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[2017] ZAECPEHC 59
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Pentree Limited v Nelson Mandela Bay Municipality (3119/2013) [2017] ZAECPEHC 59 (12 December 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE DIVISION, PORT ELIZABETH
Case
No.: 3119/2013
Date
Heard: 27 November 2017
Date Delivered: 12
December 2017
In
the matter between:
PENTREE
LIMITED
Plaintiff
and
NELSON
MANDELA BAY MUNICIPALITY
Defendant
JUDGMENT
EKSTEEN
J:
[1]
The
plaintiff claims compensation in terms of section 12(1) and (2) of
the Expropriation Act, 63 of 1975 (the Act) in respect of
a property
(the subject property) expropriated by the defendant on 2 October
2011. The amount of compensation payable and
the highest and
best use of the land is hotly disputed. The plaintiff’s
case in the trial has progressed to an advanced
stage and Ms Jenny
Falck (Falck), an expert valuer, was called to testify on behalf of
the plaintiff in respect of these issues.
When the matter was
adjourned Falck had completed her evidence in chief and
cross-examination had commenced. During the adjournment,
the
defendant served notice in terms of Rule 36(9)(a) and (b) of the
Uniform Rules of Court (the Rules), of its intention
to call Mr
Erwin Rode (Rode) to testify on behalf of the defendant as an expert
valuer. These notices prompted the present
application in which
the plaintiff seeks an order precluding the defendant from relying on
the evidence of Rode as foreshadowed
in the notices during its
further cross-examination of Falck and from calling Rode to give such
evidence. It seeks a further
order that the delivery of the
said notices be set aside as an irregular step as envisaged in Rule
30(3) of the Rules.
[2]
The trial
stands adjourned at this stage to October 2018. By agreement
between the parties the present application is brought
in advance of
the resumption of the hearing in lieu of an objection to the
utilisation by the defendant of Rode’s intended
evidence in its
further cross-examination of Falck and its leading of that evidence.
The procedure is adopted in an endeavour
to avoid the unnecessary
loss of court time when the hearing recommences.
Background
[3]
Falck
commenced her evidence on 26 October 2016. During the course of
her evidence the defendant objected to the admissibility
of portions
of her evidence. The matter was argued and I reserved judgment
in respect of the ruling. At this stage
the plaintiff proceeded
with the presentation of further expert witnesses until the
conclusion of the set down period. I
delivered my ruling to the
objection on 17 November 2016. Following upon the adjournment
and on 8 December 2016 the defendant
delivered Rule 36(9)(a) and (b)
notices in respect of one Professor Sharp, a statistician, which
questioned the reliability of
a regression analysis that Falck had
used in her valuation of the subject property. In response
Falck prepared a supplementary
valuation and a further Rule 36(9)(b)
notice in respect of the evidence of Falck was delivered on 17
January 2017.
[4]
On 1
February 2017 Falck resumed her testimony. In the course of her
evidence in chief and on 9 February 2017, following argument
on a
further objection raised by the defendant the plaintiff delivered yet
a further notice in terms of Rule 36(9)(b) relating
to the evidence
of Falck in which she expanded on the evidence foreshadowed in
her supplementary valuation. The defendant
objected to Falck
testifying in accordance with her further notice which had been filed
out of time and during the course of the
presentation of her
evidence. I condoned the late filing of the notice and ruled
that the plaintiff may proceed to lead the
evidence of Falck to the
conclusion of her evidence in chief. I ruled that the defendant
would be entitled to an adjournment
of the proceedings, if required,
at the conclusion of the evidence in chief of Falck.
[5]
At the
conclusion of Falck’s evidence in chief the matter stood down
and the defendant delivered a request in terms of Rule
2(c) of the
Eastern Cape Practice Directions for an amplification of the
additional expert notice. The amplification was
duly provided
and the defendant consulted its valuer, Mr Margolius. On 20
February 2017 counsel indicated that he did not
consider it necessary
to file a further report from Margolius at that stage and that he was
prepared to proceed to cross-examine
Falck. His
cross-examination proceeded for four days before the set down period
expired and the matter was again adjourned.
[6]
At this
juncture, during the adjournment and in April and May 2017 the
defendant delivered the notices in terms of Rule 36(9)(a)
and (b)
respectively in respect of the evidence of Rode. A report
prepared by Rode entitled “Report on Valuation Method
of Ms
Jennifer Falck” was delivered in lieu of his summary as
envisaged in Rule 36(9)(b) of the Rules.
