioner was therefore functus officio and could not reverse or ignore the decision he had already made. Appeal dismissed. THUKWANE v LAW SOCIETY, NORTHERN PROVINCES 2014 (5) SA 513 (GP)  Attorney — Articles of clerkship — Registration — Fitness — Law Society's discretion — Standard to be applied — Law Society to consider fitness of applicant on usual grounds — Person convicted of murder and robbery inherently unfit — Law Society's refusal to register articles in order — Attorneys Act 53 of 1979, s 4(b).  The applicant sought the review of the Law Society's decision not to register his articles on the ground that he was not a 'fit and proper person'  because he had been convicted of murder, robbery and the illegal possession of a firearm, and was still on parole.Held: Since the purpose of the registration of articles was to allow an applicant to enter the attorneys' profession, the expression 'fit and proper' had to be given the meaning attributed to it in cases dealing with the admission, striking-off and readmission of attorneys. Hence the Law Society had to be convinced that the applicant possessed the characteristics of integrity, reliability and honesty required of attorneys. In casu the serious nature of the applicant's crimes militated against such a conclusion. Besides, the applicant had failed to show genuine and permanent reformation, which would be a minimum requirement for the registration of his articles. In the circumstances the Law Society's decision not to register the applicant's articles would be endorsed. Application dismissed.

AMDOCS SA JOINT ENTERPRISE (PTY) LTD v KWEZI TECHNOLOGIES (PTY) LTD 2014 (5) SA 532 (GJ)  Companies — Proceedings by and against — Derivative action — Shareholder's demand that company proceed — When court may set aside demand — Companies Act 71 of 2008, s 165(3). Section 165 of the Companies Act 71 of 2008 permits a shareholder to serve a demand on a company to commence or continue legal proceedings or to take related steps to protect the legal interests of the company. Section 165(3) provides that '(a) company that has been served with a demand may apply within 15 business days to a court to set aside the demand only on the grounds that it is frivolous, vexatious or without merit'. In issue was the interpretation of the section.Held: The words 'frivolous, vexatious or without merit' could not be read eiusdem generis but had to be given their ordinary meaning. A demand would be 'without merit' if the demanded proceeding was so bad in law or so at odds with the facts that it could not succeed. The onus was on the applicant company to clearly show this. As for the court hearing the application, it had to consider the essence of the

demand, and ask whether on the evidence the company 'might conceivably' succeed in the demanded proceedings. The rules governing final relief on motion applied. (In this instance the demand made by K on company A had to be set aside: the demand was so at odds with the facts as to render it without merit. HARERIMANA v CHAIRPERSON, REFUGEE APPEAL BOARD AND OTHERS 2014 (5) SA 550 (WCC) 

Administrative law — Administrative action — Review — Discretion of court — Remedies — Substitution — Whether present case exceptional one in which court may substitute administrator's decision with its own — Administrator opposing review of its decision — Opposition creating appearance of H bias — Unfair to remit matter to it — Promotion of Administrative Justice Act 3 of 2000, s 8(1)(c)(ii).Immigration — Refugee — Refugee Appeal Board — Review — Board opposing review of its decision — Board's opposition creating appearance of bias — Consequently unfair to remit matter to it — Court substituting its own decision for that of Board — Refugees Act 130 of 1998. In issue was whether this was an 'exceptional case' justifying a court substituting its own decision for that of the Refugee Appeal Board. Section 8(1)(c)(ii)(aa) of the Promotion of Administrative Justice Act 3 of J 2000 provides that in proceedings for judicial review the court may grant any order that is just and equitable, including an order setting aside the administrative action and (in exceptional cases) substituting the administrative action.The facts were that H's application for asylum was rejected by a Refugee Status Determination Officer. H appealed to the Refugee Appeal Board, which eventually dismissed the appeal. H then applied to a high court to review and set aside the Board's decision. Held, that the Board had been inquorate at the time of the appeal hearing and that this invalidated its later decision which had to be set aside. Held, further, that this was an exceptional case justifying substitution of the Board's decision. It was exceptional because the Board had actively opposed H's review application and this made it appear to be biased. Given this, it would be unfair to remit the matter to it. The court accordingly substituted its own decision for that of the Board, declaring H to be a refugee within the meaning of the Refugees Act 130 of 1998. ROYAL SECHABA HOLDINGS (PTY) LTD v COOTE AND ANOTHER 2014 (5) SA 562 (SCA)  Estoppel — Res judicata — Issue estoppel — Requirements — Same party — Requirement may be dispensed with in appropriate circumstances. Mr Jones worked for Royal Sechaba Holdings (Pty) Ltd on a commission basis. Mr Coote and Mr Engelbrecht were directors of Royal Sechaba who authorised the payments of commission to Jones. Ultimately a controversy developed around the payments and Jones, Coote and Engelbrecht were dismissed. Royal Sechaba and Jones then went to arbitration, with Royal Sechaba claiming back from Jones

commission it alleged he was not entitled to. In the end Royal Sechaba was unsuccessful.Some time thereafter Royal Sechaba instituted an action against Coote and Engelbrecht in the high court alleging they had breached their fiduciary duties to it in making certain of the payments to Jones and claiming damages. Coote and Engelbrecht raised the special plea of res judicata in the form of issue estoppel, which was upheld by the high court, which dismissed Royal Sechaba's claim. Royal Sechaba appealed to the Supreme Court of Appeal.The Supreme Court of Appeal reiterated the requirements of a successful plea of res judicata: that there had to be the same cause of action, the same relief and the same parties in the first and second proceedings. It also reiterated that in appropriate circumstances the plea could be upheld where the cause and relief were dissimilar, but where there was a common issue of fact or law J (the form of the plea known as issue estoppel). The court added that in appropriate circumstances the requirement that the parties had to be the A same could also be dispensed with. Turning to the facts, it concluded that neither the parties nor the issues were the same in the action and the arbitration, and it dismissed the appeal and remitted the matter to the high court for adjudication. DA SILVA v ROAD ACCIDENT FUND AND ANOTHER 2014 (5) SA 573 (CC)  Motor-vehicle accident — Compensation — Claim against Road Accident H Fund — Exclusions — Exclusion of claim where passenger member of driver's household or owing duty of support — Since repealed but still applying to claims arising before effective date — Constitutionality — As spouses and children most likely to be excluded from Act's protection differentiation amounting to unfair discrimination on basis of marital status and age — High court order invalidating provision confirmed — Pending claims to be I subject to transitional provisions — Road Accident Fund Act 56 of 1996 (prior to amendment), s 19(b)(ii). Ms Da Silva was severely injured in a collision while a passenger in a motor vehicle driven by her husband. It was common cause that the sole cause of the accident was a collision with a horse. Her claim for damages from the Road Accident Fund (RAF) was precluded by s 19(b)(ii) of the old Act. The effect of the provision was to exclude claims where a passenger was a member of the driver's household or owed the driver a duty of support. Although since repealed, the section still applied to all claims — as in the case of Da Silva — where the cause of action arose before the effective date (1 August 2008). Da Silva challenged the constitutionality of the provision on grounds that it violated her right to equality. The RAF and the minister did not object to the order sought. The Free State High Court upheld her challenge declaring the section inconsistent with the Constitution and invalid. On application to the Constitutional Court for confirmation —Held: The provision differentiated between categories of people, namely those who stood in a close familial relationship with the driver and those who did not. Spouses and children were the most likely to be excluded from the Act's protection and this amounted to indirect discrimination on the basis of marital status and age. As this discrimination was on grounds listed in s 9(3) of the Constitution, it was presumptively unfair. Neither the RAF nor the minister had sought to rebut this and there was nothing further to justify any rebuttal. High court order confirmed. As to the question of remedy: The order was not one of unlimited retrospectivity — it restricted

claims to those that were pending and had not yet prescribed. Those claims would be subject to the provisions of the Transitional Act.  KHUMALO AND ANOTHER v MEC FOR EDUCATION, KWAZULU-NATAL 2014 (5) SA 579 (CC)  Constitutional law — Duties of state — Efficient and accountable public administration — Functionaries obliged to investigate alleged irregularities in C exercise of public power and correct any unlawfulness 'diligently and without delay' — Constitution, ss 195(1)(f), 195(1)(g) and 237; Public Service Act, Proc 103 of 1994, s 5(7)(a).Review — Grounds — Legality — Delay in applying — Effect — Discretion of court to refuse application brought after undue delay — Such discretion to be exercised mindful of constitutional obligation of functionaries to challenge unlawful exercise of public power — Court should therefore be slow to refuse application by reason of delay in applying — Constitution, ss 195(1)(f) and 195(1)(g).Review — Grounds — Legality — Delay in applying — Effect — Discretion of court to refuse application brought after undue delay — What constitutes undue delay — Factual enquiry in which all relevant circumstances considered — Where, as in present case, delay significant and reason for delay unexplained, delay unreasonable and undue.Review — Grounds — Legality — Delay in applying — Effect — Discretion of court to allow application in spite of undue delay — Factors to be considered — Potential prejudice to parties affected by overlooking undue delay — Mitigated by court being able to make 'just and equitable' order instead of setting aside unlawful decision — Constitution, s 172(1)(b).Review — Grounds — Legality — Delay in applying — Effect — Discretion of court to entertain application in spite of undue delay — Factors to be considered — Nature of claim — Condoning delay not warranted where, as in present case, delay constraining court's ability to determine lawfulness of challenge. The MEC for Education, KwaZulu-Natal, successfully challenged her own department's decisions to promote the first appellant and to give the second H appellant a 'protected promotion'. This in labour court proceedings launched in October 2008, some 20 months after a recommendation to do so by a task team which had been set up to investigate complaints of irregularities in her department's appointment processes. At no stage — not in the labour court proceedings, nor in the subsequent unsuccessful appeal in the Labour Appeal Court (LAC), nor in the applications for leave to appeal that were denied by the LAC and the Supreme Court of Appeal — did the MEC offer an explanation for the delay.The Constitutional Court granted leave to appeal and identified the issues in the appeal as the legal nature of the MEC's challenge to the impugned decisions; whether there was duty on a state functionary in the MEC's position to rectify unlawfulness committed under his or her authority; and whether the court should review the promotions notwithstanding the MEC's delay in bringing the application, and if so whether the promotions were lawful. As to the nature of the application, it held that it was one for judicial review of the decisions under the principle of legality, sought in terms of s 158(1)(h) of the Labour Relations Act 66 of 1995. As to remaining issues,

