Brief Summary

Appeal — Condonation for late prosecution — Appellants sought condonation for late prosecution of appeal against dismissal of their claim regarding property transfers — Delay attributed to pursuit of alternative litigation to prevent property transfer — Court found explanation inadequate, noting substantial unaccounted delay and failure to comply with procedural rules — Condonation refused, appeal lapsed.

Comprehensive Summary

Summary of Judgment

1. Introduction

The matter concerned an application in the Free State Division of the High Court, Bloemfontein, sitting as a Full Bench on appeal, for condonation of the appellants’ failure to prosecute an appeal timeously and for the reinstatement of an appeal that had lapsed, with the court also hearing argument on the merits of the intended appeal.

The parties were Phillip Tshepiso Motsima and Thandiwe Patience Motsima as the first and second appellants, and Liphapang Albert Kopa and Nthabiseng Mosoeu-Kopa as the first and second respondents, with additional respondents being the trustees of the C & D Investment Trust, the Registrar of Deeds (Free State Province), and the trustees of the Van der Merwe Family Trust. The Registrar of Deeds did not participate in the proceedings.

Procedurally, the appeal lay against the whole of a judgment and order of Molitsoane J delivered on 8 February 2021 in case number 2122/2019 (the court a quo), in which the appellants’ claims were dismissed. Leave to appeal to the Full Bench was granted on 15 July 2021, and the appeal was noted on 12 August 2021. Due to delay in prosecuting the appeal, the appellants brought a substantive application for condonation and reinstatement, opposed by the Kopas, the C & D Investment Trust, and the Van der Merwe Family Trust.

The underlying subject-matter of the dispute related to a series of transactions involving an immovable property at Woodland Hills Wildlife Estate, and the appellants’ attempt to set aside transfers said to have resulted from an allegedly unlawful arrangement (including contentions of pactum commissorium and parate executie, alternatively fraud). However, the Full Bench’s determination turned primarily on whether condonation and reinstatement should be granted in light of the procedural default and the explanation for delay, assessed together with prospects of success.

2. Material Facts

During 2017, the appellants purchased immovable property situated at Woodland Hills Wildlife Estate (the property). A dispute later arose concerning an agreement concluded between the appellants and the C & D Investment Trust, and the consequences of that agreement for the transfer of ownership of the property.

It was common cause that the property was transferred from the appellants to the C & D Investment Trust during 2017, and that the property was later transferred from the C & D Investment Trust to the Kopas on 1 October 2018. It was also before the court that, following the judgment of the court a quo, the property was transferred from the Kopas to the Van der Merwe Family Trust on 7 May 2021.

The appellants’ challenge to the substantive transactions was framed as follows. They sought to impugn both (i) the transfer from themselves to the C & D Investment Trust, and (ii) the subsequent transfer to the Kopas. The appellants alleged that the agreement underpinning the first transfer was in substance an unlawful pactum commissorium and amounted to parate executie. They further contended that the transaction between the Kopas and the C & D Investment Trust was indivisible from a verbal agreement between the appellants and the Kopas and the earlier agreement between the appellants and the C & D Investment Trust, with the result that the second transfer was similarly unlawful or, alternatively, tainted by fraud.

For purposes of the condonation enquiry, the relevant chronology concerning the appeal’s prosecution was material. The record of appeal was lodged on 8 November 2021. There was a dispute between the parties whether, when filing the record, the appellants requested a date for the hearing. The court accepted that, notwithstanding the parties’ contentions, the appeal was not thereafter prosecuted as required by the rules.

The appellants advanced as an explanation for delay that they pursued separate litigation aimed at preventing onward transfer of the property, having become concerned that the property could be sold and transferred to a bona fide third party and that such transfer could render the appeal moot. To that end, the appellants launched an interdict application on 16 July 2021 to interdict the sale and transfer of the property pending finalisation of the appeal. That interdict was dismissed by De Kock AJ on 7 October 2021. The appellants then sought leave to appeal in respect of the interdict: the application was issued on 7 December 2021, heard by Opperman J on 6 May 2022, and refused on 30 June 2022.

Despite correspondence from the respondents’ attorneys and a letter from the Registrar noting inactivity, the appellants only applied for a hearing date on 18 August 2022. In December 2022 the appellants indicated they would bring a condonation application, but they only filed the condonation and reinstatement application on 11 May 2023, shortly before the hearing of 12 June 2023.

At the hearing, it was placed on record by counsel for the respondents that the property had been sold by the Van der Merwe Family Trust, although transfer to the buyer had not yet been registered and was pending.

3. Legal Issues

The central legal questions for determination were whether the appellants should be granted condonation for non-compliance with the rules governing the prosecution of an appeal, and whether the lapsed appeal should be reinstated.

These questions required the court to make an evaluative determination involving the application of established legal principles to the procedural facts: the extent of the delay and non-compliance, whether the explanation covered the whole period and was reasonable, the relevance of the interests of justice and finality, and the weight to be accorded to the appellants’ asserted prospects of success on the merits if reinstatement were to be granted.

Although argument was also heard on the substantive merits of the appeal, the court’s dispositive task was primarily a discretionary judgment within the framework of condonation jurisprudence, including whether the explanation was acceptable and whether fairness and the interests of justice justified indulgence notwithstanding the default.

4. Court’s Reasoning

The court identified the applicable principles as settled. In condonation applications, the court emphasised that an applicant must address the degree of non-compliance, provide a full explanation for the delay that covers the entire period, and satisfy the court that the explanation is reasonable. In addition, the court identified the importance of considering the respondents’ interest in finality, the convenience of the court, avoidance of unnecessary delay in the administration of justice, and that the overarching enquiry is the interests of justice.

