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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

 

APPEAL CASE NO: A7/2023

A QUO CASE NO: 50169/2020

1. REPORTABLE: NO

2. OF INTEREST TO OTHER JUDGES: NO

3. REVISED: YES

DATE: 29/07/2024

 

In the appeal between:

 

DEY STREET PROPERTIES (PTY) LTD                                Appellant

 

and

 

WILRUS TRADING CC                                                           First Respondent

 

SHELL DOWNSTREAM SOUTH AFRICA (PTY)LTD            Second Respondent

Coram:           Molopa-Sethosa J, Moshoana J & Strydom AJ

Heard on:       17 April 2024

Delivered:      29 July 2024

 

Summary:  Appeal against Court a quo's order in counterclaim - whether Court a quo should have decided counterclaim in absence of determination on main application - determination dependant on whether underlying substratum of the applications is interrelated.

Objections to non-compliance with Rules and Directives of Court - "rules are made for the Court" principle discussed and clarified

Objection to standing of Appellant - "appeals lie against the order and not the reasoning' - dictum discussed and clarified

Failure to provide security for costs - Condonation - Jurisdiction of Court of appeal versus jurisdiction of court granting leave to appeal - Strouthos v Shears 2003 (4) SA 137 (T) discussed and clarified.

ORDER

It is ordered that:

 

[1]        The late filing of the Respondent's heads of argument is condoned.

 

[2]        The Respondent's application to declare the appeal to have lapsed, is dismissed.

1

[3]        The appeal is upheld and the order made by Mali J on the 23rd of May.2022 is set aside and replaced with the following:

 

a.         The counter application- is postponed to a date, yet to be determined, to be heard simultaneously with the main application herein;

 

b.         Wilrus Trading CC is ordered to pay the costs of Dey Street Properties (Pty) Ltd occasioned by the postponement.

 

[4]        The Respondent is ordered to pay the party and party High Court costs of the Appellant in the appeal, inclusive of counsel fees per scale B.

JUDGMENT

K. Strydom AJ (Molopa-Sethosa J and Moshoana J concurring)

 

Law and order exist for the purpose of establishing justice and ... when they fail in this purpose they become the dangerously structured dams that block the flow of social progress.

- Rev. Martin Luther King, Jr.

 

Introduction

 

[1]        Should a Court decide counter application whilst a decision in the main application has not been made, in circumstances where the relief sought in both applications is reliant on a determination of the same factual finding?

 

[2]        This, in essence, was the primary crisp point that had to be decided in this appeal.

 

[3]        However, in the way of most opposed litigation, the crispness of the appeal was muddied with the need to decide preliminary objections raised to the Appellant's standing in the appeal, coupled with a variety of procedural objections by the first Respondent.

 

[4]        As a result, before it could be determined whether the Court a quo had effected simple justice between man and man, this Court had to decide whether the exact wording, of the Court order gave the Appellant fumus boni iuris and whether the gravamen of Appellant's, in certain instances, de minimis, errors in procedendo, was not in fact mere substantiam et speciem...

 

Brief factuaI background to hearing in the Court a quo

 

[5]        As the parties to this appeal have worn a plethora of proverbial 'hats' during the course of the protracted litigation in this matter, to avoid confusion, the appellant will be referred to as "Dey" and the first respondent as "Wilrus". The second respondent, who played no active part in the appeal, will be referred to as "Shell"

 

[6]        Dey owns an immovable property on which a filling station was built. It initially leased the premises to Shell and Shell sublet the property to Wilrus. In terms of the notarial lease agreement concluded in 2007 between Dey and Shell, Shell had a right of first refusal.

 

[7]        Pursuant to an action instituted by Wilrus against Dey in 2016, the parties concluded a settlement agreement in February 2017. The salient terms thereof were that, if Dey did not enter into a new lease agreement with SheII by 1 April 2018, a lease agreement, on the same terms as per the notarial lease agreement with Shell shall come into effect between Wilrus and Dey ("the 2017 settlement agreement"). For present purposes, it is important to note that in terms of the notarial lease Shell had a right of first refusal.

 

[8]        It is common cause that Dey and Shell did not enter into a new lease agreement. As such, upon becoming aware, that Dey had c0ncluded an agreement with a third-party, Perele investments (Pty) Ltd ("Perele") for the sale of the property, Wilrus trading launched an urgent application on the 7^th of November 2018, to interdict the sale of the leased premises, It asserted its right based on the right of first refusal that, it argued, formed part of the lease agreement. Central to the determination was whether the settlement agreement meant that a lease agreement came into being between Dey and Wilrus.