Held: Public functionaries in the position of the MEC were duty-bound to investigate and rectify irregularities brought to their attention. This must be seen as discharging their constitutional and statutory obligations (under ss 1(c), 7(2) and 195(f) – (g) of the Constitution and s 5(7)(a) of the Public Service Act, Proc 103 of 1994 (the PSA)) to ensure lawfulness, account- ability and transparency in their departments. It was well established that a legality review must be initiated without undue delay, failing which the courts had a discretion to refuse the application or to overlook the undue delay. This discretion was not open-ended but had to be informed by constitutional values which committed public functionaries to uphold the rule of law and to redress unlawful decisions. Courts should therefore be slow in allowing procedural obstacles to prevent them from looking into a challenge to the lawfulness of an exercise of public power. But the Constitution did not dispense with the basic procedural requirement that a review must be initiated without undue delay or with the court's discretion. Section 237 of the Constitution (by providing that 'all constitutional obligations must be performed diligently and without delay') elevated expeditious and diligent compliance with constitutional duties to an obligation, and thus a requirement of legality. Whether a delay was undue or unreasonable was a factual enquiry upon which a value judgment had to be made with due regard to all the relevant circumstances. Considering the typically short time frames for challenges to decisions in the context of labour law, the MEC's delay was significant in itself. Furthermore, in the absence of any explanation, the delay was unreasonable. While a court had to consider the potential prejudice to an affected party were it to exercise its discretion to overlook an undue delay, the remedial powers in terms of s 172(1)(b) of the Constitution allowed it to regulate any possible unjust consequences by granting a 'just and equitable' order. The nature of the impugned decision and the strength of the merits were additional considerations in overlooking an unreasonable delay. Where, as in this instance, the delay constrained the ability of the court to determine the lawfulness of the decision accurately, condoning the delay was not warranted. COMAIR LTD v MINISTER FOR PUBLIC ENTERPRISES AND OTHERS 2014 (5) SA 608 (GP)  Review — Procedure — Record on review — Production — Duty of disclosure — Extent of record — Claim of confidentiality — All documents considered by decision-maker, as well as its deliberations, part of record and to be disclosed unless privileged — Confidentiality not conferring privilege — Uniform Rules of Court, rule 53(1)(b). Rule 53, which governs procedure in reviews, states in para (1)(b) that applicants shall call on the decision-maker to produce the record of the proceedings they want reviewed.Comair, an airline and competitor of South African Airways (SAA) (the fifth respondent), sought the review and setting-aside of the Minister for Public Enterprises' decision to provide SAA with a R5 billion loan guarantee. The minister, in response to Comair's call for the record of the proceedings, produced, inter alia, severely redacted minutes of meetings held between SAA, the Department of Public Enterprises and the treasury. The minister claimed that the contents of the minutes contained sensitive financial information that was confidential to SAA and therefore privileged.

Comair launched an interlocutory application to compel the minister to produce the complete minutes. Comair argued that it was apparent from their unredacted headings that the minutes were highly relevant to the review and that confidentiality was not a sound basis for the non-disclosure of part of the record, particularly in the light of its undertaking that they would only be disclosed to its legal representatives and independent experts. Comair also argued that confidentiality, if it existed at all, had to yield to the public interest in the disclosure of the minutes.Held: The purpose of rule 53 was to enable applicants and the review court to assess whether the decision-maker had acted lawfully when it made its decision. Hence the record on review included all documents that were before the decision-maker when it made its decision, as well as its deliberations. Confidentiality did not by itself confer any privilege against disclosure, and the minister's invocation of confidentiality defeated the J abovementioned purpose of rule 53. The redacted minutes would place both the review court and Comair at a disadvantage by denying them access A to material information the minister had before him when he made his decision. Public interest demanded that the truth be discovered. Moreover, the minister never refuted Comair's compelling arguments as to the relevance of the redacted minutes. Finally, Comair's undertaking to protect the confidentiality of the minutes meant that the minister's fears in regard to possible prejudice to SAA were unfounded. The minister would accordingly be compelled to make the unredacted minutes available for the limited disclosure applied for by Comair.SACR OCTOBER 2014

NGQUKUMBA v MINISTER OF SAFETY AND SECURITY AND OTHERS 2014 (2) SACR 325 (CC)Traffic offences — Possession, without lawful cause, of vehicle bearing falsified or mutilated engine or chassis number — Possible to possess such vehicle with 'lawful cause' — Vehicle unlawfully seized by police to be returned before enquiry into lawfulness of possession may be held — So ordered — National Road Traffic Act 93 of 1996, ss 68(6)(b) and 89(1).Search and seizure — Unlawful seizure — Return of — Police unlawfully seizing motor vehicle with falsified or mutilated engine or chassis number  — Possible to possess such vehicle with 'lawful cause' — Order for return of vehicle pending enquiry into facts surrounding possession competent — National Road Traffic Act 93 of 1996, ss 68(6)(b) and 89(1).

Section 68(6)(b) of the National Road Traffic Act 93 of 1996 (the Act) prohibits E the possession 'without lawful cause' of a motor vehicle of which the engine or chassis number has been falsified or mutilated, and under s 89(1) it is an offence to contravene or not to comply with any 'direction, condition, demand, determination, requirement, term or request' under the Act. The Supreme Court of Appeal had held that these sections of the Act precluded an order in spoliation proceedings for the restoration of possession of such motor vehicle when, as in the present case, it was unlawfully seized by the police. In an application for leave to appeal and an appeal against that decision, the Constitutional Court —Held: The premise of the SCA's finding that possession of a tampered-with vehicle would always be unlawful was wrong because it was possible to have a 'lawful cause' for the possession of such a vehicle. In casu appellant's possession of the vehicle pursuant to its return in terms of a court order would only be unlawful if it

were established that he did not have lawful cause to possess it, but since an enquiry into the facts surrounding the applicant's possession could not be held in spoliation proceedings, the police first had to restore possession. So ordered.

DIRECTOR OF PUBLIC PROSECUTIONS, NORTH GAUTENG: PRETORIA v GCWALA AND OTHERS 2014 (2) SACR 337 (SCA) Sentence — Imposition of — Factors to be taken into account — Period spent in prison awaiting trial — Quantification of — Court should consider in all cases whether period of imprisonment proposed was proportionate to crime committed, taking into account for that purpose period spent in custody — Doubling of period, especially given length of time spent in custody, could not be justified.Sentence — Imprisonment — Term of — Non-parole period — Should only be imposed where there were exceptional circumstances — None present in instant case. Murder — Sentence — Imposition of — Factors to be taken into account — Committed for reward — Deceased prominent member of community who fought corruption in area where it was rife — Accused having spent four years in prison awaiting trial — Sentence of effective 12 years' imprisonment inappropriate and replaced with sentence of 20 years' imprisonment.  The three respondents were convicted in a high court of murder and were sentenced to 12 years' imprisonment. The court directed that two years of the period spent in custody while awaiting trial had to be deducted when  calculating the date upon which the sentence was to expire for purposes of considering parole. The appellants were further sentenced to 10 years' direct imprisonment which was suspended for a period of five years. The state appealed against the sentences. The deceased was the mayor of a town and had cancelled tenders that had been awarded to one Mrs Lukhele. The latter was angered by the cancellation and arranged for the respondents to kill the deceased for reward. Mrs Lukhele was convicted in a separate trial  of murder and was sentenced to 20 years' imprisonment. Evidence was led at the trial of the respondents as to the deceased's standing in the community and the adverse consequences of her death for the community. The state contended that there were a number of misdirections committed by the court a quo that warranted the court on appeal substituting the sentences imposed with more severe sentences. The state contended that H the period of four years' imprisonment spent in custody awaiting trial had been calculated by the trial court as constituting eight years and that period was deducted from the 20 year period that the court considered would be an appropriate sentence for the appellants. The court had furthermore misdirected itself in effectively fixing a non-parole period of 10 years and that such period should only be set in exceptional circumstances and in the present case there were no such circumstances. Held, as regards the consideration of the time spent by an accused awaiting trial, that the sentencing court should consider in all cases whether the period of imprisonment proposed was proportionate to the crime committed, taking into account, for that purpose, the period spent in custody awaiting trial. The trial court in the present matter should have determined whether, in all the circumstances, the substantial and compelling circumstances shown to have existed, including the period spent in custody awaiting trial, justified it in imposing a sentence less than that prescribed by the legislature. The four years spent in custody prior to the trial by each of the respondents should have been taken into account as a factor warranting

deviation from the prescribed sentence. But the doubling of that period, especially given the length of the period spent in custody, could not be justified. The deduction of eight years of imprisonment from the number of years the trial court thought was warranted amounted to a misdirection warranting interference with the sentences imposed. Held, further, non-parole orders should be made only in exceptional circumstances and in the present case there were no exceptional circumstances and the court should accordingly not have made the order that it made. Held, further, that the trial court had failed to consider all factors that had to be weighed in the balance to determine whether the sentence that it imposed was appropriate in all the circumstances and it had misdirected itself in relation to the computation of the period spent in custody awaiting trial to be taken into account when determining that the prescribed minimum sentence should not be imposed. It had imposed sentences that were far too lenient in all the circumstances. The very factors that the trial court referred to in sentencing the respondents as aggravating, namely that they had been motivated by financial greed; that violence in the community was politically motivated and endemic; that the deceased was murdered precisely because she was fighting against corruption; and that they showed no remorse, indicated that the sentences imposed were inappropriate. In the circumstances the court was at large to interfere. The court replaced the sentences with sentences of 20 years' imprisonment.