In applying those principles, the court focused on the appellants’ explanation that a deliberate choice had been made to pursue an interdict and related leave-to-appeal process to prevent further alienation of the property, rather than prosecuting the principal appeal. The court considered this explanation inadequate. It reasoned that this decision did not satisfactorily account for why the appellants could not, at the same time, comply with the procedural steps required to keep the appeal alive. The court highlighted that a simple procedural step, such as enrolling the appeal by way of a notice of set down, would have prevented the appeal from lapsing, and it could not understand why this was not done.

The court further found that the explanation did not cover the whole period of delay, pointing specifically to the absence of particularity concerning what occurred after 30 June 2022 (the date on which leave to appeal in the interdict matter was refused) until 18 August 2022 (when the appellants applied for a date in the appeal). The lack of responsiveness to the respondents’ enquiries in July 2022 and the Registrar’s warning about inactivity weighed against the appellants, reinforcing the inference that the appeal had not been pursued with the diligence required.

The court also took into account the principle of finality in litigation, reasoning that an inordinate delay can induce a reasonable belief in the other party that the order has become unassailable, and that after such delay a litigant is entitled to assume the losing party has accepted finality. The respondents’ interest in finality, considered together with the appellants’ failure to take steps after lodging the record, supported refusal of condonation.

On prospects of success, the court assessed the appellants’ contention that their true arrangement with the C & D Investment Trust was a loan/security scheme under which the trust would hold the property as security with a repurchase right, rather than a sale transferring ownership. Against that, the court noted the evidence that the appellants made a written offer to sell the property to the C & D Investment Trust dated 22 February 2017, accepted on 1 March 2017, and that the parties concluded a separate lease agreement containing an entire agreement clause. The court noted further that the lease granted an option at a fixed price, that Mr Kopa conceded an inability to repurchase due to financial constraints, and that both appellants signed the power of attorney to effect transfer. On this evidentiary footing, the court agreed with the respondents’ submissions that the appellants understood they were selling the property and transferring the real right knowingly, and it rejected the characterisation of the arrangement as a moneylending scheme involving fraud. The court concluded that the trial court did not err and that the appellants’ prospects of success were remote and unrealistic.

While recognising that prospects of success are a weighty factor in condonation, the court reiterated that they are not decisive. In the court’s assessment, even if prospects were assumed to be strong (which it did not accept), they could not remedy the wholly inadequate explanation for the delay and the cumulative effect of the appellants’ non-compliance and the respondents’ interest in finality.

5. Outcome and Relief

The Full Bench dismissed the application for condonation and reinstatement of the appeal. The dismissal was accompanied by an order for costs against the appellants.

Because condonation and reinstatement were refused, the appeal itself was not revived for determination on the merits.

Cases Cited

Van Wyk v Unitas Hospital (Open Democratic Advice Centre as Amicus Curiae) [2007] ZACC 24; 2008 (2) SA 472 (CC).

Federated Employers Fire and General Insurance Co Ltd and Another v McKenzie 1969 (3) SA 360 (A).

Uitenhage Transitional Local Council v South African Revenue Service 2004 (1) SA 292 (SCA).

Darries v Sheriff, Magistrate’s Court, Wynberg & Another 1998 (3) SA 34 (SCA).

Palmer v Goldberg 1961 (3) SA 692 (N).

Melane v Santam Insurance Co Ltd 1962 (4) SA 531 (A).

Legislation Cited

No legislation was cited in the judgment.

Rules of Court Cited

Rule 49.

Rule 49(5)(b).

Rule 49(6)(b).

Held

The court held that the appellants failed to provide a full, reasonable, and comprehensive explanation covering the entire period of delay in prosecuting the appeal, and that their deliberate focus on separate interdict proceedings did not justify non-compliance with the procedural requirements for keeping the appeal alive.

The court held further that the respondents’ interest in finality and the administration of justice weighed against granting the indulgence of condonation and reinstatement. In assessing prospects of success as a relevant factor, the court found the appellants’ prospects to be remote, given the written sale documentation, the lease agreement containing an entire agreement clause, the appellants’ execution of transfer documentation, and concessions indicating awareness that ownership would pass.

On these cumulative considerations, the application for condonation and reinstatement was dismissed with costs.

LEGAL PRINCIPLES

Condonation is a discretionary indulgence, not a formality, and must be determined judicially on all the facts with reference to fairness to both sides and the overarching enquiry of the interests of justice.

An applicant for condonation must provide a full explanation for the delay that covers the entire period of non-compliance and is reasonable. Delay in seeking condonation after becoming aware of non-compliance is a relevant consideration and counts against the applicant.

Relevant factors in condonation include the degree of non-compliance, the explanation for it, the importance of the case, the respondent’s interest in the finality of the judgment, the convenience of the court, and the avoidance of unnecessary delay in the administration of justice.

An inordinate delay may reasonably entitle the successful party to assume that the dispute has reached finality, reinforcing the policy value of finality in litigation.

Prospects of success are a weighty factor in the condonation enquiry but are not decisive; strong prospects cannot necessarily cure a wholly inadequate explanation for delay, and weak prospects may reinforce refusal of condonation where non-compliance and prejudice to finality are pronounced.

Motsima and Another v Kopa and Others - Appeal (A90/2021; 2122/2019) [2023] ZAFSHC 260 (30 June 2023)