 

[9]        Whilst the urgent application was pending, Wilrus, on 16 November 2018 also instituted an action against Dey in which it sought a declaratory order regarding the validity of the lease agreement that came into being between them per the settlement agreement.

 

[10]      On 19 November 2018 Tuchten J granted an interim interdict in the urgent application, Interdicting Dey"... From selling or proceeding with the sale, giving an option over, leasing, or in any way directly or indirectly alienating or disposing ..." of the property, pending the final determination of the action instituted by Wilrus for the declaratory order.

 

[11]      In the urgent application Wilrus had also sought an interdict against the disposal or sale of members' interest in Dey street properties. The learned Judge refused to make an order in this regard holding that there was no basis for such' an interdict nor was such a prohibition necessary for the protection of Wilrus trading's rights.

 

[12]      In March 2019 the .parties concluded a written agreement entitled "heads of agreement of lease" ("HOA lease agreement'') in terms of which all existing disputes between them would be withdrawn, including the interdict granted by Tuchten J supra, and confirming that the effect of the settlement agreement was to create a lease agreement between them on the same terms as the previous notarial lease between Dey street properties and Shell. It also contained a clause setting certain terms which would have to be included in a "New Lease" yet to be entered into between the parties.

 

[13]      On 19 June 2020, Dey cancelled the lease agreement. Subsequently, on the 4^th of August 2020, Dey shareholders, Mr and Mrs Deschamps ("the Deschamops") sold their shares to Perele.

 

[14]      On 30 September 2020 Dey launched an application for the eviction of Wilrus on the basis that the cancellation of the lease agreement was valid as Wilrus ·had breached the lease agreement by failing to pay the amount due in terms thereof. ("Dey's main application"). Wilrus filed a counter application.

 

[15]      In its counter application, Wilrus, firstly, sought an .order enforcing its right of first refusal per the HOA lease agreement with the effect that the Deschamps' sale of their shares in Dey to the sole shareholder in Perele (a certain Mr Wolpe) should be declared invalid.

 

[16]      Secondly, on the basis that the sale of shares constituted alienation or dispossession of the property, it sought a finding that the Deschamps, as well as Mr Wolpe, be held in contempt of the interdict granted by Tuchten J in 2018. In this regard it prayed for the joinder of the Deschamps and Mr Wolpe.

 

[17]      Thirdly, it sought rectification of the lease·agreement with regards to the inclusion of VAT on the rent, as well as rectification of the commencement date for the payment of rent from the 1^st of April 2018 to the 1^st of August 2019 ("Wilrus' counter application").

 

[18]      Dey's main application was set down for hearing on the 16^th August 2021.ln its answering affidavit, Wilrus trading had raised the issue of the non-joinder of Shell, as prohibitive to the disposal of Dey's main application. In his judgment, dated 18 August 2021, Van der Westhuizen J agreed and postponed the application, ordering Dey to, within 30 days of the order, bring an application for the joinder of Shell.

 

[19]      Before Dey could join Shell, Wilrus set down its counter application for hearing on the 28^th of October 2021 before Mali J. (Shell was formally joined as a party on the 22^nd of November 2022).

 

The order of the Court a quo in re Wilrus' counter application

 

[20]     On the 23^rd of May 2022, Mali j handed down judgment, substantially in favour of Wilrus trading, and ordered as follows:

 

"1. Perele Investments (Pty) Ltd, Renee Deschamps, Jacques Deschamps and Jonathan Wolpe are joined as Respondents.

 

2.         That clause 2.3.3 of the heads of the agreement of the lease be rectified to read: "Although the period of lease remains 1 April 2018 to 31 March 2033, the Applicant is only entitled to the payment of R220 000.00 and VAT in addition to the amount of R220 000.00 as from 1^st August 2019, and not from 1^st April 2018"

 

3.         It is declared that the sale agreement concluded between the Applicant and Perele Investments (Pty) Ltd in terms of which the shareholding in the Applicant was sold and transferred is invalid.

 

4.         Renee Deschamps, Jacques Deschamps and Jonathan Wolpe are found to be in contempt of the Court order granted on 18 November 2019 under case number: 8115/2018.