VAN HEERDEN v MINISTER VAN VEILIGHEID EN SEKURITEIT EN 'N ANDER 2014 (2) SACR 346 (NCK) Prosecuting authority — Prosecutor — Liability of — Exemption from where acts in good faith — Attitude and intention with which deed committed important in determining question whether acted in good faith — Could be no question of good faith where there was animus iniuriandi — National Prosecuting Authority Act 32 of 1998, s 42. The plaintiff instituted action against the Minister of Safety and Security and the  National Director of Public Prosecutions for damages for malicious prosecution and malicious, alternatively unlawful, arrest. The plaintiff was a captain in the South African Police Services and the station commander of the Delportshoop Police Station. A police task team was set up to investigate allegations that certain mineworkers employed by one Mr Visser had been assaulted by Visser and that the police had neglected to investigate the allegations. Amongst others at other police stations, the task team investigated two police dockets at the Delportshoop Police Station concerning assaults on two complainants. The office of the DPP issued an order that the plaintiff be prosecuted on a charge of statutory perjury and of defeating the ends of justice. The two investigating officers obtained a warrant of arrest for the plaintiff and arrested him in accordance with the warrant. He was taken in a police vehicle to his own police station where his fingerprints were taken. He was then taken to the magistrates' court where he was released on bail of R100. Approximately a year later he was acquitted of the charges at his trial and discharged at the end of the state's case.

The court came to the conclusion that the plaintiff had not shown on a balance of probabilities that the first defendant had instigated the prosecution and therefore it could not be held liable for the claim of malicious prosecution. Similarly, there was no evidence that the second defendant had anything to do with the decision to arrest the plaintiff and he could accordingly not be held liable in this regard. As regards the second defendant, the court held that the fact that the docket I lacked an affidavit that would have been crucial to a successful prosecution of the plaintiff, made it clear that there was no reasonable and probable cause to prosecute the plaintiff. The court held further that the concept 'in good faith' in s 42 of the National Prosecuting Authority Act 32 of 1998, that granted an exemption from liability for prosecutors, necessarily embraced a subjective element. The attitude and intention with which the relevant act was committed were, of necessity, important in determining the question whether the relevant prosecutor had acted in good faith. There could be no question of good faith where there was animus iniuriandi, in other words, where the prosecutor intended thereby to harm the person's dignity or to prejudice him financially or foresaw that his actions could result in that and realised or foresaw that the action was unlawful as there was no reasonable and probable cause for the action. There was no justification for reading into s 42 a strong presumption of good faith on the part of the prosecutor that could not easily be rebutted. As regards the arrest, the decision to bring the plaintiff before court by way of an arrest (with the resultant embarrassment that it held for him as a well-known police officer and leader) was unreasonable in the sense that it was beyond the range of responses open to a reasonable decision-maker. The decision was arbitrary, irrational and had not been made in good faith. It was common cause that normally, when police officials were charged with less serious offences, they were brought before the court by way of summons. The first defendant was accordingly liable for the damages arising from the arrest.  S v MDAKA 2014 (2) SACR 393 (KZP) Robbery — Aggravating circumstances — What constitutes — Dangerous weapon — Test for is both objective and subjective — Accused using large stone which complainants believed was firearm — Correctly convicted of robbery with aggravating circumstances. The appellant was convicted in a regional magistrates' court of two counts of rape, three counts of robbery with aggravating circumstances and one of theft and was sentenced to 45 years' imprisonment. On appeal it was contended on his behalf that the conviction for robbery should have been for robbery simpliciter as the object he had used, namely a stone, was not a dangerous weapon. It appeared that the complainants had believed that the appellant had a firearm in his hand and he had acted as if he were drawing a firearm from his hip. It was clear that the weapon was in fact a large stone and that he had hit one of the complainants on the head with it.Held, that there could be no doubt that the weapon, objectively viewed, was a weapon of dangerous proportions and one that could inflict serious bodily harm. The complainants, however, had believed that it was an object that  appellant could use to harm them if they did not cooperate and, pursuant to his threats, they had handed

him their belongings. They only discovered afterwards that in truth it was a large stone. Given these circumstances, the magistrate had correctly convicted the appellant of robbery with aggravating circumstances.

S v HLONGWANE 2014 (2) SACR 397 (GP) Robbery — Aggravating circumstances — What constitutes — Expression  'wielding a firearm' in definition of 'aggravating circumstances' in s 1 of Criminal Procedure Act 51 of 1977 not attempt by legislature to interfere with established scope of other subprovisions — Word 'wielding' not to be interpreted to exclude every other action involving weapon from amounting to threat for purposes of subpara (iii) of definition or be interpreted restrictively within confines of subparagraph — 'Wielding', however, to be interpreted restrictively within paragraph as whole —  Something more than mere possession or holding required. The appellant appealed against his conviction and sentence of 15 years' imprisonment for robbery with aggravating circumstances. The evidence at the trial was to the effect that the appellant and a co-accused confronted two women and demanded their cellphones. During the course of the robbery the co-accused produced a knife. The co-accused, however, was acquitted as the state was unable to prove that he was the person involved in the robbery. At issue in the appeal was whether the evidence of the production of a knife by the appellant's co-accused during the course of the robbery was sufficient to satisfy the requirements of 'aggravating circumstances' for the purposes of the Criminal Procedure Act 51 of 1977; whether the appellant was an accomplice; and, if so, whether the definition of 'accomplice' was unconstitutional in that aggravating circumstances would be found in respect of the appellant without the state having to prove intention and where he had not produced any weapon.Held, that the introduction of the term 'wielding a firearm' in the definition of 'aggravating circumstances' in s 1 of the Criminal Procedure Act could not C be regarded as an attempt by the legislature to interfere with the already judicially defined scope of the other subprovisions. It should rather be construed as a readily discernible collateral ground to that of threatening to inflict the requisite degree of harm. For this reason and also to avoid inconsistency or absurdity the word 'wielding' should not be interpreted to exclude every other action involving the weapon from amounting to a threat for the purposes of subpara (iii) of the definition or be interpreted restrictively within the confines of the subparagraph. Held, further, that the definition of the term 'wielding' should be restricted when considered within the context of the definition of 'aggravating circumstances' E as a whole, and the prejudicial consequences to the accused of such a finding particularly by reference to the minimum sentencing policy under s 51 of the Criminal Procedure Act. The word 'wielding' had its standard dictionary meaning which required more than just possession or holding. Held, further, that the drawing of the knife during the course of a robbery where cellphones were demanded, as had been found by the trial court, constituted in the circumstances a threat to inflict grievous bodily harm within the meaning of subparagraph (iii) of the definition of 'aggravating circumstances'. Held, further, as to the applicability of aggravating circumstances, that it was evident on the facts that the appellant readily met the requirements of a co-perpetrator to the crime of robbery since an agreement that they together would rob the two women

could be inferred. Moreover he at all times had continued to associate with his co-perpetrator when the knife was drawn and after, rendering him at the very least vicariously liable.Held, further, that the provision was not unconstitutional as the accused was not deprived of his right to address the issue of culpability, whether in relation to the existence of substantial and compelling circumstances or when otherwise considering the triad of sentencing factors by demonstrating that he lacked intent with regard to the actus reus which constituted the aggravating circumstances. Held, further, that since the present case preceded the decision of the Constitutional I Court in Minister of Justice and Constitutional Development v Masingili 2013 JDR 2680 (CC) ([2013] ZACC 41), that provided clarity in this regard, it was understandable that the trial court would not have been aware that the issue of dolus in regard to culpability for the production of the knife by the associate was a factor relevant to sentencing and could result in finding the existence of substantial and compelling circumstances, that  justified a reduction in the minimum prescribed sentence. For this reason the matter had to be remitted to the court a quo to give the appellant an A opportunity to present such further evidence as may be considered relevant to inform the court on an appropriate sentence.

