LEGAL NOTES VOL 9/2006 Compiled by: Adv M Klein Contents 1. SA Law Reports August 2006 2. ALL SA Law Reports August 2006 3. SA Criminal Law Reports August 2006 4. New Legislation LEGAL NOTES INDEX: VOL 9 OF 2006 Administrative law Judicial review Civil procedure Representation in court Company law Guarantee Constitutional law Constitutional damages Constitutional practice Courts – Powers of Contempt of court Failure to comply with court order Contract Formalities – Signature of document Contract Payment of interests Court – High Court Jurisdiction Damages Measure of Discovery and inspection Discovery Evidence Hearsay evidence Evidence Adequacy of proof Execution Immovable property Indictment and charge Splitting of charges Insurance Insolvency Intellectual property Copyright Labour law Constructive dismissal Maintenance For children Micro finance regulations Moneylending contract Clause in contract Motor vehicle accidents Compensation Practice “further and/or alternative relief” Practice Rescission Principal and surety Action against surety Sale Of land Sale Of land – Double sale Sale – of goods Latent defects Search and seizure Restraint order Sentence Imprisonment Succession Discriminatory provisions in will EDITORIAL The Minister of Justice and Constitutional Development appointed a Steering Committee in January 2006. The inaugural meeting of the Steering Committee took place on the 15th February 2006. During this meeting all members expressed their common interests and commitment to work towards the transformation of the legal services sector and the legal profession. The members of the Steering Committee consist of individuals from representative associations and organisations of the legal profession. The associations and organizations Steering Committee members are affiliated to include Advocates for Transformation (AFT), Black Lawyers Association (BLA), Black Women Lawyers Association (BWLA), Law Societies of South Africa (LSSA), Independent Advocates Association (IAASA), Centre for Applied Legal Studies (CALS), National Paralegal Institute (NPI), Waweth Policy Research Agency, the Society of Law Teachers of Southern Africa Association (SLTSA), Centre for African Renaissance Studies (CARS), and the DoJ&CD Policy Chief Directorate (PCD). The Steering Committee member affiliated to the General Council of the Bar (GCB) resigned from his appointment in July 2006, shortly after the first draft legal services charter was produced. The mandate of the Steering Committee is to draft a legal services charter and to advise the Minister on further consultative processes with the stakeholders. Adv Menzi Simelane, the Director-General of the Department of Justice was appointed as the Chairperson of the Steering Committee, and Adv Bonisiwe Makhene, the Chief Director of the Policy Unit was appointed as the Deputy Chairperson. Mr Neville Gawula was appointed as the Head of the Secretariat to the Steering Committee. A Drafting Team was appointed during the inaugural meeting of the Steering Committee. Ms Brenda Madumisa is the Chairperson of the Drafting Team, with Adv McCaps Motimele, Adv Mark Hawyes and Mr Nano Matlala as members of the Drafting Team. Congratulations Mark! THE SOUTH AFRICAN LAW REPORTS AUGUST 2006 (4) EX PARTE MINISTER OF SOCIAL DEVELOPMENT AND OTHERS 2006 (4) SA 309 CC Constitutional practice – Courts – Powers of – Court having power to extend period of suspension of order of constitutional invalidity only until such time as period of suspension expires – Courts not having power to order revival of expired period of suspension. FAKIE NO v CCII SYSTEMS (PTY) LTD 2006 (4) SA 326 SCA Contempt of court – Failure to comply with court order – Application for committal for contempt – Civil contempt – Standard of proof – Proof beyond reasonable doubt required for civil contempt of court proceedings. MGOQI v CITY OF CAPE TOWN AND ANOTHER 2006 (4) SA 355 CPD Practice – “further and/or alternative relief “– Scope of – Applicant seeking, in heads of argument, relief not sought in notice of motion – Relief in question sought under heading „further and/or alternative relief‟ – Not apparent from applicant‟s founding or replying affidavit that such relief sought – Court declining to consider relief. Local authority – Officers – Executive mayor – Powers of – Executive mayor not having power to amend own delegated powers by removing limitation on such powers – Executive mayor purporting to amend clause 5.2.10 of City of Cape Town‟s system of delegations to delete requirement that she make decisions in consultation with municipal manager – In exercise of her amended powers, executive mayor purporting to extend period of employment of municipal manager by amending his contract of employment. Accordingly, executive mayor‟s decisions to extend municipal manager‟s period of employment being set aside and