 

5.         Renee Deschamps, Jacques Deschamps and Jonathan Wolpe are committed to imprisonment for a period of 30 days, which committal is suspended until the Respondent is afforded an opportunity, within 60 days, to exercise its right of first refusal.

 

6.         The Applicant is ordered to pay the costs"[1]

 

[21]      Mali J's reasoning behind the orders, where relevant, will be discussed further below.

 

[22]      On the 15^th of September 2022, Mali J granted Dey leave to appeal to this full Court.

 

Preliminary issues raised by the Respondent

 

[23]      Wilrus raised the following preliminary issues:

 

(a)       Dey street properties lacks standing to bring the appeal. As a result, the appeal should be dismissed.

 

(b)       In the alternative, the appeal should be struck for want of compliance with various Rules and directives of Court by Dey street properties.

 

Analysis of the objection to Dey's standing

 

[24]      Wilrus contends that Dey lacks standing to appeal Mali J's order, as it has no direct and substantial·interest in the orders (save for the order for rectification) granted and may not act on behalf of those affected parties who had not appealed the order.

 

[25]      In furthering this argument .Wilrus contended that, as an appeal lies against the order made and not the reasons for the order, Dey could not have relied on the underlying basis for the order (the cancellation of the lease) to further its grounds of appeal. When viewed in isolation, the orders made (save for rectification), so it was argued, has no impact on Dey.

 

[26]      As such, it argued that the declaration of invalidity of the "...sale of shares agreement concluded between the Applicant and Perele Investments (Pty) Ltd in terms of which the shareholding in the Applicant was sold and transferred ..." affects the Deschamps and Perele. This submission stems from Dey street properties' submission, before the Court. a quo that it, being a company, acts through its shareholders .(the Deschamps) and was therefore, as a separate legal entity, not a party to the sale of the Deschamps' shares to Perele. This submission was made despite the obvious fact that the "Applicant" referred to in the order was Dey. Unperturbed by this obvious discrepancy, counsel for Wilrus implored this Court to interpret the reference to "Applicant" in this part of the order, to logically refer to the Deschamps and not Dey (who for purposes of the a quo judgment was the Applicant)

 

[27]      In relation to the contempt of Court orders, it was similarly submitted that these orders only affect the Deschamps and Mr Wolpes in their personal capacities.

 

[28]      These contentions are factually and legally untenable.

 

[29]      In the first place, this argument loses sight of the provisions of S19(d) of the Superior Court's Act, 10 of 2013 which affords this Court the power to "...confirm, amend or set aside the decision which is the subject of the appeal and render any decision which the circumstances may require." This Court is not bound to consider the order appealed against in a piecemeal fashion, but may (and, in our view should), have regard to the Court a quo's older in toto when making its own order. As this issue ties in with Dey's contention that the counterclaim and main application were indivisible, this aspect will be further enumerated in the discussion on the 'merits' of the appeal below.

 

[30]      Secondly, as correctly submitted by Counsel for Dey, as its standing to appeal the rectification order, at least, is admitted, there is no basis-for Wilrus' submission that the appeal should be dismissed outright for want of standing.

 

[31]      Thirdly, the fact of the matter is that the Court a quo order declared the sale of shares agreement between Dey and Perele invalid, regardless of the fact that it is obvious that Dey, a company, could not have sold shares in itself to Perele.

 

[32]      Wilrus' contention that it is "only logical" that the Court a quo intended to refer to the agreement between the Deschamps and Mr Wolpes, creates more problems than it seeks to address: In holding the Deschamps in contempt of Tuchten J's interdict, despite them not having been cited in that order, Mali J clearly took stock of the fact that a company acts through its directors, stating that: "Nevertheless, it is not lost to the Court that human beings who are directors take decisions on behalf of the company." For purposes of the counter application, the Deschamps had been personally joined and yet, in spite thereof, the order made referred to Dey, the company. If the reference to "Applicant" in the Court a quo's order was such an obvious error, the absence of an application for variation thereof is glaring.

 

[33]      A company can in fact own shares as a juristic shareholder, with the proviso that it cannot own its own shares. Out of context then, Mali J's declaration of invalidity could, for instance, have referenced the sale of shares held by Dey as a juristic shareholder in company X to Perele. If this argument appears to be overly technical and out of touch with logic, it has achieved its purpose: It highlights how Wilrus' strict reliance on the principle (that appeals lie against the order made and not the reasoning), is a double-edged sword: if this Court should not have regard to the reasons underlying the order made a quo in deciding Dey's standing, it should likewise disregard the contextualization the reasons could have provided as to exactly which share of sales agreement was declared invalid.

