INDEX 1

EDITORIAL

SOUTH AFRICAN LAW REPORTS APRIL 2016

SA CRIMINAL LAW REPORTS APRIL 2016

All SOUTH AFRICAN LAW REPORTS APRIL 2016

EDITORIAL

1. When next you stand in a shop and listen to nice music, remember that you pay to listen!2 (Indirectly, the user always pays) I suppose there is nothing inherently wrong with the concept but and I do not say it does not happen, as long as the musicians also get a fair share! Remember Rodriques, his records were sold in South Africa by the thousands..and he did not even know about it!!!

2. And also, happy happy birthday!!! In 2016 the famous song “Happy birthday to you” can be played in movies and musicals without having to pay to the copyright owners, the USA copyright owners, but in the European Union et ends in December 2016.3

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

2 See South African Music Performance Rights Association v Foschini Retail Group (Pty) Ltd and others [2016] 2 All SA 40 (SCA)

3 None of the early appearances of the "Happy Birthday to You" lyrics included credits

or copyright notices. The Summy Company registered a copyright in 1935, crediting authors Preston

Ware Orem and Mrs. R. R. Forman. In 1988, Warner/Chappell Musicpurchased the company owning

the copyright for US$25 million, with the value of "Happy Birthday" estimated at US$5 million. Based

on the 1935 copyright registration, Warner claimed that the United States copyright will not expire until

2030, and that unauthorized public performances of the song are technically illegal unless royalties

are paid to Warner. In one specific instance in February 2010, these royalties were said to amount

to US$700. By one estimate, the song is the highest-earning single song in history, with estimated

earnings since its creation of US$50 million.In the European Union, the copyright of the song was set

LEGAL NOTES VOL 5/2016

Compiled by: Adv M Klein

Yes “LOL” ! Or is it capitalism at its worst or is it greed or is it good business? Answer: who is your client?

3. The word “rational” pops up in the law reports. What is rational??4. CONGRATUALTIONS the National Bar received 47 applications for

membership for this year! A record of some kind. And we received applications from longstanding advocates from the “constituent” Bars!

5. The National Bar revised its pupillage program, we also compared it with the “constituent” Bars and we are on par!

6. If you know of somebody with an LLB and who has not been admitted as advocate, perhaps now is the time…within two years with the new Practice Act you might have to do much more…community service perhaps…

SALR APRIL 2016

DIRECTOR OF PUBLIC PROSECUTIONS, GAUTENG v PISTORIUS 2016 (2) SA 317 (SCA) Criminal law — Murder — Mens rea — Intent to kill — Dolus eventualis — Whether present — Accused firing four shots at person behind toilet door.Criminal law — Murder — Mens rea — Intent to kill — Exclusion — Putative private defence — Whether established. Criminal procedure — Appeal — In what cases — On questions of law reserved — Prerequisite for reservation of questions of law that there be acquittal — Conviction on competent verdict to be regarded as acquittal on main count — Criminal Procedure Act 51 of 1977, s 319.Mr Pistorius, believing an intruder to be behind the closed door of his home's toilet, shot and killed the individual. It turned out to be Ms S.

to expire no later than December 31, 2016.

The American copyright status of "Happy Birthday to You" began to draw more attention with the

passage of the Sonny Bono Copyright Term Extension Act in 1998. When theU.S. Supreme

Court upheld the Act in Eldred v. Ashcroft in 2003, Associate Justice Stephen Breyer specifically

mentioned "Happy Birthday to You" in his dissenting opinion. American law professor Robert

Brauneis, who extensively researched the song, concluded in 2010 that "It is almost certainly no

longer under copyright." In 2013, based in large part on Brauneis's research, Good Morning to You

Productions, a company producing a documentary about "Good Morning to All", sued

Warner/Chappell for falsely claiming copyright to the song. In September 2015, a federal judge

declared that the Warner/Chappell copyright claim was invalid, ruling that the copyright registration

applied only to a specific piano arrangement of the song, and not to its lyrics and melody. In February

2016 Warner/Chappell settled for US $14 million and sent the song into the public domain.

The state later charged Pistorius with murder, but the High Court convicted him of the competent verdict of culpable homicide.This caused the state to appeal to the Supreme Court of Appeal on questions of law reserved in terms of s 319 of the Criminal Procedure Act 51 of 1977 It asserted that Pistorius ought to have been convicted of murder.The issues were:   (1)   Whether there had been an acquittal, a prerequisite for the reserving of a question of law. Held, that there had been: conviction on a competent verdict was to be regarded as acquittal on the main count.   (2)   Whether the High Court had correctly applied the principles of dolus eventualis. Held, that it had not: it had taken an objective approach to dolus; had used the test for dolus directus to establish if there had been dolus eventualis; and had assumed a perpetrator had to know the identity of his victim in order to be found to possess dolus eventualis.   (3)   Whether the High Court correctly applied the principles relating to circumstantial evidence. Held, that it had erred. A court had to take into account all of the circumstantial evidence in coming to a conclusion of fact. Here the High Court had failed to take account of certain forensic evidence in coming to its conclusion on the existence of dolus eventualis. (4)   What the interests of justice required the Supreme Court of Appeal to do. Held, that they required it to consider whether the High Court had erred on dolus eventualis; and if it had, to set aside the conviction of culpable homicide. (Paragraphs [43] and [46] at 333F – J and 334F.)   (5)   Whether Pistorius had acted with dolus eventualis. Held, that he had. C Given the nature of his weapon and ammunition, and the small size of the toilet cubicle at which he aimed, he must have foreseen the possibility that in firing he might kill the person inside. That he had continued and fired four shots, suggested he must have reconciled himself to this possibility. (6)   Whether Pistorius had established that he had acted in putative private defence. Held, that he had not: he had provided no factual basis for his purported belief that the person behind the door was about to attack him.Conviction of culpable homicide and sentence therefor set aside, and replaced with a conviction of murder. Matter referred to trial court for sentence.

KHAM AND OTHERS v ELECTORAL COMMISSION AND ANOTHER 2016 (2) SA 338 (CC) 

Election law — Electoral irregularities — Impact on freeness and fairness — Defective voters' roll allowing voters in municipal by-election to vote in districts in which they did not reside — Omission of voters' addresses hampering canvassing by candidates and impairing their right to stand for election — Elections not free and fair.Election law — Election — Duties of Independent Electoral Commission — Municipal election — Duty to register voters in correct voting districts — Duty to show addresses on voters' roll — Duty to adhere to election timetable — Non-compliance resulting in elections not being free and fair — IEC's handling of election criticised.Constitutional law — Human rights — Right to free and fair elections — Right to stand for election — Irregularities in registration process and defects in voters' roll impacting on ability of candidates to participate in municipal election — Elections not

free and fair, irrespective of effect of irregularities on result of election — Elections set aside — Constitution, s 19.

The Constitutional Court set aside the results of municipal by-elections, held in September and December 2013 in eight wards in Tlokwe (Potchefstroom), on the ground that they were not free and fair due to irregularities in voter registration. The judgment was critical of the IEC's handling of the elections.The applicants, candidates for ward councillor who had run as independents after being expelled from the ANC, claimed that —• the voters' roll was inaccurate — outsiders were registered (and allowed to vote) in the contested wards;• the segments of the voters' roll given to the applicants omitted voters' addresses; and• the segments in question were delivered late. Citing these irregularities, the applicants approached the Electoral Court for an order postponing the elections, but the court was unable to convene to hear the application. The elections went ahead and six of the applicants lost. The IEC subsequently conducted its own investigation into the matter and concluded that, though over 1000 voters had been registered in wards in which they did not live; more than 300 could not prove that they lived where they were registered; and at least 300 more were registered in the wrong voting districts, this had not affected the results. The IEC argued this was partially the result of the difficulties it faced in registering voters living in informal settlements.A further approach to the Electoral Court having failed, the applicants applied for leave to appeal to the Constitutional Court. They relied on the irregularities revealed by the IEC's investigation for an order setting aside the election results on the ground that they were not free and fair. The application was opposed by the IEC, which argued that the declared results accorded with the broad will of the electorate and ought not to be disturbed.HeldDeciding whether elections were free and fair involved a value judgment. The nature of the irregularities and their impact on the conduct and the result of the elections had to be measured against the constitutional right to free and fair elections (which included the right to stand for public office). The IEC, as the institution charged with the conduct of elections, had to be held to the high standards its constitutional duties imposed on it (para [90]).Since councillors were elected to represent specific wards, it was imperative that voters in municipal elections be registered in the wards in which they were ordinarily resident. The IEC was aware of this requirement but, on its own account, failed to observe it (paras [67] – [68]). What was troubling here was the absence of an explanation of how the incorrect registrations occurred, and why voters were placed in incorrect wards [para 68]. The IEC's conduct of the elections on the basis of an inaccurate voters' roll was in breach of the principle that only those legally entitled to do so should vote.Moreover, the failure of the IEC to supply the applicants with segments of the voters' roll containing voters' addresses was a serious breach of its obligations and had impaired the applicants' right to participate in the elections. This was compounded by its late delivery of the voters' roll and its failure to comply with the electoral timetable. The elections, and in particular the December elections, were, on the IEC's own version, tainted by these irregularities.

The elections failed the 'free and fair' test. They were conducted against the background of well-founded fears that an unknown number of voters had been wrongly registered in wards in which they did not reside and where they were not entitled to vote. This had an impact on the ability of the applicants to participate effectively in the elections, and hence on their right to stand for public office, irrespective of the effect of the irregularities on the results of the elections. An election conducted when there was a serious question as to the reliability of the voters' roll could not be described as free and fair. As to the difficulties with the registration of voters from informal settlements: The IEC had to attempt to obtain some proof of address, but the absence of an address would not affect the validity of the roll, provided the person in question was registered in the correct ward.In the circumstances, an order setting aside the elections and directing the holding of fresh elections would issue.

HERITAGE HILL DEVCO (PTY) LTD v HERITAGE HILL HOMEOWNERS ASSOCIATION 2016 (2) SA 387 (GP)

Township — Developer — Rights and duties — Liability for levies imposed by homeowners' association in terms of its articles of association on property owners in township — Developer liable for such levies as property owner of unsold individual erven reflected on registered general plan establishing township. Township — Establishment — — Subdivision of land — Ownership — Developer becoming registered owner of unsold individual erven in township upon registration of general plan establishing township — Deeds Registries Act 47 of 1937, ss 46 and 47.Where, as in the present case, the articles of association of a township's homeowners' association imposes liability for levies on members, 'including the developer, who is the registered owner of the property', the developer may — after registration in the deeds registry of the general plan establishing the township — be held liable for levies in respect of each individual erf in the township. This is so because, on a proper interpretation of ss 46 and 47 of the Deeds Registries Act 47 of 1937, the developer becomes the registered owner of the (unsold) individual erven in a township upon registration of the general plan establishing the township, and as such attracts liability for levies under the articles of association. 

NELSON MANDELA BAY METRO v GEORGIOU t/a GEORGIOU GUESTHOUSE & SPA AND OTHERS 2016 (2) SA 394 (ECP)

Local authority — Town planning — Town-planning and zoning schemes — Rezoning — Approval — Conditional approval — Ambit of conditions which may be lawfully imposed — Whether competent to approve rezoning subject to removal of restrictive title conditions — Land Use Planning Ordinance 85 of 1985, s 42.The unlawfulness of granting a rezoning application in conflict with a restrictive condition of title is not remedied by making such rezoning subject to the condition that the restrictive condition of title be removed or varied. This is so because such a

condition is not envisaged by s 42(1) of the Land Use Planning Ordinance 85 of 1985 (LUPO) and is therefore unlawful. The imposition of a condition in terms of s 42(1) of LUPO, in the context of a rezoning, relates to the determination of specific land-use restrictions to be applied to the property concerned (para [64]). It does not envisage conditions —• compliance with which cannot be positively enforced (para [69]);• that do not constitute a 'departure' and is therefore nowhere recorded in a publicly accessible register;• that achieve no more than stating the legal position;• that do not confer use rights, and suspend rezoning in the sense that no use rights are conferred or attach to the property until such time as the condition was met;• that would ignore or circumvent rights conferred by a restrictive condition.

 NEDBANK LTD v STEYN AND OTHERS 2016 (2) SA 416 (SCA)

Administration of estates — Claim against deceased estate — Procedure for enforcing — Creditor not precluded by the Administration of Estates Act 66 of 1965 from instituting action in terms of its common-law right against deceased estate for recovery of a debt owed by deceased — Administration of Estates Act 66 of 1965.A creditor is not precluded by the terms of the Administration of Estates Act 66 of 1965 from instituting action in terms of its common-law right against a deceased estate for recovery of a debt owed by the deceased. The decision of the court a quo that a creditor was so precluded was in direct conflict with the conclusion of the court in Nedbank Ltd v Samsodien NO  Contrary to the assertions of the court a quo, the decisions relied upon in Samsodien NO supported the conclusion reached in such matter. Further, Samsodien, and the cases on which it relied, was correctly decided because (1) the Act could not be construed to deprive the plaintiff of the common-law action against the deceased estate; and (2) the legislature must be taken to have endorsed the meaning the courts had attributed to pertinent provisions of the old Act (24 of 1913) when it introduced those same provisions in the new Act.The decision of the court a quo set aside.

