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[2013] ZASCA 155
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Cronimet Chrome Mining SA (Pty) Ltd and Others v Brodsky Trading 224 CC t/a Platinum Unlimited Estates, In re: Brodsky Trading 224 CC t/a Platinum Unlimited Estates v Nell and Others (851/12) [2013] ZASCA 155 (22 November 2013)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 851/12
Not reportable
In the matter between:
CRONIMET CHROME MINING
SA (PTY) LTD
...............................
FIRST
APPELLANT
CRONIMET CHROME SA
(PTY) LTD
........................................
SECOND
APPELLANT
CRONIMET CHROME
PROPERTIES (PTY) LTD
..........................
THIRD
APPELLANT
(Fourth, Eighth and Ninth
Defendants in the court a quo)
and
BRODSKY TRADING 224 CC
t/a PLATINUM UNLIMITED ESTATES
..
RESPONDENT
In
re:
BRODSKY
TRADING 224 CC t/a PLATINUM UNLIMITED ESTATES
.........
PLAINTIFF
HENDRIK PETRUS NELL
...............................................................
FIRST
DEFENDANT
CHARLOTTE FRANCIENA
NELL
.............................................
SECOND
DEFENDANT
LOURENSIA NTSWAKI
KWENAESELE
.......................................
THIRD
DEFENDANT
CRONIMET
CHROME MINING SA (PTY) LTD
..........................
FOURTH DEFENDANT
NIGHT FIRE INVESTMENTS
110 (PTY) LTD
.................................
FIFTH
DEFENDANT
JOHAN
NIEMÖLLER
......................................................................
SIXTH
DEFENDANT
(In default in the
proceedings in the court a quo)
NIEMCOR AFRICA (PTY)
LTD
................................................
SEVENTH
DEFENDANT
CRONIMET
CHROME SA (PTY) LTD
.........................................
EIGHTH
DEFENDANT
CRONIMET CHROME
PROPERTIES (PTY) LTD
..........................
NINTH
DEFENDANT
Neutral citation:
Cronimet Chrome Mining SA v Brodsky Trading 224 CC
(851/12)
[2013] ZASCA 155
(22 November 2013)
Coram
: Cachalia,
Malan, Pillay JJA, Van der Merwe and Zondi AJJA
Heard: 7 November 2013
Delivered: 22 November
2013
Summary: Where an
order given in the high court is final in effect, but is not
definitive of the rights of the parties, nor disposes
of a
substantial part of the relief claimed, the order is not appealable.
_________________________________________________________
JUDGMENT
_________________________________________________________
CACHALIA JA (MALAN,
PILLAY JJA, VAN DER MERWE AND ZONDI AJJA CONCURRING):
[1] This matter came
before us on appeal against an order of the North Gauteng High Court
(Tolmay J) on two issues separated for
determination under Rule 33(4)
of the Uniform Rules. The first was whether the plaintiff (the
respondent on appeal) had complied
with s 26 of the Estate Affairs
Agency Act 112 of 1976, and the second whether it had complied with
ss 34A(1) and (2) of the Act.
These provisions require estate agents
to have valid fidelity fund certificates before rendering services
entitling them to claim
remuneration. The high court issued a
declaratory order to the effect that the respondent had
‘substantially complied’
with those provisions, but
granted the appellants leave to appeal the order.
[2] Before the hearing in
this court the parties were given an opportunity to lodge
supplementary heads of argument on whether the
order was appealable
in the sense of being definitive of the rights of the parties and
also dispositive of at least a substantial
part of the relief
claimed. After hearing argument on this question the court decided
that the matter was not appealable. The matter
was accordingly struck
from the roll and the appellants ordered to pay the costs of their
opponents, including the costs of two
counsel. The court indicated at
the time that its reasons would follow. These are the reasons.
[3] In order to decide
whether the order of the high court is capable of being appealed it
is necessary to identify the parties
and the nature of the dispute
between them. In its particulars of claim the plaintiff describes
itself as a close corporation conducting
business as an estate agent
and business broker. It claims payment of approximately R15 million
in agent’s commission. The
claim arises from a mandate given to
the plaintiff by the first, second, third and fifth defendants (‘the
sellers’).