 

[34]      In an astounding volte-face, when it came to the contempt orders against the Deschamps, Wilrus disregarded its own contention that Dey acts through its shareholders and expected this Court to find that Dey would not be affected the potential incarceration of its sole directors

 

[35]      The objection to Dey's standing is therefore dismissed on any or all of the reasons set out supra.

 

Analysis of Wilrus' objection based on procedural non-compliance

 

[36]      In support of its contention, that the appeal should be struck from the roll for want . of compliance, Wilrus trading raised the following procedural objections:

 

(a)       The appeal has lapsed as the record was filed late: Wilrus had agreed to grant Dey an extension, to the 7^th of March 2023, to file the record. Instead, Dey street properties provided Wilrus trading with an electronic link to the record on the 8th of March 2023. Dey also did not serve two hardcopies of the record on Wilrus trading. As a result, in July 2023, Wilrus' attorney informed those of Dey that the appeal had lapsed.

 

(b)       Dey street properties prematurely set the appeal down for hearing: Contrary to this Court's directive,[2] it had sought set .down prior to filing its practice note and heads of argument.

 

(c)        Dey failed to file a notice of set down of the appeal on Wilrus: Wilrus was caught off-guard when they, pursuant to a letter from Dey's attorney's, dated 26 March 2024, realised that the appeal was set down for the 17^th of April 2024. Dey street properties had not served a notice of set down a was required. When Dey street properties served their heads of argument and practice on the 20^th of February 2024, the attorney for Wilrus trading '…did not make much of it...". as he had "...already in July 2023, informed the appellant that the appeal had lapsed."[3] Further re, despite the Registrar's notice of allocation f the date of hearing being emailed to the parties on the 11^th of January 2024, the notice, for some or other reason only came to the attention of Wilrus. trading's attorney's secretary, who failed to inform the attorney thereof.

 

[37]      A further, slightly more nuanced, objection was levelled against Dey's failure to furnish security for costs before lodging of the record, as required by Rule 49(13).

 

[38]      The first three procedural objections collectively, and the objection based on non­compliance with Rule 49(13) separately, will be analyzed below:

 

Analysis of the first three procedural objections:

 

[39]      The principle that "...the Rules made for Court and not that the courts are established for rules…"[4] is so often quoted that it has become a sacrosanct mantra to those seeking condonation for falling foul of the Rules of Court. Whilst the principle is trite, it is often misunderstood to imply that the rules are there for the Court's convenience. Naturally this position is untenable in view of the fact that the Rules also provide litigating parties with certain procedural rights and entitlements.'

 

[40]      Placing the principle within its proper context, the Constitutional Court in Mukaddam v Pioneer Foods explained that:

 

"It is important that the rules of Courts are used as tools to facilitate access to Courts rather than hindering it. Hence rules are made for Courts and not that the Courts are established for rules. Therefore, the primary function of the rules of Courts is the attainment of justice...[5]" [Own underlining)

 

[41]      This purposeful approach to the application of the Rules, has rung true since the pre constitutional era. In Federated Trust Ltd v Botha 1978 (3) SA 645 (A) it was held that: "The Court does not encourage formalism the application of the rules. The rules are not an end in themselves to be observed for their own sake. They are provided to secure the inexpensive  and expeditious completion of litigation before the Courts"[6] [Own underlining]

 

[42]      A Court confronted with objections 'bas a on procedural non-compliance is therefor called upon to decide whether such non-compliance would be to the detriment of the attainment of justice. Considerations such as prejudice to the objecting party, the expeditious completion of litigation and fair administration of justice are central to its determination on condonation of non-compliance. In our view, in determining whether non-compliance has resulted in the non-attainment of justice, regard should be had to the actual practical effect such non-compliance has had on the fair trial rights of the objecting petty or, in general, on the fairness, expediency of the matter before it.