S v IMADOR 2014 (2) SACR 411 (WCC)Prevention of crime — Offences — Contraventions of s 4 of Prevention of  Organised Crime Act 121 of 1998 — Money-laundering — Proof that moneys were proceeds of crime — State can either prove moneys derived from conduct of specific kind which was unlawful or by evidence of circumstances in which moneys were handled that gave rise to irresistible inference that they could only be derived from crime. Prevention of crime — Prevention of Organised Crime Act 121 of 1998 — Contravention of s 4 — Money-laundering — Sentence — Appellant persuading bank teller to use his personal account to launder money for large reward — Bank teller sentenced to three years' imprisonment — Trial court incorrectly ignoring principle of consistency and sentenced appellant to five years' imprisonment — Sentence reduced on appeal.  The appellant was convicted in a regional magistrates' court of money-laundering in contravention of s 4 of the Prevention of Organised Crime Act 121 of 1998 and sentenced to five years' imprisonment. It appeared from the evidence that the appellant had approached a bank teller to use his bank account to receive a sum of R789 000 and in return for which he would give the bank teller a reward of R100 000. The transaction took place and the bank teller subsequently withdrew various amounts for the appellant and was ultimately rewarded with the sum of R180 000. The court questioned on an appeal against the conviction and sentence whether it was incumbent upon the state to identify and prove the exact nature of the alleged unlawful activity which had given rise to the proceeds of crime in the present case.Held, that there were two ways in which the state could prove that the moneys derived from crime, namely by showing that they derived from conduct of a specific kind and that conduct of that kind was unlawful, or by evidence of the circumstances in which the moneys were handled, which were such as to give rise to the irresistible inference that they could only be derived from crime. The evidence of the

circumstances in the present case, including the accused's mendacity, was such as to give rise to the irresistible inference that the appellant knew that the moneys in question had been derived from an unlawful activity Held, further, as regards sentence, that the magistrate had failed to give weight to the principle of consistency as the bank teller had been sentenced to only H three years' imprisonment and, on the face of it, the appellant's criminal conduct did not differ substantially from that of the bank teller. Having regard to all the circumstances, a sentence of three years' imprisonment would be appropriate for the appellant.

S v KIRSCH 2014 (2) SACR 419 (WCC)  Review — In what cases — Recusal of presiding officer — Discovered after evidence led that state witness was friend of presiding officer — High court entitled to exercise its inherent jurisdiction to review matter and set aside proceedings — Constitution, s 173. During the course of a criminal trial in a magistrates' court it appeared, whilst the evidence of the first state witness was being led, that the state would call a witness who was a friend of the presiding magistrate and in addition the witness's secretary was the magistrate's neighbour. The magistrate adjourned the proceedings to consider her position and formed the view that the accused might have a suspicion of bias if she convicted him. She informed the parties of the need for her to recuse herself and referred the matter to the court for the proceedings to be set aside and for an order that the trial had to continue de novo before another magistrate.Held, that the court was allowed in the present case, where there was no formal application in terms of rule 53 of the Uniform Rules of Court, in terms of its inherent power under s 173 of the Constitution, to review the proceedings in the interests of justice. The proceedings were accordingly set aside and the case remitted to the court a quo to be heard by another magistrate.

S v MAGANO 2014 (2) SACR 423 (GP)  Sentence — Life imprisonment — Imposition of — Passing of imprisonment requires presence of sufficient information to enable court to produce informed and balanced sentence — Failure to request pre-sentencing report or to give counsel sufficient opportunity to address court on mitigation was misdirection. The appellant, an unmarried father of two children, was 32 years old when he was convicted of raping a 12-year-old girl. At the time when he was sentenced in the high court (in 2002) there was no information before the court whether the complainant had been injured and if so the extent of her injuries. Similarly, there was no information about the appellant other than that of his age, status and the fact that he was sometimes employed as a police informer. The court nonetheless sentenced him to life imprisonment. On appeal, Held, that the passing of a sentence of life imprisonment required the presence of enough information to enable the sentencing court to produce an informed and balanced sentence. To proceed and sentence the appellant to a term of life

imprisonment with only the information that the court had, amounted to misdirection and the court was accordingly at large to consider the sentence afresh. A Held, further, that in the circumstances a sentence of 20 years' imprisonment, backdated to the date on which the original sentence was passed, would be appropriate.

ALL SA LAW REPORTS OCTOBER 2014

PART ONE

Body Corporate of “The Avenues” v Hurwitz NO and another [2014] 4 All SA 1 (SCA)Sectional title – Right of extension of scheme – Competing claims by body corporate and developers of scheme – Where developers do not reserve right to extend scheme in the application for the registration of a sectional plan, then in terms of section 25(6) of the Sectional Titles Act 95 of 1986, the right to extend the scheme vests in the body corporate – Body corporate needs written consent of all its members and the mortgagee of each unit in the scheme for exercise of its right to extend, but members or mortgagees not entitled to withhold approval without good cause in law.

The right to extend a sectional title scheme was contested by the appellant (as the body corporate of the scheme) and the respondents (as developers of the scheme). The appellant, accordingly, launched an application before the High Court against the developers in which orders were sought declaring that the right to extend the scheme vested in it and that the developers’ consent to the extension of the scheme was not required. An additional order sought was to direct the developers to dispose of certain sections in the scheme registered in their names. The application was dismissed with costs, the court finding that the provisions of rule 77 of the rules of the scheme (as adopted by the body corporate and registered with the Registrar of Deeds in terms of section 5(3)(f)  of the Sectional Titles Act 66 of 1971) were binding upon the body corporate and the developers accordingly were the sole holders of rights of extension. That gave rise to the present appeal.

In April 2005, the body corporate had entered into an agreement with a third party for the sale to that person of a portion of the body corporate’s alleged right of extension in the scheme. The sale was subject to the suspensive condition that the body corporate obtain the written consent of all its members and existing bond holders to the sale in terms of section 25(6) of the Sectional Titles Act 95 of 1986 (“the 1986 Act”). The developers, as members of the body corporate, declined to furnish their consent to the sale. In their answering affidavit they stated that there was no obligation on them to do so, nor to give reasons for their refusal. It was clear, however, that their refusal to grant consent was based upon their contention that they possessed the right to extend the scheme.

Held – The 1971 Act was repealed by the 1986 Act with effect from 1 June 1988. Under the 1971 Act, a developer could acquire a right of extension provided the developer satisfied the requirements of section 18(1). However, in terms of section 25(1) of the 1986 Act, a developer has to reserve this right in the application for the registration of a sectional plan. The reservation has to be effected by way of a registered condition imposed by the developer in terms of section 11(2) at the time of

registration of the sectional title register. If the developer makes no such reservation, or such right has lapsed, then in terms of section 25(6) of the 1986 Act, the right to extend the scheme vests in the body corporate, which is entitled, subject to compliance with the requirements of section 25 to obtain a certificate of real right in respect of the right of extension. The body corporate may only exercise such right with the written consent of all its members and the mortgagee of each unit in the scheme. A member or a mortgagee is not entitled to withhold approval without good cause in law. Section 60(1)(b) of the 1986 Act preserved any right of extension acquired by a developer in terms of section 18 of the 1971 Act. while conceding that they had not acquired any right of extension under the 1971 Act, the respondents submitted that the rules of the body corporate had the status of a contract between the body corporate and its members, including the developers, and that rights conferred on the developers by the rules were accordingly binding on and enforceable as against the body corporate. It was contended further that section 60(4) of the 1986 Act preserved any rights arising from any agreement concluded before its commencement, and that the developers’ rights were accordingly explicitly preserved as the provisions of rule 77 were based upon an agreement concluded between the developers and the body corporate. The Court pointed out that the body corporate could not, by agreement with the developers, confer a right of extension of the scheme on the developers and thereby deprive individual owners of sections and holders of mortgage bonds of their statutory right to withhold their written consent. At the time of the agreement with the developers, the body corporate had not acquired any right of extension which it was thereby able to confer upon the developers in terms of that agreement. The court a quo, accordingly, erred in concluding that the developers possessed the right to extend the scheme in terms of rule 77.

The appeal was upheld with costs, and the order of the court  a quo was set aside and replaced with a declaration that no right of extension vested in the respondents; that all rights of extension in respect of the scheme vested in the appellant, that the consent of the respondents was not required for the exercise by the appellant of its rights; and the respondents were not entitled to have the relevant units registered in their names.

Plaaskem (Pty) Ltd v Nippon Africa Chemicals (Pty) Ltd [2014] 4 All SA 12 (SCA)

Contract – Duration of – Unspecified duration – Whether subject to tacit term that contract was terminable on reasonable notice – Matter of construction whether terminable on reasonable notice, having regard to the express terms of the contract and the surrounding circumstances – If the contract requires the parties to work closely together and to have mutual trust and confidence in each other, it is reasonable to infer that they did not intend to bind themselves indefinitely, but rather contemplated termination by either party on reasonable notice.

In February 2005, the parties entered into a written agreement. The issue was whether, as pleaded by the appellant, the contract contained a tacit term to the effect that it was terminable by either party on reasonable notice.

The High Court found that the contract did not have a tacit or implied term that the agreement was terminable on a reasonable notice. The purported notice of cancellation of the agreement by the appellant with effect from 30 June 2010, was thus held to have been invalid and of no effect. The appellant was held to be obliged

to render a statement and debatement of account to the respondent in respect of all sales it made in keeping with the agreement, for a stipulated period.

