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[2020] ZAGPJHC 173
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Dos Santos and Others v Joubert and Others (2020/8288) [2020] ZAGPJHC 173 (24 April 2020)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 2020/8288
In
the matter between:
SAMUEL
AGOSTINHO REIS DOS SANTOS
First
Applicant
CARLOS
MANUEL VARGES PINTO
Second
Applicant
MARIO
MANUEL VARGES PINTO
Third
Applicant
PINCAR
AUTO SERVICES (PTY) LTD
Fourth
Applicant
and
FRANCOIS
JOUBERT
First
Respondent
SUSANNA
JACOBA JOUBERT
Second
Respondent
FRANCOIS
JOUBERT N.O.
Third
Respondent
SUSANNA
JACOBA JOUBERT N.O.
Fourth
Respondent
ROELOF
PETRUS GERHARDUS LABUSCHAGNE N.O.
Fifth
Respondent
INDUSTRIAL
STEEL FIBRES CC (IN BUSINESS RESCUE)
Sixth
Respondent
SERISO
333 CC
Seventh
Respondent
JULIAN
EMPEDOCLES
Eighth
Respondent
M
J SWANEPOEL
Ninth
Respondent
A
M ERASMUS, THE SHERIFF KRUGERSDORP
Tenth
Respondent
M
C M VAN DER MERWE, THE SHERIFF RANDFONTEIN
Eleventh
Respondent
JUDGMENT
Weiner
J
[1]
This case
concerns the applicable test to be applied in determining whether it
is the interests of justice to suspend the operation
of certain
orders granted by Senyatsi J on 5 March 2020 (the ‘impugned
orders’).
[1]
The crisp
issue is whether, despite being interim in form, the orders have such
irreparable consequences that the interests of
justice demand that
they be suspended in terms of s 18 of the Superior Courts’ Act
10 of 2013 (the ‘Act’).
[2]
The law has
evolved over the decades in regard to this vexed question. In the
main the authorities have dealt with differentiating
between interim
and final orders for the purposes of deciding the question of
appealability.
The
determination of whether the impugned orders are in fact appealable
falls to be made by the court that granted the interim interdict.
That court may also have regard to other features of the order apart
from the finality of its effect or substance. This Court,
however,
has to consider the appealability of the order for the purpose of
deciding whether it would be appropriate to suspend
the operation of
the impugned orders under s 18.
[2]
Therefore,
one
of the issues which this Court must take into consideration in
deciding whether the impugned orders should be suspended pending
the
appeal processes, is whether the orders are purely interlocutory,
final in effect and/or final in substance, in terms of s
18 of the
Act.
[3]
The
impugned orders are clearly interim in form, but that does not end
the enquiry. As Maya P in
Director-General,
Department of Home Affairs v Islam
held:
[3]
‘
Traditionally,
under common law, an interim order was not appealable except where it
was shown that it was (a) final in effect as
it could not be altered
by the court which granted it; (b) definitive of the rights of the
parties in that it granted definitive
and distinct relief; and (c)
was dispositive of at least a substantial portion of the relief
claimed in the main proceedings. The
test has since evolved. So
whilst the traditional requirements are still important
considerations, the court may in appropriate
circumstances dispense
with one or more of those requirements if to do so would be in the
interests of, having regard to the court’s
duty to promote the
spirit, purpose and objects of the Constitution eg where the interim
order “has an immediate and substantial
effect, including
whether the harm that flows from it is serious, immediate, ongoing
and irreparable”.
’
Background
[4]
For purposes of convenience the first to fifth and seventh
respondents will be referred to as the respondents.
[5]
The applicants (in various capacities) sought to acquire:-
5.1. a steel wool
manufacturing business; together with
5.2. a charcoal
manufacturing business;
[6]
Such businesses operated under ISF 2011 (Pty) Ltd. (ISF P/L).
In respect of these businesses the respondents employed
a fairly
complicated structure, involving multiple entities:
6.1.1. the steel wool
manufacturing business, operated from what is known as the Delporton
property, which was registered in the
name of the Francois and Ronel
family Trust (the ‘Trust’);
6.1.2. the charcoal
manufacturing business operated from what is referred to as the
Wheatlands property, which was believed to be
registered in the name
of Henque 2959 CC, but was actually registered in the name of
Industrial Steel Fibres CC (the ‘CC’).
6.1.3. in respect of
machinery and equipment utilised by ISF P/L, such assets were
ostensibly registered in the name of Seriso
333 CC (‘Seriso’).
[7]
In order for the applicants to acquire the entire interest and
control in the steel wool and charcoal manufacturing businesses,
the
applicants and certain of the respondents entered into a suite of
agreements, listed below:-
7.1.1. An agreement for
the sale of shares in ISF P/L;
7.1.2. An agreement for
the sale of members’ interest in Seriso (the ‘Seriso
agreement’);
7.1.3. An agreement for
the sale of the Delporton property by the Trust (the ‘Delporton
agreement’);
7.1.4. An agreement for
the sale of the Wheatlands property.
[8]
All of the aforementioned agreements were signed and executed in May
2018.
