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[2021] ZAWCHC 280
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Takealot Online (RF) (Pty) Ltd v Driveconsortium Hatfield (Pty) Ltd - Application for Leave to Appeal (7348/2021) [2021] ZAWCHC 280 (11 October 2021)
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE
DIVISION, CAPE TOWN)
Case
No: 7348/2021
TAKEALOT
ONLINE (RF) (PTY) LTD
Applicant
and
DRIVECONSORTIUM
HATFIELD (PTY) LTD
Respondent
Date
of hearing: 17 August 2021 and 6 October 2021
Date
of Judgment: 11 October 2021 (to be delivered via email to the
parties’ legal representatives)
JUDGMENT:
11 OCTOBER 2021
HENNEY,
J
Introduction
:
[1]
This is an application for leave to appeal against the whole of the
judgment of this court, delivered
on 26 May 2021, in which it granted
an interdict in favour of the respondent with costs, including the
cost of two counsel.
[2]
At the outset, it needs to be said that some of the issues raised in
this application for leave
to appeal were not addressed or fully
ventilated in the main application. The court was also not
asked to address it in the
manner it is now being asked to. What is
further unusual is that this application for leave to appeal was
argued over almost a
full day.
[3]
Mr Dickerson appears for the applicant in these proceedings, although
he did not appear in the
proceedings in which an interdict was
sought. He is assisted by Mr. Vaughn, who had been counsel for the
applicant in the interdict
proceedings. Mr. La Grange, assisted by
Mr. Quixley, appears for the respondent in this matter.
Grounds
of appeal
:
[4]
Mr. Dickerson submitted that the most important grounds of the appeal
are the following:
1) that
the court erred in granting an amendment to the notice of motion
which substantially altered or changed
the case the respondent
originally made out in the founding papers;
2)
that the
court erred in finding that the respondent had shown that it had a
prima
facie
right where there were no dispute of fact on the papers, and failed
to appreciate the approach in determining whether an applicant
has a
prima
facie
right to an interim interdict, as laid out in Gool v Minister of
Justice and Another
[1]
;
3) that
Part 2 of the order, which was in essence a spoliation order,
amounted to final relief;
4) that
the court failed to apply the provisions of section 69 (d) of the
Consumer Protection Act (“the
CPA”) 68 of 2008, which
states that a party who seeks to enforce any right in terms of the
act or in terms of a transaction
or agreement, or otherwise resolve a
dispute with a supplier, may only approach the court with
jurisdiction over the matter if
all other remedies available to that
person, in terms of national legislation, have been exhausted;
5) that
the court erred in impermissibly applying the provisions of section
114 of the CPA, dealing with interim
relief, in circumstances where
the respondent has not applied for relief to a court before such
interim relief was applied for
in terms of this provision.
Discussion:
[5]
Regarding the first ground of appeal, which is that the court granted
the respondent leave which
substantially amended its notice of
motion, in circumstances in which its case had been brought on a
different basis, thereby permitting
the respondent to substantially
alter its original relief it sought in its notice of motion. In
my view, there is no substance
to this complaint, because from a
reading of the initial notice of motion, as contained on page 1 of
the record, the amendments
applied for and granted did not
substantially change the case which the appellant had to meet.
[6]
In respect of the first amendment, regarding prayer 2, the court was
asked to permit an amendment
in order to add, after the words
“National Consumer Commission”, the words alternatively
“in the Western Cape
Division of the High Court”. This
amendment was sought by the respondent, after it realised that the
relief sought in terms
of section 48 of the CPA, regarding the
unfairness, unreasonableness and unjust contract terms as they have
referred to in paragraphs
59 to 70 of the founding affidavit, could
only be granted, in terms of section 52 of the CPA, by a court and
not the National Consumer
Commission. This the applicant was also
aware of. In its answering affidavit it stated the following:
[2]
‘
5.1.1 In terms of
pray 4 of the notice of motion, the Applicant seeks an interim
interdict pending the institution of “proceedings
against the
respondents at the National Consumer Commission” within 10 days
of the grant of the order. Nowhere in the founding
affidavit does
Applicant clearly and categorically set out the supposed “relief”
it will seek from the National Consumer
Commission (“the
Commission”) but merely makes generalized broad allegations of
contraventions of the various provisions
of the Consumer Protection
Act 68 of 2008 (“the Act”) which bear no relation to any
of the relief which it may claim
from the Commission.