Held – It has been stated by the courts that the law regarding a contract of unspecified duration is a matter of construction of the agreement according to the ordinary principles of construction. Concern has been raised regarding the fact that parties could be bound in perpetuity. In the present case, having regard to the wording of the contract it was clear that there was no indication that the parties intended to be bound in perpetuity. The next enquiry concerned the intention of the parties, having regard to the nature of the relationship between the parties, as well as the surrounding circumstances. The Court noted that the contract required the parties to form and maintain a close working relationship with regular contact and interaction between them. It also covered a wide spectrum of products in respect of both existing and new products. It was, therefore, assumed that the nature of the relationship might change over time. That commercial reality strongly suggested an intention by the parties not to be and remain bound in perpetuity. Taking the surrounding circumstances into account and in view of the fact that the contract was silent as to its duration, it was necessary that a tacit term be imported. That term was that the contract could be terminated by either party on reasonable written notice.

The appeal was, accordingly, upheld.

Security Industry Alliance v Private Security Industry Regulatory Authority and others [2014] 4 All SA 21 (SCA)

Administrative law – Review of administrative action – Security industry regulatory authority – Promulgation of regulations for payment of fees by security companies – Amendment of regulations to increase fees – Validity of amendment to regulations challenged under Promotion of Administrative Justice Act 3 of 2000 – Where amendment based on material error of law, new regulations falling to be set aside.

The appellant applied to the High Court for the setting aside of an amendment to regulations promulgated by the third respondent. In terms of the regulations, security service providers in the security industry were required to pay increased levies.

The first respondent (“the Authority”) was established under the Private Security Industry Regulation Act 56 of 2001 (“the Act”) to regulate the private security industry. The Act repealed the Security Officers Act 92 of 1987  except for its provisions, including the regulations, relating to, inter alia, the deduction and payment of annual amounts. One of the saved provisions of the repealed legislation was section 18 which required every person registered as a security officer to pay an annual amount to the Security Officers’ Interim Board. The other relevant saved section, for present purposes, was section 32, which empowered the Board (now the “Authority”) to make regulations regarding prescribed matters. Regulation 9(3) and (4) make provision for the formulae to be applied for the determination of the prescribed amount contemplated in section 18(1) of the repealed legislation. The regulations were amended with effect from 1 December 2011. In terms of the amendment, the fees payable by a security business to the Authority were increased. The issue on appeal was the validity or otherwise of the decision of the first and third respondents (the “Authority” and the “Minister”) to make and publish the amendment to the regulations.

Two grounds of appeal raised by the appellant were focused on by the court. The first was that the consultation process leading to the promulgation of the new regulations was inadequate and therefore procedurally unfair, and the second was that the increases of the prescribed amounts were unreasonable and irrational. The appellant sought to review the decisions of the respondents in terms of the provisions of the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”).

Held – The decision of the Minister to publish the amendment to the regulations on the recommendation of the Authority constituted administrative action.

The appellant’s primary complaint was that the consultation process followed by the Authority was conducted in a mechanical and formalistic manner without properly considering the comments received. In publishing its draft amendment to the regulations and calling for, and receiving, comments and representations thereon, the Authority chose to follow the notice and comment procedure provided for in section 4(3) of PAJA to give effect to the requirement of procedurally fair administrative action. Section 4(3) requires an administrator to consider any comments received, and decide whether or not to take the administrative action, with or without changes. The primary question was whether the Authority and the Minister considered the comments received from interested parties and decided whether or not to proceed with the amendment to the regulations with or without changes as required by the section. It was found that comments received were considered, but in deciding to proceed with the amendment, the Authority accepted the Minister’s incorrect advice that current legislation did not permit it to classify businesses by size or income in order to arrive at differentiated fees, as submitted in the appellant’s comments. The Authority, therefore, committed an error of law. The question to be considered was whether the error of law was material. As the Minister’s decision was contaminated by incorrect facts, he could not be said to have taken a proper decision. The amendment to the regulations, accordingly, fell to be set aside.

The appeal was upheld and the order of the court below was set aside and replaced with an order in terms of which the application for the setting aside of the amendment to the regulations succeeded.

Zuma v Democratic Alliance and others [2014] 4 All SA 35 (SCA)

Civil procedure – Court order – Interpretation and enforcement of – Failure to comply with order requiring production by Acting National Director of Public Prosecutions of record of decision to discontinue prosecution – No specific claim of confidentiality by appellant despite opportunities to assert such claims – No case advanced by appellant to justify failure to comply with order, with the result that appeal was dismissed.

The appellant was the current president of South Africa, and the first respondent (“the DA”) was the official opposition in Parliament. In previous litigation (referred to in the judgment as “the first appeal”), the DA had applied to the High Court for the review and setting aside of the decision of the National Director of Public Prosecutions (“the NDPP”) to discontinue with the prosecution of the president. Thereafter, the DA required the office of the NDPP and the Head of the Directorate of Special Operations to deliver to the registrar of the High Court, in terms of rule 53(1) of the Uniform Rules of Court, the record on which the impugned decision was

based, which included representations made by the president as to why the prosecution should be discontinued. The court found in favour of the DA and ordered the Acting National Director of Public Prosecutions (“ANDPP”) to produce and lodge with the registrar of this Court the record of the decision excluding the written representations made on behalf of the president and any consequent memorandum or report prepared in response thereto, or oral representations, if the production thereof would breach any confidentiality attaching to the representations. The reduced record was to consist of the documents and materials relevant to the review, including the documents before the ANDPP when making the decision and any documents informing such decision.

A list of documents allegedly constituting the reduced record was supplied to the DA in May 2012, consisting of representations that the ANDPP received from the DA and others, attempting to persuade him not to discontinue the prosecution. The DA responded by requesting internal NPA memoranda, reports or minutes of meetings dealing with the contents of the recordings and/or the transcript itself, failing which it would take steps to compel compliance with the order in the first appeal. When that yielded no results, the DA approached the High Court for relief. The High Court ordered the president to comply with the order in the first appeal, and to provide the documents sought by the DA. That led to the present appeal.

The appeal concerned the interpretation and enforcement of the order made in the first appeal.

Held – Although it was contended for the president that the audio recordings were an integral part of the representations made by him and therefore fell within the confidentiality protection offered by the order in the first appeal, Counsel for the president could not identify within the record the factual foundation for that proposition. It was, therefore, conceded that the president had no case against the release by the ANDPP of the audio recordings, and a transcript thereof. The Court agreed that the audio recordings could not be said to reveal the president’s confidential representations.

The Court then turned to the second part of the order of the court below which related to documentation admittedly in the hands of the office of the NDPP. The present Court could detect no flaw in the reasoning of the court below, and there was no effective argument raised by the appellant in that regard.

The appeal was dismissed, and the first respondent was given five days within which to comply with the DA’s request.

Dladla and others v City of Johannesburg Metropolitan Municipality and another [2014] 4 All SA 51 (GJ)

Constitutional law – Housing – Provision by city of temporary accommodation – Constitutionality – Right to dignity and the right to privacy – Constitution of the Republic of South Africa, 1996 – Sections 10, 12 and 14 – Right to dignity obliges local authority to respect family unit when it is obliged by law or court order to supply homeless persons with temporary accommodation.

The applicants were relocated to a shelter pursuant to a Constitutional Court order which directed the first respondent to provide them with alternative accommodation.

The shelter’s rules included a requirement that the applicants vacate the shelter for the entire day, every day of the week, and return during the late afternoon. The shelter also had a policy to separate genders to the extent that it also disallowed spouses or permanent life partners from staying together. Incidental thereto, was the plight of mothers caring for their children during the day. The applicants’ case was that the limitations contained in the said rules were a violation of their constitutional rights as enshrined insections 10, 12 and 14 of the Constitution.

Held – Section 10 of the Constitution guarantees every person the right to inherent dignity and the right to have their dignity respected and protected. A central aspect of marriage is cohabitation, the right (and duty) to live together, and legislation that significantly impairs the ability of spouses to honour that obligation would also constitute a limitation of the right to dignity. The rules and the limited gender separation as referred to above had humiliating consequences in that they compromised and disrupted the family as a unit. The applicants were, therefore, entitled to a declaration that the splitting up of families by gender at the shelter was in violation of sections 10, 12 and 14 of the Constitution. In the absence of any legislative provision, there can be no justified limitation of the right of spouses (and life partners) to co-habit. Any infringement of that right is an infringement of the right to dignity and unconstitutional and falls to be struck down.

The daily lock-out rule also violated the residents’ rights to privacy and dignity. It resulted in residents being exposed to dangers inherent in street life and inhibited their freedom in material respects and thus infringed on their right to freedom, security and dignity.

The impugned rules were held to be unconstitutional, and an interdict was granted, preventing the respondents from enforcing the rules against the applicants.

Mogalakwena Local Municipality v Provincial Executive Council, Limpopo and others [2014] 4 All SA 67 (GP)

Civil procedure – Interim interdict – Requirements – Applicant must establish a prima facie right, a well-grounded apprehension of irreparable harm if the interim relief was not granted, an absence of any other satisfactory remedy and a balance of convenience in favour of the grant of interim relief.

Civil procedure – Urgency – Uniform Rules of Court – Rule 6(12) – Rule confers a general judicial discretion on a court to hear a matter urgently – Factors to be considered set out by court.