latter‟s amended employment contract being declared unlawful and invalid. VAN AARDT AND ANOTHER v WEEHUIZEN AND OTHERS 2006 (10 SA 401 NPD Contract – Formalities – Signature of document – Where obligation to append signature to document arising out of agreement between parties, Court having power to order, in alternative, signature of document by official if respondent refuses to sign document in compliance with Court order – Respondent‟s obligation arising out of applicant‟s right of pre- emption, being variety of pactum de contrahendo – Court having power to grant order directing respondent to sign necessary documentation to effect, transfer, and in event of respondent‟s refusal to do so, director Deputy Sheriff to sign documentation. BURGER v BURGER AND ANOTHER 2006 (4) SA 414 D&CLD Maintenance – For children – Securing of payment of future maintenance Order for securing such payment from parent‟s portion and proceeds of sale of immovable property – High Court interdicting holder of father‟s fund from making payment to him from funds until children became self- supporting – Father exhibiting unsettled and hostile attitude towards mother‟s proposal that his portion of proceedings of sale of property be allocated to future maintenance of children – Attitude likely to have same result as intentional dissipation of funds – Court accordingly granting order restraining payment by holder of funds to father until children become self- supporting. NEDBANK LTD v MASHIYA AND ANOTHER 2006 (4) SA 422 TPD Execution – Immovable property – Order declaring specially hypothecated immovable property executable – Application for – Necessary allegations – Court setting out allegations to be contained in founding affidavits to application for default judgment where plaintiff simultaneously seeking order declaring defendant‟s specially hypothecated immovable property executable – In light of deficiencies in plaintiff‟s papers, Court postponing matter sine die to allow plaintiff opportunity to supplement papers. Held, that in terms of the Transvaal rules of practice, a creditor who sought to have his debtor‟s specially hypothecated immovable property declared executable was required to make the following averments in the founding affidavit to his application for default judgment: (1) the amount of the arrears as at date of the application for default judgment; (2) whether the property had been acquired by means of, or with the assistance of, a State subsidy; (3) whether or not, to the creditor‟s knowledge, the property was occupied; (4) whether the property was used for residential or commercial purposes; and (5) whether the debt had been incurred in order to acquire the property. KR SIBANYONI TRANSPORT SERVICES CC v SHERIFF, TRANSVAAL HC 2006 (4) SA 429 TPD Practice – Rescission – Grounds for – At common law, judgments rescindable on grounds of fraud and iustus error – Semble: There could also be other grounds based on justice and fairness. The appellant sought to rescind an order based on a settlement agreement between the parties on the basis that he never gave instructions to his attorneys to agree to the order. Held, that based on the facts and the probabilities in casu, a settlement had been reached, and that any misunderstanding could not have been a iustus error. The application was accordingly without foundation in law or in fact, and fell to be dismissed. UNITAS HOSPITAL v VAN WYK AND ANOTHER 2006 (4) SA 436 SCA Discovery and inspection – Discovery – Promotion of Access to Information Act 2 of 2000 – Impact of on discovery procedure – PAIA having no impact on discovery procedure – Once court proceedings begin, access to information governed by Uniform Rules of Court – Provisions of PAIA no longer applicable as between parties. The first respondent intended instituting action against the appellant hospital for damages arising out the death of her late husband while he was a patient at the hospital. She contended that his death was the result of negligence on the part of the hospital‟s nursing staff. With a view to instituting those proceedings the first respondent brought an application in the High court against the appellant and the second respondent under s 50 of the Promotion of Access to Information Act 2 of 2000 (PAIA). She sought access to a report that had been compiled by the second respondent on general nursing conditions in the ICU and high- care units at the hospital. Held, that the first respondent had failed to meet even the threshold requirement that the report would be of assistance to her in the action she intended instituting against the appellant. The question whether, in addition, she had shown an „element of need‟ or „substantial advantage‟ therefore did not arise. Consequently the application ought to have been dismissed. HAUPT t/a SOFT COPY v BREWERS MARKETING INTELLIGENCE 2006 (4) SA 458 