5.1.2 The Applicant’s
fundamental complaint, once distilled from the various allegations
makes in relation to the Respondent’s
conduct in terms of
clause 5.2.1 of the Franchise Agreement (“the Agreement”)
… is essentially that that clause
is an unreasonable, unfair
or unjust contract term.
5.1.3 However, those
sections of the Act which deals with unfair, unreasonable or unjust
contract terms (in particular sections
48 of the Act read with
section 52 thereof) make it clear that only a court has jurisdiction
to make findings in relation to such
terms or conduct. Indeed, I am
advised and respectfully say that neither the Commission nor the
National Consumer tribunal “(the
Tribunal”) have the
powers under section 52 of the Act. The Tribunal has held that only
the ordinary courts have the power
to apply section 48 of the Act.
5.1.4 in the
circumstances, the Applicant’s fundamental complaint is simply
not one which can be determined by the Commission
and/or the
Tribunal, which the Applicant itself concedes is a time-consuming
process which may follow various routes, depending
on the nature of
investigations, findings and other factors.
5.1.5 The effect of the
Applicant’s relief is that it will secure for itself and
alleged “interim position” in
relation to main
proceedings (before the Commission) which cannot achieve the
purported intended result and have no prospects of
success. In those
circumstances I am advised and respectfully submit that “interim”
interdict can be granted . . .
’
This was stated by the
applicant in its answering affidavit, in answer to what the
respondent stated in its founding affidavit about
its reliance on
section 48 of the CPA.
[7]
The amendment to the notice of motion was clearly within the bounds
and parameters of the case
it set out in its founding affidavit, to
which the applicant had ample opportunity to answer, to as can be
seen from its answering
affidavit. The other amendments, in my view,
were clearly of a cosmetic nature and did not affect or substantially
change the case
as pleaded in the founding affidavit. In my view,
there was in any event no prejudice to the applicant when the court
granted the
amendment. Clearly if the amendment would have caused
prejudice to the applicant, it could have requested an indulgence
from the
court in order to deal with the amendment. It chose not to
do so, which, in my view, was a correct decision, because in its
answering
affidavit it clearly dealt with the issues which the
amendment sought to address. In my view, regarding this ground of
appeal,
there are no reasonable prospects that another court would
come to a different conclusion.
[8]
Regarding the second ground of appeal, which is that the respondent
had not established a
prima facie
right and that the court
failed to appreciate that this could only be adopted in proceedings
for an interdict
pendente lite
, if there should be a dispute
of fact, the applicant contends that there is no dispute of fact, and
the only dispute is one of
law, which is whether the respondent’s
common cause conduct amounted to a breach, and/or whether clause
35.3.2 of the agreement
is unjust or unfair.
[9]
I agree that the conduct of the respondent with regards to the
correspondence it made to the various
entities about the applicant
was not disputed; the question remains whether it amounted to a
breach of the agreement. This is clearly
a legal question, but that
is not the end of the matter. It would also seem that the other
question that needs to be considered
in this matter is whether some
of the terms of the agreement and the conduct of the applicant
amounted to unfair, unreasonable
or unjust contract terms. The
finding of the court was that a court may very well come to the
conclusion that the provisions of
clause 5.2 are unfair and
overbroad, as it gives a franchisor the power to seize and reduce the
areas of operation and the volume
and size of a business operation of
the franchisee, for any reason, or at the very least for reasons that
cannot be properly justified.