Constitutional law – Government – Provincial intervention in local government – Constitution of the Republic of South Africa, 1996 – Section 139 – Section provides that an assumption of responsibility by provincial government for obligations of local government is not competent unless a directive has first been issued.

Disunity amongst the councillors elected as members of the council of the applicant municipality led to the first respondent (“the province”) taking a decision to intervene in the government of the municipality by assuming responsibility for what the province asserted were certain executive obligations of the municipality under section 139(1)(b)of the Constitution as amended by section 4 of the Constitution Eleventh Amendment Act 3 of 2003. The municipality objected to the intrusion into its governmental competence and sought relief directed at staying the

implementation of the province’s decision pending a review of the decision in due course.

Held – Section 139 of the Constitution provides for provincial intervention in local government. Counsel were agreed that as it stood before its amendment, section 139(1)had to be interpreted to mean that an assumption of responsibility was not competent unless a directive had first been issued. Although the assumption of responsibility in the present case was not preceded by a directive in this case, the respondents submitted that the amendment to section 139 had changed the position and an intervention by the province under section 139(1)(b) was lawful even if it had not been preceded by a directive. The Court held in interpreting section 139(1) in its amended form, significant weight should be given to the policy of the Constitution to separate the powers of the three spheres of government applicable in this context. The power to intervene in the affairs of a municipality is most intrusive. As a result, the Court favoured an interpretation that would require the province to issue a directive in a case such as the present. Such an interpretation would promote the constitutional values of democracy and separation of powers. In the Court’s opinion, the municipality’s prospects of success on review were good.

The Court then considered the respondents’ submission that the matter was not urgent. The evaluation had to be undertaken by an analysis of the applicant’s case taken together with allegations by the respondent which the applicant did not dispute. Rule 6(12) confers a general judicial discretion on a court to hear a matter urgently. When urgency is in issue, the primary investigation should be to determine whether the applicant would be afforded substantial redress at a hearing in due course. If the applicant cannot establish prejudice in this sense, the application cannot be urgent. Once such prejudice is established, other factors come into consideration. These factors include (but are not limited to) whether the respondents can adequately present their cases in the time available between notice of the application to them and the actual hearing, other prejudice to the respondents and the administration of justice, the strength of the case made by the applicant and any delay by the applicant in asserting its rights. Applying those considerations, the Court was satisfied that the matter was urgent.

As the application was interim interdictory relief, the applicant had to establish a prima facie right, a well-grounded apprehension of irreparable harm if the interim relief was not granted and the ultimate relief was granted, an absence of any other satisfactory remedy and a balance of convenience in favour of the grant of interim relief. Where there were factual disputes, the facts set out by the applicant had to be taken together with any facts set out by the respondent which the applicant could not dispute and the court had to consider whether, having regard to the inherent probabilities, the applicant should on those facts obtain final relief. The applicant was found to have established all the requirements for the interim interdicts, and the application accordingly succeeded.

Murgatroyd v Van den Heever NO and others [2014] 4 All SA 89 (GJ)

Company law – Companies Act 71 of 2008 – Business rescue proceedings – Business rescue practitioner’s entitlement to reimbursement for expenses and disbursements – Whether the expenses were reasonably necessary to carry out the practitioner’s functions and facilitate the conduct of the company’s business rescue

proceedings as contemplated in subsections 143(1) and (6) and regulation 128(3) of the Companies Act – Question is a factual one which must be assessed on the facts and circumstances of each case with reference to factors such as the size of the company, the functionality of its management, the accuracy and currency of its financial and accounting data, the complexities involved and the scope of the work required to be undertaken by the business rescue practitioner.

In May 2012, a company (“Sanyati”) voluntarily commenced business rescue proceedings pursuant to a resolution of its board, and in June 2012, the applicant was appointed the company’s business rescue practitioner. The sixth to eighth respondents were appointed to assist the applicant in his duties. They rendered their services and invoiced the applicant. The company was then liquidated, and the liquidation order superseded the business rescue proceedings. The amounts owing to the sixth and eighth respondents were not paid. Although the sixth respondent’s claim was subsequently admitted, that of the eighth respondent was disputed on the basis that the claim did not relate to expenses incurred by the applicant to the extent reasonably necessary to carry out his functions qua practitioner and facilitate the conduct of Sanyati’s business rescue proceedings. The liquidators argued that a practitioner must himself perform his functions and he has no authority to delegate them to external professionals or persons.

Held – In accordance with the maxim delegatus non potest delegare, a business rescue practitioner may not delegate his powers unless authorised to do so, either expressly or by necessary implication. A practitioner has various other powers and duties in addition to those enumerated in section 140 of the Companies Act 71 of 2008. There is no indication in the Act that all the functions of a practitioner are required to be undertaken and discharged by the practitioner personally. His functions and duties are broad and require a variety of steps to be taken. The very nature of a practitioner’s powers implies that he may in appropriate circumstances appoint advisors, valuators, auctioneers, forensic accountants, lawyers and other experts or persons to assist him in the carrying out of his plenary functions. A practitioner, therefore, by necessary implication has the power to appoint advisors.

The test for a business rescue practitioner’s entitlement to reimbursement for expenses and disbursements is whether they were reasonably necessary to carry out the practitioner’s functions and facilitate the conduct of the company’s business rescue proceedings. The question is a factual one which must be assessed on the facts and circumstances of each case with reference to factors such as the size of the company, the functionality of its management, the accuracy and currency of its financial and accounting data, the complexities involved and the scope of the work required to be undertaken by the business rescue practitioner.

It was found that the applicant was entitled to full reimbursement for expenses incurred during the business rescue proceedings.

Phillips v Minister of Rural Development and Land Reform and another [2014] 4 All SA 100 (LCC)

Land – Restitution of land rights claim – Dispossession of right in land – Development Trust and Land Act 18 of 1936  – Alleged dispossession said to have

occurred when the properties were forcibly sold for incorporation into a homeland when the area in question was declared subject to occupation by Black people only – Court established that a deprivation of ownership prompted by a racial law is a forced sale and consequently a dispossession – If, but for the racial law, the seller would not have sold, then the sale was a forced sale.

In 1998, the plaintiff lodged a restitution of land rights claim in respect of two properties. He alleged that he had been dispossessed of rights in the land as a result of a past racially discriminatory law (the “Development Trust and Land Act 18 of 1936”), and that he did not receive just and equitable compensation. The alleged dispossession was said to have occurred when the properties were forcibly sold for incorporation into a homeland when the area in question was declared subject to occupation by Black people only.

Although conceding that the Development Trust and Land Act was a racially discriminatory law, the respondents argued that the sales of land were not dispossessions and that equitable compensation was paid with the result that the plaintiff was not entitled to restitution of rights.

Held – The first question to be decided was whether there had been a dispossession of land. The Court referred to extensive case law which established that a deprivation of ownership prompted by a racial law is a forced sale and consequently a dispossession. If, but for the racial law, the seller would not have sold, then the sale was a forced sale. The current case fell squarely into that category of cases. The plaintiff was, therefore, dispossessed of a right in land.

The issue of just and equitable compensation was postponed sine die.

S v Pedro [2014] 4 All SA 114 (WCC)

Criminal procedure – Criminal capacity – Observation of accused – Mental state – Criminal Procedure Act 51 of 1977 – Assessment and report in terms of section 79(1)(b)– Three psychiatrists, including a private psychiatrist, must be appointed when the case falls within section 79(1)(b) unless the court, upon application by the prosecutor, directs that a private psychiatrist need not be appointed, in which case there must be two psychiatrists – In casu, the prosecutor did not request the trial court to dispense with the appointment of a private psychiatrist – Court set aside the proceedings and remitted the case to the court a quo to be dealt with in accordance with the legal principles.

The accused was charged with culpable homicide on the ground that the accused’s negligent driving of a vehicle caused the death of a young child. He was referred for assessment and report in terms of section 79(1)(b) of the Criminal Procedure Act 51 of 1977. The report of two State psychiatrists concluded that the accused did not have the capacity to understand the proceedings as contemplated in section 77 of the Act and that at the time of committing the alleged offence he was incapable of appreciating the wrongfulness of the alleged offence and of acting accordingly. It was recommended that he be retained as a State patient. Consequently, the magistrate found the accused not guilty in terms of section 78(6)(a) and ordered, in terms of section 77(6)(a)(ii), that the accused be admitted to and detained in VBH as

if he were an involuntary mental healthcare user contemplated in section 37 of the Mental Health Care Act 17 of 2002.

The matter was referred to the present Court on the ground that the accused had never pleaded to the charge of culpable homicide and that a finding of not guilty should not have been made in terms of section 78(6)(a). The review judge was requested to set aside the acquittal but to confirm the order made in terms of section 77(6)(a)(ii).

The present Court requested oral arguments on whether the second psychiatrist on the assessment panel should have been a psychiatrist expressly appointed by the court for the accused; whether, in the absence of any request and direction to the contrary, the magistrate was required to appoint a private psychiatrist as a third psychiatrist on the panel; whether, in view of the finding of the psychiatrists that the accused was not fit to stand trial, the entering of a not guilty verdict was correct; and whether, given that the accused was charged with culpable homicide, the detention order should have been in terms of sub-paragraph (i) rather than subparagraph (ii) of section 77(6)(a).