[7]
In his
report Rode responds to the methodology adopted by Falck in the
exercise of her valuation. He criticises important
assumptions
on which Falck relied, her selection of a valuation method (the
comparable sales method) and her application of that
method including
her assessment of the comparable transactions and other market
evidence. By virtue of the criticism of Falck’s
assessment of comparable transactions Rode considers that a different
valuation method, the land-residual method ought to have
been
employed for the verification of the market value arrived at by the
other valuation methods adopted by Falck. Falck
had, in
evidence, rejected the use of the land-residual method and Rode is
critical of her rejection thereof.
The
objection
[8]
The
plaintiff objects to the defendant’s intention to call Rode as
an expert witness and to put Rode’s evidence to Falck
during
cross-examination as:
(a)
the notices, it is alleged, are out of
time in that the defendant has failed to comply with the
time periods
stipulated in Rule 36(9) of the Uniform Rules; and
(b)
the notices are filed at such a late
stage in proceedings that the prejudice caused thereby cannot
be
cured by a postponement coupled with an appropriate costs order.
[9]
Rule 36(9)
provides:
(9) No person
shall, save with the leave of the court or the consent of all parties
to the suit, be entitled to call as a witness
any person to give
evidence as an expert upon any matter upon which the evidence of
expert witnesses may be received unless he
shall—
(a)
not
less than fifteen days before the hearing, have delivered notice of
his intention so to do; and
(b)
not
less than ten days before the trial, have delivered a summary of such
expert’s opinion and his reasons therefor.”
[10]
On behalf
of the defendant it is argued that where Rule 36(9) refers to
“fifteen days before the hearing” and “ten
days
before the trial” it should be interpreted as referring not to
the commencement of the evidence in the trial hearing,
but to the
commencement of each session when evidence is given. It
accordingly disputes the suggestion that the notices were
filed
late. By virtue of the conclusion to which I have come in this
matter I do not think that it is necessary to resolve
this dispute.
Suffice it to say that on the ordinary reading of the rule it appears
to me,
prima
facie
,
that the rule envisaged that the said notices were required to be
filed prior to the commencement of the first session of trial.
I shall accordingly accept for purposes of this judgment, that the
notices were filed late and not in accordance with the timeframes
set
out in Rule 36(9). I pause to record, however, that both
parties have filed numerous notices in terms of Rule 36 after
the
commencement of the trial. The trial commenced in February
2015. No less than 27 notices in terms of the provisions
of
Rule 36(9) of the Rules have been filed after the beginning of
November 2015. Save to the extent set out earlier herein,
however, no objection was taken to these notices by virtue of them
being filed out of time.
[11]
Mr
Breitenbach
SC
, on
behalf of the plaintiff argues further that the notice of the
evidence of Rode comes at a stage when Falck is already under
cross-examination. He would therefore need to consult with
Falck at this stage in respect of the views of Rode and, depending
on
her advice, he would probably need to present additional evidence in
chief from Falck and possibility also need to recall witnesses
who
have already testified or to call additional witnesses. Such a
consultation would be wide-ranging and would deal with
topics already
canvassed under cross-examination. For this reason, so the
argument goes, it would carry with it a significant
risk that the
integrity of the evidence of Falck as a whole would be compromised.
Prejudice would accordingly be caused by
the condonation of the late
filing of the notices, so it is contended, which cannot be cured by a
postponement coupled with an
appropriate costs order.
[12]
Mr
Ford
SC
, on
behalf of the defendant, on the other hand, contends that I ought, in
the context of the present matter, to condone the late
filing of the
notices as I am entitled to do by virtue of the provisions of Rule
27(3) of the Rules.
[13]
The Court
has a wide discretion to condone non-compliance with the Rules (see
Smith NO
v Brummer NO
1954 (3) SA 352
(O) at 358A; and
Du
Plooy v Anwes Motors (Edms) Beperk
1983 (4) SA 212
(O) at 216H-217A) which must, in principle, be
exercised in the light of all the circumstances. (See
Coopers
(South Africa)(Pty) Ltd v Deutsche Gesellschaft für
Schädlingsbekämpfung MBH
1976
(3) SA 352
(A)
at
374B;
and
Smit
v Shongwe
1982
(4) SA 699
(T) at 701G.) The discretion will of course be
exercised judicially with due regard to the question of prejudice or
potential
prejudice to each of the parties. (
Coopers
supra
at 372H and 374B.)