The mandate encompassed finding a purchaser for
their interests, in the ‘whole of the mining operation’,
which includes
the first, second and third defendants’
shareholding in the fourth defendant, an immovable property owned by
the fifth defendant
and a crushing mining permit, also owned by the
fifth defendant. The value of the transaction is R190 million.
[4] The plaintiff alleges
that it introduced the appellants to the sellers as a result of which
a sale agreement was concluded whereby
the appellants bought the
sellers’ mining interests and also agreed to pay the commission
on the transaction. It also alleges
that it and its members held
valid fidelity fund certificates as required by the Act. As I have
mentioned the validity of these
certificates was the only issue
separated for determination in the high court.
[5] The appellants deny
liability for payment of the commission on various grounds. For
present purposes, and as result of the order
of the high court, we
are concerned with only one of these: they assert that when the
mandate was agreed and thereafter, the plaintiff,
its members and its
employees did not have valid fidelity fund certificates as required
by s 26 of the Act. Accordingly, say the
appellants, without valid
certificates the plaintiff was not entitled to act as an estate agent
and is therefore prohibited by
ss 34 A(1) and 34 A(2) of the Act from
enforcing its claim.
[6] The sellers were sued
together with the appellants, but in the alternative. They do not
contest the plaintiff’s claim
for commission, nor do they
appear to take issue with the validity of the certificates. Their
case is that it is the appellants
– not they – who are
liable for payment of the commission.
[7] The appellants
applied for the issues concerning the validity of the fidelity fund
certificates to be separated for prior determination
and the parties
subsequently agreed on this course. The court accordingly allowed the
separation and proceeded to hear evidence
on this issue.
[8] The plaintiff called
several witnesses to prove that it had complied with the relevant
provisions of the Act. The second defendant,
Ms Nell, testified on
behalf of the respondent. The appellants elected not to testify.
After considering the evidence the court
found that the respondent
had ‘substantially complied’ with these provisions and
made a declaratory order to this effect.
The appellants seek to
reverse this order.
[9] For present purposes
it is not necessary to consider whether or not the high court was
correct in reaching this conclusion.
Here we are concerned only with
whether the order of the high court is appealable. In this regard the
court is guided amongst others
by the following considerations:
whether the order of the high court is definitive of the rights of
the parties; has the effect
of disposing of at least a substantial
portion of the relief claimed; would lead to a prompt resolution of
the real issue between
the parties and whether the balance of
convenience favours a piecemeal consideration of the case. Ultimately
the court adopts a
flexible and pragmatic approach in deciding
whether or not it is appropriate to entertain the appeal in the
particular circumstances.
[10] Bearing these
principles in mind I turn to consider whether the high court’s
order is appealable. The appellants contend
that if the merits of the
appeal are upheld and the court upholds its contention that the Act
was not complied with in respect
of fidelity fund certificates, this
would end the dispute and lead to an immediate dismissal of the
plaintiff’s action. Indeed
that is the order it seeks.
[11] The plaintiff on the
other hand contends that the issue regarding the validity of the
fidelity fund certificates may affect
only a minor portion of the
relief claimed pertaining to the immovable property, which is worth
R1 million, and that that constitutes
an insignificant part of the
claim. The sale of shares, it says, constitutes the main part of the
transaction and may not fall
within the definition of a ‘business
undertaking’ in s 1 of the Act. It is an issue yet to be
decided by the high
court. The order of the high court is accordingly
not definitive of the rights of the parties and will not dispose of a
substantial
part of the relief claimed. The sellers support this
view.
[12] But the appellants
say that the issue as to whether the sale of shares, which was part
of the composite transaction also involving
the immovable property
and the crushing permit, fell within the definition of business
undertaking, is not an issue on the pleadings,
and is therefore not
an issue the high court need consider.