TWALA v MEC FOR EDUCATION, EASTERN CAPE AND OTHERS 2016 (2) SA 425 (ECB) 

Administrative law — Access to information — Access to information held by public body — Request — Refusal — Internal appeal — Late lodging of appeal and failure to seek condonation from body in question — Consequences — Whether applicant barred from seeking judicial relief — Promotion of Access to Information Act 2 of 2000, s 75(1)(a)(i), s 75(2) and s 78(1).Section 75(1)(a)(i) of the Promotion of Access to Information Act 2 of 2000 (the Act) provides that an internal appeal against a decision of the information officer of a public body to refuse a request for access to records of that body has to be lodged within 60 days after the decision was taken. Section 75(1)(a)(i) had to be read with s 75(2)(a) and (b), which provide, firstly, that an 'appeal authority' has to condone the failure of a requester of information to lodge an appeal within the abovementioned period 'on good cause shown' by the requester, and secondly, should it refuse to so grant condonation, the appeal authority must give notice of such refusal to the requester. Pertinently, a requester whose internal appeal was unsuccessful, or who is aggrieved by a decision not to allow the late lodging of the appeal, could

apply to court for appropriate relief, but only after having 'exhausted the internal appeal procedure against a decision of the information officer of a public body as provided for in section 74' (s 78(1)).Arising out of a decision by her employer, the Department of Education, Eastern Cape Province (the department), the applicant had lodged a request in terms of the Act and in the prescribed form for access to certain documentation. No decision having being made, and having heard nothing for over a period of 30 days, the applicant launched an internal appeal in the prescribed form against the deemed refusal. It was common cause that the applicant's appeal was 20 days out of time. After receiving nothing as to the decision of the department, the applicant approached the High Court for an order directing the respondents to grant her access to the documents in question.The respondents argued, firstly, that the failure by the applicant to comply with the 60-day time period meant that the internal appeal was a nullity and did not need to be considered by the relevant authority.Held, that the failure of the applicant to timeously lodge her appeal did not without more render it a nullity. This was in the light of inter alia: The Act pertinently not making provision for the consequences of non-compliance with the 60-day procedural requirement, or any sanction therefor; and further, a consideration that administrative convenience, which the procedural requirement under consideration served to further, could not lightly be allowed to override the exercise of a constitutional right, namely the right to access to information.It was further argued by the respondents that, in failing to lodge an application for condonation for the late lodging of the appeal envisaged in s 75(2) of the Act, accompanying and separate from the appeal, it could not be said that the applicant had first exhausted all her remedies as required by s 78. As to this submission, the court pointed out that the legislation and the prescribed appeal form were silent as to the procedure that had to be followed in exercising the right to have the late lodgement of an internal appeal condoned on good cause shown. Neither had it been established whether procedural requirements had been laid down by the department. Held, that legality, in the circumstances of the exercise of the power in s 75(2), required that a requester of information be informed of and made aware of any procedural requirements which might have existed for the exercise of his or her fundamental rights (which was not proved to have occurred in this case). In the wider context of the fact that the relevant authority was exercising a statutory authority, that its exercise affected the exercise of a fundamental right and that the curtailment of the right lay within the actual decision-making process. The principle of legality had to include the common-law right of natural justice and its component of procedural fairness. Held, that, in the absence of the relevant authority having determined procedural requirements for the exercise of its power in s 75(2), and the prescribed form being silent about the provisions of s 75(2), fairness required that the requester be afforded a reasonable opportunity to place information before the relevant authority to enable it to exercise its jurisdiction, if it were unable to do so on the material before it. It had to, however, decide the matter; it could not simply ignore the appeal as the authority in the present matter had effectively done. Failing a decision in terms of s 75(2) and advising the requester of its decision in the appeal, the relevant authority must be taken to have impliedly condoned the late filing of the appeal, thereby allowing the process to continue to the next stage. (Paragraph [20] at 434I – 435B.)

The court granted relief in terms of s 78(2), condoning the applicant's non-compliance with s 75(1)(a)(i) and ordering that access to the documentation be granted.

HARVEY v NILAND AND OTHERS 2016 (2) SA 436 (ECG) 

Constitutional law — Human rights — Right to privacy — Privacy of communications — Social-media communications — Admissibility in evidence — Discretion of court — Unlawfully hacked Facebook posts — Constitution, s 14(d).Electronic communications and transactions — Unauthorised access to data — Admissibility in evidence — Though conduct criminalised under ECTA, evidence so obtained not ipso facto inadmissible — Court retaining usual discretion to admit — Electronic Communications and Transactions Act 25 of 2002, s 86(1).Evidence — Admissibility — Electronic communications — Unauthorised access — Data so obtained not ipso facto inadmissible despite criminalisation of conduct under ECTA — Court retaining usual discretion to admit unlawfully obtained evidence — Electronic Communications and Transactions Act 25 of 2002, s 86(1).Evidence — Admissibility — Social-media evidence — Unlawfully hacked Facebook posts — Balance between evidence-gathering and privacy — Evidence, though unlawfully obtained, revealing wrongdoing essential to applicant's case — No other lawful means of obtaining evidence — Public interest in exposure of respondent's conduct overriding his expectation of privacy — Evidence admissible.Media — Social media — Social-media evidence — Admissibility — Unlawfully hacked social-media posts — Evidence admissible at discretion of court.

When Harvey and Niland, sole members of a close corporation, fell out, Niland left the workplace but remained a member of the corporation. Later, when Harvey began to suspect Niland of secretly competing against the corporation and violating his fiduciary duties, he sought a prohibitory interdict. To bolster his case Harvey relied on Niland's Facebook communications. * The issue before court was whether the Facebook evidence was admissible. Niland argued that it had to be struck out because it infringed his right to privacy and was obtained through the commission of an offence under s 86(1) of the Electronic Communications and Transactions Act 25 of 2002 (ECTA).  Held:ECTA, by its silence on the issue of the admissibility of evidence obtained in contravention of s 86(1), sanctioned its admission, subject to the court's common-law discretion to exclude it. While it would be accepted that Harvey had unlawfully acquired the evidence, its admission would depend (i) on the nature and extent of the violation of Niland's right to privacy; and (ii) whether Harvey could have obtained the evidence in another, lawful way.It was established law that the right to privacy was not absolute, and that personal space would shrink as one moved from private into business and social interactions. The hacked posts were business communications that were relevant to Niland's fiduciary duties and revealed duplicitous conduct on his part. The evidence was essential to Harvey's case and could not in practice have been procured in another, lawful way. In the circumstances Niland's appeal to privacy rang hollow and would be overridden by the public interest in the exposure of his deceitful conduct. In the result the evidence would be ruled admissible. Application to strike out dismissed.

NAIDOO AND OTHERS v KALIANJEE NO AND OTHERS 2016 (2) SA 451 (SCA)

Insolvency — Trustee — Property passing to trustee — Warrant to take possession of insolvent's property — Issued in circumstances where assets already under judicial attachment — Whether magistrate precluded from issuing warrant — Insolvency Act 24 of 1936, s 69(3).Insolvency — Trustee — Property passing to trustee — Warrant to take possession of insolvent's property — Distinction between such warrant and one issued under CPA — Provisions applicable to issuing of warrant under CPA not applicable to issuing of warrant under Insolvency Act — Insolvency Act 24 of 1936, s 69(3); Criminal Procedure Act 51 of 1977, s 21.

This matter concerned the validity of a search-and-seizure warrant issued by a magistrate in terms of s 69(3) of the Insolvency Act 24 of 1936 (the Act). The liquidators of a close corporation, M & M, of which the first appellant was the sole member, had approached the magistrate for such a warrant on the basis of their reasonable belief that assets of M & M had been concealed. The appellants had subsequently, without success, applied to the court a quo to have the warrant set aside. In the Supreme Court of Appeal, the appellants raised multiple challenges against the validity of the warrant. The court rejected all such challenges and dismissed the appeal.One challenge was that the liquidators' application constituted an abuse of process, in that (a) the warrant was unnecessary, in that assets which the relevant authorities were empowered in terms of the warrant to attach were already under judicial attachment; and (b) the request for the warrant had been motivated by an improper purpose.Held, as to (a), that the judicial processes had proven to be ineffective, and the surreptitious concealment of assets long after the formality of their attachment did not preclude a magistrate from issuing a warrant to preserve them. As to (b), the claims to such effect were entirely unsubstantiated. In reality, the existence of a reasonable suspicion that the assets of M & M had been concealed constituted an answer to both allegations. It was argued that while the issuing of a warrant under s 69(3) constituted the exercise of a judicial discretion, it was not akin to civil proceedings. As such, given that the warrant had included a costs order and, in providing a 'return date', had been granted provisionally, it had been issued beyond the provisions of s 69 of the Act.Held, that while the clauses relating to costs and the return date were anomalous, it was clear that the warrant had not been issued in the process of civil litigation, but, in the light of its other provisions, it was no more than a warrant issued under s 69. The anomalous provisions, in truth, had no effect — the costs clause was unenforceable, while the reference to a 'return date' did not mean that the warrant was 'provisional'. The appellants also contended that, in light of the wording in s 69(4) of the Act that the warrant 'be executed in a like manner as a warrant to search for stolen property', one had to regard such a warrant as one issued under the provisions of the Criminal Procedure Act 51 of 1977 (CPA). The warrant under consideration did not, however, match up to the strict requirements of a criminal warrant and had to be set aside.Held, that there were fundamental differences between a warrant issued under s 69 of the Act and a criminal warrant, and, as such, the former could not be construed as being akin to a warrant issued under s 21 of the CPA, nor necessarily subject to the

same limitations and restrictions attendant upon criminal warrants. Further, the reference to s 21 of the CPA in the warrant meant simply that it had to be executed in the manner set forth under such section, and not that it was, or was to be regarded as, a warrant issued under the CPA. As such, the appellants' argument, that the warrant had to comply with the provisions of s 21 of the Criminal Procedure Act and that it was therefore necessary for a specific police officer to be identified in the warrant as the person who should effect the search and seizure, fell away.

MATHALE v LINDA AND ANOTHER 2016 (2) SA 461 (CC) 

Magistrates' court — Civil proceedings — Practice — Execution — Execution order under s 78 of Magistrates' Courts Act 32 of 1944 — Whether appealable — Approach to be adopted by courts — Appealability dependent on whether order final in effect in terms of s 83(b) of Magistrates' Courts Act 32 of 1944.

At the time of approaching the Constitutional Court, the applicant, Mr Mathale, had been residing at a property in the township of Winnie Mandela Park, Tembisa, for over 20 years. The first respondent, Mr Linda, had obtained, in the Tembisa Magistrates' Court, an order evicting the applicant from such property on the ground that he (the first respondent) was the registered owner thereof, it having been allocated to him by the second respondent, the Ekurhuleni Metropolitan Municipality, the local authority within whose jurisdiction the property fell. The applicant appealed such eviction order, which appeal was still pending. In the light of delays in finalising such appeal, Mr Linda successfully applied in the magistrates' court, in terms of s 78 of the Magistrates' Courts Act 32 of 1944 (the Act), for the eviction order to be implemented, pending the finalisation of the eviction appeal. Mr Mathale appealed such execution order. In dismissing such appeal the High Court assumed that a s 78 order was appealable, provided that it was in the interests of justice to regard it as such. It held that this was not such a case. The Supreme Court of Appeal dismissed Mr Mathale's application for special leave to appeal.

The fundamental question for the Constitutional Court was whether, in general, s 78 orders and those concerning an eviction from one's home, in particular, were appealable. A related question was whether the High Court had erred in its approach to the appeal. Finally, the court had to decide whether to set aside the execution order, and hence interfere with the magistrates' court's exercise of its discretion.Held, that, while it was generally not in the interests of justice for interlocutory relief, which interim execution orders are ordinarily considered to be, to be subject to appeal, as this would defeat the very purpose of the relief, an exception existed in the form of s 83(b) of the Act, which provides that any order obtained in any civil suit or proceeding in a court, having the effect of a final judgment, is subject to appeal. The execution order under consideration had the effect of a final judgment. This was in the light of: the fact that once a court permitted the execution order to be executed, pending an appeal, Mr Mathale's right to occupy his home would be brought to an abrupt end; there was no guarantee that Mr Mathale would be able to return to and continue living in the property he had been living in for the last 20 years; and the immediate and devastating effect the execution order would have when implemented, which would render Mr Mathale homeless, causing him

immeasurable suffering and indignity. Given the finality of the order, it was appealable.

Held, further, that properly interpreted, s 83(b) of the Act meant that all orders, even if they were interlocutory, were appealable if they had the effect of a final judgment. In other words, s 83(b) made interlocutory relief appealable, provided it was final in effect. A High Court was required to examine the facts and circumstances of each case to determine whether, in truth, the order was final in effect. Held, further, that the High Court erred in its approach to the appeal, and in concluding that the execution order was not appealable. Section 83(b) did not require a court to determine whether the interests of justice would favour viewing an order as appealable; rather, the relevant enquiry under s 83(b) was only whether the judgment or order would have the effect of a final judgment. Once a High Court had found that the decision from the magistrates' court had the effect of a final judgment, it was obliged to look into the merits and decide whether or not to set aside the execution order. The High Court's failure in this regard on this basis alone was sufficient to set aside the High Court's order.

Held, further, that the execution order granted by the magistrates' court had to be set aside. On a consideration of (a) the irreparable harm suffered by either parties; (b) the prospects of success on the main appeal; and (c) the balance of convenience, the magistrates' court was incorrect in its conclusion that the application of the just-and-equitable test called for it to grant the execution order. As to (a), the harm suffered by Mr Mathale would be irreparable were the eviction to be put into operation, pending the appeal.To have his home taken away while he defended his rights in the courts — given the sanctity of a home — would not serve the ends of what was just and equitable. As to (c), on the basis that Mr Mathale stood to be evicted from his home, with no alternative means of accommodation whilst still prosecuting the appeal, the balance of convenience favoured Mr Mathale. The decision of the High Court was set aside, as well as the order of the magistrates' court permitting Mr Mathale's eviction pending his appeal against his eviction order.

LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA t/a THE LAND BANK v FACTAPROPS 1052 CC AND ANOTHER 2016 (2) SA 477 (GP)

Mortgage — Mortgage bond — Nature — Not only applying to immovable property — Special notarial bond constituting mortgage bond — Security by Means of Movable Property Act 57 of 1993, s 4; Insolvency Act 24 of 1936, s 2.Mortgage — Notarial bond — Special notarial bond — Nature — Constituting mortgage bond — Security by Means of Movable Property Act 57 of 1993, s 4; Insolvency Act 24 of 1936, s 2.Prescription — Extinctive prescription — Period of prescription — Debt secured by special notarial bond — Special notarial bond constituting mortgage bond to which 30-year prescription period applying — Prescription Act 68 of 1969, s 11(a)(i).

Subsection 11(a)(i) of the Prescription Act 68 of 1969 provides for a prescription period of 30 years in respect of 'any debt secured by mortgage bond'.

The correct interpretation of s 11(a)(i) is that a special notarial bond is included in the reference to 'mortgage'. It follows that the applicable period of prescription of a debt secured by a special notarial bond is 30 years. The notion that mortgage bonds must in all instances apply to immovable property is negated by the substitution (effected by s 4 of the Security Act 57 of 1993) of the definition of 'special mortgage' in s 2 of the Insolvency Act 24 of 1936, to include both 'a mortgage bond hypothecating immovable property and a notarial mortgage bond hypothecating specially described movable property'. Both confer a real right of security upon registration in the Deeds Office. 

TSHWANE CITY AND OTHERS v NAMBITI TECHNOLOGIES (PTY) LTD 2016 (2) SA 494 (SCA)

Administrative law — Administrative action — What constitutes — Cancellation of municipal tender prior to adjudication — Not constituting administrative action — Promotion of Administrative Justice Act 3 of 2000, s 1.Government procurement — Procurement process — Cancellation of tender prior to adjudication — Not constituting administrative action and therefore not subject to review under PAJA — Promotion of Administrative Justice Act 3 of 2000, s 1.Court — Powers of — Separation of powers — Between judiciary and executive — Order reinstating cancelled municipal tender — Compelling state organ to consider and award tender it decided not to proceed with may infringe on doctrine of separation of powers.The cancellation of a tender by an organ of state prior to its adjudication did not constitute administrative action — it was not a decision of an administrative nature and had no direct external legal effect — and therefore could not be reviewed under the Promotion of Administrative Justice Act 3 of 2000. The Supreme Court of Appeal so held in upholding an appeal against a High Court decision (made on judicial review under PAJA) which set aside as unfair the City of Tswhane's cancellation of a tender prior to its adjudication, and ordered the City to adjudicate and award the cancelled tender.For a court to effectively compel a state organ to consider and award a tender that it had decided not to proceed with, may infringe on the doctrine of separation of powers and should only be done in extreme circumstances.