[9]
After disputes arose over the applicants’ failure to make
certain payments, the respondents cancelled the Seriso and Delporton
agreements. The applicants disputed the cancellation and that matter
is the subject of an action. Whilst such action was pending,
the
respondents threatened to sell both the Delporton property, as well
as the movable property (the ‘Seriso assets’),
that
formed part of the Seriso agreement. A demand for them to desist
therefrom was refused.
The
first application
[10]
The applicants thus launched the first application, the purpose of
which was to interdict the respondents from selling the
Delporton
property and the Seriso assets found on a property described as the
‘Wheatlands property’. The steel wool
manufacturing
business and the charcoal factory were being conducted and operated
from such properties. They thus sought to ‘preserve
the
status
quo
’, pending the finalisation of an action instituted
under case number 2019/33056, and an action to be instituted by the
first
to third applicants within thirty days from the granting of
Senyatsi J’s order.
[11]
The first
application was confined to the preservation of the applicants’
rights in Delporton and the movable assets of Seriso.
The applicants
contended that instead of only deciding those issues, Senyatsi J
granted a much wider order.
[4]
Such order provided:
1. The forms and service
and time periods provided for in the Uniform Rules of Court are
dispensed with and this application is
urgent;
2. The Francois and Ronel
Familie Trust (Registration number: IT483/2008), represented by the
trustees for the time being, the Third,
Fourth and Fifth Respondents,
is interdicted from selling or in any way disposing of or encumbering
Erven 29, 32 and 33 Delporton,
situated at 1 to 5 Carter Street,
Delporton, Krugersdorp (“the property”) and held under
Title Deed number: T37447/2010,
pending the finalisation of an action
instituted out of this Court under case number [33056/2019];
3. The Eighth Respondent
is ordered to record and register this interdict on the said Title
Deed of the property;
4. The First, Second,
Third, Fourth, Fifth and Seventh Respondents are interdicted from
selling the moveable assets specified in
the schedule marked “A”
hereto, being the moveable assets which the First, Second and Third
Applicants purchased in
terms of an agreement of sale of members’
interest in Seriso 333 CC dated 8 May 2018, pending the finalisation
of an action
or application which the First, Second and Third
Applicants shall institute out of this Court within 30 (thirty) days
from the
granting of this order, for declaratory and or other relief
in respect of the said assets;
5. The Delporton
property, including all the moveable assets currently found thereon,
is placed in the hands of an independent party
to hold legal and
factual possession thereof until the finalisation of the pending
action under case number 33056/2019;
6. The independent third
party for the purpose of [paragraph 5] above is:
6.1. Erven 29, 32 and 33
Delporton situated at 1 to 5 Carter Street, Delporton, Krugersdorp is
Mr M.J. Swanepoel and the Sheriff
of the Delporton Area;
6.2. Plot 65 Wheatlands
Randfontein is Mr J.P. Empedocles; and the Sheriff Randfontein;
7. The independent third
parties stated in [paragraph 6] above shall compile an inventory of
the assets found on both properties
and hand the copies thereof to
the parties involved in the action under case number 33056/2019 and
shall ensure that insurance
cover is taken at the cost of the
properties against fire and other related risks;
8. The costs of the
application shall be the costs in the main case under case number
33056/2019.
The
present application
[12]
The applicants do not challenge paragraphs 1-4 of the order; that is
the relief they sought. However, the applicants joined
issue with the
mechanisms in which the property and assets were ordered to be
preserved as set out in paragraphs 5, 6 and 7 of
the order, which
comprise the impugned orders.
[13]
The applicants thus applied, as a matter of urgency, for relief that
the operation and execution of certain portions of the
order handed
down by Senyatsi J on 5 March 2020, be suspended, pending the
finalisation of the applicants’ application for
leave to
appeal, including any petition to the Supreme Court of Appeal and
thereafter, if applicable, the finalisation of the applicants’
appeal. The relief sought related to the impugned orders.
[14]
The applicants contended that Senyatsi J erred in granting the
impugned orders, as such orders were not competent given that
the
respondents ought to have brought a counter-application in the form
of a
rei vindicatio.
The respondents submitted that such an
application would have amounted to a decision on the issue of
cancellation and therefore
such relief would not have been competent.
For the purposes of the present application, it is not necessary to
deal with this issue.
[15]
Upon receipt of the order on 5 March 2020, the respondents were
informed of the applicants’ intention to launch an application
for leave to appeal against the offending portions of the order.
Notwithstanding this, the respondents executed on the order in
the
late afternoon on 5 March 2020.
[16]
On 6 March 2020, the applicants filed their application for leave to
appeal. On the same day, the applicants’ attorney
sent a letter
calling for a written undertaking to cease execution in respect of
the impugned orders. In response thereto, the
respondents indicated
that according to them, such orders are not appealable. On Monday, 9
March 2020, this application was launched.
[17] It was the
applicants’ contention that the order by Senyatsi J is final in
effect in terms of s 18(1)
alternatively
, there are
exceptional circumstances which will result in the applicants
suffering irreparable harm if this Court does not grant
an order
suspending the execution of the impugned orders, pending the leave to
appeal, within the meaning subscribed in s 18(2)
and (3) of the Act.
The respondents, on the other hand, contended that the impugned
orders are clearly not final, as Senyatsi J
made no finding on the
issue of the validity of the respondents’ cancellations of the
Seriso or Delporton agreements. It
is specifically mentioned that
those orders will operate ‘until the finalisation of the
pending action under case number
33056/19’. The respondents
submitted further that the impugned orders do not have a final
effect, as contemplated in s 18(1)
of the Act.