[13] A perusal of the
pleadings reveals that in its particulars of claim the plaintiff
pleaded that it had complied with the provisions
of the Act regarding
the required fidelity fund certificates and then went on to plead
that it was required to find a buyer for
their ‘interests in
the whole of the mining operation’ inclusive of the
shareholding, immovable property and crushing
permit. This means that
the composite transaction constituted the sale of a ‘business
undertaking’ as contemplated
by the Act and required compliance
with the Act. Pleaded thus, say the appellants, the inapplicability
of the Act to the share
transaction did not arise on the pleadings.
[14] But I do not think
that this is the only reasonable interpretation of the pleadings. In
my view the pleadings can also reasonably
be construed to read that
the respondent had complied with the Act to the extent necessary or
required, but that it is not precluded
from claiming any other part
of the commission where the subject matter of the transaction falls
outside the ambit of the Act.
In this regard there is no dispute that
any claim for commission on the sale of the immovable property may be
enforced only if
the agent has a valid fidelity fund certificate as
the Act requires. But it is less clear that the sale of shares in
this transaction
also requires compliance with the Act.
[15] The high court
considered that the ‘essence’ of the transaction was the
sale of the shares. And it expressly declined
to rule on whether, for
this reason, the transaction fell outside the scope of the Act
because, so the learned judge said, this
was not an issue separated
for determination under Rule 33(4). She thus concluded that the
evaluation of the transaction could
not be dealt with at that stage.
Put simply, the issue of the applicability of the Act to the
transaction as whole was not dealt
with, did not fall within the
ambit of the order granting leave to appeal and consequently was not
an issue over which this court
now has jurisdiction. The dispute over
the characterisation of the transaction therefore remains and a
decision by this court on
the separated issues would clearly not
dispose of this question. This means that even if the issue
concerning the fidelity fund
certificates is decided in favour of the
appellants this will not dispose of a substantial part of the relief
claimed or be definitive
of the rights of the parties.
[16] Even if the
appellant is correct in its submission that the applicability of the
Act to the transaction did not arise on the
pleadings, it was open to
any of the parties to raise the issue as a question of law. For as
this court said in
Paddock Motors (Pty) Ltd v Igesund
1976 (3)
SA (A) at 24B-C:
‘
If
. . . the parties were to overlook a question of law arising from the
facts agreed upon, a question fundamental to the issues
they have
discerned and stated, the Court could hardly be bound to ignore the
fundamental problem and only decide the secondary
and dependent
issues actually mentioned in the special case. This would be a
fruitless exercise, divorced from reality, and may
lead to a wrong
decision.’
[17] In this case it is
clear that it would be fruitless exercise for this court to entertain
the appeal on the separated issues
if the high court ultimately
determines that the Act did not apply to the transaction or to a
large part of it. For these reasons
I concluded that the decision is
not appealable.
[18] Turning to the
question of costs, all parties were given adequate notice that the
presiding judge was of the prima facie view
that the matter was not
appealable and that the parties would be required to address the
court on this issue in the event that
they decided to proceed with
the appeal. In response the appellants persisted with the appeal. The
plaintiff and the sellers adopted
the stance that the matter was not
appealable but nevertheless were required to attend the hearing in
the event the court entertained
the merits of the appeal. In those
circumstances I considered it appropriate to order the appellants to
pay the costs of both the
plaintiff and the sellers, including the
costs of two counsel.
_________________
A CACHALIA
JUDGE OF APPEAL
APPEARANCES
For Appellants: A Kemack
SC (with him E Eksteen)
Instructed
by:
Werthschröder
Inc, Johannesburg
Webbers,
Bloemfontein
For Respondent: S J
Bekker (with him W J Bezuidenhout)
Instructed
by:
Louw
Attroneys, Centurion
Symington
& De Kok, Bloemfontein
For
1
st
, 2
nd
, 3
rd
and
5
th
Respondents: S Güldenpfennig (with him H J
Snyman)
Instructed
by:
Spector
Attorneys, Krugersdorp
Hill
McHardy & Herbst Inc, Bloemfontein