The law reports 

December 2014 (6) South African Law Reports (pp 315 – 625); [2014] 4 All South Africa Law Reports November no 1 (pp 279 – 410); and no 2 (pp 411 – 537); 2014 (10) Butterworths Constitutional Law Reports – October (pp 1137 – 1264) and (11) November (pp 1265 – 1395)

David Matlala BProc (University of the North) LLB (Wits) LLM (UCT) LLM (Harvard) HDip Tax Law (Wits) is an adjunct professor of law at the University of Fort Hare.

This column discusses judgments as and when they are published in the South African Law Reports, the All South African Law Reports and the South African Criminal Law Reports. Readers should note that some reported judgments may have been overruled or overturned on appeal or have an appeal pending against them: Readers should not rely on a judgment discussed here without checking on that possibility – Editor. 	

Abbreviations: 

CC: Constitutional Court
GJ: Gauteng Local Division, Johannesburg
GP: Gauteng Division, Pretoria
KZD: KwaZulu-Natal Local Division, Durban
LCC: Land Claims Court
SCA: Supreme Court of Appeal
WCC: Western Cape Division, Cape Town

Attorneys

Refund of unlawfully charged and retained contingency fee: In Bitter NO obo De Pontes v Ronald Bobroff & Partners Inc 2014 (6) SA 384 (GJ) the first respondent, Ronald Bobroff and Partners Inc (RBP), was a law firm that acted for one Anthony De Pontes (Anthony) in a motor vehicle accident claim against the second respondent, the Road Accident Fund (RAF). The claim was settled in a capital amount of some R 6 mil­
lion. Thereafter RBP made certain payments to Anthony but retained an amount of 
R 2,1 million, which was 30% of the capital amount paid by the RAF. The amount was retained as security for RBP’s attorney and own client costs as per a common-law contingency fee agreement concluded between the parties. It was retained notwithstanding the fact that RBP had in the meantime received from the RAF a further payment of some R 260 000 for costs and disbursements that included some R 83 000 for taxed party and party fees, about R 8 000 for correspondent attorney’s fees and a further R 169 000 for disbursements relating to expert reports and counsel’s fees. The applicant Bitter, who was Anthony’s curator ad litem, instituted proceedings for payment of the R 2,1 million to Anthony’s new attorneys, there to be held in trust until RBP’s fully itemised attorney and client bill of costs, reflecting reasonable attorney and client fees and disbursements, was settled by agreement or taxed by the taxing master. The order was granted with costs on attorney and client scale as a mark of disapproval of the conduct of the first respondent.

Mayat J held that in the absence of a lawful agreement relating to contingency fees within the parameters of the Contingency Fees Act 66 of 1997 (the Act), and the alleged common-law contingency fee agreement between the parties not falling within the parameters of the Act, the first respondent was only lawfully entitled to fair and reasonable costs for work actually done. Furthermore, in the absence of a lawful agreement, the first respondent’s entitlement to a fair and reasonable fee for services actually rendered could only be determined on the basis of an attorney and client bill of costs taxed by the taxing master. Accordingly, there was no legal basis for the first respondent to retain the sum of R 2,1 million as it did, particularly since the attorney and own client costs in the instant case would in all likelihood constitute a small fraction of that amount. More importantly, there was no prejudice to the first respondent if such money was paid to the trust account of the applicant’s attorneys pending agreement or taxation of the bill of costs, which was to be submitted.

Companies

Effect of restoration of registration on prospecting or mining rights that lapsed on deregistration of a company: Section 56(c) of the Mineral and Petroleum Resources Development Act 28 of 2003 (the MPRDA) provides among others that ‘[a]ny right, permit, permission or licence granted or issued in terms of this Act shall lapse, whenever … a company or close corporation is deregistered in terms of the relevant Acts and no application has been made or was made to the minister for the consent in terms of section 11 or such permission has been refused; … ’. Section 11 deals, among others, with cession, letting, subletting, disposal, assignment and alienation of a prospecting or mining right, which can be done only with the consent of the Minister. In Palala Resources (Pty) Ltd v Minister of Mineral Resources and Energy and Others 2014 (6) SA 403 (GP) the applicant company, Palala Resources, was deregistered in July 2010, at which stage the prospecting right that it held over a farm in Malamulele area in Limpopo Province, lapsed. Two months later, in September 2010, registration of the company was restored and as a result it contended that the prospecting right that it held before deregistration, had been revived. As a back-up position, the company also applied for renewal of the prospecting right. The Acting Director-General of the Department of Mineral Resources and Energy accepted the application for renewal of the prospecting right, which decision was overturned by the first respondent, the Minister. The applicant applied for review and setting aside of the Minister’s decision, which application was dismissed with costs.