 

[43]      Similarly, any alleged infringement of the procedural rights afforded to a party in terms of the Rules should be evaluated from the premise of the attainment of justice between parties. Put differently, the Rules provide parties with certain procedural rights aimed at safeguarding such a litigant's rights to attain justice. However, such procedural rights are not absolute and do not exist in isolation from the overarching determination of whether the non-compliance complained of constituted an infringement on the objector's ability to obtain justice. Whether or not a party's non-compliance has infringed on the ability of the complaining party, will depend on fact and logic, and not on an overly technical comparison of the non-compliance vis·a vis the wording of the specific Rule, in abstract.

 

[44]      In casu, for instance, Wilrus has brought an application to declare that the appeal has lapsed based on the late filing of the record by Dey. The facts however disclose that the record was filed, albeit one day late, more than a year before the hearing of the appeal. The record, whilst voluminous, consists of applications, affidavits and annexures that Wilrus had either compiled or was already in possession of. Similarly, the failure by Dey to provide Wilrus with two hardcopies of the record has not been shown to have prejudiced Wilrus. This Court, in fact, prepared for the hearing on the basis of the electronic record as uploaded on the Case Lines system and has prepared this judgment with reference to such electronic record only. To his credit, Counsel for Wilrus properly conceded that they could not prove real prejudice in this regard.

 

[45]      Furthermore, Dey does not deny that the hearing of the appeal w s set down before there was proper compliance with the directives of this Court relating to the filing of heads of argument. However, directives, .as with the rules are aimed at ensuring the expeditious attainment of justice by providing legal certainty' as to the procedural steps a specific Court or Division deems to be the most effective in attaining such justice (within the context of that Court or Division's particular composition, workload etc.)

 

[46]      Compliance with such directives, at least in this .division, is usually monitored by the relevant registrar. In casu, Dey street properties managed to proverbially "slip one past the goalkeeper". Regardless of how the set down was obtained, the question remains the same: did the non-compliance with the directive impede the attainment of justice between the parties? On its own version, Wilrus trading, on receiving Dey street properties' heads of argument in February 2024 paid little regard thereto. This begs the question: had the heads been filed prior to the application for a hearing date, would it have affected the regard Wilrus trading's attorney would have had thereto?

 

[47]      Insofar as the failure to file the notice of set down is concerned, the facts presented by Wilrus trading, at most, constitute grounds for the granting of its condonation application for the late filing of its own heads of argument. The condonation so sought is granted.

 

Analysis of the objection based on non-compliance with Rule 49(13)

 

[48]      The day before the hearing of the appeal, Dey furnished security for costs. However, according to Wilrus, said security was neither properly furnished nor "good and sufficient". As correctly argued by Wilrus, whether or not the security so furnished is good and sufficient, does not truly affect the nature of its objection. Had Dey timeously furnished the security, the alleged inadequacies could have been placed and argued before the registrar as foreseen by the Rule. Given the lateness of the furnishing, Wilrus has been denied its rights in this regard. As a result, we will disregard the belated security furnished by Dey in evaluating this objection.

 

[49]      Wilrus furthered its argument in this regard along the following lines:

 

(a)       The provisions of Rule 49(13) are peremptory and as such the failure of an Appellant to furnish security before lodging the record of appeal rendered the lodging of the record an irregular step within the meaning of Rule 30, which, on application, may be set aside.

 

(b)       However, the fact that Wilrus trading had not brought such a Rule 30 application, did not release Dey from its obligation to furnish security, nor did it preclude Wilrus from applying for the striking of the appeal, on this basis, at the hearing of the appeal itself.

 

(c)        Dey could also not apply to the Court of appeal to be released from its obligation to furnish security, as it is the Court that granted leave to appeal that should be applied to for such an order.

 

[50]      As authority for these submissions, Wilrus trading cited the cases of Strouthos v Shears 2003 (4) SA·1 7 (T) ("Strouthos"), TR Eagle Air Pt Ltd v RW Thompsom 2021 JDR 0699 ("TR Eagle") and Jeanru Konstruksie Pty Ltd v Botes 2023 (6) SA 305 (GP) ("Jeanru").

 

[51]      By and large, each of the submissions was supported by a portion of the dictum of one or all of the authorities referred to and, as general principles seemingly ring true. However, in developing its argument, Wilrus trading sought to elevate the reasoning of those Courts to substantive absolute principles of law that would limit this Court's discretion in relation to·condoning non-compliance with the Rules or Directives.  It also failed to interpret the findings of those Courts within the context of each case and, particularly in relation to (c) supra, misconstrued thee application of the dictum.