[18]
Section 18 of the Act provides, inter alia:
18 Suspension of
decision pending appeal
(1) Subject to
subsections (2) and (3), and unless the court under exceptional
circumstances orders otherwise, the operation and
execution of a
decision which is the subject of an application for leave to appeal
or of an appeal, is suspended pending the decision
of the application
or appeal.
(2) Subject to subsection
(3), unless the court under exceptional circumstances orders
otherwise, the operation and execution of
a decision that is an
interlocutory order not having the effect of a final judgment, which
is the subject of an application for
leave to appeal or of an appeal,
is not suspended pending the decision of the application or appeal.
(3) A court may only
order otherwise as contemplated in subsection (1) or (2), if the
party who applied to the court to order otherwise,
in addition proves
on a balance of probabilities that he or she will suffer irreparable
harm if the court does not so order and
that the other party will not
suffer irreparable harm if the court so orders.
.....
[19]
The application before Senyatsi J was one brought by the applicants
interdicting certain of the respondents from selling certain
properties and assets, the subject matter of the Delporton and Seriso
agreements. In granting the applicants the interim relief
they
sought, the learned judge considered the balance of convenience. In
this regard the learned judge stated as follows:
19.1 ‘The
Applicants aver that a total of R8 million has been paid to the
Respondents.’
[5]
19.2 ‘The fourth
Applicant avers that it has paid, just in respect of the Delporton
property alone, the following amount:
R3 million deposit as required
in the agreement; R900 000.00 balance into the trust account of
Heidtmann and Du Preez attorneys
in terms of clause 3.2. and 3.3. of
the sale agreement. The total of R5.64 million has therefore, so
contends counsel for the Applicants,
been paid by the fourth
Applicant in relation to the Delporton property.’
[6]
19.3 ‘Despite the
payment of the amount, the fourth Applicant contends that the Trust
insists on cancelling the agreement
and retain the sum of R5.64
million.’
[7]
19.4 ‘It has been
submitted on behalf of the Applicants...that if the interim relief is
not granted, there is a serious potential
of irreparable harm. The
reason advanced for this proposition is that the Respondents would be
empty shells devoid of all assets.’
[8]
19.5 ‘It cannot be
denied that if the Delporton property is sold, the R5.4 million
already paid by the Applicants is
at risk. There is indeed a pending
action which is the subject of a dispute on whether the sale
agreement has been concluded or
not. The Respondents contend that the
agreement been cancelled for non-performance. They raise various
reasons such as non-payment
of VAT, clearance figure[s] with the
municipality and the balance of the purchase price of movable
assets.’
[9]
[20]
Senyatsi J thus found that the applicants had shown that the balance
of convenience favoured them in granting the interdicts
against the
respondents. The respondents did not launch a counter-application. In
their answering affidavits they suggested that
if the applicants
succeeded with their interdict, the properties and assets should be
placed in the hands of independent third
parties (the eighth and
ninth respondents herein).
[21]
It appears clear from the judgment of Senyatsi J, that in granting
the impugned orders, the balance of convenience in respect
of these
orders was not considered at all. He dealt with this relief as
follows:
‘
In opposing the
submission by [the fifth, sixth and seventh respondents] …the
Applicants contended that such submission was
without merit and not
in compliance with the Rules of this Court.
[Counsel for the
Applicants]
argued that for such an alternative order to be made
as contended on behalf of the Respondent, the Respondent ought to
have filed
a counter-application. I do not agree with the submission
by
[the Applicants]
. I say so because
[in its]
opposing
affidavit, the Respondent prayed, as an alternative that:
“
In the event of
the ... Court finding that an interim interdict ought to be granted,
it is prayed for that all the immoveable assets,
as listed as per
annexure ‘AA5’, as well as both the Delporton and
Wheatlands properties be placed in the hands of
an independent third
party, to be identified and elected by the Court, to hold legal and
factual possession thereof until the finalisation
of all the
disputes.”
As a consequence, I
hold the respectful view that the Applicants have made out a case for
the relief sought.’
[10]
[22]
The applicants submitted that the relief (contained in the impugned
orders) amounted to what was in effect an order on a
counter-application
and that such relief was granted:
22.1. in the absence of
averments contained in affidavits justifying such orders;
22.2. involving disputes
extraneous to the urgent application;
22.3. in respect of
parties who were not cited in the application.
[23]
The order of Senyatsi J did not contain provisions which might have
been ordered to preserve the
status quo
and prevent both
parties from suffering irreparable harm. The respondents did not
offer to indemnify the applicants for any damages
which they may
suffer as a result of the impugned orders if the applicants were
ultimately successful, nor was there an order to
this effect. There
was no suggestion by the respondents, nor was it contained in the
order, that the businesses should continue
running under the
supervision of the eighth and ninth respondents.
[24]
The result of the order without these safeguards points to the fact
that the balance of convenience was not shown by the respondents
to
be in their favour, more particularly considering the learned Judge’s
finding in respect of the balance of convenience
being in the
applicants’ favour in obtaining the interdictory relief which
it did.