Keightley AJ held that generally the legal personality of a company that was lost by its deregistration was revived retrospectively. That meant that, in general terms, as regards its rights and obligations, the company would on restoration reassume them as if they had not been lost in the first place. However, the intended meaning and effect of s 56(c) of the MPRDA was different in that mining and prospecting rights held by companies which were deregistered lapsed, meaning that they became void or legally invalid, unless, prior to the deregistration, the company applied for the Minister’s written consent to cede or otherwise dispose of the right. The fact that s 56(c) expressly provided for a s 11 application to act as an exception to a right lapsing on deregistration, coupled with the fact that restoration of registration was not identified as an exception, was a strong indication that the legislature intended that only in the case of a s 11 application, and no other, would a mining or prospecting right be protected from becoming void on deregistration. It was important to appreciate that what the deeming provision in s 73(6A) of the applicable Companies Act of 1973 did was to revive legal personality of the company. The deeming provision of the section did not revive rights that had lost their legal validity and had become void. Thus, while the effect of the provision was to reinvest in the company the rights and assets it previously held, that only applied insofar as those rights and assets which still existed. The deeming provision could not have the effect of giving life to rights that, because they had lapsed, were legally dead. For that reason the applicant’s contention that the effect of the deeming provision in s 73(6A) was retrospectively to revive a prospecting right that had lapsed by operation of s 56(c) was misdirected and could not be upheld.         

Delict

Abolition of action for adultery: In RH v DE 2014 (6) SA 436 (SCA) the respondent husband, DE, and Ms E were married to each other. A few years down the line a breakdown of the marriage took place and as a result Ms E left the matrimonial home never to return. In the event the respondent, citing breakdown of the marriage, sued for divorce, which was granted. However, before the marriage was dissolved Ms E had an adulterous affair with the appellant RH. For that reason the respondent sued the appellant for damages due to the commission of adultery, claiming compensation under headings contumelia (insult or injury to self-esteem) and loss of consortium (loss of comfort and company of spouse). In the GP, Vorster AJ awarded the respondent damages in a composite amount of R 75 000 covering both headings. An appeal against that judgment was upheld with costs.

Brand JA (Cachalia, Tshiqi, Majiedt and Mbha JJA concurring) held that a history of the delictual action for adultery revealed its archaic origin. On the one hand it stemmed from the concept peculiar to old English law in terms of which the husband had some proprietary interest in the person and ‘services’ of his wife. According to some earlier judgments, on the other hand, the action was influenced by the biblical notion received from canon law that both husband and wife in a marriage were entitled to the sole use of each other’s body. When those archaic notions were exposed by the changing norms of society, the law started looking for a new raison d’etre. However, the time had come for South African law to recognise, in harmony with most other legal systems, that in the light of changing mores, those reasons advanced for the continued existence of the action had now also lost their persuasive force. What was more, even if the action still performed some legitimate function, that notional advantage would be outweighed by the hurt and damage that the action too often brought about. Accordingly, in the light of changing mores of the society the delictual action of the innocent spouse based on adultery had become outdated and could no longer be sustained. Consequently, the time for its abolition had come, this meaning that the action derived from the actio injuriarum and based on adultery, which afforded the innocent spouse a claim for both contumelia and loss of consortium was no longer wrongful in the sense that it attracted liability and was therefore no longer available as part of South African law.

The court added obiter that its judgment did not touch on other actions based on actio injuriarum connected with the institution of a marriage such as abduction, enticement and harbouring of someone’s spouse. Nor did it deal with the continued existence of the claim against a third party, based on adultery, for the patrimonial harm suffered by the innocent spouse through loss of consortium of the adulterous spouse which would include, for example, loss of supervision over the household and children.