Purpose
of Rule 36(9)
[14]
The main
purpose of the rule was summarised in
Coopers
(SA)
supra
at 371 where Wessels JA recorded:
“
In
deciding whether there has been due compliance with sub-rule (9)
(b)
,
it is, in my opinion, relevant to have regard to the main purpose
thereof, which is to require the party intending to call a witness
to
give expect evidence to give the other party such information about
his evidence as will remove the element of surprise,
which in
earlier times (regarded as an element affording a tactical advantage)
frequently caused delays in the conduct of trials.
….
Consequently, when summarising the facts or data on which the expert
witness premises his opinions, the draughtsman
should ensure that
no information is omitted, where the omission thereof
might lead to the other side being taken by
surprise when in due
course such information is adduced in cross-examination or evidence.”
[15]
The purpose
and the effect of Rule 36(9) was subsequently elaborated on in some
detail in
Doyle
v Sentraboer (Cooperative) Limited
1993 (3) SA 176
(SECLD) where Mullins J explained at 180G-181B:
“
Rule
36(9) is a limitation on the right of litigants to call whoever they
choose as witnesses. Normally a party does not know what
witnesses the other party is going to call, or what such
witnesses are going to say. He must prepare as best he can by
assembling
his own witnesses to deal with the issues raised on the
pleadings. There are other provisions of Rule 36, such as discovery,
production
of documents, medical and physical examinations and such
like, which assist a party in preparing for trial. Moreover
a party is not required to inform his opponent who his witnesses are
or what they are going to say.
Rule 36(9),
however, makes serious inroads upon the common-law right of a party
to exercise the fundamental and valuable right to
call a witness
without a warning to his opponent
(Boland
Construction Co (Pty) Ltd v Lewin
1977
(2) SA 506
(C)
at
508.) It also places such party at a disadvantage in having to
intimate in advance what his expert witness is going to
say. This
disadvantage does not apply to non-expert witnesses, who can be
called without warning, no matter how much the evidence
may take the
other party by surprise.
Prior to the
promulgation of the Uniform Rules of Court, even expert witnesses
could be called without notice to the other
side. While providing a
tactical advantage, this frequently led to postponements and other
delays in the conduct of trials. …
Expert witnesses
should be impartial, and the frequently very involved and technical
nature of their evidence demands that the
other party should be able
to prepare to cross-examine such witnesses and, if necessary, to
allow his own expert witnesses to prepare
in advance to counter such
evidence.”
For
these reasons the rule ought to be interpreted restrictively and the
Court ought to lean in favour of granting condonation for
the
non-compliance with the rule in the absence of cogent reason to the
contrary.
Prayer
1
[16]
The
main relief sought by the plaintiff is set out earlier herein.
In prayer 1 of the plaintiff’s notice of application
it seeks
an order to preclude the defendant firstly from utilising the
evidence of Rode foreshadowed in the notices in its further
cross-examination of Falck and secondly from calling Rode to give
evidence.
[17]
As
appears from the title of the report by Rode (“Report on
Valuation Method of Ms Jennifer Falck”) it sets about
criticising
the methodology employed by Falck in her valuation of the
subject property. Rode did not embark on any investigation of
his
own to attempt to express an opinion on any pleaded issue.
Counsel on behalf of the defendant is generally entitled to test
the
reasoning of Falck in arriving at her conclusions by
cross-examination. He is entitled to consult with any expert he
pleases and to consider any written authority which he is able to
obtain in order to conduct his cross-examination. He would
be
entitled, in testing the merit of her evidence, to put every
criticism raised by Rode to Falck without reference to Rode or
to the
Rule 36(9)(b) notice. He would be entitled to do so without
filing a notice in terms of Rule 36(9) in respect of Rode
or any
other expert with whom counsel may have consulted.
[18]
This
Mr
Breitenbach
was constrained to acknowledge during argument, however, he submitted
that where such cross-examination is linked to the opinion
of a
particular expert which the defendant wishes to call it should first
comply with the provisions of Rule 36(9) of the Rules
before he would
be entitled to put such proposition to the witness.
Unsurprisingly Mr
Breitenbach
was unable to refer to any authority supporting this proposition.