[25] The applicants
contended that the execution of the order has caused
inter alia
the following substantial, irreparable and immediate
consequences:
25.1. The businesses have
ceased to operate.
25.2. There are
approximately eighty-five employees who were working in the
businesses operated at the two properties. They are
now all without
work and, like the applicants, have been ejected from the properties.
25.3. Since the
businesses are no longer operating, there are insufficient funds to
pay employees their salaries.
25.4. Two of the
employees reside in a house and a cottage on the Wheatlands property.
They have been entitled to stay there as
part of their respective
employment packages. The eighth respondent, who by virtue of the
court order is in charge of the Wheatlands
property, requires that
these employees pay rent. Therefore, these employees’
residences are now in jeopardy.
25.5. The Sheriffs and
the business rescue practitioners did not give the applicants an
opportunity to remove the stock from the
properties. Therefore, all
of the businesses’ stock is still on the properties and the
applicants have no access thereto,
nor any means of protecting the
stock.
25.6. The applicants have
received numerous enquiries from customers as to whether the
businesses have closed down. Furthermore,
several customers have
indicated that they need stock urgently and that they will have to
use an alternative supplier. The businesses’
reputations and
future prospects have already been severely damaged.
25.7. Within the space of
a week or at most a few weeks, it is inevitable that most of the
businesses’ customers will seek
alternative suppliers of steel
wool and charcoal.
25.8. The applicants
cannot supply its customers and cannot deliver on orders placed.
[26]
It does not appear from the judgment of Senyatsi J whether any of
these consequences were dealt with by the parties or, if
they were,
that they were taken into account by the learned Judge in assessing
the balance of convenience and granting the impugned
orders. It is
also not clear whether the impugned orders were based upon what the
respondents submitted in answer to the applicants’
claims of
the dire consequences of the order. In the present application, the
respondents contended that the businesses had already
virtually
ceased operating, as the applicants were unable to pay their
employees or creditors and many staff had already been retrenched.
Are
the impugned orders, although interim in form, final in effect for
the purposes of s18?
[27]
The
impugned orders are clearly interim in form. This is, however, not
fatal to the application. In order to decide whether it is
in the
interests of justice to suspend the operation of the impugned orders,
in terms of s 18 of the Act, it is necessary to weigh
up several
considerations. As stated above, this court in assessing whether to
suspend the operation of the impugned orders, must
deal with the
issue of the requirements for an interim order to be considered
appealable, Snyders JA in
Government
of the Republic of South Africa v von Abo
stated:
[11]
‘…
It is
fair to say that there is no checklist of requirements. Several
considerations need to be weighed up, including whether the
relief
granted was final in its effect, definitive of the rights of the
parties, disposed of a substantial portion of the relief
claimed,
aspects of convenience, the time at which the issue is considered,
delay, expedience, prejudice, the avoidance of piecemeal
appeals and
the attainment of justice.
’
[28]
The
applicants, in submitting that they are suffering irreparable harm as
a result of the impugned orders, referred to
International
Trade Administration Commission v SCAW South Africa (Pty) Ltd
,
[12]
which provided a synopsis of the jurisprudence post the test in as
set out in
Zweni
v Minister of Law and Order.
[13]
In
Zweni
,
the test for appealability required the following three attributes,
namely, that—
‘…
the
decision must be final in effect and not open to alteration by the
court of first instance; it must be definitive of the rights
of the
parties; and lastly, it must have the effect of disposing of at least
a substantial portion of the relief claimed in the
main
proceedings….
’
[14]
[29]
This test has evolved over the years. The Constitutional Court in
SCAW
opined:
‘
After Zweni the
Supreme Court of Appeal has recognised that the general rule against
piecemeal appeals could conflict with the interests
of justice in a
particular case. Howie P — writing for a unanimous court in S v
Western Areas — was required
to decide, in an application
for leave to appeal in a criminal matter, whether the dismissal of an
objection to an indictment was
appealable in terms of s 21(1) of the
Supreme Court Act. After surveying its case law on the appealability
of a “judgment
or order” in civil and criminal cases and
after referring to the interests-of-justice test set by this court in
Khumalo v
Holomisa, he concluded that the general principles
enunciated in Zweni are neither exhaustive nor cast in stone. He
further held
that:
“
(I)t
would accord with the obligation imposed by s 39(2) of the
Constitution to construe the word decision in s 21(1) of the Supreme
Court Act to include a judicial pronouncement in criminal proceedings
that is not appealable on the Zweni test but one which the
interests
of justice require should nevertheless be subject to an appeal before
termination of such proceedings. The scope which
this extended
meaning could have in civil proceedings is unnecessary to decide. It
need hardly be said that what the interests
of justice require
depends on the facts of each particular case.” …
More recently, in
Philani-Ma-Afrika and Others v Mailula and Others, the Supreme Court
of Appeal had to decide whether an order
of the high court which puts
an eviction order into operation pending an appeal was appealable. In
a unanimous judgment by Farlam
JA, the court held that the execution
order was susceptible to appeal. It reasoned that it is clear from
cases such as S v Western
Areas that “what is of paramount
importance in deciding whether a judgment is appealable is the
interests of justice”.
As we have seen, the Supreme Court of
Appeal has adapted the general principles on the appealability of
interim orders, in my respectful
view, correctly so, to accord with
the equitable and the more context-sensitive standard of the
interests of justice favoured by
our Constitution. In any event, the
Zweni requirements on when a decision may be appealed against were
never without qualification.