NATIONAL TREASURY AND ANOTHER v KUBUKELI 2016 (2) SA 507 (SCA)

Constitutional law — Foundational values — Rule of law — Rational decision-making — Exercise of public power — Fiscal investigation into municipality's finances — Right to be heard incidental to main purpose of investigation — Failure to interview particular individual not justifying finding that investigation arbitrary or irrational. During May and June 2013 the National Treasury conducted a forensic investigation into financial irregularities in the hiring and use of mayoral cars by the OR Tambo District Municipality. The investigation arose from a newspaper article alleging that the mayor had hired luxury cars for two months at a cost of R500 000, and that two of them were then crashed, resulting in liability for the municipality of R225 000.The treasury asked the municipality to make Mr Kubukeli, the mayor's bodyguard and driver, available for an interview, but Mr Kubukeli was never informed of the

request. The treasury completed its investigation without interviewing Mr Kubukeli, made findings of financial mismanagement and lack of internal controls at the office of the mayor, and offered certain recommendations. In respect of Mr Kubukeli the treasury found that car-hire costs had mushroomed when he became the mayoral driver and that he had negligently crashed the two cars. It recommended that the resulting damages be recovered from him.

Mr Kubukeli complained that he received no notice of the treasury's request to make himself available for an interview. Expressly disavowing reliance on PAJA, he asked the High Court for an order declaring the findings against him to be unlawful under the rule-of-law requirement of rational decision-making. But the High Court found in favour of Mr Kubukeli on the ground that the report constituted unfair administrative action under PAJA because he was denied the right to make representations. In an appeal to the SCA —

HeldThe High Court, by finding for Mr Kubukeli on the basis of procedural unfairness under PAJA, misconceived the nature of the enquiry. Since it was a constitutional-rationality enquiry, the question was whether the treasury's exercise of its investigative powers was rationally connected to their purpose. Though there was no general duty on decision-makers to consult interested parties for a decision to be rational under the rule of law, such a duty might arise in particular circumstances. In the present case the conduct of an individual like Mr Kubukeli was merely incidental to treasury's purpose of securing — via its investigative powers — sound management of the municipality's fiscal and financial affairs. † It followed that the request that Mr Kubukeli attend an interview was not a recognition of his right to be heard but merely intended to assist the treasury to achieve its purpose, which it did. Viewed objectively, the purpose of the investigation — the identification of shortcomings in the financial management and internal control of the municipality — was achieved. The findings were, moreover, not binding on Mr Kubukeli, and open to challenge in later proceedings. Hence the investigation, report and recommendations without the participation of Mr Kubukeli were founded on reason and not arbitrary or irrational. Appeal upheld.

NEL v ROAD ACCIDENT FUND 2016 (2) SA 517 (GP) 

Motor vehicle accident — Compensation — Claim against Road Accident Fund — Limits — Limit in respect of loss of income or support — Apportionment of liability for contributory negligence to occur before application of limit — Road Accident Fund Act 56 of 1996, s 17(4)(c); Apportionment of Damages Act 34 of 1956, s 1(1)(a).The cap in s 17(4)(c) of the Road Accident Fund Act 56 of 1996, which limits a plaintiff's claim against the fund for loss of income or support, must be applied after any apportionment of damages for contributory negligence under s 1(1)(a) of the Apportionment of Damages Act 34 of 1956.

SOUTH AFRICAN BROADCASTING CORPORATION SOC LTD AND OTHERS v DEMOCRATIC ALLIANCE AND OTHERS 2016 (2) SA 522 (SCA)

Constitutional law — Chapter 9 institutions — Public Protector — Powers — To take appropriate remedial action — Nature of — Constitution, s 182(1)(c).Constitutional law — Chapter 9 institutions — Public Protector — Powers — To report — Status of findings in report — Constitution, s 182(1)(b).The origin of this case was a complaint made by former employees of the South African Broadcasting Corporation (SABC) to the Public Protector.The complaint was about the appointment of one Motsoeneng as Acting Chief Operations Officer (Acting COO), maladministration, and interference by the Minister of Communications. The Public Protector investigated and wrote a report. Among her findings was that Motsoeneng's appointment was irregular and he had acted unlawfully. She prescribed remedial actions for the SABC's board to take. These included the instituting of disciplinary proceedings against Motsoeneng.

The board failed to take these actions. Instead, it resolved to appoint Motsoeneng as Acting COO. The Minister approved the appointment.The Democratic Alliance then applied for orders suspending Motsoeneng; that the board begin disciplinary proceedings; and to review the board's resolution and Minister's decision. The High Court held that the Public Protector's findings and remedial actions were not binding. But they could only be rejected if it was rational to do so. Here it had not been. The court ordered the board to begin disciplinary proceedings, and that Motsoeneng be suspended until they were finished. It later granted leave to appeal to the Supreme Court of Appeal (SCA).

In issue there were the following:(1)   The High Court's conclusion that the Public Protector's findings were not 'binding and enforceable'. Held, that the conclusion was incorrect. It derived from an inapt comparison of the High Court and the Public Protector, and the High Court's orders with the Public Protector's findings. A better comparison was an administrative body's decision. It stood and had legal consequences until set aside. This had to apply equally or more strongly to the findings of the Public Protector, owing to its special position.The High Court also erroneously followed the English position on the status of the Parliamentary Commissioner's findings. The Parliamentary Commissioner and Public Protector were dissimilar, and so, consequently, was the status of their findings.

(2)   How a body might respond to the Public Protector's findings and recommendations of remedial action. Held, that the findings and remedial actions had to be implemented. If a body disputed them, its remedy was review. (3)   The nature of the Public Protector's power 'to take appropriate remedial action' (s 182(1)(c) of the Constitution). Held, that this included the power to determine the remedy, and to direct its implementation. The High Court's orders that disciplinary proceedings be instituted and that Motsoeneng be suspended pending their outcome, upheld; and the appeal dismissed.

SOUTH AFRICAN AIRWAYS SOC v BDFM PUBLISHERS (PTY) LTD AND OTHERS 2016 (2) SA 561 (GJ)

Evidence — Privilege — Confidentiality — Enforcement — Any relief sought to protect confidentiality subject to public-interest override — In circumstances of

present case, public interest in being informed outweighing state organ's rights to confidentiality — Constitution, s 16. Evidence — Privilege — Confidentiality — Legal advice privilege — Ambit — Privilege against disclosure not absolute — Protection of confidentiality of any information, including privileged legal advice, subject to public-interest override — In circumstances of present case, public interest in being informed outweighing state organ's rights to confidentiality — Constitution, s 16. Evidence — Privilege — Confidentiality — Legal advice privilege — Ambit — Not extending to preservation of confidentiality of advice disclosed by unauthorised means — Constituting only negative right to prevent admission into evidence of advice obtained from legal advisor in confidence.Lawyers— Privilege — Confidentiality — Legal advice privilege — Waiver — Imputed waiver — Strict test — Whether to impute waiver from delay in claiming confidentiality.Evidence — Privilege — Confidentiality — Unauthorised disclosure of confidential information — Remedy — Interdictory relief inappropriate — Once disclosed, confidentiality lost and its protection futile. Motions — Urgent applications — Default procedure set out for matters in respect of which less than 24 hours' notice is to be given — Mandatory for applicant's attorney to follow such procedure.

This case concerns an application by the respondent media houses for reconsideration (in terms of Uniform Rule 12(1)(b)) of an order granted in their absence, interdicting them from publishing the contents of a legal opinion that South African Airways (SAA) had obtained and which had entered the public domain by unauthorised means. SAA had served the application for the order on the respondent media houses only after news items covering the contents of the opinion had already been published. Also relevant in the reconsideration application was that, despite the intended publication having been brought to SAA's attention and their subsequent interactions with representatives of the media houses, SAA made no demand to stop publication, claimed no privilege and gave no indication that legal action would follow to prevent publication. Of further relevance was that when the application was launched, service was by email sent at 22h00, notifying that the hearing would be at 22h30 but not where it would be held. In the event, the application was decided approximately two hours after notification, shortly after midnight at a judge's home, on SAA's version alone.

At issue were — (1) the implications of the absence of proper service of the urgent application; (2) whether the legal professional privilege could be invoked to obtain an interdict against publication; (3) the futility of the order, given the extent of publication prior to the application being served and the order being granted; (4) if legal professional privilege ever existed, whether not claiming it when interacting with the respondents' representatives constituted imputed waiver of the privilege; and (5) whether, assuming a right by SAA in the confidentiality of the contents of the document, public interest trumped such confidentiality rights.Held(1)   There was a mandatory professional duty on an attorney in any urgent application on less than 24 hours' notice, to undertake certain default actions to ensure effective service. The interactions which took place prior to the application

were misrepresented in SAA's founding affidavit in a calculated effort to positively mislead the judge and to obscure the unprofessionalism attendant on the service of the application. These misrepresentations, together with the sham service, by themselves justified dismissal of the application. (2)   A person whose confidential legal advice was by some unauthorised means released into the public domain could not invoke the legal professional privilege to obtain an interdict against its publication. If the confidentiality were lost and the world came to know of the information, there was no remedy in law to restrain publication by strangers who learned of it. This was because the legal advice privilege was a negative right to refuse disclosure, in proceedings, of any confidential information exchanged between attorney and client; not a positive right to protection or preservation of information, the confidentiality of which had been or may be breached through unauthorised means. This vulnerability to loss of the confidentiality of the information over which a claim of privilege could be made flowed from the nature of the right itself. (3)   It was incontrovertible that the contents of the document were confidential to SAA. However, once shattered, confidentiality cannot be put back together again. In circumstances such as the present, where a court could not conceive of any utility in an order and which would if granted be a mere sterile gesture, courts have refused relief. If confidentiality were not yet breached, an interdict may be an appropriate form of relief to preserve confidentiality, but if already breached it was unlikely that any interdictory relief could be effective, and such an order would be inappropriate.(4)   Imputed waiver required clear proof and could not be lightly inferred. The test to impute an intention to waive must be strict. SAA had on four occasions communicated with journalists without claiming that any of its rights were violated, and could properly be criticised for not proclaiming a right to confidentiality earlier. However, a claim of privilege could be belated, and on the probabilities it could not be assumed that the employees of SAA construed the document as being eligible for a claim of privilege earlier than the consultation with their attorney and counsel. That probability and the clumsiness that attended the urgent application went hand in hand. On the facts, imputing waiver of confidentiality was not justified. (5)   The limitations on the application of legal advice privilege did not inhibit a person from seeking relief to prevent publication of confidential information in a general sense. Information which was the subject of a claim of privilege was simply an example of one form of confidential information. However, any relief sought from a court to protect any form of confidential information was subject to recognised public interest overrides — an exercise which required a balancing of contending values in a fact-specific context. The right to freedom of expression in s 16 of the Constitution had to be weighed. SAA was an organ of state whose financial and governance affairs were of legitimate interest to all South Africans, and had been subject to critical scrutiny for a long time. Also, little of what was claimed as confidential information was not already in the public domain before the document containing the confidential legal advice was leaked to the media. Accordingly, the public interest in being informed outweighed the right of SAA to confidentiality in the contents of the document.

MASSTORES (PTY) LTD v PICK 'N PAY RETAILERS (PTY) LTD AND ANOTHER 2016 (2) SA 586 (SCA) 

Delict — Specific forms — Interference with contractual relationship — What constitutes — A and B both leasing spaces in shopping centre — In terms of A's contract with landlord, A restrained from operating supermarket; in terms of B's contract with landlord, B given exclusive right to operate supermarket — A operating supermarket in breach of its restraint preventing B from obtaining performance in terms of its right to exclusivity — Whether requirements of delict met.Delict — Specific forms — Interference with contractual relationship — Inducement not prerequisite for successful action.Lease — Huur gaat voor koop rule — When applicable — Inapplicability of rule to 'collateral rights' unconnected with lease — Exclusivity clause in lease agreement integral part of that lease and not collateral right.

The appellant in this matter, Masstores (Pty) Ltd (Masstores), leased part of the shopping centre, Capegate, in terms of an agreement entered into with the owner (lessor) at the time, the Capegate Regional Centre Joint Venture (JV). Such agreement contained a restraint provision to the effect that Masstores would not operate as a 'general food supermarket'. The first respondent, Pick 'n Pay Retailers (Pty) Ltd (Pick 'n Pay), had also entered into a lease agreement with the JV in terms of which it leased a part of the shopping centre. That lease agreement secured Pick 'n Pay a right of exclusivity by providing that the lessor would not permit any other supermarket to be operated in the shopping centre. However, in the view of Pick 'n Pay, Masstores did commence operating a general food supermarket when the latter launched its Foodco concept in its Game store in Capegate. Arising therefrom, Pick 'n Pay launched an application in the court a quo, seeking a final interdict against Masstores, restraining it from interfering in the contractual relationship between Pick 'n Pay and the second respondent, Hyprop Investments Ltd, being the JV's successor in title (Hyprop), by carrying on a business exclusively granted to Pick 'n Pay in terms of the latter's lease agreement. The court a quo granted the interdict. Masstores appealed such order.The first question that called for the Supreme Court of Appeal to decide was whether Masstores had operated a general food supermarket, thereby breaching its agreement with Hyprop, and trading in competition with Pick 'n Pay. It held that it had. This was in the light of the photographic evidence, the ordinary dictionary definition of 'supermarket', and Masstores' views of its own affairs. Pick 'n Pay's claim was based in delict, namely the unlawful interference (in this case by Masstores) in a contractual relationship (between Pick 'n Pay and Hyprop). The central question, then, was whether Pick 'n Pay had successfully met the requirements to establish such a delict, namely: an unlawful act; which constituted an interference in the contractual relationship; and which was committed with some form of dolus. Related was the question whether, as was claimed by Masstores, to be successful in its claim for unlawful interference in a contractual relationship, Pick 'n Pay had to prove an inducement by Masstores of Hyprop.Held, that Pick 'n Pay had established the requirements for its delictual claim. Masstores, in becoming aware of Pick 'n Pay's rights to exclusivity yet continuing to trade as a supermarket, acted contrary to the restraint contained in its lease and in defiance of the demand to cease trading as a supermarket. In doing so it acted wrongfully in preventing Pick 'nPay from obtaining the performance to which it was entitled by virtue of its contractual right of exclusivity. Further, in failing to heed

the demand from Hyprop to desist from conducting a supermarket, it acted with direct intent, or, at the very least, dolus eventualis. Held, that inducement or enticement is not a requirement in a claim based on unlawful interference in a contractual relationship. Delictual actions in interference cases, in addition to those where inducement or enticement features, include those where there is a breach of a legal duty or the infringement of a subjective right; this case would fall into the latter category.On behalf of Masstores it was further argued that Pick 'n Pay's personal right to exclusivity, which it had negotiated with JV, the owner of Capegate at the time, did not bind successive owners, ie Hyprop. The huur gaat voor koop rule which might otherwise have been of assistance to Pick 'n Pay, so it was argued, was limited to a lessor's obligation to give possession and a lessee's concomitant obligation to pay rental; the right to exclusivity, however, was a 'collateral right' unconnected with the lease.Held, that, in respect of the lease entered into by Pick 'n Pay, the right to exclusivity was a sine qua non for its tenancy. Thus understood, the right to exclusivity was integral to the right of occupancy and could not be regarded as a collateral right. Appeal dismissed.