SCA Intellectual property – Copyright – Infringement of computer programs what constitutes infringement Reproduction of substantial part of computer program – Whether substantial part of computer program being reproduced depending more on quality than on quantity of reproduction. Only 26% of graphic content and 83% of search component of computer program being reproduced, amount to 63 lines out of several thousand lines of source code – However, such components being valuable ingredients of program – Reproduction thus constituting reproduction of substantial part of computer program – Accordingly, reproduction infringing copyright in computer program – Court interdicting continued infringement. MEC. DEPARTMENT OF WELFARE, EASTERN CAPE v KATE 2006 (4) SA 478 SCA Constitutional law – Constitutional damages – Award of – Appropriateness of – Unreasonable delay in considering claimant‟s application for disability grant resulting in denial of claimant‟s right to social assistance during period of delay – Problem of unreasonable delays in administration of social grants having become endemic. The decision in Kate v MEC for Department of Welfare, Eastern Cape 2005 (1) SA 141 (SE) () 1 All SA 745) substantially confirmed. SASFIN BANK LTD v SOHO UNIT 14 CC t/a AVENTURA EILAND AND OTHERS 2006 (4) SA 513 TPD Principal and surety – Action against surety – by undisclosed principal – Application of doctrine of undisclosed principle not invalidating suretyship for want of compliance with s 6 of General Law Amendment Act 50 of 1956 – Section requiring terms of contract of suretyship, including identity of creditor, to be embodied in written document – However, sufficient for such purposes that identity of creditor capable of being extrinsic evidence – Identity of undisclosed principal capable of being proved by extrinsic evidence – Reliance on doctrine of undisclosed principal thus not invalidating contract of suretyship in terms of s 6 of Act. GEYSER v NEDBANK LTD AND OTHERS: IN RE NEDBANK LTD v GEYSER 2006 (4) SA 544 WLD Court – High Court – Jurisdiction. The first respondent had instituted action in the Witwatersrand Local Division for payment of the balance of moneys due and owing in terms of a written agreement of loan. It appeared that the agreement of loan had been entered into in Pretoria, outside the jurisdiction of the Court, and all the obligations of the parties in terms of the loan agreement had to be performed outside the jurisdiction of the Court. Held, on the authorities, that the choice of domicilium citandi et executandi in Johannesburg within the jurisdiction of the Court was clearly not enough to establish the jurisdiction of the Court.(The parties chose their domicilium and not the court‟s jurisdiction) Held, further, that so much of the loan transaction had occurred outside of the jurisdiction of this Court, and so little within it, that there were not enough factors giving rise to the jurisdiction of this Court and to justify its competence to hear the matter. VAN NIEKERK AND ANOTHER v FAVEL AND ANOTHER 2006 (4) SA 548 WLD Sale – Of land – Breach of contract by purchaser – Rectification of – Demand by seller under s 19 of Alienation of Land Act 68 of 1981 that breach be rectified – Purchaser to be given 30 days to rectify alleged breach (s 19 (2)(b)) – Thirty-day period commencing on date of posting of seller‟s demand. BAFANA FINANCE MABOPANE v MAKWAKWA AND ANOTHER 2006 (4) SA 581 SCA Moneylending contract – Clause in contract whereby debtor undertakes not to apply for administration order in terms s 74(1) of the Magistrates‟ Courts Act 32 of 1944 and that loan debt will not form part of administration order for which debtor might apply – Such clause unenforceable as being contrary to public interest. SMITH v ROAD ACCIDENT FUND 2006 (4) SDA 590 SCA Motor vehicle accidents – Compensation – Claim in terms of Road Accident Fund Act 56 of 1996 – Unidentified owner or driver – Liability of Fund to negligent driver – Designated beneficiary of Fund the injured third party and not uninjured negligent driver – Fund under no liability to negligent driver. The decision in the Eastern Cape Division in Smith v Road Accident Fund  4 All SA 579 confirmed. HARLEY v UPWARD SPIRAL 1196 CC AND OTHERS 2006 (4) SA 597 D&CLD Sale – Of land – Double sale – Doctrine of notice - First purchaser retaining right to transfer of property where second purchaser accepting transfer with knowledge of first purchaser‟s rights in terms of first sale – Court granting order in form of rule nisi directing re-transfer of property from second purchaser and seller from, inter alia, selling property. ALL S.A. LAW REPORTS AUGUST 2006 GARDNER AND ANOTHER v MARGO  3 All SA 229 (SCA) Company law – Guarantee provided by company regarding price obtainable for sale of shares – Whether constituting a breach of the provisions of Companies