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[2012] ZASCA 120
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Ngqula v South African Airways (Pty) Ltd (775/11) [2012] ZASCA 120; 2013 (1) SA 155 (SCA) (19 September 2012)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 701/11
Reportable
In the matter between:
KHAYAKHULU
NGQULA
............................................................................
APPELLANT
and
SOUTH AFRICAN AIRWAYS
(PTY) LIMITED
..........................................
RESPONDENT
Neutral
citation
:
Ngqula v
South African Airways
(701/11)
[2012] ZASCA
120
(19 September 2012)
Coram:
HEHER, PONNAN AND WALLIS
JJA
Heard:
10 September 2012
Delivered:
19 September 2012
Updated:
Summary:
Practice – removal of proceedings –
Interim Rationalisation of High Courts Act 41 of 2002, s 3 –
non-appealability
of order authorising removal – such order
simple interlocutory order.
_________________________________________________________________
ORDER
____________________________________________________________________
On appeal from:
South
Gauteng High Court (Johannesburg) (Cassim AJ sitting as court of
first instance):
1. The appeal is struck
off the roll.
2. The appellant is to
pay the costs including the costs of employing two counsel.
_______________________________________________________________________
JUDGMENT
_______________________________________________________________________
HEHER JA (PONNAN AND
WALLIS JJA concurring):
[1] This purports to be
an appeal against an order made by Cassim AJ in the South Gauteng
High Court (‘the SGHC’), acting
in terms of s 3 of the
Interim Rationalisation of the Jurisdiction of the High Courts Act 41
of 2001, which provides:
‘
(1)
If any civil proceedings have been instituted in any High Court, and
it appears to the Court concerned that such proceedings-
(a)
should have been
instituted in another High Court; or
(b)
would be more
conveniently or more appropriately heard or determined in another
High Court,
the
Court may, upon application by any part thereto and after hearing all
other parties thereto, order such proceedings to be removed
to that
other High Court.
(2)
An order for removal under subsection (1) must be transmitted to the
registrar of the High Court to which the removal is ordered,
and upon
receipt of such order that Court may hear and determine the
proceedings in question.’
[2] On the application of
the present respondent, in the face of opposition from the appellant,
the learned judge authorised the
removal of the civil trial
proceedings instituted by the respondent against the appellant in the
SGHC to the North Gauteng High
Court (‘the NGHC’) and
ordered that the costs of the application be costs in the trial.
[3] When the matter was
called in this Court we invited appellant’s counsel to address
us on the appealability of the order.
For the reasons that follow we
are satisfied that the order is not appealable and that the appeal
should therefore be struck off
the roll.
The background to the
application
[4] The appellant was
employed by the respondent as a director and its chief executive
officer. The respondent issued two summonses
against the appellant.
In case no 27955/2010 it claimed payment of R26 581 794.77 arising
out of alleged breaches of fiduciary
duties deriving from his
contract of service. In case no 30920/2010 it sued for payment of US
$ 3 400 000 arising from a sponsorship
agreement with one Cabrera, an
Argentinian golfer, an amount which the appellant allegedly had no
authority to spend, and a further
R229 170 in unauthorised
disbursements for which the respondent sought to hold the appellant
liable.
[5] The appellant filed
an exception to the first claim on the ground that the SGHC lacked
jurisdiction. In the second case the
same defence was raised by way
of special plea. In both cases the alleged ouster of jurisdiction is
founded in clause 25 of the
appellant’s service contract which
reads:
‘
This
agreement will be interpreted and applied in accordance with the laws
of the Republic of South Africa. The parties irrevocably
consent and
submit solely to the jurisdiction of the High Court of the Republic
of South Africa (Transvaal Provincial Division),
or any successor
thereto for the purpose of enforcing any of their rights in terms of
this Agreement.’
The appellant sought
dismissal of the respondent’s claims on the basis that the
clause vested the NGHC with exclusive jurisdiction
to enforce the
rights upon which the respondent relied.
[6] Before the exception
and plea could be adjudicated, the respondent brought an application
for removal of the actions to the
NGHC under s 3(1)(b) of the Act. It
did not concede that the clause operated as an ouster of the
jurisdiction of the SGHC. Its
approach, as stated in its founding
affidavit was that ‘it is . . . convenient and more appropriate
that the proceedings
be transferred to the [NGHC], in order to
dispense with the dilatory objection which will delay the
determination of the real and
main issues between the parties’.