Held – Three psychiatrists, including a private psychiatrist, must be appointed when the case falls within section 79(1)(b) unless the court, upon application by the prosecutor, directs that a private psychiatrist need not be appointed, in which case there must be two psychiatrists. In either event, the court may appoint a clinical psychologist. In the present case, the prosecutor did not request the trial court to dispense with the appointment of a private psychiatrist. A private psychiatrist should thus have been appointed by the court.

Finding that the relevant legislative provisions were not complied with in this case, the Court set out what the proper procedure would be, set aside the proceedings and remitted the case to the court a quo to be dealt with in accordance with the legal principles set out in this judgment.

PART TWO

National Director of Public Prosecutions and others v Freedom under Law [2014] 4 All SA 147 (SCA)

Administrative law – Judicial review – Powers of court – Order of court not only setting aside impugned decisions but issuing mandatory interdicts constituting inappropriate transgressions of the separation of powers doctrine – Doctrine precludes the courts from impermissibly assuming the functions that fall within the domain of the executive.

 Administrative law – Judicial review – Reviewability of a prosecutorial decision to discontinue a prosecution – Although decisions not to prosecute are in the same way as decisions to prosecute subject to judicial review, it does not extend to a review on the wider basis of the Promotion of Administrative Justice Act 3 of 2000, but is limited to grounds of legality and rationality.

 Words and phrases – “administrative action” – Promotion of Administrative Justice Act 3 of 2000 – Section 1 – Administrative action is any decision taken, or any failure

to take a decision, by a natural or juristic person when exercising a public power or performing a public function in terms of an empowering provision, which adversely affects the rights of any person and which has direct, external legal effect.

The first appellant was the National Director of Public Prosecutions (“NDPP”). The fourth appellant (“Mdluli”), who was a pivotal figure in the proceedings, held the office of National Divisional Commissioner: Crime Intelligence in the South African Police Service (“SAPS”), a position also described as Head of Crime Intelligence, since 1 July 2009.

The respondent was a not-for-profit public interest organisation involved in the promotion of democracy and the advancement of respect for the rule of law in the Southern African region.

In March 2011 Mdluli was arrested and charged with 18 criminal charges, including murder, intimidation, kidnapping, assault with intent to do grievous bodily harm and defeating the ends of justice. In November 2011, Mdluli’s legal representatives made representations to the second appellant (“Mrwebi”) in his capacity as Special DPP and head of the SCCU, seeking the withdrawal of the fraud and corruption charges. Mrwebi decided to withdraw these charges. Shortly thereafter, the Director of Public Prosecutions for South Gauteng decided to withdraw the murder and related charges as well.

Held – The NDPP, supported by Mdluli and Mrwebi, raised the issue of the reviewability of a prosecutorial decision to discontinue a prosecution. The domain of judicial review under the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”) is confined to “administrative action” as defined in section 1 of PAJA. The definition starts with the premise that “administrative action” is any decision taken, or any failure to take a decision, by a natural or juristic person when exercising a public power or performing a public function in terms of an empowering provision, which adversely affects the rights of any person and which has direct, external legal effect. As section 1(ff) of the definition excludes a decision to institute or continue a prosecution, the question in the present context was whether the exception extended to its converse as well, namely a decision not to prosecute or to discontinue a prosecution. The Court was of the view that it is necessary to focus on the policy considerations that underlie the exclusion of a decision to institute or continue to prosecute from the ambit of PAJA and to reflect on whether or not the same considerations of policy will apply to a decision not to prosecute or to discontinue a prosecution. Examining the authorities, the Court concluded that decisions to prosecute and not to prosecute are of the same genus and that, although on a purely textual interpretation the exclusion in section 1(ff) of PAJA is limited to the former, it must be understood to incorporate the latter as well. Although decisions not to prosecute are – in the same way as decisions to prosecute – subject to judicial review, it does not extend to a review on the wider basis of PAJA, but is limited to grounds of legality and rationality.

Where PAJA finds no application, the legality principle has now become well-established in our law as an alternative pathway to judicial review. The principle acts as a safety net to give the court some degree of control over action that does not qualify as administrative under PAJA, but nonetheless involves the exercise of public

power. It includes review on grounds of irrationality and on the basis that the decision-maker did not act in accordance with the empowering statute.

A further technical challenge by the NDPP was that the impugned decisions were not final, but only provisional. Section 6 of the Criminal Procedure Act 51 of 1977 draws a distinction between the withdrawal of criminal charges, before an accused person has pleaded in section 6(a), and the stopping of a prosecution after the accused person has pleaded, as contemplated in section 6(b). The latter section provides that where the prosecution is stopped the court is obliged to acquit the accused person, while a withdrawal in terms of section 6(a) does not have that consequence. A charge withdrawn under section 6(a) can therefore be reinstituted at any time. The NDPP argued that the withdrawal of charges was covered by section 6(a) and not by section 6(b), and that the decisions were only provisional and therefore not subject to review. The Court rejected the notion that a decision to withdraw a criminal charge in terms of section 6(a) can be described as provisional just because it can be reinstituted. The withdrawal of a charge in terms of section 6(a) is final. The prosecution can only be recommenced by a different, original decision to reinstitute the proceedings.

In challenging the decision to withdraw the fraud and corruption charges, the respondent contended that Mrwebi had failed to comply with the provisions of section 24(3)of the National Prosecuting Authority Act 32 of 1998 in that he did not take the decision to withdraw the charges in consultation with the DPP of the area of jurisdiction concerned as required by the section. The Court agreed that Mrwebi’s decision was not in accordance with the dictates of the empowering statute on which it was based, and that the decision could therefore not stand.

In respect of the decision to withdraw the murder and related charges, the respondent maintained that the decision was irrational. That contention was not substantiated in argument. The respondent’s real argument, which found favour with the court a quo was that the failure to proceed with the murder and related charges after the findings of an inquest became available, was irrational. The Court held that the earlier decision to withdraw the charges – which was the impugned decision – could not be set aside on the basis that a subsequent decision, taken in different circumstances, not to reinstate all or some of those charges, was not justified. To that extent, the appeal had to succeed. The NDPP did concede that some of the murder and related charges were bound to be reinstated, and the Court decided to incorporate the undertaking to take steps in that regard into its order.

The Court next turned to the decisions by the Commissioner of Police, to terminate the disciplinary proceedings against Mdluli and then to reinstate him to his position on 27 March 2012. Finding that the decisions were irregular, the Court set them aside under section 6 of PAJA.

On the issue of appropriate relief, the Court noted that the court a quo did not limit itself to the setting aside of the impugned decisions. In addition, it ordered the NDPP to reinstate all the charges against Mdluli and to ensure that the prosecution of these charges were enrolled and pursued without delay; and directed the Commissioner of Police to reinstate the disciplinary proceedings and to take all steps necessary for the prosecution and finalisation of the proceedings. The present Court agreed with the appellants that the mandatory interdicts were inappropriate transgressions of the separation of powers doctrine. The setting aside of the withdrawal of the criminal

charges and the disciplinary proceedings have the effect that the charges and the proceedings are automatically reinstated and it is for the executive authorities to deal with them. The court below went too far.

In all the circumstances, the appeal was partially successful.

Road Accident Fund v Faria [2014] 4 All SA 168 (SCA)

Civil procedure – Appeal – Mootness – Whether appeal should be dismissed for mootness in terms of section 16(2)(a)(i) of the Superior Courts Act 10 of 2013 as there was no longer any issue for determination between the parties – Where case raised an important question of law, in the full context of the matter, it could not be said that the appeal would have no practical effect or result.

Motor vehicle accidents – Claim for general damages – Compensation for injury – Road Accident Fund’s rejection of its own expert’s assessment that the claimant’s injury was a “serious injury” in terms of section 17(1) of the Road Accident Fund Act 56 of 1996 – As the assessment of injuries as serious is now an administrative rather than a judicial decision, the Road Accident Fund is not bound by the views of its own expert, and the High Court wrongly awarded general damages.

While riding a bicycle, the respondent was injured in a collision with a motor vehicle. In terms of the provisions of the Road Accident Fund Act 56 of 1996 (“the Act”), the appellant (“RAF”) was liable to compensate him for his injuries. The plaintiff sued the RAF in terms of the Act, claiming damages in an amount of R850 000. The RAF disputed both the merits of the plaintiff’s claim as well as the quantum of damages. However, the High Court found that it was liable to pay the plaintiff 100% of his proven damages. The court later made an order that the respondent be awarded general damages in an amount of R350 000.

The issue on appeal was whether it was competent, as a matter of law, for the High Court to have decided to award the respondent general damages in the circumstances of the case.

The respondent had undergone medico-legal assessments by two orthopaedic surgeons, one of whom was appointed by the RAF. The two orthopaedic surgeons prepared a joint minute in terms of which they agreed that the respondent had suffered disfigurement and psychological problems as a result of the scarring at his shoulder and that, accordingly, that he had suffered a “serious injury”, resulting in “serious long-term impairment”.

Held – As the RAF had in the interim paid the amount of R350 000 to the respondent (albeit in error), the issue between the parties had become moot. The issue, therefore, was whether the appeal should simply be dismissed for mootness in terms of section 16(2)(a)(i) of the Superior Courts Act 10 of 2013 as there was no longer any issue for determination between the parties. The parties accepted that this case raised an important question of law, viz whether the Road Accident Fund Regulations (“the Regulations”) promulgated in terms of the Act provide for the RAF to reject its own expert’s finding in respect of determining a serious injury and to require that there should be compliance with the procedures provided for in the Regulations in determining whether or not an injury is “serious”. In the full context of

the matter, it could not be said that the appeal would have no practical effect or result. The merits of the appeal were, therefore, considered.