Act 61 of 1973 – Section 38. The dispute between the parties centred largely on the amount to which the third party was entitled in respect of shares sold on his behalf. A final point considered by the Court was whether a guarantee provided by the second appellant in respect of the amount he would receive for the sale of his shares constituted a breach of the provisions of section 38 of the Companies Act 61 of 1973. The Court found that it did not, GQWETHA v TRANSKEI DEVELOPMENT CORPORATIONS LTD  3 All SA 245 (SCA) Administrative law – Judicial review – Unreasonable delay – Pursuant to a disciplinary enquiry, the appellant was dismissed by the first respondent on account of alleged financial irregularities. She instituted proceedings for judicial review to have the dismissal set aside. According to the majority of the Court, it was important for the efficient functioning of public bodies that a challenge to the validity of their decisions should be initiated without undue delay. In the present case the delay of fourteen months, for which there was no adequate explanation, was unreasonable, and no grounds had been shown for overlooking. The appeal was dismissed with costs. MICRO FINANCE REGULATORY COUNCIL v AAA INVESTMENT (PTY) LTD AND ANOTHER  3 All SA 256 (SCA) Micro finance – regulations - The first respondent‟s submission regarding the appellant‟s authority to make its rules was misconceived. In regulating micro- lenders who agree to such regulation it does not purport to be exercising legislative or other public powers that require a constitutional or legislative source. It purports only to regulate those who are willing to submit to its regime, and the source of its authority to do so is their consent. The appellant was accordingly clearly entitled to make its rules. The appeal was upheld with costs. NAVY TWO CC v INDUSTRIAL ZONE LTD  3 All SA 263 (SCA) Civil procedure – Representation in court – Sole member of a close corporation seeking to represent it – Whether case fell within exception to rule barring a person who is not a practitioner from representing entity – Court should have exercised discretion before making decision. Only practitioners can represent close corporations. DU PREEZ v MINISTER OF JUSTICE AND CONSTITUTIONAL DEVELOPMENT AND OTHERS  3 All SA 271 (SE) Constitutional law – Allegation of unfair discrimination – Weighting of short listing criteria in order to comply with affirmative action measures – Where effect is to create absolute bar to white males being successful, policy is not rational and justifiable. The complainant had 19 years‟ experience as a magistrate and held the degrees of B Juris, LLB and Master of Public Administration. He averred that in the short listing of candidates, the Magistrate‟s Commission had unfairly discriminated against him on the basis of race and gender. In support of that allegation, he referred to the weighting attached to the criteria on the score sheet. The Court concluded that the complainant had been unfairly discriminated against, and upheld the complaint. MURRAY v MINISTER OF DEFENCE  3 All SA 290 (C) Labour law – Constructive dismissal – Onus of proof – Plaintiff required to prove that he had no voluntary intention to resign, but that the employer must have caused the resignation – Court must look at the employer‟s conduct as a whole and determine whether its effect, judged reasonably and sensibly, was such that the employee could not have been expected to put up with it. As the plaintiff was a member of the South African National Defence Force, the provisions of the Labour Relations Act 66 of 1995 did not apply to him. The resolution of his labour dispute therefore had to be based on the common-law principles of the contract of employment. Examining the incidents of which the plaintiff based his complaints, the Court found that the plaintiff did not allege that any of the said incidents caused the continuing employment relationship to become intolerable thus leading him to resign. The chronology of events which preceded plaintiff‟s resignation may be divided into phases, these being the first preliminary investigation which led to the holding of the First Court Martial; the second preliminary investigation which led to the holding of the Second Court Martial. Viewing the incidents objectively, the Court could not find that they were of such a nature that the plaintiff‟s employment was rendered intolerable. It therefore dismissed the claim with costs. D & H PIPING SYTEMS (PTY) LTD v TRANS HEX GROUP LTD 3 All SA 309 (SCA) Sale – of goods – Latent defects – Liability of manufacturers – When manufacturer liable for consequential damages. In the High Court the appellant alleged the respondent to be a „manufacturing seller‟ and, on the basis that the aggregate and sand supplied to it by the respondents had been latently defective, claimed