[10]
The court also concluded that the conduct of the applicant, in the
manner in which it exercised its contractual
rights, was unjust and
unfair and a
prima facie
contravention of section 51 (1) (i)
(i) of the CPA, which the applicant denies, contending that it was at
all times entitled to
do so in terms of the agreement. The court then
concluded that a court hearing the matter in terms of section 52,
needs to determine
whether the conduct of the applicant in exercising
its rights in terms of the agreement, as well as the contract terms,
can be
regarded as fair, reasonable and just in terms of the
provisions of section 48 of the CPA.
[11]
The applicant vehemently opposed and denied that any of the terms of
the agreement are in contravention of
the provisions of the CPA, and
that its conduct, based on the agreement, was in contravention of the
provisions of the CPA. There
seems to be very difficult legal
questions that need to be addressed and which seem to be in dispute.
Is it the place of a court
in an urgent application for interim
interdictory relief to make such a decision? In this regard, the
applicant in its heads of
argument
[3]
in the initial application before the court, said the following: ‘.
. .The applicant’s prima facie right can derive
solely from its
allegation that the respondent’s conduct is prohibited by the
Consumer Protection Act as
being unfair, unjust or unreasonable in
the particular circumstances.
This
court must be satisfied that it should be successful in proving this
in due course in order for an interim interdict
to be granted.” (Own emphasis added.)
[12]
There was therefore clearly a realisation that the respondent’s
prima facie
right can derive only from its allegation that the
applicant’s conduct is prohibited by the CPA as being unfair,
unjust or
reasonable in the particular circumstances, for the court
to conclude that it has established a
prima
facie right, and
that the right can only fully be established in proceedings that will
follow thereafter. This was exactly
the court’s finding
in the initial application, which formed the basis upon which the
court found that a
prima facie
right existed. This is clearly
a legal question, that could not have been determined in urgent
interlocutory proceedings of this
nature.
[13]
Our courts are called upon to make difficult decisions regarding
novel legal issues and have to interpret
legislation such as the CPA
on an urgent basis in applications like this. It is difficult to deal
with such issues during an application
for an interim interdict, and
our courts have in the past concluded that in such cases where a
legal issue is in dispute, it need
not be dealt with finally during
an application for an interim interdict. In this regard, this
court in
Ward v Cape Peninsula Ice Skating
Club
1998 (2) SA 487
(C),
after discussing the requisites of an interim interdict, had the
following to say at 497-498:
‘
The
question of the proper approach to be followed in applying the first
requirement to a legal issue, is, however, not that
clear. This
topic is discussed by C B Prest in
The
Law and Practice of Interdicts
at
59 - 60. After referring to the apparently conflicting decisions
in
Mariam v Minister of the
Interior and Another
1959 (1)
SA 213
(T) at 218B - E (where the
prima
facie
right test was applied to
a disputed point of law) and
Fourie
v
Olivier en 'n Ander
1971
(3) SA 274
(T) at 285 B - E (where Viljoen J held that the
prima
facie
right test did not apply
to a legal issue) Prest says the following:
“
The
fact that a Court is called upon to decide a point of law in
circumstances of urgency does not necessarily make the task any
easier than being called upon to decide a dispute of fact. This was
made clear by Franklin J in
Beecham Group Ltd v B-M Group
(Pty) Ltd
where, in the papers before the Commissioner,
there were no substantial disputes of fact but the Court had to deal
with difficult
questions of law, in respect whereof detailed and
thorough argument had been presented to the Court.
When
regard is had to the wider context of the application for urgent
relief in circumstances where detailed argument and mature
reflection
are not possible, then the approach taken by Franklin J and the view
expressed by Roper AJ in
Mariam v Minister of the Interior
and Another
must be preferred.”