[19]
Rode,
as recorded earlier, did not attempt to value the subject property
and he expresses no view on its value. The report
by Rode
contained in the Rule 36(9) notices criticises important assumptions
made by Falck and explains why, in his expert opinion,
he considers
such assumptions to be fallacious. He doubts the reliability of
her method of valuation (the comparable sales
method) and criticises
her application of that method, including her assessment of
comparable transactions and other market evidence,
and he advances
reasons for his opinion in this regard. He postulates that a
different valuation method should have been
employed to verify her
conclusions arrived at by the comparable sales method and, had she
done so correctly, he opines that the
fallacy in her valuation would
have been revealed. All of this, in my view, constitutes
evidence which is strictly in answer
to the various reports contained
in the Rule 36(9)(b) notices filed in respect of the evidence of
Falck and to which she has testified.
It is a rebuttal of her
evidence.
[20]
This
brings me to the structure of Rule 36(9) which I have set out
earlier. In
Klue
and Another v Provincial Administration, Cape
1966 (2) SA 561
(E) at 563A Addleson AJ (as he then was) concluded:
“
I
do not think that Rule 36 (9)
(b)
was
designed to encourage one party to wait until ten days before a trial
in order to satisfy himself that his opponent does
not intend to call
expert evidence, before himself deciding whether or not to call
expert evidence on a material issue on the
pleadings. Such an
approach would in many cases result in a situation of stalemate and
would in my view be contrary to the spirit
of the Rule.”
[21]
The
rule accordingly does not provide for a plaintiff to take a
particular step within a prescribed period whereafter the defendant
is required to respond thereto. The rule imposes the same
limitation on each party requiring it to file its notices within
the
stipulated time prior to the commencement of the trial. It
would accordingly be impossible, if the parties adhere to
the rule,
for an expert on one side of the litigation to timeously give notice
of his expert criticisms relating to the evidence
of his counterpart
on behalf of the other party. For this reason Margo J, giving
the unanimous judgment of the Full Court
on appeal in the matter of
Coopers
(SA)
supra,
concluded
that the rule was “not intended to cover evidence strictly in
answer to an opposing parties summary”.
(The judgment of
the Full Bench is not reported. See, however, the commentary in
Erasmus:
Superior Court Practice
(2
nd
ed) vol 2 p. D1-491.) The further appeal to the Appellate
Division (now the Supreme Court of Appeal) was decided on different
grounds and the finding of the Full Bench was not addressed by the
Appellate Division. I am in agreement with the conclusion
of
Margo J and it accords with the manner in which the rule has in my
experience been applied in this Division. Usually evidence
in
rebuttal of an expert’s opinion would be given without a
further Rule 36(9) notice by an expert in respect of whom notice
has
been timeously given by the opposite side and cross-examination would
proceed on instructions provided by such an expert.
In
principle, however, I do not think that the positon can be different
where the evidence in rebuttal emanates from a different
expert.
For this reason I consider that Mr
Ford
,
on behalf of the defendant is entitled to put Rode’s criticisms
of Falck’s valuation to her during cross-examination.
I
do not consider that such a ruling could serve to undermine the
purpose of the rule in any manner. Falck is herself an
expert
in the same field as Rode. She has expressed her expert opinion
and she has had very extensive notice of the conflicting
views
expressed by Rode. She has ample time to prepare her responses
thereto prior to the cross-examination proceeding in October
2018.
There can be no element of surprise to her. Similarly, in the
event that Rode is called to testify counsel on
behalf of the
plaintiff will have had extensive notice of the opinions of Rode
before he begins to testify. In the event
that he requires time
to consult with Falck in order to prepare his cross-examination that
may be done after she has completed
her evidence. Should a
postponement be required to do so any prejudice which may arise
therefrom may be compensated for by
an appropriate costs order.
[22]
I
turn to consider the second leg of the objection. Rode’s
report, as alluded to earlier, is essentially a criticism
of Falck’s
valuation. It is his conclusion that her valuation is
fallacious for the reasons contained in his report.
The present
proceedings are, of course, expropriation proceedings where there is
no
lis
between
the parties and no
onus
on either of the parties in respect of the value of the subject
property. At the conclusion of the matter I would be required
to fix the amount of compensation payable. In the event that
Rode’s criticisms should be valid and that Falck’s
valuation is indeed fallacious the Court may be seriously misguided
in coming to a conclusion without reference to Rode’s
evidence
in respect of the reasonable compensation to be awarded. It
would, in those circumstances, result in major prejudice
to the
defendant were I to fix the amount of compensation without
considering Rode’s criticism of Falck’s approach.