payment by the respondent of its consequential loss of R13 million. Held, that, on the evidence the respondent had known at the relevant time that the aggregate and sand supplied by it to the appellant would be used in the manufacture of concrete pipes and a term to that effect had therefore been incorporated into the contracts between them. Held, further, that, on a proper construction of the authorities, a vendor who sold goods of his own manufacture was liable for consequential loss caused by a latent defect in the goods sold. (Case also reported in S.A. Law Reports 2006(3)SA 593 SCA ) The appeal was accordingly upheld. ETHEKWINI MUNICIPALITY v VERULAM MEDICENTRE (PTY) LTD  3 All SA 325 (SCA) Contract – Payment of interests – Applicability of in duplum rule – Rule not applicable where not dealing with arrear interest. Held, the sole issue for determination on appeal was whether the duplum rule applied to the respondent‟s claim against the appellant. The effect of the in duplum rule is that the interest due in respect of a debt ceases to run when it reaches the amount of the unpaid capital sum. The rule is based on public policy and is meant to protect debtors from exploitation by creditors who could force them to pay unregulated charges. It cannot be waived in advance or during the period of the loan. The rule is confined to arrear interest alone. On a proper interpretation of the contractual provision relating to interest, the Court found the appellant‟s reliance on the in duplum rule to be without merit. As there was no debt owing until the contract was cancelled, the present case did not deal with arrear interest. It was also found that the interest agreed upon by the parties was not interest in the ordinary sense but was a means of formulating fair and proper restitution for what had been paid,. The appeal was dismissed with costs. PIETERSE v SHROSBREE: SHROSBREE NO v LOVE  3 All SA 343 (SCA) Insurance – Insolvency - Whether the trustee of an insolvent deceased‟s estate is entitled to the proceeds of insurance policies for redistribution to creditors of the deceased, in preference to the nominated beneficiaries – Effect of section 63 of the Long Term Insurance Act 52 of 1998 on such situation. After the death of the deceased, the first two respondents, as nominated beneficiaries, accepted the benefits of the policy. A short time thereafter, the deceased estate was sequestrated. The first two respondents unsuccessfully sought a declarator that they were entitled to the proceeds of the policy. Nominated beneficiaries are better off than creditors!! Never make your estate a beneficiary!! MINISTER OF EDUCATION v SYFRETS TRUST LTD  3 All SA 373 (C) Succession – Discriminatory provisions in will – Freedom of testation not an unfettered right – Discriminatory provisions deleted from will. Trust and trustee – Trust instrument – Variation of – Testamentary trust created for purpose of „providing bursaries for deserving students with limited or no means of either sex (but of European decent only)‟ – Trust later amended by codicil to make „persons of Jewish decent (sic), and females of all nationalities‟ ineligible to compete for bursaries – Application for order varying trust conditions by deleting discriminatory provisions in will and codicil. The late S, who died in 1921, had in 1920 execute a will in which it was provided, that the residue of his estate should be held in trust and that after the death of his wife, and in the event of both his sons dying without being survived by lawful issue, should be applied for the purpose of forming a fund (the trust). Held, that it was the public policy of today – not of 1920 (when the will and codicil were executed) – Which was decisive in the present application. Held, further, that the condition limiting eligibility for the bursaries to candidates of „European descent” constituted an instance of interdict discrimination based on race or colour. The exclusion of Jews and women in terms of the codicil, in turn, constituted direct discrimination on the grounds of gender and religion. Such discrimination, being based on some of the prohibited grounds specified in s 9(3) of the Constitution, was therefore presumed to be unfair „unless it is established that the discrimination is fair‟. (Also reported in S.A. Law Reports 2006(4) SA 205 CPD ) THE SOUTH AFRICAN CRIMINAL LAW REPORTS AUGUST 2006 (2) S v WILLIAMS : S v PAPIER 2006 (2) SASV 101 KPD Sentence – Imprisonment – Duration of – Non-parole period. In imposing sentence, judicial officers cannot fix non-parole period in terms of Correctional Services Act 111 f 1998 (as magistrate having done in two cases under review) –If court wishing to fix non-parole period, having to do so in terms of s 276B of Criminal Procedure Act 51 of 1977. Regarding the present cases, the sentences imposed were fitting, but the