OCTOBER AND ANOTHER NO v HENDRICKS AND ANOTHER 2016 (2) SA 600 (WCC)

Land — Unlawful occupation — Eviction — Statutory eviction — Unlawful occupier — Whether holder of bare ownership in context of usufruct could be unlawful occupier — Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998, s 1.Usufructuary - person in charge-consent of usufructuary essential

This case concerned the executor of an estate who applied in that capacity as the owner of a property to evict certain 'unlawful occupiers' under the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998.The case raised the position of a usufructuary and holder of bare ownership in the context of the Act, and the question whether a holder of bare ownership could be an 'unlawful occupier'. An 'unlawful occupier' is defined as 'a person who occupies land without the . . . consent of the owner or person in charge, or without any other right in law to occupy the land . . .' (s 1).Held, that an owner might, or might not be, the person in charge of the land (the person with authority to permit others to enter or reside on it); and that it was the consent of the person in charge that was relevant. In the context of a usufruct, the usufructuary would be the person in charge; and a holder of bare ownership occupying without the consent of the usufructuary could be an 'unlawful occupier'.

COMMISSIONER, SOUTH AFRICAN REVENUE SERVICE v STEPNEY INVESTMENTS (PTY) LTD 2016 (2) SA 608 (SCA) 

Revenue — Capital gains tax — Base cost of asset — Pre-valuation date assets — Valuation of market value on valuation date — Proof — Must be based on actual financial information available at time of making valuation, not on selected

information closer to valuation date — Income Tax Act 58 of 1962, sch 8 para 29(7)(b).

Capital gains tax (CGT) is payable on the difference between the proceeds of the sale and the base cost of the asset disposed of. The base cost of assets acquired before the introduction of CGT is calculated with reference to a date that CGT was introduced as the 'valuation date', ie 1 October 2001. Paragraph 29(7)(b) of the eighth schedule to the Income Tax Act 58 of 1962 provides:      'The Commissioner may, notwithstanding any proof of valuation submitted . . . (if) not satisfied with any value at which an asset has been valued . . . adjust the value accordingly.'Here, the taxpayer (Stepney) had sold pre-valuation date assets for less than their base cost — as determined by a valuation in 2004 of their market value on the valuation date — and so claimed a capital loss. The Commissioner invoked para 29(7)(b) to adjust the base costs and issued an additional assessment, which was subsequently set aside by a tax court. At issue in this case, the Commissioner's appeal against the tax court's decision, was whether the 2004 valuation was reasonable.The assets in question were shares in a company which, at the time of acquisition of the shares, was in the process of developing a casino for which it held a permanent casino licence. By 1 October 2001 the company was involved in litigation in respect of the site where the casino was to be located and so, unable to utilise the licence, was in the process of acquiring a temporary licence at a different location. The 2004 valuation was based on financial projections prepared by Deloitte in 2001 as part of figures submitted to the Gambling Board in respect of the application for temporary licences.HeldAt the time of the 2004 valuation, the valuator was in possession of financial information that would have had a material effect on valuation. The justification for using the 2001 Deloitte figures, ie that they were closer in time to the valuation date, was fatally flawed because the actual figures available to it when the valuation was done showed that the Deloitte figures were unreasonably optimistic. (This was one of various respects in which the valuation was flawed.) A court was entitled to reject a valuation if not satisfied with the investigations underpinning it. As a consequence, Stepney had failed to discharge its onus of proving the para 29 market value (of the shares of the valuation date) and thus also its aggregate base costs. The tax court was wrong in upholding that valuation. Appeal upheld.

BLASTRITE (PTY) LTD v GENPACO LTD 2016 (2) SA 622 (WCC)

Practice — Intermediate proceedings — Security for costs — Peregrinus — Common-law practice in terms of which peregrinus plaintiff could be called upon to furnish security for costs — Whether amounting to unfair discrimination and/or violation of constitutional right to equality.This matter concerned the constitutionality of the common-law practice in terms of which a peregrinus plaintiff that owns no immovable property in South Africa could be called upon to furnish security for costs. Arising from arbitration proceedings in which a peregrinus, both of the Republic and the court, Genpaco Ltd (Genpaco), sought certain relief from an incola, Blastrite (Pty) Ltd, the latter had applied, in terms

of s 21(1) of the Arbitration Act 42 of 1965, for an order directing Genpaco to put up security for costs in the arbitration proceedings. Genpaco in response argued, firstly, that the applicant had not made out a case for the exercise of the court's discretion in favour of ordering security, and that equity and fairness dictated that the application should be refused. The court disagreed, holding that the circumstances of the case called for it to exercise its discretion in favour of Blastrite, namely: the fact that Genpaco had the means to furnish the security and would thus not be prevented from its claim; and the uncertainty, inconvenience and additional expense associated with the enforcement of any costs order that Blasrite would be awarded, were Genpaco to be unsuccessful in its claim. Genpaco further argued that the common-law practice in terms of which a plaintiff peregrinus may be called upon to give security for costs was unconstitutional in that: (a) in differentiating without a rational basis between a plaintiff peregrinus and a plaintiff incola, the practice violated the right to equality before the law enshrined in s 9(1) of the Constitution; and (b) in displaying a xenophobic attitude to Genpaco, and by directly or indirectly imposing a burden or disadvantage on a peregrinus, it amounted to unfair discrimination.Held, that any differentiation upon which Genpaco relied was irrelevant. The common-law practice was not such that security for costs was required purely on the basis that a litigant was a peregrinus that owns no immovable property in this country. The court in fact retained a discretion whether or not to order security, to be exercised on the basis of the particular circumstances of the case and considerations of fairness and equity to both parties.

Held, further, that the practice, in distinguishing between a peregrinus plaintiff and an incola plaintiff, did not violate s 9(1) of the Constitution. The differentiation underlying such practice was rational. The purpose of the practice, which was aimed at enabling an incola to recover the costs of successfully defending a claim by a peregrinus, was in fact to increase equality between a peregrinus plaintiff and an incola plaintiff. A peregrinus, which did not reside or conduct business in South Africa, and that did not own sufficient assets to satisfy a costs order, was not at risk on an equal footing with an incola or resident party. The practice relating to security for costs thus had the effect of restoring a measure of equality between the parties. Held, further, that the practice relating to security did not impose any burden or disadvantage on a peregrinus: the security represented a small proportion of the total expenses of litigation and, as such, would unlikely be prohibitively expensive. )Held, further, that the practice had nothing to do with xenophobia — it was laid down as far back as 1828 that a non-resident plaintiff who did not own immovable property in this country could be called upon to give security for the costs of the action.Held, accordingly, that the common-law practice in terms of which a non-resident plaintiff who does not own immovable property in this country can be called upon to give security for the costs of a lawsuit, was neither irrational nor amounted to unfair discrimination and, as such, was consistent with the Constitution. 

SACR APRIL 2016

S v DALINDYEBO 2016 (1) SACR 329 (SCA)

Arson — What constitutes — Setting fire to one's own property — Where done with intent to prejudice property interests of another, arson can be committed.

Sentence — Imposition of — Factors to be taken into account — Abuse of position of authority — Shameful abuse of position of authority by king who burnt down homes of certain subjects, kidnapped others and personally brutally assaulted three young men — Such heinous crimes calling for severe sentence.

The appellant, paramount chief of the AbaThembu tribe in the Eastern Cape(also referred to as the king of the tribe), was convicted in the High Court of a number of offences: (a) three counts of arson in that he had set fire to the dwellings of three of his subjects (and tenants) in order to secure their eviction for having breached his rules; (b) three counts of attempted murder in that he had publicly and brutally assaulted three young men, apparently as punishment for their having committed crimes; (c) culpable homicide in respect of a fourth young man who was alleged to have been party to the alleged crimes and who was killed by members of the community who were loyal to the king; (d) attempting to defeat the course of justice by unduly influencing one of the complainants in the arson charges to withdraw the charge; and (e) one count of kidnapping in that he had deprived the wife and six children of one of his subjects of their liberty by forcing them to accompany him to his palace in order to induce her husband to present himself there. He was sentenced individually in respect of these crimes to an effective term of 15 years' imprisonment.He appealed with the leave of the court a quo against both the convictions and sentences. As to the convictions, it was contended inter alia on his behalf, as regards the convictions for arson, that the structures he had set alight had acceded to his land and therefore belonged to him. Since the offence could not be committed when one set fire to one's own property, said convictions were improper.Held, that arson can be committed where a person sets fire to his own immovable property with the intention to prejudice the property interests of another person. The court held further, on the evidence, that the conviction on the count of culpable homicide could not be sustained and the conviction and the sentence of 10 years' imprisonment on that count therefore had to be set aside. As to the cumulative effect of the sentences, the court rejected the appellant's contentions that the effective sentence was too severe. It emphasised that persons in positions of authority, such as the appellant, were obliged to act within the limits imposed by the law, and that no one was above the law. The Constitution guaranteed equal treatment under the law and in the present matter the appellant had behaved shamefully and had abused his position as king. The period of imprisonment he was to serve was no more than just deserts for what, given his position of authority, were particularly heinous crimes. With the falling-away of the sentence for the count of culpable homicide, the new effective sentence was one of 12 years' imprisonment. 

NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS v RAMLUTCHMAN 2016 (1) SACR 362 (KZP)

Prevention of crime — Confiscation order in terms of Prevention of Organised Crime Act 121 of 1998 — Benefits of crime — Restricted to profit or gain and not entire proceeds of crime.

The appellant appealed against the dismissal by a magistrate of an application for a confiscation order in terms of s 18 of the Prevention of Organised Crime Act 121 of

1998 (POCA) against the respondent. It was contended that the 'benefit' that derived from the proceeds of unlawful activities was the total amount of the proceeds of a contract for the building of schools.The respondent had been found guilty of 21 counts of fraud and one count of corruption under the Prevention and Combating of Corrupt Activities Act 12 of 2004. The facts were that he had created and submitted false documents to the Construction Industry Development Board to support an application for a grading to which he was not entitled. He had thus misrepresented his status and been awarded tenders that he would otherwise not have obtained. The appellant conceded in the magistrates' court that it had not shown the exact profit the respondent had derived from the corrupt scheme, despite having had access to the complete audited financial records. The magistrate consequently found that the appellant had failed to discharge the onus that rested upon it.Held, that on a purely factual and common-sense approach, the entire amount received as the proceeds of unlawful activities could not be a benefit if it were not exclusively a gain or profit. In the present matter the cost of the construction component of the proceeds received could not rationally be equal to a gain or benefit. To treat it as such, and order its confiscation, would result in the state unjustly enriching itself at the expense of the respondent. It would be disproportionate and create an imbalance between effectiveness and fairness as required. Appeal dismissed. 

S v DJ 2016 (1) SACR 377 (SCA)

Sentence — Plea-and-sentence agreement — Presiding officer of view that proposed sentence unjust — Parties to be informed of this and proposed substitute sentence at outset of trial — Criminal Procedure Act, s 105A(9)(a).

When a trial judge forms the view that the sentence proposed in a plea agreement in terms of s 105A of the CPA is unjust, he or she should, at the outset of the trial, inform the parties of this view and also of the sentence he or she considers just. The failure by the trial judge in the instant case to do so, and instead to substitute his own sentence for the sentence proposed by the parties, constituted non-compliance with the peremptory provisions of s 105A(9)(a). The court set aside the convictions and sentences on appeal and remitted the matter to the High Court for trial de novo before another judge.

In the Gauteng Division of the High Court, Pretoria (Webster J), the first appellant, Ms DJ, pleaded guilty to charges of murder and child abuse in terms of s 305(3)(A) read with ss 1 and 305(6) of the Children's Act 38 of 2005 (the Children's Act) (child abuse or neglect). The second appellant, Mr MB, pleaded guilty to culpable homicide. These pleas were in terms of their plea-and-sentence agreements concluded with the state (the agreements). Attached to the agreements were the plea explanations which fully set out the factual and legal bases of the said pleas. Other documents forming part of the agreements were the post-mortem report and relevant information relating to the appellants' mitigating and aggravating factors.

It is necessary to briefly set out the relevant background, which was undisputed, leading to the charges being preferred against the appellants. On 4 March 2014 the

appellants, who lived together as husband and wife and were legally represented, were arraigned in the High Court inter alia on the charges mentioned above. They were alleged to have assaulted Ms DJ's two minor children from a previous relationship, 5-year-old AJ (deceased) and his older brother SE, on numerous occasions, and subsequently causing AJ's death. The assaults were inter alia committed by hitting the children with various objects, including a belt, wooden stick, and by burning them with cigarettes. They were also alleged to have failed to provide them with proper food and medical care. The deceased had also been locked indoors for prolonged periods.In terms of the agreement, Ms DJ agreed to be sentenced to 18 years' imprisonment for count 1 (murder) and three years' imprisonment in respect of count 2 (child abuse). The sentences would be served concurrently, with the result that she would serve an effective sentence of 18 years' imprisonment. Mr MB agreed to be sentenced to 12 years' imprisonment for culpable homicide, conditionally suspended for five years.Contrary to the sentences proposed in the agreements, the trial court imposed the following sentences on Ms DJ — counts 1 and 2 were taken together for purposes of sentence. She was sentenced to 15 years' imprisonment, of which three years are suspended for a period of five years on condition that she is not convicted of a crime of which violence is an element. Mr MB was sentenced to 15 years' imprisonment, of which three years were suspended for a period of five years on condition that he is not convicted of a crime of which violence is an element.The sentences imposed by the trial judge differed materially from those proposed by the parties. Ms DJ would receive an effective six years' imprisonment less than what was proposed. On the other hand, Mr MB would receive an effective sentence of two years' imprisonment more than what was proposed in the agreement.Dissatisfied with this, the appellants applied for leave to appeal from the trial judge. The state also applied for the reservation of a question of law in terms of s 319 of the Act.