…
In Machele and
Others v Mailula and Others …
[the
court]
reaffirmed the importance of 'irreparable harm' as a
factor in assessing whether to hear an appeal against an interim
order, albeit
an order of execution:
“
The
primary consideration in determining whether it is in the interests
of justice for a litigant to be granted leave to appeal
against an
interim order of execution is, therefore, whether irreparable harm
would result if leave to appeal is not granted.”
…
The test of
irreparable harm must take its place alongside other important and
relevant considerations that speak to what is in
the interests of
justice, such as the kind and importance of the constitutional issue
raised; whether there are prospects of success;
whether the decision,
although interlocutory, has a final effect; and whether irreparable
harm will result if leave to appeal is
not granted. It bears
repetition that what is in the interests of justice will depend on a
careful evaluation of all the relevant
considerations in a particular
case.’
[15]
[30]
The
respondents, on the other hand, referred to various authorities,
including
Cipla
Agrimed (Pty) Ltd v Merck Sharp Dohme Corporation and Others
,
[16]
where Gorven AJA (writing for the majority) referred to
Globe
and Phoenix Gold Mining Company Ltd v Rhodesian Corporation Ltd
,
[17]
in which it was held that—
‘
The order does
not irreparably anticipate or preclude in whole or in part the relief
sought in the main action or suit. It does
not dispose of any issue
or any portion of the issue in the main suit, and the execution of
the order will not cause irreparable
prejudice at the later stage in
the sense that it will cause prejudice to the respondent when the
final judgment is given. We have
not to look to any inconvenience or
even expense which an interim order may cause to the person against
whom such order operates.
We must look to its effect upon the issue
or issues in the suit. An interlocutory order may of course cause
some degree of prejudice
— using this word in its widest sense
— to the person required to carry it out, but . . . [this] does
not constitute
that irreparable prejudice which would give to an
interlocutory order the effect of a final judgment.’
[31]
In
Cipla
, the majority held:
‘
Here the issue
of prejudice was raised. …the only prejudice which may make an
order appealable is prejudice which in some
way affects the final
determination of an issue in the suit or stands in the way of an
issue being determined at a later
date.
This is what the cases have consistently meant when using the words
“final in effect”.
’
[18]
[32]
The
respondents thus contended that the interdict that was granted is
plainly interim, given the manner in which it was formulated
(expressly, to operate
pendente
lite
)
and that it is not final in effect. They submitted that to contend,
as the applicants did, that it must be dealt with as final
(because
of its effect) is to conflate the ‘disputed right’ and
the ‘object of that right’.
[19]
In this case, the ‘disputed right’ is the cancellation
(the validity of which will determined in due course, on trial)
and
the interdict granted by Senyatsi J does not dispose of any one of
the issues that require determination in due course. The
‘object
of the right’, however, is that which must perhaps be returned,
depending on the outcome (whether it is a business
or the constituent
assets that are used to carry on a business).
[33]
The
respondents also relied upon
Atkin
v Botes
,
[20]
where the SCA, referring to
Phillips
and Others v National Director of Public Prosecutions
,
[21]
stated as follows:
‘
Howie P said in
Phillips…
“
And in the case
of a common-law interim interdict or attachment pendente lite there
is no reason why, for sufficient cause, they
would not, generally, be
open to variation, if not rescission.”
This is just such a
case. …Atkin could approach the court a quo for an
amelioration or setting-aside of the interdict because
of the
practical experience of its operation. …. It may well be that
Atkin could show that the continued operation of the
order would work
great hardship on him, his family, and his ex-wife and severely
handicapped minor child whom he is obliged to
maintain in terms of a
court order. If so, he would be entitled to request the court a quo
to reconsider the order and that court
would be entitled to vary or
even rescind it. For that reason, the order made in the interdict
proceedings cannot be said to have
final effect.
’
[22]
[34]
The
respondents argued that this is the applicants’ remedy. It
could raise all the issues it considers to amount to irreparable
harm, in order to obtain a variation of the order, “
even
if the only new circumstance is the practical rule experience of
its operation
”.
[23]
In addition it could seek to vary the order by requiring
the court ‘
to
impose reasonable conditions such as an undertaking to be liable in
damages if it emerges that the interdict should not have
been
granted
’.
[24]
[35]
It is
important to bear in mind that as Gorven JA stated in
Cipla,
as
the
appellant therein relied ‘
solely
on what is meant by “final in effect” in submitting that
the order in question is appealable, the enquiry need
only be
confined to this’.
[25]
Thus the court did not concern itself with the test in relation to
the interests of justice. The applicants in the present case
specifically rely on that test.
[36]
In
dealing
with the concepts of ‘final in effect’ and ‘final
in substance’,
Binns-Ward J in
Velocity Trade
Capital (Pty) Ltd v Quicktrade (Pty) Ltd,
stated as follows:
‘
It
is perhaps appropriate that I should at this point explain that I
consider that there can be a material difference between an
order
that is final in effect and one that is final in substance.