purported ordering of non-parole periods was set aside. S v WALDECK 2006 (2) SACR 120 NCD Evidence – Hearsay evidence. Court must exercise caution before admitting hearsay evidence and must look for compelling justification to do so in criminal cases. Having been convicted of murder and sentenced to 15 years‟ imprisonment, the appellant appealed against his conviction. The impugned evidence was that of the neighbour of the deceased, who testified that she had been approached by the deceased who told her that the appellant had assaulted her. The witness testified that she had seen bruises on the person of the deceased. Further hearsay evidence was heard from the father of the deceased to whom the deceased had been taken after the assault by the appellant. Examining the magistrate‟s handling of the evidence, the present Court found her judgment to be lacking in various respects. In examining the hearsay evidence, the Court considered the purpose for which the evidence was tendered and found that the object was the probative value of the evidence. On a careful examination of the evidence, the Court found the statements allegedly made by the deceased to the relevant witnesses to be admissible. This led to the question of whether the appellant had intended to murder the deceased and whether the State had proved dolus directus or dolus eventualis. Although not satisfied that the appellant had intended directly to bring about the deceased‟s death or that he foresaw the possibility of the deceased‟s death ensuing as a result of the assault, the Court was satisfied that the appellant ought to have foreseen the death of the deceased resulting from his conduct. The Court therefore decided that the appellant had negligently caused the death of the deceased and was accordingly guilty of culpable homicide. (Also reported at  2 All SA 341 NCD) S v CHARZEN AND ANOTHER 2006(2) SACR Evidence – Adequacy of proof – Identification – „Unignorable‟ error in description of attacker – Misdescription not explained – Absence of physical evidence (fingerprints or retrieved stolen items) creating reasonable doubt – Convictions set aside on appeal. Evidence – Identification – Certainty beyond reasonable doubt that identification is reliable – Generally recognised that evidence of identification based upon a witness‟s recollection of a person‟s appearance can be dangerously unreliable, and must be approached with caution. The key question was the adequacy of the complainant‟s evidence identifying the appellants as the two robbers who had shot him. The complainant had referred to dreadlocks in his description of the first appellant. Such a feature was absent from the first appellant at the trial, and no evidence that he had ever had dreadlocks was to be found. The Court could not ignore the error, and could not, in the absence of any other evidence against the appellants, confirm the convictions. It upheld the appeal on that basis. Also reported at  2 All SA 371SCA ) ABSA BANK LTD v FRASER AND ANOTHER 2006 (2) SACR 158 SCA Search and seizure – Restraint order in terms of Prevention of Organised Crime Act 121 of 1998 – Effect of on defendant‟s concurrent creditors – Proper interpretation of s 33 (1) of Act not excluding concurrent creditors‟ interests in restrained property – Defendant‟s legal expenses having no preference in respect of restrained property over proven concurrent claims. Semble: Court expressly not deciding whether entitled to release restrained property to meet concurrent claim before confiscation order made. Also reported at  2 All SA 1 SCA . S v JABANI 2006 (2) SACR 171 NCD Indictment and charge – Splitting of charges – Accused convicted of attempted murder and rape – Clear that accused‟s dominant intention was to rape complainant even if it took extreme measures to achieve this end. LOUW AND ANOTHER v MINISTER OF SAFETY AND SECURITY AND OTHERS 2006 (2) SACR 178 TPD Damages – Measure of – For unlawful arrest – Plaintiffs arrested without warrant for alleged theft of fax machines – Detained overnight at police station – No reasonable suspicion of crime having been committed – Police abusing powers and acting with ulterior motives – Arrests unlawful – Factors taken into account in determining quantum set out – Damages of R75 000 awarded to each plaintiff. NEW LEGISLATION Since 27 April 1994, the Department of Justice and Constitutional Development has promoted 108 Bills, which have been enacted by Parliament. In 1994 the Department promoted 5 Bills, 12 in 1995, 16 in 1996 as well as in 1997 and 1998, 3 in 1999 (election year), 7 in 2000, 10 in 2001, 14 in 2002, 8 in 2003 and 1 in 2004. This is an average of about 11 Bills per year. Forty of these statutes are entirely new statutes, giving an indication of the growth in our law since 1994, mainly in order to give effect to the new constitutional dispensation !