Fundamental rights

Right to dignity, privacy, freedom and security of person: In an earlier case of the City of Johannesburg Metropolitan Municipality v Blue Moonlight Properties 39 (Pty) Ltd and Another 2012 (2) SA 104 (CC), the CC ordered the city of Johannesburg (the City) to provide temporary accommodation to persons who had been evicted from private property. That process, which was supposed to last six months and could be extended to 12 months, took too long as some three years down the line the City was still working on a temporary accommodation policy. That led to the present case of Dladla and Others v City of Johannesburg and Another 2014 (6) SA 516 (GJ); Dladla and Others v City of Johannesburg Metropolitan Municipality and Another [2014] 4 All SA 51 (GP) where, because of the delay in finalising temporary accommodation policy, the City accommodated the evicted persons in a totally different accommodation arrangement, namely, an overnight accommodation facility run by the second respondent, Metropolitan Evangelical Services, a not for profit organisation. The rules and policy of the second respondent, which the first respondent City approved of, provided that residents of the overnight accommodation facility shelter would vacate during the day, during which time the gate would be locked, and come back in the evening. Moreover, when there spouses or permanent life partners were not allowed to live together. The applicants, Dladla and Others, approached the High Court for an order declaring that the shelter rules and policy violated their fundamental rights to dignity, freedom, privacy and security of person and that the respondent should be interdicted and restrained from implementing them. The order sought was granted with costs.
Wepener J held that the rules and limited gender separation policy of the respondents had humiliating consequences. They compromised and disrupted the family as a unit and created emotional distance in a relationship. The inability of spouses and partners to live as a family represented a loss to them of one another and created an additional financial burden on the couple’s limited financial resources. The most basic associative privileges connected to a marriage or permanent relationship were denied to the couples. The splitting-up of families at the overnight accommodation shelter cut to the very heart of the right to dignity and family life. As a result the applicants were entitled to a declaration that the splitting-up of families by gender at the shelter was in violation of s 10 (human dignity), s 12 (freedom and security of persons) and s 14 (privacy) of the Constitution.

In the absence of any legislative provision there could be no justified limitation of the right of spouses, and life partners, to cohabit. Any infringement of that right was an infringement of the right to dignity and was therefore unconstitutional. The daily lockout rule also violated the residents’ right to privacy and dignity and resulted in residents being exposed to dangers inherent in street life while it also inhibited their freedom in material respects. That infringed residents’ right to freedom, security and dignity.

Lease

Cancellation of lease: In Malan v City of Cape Town 2014 (6) SA 315 (CC); Malan v City of Cape Town 2014 (11) BCLR 1265 (CC) the appellant, Malan, was a 74-year-old widow who received social grant and lived in public rental housing in respect of which she paid nominal rental. The owner of the property, the City of Cape Town, cancelled the lease after allegations of breach thereof and thereafter obtained a High Court order evicting her from the premises. It was alleged that she fell in arrear with payment of rent and that illegal activity, in the form of drug trafficking and possession of illegal ammunition, took place on the premises. Such activities were allegedly carried out by the applicant’s son and daughter as well as third parties. The WCC held per Dolamo J that the respondent was justified in seeking the applicant’s eviction. The CC granted the applicant leave to appeal but dismissed the appeal with no costs as the case raised the important constitutional right of access to housing.

The majority judgment was read by Majiedt AJ while Dambuza AJ (Froneman and Madlanga JJ concurring) and Zondo J delivered separate dissenting judgments. The court held that the respondent had lawfully and validly cancelled the lease agreement on the ground of illegal activities that took place on the property. The applicant was well aware of illegal activity that was taking place there and at no stage did she aver that she could not control the prohibited conduct. The letter delivered to her giving notice of cancellation of the lease enabled her, if she was so minded, to protest the allegation that illegal activities were taking place on the property and, if such were admitted, to take steps to bring such activities to an end. She did neither. In the face of bare, unsubstantiated denial and continuation of illegal activities beyond the date of notice of cancellation, the unavoidable conclusion was that the applicant had failed to remedy breach of the lease agreement.     