In terms of section 17(1) of the Act, after its amendment by the Road Accident Fund Amendment Act 19 of 2005, a third party is entitled to compensation for a non-pecuniary loss only for a serious injury as contemplated in subsection (1A). Subsection 17(1A), in turn, stipulates that the assessment of a “serious injury” must be undertaken by a medical practitioner by way of methods prescribed by the regulations.

The amendment Act, read together with the Regulations, introduced two paradigm shifts that are relevant to the determination of this appeal: (i) general damages may only be awarded for injuries that have been assessed as serious in terms thereof and (ii) the assessment of injuries as serious has been made an administrative rather than a judicial decision. Under the new legislative scheme, the RAF is not bound by the views of its own expert. Therefore, the High Court erred in awarding general damages. The appeal was upheld and the order of the High Court that the appellant was to pay the respondent the sum of R350 000 as general damages was set aside.

Centre for Child Law v Governing Body of Hoërskool Fochville and another; In re: Governing Body of Hoërskool Fochville and another v Centre for Child Law and a related matter [2014] 4 All SA 196 (GJ)

Civil procedure – Application for leave to appeal in respect of an interlocutory application – Settlement of underlying application – A live issue remained and leave granted.

In November 2013, the applicant was ordered to comply with a rule 35(12) notice in litigation against a school. The order was not complied with. Instead an application for leave to appeal was served, suspending the effect of the order. On 18 June 2014, the litigation between the school and the Gauteng Department of Education became settled by way of an agreement. The applicant in the current proceedings had sought leave to intervene in the main application in the litigation referred to above.

Held – The lis between the parties had been extinguished by the agreement because the agreement was not contingent upon the performance by one or other party fulfilling its future obligations. However, taking cognisance of the practical utility of a judgment, and finding that a live issue did remain, the Court granted leave to appeal.

Governing Body of Hoërskool Fochville and another v Centre for Child Law; In re: Governing Body of Hoërskool Fochville and others (Greenside High School Governing Body as amicus curiae) [2014] 4 All SA 204 (GJ)

Civil procedure – Discovery of documents – Uniform Rules of Court – Rule 35(12) – Interpretation – Irrelevant or privileged documents – A litigant who refers to a document in an affidavit must produce it on demand – Confidentiality not a reason to refuse to disclose – Where the references to privileged document extensive and went to root of the controversy, such reference thereto was a waiver of privilege.

Legal representation – Minors in litigation – Need to clearly distinguish between a child litigating and being represented by a legal representative and a child in respect of whom another party, ie a parent or curator litis or other entity, is the litigant nomine officio – An NGO who litigates in its own name cannot be the “legal representative” of another person and cannot on the premise of an attorney and client relationship claim privilege in respect of its communications with such other persons because logically, no such relationship can arise under those circumstances.

The second applicant was a school which had applied for a declaratory order that Afrikaans be the sole medium of teaching at the school. That matter (the “main application”) was pending. The respondent (“CCL”) was an organisation devoted to the protection of children’s rights in the public interest. It sought to intervene as a co-applicant, and sought a declaratory order that the children whose names were listed in an annexure had a right to receive education at the school, with English as their medium of instruction.

The school filed a rule 35(12) application, seeking the discovery of questionnaires through which CCL canvassed the needs of the children whose interests it was championing. CCL refused to comply on grounds of privilege, or on alleged public interest grounds that the best interests of the children who were informants required anonymity.

Held – Once a litigant refers to a document in an affidavit or pleading, that litigant must discover it upon demand, unless it can put up a cogent reason to refuse. It cannot be a legitimate reason to excuse compliance that the requesting party does not need the document to state its case in response. Confidentiality does not trump the rule. The Court disagreed with the proposition that rule 35(12) must be literally interpreted and irrelevant and privileged documents must be disclosed. Instead, it believed that an irrelevant or privileged document, if referred to in a pleading or affidavit, cannot be subjected to compulsory disclosure in terms of rule 35(12). It was thus held that, upon a proper interpretation of rule 35(12), a party called upon to comply with rule 35(12) is excused from so doing, if that party shows that the document sought is irrelevant to the issues in the matter, or is privileged, but cannot refuse on the grounds of confidentiality.

The Court then turned to consider CCL’s status in the proceedings. The court held that an organisation such as CCL who litigates in its own name cannot be the legal representative of another person and cannot on the premise of an attorney and client relationship claim privilege in respect of its communications with such other persons because logically, no such relationship can arise under those circumstances. The Court confirmed that a questionnaire obtained by a litigant from learners about life in a school for purposes of the litigant launching application is a privileged document. However, insofar as the references to the privileged documents were extensive and went to root of the controversy, such reference was a waiver of privilege.

The conclusion was that the questionnaires had to be discovered.

MGRO Properties (Pty) Ltd and another v Snyers and another [2014] 4 All SA 235 (LCC)

Land – Eviction application – Requirements – Extension of Security of Tenure Act  62 of 1997 – Section 9(2) – Farmworker’s contract of employment and right of residence – Right of residence would terminate upon the termination of employment – Court held that as the first respondent voluntarily resigned, his right of residence had been terminated in terms of section 8.

In terms of the Extension of Security of Tenure Act 62 of 1997, the applicants sought the eviction of the respondents from the dwelling they occupied on a farm owned by the first applicant.

The first respondent, aged 48, was an erstwhile farmworker on the farm. He was an occupier on the farm as defined in the Act and resided in the dwelling together with the second respondent, his wife aged 45, their 2 daughters and 2 grandchildren. In terms of contracts of employment with the previous farm owner, the first respondent’s right of residence would terminate upon the termination of his employment, whereafter he would have to vacate the dwelling he occupied. When the first applicant acquired the farm in 2010 the second applicant concluded an employment contract with the first respondent. It was agreed that the housing agreement would be terminated upon termination of the employment contract, whereafter the occupier would be obliged to vacate the premises on 2 month’s notice by the owner. The first respondent resigned in December 2010, alleging later that the applicants had asked him to resign.

Held – The respondents did not have any right to continue to live on the property. The Court turned to consider whether the mandatory requirements for the granting of an eviction order as specified in section 9(2) the Act had been complied with. Given that the first respondent voluntarily resigned, his right of residence had been terminated in terms of section 8. The notices given to him were valid notices in terms of section 9(2)(b).

Finding that all the requirements of section 9(2) were complied with, the Court granted the eviction order.

Netcare Hospitals (Pty) Ltd v KPMG Services (Pty) Ltd and another [2014] 4 All SA 241 (GJ)

Civil procedure – Interdict – Requirements – There must be a prima facie right on the part of the applicant; there must be a well-grounded apprehension of irreparable harm if the interim relief is not granted; the balance of convenience must favour the granting of the interim relief; and there must be no other ordinary remedy to give adequate redress to the applicant.

Competition law – Competition Commission – Conducting of market inquiry – Use of external consultants – Competition Act 89 of 1998 – Chapter 4A – Argument that external consultant was privy to confidential information at the heart of applicant’s business that was clearly relevant to the market inquiry – Whether this constituted a breach of fiduciary duty of loyalty to the applicant and placed it in an untenable conflict of interest – Applicant had to establish a contractual or delictual right against the external contractor not to disclose information imparted or received in confidence.

In November 2013, the Competition Commission gave notice that it intended to conduct a market inquiry into the private healthcare sector in terms of Chapter 4A of the Competition Act 89 of 1998. It chose to conduct the inquiry through an independent panel of experts supported by a team of Commission staff members and external consultants. The services of the first respondent (“KPMG”) were procured to provide expert, technical and administrative support to the Commission during the enquiry.

The applicant (“Netcare”) sought to interdict KPMG from acting as a service provider for the Commission in the course of the market inquiry. Netcare contended that KPMG’s conduct in tendering, negotiating terms and/or accepting an appointment to act as the Commission’s service provider, while being employed by Netcare in respect of the same subject matter and being privy to confidential information at the heart of Netcare’s business that was clearly relevant to the market inquiry, constituted a breach of its fiduciary duty of loyalty to Netcare and placed it in an untenable conflict of interest.

Held – Section 43B of the Competition Act empowers the Commission to initiate a market inquiry – which is a formal inquiry in respect of the general state of competition in a market for particular goods or services, without necessarily referring to the conduct or activities of any particular named firm.

The classic formulation of the requirements for an interim interdict is that there must be a prima facie right on the part of the applicant; there must be a well-grounded apprehension of irreparable harm if the interim relief is not granted and the ultimate relief sought by the applicant is eventually granted; the balance of convenience must favour the granting of the interim relief; and there must be no other ordinary remedy to give adequate redress to the applicant.

Netcare claimed to have a right to interdict KPMG from acting for the Commission because KPMG was under a fiduciary duty to avoid an untenable conflict of interest and not to disclose Netcare’s confidential information. Netcare had to establish a contractual or delictual right against KPMG not to disclose information imparted or received in confidence, and that such right gave rise to the remedy to disqualify KPMG from acting for the Commission even after the relationship between Netcare and KPMG had terminated. That was not established.

The Court went on to find that Netcare had not satisfied the remaining requirements for an interdict, and had failed to establish its case.

The application was dismissed.

END