The court set aside the convictions and sentences on appeal and remitted the matter to the High Court for trial de novo before another judge.

GOQWANA v MINISTER OF SAFETY AND SECURITY NO AND OTHERS 2016 (1) SACR 384 (SCA)

Search and seizure — Search warrant — Validity of — Identification of person conducting search — Specific official entrusted to execute search should be identified.Search and seizure — Search warrant — Validity of — Identification of offence for which warrant obtained — Specific statutory offence, including statute and section applicable, should be stated.Search and seizure — Search warrant — Validity of — Affidavit on which warrant granted by magistrate — Should be made available to person in charge of premises at time of search.The appellant was the owner of business premises which were raided by the police at the instigation of the Limpopo Gambling Board, which complained that the premises were being used for gambling without a licence as required by the National Gambling Act 7 of 2004 and the Northern Province Casino and Gaming Act 4 of 1996. The search warrant, issued by a magistrate, was addressed to 'the Station

Commander' and referred to the offence which was alleged to have been committed as 'Illegal Interactive Gambling (Online Gambling)'. The warrant was executed and a quantity of goods seized.He applied in the High Court for the setting-aside of the warrant but this was refused. An appeal against this finding was also dismissed by the full court. On appeal to the Supreme Court of Appeal, the appellant contended that the police had unlawfully obtained possession of his goods since the search warrant was defective in two respects namely, that it failed to name a specific police official authorised to conduct the search in terms of the warrant, and, secondly, that the alleged offence mentioned in the warrant was not an offence in law.Held, that the repeated correlation between 'a' and 'such' when reference was made to a 'police official' in s 25(1) of the Criminal Procedure Act 51 of 1977, which set out the powers of the police to carry out searches in terms of a warrant, indicated a singular degree of specificity. Although rare that the station commander would conduct such a search — normally it would be the investigating officer — an interpretation that the police official should be named in the warrant acted as a safeguard against abuse. When the warrant was executed, a person at the premises to be searched could then ask the police official not only to produce their identity card but also to demonstrate the reference to themself in the warrant itself. Held, as to the failure to denote the actual offence in the warrant, that there was no statutory offence known as 'Illegal Interactive Gambling (Online Gambling)'. It was ordinarily desirable when dealing with a statutory offence, as opposed to a common-law crime, that the warrant should pertinently refer to the specific statute and the applicable section or subsection. This would enable the person in charge of the premises, and the police official authorised in terms of the search warrant, to know precisely that for which the search had been authorised.The court found it necessary to comment on a complaint by the appellant that his attorney was not given a copy of the affidavit upon which the warrant was granted on arrival at the scene of the search — this had only happened weeks later, after repeated requests, which included a formal letter of demand. It noted that it was imperative that the supporting affidavit accompany the warrant and be handed over together with it. This would expedite any court application in which a person might wish to contend that their rights had been adversely affected by the search.

IN RE JY 2016 (1) SACR 399 (KZP)

Mental health — Involuntary healthcare user — Interaction between Mental Health Care Act 17 of 2002 and s 77(6)(a)(ii) of Criminal Procedure Act 51 of 1977 — Provisions of former cannot be dispensed with or superseded by latter.

The provisions of the Mental Health Care Act 17 of 2002 (the MHCA) cannot be dispensed with or superseded by the provisions of s 77(6)(a)(ii) of the Criminal Procedure Act 51 of 1977 (CPA). They work in conjunction with each other while serving different purposes, namely:   •   The detention of persons under s 37 of the MHCA caters for cases where persons are not criminally charged for any offences, whereas s 77(6)(a)(ii) of the CPA provides for the referral of accused persons who are charged for offences and are found unfit to stand trial.   •   Where an institution is not specified in the court order referring a person in terms of s 77(6)(a)(ii) of the CPA, the chairperson of the mental-health review board would

be at liberty to select an institution which would be in the best interest of the mental-healthcare user, without reverting to the court.   •   Where the mental-health review board finds that the person referred does not require involuntary care, treatment and rehabilitation, an application should be made to the High Court for the release of such person.   •   Where the referral is done in terms of s 77(6)(a)(ii), and the mental-health reports pursuant to the provisions of ss 79(3) and (4) of the CPA are done, such reports must be sent to the mental-healthcare practitioners of the institution specified in the referral in terms of s 77(6)(a)(ii) of the CPA. 

S v SN 2016 (1) SACR 404 (GP)

Trial — Mental state of accused — Enquiry in terms of s 77 of Criminal Procedure Act 51 of 1977 — Proceedings in terms of s 77(6)(a) — Magistrate failing to order detention in terms of s 77(6)(a)(ii)(aa) after finding accused committed no offence — Application of provisions of section peremptory — Such failure accordingly constituting gross irregularity — Decision set aside on review.

The accused, who had been charged with theft in a magistrates' court, was referred for observation in terms of s 77(1) of the Criminal Procedure Act 51 of 1977 (CPA). A psychiatric report was subsequently presented to the court which indicated that the accused was not fit to stand trial nor capable of appreciating the wrongfulness of his actions, and recommended that he be admitted as an involuntary patient under ch V of the Mental Health Care Act 17 of 2002. The Director of Public Prosecutions (DPP) accordingly requested that the matter proceed in terms of s 77(6)(a) of the CPA and that the accused be detained in an institution. The court, however, simply released the accused back into society after finding that he could not be linked to any offence. The DPP then requested that the court refer the matter to the High Court on review.Section 77(6)(a)(ii) (aa) of the CPA provides inter alia that, where the court finds that the accused is not capable of understanding the proceedings so as to make a proper defence, it 'shall direct that the accused where . . . he has not committed any offence . . . be admitted to and detained in an institution . . . as if he or she were an involuntary mental health care user contemplated in section 37 of the Mental Health Care Act, 2002'.Held, that the provisions of s 77(6)(a)(ii) (aa) were peremptory, even where the court found that an accused had not committed any offence. The failure by the court to apply the provisions accordingly amounted to a gross irregularity which necessitated that the proceedings and order, in terms whereof the accused was released, be set aside.

S v CHAUKE 2016 (1) SACR 408 (SCA)

Trial — Mental state of accused — Enquiry in terms of ss 77, 78 and 79 of Criminal Procedure Act 51 of 1977 — Nature of enquiry — Psychiatrist reporting that accused not suffering from any mental illness or defect after unspecified examination lasting just one day — Such not meeting requirements set out in ss 79(3) and (4) — Report to be based on holistic assessment of all relevant facts and circumstances.

In the appellant's trial in the High Court on two counts of murder his defence counsel requested that he be examined by a psychiatrist in order to determine his mental

accountability at the time when the offences were committed. The matter was adjourned for this purpose. On resumption of the trial, a report drawn up by his psychiatrist after an examination conducted in one day — in the presence of four colleagues — was handed in to court. The report stated that they found no acute or residual symptoms of a mental illness and concluded that the appellant was fit to stand trial and that there was no evidence that he was mentally ill at the time of the alleged offence. It did note, however, that the appellant had previously been admitted to a psychiatric hospital and periodically received antipsychotic medication.After the appellant testified, the court questioned him and asked him inter alia whether during an 'attack' of his disorder he understood what he was doing. The appellant replied in the negative. The court then called the investigating officer regarding the appellant's mental capacity, who testified that his impression was that there was nothing wrong with the appellant. Relying on the findings of the report, the court rejected the appellant's defence that he did not know or remember anything about the offences, and convicted him of the two counts of murder.On appeal it was argued that the court had failed to comply with the provisions of ss 77 and 79 of the CPA and should have referred the appellant for observation in terms of those provisions.Held, that the record reflected a concern that the appellant might, at the time of the commission of the offences, have been suffering from a mental illness or defect. In such circumstances the court ought to have acted in terms of s 78(2) and directed that the matter be enquired into and reported on in accordance with the provisions of s 79. Held, further, that the report by the psychiatrist did not meet the requirements set out in ss 79(3) and (4) and was of no assistance for the purposes of an enquiry into the appellant's mental state. It was silent on the nature of the tests conducted and the basis upon which the conclusions were reached, and the trial court was accordingly not in possession of all relevant facts regarding the appellant's mental condition. Such a report ought to be based on a holistic assessment of all such relevant facts and circumstances and include interviews with persons other than merely the medical personnel conducting the assessment.Held, further, that the court had erred in attempting to seek assistance from the investigating officer, who was not an expert in the field of mental disease, and that this constituted an irregularity. The appeal was upheld and the convictions and sentences were set aside.

S v MATHONSI 2016 (1) SACR 417 (GP)

Bail — Application for — Duty of court hearing application — Second application based on new evidence — State and accused's attorney merely addressing court and not presenting evidence — Procedure flawed — Duty of court to guide parties on how proceedings should unfold.

The appellant appealed against the refusal by a magistrate to grant him bail pending his trial on a charge of robbery with aggravating circumstances. It appeared that two separate bail applications were made. The second one was based on new facts, namely that a further charge pending against the appellant had been withdrawn, and, secondly, that his brother had passed away, requiring him to attend to certain rituals. No evidence was led at this second application and both the appellant's attorney and prosecution merely addressed the court from the bar. 

Held, that the procedure followed in the second bail application was flawed. It was the duty of the court, in the interests of justice, to guide the parties as to how the proceedings should unfold. The court did not take a sufficiently active role in the proceedings during the application. Held, further, that there was in fact no second bail application because of the procedure used. In the circumstances, the court was unable to weigh the interests of justice against the appellant's right to personal freedom, and in particular the prejudice he was likely to suffer, if he were to be further detained in custody. Held, further, that, in the peculiar and unprecedented facts of the matter, it was the duty of the court on appeal to step into the breach. The appeal was accordingly upheld and the appellant released on bail.

S v TLADI AND OTHERS 2016 (1) SACR 424 (GP)

Rape — Sentence — Factors to be taken into account — Age of accused — Huge disparity in sentences meted out to young offender and co-offender only one year older than he — Disparity disturbingly inappropriate — Same sentence imposed on offenders on appeal.The three appellants were convicted in a regional magistrates' court of kidnapping and raping the complainant. They were each sentenced to four years' imprisonment for the kidnapping. The first and third appellants were sentenced to 15 years' imprisonment for the rape, and the second appellant to five years' imprisonment. The evidence indicated that the first appellant had attacked the complainant's boyfriend in a tavern whilst the other two appellants offered assistance to the complainant to escape, only to lure her away from the tavern so that they could rape her. The second appellant had fashioned a condom out of a used crisp packet when he raped the complainant. She was raped six times in all. At the time of the offence the first appellant was 28 years of age; the second appellant was one month short of his 18th birthday; and the third appellant was 19 years old.On petition the appellants were granted leave to appeal against their convictions and sentences but when the court requested reasons why the sentences should not be increased, they attempted to withdraw the appeal. The court did not accede to this request.Held, that there was no justification for the vast difference in the sentence between the second and third appellants in respect of the conviction for rape and that this distinction was disturbingly inappropriate. Held, further, that the sentence of 15 years' imprisonment on the third appellant was equally suitable for the second appellant. The sentence was ordered not to run concurrently with that imposed for the kidnapping. Held, further, that on account of the maturity of the first appellant; his attack on the complainant's boyfriend; and that he had not desisted with the horrifying crime when the police arrived in the facility, but had taken the complainant to another house where he raped her again, an appropriate sentence was one of life imprisonment.

ALL SA LAW REPORTS APRIL 2016

City of Tshwane Metropolitan Municipality v Mitchell [2016] 2 All SA 1 (SCA)

Administrative law – Property – Section 118(3) of the Local Government: Municipal Systems Act 32 of 2000 – Interpretation of – Whether security provided for in section

118(3) in favour of a municipality, for moneys owed to it for services delivered in respect of fixed property, is extinguished when the property is sold at a sale in execution and subsequently transferred to the purchaser – Debt not extinguished on transfer of property, but municipality must comply with jurisdictional requirements in terms of own by-laws before pursuing owner for debt.

The interpretation of section 118(3) of the Local Government: Municipal Systems Act 32 of 2000 was at the heart of the present matter. The question on appeal was whether the security provided for in section 118(3) in favour of a municipality, for moneys owed to it for services delivered in respect of fixed property, is extinguished when the property is sold at a sale in execution and subsequently transferred to the purchaser.

In February 2013, the respondent purchased immovable property situated within the appellant’s municipal boundaries at a sale in execution.

In terms of section 118(1), a registrar of deeds may not register the transfer of property, except on production of a clearance certificate confirming that all amounts due to the municipality in respect of that property for service fees, levies, rates and taxes for the two years preceding the date of application for the certificate, had been paid in full. When the respondent applied for a clearance certificate, the appellant issued a written statement reflecting an outstanding amount in respect of municipal service fees, levies and rates. That amount included debts older than two years preceding the date of the application for a clearance certificate.

The amount in question was disputed by the respondent, and the appellant amended the amount to represent only the debt due for the two years preceding the date of the respondent’s application for issue of the certificate. Consequently, the historical debt was left still outstanding, due and payable if it had not become prescribed.

The respondent sold the property to a third party (“Prinsloo”) who, before taking transfer, applied to the appellant for the supply of municipal services. A municipal official refused to open an account in her name and informed her that she would be held liable for the historical debt. Prinsloo, accordingly, gave instructions to the attorney who was to deal with the transfer not to proceed with it until the issue of the historical debt had been resolved. The respondent then approached the High Court for a declaration that he, or his successors in title of the property, were not liable for the historical debt owed to the appellant by previous owners. Finding in the respondent’s favour, the High Court held that the security provided by section 118(3) in favour of the respondent was extinguished by the sale in execution and subsequent transfer of that property into the name of the applicant.

Held – In the case of City of Tshwane Metropolitan Municipality v Mathabathe and another [2013] 3 All SA 227 (2013 (4) SA 319) (SCA), the present Court clearly held that a transfer of property from one owner to another does not extinguish the security created by section 118(3). In distinguishing between that case and the present one, the court a quo was wrong. The Court disagreed with the respondent’s submission that section 118(3) of the Act should be interpreted in accordance with the common law relating to the effect of a sale in execution on the rights of bondholders. No distinction can therefore be drawn between property sold either at a sale in execution

or in a private sale when considering the question whether the hypothec created by section 118(3) survives transfer. It follows that the court below erred in concluding that the appellant’s statutory hypothec had been extinguished by the sale in execution and subsequent transfer of the property into the name of the respondent.

The Court held that there was nothing preventing the appellant from perfecting its security over the property to ensure payment of the historical debt. Perfecting its security would involve obtaining a court order, selling the property in execution and applying the proceeds to pay off the outstanding historical debt. Counsel for the appellant conceded that before a municipality can look to an owner for payment, it has to comply with its own by-law, and has to show that there is no occupier on the property concerned and the person who had entered into the contract to receive the services cannot be traced or has absconded, is unable to pay, or does not exist.