 

[52]      A diligent search of available caselaw and Erasmus'·Commentary to the Uniform Rules, revealed Strathos as the sole source of the proposition that only the Court granting leave to appeal could release the Appellant from its obligation to provide security for costs and that the Court hearing the appeal itself has no such jurisdiction.

 

[53]      It is important to note that the Court in Strathos was not sitting as a Court of appeal, nor was it called upon to determine whether a Court of appeal may condone the failure to provide security for costs. Instead, it, as a Court of first instance, was called upon to decide an opposed application brought by the Respondent for an application to compel the Appellant to furnish security for costs of the appeal. The sole issue for determination was whether the Respondent had followed the correct procedure in launching the application to compel.

 

[54]      The application was ultimately dismissed on the basis that, as the Appellant remains obliged to furnish security until it was released from such obligation, the granting of the order to compel was unnecessary and, in any event, not sanctioned by the Rule itself. In his conclusion, the learned judge stated that:

 

"The Rule does not provide for an order in the terms prayed. I have explained what I perceive to be the correct procedure to be followed." [Own underlining]

 

[55]      As such, where the learned judge discussed the relative jurisdictions of the Courts, it must be understood as part of what he perceived to be the procedure to be followed where an Appellant fails to furnish security for costs prior to filing the record of appeal:

 

(a)       The Appellant should apply to be released from his obligation at the hearing of the leave to appeal application or subsequently, on application to the Court which granted leave to appeal.

 

(b)       If the Appellant did not obtain an order releasing it from its obligation, the Respondent would be entitled to bring an application in terms of Rule 30 to have the filing of the record set aside as an irregular step.

 

(c)        In the event that the Respondent did not bring a Rule 30 application, or if it was refused, "... the appeal will be proceeded with, and a respondent will then have to move for the appeal to be struck for want of compliance ..."

 

[56]      It is evident from the proposed procedure that the learned Judge foresaw that two distinct applications could serve before the Court granting leave to appeal and the Court of appeal, respectively:

 

(a)       The first application would be the Appellant's application to be released from the obligation to furnish security. This “release application" would have to be brought before the Court granting leave to appeal. As the Court of appeal would not have been constituted yet at such· a stage, it is logical that the application for release from the obligation could only be made to the Court which granted the leave to appeal.

 

(b)       However, even if no such release application is brought by the Appellant, the Respondent would have to apply to the Court hearing the appeal for the appeal to be struck.

 

[57]      To hold that the Court of appeal's jurisdiction to condone the failure to provide security is somehow ousted by the Court granting leave to appeal's exclusive jurisdiction to hear the release application, would· render the need for the Respondent to apply to the Court of appeal for the striking of the appeal a nullity. Furthermore, had this been the intended consequence, the Rules would have provided that the hearing of the appeal shall not proceed until the release 'application had been made and granted (or the security had been furnished.)

 

[58]      The rationale underscoring the finding that the court of appeal retains the discretion to condone the Appellant's failure to furnish security, lies in the fundamental principle that the Rules are tools available to the Court to ensuring justice is done between the parties. The reason why security for costs should ideally be provided before the record of appeal is lodged, is an eminently practical one: It is only upon receipt of the record that the Respondent's preparation for the appeal can start in earnest. The bulk of the Respondent's legal costs will concomitantly arise between the filing of the record and the hearing of the appeal. As such, before it incurs such costs, security should be furnished by the Appellant. If security is not furnished, the Respondent can avoid incurring costs by employing the mechanisms of Rule 30. However, if it fails to do so and, in any event, incurs all the costs relating to opposing the appeal, any objection at the hearing of the appeal in this regard is tantamount to proverbially 'closing the gate after the horse has bolted.' In keeping with the precise technical nature of the procedural complaints, the Respondent would be wise to take heed of the principle that ius civile vigilantibus scriptum est.

 

[59]      In Collatz v Alexander Forbes Financial Services (Pty) Ltd[7] a full bench of this Court, in more eloquent terms, endorsed a flexible approach to the Rules in terms of which logic and practical efficiency supersedes formalism:

 

"20. As such, if this appeal were to be struck from the roll, the appellants .can nevertheless seek to resurrect their appeal... This would bring about even further delays; all the while leaving the disputes between the parties unresolved. The interests of justice, fairness and finality are the constellation of lodestars in litigation.”