The
term “final in effect” in the relevant context is
something of a term of art. It bears the connotation that the
order
in question is not susceptible to alteration by the court that made
it. An interim order that is final in substance, on the
other hand,
is one that, if it were implemented or complied with when it was
made, would in a practical way irreversibly anticipate
the
substantive effect of the remedy in issue in the pending principal
case
….
’
[26]
(Emphasis added).
[37]
Binns-Ward J in
Velocity
further considered the development in
our law in regard to this vexed question of the nature of interim
orders. Although they deal,
in the main, with the appealability of
such orders, these principles are obviously relevant to the issue
under consideration in
this case. Binns-Ward J stated:
‘
A consideration
of recent judgments of the appeal court and the Constitutional Court
makes it apparent that judicial policy in respect
of the question has
in the constitutional era become notably more nuanced and less
inflexible than it was when Cronshaw was decided.
Section 173 of the
Constitution has been influential in this regard.
[38]
In
Phillips
,
the SCA held that a restraint order made in terms of the
Prevention
of Organised Crime Act 121 of 1998
was appealable
notwithstanding that it ‘…
is
only of interim operation and that, like interim interdicts and
attachment orders pending trial, it has no definitive or dispositive
effect…
’.
[27]
Howie JA continued—
‘
Absent the
requirements for variation or rescission laid down in
s 26(10)(a)
…
a restraint order is not capable of being changed. The defendant is
stripped of the restrained assets and any control
or use of them.
Pending the conclusion of the trial or the confiscation proceedings
he is remediless
.’
[39]
The
court found ‘
that
unalterable situation
’,
relative as it was, made the interim order final in the sense
required for appealability.
[28]
Binns Ward noted in
Velocity
—
‘
Phillips stands
as an illustration of two truths. First, that it is not necessary
that all the requirements in Zweni be
satisfied for a
decision to be appealable. Second, that the insusceptibility of
a decision to being altered by the court of
first instance does not
have to be absolute for the decision to be considered as sufficiently
final in effect to render it appealable
.’
[29]
[40]
Similarly,
in
Ntlemeza
v The Helen Suzman Foundation
,
[30]
Navsa
JA stated that—
‘
There
were exceptions to the rule that purely interlocutory orders were not
appealable. It is necessary to point out that a number
of judgments
of this court relaxed this rule on the basis that an appeal may be
heard in the exercise of the court's inherent jurisdiction
in
extraordinary cases where grave injustice was not otherwise
preventable.
’
[41]
More
recently, the Full Bench of this division in
Old
Mutual v Moyo
[31]
dealt with this issue as follows:
‘
The
approach to the appealability of interlocutory orders that has been
taken by our appellate courts for years now has been increasingly
flexible and pragmatic …. But an order that is in the form of
an interim interdict which operates pending the outcome of
an action
mentioned in the order itself, as in this case, is ordinarily not
appealable.
’
[32]
…
‘
Although
it is generally considered not in the interests of justice to permit
an appeal against an interim interdict since it will
defeat the
interim nature of the order and undermine “a necessarily
imperfect procedure, which is nevertheless usually best
designed to
achieve justice”, it is now settled
that
there are limited circumstances where the interests of justice
dictate that an interim interdict be appealable.
….
In
deciding what is in the interests of justice, each case has to be
considered in the light of its own facts. In other words,
it is
a fact-specific enquiry.
’
[33]
[Emphasis added]
[42]
In
the present case, the balance of convenience was not weighed up in
relation to the impugned orders. The order did not result
in the
status quo
being preserved. It resulted in the consequences referred to by the
applicants in paragraph [25] above. These consequences are
irreversible.
[43]
In
my view, the principles upon which the respondents rely are not
applicable in the circumstances of this case. As stated in
Moyo—
‘
The
fact that
[the
order]
is
not definitive of the rights about which the parties are contending
in the main action and does not dispose of any relief claimed
in
respect thereof, although a relevant and important consideration,
cannot be decisive and the determining factor in this instance.
The
interim interdict should not have been granted in the first place by
reason of a failure to meet the first requirement for
the granting of
an interim interdict…The interdict, although interim, has an
immediate and substantial effect.
’
[34]
[44]
The
interests of justice in the particular circumstances of this case
demand that the order should be corrected forthwith before
the
proceedings have run their full course and before it has any further
adverse consequences as the impugned orders have had an
immediate and
drastic effect on the applicants’ businesses, and the lives of
their employees. The applicants are accordingly
entitled to the
relief they seek.
[45]
This
finding results in it not being necessary for this Court to consider
the requirements of s 18(2) and (3) of the Act. In
the event
that I am wrong, I am of the view that for the same reasons as stated
above, the applicants would have succeeded in satisfying
the
requirements thereof.
[46]
The
reasons proffered by Binns-Ward J in
Velocity
are apposite in this regard:
[The
respondent],
relying on
s 18(2)
of the
Superior Courts Act,
submitted
however that the order would not be suspended by reason of
an application for leave to appeal or any subsequent appeal. As I
understood
the argument it was premised on the characterisation of
the order as (i) interlocutory and (ii) not being final in effect in
the
technical sense of that term explained earlier. There is no
dispute concerning the incidence of the first of those attributes, at
least in respect of the form of the order. But it is not clear to me
that the second applies. Counsel’s argument is predicated
on
the assumption that the underlined words in the phrase “an
interlocutory order not having the effect of a final judgment”
in
s 18(2)
denote “final in effect” in the Zweni sense. I
do not accept that is so.