The interests of justice require not only that Falck’s opinions
be tested against the criticism of Rode but also that Rode
should be
heard, and his opinions tested under cross-examination.
[23]
I
am by no means persuaded that there is any entitlement to consult
with the witness Falck nor to lead further evidence in chief
from her
at this stage. In the event that Falck is of the view that
Rode’s opinions and his attack on her methodology
or
assumptions are unfounded she is able, by virtue of her own
expertise, to defend her valuation in cross-examination. If
she
were to advise that the plaintiff would be required to lead further
witnesses in order to meet the criticism or to recall
witnesses
who have already testified such advices could be conveyed after she
has testified and any prejudice arising from the
late filing of the
notice could then be cured by a postponement. In the event that
portions of Rode’s report are not
raised in cross-examination
the plaintiff may seek leave at the conclusion of the
cross-examination to raise these issues in evidence
with Falck.
Nevertheless, in this case the defendant has agreed that counsel for
the plaintiff may consult with Falck at
this stage notwithstanding
that she is currently under cross-examination. I shall
accordingly consider the matter on this
basis.
[24]
I
revert now to the prejudice which Mr
Breitenbach
contends would result from such a consultation. The essence of
the argument is that the integrity of the evidence of Falck
as a
whole may be compromised as it may be influenced or tainted by the
wide ranging interview which he would be required to hold
with her.
I readily accept that it is ordinarily improper to consult with a
witness whilst she is under cross-examination.
I accept too
that in the case of a factual witness the evidence of such a witness
may well be influenced or tainted by such an
interview to the extent
that the integrity of such witness’s evidence as a whole might
be undermined. In the case of
expert witnesses, however, they
are required to be impartial. The resolution of a conflict
between the opinions of rival
expert witnesses will generally not
depend on credibility but rather on the reasoning inherent in their
opinions. The
ultimate finding will depend on the
examination of the opinions expressed and an analysis of the
reasoning behind them. (See
the
South
African Law of Evidence
2
nd
ed p. 328.) In these circumstances the prejudice which the
plaintiff contends for seems to me to be more apparent than real.
[25]
In
the circumstances I consider that the interests of justice require
that the late filing of the Rule 36(9)(a) and (b) notices
in respect
of the evidence of Rode be condoned. The objection to the use
of the content of the Rule 36(9)(b) notice in cross-examination
and
to the calling of Rode to testify can therefore not be sustained.
Prayer
2
[26]
I
have accepted earlier that the Rule 36(9) notices were not delivered
in terms of the Rules. To this extent the delivery
of the
notices are irregular. Rule 30(3) of the Rules , however,
confers a wide discretion on the Court to make any order
as to it
seems meet in these circumstances. I have considered earlier
the balance of prejudice to the parties and to the
Court if the
evidence of Rode were to be excluded. By virtue of the
conclusion to which I have come in respect of prayer
1 it must follow
that the application to set aside the said notices must fail.
In these circumstances the relief sought in
prayers 3 to 5 of the
notice of motion, which seek condonation in respect of various
procedural shortcomings, need not be considered.
Costs
[27]
The
blame for the notices being late, as measured against the time frames
set out in the Rules, cannot be laid at the door of the
defendant.
Three supplementary notices in terms of Rule 36(9)(b) of the Rules in
respect of the evidence of Falck were filed
after the commencement of
the trial. The criticism of the approach set out in these
notices and in Falck’s evidence
could therefore not have arisen
15 days prior to trial. The attack on the utilisation of Rode’s
opinion in cross-examination
and in evidence was ill-founded for the
reasons set out earlier herein. In these circumstances I
consider that the costs
of this application should follow the result.
[28]
In
the result, the application is dismissed with costs, including the
costs of two counsel.
J
W EKSTEEN
JUDGE
OF THE HIGH COURT
Appearances:
For
Plaintiff:
Adv A Breitenbach SC and Adv Townsend instructed by DHM Attorneys,
Somerset
West
c/o Greyvensteins Inc, Port Elizabeth
For
Defendant:
Adv EAS Ford SC and Adv G Richards instructed by Rushmere Noach Inc,
Port Elizabeth