[7] In its application
the respondent put forward a number of reasons for the contention
that clause 25 does not oust the jurisdiction
of the SGHC. It
likewise enunciated various factors said to support its reliance on
sub para (b).
[8] The appellant opposed
the removal. His stance was purely dilatory and tactical because the
foundation of his objection was that
the NGHC was the only court
which could properly try the dispute on the merits.
[9] Of relevance to the
argument of appellant’s counsel in the appeal are the following
statements made by the appellant in
his answering affidavit:
’
14.
Fourthly, and in so far as the applicant concedes that it made a
mistake in instituting the proceedings in the wrong Court,
then the
respondent cannot be deprived of the legitimate defence of
prescription which has arisen, as a matter of law, due to that
mistake. The Court has no discretion to reverse the application of
the legal rule of prescription.
15.
In so far as the Court admittedly does have the discretion to
transfer proceedings, that discretion may not properly be exercised
so as to prejudice a innocent party, such as the respondent.’
and
‘
I
deny these allegations and more specially deny that I will suffer no
prejudice should the proceedings be transferred, as I will
have been
deprived of a perfectly legitimate defence, which is dispositive of
the entire action due to the applicant’s unilateral
mistake in
interpreting its self-drafted and binding agreement.’
[10] The court a quo
agreed with the respondent. The learned judge did not find it
necessary to decide on the effect of clause 25,
and so there was no
decision that the SGHC did not in fact possess jurisdiction. The
appellant’s heads of argument suggest
that such a decision was
necessary because, if subpara (a) was applicable, resort could not be
had to subpara (b). But this is
untenable as each subparagraph
provides an independent ground of removal.
Appealability
[11] With that
introduction I revert to the question of whether an appeal against an
order removing proceedings under s 3 can properly
be entertained by
this Court.
[12] The
principles upon which appealability must be tested were, as is
well-known, summarised in
Zweni v Minister of
Law and Order
1993 (1) SA 523
(A) at
531H-533F, subject to a certain degree of flexibility in particular
cases:
Health Professions Council of South
Africa v Emergency Medical Supplies and Training CC t/a EMS
2010
(6) SA 457
(SCA) at para 15. For present purposes it will be
sufficient to direct attention only to certain aspects that Harms JA
identified
as cardinal in
Zweni
.
[13] The first is the
emphasis on whether an appeal will lead ‘to a more expeditious
and cost effective determination of the
main dispute between the
parties, and, as such will contribute to its final solution’
(at 531I-532B). In direct opposition
to this principle, far from
directing his energies to resolving the main dispute – the
alleged breach of fiduciary duties
– the appellant employs the
appeal in an attempt to avoid a determination of the merits by
raising a defence of prescription
to the claim if and when it is
instituted in the NGHC.
[14] The
second is the attention that must be paid to the effect rather than
the form of an order in weighing its appealability.
In the court a
quo the order made was a practical pre-trial direction intended to
overcome a technical objection – whether
a good or bad
objection matters not – and thereby to assist the parties to
come to terms with the real dispute. Its predominant
effect was as a
procedural mechanism incidental and preparatory to that dispute. That
being so, then it, seems to me, that the
order properly falls into
the category of ‘simple interlocutory order’ (
Zweni
at 532G-H).
[15] If, as
Zweni
held (at 532J),
finality in effect is a necessary characteristic of an appealable
order, an order for removal fails to make the
grade. A procedural
provision
(such
as s 3(1)) designed to bring the parties before a court capable of
making a final pronouncement, carries the main dispute
no further and
provides no relief bearing on its determination. Although the order
may not be susceptible of alteration by either
the referring court or
the court to which the trial is referred, it has no final effect on
the proceedings or on the rights of
the parties – the court
which will hear the matter simply
becomes burdened with the obligation to try the
dispute vice the referring court.
[16] The
order of the referring court does not dispose of any portion of the
relief claimed in the main proceedings (
Zweni
at 533A). Counsel for the appellant disputed
this. The appellant intended to plead prescription to the claim (a
‘spes’,
counsel conceded, and not a realised defence).