The majority of the court concluded that the court below should not have made the orders it granted and the respondent’s application should have been dismissed. The appeal was thus upheld.

Commissioner for the South African Revenue Service v Capstone 556 (Pty) Ltd[2016] 2 All SA 21 (SCA)

Tax – Income tax – Sale of shares – Proceeds of – Whether revenue or a receipt of a capital nature – Intention of taxpayer – Where a profit is the result of the sale of an asset, the intention with which the taxpayer had acquired and held the asset is of great importance – Evidence showing that the first and primary purpose of the acquisition of the shares was to rescue a major business in the retail furniture industry by long term investment of capital, and it was not a purchase of shares as trading stock for resale at a profit.

The respondent (“Capstone”) disposed of approximately 17 million shares in a company (“JDG”) and made a profit of nearly R400 million. The main question in this appeal was whether Capstone was liable for tax on the amount of the profit on the basis that it constituted income as the appellant, the Commissioner for the South African Revenue Service (the “Commissioner”) contended, or a receipt of a capital nature (as Capstone contended).

The Tax Court found for the Commissioner but that finding was overturned by the Full Court of the High Court, leading to the present appeal.

Held – In terms of section 82 of the Income Tax Act 58 of 1962 (now section 102 of the Tax Administration Act 28 of 2011) the burden of proving that the decision of the Commissioner subject to appeal was incorrect, rested on Capstone.

Section 1 of the Income Tax Act defines “gross income” in essence as the total amount received by or accrued to a person, excluding receipts or accruals of a capital nature. Our courts have therefore taken the view that any receipt or accrual must be either income or capital. Capstone could thus only discharge the onus by showing, on a balance of probabilities, that the proceeds were capital. That was a question of law to be decided on the particular facts of each case, for which there is no single infallible test. Whilst recognising that it is not universally valid, our courts

have in circumstances such as the present consistently applied the test that a gain made by an operation of a business in carrying out a scheme of profit-making, is income and vice versa. Where a profit is the result of the sale of an asset, the intention with which the taxpayer had acquired and held the asset is of great importance and may be decisive. In essence, the question is whether the asset was acquired for the purpose of reselling it at a profit and assumed the character of trading stock.

Apart from the intention of the taxpayer, a number of factors must be considered. First, the nature of the business activities of the taxpayer must be scrutinised, and the period for which the asset is held and the period for which it was anticipated it would be held at the time of acquisition will be relevant. When dealing with an investment, the nature of the risk undertaken has a bearing on whether the exercise is one directed at building up the value of the taxpayer’s capital or directed at generating revenue and profit. Finally, it must be recognised that in many commercial situations there may be no clear intention at the outset.

The Court found that it was clear from the evidence that the first and primary purpose of the acquisition of the shares was to rescue a major business in the retail furniture industry by long term investment of capital. It was not a purchase of shares as trading stock for resale at a profit. The intention of Capstone was consistent with an investment of a capital nature.

The appeal was therefore dismissed with costs.

South African Music Performance Rights Association v Foschini Retail Group (Pty) Ltd and others [2016] 2 All SA 40 (SCA)

Intellectual property – Copyright – Payment of royalties – Tariff of royalties – Determination of tariff by Copyright Tribunal – Section 9A read with sections 30(b), 33(3) and 33(5) of the Copyright Act 98 of 1978 – Jurisdiction of tribunal established by absence of agreement between user and owner of copyright – All that is required of a claimant is to place evidence before the tribunal on the issue of whether the claim is well-founded.

The respondents were a group of retailers whose entitlement to play background music in their stores attracted an obligation to pay royalties to the appellant (“SAMPRA”). Section 9A(1)(a) of the Copyright Act 98 of 1978 (the “Act”) imposed such obligation, providing as it did that in the absence of an agreement to the contrary no person may broadcast, cause the transmission of, or play a sound recording without the payment of a royalty to the owner of the relevant copyright. The amount of the royalty payable (“the tariff”) was in terms of section 9A(1)(b) of the Act, to be determined by agreement between the user of the sound recording, the performer and the owner of the copyright, or between their representative collecting societies. In the absence of an agreement, section 9A(1)(c) of the Act provided that the user, performer, or owner could refer the matter to the Copyright Tribunal (“the tribunal”), or they may agree to refer the matter for arbitration.

Agreement not being reached in this case, the retailers referred the matter to the tribunal for determination. The tribunal determined that in the circumstances a

reasonable tariff lay somewhere between the respective amounts proposed by the retailers and set by SAMPRA. The tariff awarded exceeded that proposed by the retailers, but was less than that set by SAMPRA. SAMPRA, accordingly, applied for and was granted leave by the tribunal, to appeal to this Court against the tariff awarded, as well as the costs order granted in favour of the retailers.

SAMPRA argued on appeal, that the retainers would have to satisfy the tribunal that their claims regarding the unreasonableness of the tariff set by SAMPRA were well-founded, and only then would the tribunal be empowered to determine a reasonable tariff. SAMPRA then submitted that the retailers did not adduce sufficient evidence in support of their claims regarding the unreasonableness of the tariff, and that the appeal should be upheld, the tariff determined by the tribunal be set aside and replaced by the tariff set by SAMPRA. In response, the retailers argued that all that was necessary to activate the tribunal’s jurisdiction was the absence of agreement on the amount of the tariff between the retailers and SAMPRA.

Held – In terms of section 9A, all that was required before the matter could be referred to the tribunal was the absence of an agreement between the user (being the retailers) and SAMPRA, as “the owner”, as to the amount of any royalty payable to the owner of the relevant copyright. Once the absence of an agreement was established, the jurisdiction of the tribunal to determine the dispute in terms of section 30, read with section 33(3) and 33(5), of the Act was established.

Section 33(5) provides that the tribunal shall make an order declaring that the applicant is entitled to a licence on such terms and conditions and subject to the payment of such charges, as the tribunal may determine to be reasonable in the circumstances, if it is satisfied that the claim of the applicant is well-founded. For the tribunal to be satisfied that the claim of the applicant is well-founded, it must have a foundation in fact or reason, based on good grounds or evidence. Consequently, all that is required of a claimant is to place evidence before the tribunal on the issue of whether the claim is well-founded. That involves an evidentiary burden rather than a legal burden of proof.

The Court then turned to consider whether sufficient evidence was placed before the tribunal for it to be satisfied that the claim by the retailers was well-founded in that the tariff proposed by SAMPRA was unreasonable. The Court had regard to expert evidence, and found that SAMPRA had led no expert evidence to rebut the evidence of the retailers’ expert that the tariff set by SAMPRA was excessive and therefore unreasonable. The Court also found no basis for the tariff set by the tribunal. It found the tariff proposed by the retailers to be fair to SAMPRA and the retailers and reasonable in the circumstances of this case. That conclusion led to the upholding of the appeal.

Brown v Health Professions Council of South Africa and others [2016] 2 All SA 62 (WCC)

Administrative law – Health Professions Council – Decision of – Review application – Court’s powers on review – Courts should take care not to usurp the functions of administrative agencies as its task is to ensure that the decisions taken by administrative agencies fall within the bounds of reasonableness as required by the

Constitution – As long as the purpose sought to be achieved by the exercise of public power is within the authority of the functionary, and as long as the functionary’s decision, viewed objectively, is rational, a court cannot interfere with the decision simply because it disagrees with it or considers that the power was exercised inappropriately.

In terms of a new dispensation in existence since July 2008, general damages may now only be claimed by a person who has been injured in a motor vehicle accident where a “serious injury” has been suffered by the claimant and where that has been either accepted by the Road Accident Fund (“RAF”) or proved in the manner prescribed by regulation.

The applicant was injured as a passenger in a motor vehicle accident, and lodged a claim for compensation. In order to be awarded general damages it was incumbent on him to prove, in the prescribed manner, that he had sustained a serious injury as contemplated in section 17 of the Road Accident Fund Act 56 of 1996 read together with the Regulations.

The Fund required the applicant to submit to tests and accepted the report of an occupational therapist who concluded that the applicant’s injuries were not serious. The applicant lodged a dispute against that assessment but the Appeal Tribunal found that the applicant’s injuries could not be regarded as serious.

On the grounds that the decision was taken arbitrarily or capriciously and/or relevant considerations were not considered; that the decision was not rationally connected to the information before it; the decision was procedurally unfair in that, despite the applicant’s request, the Tribunal/panel did not include an occupational therapist, the applicant sought its review.

Held – It was necessary to note the ambit of a court’s discretion and powers on review, particularly in relation to the distinction between a review and an appeal. As pointed out in case law, the court should take care not to usurp the functions of administrative agencies. Its task is to ensure that the decisions taken by administrative agencies fall within the bounds of reasonableness as required by the Constitution.

Decisions of administrative bodies must be rationally related to the purpose for which the power was given, otherwise they are in effect arbitrary and inconsistent with this requirement. That does not mean that the courts can or should substitute their opinions as to what is appropriate for the opinions of those in whom the power has been vested. As long as the purpose sought to be achieved by the exercise of public power is within the authority of the functionary, and as long as the functionary’s decision, viewed objectively, is rational, a court cannot interfere with the decision simply because it disagrees with it or considers that the power was exercised inappropriately.

Applying the above principles, the Court found no grounds upon which to review the decision of the first respondent. The impugned decision was taken by a panel of medical experts who considered all the medical reports before them, at least half of

which supported the decision which they ultimately took. In the circumstances, the application was dismissed.

Cele v S [2016] 2 All SA 75 (KZP)

Criminal law – Rape – Appeal against conviction – Proof of guilt – Onus of proof – Onus to prove the guilt of an accused person rests on the State, with there being no duty on an accused person to prove his innocence – Trial court committing various misdirections in its assessment of evidence, resulting in conviction and sentence being set aside.

Convicted on a charge of rape of a 5-year-old girl, the appellant was sentenced to 15 years’ imprisonment. He was granted leave to appeal against conviction only.

Witnesses for the State were the complainant and her mother, whilst the defence witnesses were the appellant, his uncle and his aunt. The appellant and the complainant were cousins.

Held – The onus to prove the guilt of an accused person rests on the State, with there being no duty on an accused person to prove his innocence.

The trial court was found to have accepted that the complainant was a credible and impressive witness, and failed to explore all the contradictions in the State’s case. That constituted a misdirection. The trial court also erred in its interpretation of the medical report by the doctor who had examined the complainant.

A further misdirection existed in the form of the trial court’s failure to consider the possibility that the complainant could have been coached into making the allegations she made in the statements to the police. The testimony of the witnesses raised such possibility, and it was incumbent on the court to address the issue. The Court also found that the appellant was an evasive and unsatisfactory witness, but provided no substantiation for that conclusion.

Not satisfied that the State had succeeded in proving the guilt of the appellant beyond reasonable doubt, the Court upheld the appeal and set aside the conviction and sentence.

In a dissenting judgment, the view was expressed that the appellant’s appeal against conviction should be dismissed.

The dissenting judge raised the question of how an appeal court should approach the evidence of a single witness, a child testifying at the age of eight years about an accused allegedly raping her three years earlier. Addressing each of the grounds of appeal, the Court concluded that it would have dismissed the appeal.

The appellant’s contention that there was no medical corroboration for the complainant fell to be rejected. The judge held that there was nothing unclear about the doctor’s observations of injury to the complainant. The appellant’s suggestion that the report did not corroborate the complainant’s version because it was done nine days after the incident, was also found wanting. It was held that no adverse

inference against the prosecution witnesses could be drawn from the delay of 9 days in seeking a medical examination.

Next, the dissenting judge considered the allegation by the appellant that the complainant’s testimony was marked by inconsistency. The primary challenge to the reliability and credibility of the complainant’s evidence was levelled at differences between the complainant’s evidence and her statement to the police. The only differences the appellant relied on in its heads of argument related to what she said she had worn when she was allegedly raped to where the rape occurred. The judge found credible reasons for the inconsistencies – which would render them immaterial. It did not necessarily follow therefore that the only reasonable inference to be drawn from the inconsistency was that the complainant was mendacious or even mistaken when she was testifying. The inconsistency had to be weighed in the context of all the evidence. In the circumstances of this case, it could not be said that the inconsistency amounted to a contradiction.

The trial court had found the complainant to be a credible witness, and the appellant to be an evasive and unsatisfactory one. The dissenting judgment found those findings not to be open to question, issuing a reminder that an appeal court should be slow to overturn a trial court’s findings on credibility. Evidence of credibility cannot be approached in a piecemeal manner. All the evidence for and against each party has to be viewed holistically.

Cliff v Electronic Media Network (Pty) Ltd and another [2016] 2 All SA 102 (GJ)

Civil procedure – Interim interdictory relief – Requirements – Applicant must establish a prima facie right, albeit open to some doubt; a well-grounded apprehension of irreparable harm to the applicant if the interim relief is not granted and the applicant ultimately succeeds in establishing his right; the absence of a satisfactory alternative remedy; and the balance of convenience favouring the applicant.

The applicant had held a position as a judge in the television programme “SA Idols” flighted by the respondents (collectively referred to by the court as “M-Net”). M-Net severed their relationship with the applicant for the 2016 Idols season as a consequence of a tweet he posted on social media, which was construed as racist, or in support of racism. A racist and derogatory statement made by a third party (“Sparrow”) on a social media platform was the starting point of the matter. The comment was met with widespread anger and outrage and sparked a public outcry, particularly on social media. Joining in the debate, the applicant posted a tweet stating, “People really don't understand free speech at all”. That was also met with outrage and a barrage of criticism on social media, with some members of the public equating the statement not as support for freedom of speech, but as support for the racist views of Sparrow. That led to accusations that the applicant was himself being racist. The applicant’s tweet led M-Net to allege that the comment was detrimental to their brand and necessitated the termination of the applicant’s role as brand ambassador in his capacity as an Idols judge.

In an urgent application, the applicant sought relief in that regard. The present hearing dealt only with the first part of the two-part application. The relief sought by

the applicant in Part A of his application was the urgent reinstatement of his contract with M-Net.

Held – The Court was not, at the present stage, concerned with the issues of freedom of speech or whether the applicant’s conduct amounted to racism. The Court defined the ambit of the dispute as relating solely to the contractual relationship between the parties and whether it should be restored to its position prior to its termination.

A court has a wide discretion in deciding whether to grant interim relief. In order for the applicant to be successful in an application for interim relief, pending the determination of the main issues in dispute, he must establish a prima facie right, albeit open to some doubt; a well-grounded apprehension of irreparable harm to the applicant if the interim relief is not granted and the applicant ultimately succeeds in establishing his right; the absence of a satisfactory alternative remedy; and the balance of convenience favouring the applicant.