…

"26. Additionally, whatever financial prejudice the appellants may suffer, or potentially suffer, because of the appellants' failure to furnish security has already been incurred or suffered. I say so because the respondents have prepared on all aspects for this appeal, filed heads of argument dealing with the merits of the appeal, and have incurred the costs of counsel to argue the appeal. It would truly be a pyrrhic victory for the respondents if the appeal were to be struck from the roll, despite their already incurring such costs and without the merits of the appeal being determined."

 

[60]      More to the point, as succinctly put by counsel for Dey street properties: "We are all here. There is no point in kicking this can further down the road."

 

Analysis of the merits of the appeal

 

[61]      Dey's primary contention was that Wilrus' counter application should not have been decided by the Court a quo separately from Dey's main application. It submitted that:

 

(a)       The relief sought by (and granted to) Wilrus in the counter application, was implicitly reliant on a finding that it, Dey, had not cancelled the HOA lease agreement prior to the transfer of shares from the Deschamps to Mr Wolpe.

 

(b)       Dey's defence to the counter application was that it had validly cancelled the HOA lease agreement and that, as a result, Wilrus trading's right of first refusal was no longer in effect at the time when the shares were transferred.

 

(c)        However, for purposes of Dey's main application, the cancellation of the HOA lease agreement is also the primary subject matter of, and basis for, the application for ejection of Wilrus.

 

[62]      Wilrus, on the other hand, doubled down on the principle that "appeals lie against orders and not reasons" and submitted that, as the Court a quo made no order in respect of the cancellation, the relief, yet to be determined, in the main application, is not affected.

 

[63]      We have already, in our discussion on Dey's standing, touched ·on how such a strict interpretation of the principle would lead to absurdities. On a purely practical level, the court a quo's order in the counter application if allowed to stand, would greatly affect the executability of an order made in the main application and vice versa.

 

[64]      The Supreme Court of Appeal, in HLB International (South Africa) v MWRK Accountants and Consultants[8] clearly elucidated the fallacy in delineating, in such absolutes, a Court's order from its reasoning:

 

"[26] The now well-established test on the interpretation of court orders is this:

 

'…The starting point is to determine the manifest purpose of the order. In interpreting a judgment or order, the court's intention is to be ascertained primarily from the language of the judgment or order in accordance with the usual well known rules relating to the interpretation of documents. As in the case of a document, the judgment or order and the court's reasons for giving it must be read as a whole in order to ascertain its intention…’

 

[27]      The manifest purpose of the judgment is to be determined by also having regard to the relevant background facts which culminated in it being made. For as was said in KPMG Chartered Accountants (SA) v Securefin Ltd and Another, 'context is everything"' [Own underlining]

 

[65]      Therefore, where the Supreme Court of Appeal, in Neotel,[9] refused to create an exception to the "...sound, tried and, doubtlessly, trusted principle ..."[10]·that appeals lie against orders and not reasons, the dictum itself should be understood in context. There, the appeal was only against a portion of the judgment containing the Court's reasoning in reaching its conclusion and not the order applicable inter partes. This somewhat anomalous situation was due to the appeal against the order itself, through effluxion of time, becoming moot inter partes. It was argued that the reasons so contained would be binding not only on the appellants, but the public at large. By and large, the Supreme Court of Appeal dismissed the appeal on the basis that the  reasons constituted an interpretation of legislative requirements, which interpretation remained open to challenges in future, stating that:

 

"[26] In truth the appellant was requesting this court to give an opinion on the meaning of s 9(2)(b), read with s·13(6),.of the ECA, in circumstances where the substantive order made by the court-a quo is not before this Court, and which, consequently, is incapable of being altered or substituted. That is not in the interests of justice.”

 

[66]      Neotel was therefore decided within the context of what had essentially become an academic discussion. By appealing the reasons only, the Appellant effectively sought to change the nature of an appeal to that of a declaratory order. Simply put, in Neotel, there were no live issues inter parte to appeal against. In casu, that is definitely not the case.

 

[67]      The Supreme Court of Appeal, in dismissing the appeal, also sought to negate "... the undesirable prospect of matters being disposed of in a piecemeal fashion. And, even more concerning, the 'hollowing-out', or erosion, of the substratum of judgments and·orders that are not before this court, and the negative consequences accompanying such a process."[11] Despite being stated within the context of an appeal against reasons only, the sage wisdom incumbent in this warning, would have best been heeded by the Court a quo in casu. The status of the lease agreement was not only intrinsically intertwined with every aspect of the counter application (and not just the most evident such as the setting aside of the sale of shares).