A
decision that has the effect of a final judgment is in truth not an
interlocutory judgment or order notwithstanding that it might
be such
in form. That indeed is the import of an established body of
jurisprudence, salient components of which were referred to
in the
majority judgment in Cipla Agrimed. There is no logical basis for
distinguishing orders that are dressed up as interlocutory
but are in
effect final, and therefor actually final, from those to which
s
18(3)
applies. And I cannot conceive of any sensible object that the
legislature could be thought to want to achieve by drawing any such
distinction.
In
my judgment
s 18(2)
is directed at regulating the position in those
exceptional cases in which an appeal is sought to be prosecuted
against a simple
interlocutory order… I do not think
that an order, such as the one in the current case, that from the
moment it is
made would be final in substance, falls into that
category. In my view the latter type of order is one to which
s 18(1)
would apply.
But
even were I wrong in this regard, the considerations that underpin my
characterisation of the order … as one to which
s 18(1)
applies would in that event provide sufficient reason, if there were
a relevant application, for an order in terms of
s 18(2)
to be
made.
’
[35]
[47]
There
were concerns raised by the respondents (including the eighth and
ninth respondents) that:
47.1.
The
premises at which the businesses were being conducted were unsafe for
the employees and this situation had been reported to
the Department
of Labour.
47.2.
The
‘essential services’ permits were not issued to the
applicants, but to other parties.
47.3.
It
was doubtful that the businesses conducted by the applicants could be
described as ‘essential services’.
[48]
I
intend to deal with these issues in the order which I make hereunder.
Accordingly,
the following order is made:
1. The operation and
execution of paragraphs 5, 6 and 7 of the order granted by Senyatsi J
on 5 March 2020 under the case number
2020/3016 is suspended,
pending the finalisation of the applicants’ application for
leave to appeal, including any petition
to the Supreme Court of
Appeal, and thereafter, if applicable, the finalisation of the
applicants’ appeal.
2. The first to fifth
respondents, and the eighth to eleventh respondents, are required to
do all things necessary to restore the
status quo
prior to the
execution of the order under case number 2020/3016, and thereby
return factual and legal possession and control of
the Delporton and
Wheatlands properties and all assets thereon to the applicants,
including handing back all keys and remote control
units to the
applicants’ attorneys.
3. The applicants shall
not be entitled to commence business activities prior to:
3.1. Obtaining clearance
from the Department of Labour.
3.2. Obtaining valid
essential services permits in the name of the entities that intend to
trade.
3.3.
Complying
with all Government Directives relating to carrying on business
during the period of lockdown and thereafter.
[36]
4. The first to fifth,
seventh, eighth and ninth respondents shall pay the costs of the
application, jointly and severally, the
one paying, the others to be
absolved.
_____________________________
S
E WEINER
JUDGE
OF THE HIGH COURT
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Date
of hearing: 19-20 March 2020
Date
of judgment: 24 April 2020
Appearances:
Counsel
for the Applicants: Adv. J C Viljoen
Instructing
Attorneys: Stupel & Berman Inc
Counsel for the 1
st
-5
th
and 7
th
Respondents: Adv. A J Daniels SC; Adv. N Smit
Instructing
Attorneys: Kapp Attorneys Inc
Counsel
for the 8
th
and 9
th
Respondents: Adv. M Letzler
Instructing
Attorneys: Smith Van Der Watt Inc
[1]
Although
this matter came before this Court as a matter of urgency, the
Government’s lockdown requirements relating to COVID-19
came
into operation soon after the hearing. In light of the lockdown, it
appeared that the applicants’ business would not
be able to
operate, and the relief they sought lost the element of urgency. On
14 April 2020, this Court was informed that two
entities, Industrial
Fibres 2011 and Eco Coal, which they imply are somehow associated
with the applicants, had been issued with
‘essential services’
permits to operate their business. The permits are dated 14 April
2020. The respondents objected
to that information being conveyed to
the Court, inter alia, because the permits were not issued to the
applicants but to other
parties not before this Court and that the
business of steel wool manufacture and charcoal sales are not
essential services.
I do not consider it is necessary to make any
findings in relation to this issue, as will appear more fully from
the reasons
and decision set out below.
[2]
Velocity
Trade Capital (Pty) Ltd v Quicktrade (Pty) Ltd and Others
(7263/2019; 5717/2019)
[2019] ZAWCHC 92
(29 July 2019);
[2019] 4 All
SA 986
(WCC) para 30.
[3]
Director-General,
Department of Home Affairs and Another v Islam and Others (
459/2017)
[2018] ZASCA 48
(28 March 2018) para 10 (footnotes omitted).
[4]
Unreported
judgment of
Samuel
Agostinho Reis dos Santos & 2 Others v Francois Joubert & 7
Others
(2020/2016) [2020] ZAGPJHC (5 March 2020). The applicants in the
matter before Senyatsi J are comprised of the first to third
applicants in the current matter.
[5]
Ibid para 12.
[6]
Ibid
para 16.
[7]
Ibid para 17.
[8]
Ibid
para 26.
[9]
Ibid
para 27.
[10]
Ibid paras 37-38.
[11]
Government
of the Republic of South Africa and Others v von Abo
2011 (5) SA 262
(SCA) (4 April
2011); 2011 (5) SA 262
(SCA) para 17.