Medical negligence

Negligence: In Sibisi NO v Maitin 2014 (6) SA 533 (SCA) the appellant, Mrs Sibisi, sued the respondent, Dr Maitin, for injury suffered by her baby, Y, during birth. As a result of the injury the baby became permanently paralysed in the shoulder and arm. This was due to the size of the baby at birth, it being 4,68 kg. It was alleged that the respondent had acted negligently by not establishing the weight of the baby with the result that it got stuck in the pelvis area during birth at which stage it suffered permanent shoulder paralysis and also because of the forceful manoeuvre (McRoberts manoeuvre) used to extract it. The appellant argued that in the circumstances of the case a Caesarean section should have been resorted to instead of natural birth. At the trial the parties agreed on a separation of merits from the quantum with the result that the action proceeded on merits only, the issue of quantum being postponed. The KZD (per Penzhorn AJ) dismissed the claim for lack of negligence on the part of the respondent. An appeal to the SCA was dismissed with costs.

Lewis JA (Ponnan, Pillay JJA, Dambuza and Mathopo AJJA concurring) held that foetal size was not a good predictor of shoulder dystocia (difficult childbirth). Therefore, there was no reason why the respondent would have foreseen that the baby would present with shoulder dystocia. Medical literature on the subject was clear that unless the mother was diabetic or had history of problems with shoulder dystocia a Caesarean section was not advisable. Due to risks inherent in the Caesarean section, including causing septicaemia (infection) and possible death of the mother, which was very real, the suggestion that in all cases of shoulder dystocia a Caesarean section should be performed could not be accepted. Therefore, there was no mismanagement on the part of the respondent of the appellant’s labour and certainly no negligence. A reasonable obstetrician in the respondent’s position would not have foreseen the possibility of shoulder dystocia and would have proceeded on the same basis as the respondent did. The appellant bore the onus of showing that an obstetrician with reasonable skill and diligence possessed by that branch of the profession would have foreseen the possibility of shoulder dystocia and taken steps to mitigate the risk. The appellant did not discharge that onus.

Nuisance

Liability for loss of livestock caused by spread of disease: In Oosthuizen v Van Heerden t/a Bush Africa Safaris 2014 (6) SA 423 (GP) the appellant, Oosthuizen, and the respondent, Van Heerden, were carrying on farming activities on neighbouring farms in Ellisras (now Lephalale) in Limpopo Province. The appellant kept cattle while the respondent kept blue wildebeest (wild animals). After the appellant lost six head of cattle due to ‘snotsiekte’ (bovine malignant catarrhal fever) it was common cause that the source was the wildebeest. The problem was that another farmer on a neighbouring farm, Van Vuuren, also kept blue wildebeest. It was, therefore, not known which wildebeest caused the spread of the disease. As Van Vuuren’s farm was a little further away the appellant chose to leave him alone. The magistrate dismissed the appellant’s claim against the respondent for failure to prove the cause of the disease and the quantum of damages. An appeal to the Gauteng Division, Pretoria was dismissed with costs.

Keightley AJ (Louw J concurring) held that the magistrate was correct on the causation finding. The court did not have to decide on the quantum issue as the appeal failed on two other grounds, namely negligence and wrongfulness. It was held that while it could not be gainsaid and it was common cause that blue wildebeest carried ‘snotsiekte’ virus, that in itself was insufficient to establish negligence on the part of the respondent. The risk of the cattle contracting ‘snotsiekte’ from the respondent’s blue wildebeest was very low. It could not per se be negligent for game farmers to keep blue wildebeest. Given the low risk of infection and the high cost of erecting a game fence, it was hardly credible to suggest that the respondent was negligent in failing to erect such fence. Whether a particular defendant or respondent acted wrongfully or negligently in keeping blue wildebeest in proximity to cattle-farming activities depended very much on the particular facts to hand. The mere fact that wildebeest were known to be carriers of the ‘snotsiekte’ virus did not mean that the appellant’s right to reasonable use of his farm trumped the concomitant right of the respondent. Reasonable use of property between neighbours with competing interests necessarily involved a ‘give-and-take’ on both sides. In the instant case parties could have discussed measures to accommodate both of their farming requirements but that was not done. The assumption of the appellant that if his cattle contracted the disease the law would hold the respondent liable for loss was misplaced.    