The establishment of a prima facie right is the first and most important requirement for an applicant claiming interim interdictory relief. A prima facie right may be shown even where the facts set out by the respondents show contradictions and inconsistencies in the applicant’s version. A temporary interdict can be granted even if the right is open to some doubt. It is only if there is serious doubt cast on the facts alleged by the applicant that a court must refuse the interim relief. M-Net disputed that it had entered into any agreement with the applicant in respect of the 2016 season of Idols. However, the Court found its conduct and its statements to the media to display the contrary. The Court held that it was disingenuous of M-Net to now refute the existence of an agreement between the parties. If not an oral agreement, then there was a tacit agreement that the applicant would be an Idols judge. Consequently, the Court was satisfied that the applicant had shown a prima facie right that he had a contract with M-Net which was terminated without due process.

The irreparable harm contended for by the applicant was that of being branded a racist. Being fired for being labelled a racist does untold reputational and financial harm to him. Acknowledging such reputational harm, the Court found merit in the applicant’s submissions that he had a reasonable apprehension of suffering irreparable harm. A defamation action in due course or even a declaration of the unconstitutionality of M-Net’s termination of the contract would not address the reputational damage that the applicant was suffering at present. The interim relief sought was the only satisfactory remedy that would go some way in addressing the issue.

To see where the balance of convenience lay, the Court had to weigh the prejudice suffered by the applicant if the relief was refused as against the prejudice M-Net would suffer if the relief was granted. The Court was satisfied that the balance of convenience in this matter favoured the applicant.

Concluding that the applicant had satisfied the requirements for interim relief, and made out a prima facie case for the contractual relief he contended for, the Court held that temporary reinstatement was a competent prayer in the circumstances of

this case. Therefore, pending the finalisation of Part B of the notice of motion, the contractual relationship between the parties was reinstated to what it was on or about 6 January 2016.

Firstrand Bank Ltd v Hazan and another; Firstrand Bank Ltd v Hazan Wholesalers and Distributors CC [2016] 2 All SA 112 (GJ)

Motion proceedings – Founding affidavit – Deponent to – Authority of – Deponent to an affidavit in motion proceedings need not be authorised by the party concerned to depose to the affidavit, as it is the institution of the proceedings and the prosecution thereof that must be authorised – Remedy of a respondent who wishes to challenge the authority of a person allegedly acting on behalf of the purported applicant is not to challenge the authority in the answering affidavit, but instead to make use of rule 7(1) of the Uniform Rules of Court.

Insolvency – Winding-up application – Requirements for the grant of a final winding-up order – Applicant required to show that it was a creditor of the respondent within the meaning of section 346(1)(b) of the Companies Act 61 of 1973 read with item 9 of Schedule 5 of the Companies Act 71 of 2008, and that the respondent was unable to pay its debts within the meaning of section 345 of the 1973 Act.

Two matters were heard together due to the common facts involved.

The applicant (“FNB”) was the same in each application. It had sought and obtained a provisional winding-up order of Hazan Wholesalers and Distributors CC (“the Savoy”). The present Court had to decide, in the first application, whether a final order for the winding-up of the Savoy should be granted.

FNB had advanced a loan and other credit facilities to the Savoy. The sole member of the Savoy (“Mr Hazan”) and his wife signed suretyship agreements binding themselves in respect of payment of the debts of the Savoy. The Savoy breached the facility agreement and the loan agreement and all amounts owing became due and payable. FNB made a demand for payment but the respondents failed to make payment. In the second application, the Court was required to determine FNB’s claims for payment against the sureties.

Held – The respondents’ first challenge was to the authority of the deponent to FNB’s founding affidavit to depose to FNB’s founding affidavit and to bring the application on behalf of FNB. In determining the question whether a person has been authorised to institute and prosecute motion proceedings, it is irrelevant whether such person was authorised to depose to the founding affidavit. The deponent to an affidavit in motion proceedings need not be authorised by the party concerned to depose to the affidavit. It is the institution of the proceedings and the prosecution thereof that must be authorised. The remedy of a respondent who wishes to challenge the authority of a person allegedly acting on behalf of the purported applicant is not to challenge the authority in the answering affidavit, but instead to make use of rule 7(1) of the Uniform Rules of Court. That option was not utilised by the respondents.

The next argument raised by the respondents was that the certificates of indebtedness relied upon by FNB did not form part of the facility agreement as they had not been attached when the facility agreement was requested by the respondent’s attorney. The Court had regard to a clause in the suretyship agreements which provided a contractual foundation for the use of the certificates. Therefore, the certificates could be used as evidentiary tools. The accuracy of the content of the certificates was confirmed by the Court.

None of the various defences to the claims for payment were found to have any merit.

Turning to the winding-up application, the Court held that in order for a final winding-up order to be granted, FNB had to demonstrate that it was a creditor of the Savoy within the meaning of section 346(1)(b) of the Companies Act 61 of 1973, which was to be read with item 9 of Schedule 5 of the Companies Act 71 of 2008; and that the Savoy was unable to pay its debts within the meaning of section 345 of the 1973 Act. That onus was discharged.

Consequently, the respondent was placed under final winding-up, and judgment was granted against the respondents in the remaining application.

Gongqose and others v S; Gongqose and others v Minister of Agriculture, Forestry and Fisheries and others [2016] 2 All SA 130 (ECM)

Administrative law – Review application – Undue delay – Section 7(1)(b) of the Promotion of Administrative Justice Act 3 of 2000 makes it incumbent on a person bent on challenging an administrative action on review under the Act to resort to such proceedings without unreasonable delay and not later than 180 days after the date on which the person concerned was informed of the administrative action.

Criminal law – Conservation offence – Fishing in marine protected area – Marine Living Resources Act 18 of 1998 – Section 43(2)(a) – Unlawfulness – Whether proof of existence of customary right of access to marine resources negated unlawfulness – Court confirming validity of customary right, but finding that failure to seek exemption before fishing in area rendered conduct unlawful.

For convenience, the present matter encompassed both an appeal and a review simultaneously.

Common to both proceedings was a complaint concerning the entitlement of three traditional communities (referred to by the court as the “Dweba-Cwebe communities”) to exercise their customary rights to access certain marine resources in a marine protected area. The Dwesa-Cwebe communities, of which the appellants and some of the applicants were a part, resided outside the borders of the Dwesa-Cwebe Nature Reserve (the “Reserve”) which, together with its neighbouring marine protected area, was located on either side of a river. The communities had, over a long period of time, enjoyed customary law rights of access to the marine resources in the Reserve. Their relocation between 1900 and 1950 resulted in their being excluded from a significant portion of their ancestral land and barred from exercising

their customary law rights of access to the marine resources in the marine protected area.

With the promulgation of the Marine Living Resources Act 18 of 1998 (the “MLRA”) the Reserve was declared a strict “no take” zone, which in effect prohibited even members of the Dwesa-Cwebe communities from exercising any form of access to the marine resources. Section 43(2)(a) of the MLRA made it an offence for anyone to fish or attempt to fish in a marine protected area without the permission of the Minister responsible for environmental affairs. Nevertheless, after the regulatory framework was imposed members of the Dwesa-Cwebe communities continued exercising their customary right of access to the marine protected area and the Reserve.

In the meantime, the Dwesa-Cwebe communities lodged a land restitution claim in respect of what was referred to as the “Dwesa-Cwebe Nature Reserves”. That resulted in a settlement agreement between the claimant communities and the then Minister of Land Affairs in terms of which the claimed land would be restored to the claimant communities. The settlement agreement excluded the marine protected area from its ambit, but confirmed that the communities should have access to sea and forest resources, based upon the principle of sustainable utilisation as permitted by law.

The appeal related to criminal proceedings in terms of which the appellants were convicted of attempting to fish in the marine protected area without permission. Apart from appealing the finding that they were guilty of a contravention of the offence in question, the appellants, together with other members of the Dwesa-Cwebe communities, also launched proceedings seeking an order reviewing and setting-aside the decision to declare the marine protected area on a strictly “no-take” basis.

Held – In considering the appeal, the question to be addressed was whether proof of the existence of the customary right of access to marine resources negated unlawfulness on a charge under the MLRA. The appellants contended that the MLRA, which did not recognise the appellants’ customary fishing rights, had not extinguished those rights. They argued that customary law conferred on them the necessary authority to fish in the marine protected area without a permit. The Court held it to be unlikely that a law of general application aimed at preserving and protecting marine living resources for the benefit of all, had the effect of jettisoning (and not preserving) the customary rights that had been exercised by traditional communities. Upon a proper reading of the relevant provisions of the MLRA nothing prevented the appellants from seeking exemption on the basis that in terms of customary law such permit was not required. The appellants had not sought the exemption before setting out to fish, rendering their conduct unlawful.

The Court then turned to consider the appellants’ alternative submission that section 43(2)(a) of the MLRA was inconsistent with the Constitution and invalid to the extent that it did not recognise existing customary law rights of access to marine resources and criminalised the exercise of customary law rights that had never been extinguished in circumstances that would satisfy the Constitution. It was held that section 43 was not unconstitutional for not permitting the recognition of customary law rights of access to marine resources.

There being no merit in the appeal, the Court was left to consider the review application. The applicants’ principal complaint in relation to the marine protected area decision was that they were not consulted at all when the impugned declaration was made. They contended that the decision is reviewable on the grounds that it was procedurally unfair; unreasonable and irrational; inconsistent with sections 30, 31, 39(3) and 211 of the Constitution; and inconsistent with the right to environmental justice and equitable access to natural resources. It is trite law that whilst the validity of the administrative act is generally challenged by way of judicial review, such challenge may arise not by the initiation of the proceedings, but by way of a defence, as a collateral issue, in a claim for the enforcement of a private law right. The review application in this matter was found not to constitute a collateral challenge.

The problem which the applicants in the review application did face was that of undue delay in seeking review. Section 7(1)(b) of the Promotion of Administrative Justice Act 3 of 2000 makes it incumbent on a person bent on challenging an administrative action on review under the Act to resort to such proceedings without unreasonable delay and not later than 180 days after the date on which the person concerned was informed of the administrative action. The review application in this case was brought some 13 years after the decision to which it related was made. The Court had to decide whether such delay should be condoned. Finding that the interests of justice did not favour the grant of condonation, the Court upheld the plea of undue delay.

As a result, both the appeal and the review application failed.

Hanekom v Voight NO and others [2016] 2 All SA 155 (WCC)

Trusts – Testamentary trust – Variation of trust deed – Amendment to original trust deed in 2001 memorandum of agreement – Whether the 2001 memorandum constituted a valid amendment of the 1980 trust deed – Court concluded that the 2001 memorandum differed from the 1980 trust deed in several respects and held that circumstances had completely changed in a manner which was not envisaged by the testator.

The appellant and the first to sixth respondents were sisters, as well as trustees and beneficiaries in a testamentary trust. The appellant was embroiled in a long-standing dispute with her sisters.

The original trust deed relating to the trust was created in 1980. The appellant challenged the validity of an amendment to the original trust deed in a 2001 memorandum of agreement. The court below found that the Master of the High Court’s decision that the 2001 memorandum was valid constituted administrative action, and as the appellant had not brought an application for the review of the decision, the 2001 memorandum stood as the trust deed.

On appeal, the question was whether the 2001 memorandum constituted a valid amendment of the 1980 trust deed.

Held – The 2001 memorandum differed from the 1980 trust deed in several respects. In challenging the validity of the 2001 variation to the original trust deed, the appellant referred to the fact that original trust deed required unanimous decision-making whereas the 2001 memorandum stipulated that a majority decision had to prevail. The Court rejected the appellant’s argument, pointing out that circumstances had completely changed in a manner which was not envisaged by the testator.

Finding that the appeal lacked merit, the Court dismissed the appeal.

Lawyers for Human Rights v Minister of Home Affairs and others [2016] 2 All SA 168 (GP)

Immigration – Illegal foreigners – Arrest and detention pending deportation – Section 34(1)(b) and (d) of the Immigration Act 13 of 2002 – Constitutional validity – Failure to afford a detainee an automatic right to have the lawfulness of his detention confirmed by a court or a right to appear in court to challenge the request for an extension of the period of detention – Section 35 of the Constitution of the Republic of South Africa, 1996 encompassing the rights of arrested, detained and accused persons – Limitation of section 35 rights not justifiable and impugned sections declared unconstitutional.

Acting on behalf of persons detained in terms of immigration laws, the applicant sought an order declaring section 34(1)(b) and (d) of the Immigration Act 13 of 2002 unconstitutional and invalid. The only parties opposing the relief claimed by the applicant were the first and second respondents, collectively referred to by the court as “Home Affairs”.

Held – Section 34 deals with deportation and detention of illegal foreigners and provides in the impugned sections that an immigration officer may arrest and deport an illegal foreigner, and pending such deportation, may detain the person in question. However, the foreigner may at any time request that his detention for the purpose of deportation be confirmed by warrant of a court, which, if not issued within 48 hours of such request, shall cause the immediate release of such foreigner – and provided that the foreigner may not be held in detention for longer than 30 calendar days without a warrant of a court which on good and reasonable grounds may extend such detention for an adequate period not exceeding 90 calendar days. The detention and deportation of illegal foreigners is further regulated by regulation 33 of the Immigration Regulations enacted on 22 May 2014. Section 34(1)(b) read with sub-regulation 33(3) does not afford a detainee an automatic right to have the lawfulness of his detention confirmed by a court nor does it provide for an appearance in court. Similarly, section 34(1)(d) read with sub-regulation 33(4) provides for the extension of the period of detention of a detainee without affording the detainee a right to appear in court to challenge the request for an extension. The applicant contended that the failure to afford detainees the automatic right to appear in a court to have the lawfulness of their detention and/or extension thereof

confirmed, limits their rights contained in section 35(1)(d) and 35(2)(d) alternatively section 12(1) of the Constitution. Section 35 encompasses the rights of arrested, detained and accused persons.

The power to detain an illegal immigrant is exercised by the Executive through an immigration officer who is a non-judicial officer. Section 34(1)(b) and (d) did not provide for judicial oversight in respect of each and every person detained in terms of the section nor did it provide for an appearance in court. On face value therefore, section 34(1)(b) and (d) therefore limited the rights contained in section 35(2)(d).

Once a limitation of a fundamental right has been established, the burden to justify the limitation under section 36(1) of the Constitution rests on the party asserting that the limitation is justifiable. Home Affairs failed to provide any justification for the limitation of the fundamental right contained in section 35(2)(d).

It was declared that section 34(1)(b) and (d) of the Immigration Act 13 of 2002 was unconstitutional and invalid. The Court remedied the issue by a reshuffling of the words of the section.

New Adventure Shelf 122 (Pty) Ltd v Commissioner for the South African Revenue Service [2016] 2 All SA 179 (WCC)

Tax – Capital gains – Disposal of asset – Proceeds of disposal only realised in subsequent years – Income Tax Act 58 of 1962 – Section 26A – Section provides that the taxable capital gain of a taxpayer must be included in the taxable income for the particular year of assessment as determined in terms of the Eighth Schedule.