Thus, counsel argued, the order is destructive of the appellant’s
rights and
in that way finally disposes of a material defence to the
action.
[17] I think
the last-mentioned submission is fallacious. The purpose of s 3(1)(a)
of the Act is to empower a court that does not
have jurisdiction to
remove proceedings to a court which will have jurisdiction. Before
the Act came into being that was not possible
if the SGHC did not
have jurisdiction to entertain the main dispute when the summons was
issued, cf
Road Accident Fund v Rampukar
;
Road Accident Fund v Gumede
2008
(2) SA 534
(SCA) at 538I-539A.
[18] As such a removal is
now permitted, it may follow that a party that is deprived of its
right to object to the court’s
jurisdiction in consequence of
the case being transferred to a court having jurisdiction, cannot
complain of either the loss of
its plea to the jurisdiction or the
loss of any advantage that would otherwise flow from that plea being
upheld, such as the acquisition
of a defence of prescription if the
plaintiff instituted action afresh. So viewed the legislation
provides a means for overcoming
challenges to the jurisdiction of the
different high courts by treating such challenges as procedural in
character. However, I
do not rule out the possibility that, for the
purposes of prescription, the institution of proceedings in a court
not possessing
jurisdiction may be regarded as ineffective to
interrupt prescription. In such a case the transfer may properly be
treated as if
it were the commencement of a fresh action constituting
an effective interruption. It is unnecessary to decide which, if
either,
is the correct approach. I raise the alternatives to
illustrate that a party must take the law (and its consequences) as
it finds
them rather than rely on the consequences of the law that
was.
[19] A second
consideration is this: prescription must be tested if and when it is
raised in a pleading. That has not happened.
The court at the stage
of a removal application should not be asked to undertake a
hypothetical exercise of predicting prejudice,
and to that end shut
the applicant for removal out of procedural relief that is obviously
both convenient and appropriate (subpara
(b)) and, in addition,
fulfils the purpose for which the statute is designed (subparas (a)
and (b)), (the more so where removal
accords with the pleaded defence
on the contract, as here).
[20] For these reasons I
conclude that a removal order under s 3 of the Act has none of the
characteristics of an appealable order.
[21] Counsel for the
appellant submitted that the appellant should not be mulcted in
costs. The question of appealability, he argued,
was raised by the
court and not the
opposing
party. I do not agree. The appellant pursued an appeal without legal
foundation for doing so and purely for the purpose
of achieving a
technical advantage in the litigation. Even if the respondent had not
opposed the appeal it could not have been
upheld. The respondent, on
the other hand, was entitled to come prepared to defend itself on the
merits of the appeal.
[22] That the losing
party should bear the costs is in accord with a long history of
similar approaches to costs orders when an
appeal court itself raises
the question of appealability:
Western
Johannesburg Rent Board and Another v Ursula Mansions (Pty) Ltd
1948
(3) SA 353(A)
;
Charugo
Development Co (Pty) Ltd v Maree NO
1973
(3) SA 759
(A) at 764G-H;
Wellington
Court Shareblock v Johannesburg City Council
;
Agar Properties (Pty) Ltd v
Johannesburg City Council
1995
(3) SA 827
(A) at 835F-H. Counsel for the respondent apparently
discussed the question of appealability with their attorney at the
time of
the application for leave to appeal and their considered
judgment was that the objection would not succeed. I do not think
that
counsel should be criticised for not advising the court a quo of
their reservations, as happened in
Kett
v Afro-Adventures (Pty) Ltd
1997
(1) SA 62
(A) at 67C-D.
[23] The following order
is made:
1. The appeal is struck
off the roll.
2. The appellant is to
pay the costs including the costs of employing two counsel.
_________________
J A HEHER
JUDGE OF APPEAL
APPEARANCES
APPELLANT:
G Farber SC (with him D C Mpofu)
Billy Gundelfinger,
Johannesburg
McIntyre & Van der
Post, Bloemfontein
RESPONDENT: I V Maleka SC
(with him T J B Bokaba SC)
Edward Nathan Sonnenberg
Inc, Johannesburg
Lovius Block,
Bloemfontein