 

[68]      For instance, if the court in the main application at some future date, were to find that the HOA lease agreement had been validly cancelled prior to the sale of shares, the Deschamps could have conceivably already undergone a period of incarceration for contempt, despite the fact that they had legally done no wrong. In this regard, it was submitted by counsel for Wilrus, that the Deschamps' contempt is not reliant on the validity of the cancellation, but rather based on their disregard of the interdict granted by Tuchten J. According to Dey, in terms clause 2.3.5 o{ the HOA lease agreement, all preceding litigation and orders (including Tuchten J's interdict) had become settled between the parties. Wilrus countered by referencing the introduction to clause 2.3 of the HOA lease agreement, which states that: "Therefore, the parties agree that the following provisions will form part of the New Lease which will shortly be reduced to writing, namely…" As no new lease was concluded, Wilrus argued, the settlement of litigation between the parties, being one of the provision that should have been included in the New Lease, had not yet come into effect. The HOA lease agreement, in essence, according to Wilrus, was an agreement on which terms to include in an agreement to be reached at some future date. However, were one to follow this contention down the garden path, Wilrus' reliance on the fact that a New Lease had not been concluded - to argue the correctness of the contempt orders - would also be inherently contradictory to its submission regarding the rectification ·order. The rental amounts, period of lease, including commencement date, are contained in clause 2.3.1 to 2,3.4 of the HOA lease agreement and are, on the strength of Wilrus' argument, therefore also subject to the conclusion of the New Lease agreement. If the provisions contained in clause 2.3 were not enforceable in the absence of the conclusion of such a New Lease agreement, one has to ponder on what basis rectification was sought of the terms of a non existent agreement...

 

[69]      Our musings in this regard are not to be understood to be this Court's determination on the provisions, enforceability or otherwise of the HOA lease agreement. The reason for our disinclination to engage with the HOA agreement itself, is the very basis of Dey's complaint: Any finding by this court relating to the HOA lease agreement and its terms would have a binding effect on the court deciding the main application. Without having considered the evidence or legal argument of the main application, our determination in the counter application, would pre-empt vital findings that should have been made by the court deciding the main application. Even if the court in the main application were to turn a blind eye to all things counter application, its determination regarding the validity of the cancellation of the lease agreement would affect the rationality of the orders granted in the counter application retrospectively. The potential. injustices that, should the order a quo stand, could ripple from a finding on the status of the lease agreement in the main application, are legion in their permutations.

 

[70]      Considering our finding in this regard, it is unnecessary to deal with the other grounds raised regarding the merits of the appeal.

 

Order

 

Having regard to what is set out above, the following order is therefore made:

 

[1]        The late filing of the Respondent's heads of argument is condoned.

 

[2]        The Respondent's application to declare the appeal to have lapsed, is dismissed.

 

[3]        The appeal is upheld and the order made by Mali J on the 23^rd of May 2022 is set aside and replaced with the following:

 

a.         The counter application is postponed to a date, yet to be determined, to be heard simultaneously with the main application herein;

 

b.         Wilrus Trading CC is ordered to pay the costs of Dey Street Properties (Pty) Ltd occasioned by the postponement.

 

[4]        The Respondent is ordered to pay the party and party High Court costs of the Appellant in the appeal, inclusive of counsel's fees per scale B.

 

K Strydom

[Acting Judge of the High Court,

Gauteng Division, Pretoria]

 

I concur

 

LM Molopa-Sethosa

[Judge of the High Court

Gauteng Division, Pretoria]

 

I concur

 

GN Moshoana

[Judge of the High Court,

Gauteng Division, Pretoria]

 

 

DATE OF HEARING          :           17 April 2024

 

DATE OF JUDGMENT      :           29 JULY 2024

 

APPEARANCE ON BEHALF OF THE APPELLANT:

 

Adv                :           H A VAN DER MERWE

                                  C GORDON

 

Instructed by :           GELDENHUYS MALATJI INC

 

APPEARANCE ON BEHALF OF THE FIRST AND FIFTH RESPONDENT:

 

Adv                :           D VAN DEN BOGERT SC

                                  D R DU TOIT

 

Instructed by :           STATE ATTORNEY PRETORIA

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