[12]
International
Trade Administration Commission v SCAW South Africa (Pty) Ltd
(CCT 59/09)
[2010] ZACC 6
(9 March 2010); 2012 (4) SA 618 (CC).
[13]
Zweni
v Minister of Law and Order
1993
(1) SA 523
(A) at 532I-533A-B.
[14]
SCAW (note 12 above) para 49.
[15]
Ibid
paras 51-55 (footnotes omitted).
[16]
Cipla
Agrimed (Pty) Ltd v Merck Sharp Dohme Corporation and Others
(972/2016)
[2017] ZASCA 134
(29 September
2017); 2018 (6) SA 440
(SCA) para 39.
[17]
Globe
and Phoenix Gold Mining Co Ltd v Rhodesian Corporation Ltd
1932 AD 146
at 155. The respondents also referred to
Andalusite
Resources (Pty) Ltd v Investec Bank Limited and Another
(18167/2019) [2019] ZAGPJHC 179 (20 June
2019); 2020 (1) SA 140
(GJ)
where Keightley J followed
Cipla
.
[18]
Cipla
(note
16 above) para 40.
[19]
As
described by Keightley in
Andalusite
Resources
(note
17 above).
[20]
Atkin
v Botes
(566/10)
[2011] ZASCA 125
(9 September
2011); 2011 (6) SA 231
(SCA)
para 12.
[21]
Phillips
and Others v National Director of Public Prosecutions
2003 (6) SA 447 (SCA).
[22]
Atkin
(note 21 above) para 12.
[23]
See
Knox
D’Arcy Ltd & others v Jamieson & others
[1996] ZASCA 58
;
1996 (4) SA 348
(A) at 359I-360B; applied in
Lagoon
Beach Hotel v Lehane
(235/2015)
[2015] ZASCA 210
(21 December
2015); 2016 (3) SA 143
(SCA) para 10.
[24]
Cipla
(note
16 above) para 46.
[25]
Cipla
(note
16 above) para 37
[26]
Velocity
(note
2 above) par
a
39.
In
Cipla
(note
16 above) para 40, Gorven AJA appears to accept that there is
no difference for the purposes of appealability between
an
ostensibly interim order that is ‘final in effect’ and
one that is final in substance.
[27]
Phillips
(note
22 above) para 20.
[28]
Ibid.
[29]
Velocity
(note 2 above) para 51.
[30]
Ntlemeza
v Helen Suzman Foundation and Another
(402/2017)
[2017] ZASCA 93
(9 June
2017); 2017 (5) SA 402
(SCA) para
20.
[31]
Old
Mutual Limited and Others v Moyo and Another
(A5041/19) [2020] ZAGPJHC 1 (14 January 2020);
[2020] 2 All SA 261
(GJ) para 98.
[32]
The
Court cited the following cases in this regard:
S
v Western Areas
2005 (5) SA 214
(SCA) paras 25-26;
National
Director of Public Prosecutions v King
2010 (2) SACR 146
(SCA) paras 50-51;
Philani-Ma-Afrika
v Mailula
2010 (2) SA 573
(SCA) para 2;
Government
of the RSA v von Abo
2011 (5) SA 262
(SCA) para 17;
Phillips
v Reserve Bank and Others
2013 (6) SA 450
(SCA) para 28;
Nova
Property Group Holdings Ltd and Others v Cobbett
2016 (4) SA 317
(SCA) paras 8-11;
Celliers
NO and Others v Ellis and Another
[2017] ZASCA 13
para 20. It further
cited:
A
frican
Wanderers Football Club (Pty) Ltd Wanderers Football Club
1977
(2) SA 38
(A);
Cronshaw
and another v Fidelity Guards Holdings (Pty) Ltd
[1996] ZASCA 38
;
1996 (3) SA 686
(A) at 690B and 690H-691G;
Cipla
(note 16 above) para 37;
S
v S and Another
2019 (6) SA 1
(CC) paras 46-47.
[33]
Old
Mutual v Moyo
(note 32 above) para 103. The court relied on the following cases in
this regard:
Cipla
(note 16 above) para 37,
Department
of Home Affairs and Another v Islam and Others
(459/2017)
[2018] ZASCA 48
(28 March 2018) para 10, and
Velocity
Trade Capital v Quicktrade
(note
2 above) para 30 et seq. It also referred to Constitutional Court
judgments in cases such as
S
v S
2019 (6) SA 1
(CC) paras 46-47,
Tshwane
City v Afriforum and Another
2016 (6) SA 279
(CC) para 40,
Children’s
Institute v Presiding Officer, Children’s Court, Krugersdorp,
and Others
2013 (2) SA 620
(CC) para 16, and
National
Treasury and Others v Opposition to Urban Tolling Alliance and
Others
2012
(6) SA 223
(CC) para 25, although it noted that it should be borne
in mind that the operative standard for determining whether leave to
appeal should be granted by the Constitutional Court is the
interests of justice.
[34]
Old
Mutual v Moyo
(note 32 above) para 104.
[35]
Velocity
(note 2 above) paras 65-68 (original emphasis and references
omitted).
[36]
As
set out in the following website:
https://www.thedti.gov.za/Covid-19.jsp
.