In 2006, the applicant sold immovable property in terms of an agreement which provided for the purchase price to be paid in subsequent years. Section 26A of the Income Tax Act 58 of 1962 provides that the taxable capital gain of a taxpayer must be included in the taxable income for the particular year of assessment as determined in terms of the Eighth Schedule.

It was common cause between the parties that on the facts of the current case, the relevant provisions of the Eighth Schedule deemed the date of the disposal to have been the date upon which the contract was concluded, and that the proceeds were deemed to have accrued to the taxpayer and fell to be accounted for income tax purposes in the year in which the disposal occurred, even if the proceeds actually fell to be received after that year. For capital gains purposes, the applicant’s sale of property was accounted for in the assessment of taxable income for the 2007 tax year. The contract was cancelled during the taxpayer’s 2012 year of assessment. The terms of cancellation provided for the return of the property to the taxpayer, which was entitled to retain that part of the purchase price that had been paid by that stage as pre-estimated damages. In the result, part of the amount of the proceeds of the transaction that had been taken into account in determining the taxpayer’s capital gain in respect of the disposal became irrecoverable. Relying on the provisions of paragraph 35(3)(c) of the Eighth Schedule, the applicant contended that its income tax assessment for the 2007 tax period should be reopened, and that a reassessment of its taxable income in that year of assessment should be undertaken with regard to the amount of the proceeds actually received and retained by it in the

context of the cancellation of the contract. The respondent contended that it would be contrary to basic principle to reopen what had been an admittedly correct and unimpeachable assessment of taxable income for a particular tax period on the basis of an event that occurs in a subsequent tax period.

The applicant applied for an order directing the respondent to amend the assessment in respect of the applicant’s 2007 year of assessment, and for the review of the 2007 assessment.

Held – The case concerned how a capital gain accrued as a result of the disposal of an asset in a particular year of assessment falls to be treated for capital gains tax purposes when the contract in terms of which the asset was sold is cancelled during a subsequent tax period, with the effect that the taxpayer does not realise the full proceeds of the disposal that had been taken into account in assessing its taxable income in the year that the asset was disposed of.

The application for review was sought in terms of section 6 of the Promotion of Administrative Justice Act 3 of 2000. Section 7(1) of that Act prescribes that review proceedings in terms of section 6 must be brought without unreasonable delay and not later than 180 days after the date on which any proceedings instituted in terms of internal remedies have been concluded; or where no such remedies exist, the date on which the person concerned was informed of the administrative action, became aware of the action and the reasons for it, or might reasonably have been expected to have become aware of the action and the reasons for it. Section 9 allows for the court, on application, to extend the period in terms of section 7(1) if the interests of justice so require. The review application in this case was brought out of time, and confronted with that, the applicant’s Counsel applied orally from the bar for the necessary extension of time. That raised the question whether an application in that form and at that stage of the proceedings was permissible. The decision whether or not to grant an application for an extension of time in terms of section 9 entails the exercise by the court of a broad discretion in the light of all relevant facts. While it is not desirable that applications of this nature be brought informally in the manner that happened, if the manner in which the application is brought does not occasion the other litigants involved in the case substantial injustice, it would be counter-intuitive to the promotion of constitutional values for a court to decline to consider it on its merits on purely procedural grounds. The Court held that it would be in the interests of justice to entertain the review application.

The merits of the review application turned on the application and proper construction of the pertinent provisions of the Eighth Schedule.

The Court was satisfied that the construction of the relevant legislation propounded by the respondent was correct. The contesting interpretation advanced on behalf of the applicant was inconsistent with the plain wording of the provisions. The applicant had established no basis for the expungement of the capital gains tax liability in the taxpayer’s 2007 year of assessment and did not have a valid basis to object to or appeal against that assessment. The application for review was dismissed.

S v Masooa [2016] 2 All SA 201 (GJ)

Criminal procedure – Evidence – Criminal Procedure Act 51 of 1977 – Recalling of witnesses in terms of section 167 and subpoenaing of witnesses in terms of section 186 – Scope of court’s powers explained – Court emphasised the necessity to maintain impartiality, open mindedness and fairness and not to take over the role of the prosecutor, or lose its impartiality, or the appearance of impartiality.

After the close of the defence case in this matter, the Court raised concerns about the need to invoke the provisions of section 186 of the Criminal Procedure Act 51 of 1977 and the advisability of recalling certain witnesses under section 167.

The concerns related to expert testimony regarding the reliability of forensic tests and analysis despite extraneous facts and interference. If the court accepted that aspect of the evidence which was based purely on the application of scientific analysis and the expert’s knowledge then the only issues would be his credibility and whether the court itself when weighing up the totality of evidence could raise any query regarding the veracity of the scientifically based testimony and thereby cast doubt as to whether the State had proven its case beyond reasonable doubt. Another concern related to the court and the assessors’ levels of knowledge regarding the basic operation of a motorcycle and the basic functioning of a semi-automatic firearm such as the one possessed by the deceased. Such concerns brought into play the possible need for the court to call witnesses in terms of section 186.

Section 167 dealt with the recalling of witnesses.

Held – The need to obtain the views of the parties before calling witnesses in terms of section 186 was the first issue to be considered. In the present case there was potential prejudice to the accused if the section was invoked, as would be the case with applying section 167. Accordingly before remanding the trial, the parties were advised that the court wished to hear argument regarding the possibility of the court calling additional expert witnesses, calling evidence with regard to the controlling of the deceased’s motorcycle and the mechanism of firearms as well as recalling other witnesses who had already testified. In deciding whether to invoke section 186, the court must scrutinise the reason for doing so, in case the real reason is to shore up the State case. The Court emphasised the necessity to maintain impartiality, open mindedness and fairness – and not to take over the role of the prosecutor, or lose its impartiality, or the appearance of impartiality. Bearing those principles in mind, the Court identified the expert witnesses needed in this case, and provided for the subpoenaing of such witnesses.

Section 167 compliments section 186 insofar as the calling or recalling of a witness appears to the court to be essential to the just decision of the case. It is,however, confined to a witness who has already been subpoenaed or who has already testified.

Returning to the issue in respect of which the Court harboured concerns, the Court concluded that it was necessary to recall the expert referred to above. The need to recall that witness was essential to the just decision of the matter. The accused had failed to advance details of his version as to how the incident unfolded, and the witness was qualified to testify as an expert on crime reconstruction and different

weapons. Furthermore, the Court saw fit to recall two witnesses in order to inform the Court whether any additional photographs were taken and if so, to produce them.

Singh and another v Mount Edgecombe Country Club Estate Management Association 2 (RF) NPC and others [2016] 2 All SA 218 (KZD)

Motion proceedings – Dispute of fact – Where disputes of fact have arisen in motion proceedings, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred by the applicant, which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order.

Contract – Residential estate rules – Lawfulness – Where rules were agreed to by all the residents of the estate, and were not contrary to public policy, they had to be given effect to.

Spoliation-Incorporeal rights – Possession of incorporeal rights is protected against spoliation by the mandament – Mandament van spolie is not concerned with the protection or restoration of rights, but the restoration of the factual possession of which the spoliatus has been unlawfully deprived.

In three applications before the court, the conduct rules of the Mount Edgecombe Country Club Estate Management Association 2 (RF) (NPC) were challenged. For ease of reference, the court referred to the country club as “the respondent”. The first applicant in the first application was the applicant in the second and third applications, and was referred to simply as “the applicant” in the court’s judgment.

In the first application (“the rules application”), the two applicants sought an order declaring certain specified rules of the conduct rules to be declared unlawful and to be regarded as pro non scripto. The respondent instituted a counter-application in which it sought an order declaring that it was entitled to suspend the use of the access cards issued to the applicant, his invitees and members of his family, together with the biometric access for such persons, for as long as certain fines issued to him pursuant to the conduct rules had not been paid. In the second application (“the spoliation application”), the applicant sought confirmation of a rule nisi directing the respondent to reactivate his access cards and the biometric access of his family. In the third application (“the trespass application”), the applicant sought an order directing the respondent to allow certain contractors engaged by him access to the estate and a further order restraining the respondent, or any person acting through or with its instructions, from entering upon various specified immovable properties within the estate.

Held – The relationship between the applicants and the respondent had its foundation in contract and that contractual nature of the relationship between the parties had to provide the framework within which the application had to be decided.

Beginning with the rules application, the Court examined each of the impugned rules, and concluded that they could not be considered unlawful. Despite their restrictive and regimented nature, they could not be said to be contrary to public policy. Moreover, the rules had been agreed upon by all the residents of the estate. The rules therefore had to be given effect to.

Turning to the respondent’s counter-application, the Court noted that the applicant had put the commission of the breach of the conduct rules in issue. Where disputes of fact have arisen in motion proceedings, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred by the applicant, which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The respondent fell at the first hurdle, as it failed to establish that the relevant rules were breached.

In the spoliation application, the applicant complained of the effect of deactivating his access cards and biometric access as he, and the members of his family, would not be able to enter the estate “as a resident”. The applicant was therefore contending for the illicit deprivation by the respondent of the exercising, or “quasi-possessio”, of his right to enter the estate in such capacity. The possession of incorporeal rights is protected against spoliation by the mandament. The mandament van spolie is not concerned with the protection or restoration of rights, but the restoration of the factual possession of which the spoliatus has been unlawfully deprived. What is protected by the remedy is the actual performance of acts, which if lawfully performed, would constitute the exercise of the right in question. Based on the evidence before it, the Court found that the respondent’s contention that it had legally suspended the applicant’s access cards and biometric access to the estate by operation of the provisions of its memorandum of incorporation and conduct rules was without merit. The applicant was, therefore, entitled to confirmation of the rule nisi.

Finally, the Court dismissed the trespass application, finding that the applicant had not established that there had been an “intrusion” onto his property by the respondent’s manager during the course of an inspection.

Tshiyombo v Members of the Refugee Appeal Board and others [2016] 2 All SA 278 (WCC)

Immigration – Asylum seeker – Refugee – Refusal of application by Appeal Board – Review – Applicant bore the main burden of proof but the duty to ascertain and evaluate all the relevant facts is shared between the applicant and the examiner – Court held that the Appeal Board made inferences which were based on unfounded assumptions and opinions that were not put to the applicant or his legal representative during the appeal hearing – Conduct of the appeal hearing was procedurally unfair and applicant succeeded in establishing a case for the review and setting aside of the Appeal Board’s decision.

An application by the applicant for refugee status had been refused by the refugee status determination officer, and his appeal to the Refugee Appeal Board had failed. The applicant therefore applied for the review of the decision to refuse his application, and for an order declaring him to be a refugee entitled to asylum in terms of the Refugees Act 130 of 1998. Interim relief had been granted in the first part of the application, in terms of which the sixth respondent had been directed to issue a temporary asylum seeker permit to the applicant. The interim order also provided a time-table for the further conduct of the matter concerning the judicial review sought by the applicant.

Held – The respondents had failed to comply with the directions set out in the interim order. Importantly, in not filing the administrative record of proceedings, they had failed to comply with rule 53(1)(b) of the Uniform Rules of Court. Such conduct prejudiced the administration of justice because it impinged adversely on the applicants’ constitutional right to a determination of their suits by the application of law in a fair hearing.

The record also established that the respondents had not properly considered the applicant’s application. Despite the applicant setting out details of the danger he faced were he to return to his native country of the Democratic Republic of the Congo, the respondents appeared not to take his fears seriously. That was the wrong approach. Although the applicant bore the main burden of proof, the duty to ascertain and evaluate all the relevant facts is shared between the applicant and the examiner. It being clear that the Appeal Board made inferences which were based on unfounded assumptions and opinions that were not put to the applicant or his legal representative during the appeal hearing, it was concluded that the conduct of the appeal hearing was procedurally unfair. The applicant therefore succeeded in establishing a case for the review and setting aside of the Appeal Board’s decision.

The Board’s decision was substituted with one in terms of which the applicant was granted asylum. The sixth respondent was directed to issue the applicant with a formal written recognition of refugee status.

Van den Heever NO and others v Aon South Africa (Pty) Ltd [2016] 2 All SA 302 (GJ)

Special plea – Res judicata and issue estoppel – Requirements for res judicata – Common law requirements for res judicata are three-fold, viz same parties, same cause of action, same relief – Defendant failing to make out case – Special plea dismissed.

The present case focused on the principles attached to res judicata and issue estoppel. The special plea raised by the sole defendant in the present action (“AON”) stemmed from the fact that an action (“the first action”) was previously instituted under another case number in this Court. The present matter was referred to by the court as “the second action”.

The multiplicity of parties and their inter-relation made the factual background to the litigation complicated. Suffice to say that in the first action, the plaintiffs were the three liquidators of a company (“PGH”). They instituted action to recover monies transferred out of PGH’s banking account and paid into the account of the second defendant (“Glenrand MIB”). The court found that they were entitled to judgment against the first defendant (“Glenrand MIB Financial Services” – a subsidiary of Glenrand MIB), and that there was a disposition of property which was without value. Before that court handed down judgment, a merger between Glenrand MIB and AON took effect. The merger resulted in AON being joined as an interested party to an appeal which was at that stage being pursued in the Supreme Court of Appeal (SCA). Once the SCA handed down judgment, the appointed liquidators of Glenrand MIB Financial Services (by then also liquidated) caused summons to be issued against AON in this Court (in the present or second action). In the particulars of

claim, the plaintiffs alleged that as AON had acquired Glenrand MIB in the merger referred to above, AON was liable for payment of the amount held by the court in the first action to be payable.

To that, AON raised a special plea that the plaintiffs were precluded by reason of the exceptio res iudicata vel litis finitae or issue estoppel, from pursuing the present action.

Held – The sole issue for determination by this Court was whether the special plea of res judicata and issue estoppel should be upheld or dismissed.

The party who raises res judicata must allege and prove all the elements based on the defence.

Referring to Amler’s “Precedents of Pleadings”, the court noted the statement of the law as being that the exceptio rei judicatae is based on the irrebuttable presumption that a final judgment on a claim submitted to a competent court is correct. This presumption is founded on public policy which requires that litigation should not be endless and on the requirement of good faith, which does not permit of the same things being demanded more than once. Reference was also made to case law, in which it was stated that the common law requirements for res judicata are three-fold, viz same parties, same cause of action, same relief.

In applying the legal principles to the facts of the instant matter, it became clear that the defendant had not met the requirements of res judicata and/or issue estoppel. A close scrutiny of the pleadings in the first action and the second action, with the concomitant comparison of the two, show that the plaintiffs in the second action were not plaintiffs in the first action. None of the other requirements of res judicata had been met. Although AON argued for the relaxation of the traditional requirements for a successful plea of res judicata, the Court found no reason to accede to that request.

The special plea was thus dismissed with costs.