In
Beecham
Group Ltd v B-M Group (Pty) Ltd
1977 (1) SA 50
(T) at 55H,
Franklin J, delivering the judgment of the Full Bench, referred to
the following approach of the Commissioner of Patents
(Nicholas J)
whose decision was being taken on appeal:
“
Although
there are in the present papers no substantial disputes of fact,
these grounds of objection raise difficult questions of
law, to which
detailed and thorough argument was devoted by both sides. These are,
however, matters to be dealt with at the trial,
and it is both
unnecessary and undesirable that I should give my views on them at
this stage. It is sufficient for me to say for
present purposes that
I have carefully considered all the arguments which have been
advanced, but that I do not think that on the
respondent's side they
are such as to disturb my strong
prima facie
view
that the patent is valid.”
In
my view it is clear from the judgment of Franklin J that he approved
of the approach adopted by the Commissioner (Nicholas J).
At
58H-59A he said the following:
“
I
have, after careful consideration, come to the conclusion that there
are no adequate grounds for holding that the Commissioner
erred in
law or that he did not exercise a proper judicial discretion in
dismissing the application on the grounds stated in his
judgment. He
took into account all the main factors bearing upon the establishment
of a
prima facie
right, upon the adequacy or
otherwise of an award of damages, and upon the balance of
convenience; and I am not persuaded
that his conclusions in regard to
any of those issues were wrong in law or based on any material
misdirections.”
In
English law, I may point out, the test for the first requirement for
an interim interdict is formulated differently. Instead
of
a
prima facie
right, as in our law, reference is
made to a “serious question to be tried”. (See
American
Cyanamid Co v Ethicon Ltd
[1975] UKHL 1
;
[1975] 1 All ER 504
(HL).) It is
significant, however, that precisely the same approach is followed
with respect to disputed issues of fact and difficult
questions of
law. See the
dicta
at 510c-e:
“
The
use of such expressions as a probability, ''a
prima
facie
case'', or ''a strong
prima facie
case''
in the context of the exercise of a discretionary power to grant an
interlocutory injunction leads to confusion as
to the object sought
to be achieved by this form of temporary relief. The Court no doubt
must be satisfied that the claim is not
frivolous or vexatious; in
other words, that there is a serious question to be tried.
It
is no part of the Court's function at this stage of the litigation to
try to resolve conflicts of evidence on affidavits as to
facts on
which the claims of either party may ultimately depend nor to decide
difficult questions of law which call for detailed
argument and
mature considerations. These are matters to be dealt with at the
trial.”
It
seems to me, however, that the approach of Viljoen J in
Fourie
v Olivier en 'n Ander
(
supra
) can be reconciled with
that of Nicholas J (approved in the
Beecham
case
supra
),
if due regard be had to the expression “
difficult
questions
of law”. This reference to “difficult” appears to
imply that ordinary questions of law could be
decided at the
interlocutory stage of the proceedings.
How
are ordinary questions of law to be distinguished from “difficult
questions of law”? I would venture to suggest
that a basis for
such a distinction can be found in the remarks made in the
American
Cyanamid
case
supra
(quoted above) to the
effect that difficult questions of law are those which require
“detailed argument and mature considerations”.
Whether or
not a question of law is to be described as difficult for purposes of
this test would obviously depend on the nature
of the question
concerned and the circumstances in which it is required to be decided
at the interlocutory stage.’
[14]
In my view, it was therefore perfectly permissible for this court,
even though there was no dispute of fact,
to find that, there being a
number of legal disputes and difficult questions of law between the
two parties, a
prima facie
right had been established. In my
view therefore, there is no merit in this ground of appeal.
[15]
The next ground of appeal is that the court erred in granting the
respondent the relief, when in terms of
the agreement provision had
been made for any disputes between the two parties to be dealt with
by means of arbitration. The court
dealt with this issue in the
judgment. The argument raised, for the very first time during these
proceedings, was that this court
had no jurisdiction to deal with the
application, because the respondent, in terms of
section 69
(d) of
the CPA, had not exhausted all other remedies available to it in
terms of national legislation. This issue was not raised
during the
original hearing of the matter. In any event this argument, in my
view, is misplaced, because in terms of the provisions
of
section 52
of the CPA, which was conceded by the applicant in its answering
affidavit as was referred to earlier, only a court of law can
deal
with the issues raised regarding unfair, unreasonable or unjust
contract terms in terms of
section 48
of the CPA. An arbitrator, the
Commission or Tribunal, is not empowered in terms of the act to deal
with these kinds of matters.