Restitution of land rights

Determination of equitable compensation: In the case of Florence v Government of the Republic of South Africa 2014 (6) SA 456 (CC); Florence v Government of the Republic of South Africa 2014 (10) BCLR 1137 (CC) in 1957 the Florence brothers bought property in Rondebosch, Cape Town on which they had lived for some years. Payment was in instalments all of which were duly paid. However, the buyers could not take transfer of the property because of the Group Areas Act 77 of 1957, which classified the area as ‘white group area’ and accordingly disqualified them from becoming owners. As a result in 1970 the parties agreed to cancel the contract and an amount of R 1 350 was returned to the buyers. In 1995 a land restitution claim was instituted against the property. As subsequent development had taken place the claimant, a member of the Florence family who also claimed on behalf of the other brothers, did not seek restitution of the property. Instead, equitable redress in the form of financial compensation was sought together with erection of a memorial plaque. The claimant and owner of the property agreed that a memorial plaque would be erected on the property. Thereafter the Florence family approached the Land Claims Court (LCC) for determination of their claim, just and equitable compensation and costs of erecting the memorial plaque.

The LCC held that the market value of the property at the time of its loss in 1970 was R 31 778 plus the agreed removal cost of R 85 from which had to be deducted the refunded R 1 350 which the Florence family received at the time. Therefore the difference was R 30 513 which the family did not receive. Using the consumer price index (CPI) the R 30 513, loss suffered in 1970 was converted into the present value of 
R 1 498 890 which was awarded as equitable redress. The court rejected the claim that equitable redress had to be achieved using a 32-day-deposit rate-investment yield or capital-gain metric. Doing so, it was held, would result in overcompensation and thus not be equitable. The court also rejected the claim for the costs of erecting a memorial plaque, holding that the Restitution of Land Rights Act 22 of 1995 (the Restitution Act) did not give it the power to do so. On appeal to the SCA the CPI conversion rate of the LCC was confirmed. However, the appeal succeeded on the costs of erecting memorial plaque which the respondent, the government, was ordered to pay.

On further appeal to the CC the CPI conversion rate of the claim was confirmed. The cross-appeal against the costs of erecting the memorial plaque order of the SCA was upheld. No order was made as to costs. The majority judgment was read by Moseneke ACJ while Van der Westhuizen J and Zondo J read separate dissenting judgments. Khampepe J concurred in the judgment of Moseneke ACJ in the main appeal (CIP conversion rate) and that of Van der Westhuizen J in the cross-appeal (costs of memorial plaque).

Moseneke ACJ held that Parliament had adopted a conversion mechanism that was meant to ensure that compensation sounding in money should reflect changes in the value of past monetary loss. The claim against the state for equitable redress was not a civil debt. Neither was it punitive nor retributive. It was not to be likened to a delictual claim aimed at awarding damages that were capable of precise computation of loss on a ‘but-for’ basis. It was a constitutional scheme paid out of public funds in order to find equitable redress to a tragic past. Therefore, the LCC was correct in calculating the financial loss at the time of the dispossession and for the purpose of placing the Florence family in the same position they would have been immediately after the dispossession. The Restitution Act did not warrant an approach that fixed compensation, as if the loss never occurred. Nor did it warrant awarding a full replacement value of the property. Just and equitable financial compensation did not aim to restore claimants in current monetary terms to the position they would have been in had they not been dispossessed but rather the financial loss they incurred at the time of dispossession.       

OTHER CASES

Apart from the cases and material dealt with or referred to above, the material under review also contained cases dealing with access to information, application for leave to appeal not suspending operation of business rescue order, appointment of judges, approval of building plans, business rescue, claim for constitutional damages, Constitutional Court decision binding on SCA even if wrong, consumer credit agreements, deduction of foster child grant from loss of support claim,  detention of illegal immigrants, disciplinary action against soldiers, distribution of free residue in insolvent estate, discovery and inspection of documents, duty of court to investigate matters of concern in proceedings, duty to keep information secret, examination of persons in insolvency inquiry, infringement of patent, irregular finding of fraud against attorney, removal of outdoor advertising signs, special votes cast in by-elections, threshold requirements for winding-up of company and unconstitutionality of detention of mentally impaired accused for indefinite period.