This ground of appeal, in my view, is
also without merit.
[16]
The last issue that was raised as a ground of appeal was the fact
that the court impermissibly applied the
provisions of
section 114
of
the CPA, dealing with interim relief, without the respondent first
having applied in separate proceedings for relief to a court.
The
argument of the applicant in this regard is that the party first had
to institute proceedings before the court, before it can
apply for
interim relief pending the finalisation of the proceedings. This is
essentially a matter of the interpretation of the
specific section.
[17]
The applicant’s interpretation envisages a duplication of
proceedings and a cumbersome approach to
the section. Such an
interpretation seeks to circumvent the provisions of the act, more
especially in a case like this where a
party seeks urgent relief from
the court. What it then means is that a party like the
respondent is prohibited from applying
for interim relief unless it
has first instituted proceedings, either in a court or before a
Tribunal. That, in my view, is not
a sensible and businesslike
interpretation of the provision. Subsection 3 of that section states
that when an interim order has
been granted and a hearing into that
matter has not been concluded within six months of that order, the
court or Tribunal, on good
cause shown, may extend the interim order
for a further period of six months. This clearly envisages a
situation where the hearing
into that matter can be instituted after
the interim order had been granted. The purpose of this subsection is
to prevent abuse,
in circumstances where an interdict had been
applied for and the person in whose favour the interdict had been
granted failed to
proceed with a hearing within the period of six
months after the date of the order.
[18]
In any event, the provisions of
section 114
, and the manner it was
applied in this case, were clearly aimed at supplementing the
interdictory relief the respondent would ordinarily
have been
entitled to under the common law. Any interpretation of
section 114
that stifles or undermines such relief would in my view be contrary
to the provisions of section 34 of the Constitution, which
guarantees
a person’s right of access to courts. In my view
therefore, there is also no merit in this ground of appeal.
[19]
The next question to consider is whether it would be in the interest
of justice to grant leave to appeal.
This argument was raised given
the nature of the legal questions applicable in this matter, and
furthermore, given the extended
criteria with regards to whether
leave to appeal should be granted in matters where an interim
interlocutory interdict had been
granted, as laid down in
Tshwane
City v Afriforum and Another
[4]
,
where it was held that the common law test for appealability has
since been denuded of its somewhat inflexible nature. The
court
held that, unlike before, appealability no longer depends largely on
whether the interim order appealed against has final
effect or is
dispositive of a substantial portion of the relief claimed in the
main application, and that all of this has
been subsumed under
the constitutional interests of justice standard.
[20]
In my view, having regard to the interests of justice, the whole
purpose of granting the interim relief would
be defeated if leave to
appeal is to be granted. This is in circumstances where the
respondent has already issued summons before
this court in the main
action under case number 9547/2021, and the applicant has already
filed an appearance defend, a special
plea and an exception to the
particulars of claim. The interim interdict will only prevail
until the action proceedings have
been finalised; the granting of
leave to appeal in this application will bring the proceedings in the
main action to a halt and
the purpose of the interdict will have been
defeated.
[21]
In my view therefore, it would also not be in the interests of
justice that leave to appeal be granted in
this matter. In the
result therefore, I make the following order:
a) that
the application for leave to appeal is dismissed;
b) that
the applicant pay the costs, including the cost of two counsel.
R.C.A.
HENNEY
Judge
of the High Court
[1]
1955 (2) SA 682
(C) at 688 D-E
[2]
Page 159-160 of the record
[3]
Page 20 para 53
[4]
2016 (6) SA 279
(CC)
.