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[2023] ZAKZPHC 28
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Fit 24 Gyms Proprietary Limited and Another v Tower Property Fund Limited (886/2021P) [2023] ZAKZPHC 28 (9 March 2023)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
No: 886/2021P
In
the matter between:
FIT
24 GYMS PROPRIETARY LIMITED
FIRST APPLICANT
[Registration
Number: 2017/240255/07]
MAREK
STEFAN BURCZAK
SECOND APPLICANT
and
TOWER
PROPERTY FUND LIMITED
RESPONDENT
[Registration
Number: 2012/066457/07]
Coram:
Mossop J
Heard:
7 March 2023
Delivered:
9 March 2023
ORDER
The following order is
made:
The application for leave
to appeal is dismissed with costs.
JUDGMENT
MOSSOP
J:
[1]
This is an application for leave to appeal against a judgment that I
delivered
on 28 November 2022 after hearing argument in an opposed
motion (the opposed motion). I granted judgment in favour of the
respondent
in this application for payment of the amount of R4 001
328.85, interest thereon and costs.
This
application is brought at the instance of the first and second
respondents in the opposed motion and for the purposes of this
application, I shall refer to them now as ‘the applicants’.
It follows that the applicant in the opposed motion shall
now be
referred to as ‘the respondent’.
[2]
As in the opposed motion, Mr Reddy appeared for
the applicants and Mr Schaup appeared for the respondent. Both
counsel are thanked
for their respective contributions.
[3]
Before dealing with the merits of the
application, I need to explain why it has taken so long to hear this
application. It is my
habit to hear applications for leave to appeal
as soon as practically possible after they have been filed. This
application was
delivered on 15 December 2022, after the end of the
judicial year and when the court was in its end of year recess
period. I was,
however, on recess duty commencing on 8 January 2023
and received the notice of application on that day. Unfortunately, I
could
not thereafter immediately deal with the application during the
first session of the first term of 2023 as I was assigned circuit
court duties in Madadeni in Northern KwaZulu-Natal. I returned from
such duties two weeks ago but there was then difficulty in
arranging
a date convenient to both counsel. This explains why this application
has not been heard as swiftly as it should have
been.
[4]
As
was pointed out by Mr Reddy in his argument, section 17 of the
Superior
Courts Act, 10 of 2013
(the Act) regulates applications for leave to appeal from a
decision of a High Court.
It provides as follows:
‘
(1)
Leave to appeal may only be given where the judge or judges concerned
are of the opinion that –
(a)
(i)
the appeal would have a reasonable prospect of success; or
(ii)
there is some other compelling reason why the appeal
should be heard, including conflicting judgments on the matter
under
consideration;
(b)
the decision sought on appeal does not
fall within the ambit of section 16(2)(a); and
(c)
Where the decision sought to be appealed
does not dispose of all the issues in the case, the appeal would lead
to a just and prompt
resolution of the real issues between the
parties.'
[5]
Prior
to the enactment of the Act, the applicable test in an application
for leave to appeal was whether there were reasonable prospects
that
an appeal court may come to a different conclusion than that arrived
at by the lower court. The enactment of the Act has changed
that test
and has significantly raised the threshold for the granting of leave
to appeal.
[1]
The use of the word ‘would’ in the Act indicates that
there must be a measure of certainty that another court will
differ
from the court whose judgment is sought to be appealed against. This
was acknowledged by Mr Reddy in his argument.
[6]
Leave
to appeal may thus only be granted where a court is of the opinion
that the appeal would have a reasonable prospect of success,
and
which prospects are not too remote.
[2]
As
was stated by Schippers JA in
MEC
for Health, Eastern Cape v Mkhitha and Another
[3]
:
‘
An
applicant for leave to appeal must convince the court on proper
grounds that there is a reasonable prospect or realistic chance
of
success on appeal. A mere possibility of success, an arguable case or
one that is not hopeless, is not enough. There must be
a sound,
rational basis to conclude that there is a reasonable prospect of
success on appeal.’
[7]
My judgment against which
leave to appeal is sought is comprehensive and I stand by the reasons
set out therein.
I
have, however, considered the respective arguments, authorities and
submissions of both counsel in proposing and resisting leave
to
appeal. In particular, the submissions of Mr Reddy gave me pause for
thought and I accordingly deemed it prudent to reserve
judgment in
order to give me the opportunity to fully consider those submissions
and assess their significance. I have now done
this.
[8]
As was submitted by Mr Schaup in argument, many of the points taken
in
the answering affidavit in the opposed motion were abandoned and
not persisted in when the matter was argued. In addition, certain
points were argued by Mr Reddy in the opposed motion but were not
mentioned when this application for leave to appeal was heard
nor are
they accommodated in the notice of application for leave to appeal. I
refer in this regard to the issue of the attestation
of the
respondent’s founding affidavit by a Mr Rivaaj Singh. I shall
assume that this is not a ground upon which that the
applicants rely
in seeking leave to appeal (it was, in my view, satisfactorily
resolved on the papers before argument was heard
in the opposed
motion).
[9]
The notice of application for leave to appeal sets out the grounds
that
the applicants rely upon. I shall briefly consider each of them,
seriatim
:
(a)
The
first ground of appeal
The first ground of
appeal is that I erred in finding that the respondent was permitted
to rely upon the first application brought
by the respondent and
which was launched on 15 February 2021. It is perhaps necessary to
mention that in terms of an agreement
of lease (the lease agreement),
the respondent was the first applicant’s landlord. The first
respondent conducted the business
of a gymnasium at the respondent’s
premises, but fell into arrears with its rental payments. This led to
an application for
a money judgment being brought against the
applicants by the respondent (the first application). The first
application, which was
not opposed by the applicants, led to the
conclusion of a settlement agreement (the settlement agreement).
Thereafter, another
application, the second application, was brought
when the first applicant defaulted on its obligations arising out of
the settlement
agreement and also defaulted on its continuing
obligations to the respondent, the lease agreement not having been
cancelled after
the institution of the first application or after the
conclusion of the settlement agreement. I did not at any stage rely
upon
the first application to conclude that the respondent was
entitled to the relief that it claimed. The first application
underpinned
the conclusion of the settlement agreement and had never
been withdrawn, but obviously that application had been resolved by
the
consensual conclusion of the settlement agreement. The first
ground of appeal is thus unpersuasive.
(b)
The
second ground of appeal
The second ground of
appeal appears to comprise an allegation that I erred in concluding
that the settlement agreement was effective
but still found that the
respondent was not precluded from reverting to its original cause of
action, namely the lease agreement.
Clauses 8.1 and 8.2 of the
settlement agreement provided as follows:
‘
8.1
This Agreement is not a novation of the original debt obligation
owed
by the Tenant to the Landlord in terms of the Lease Agreement.
8.2
It is therefore recorded that, in the event of that the tenant
and/or
the Guarantor breach any of the terms of this Agreement and fails to
remedy such breach as per clause 9 below, the full
amount of the
original obligation in the sum of R2,172,991.38 together with
interest at the prescribed legal rate
a tempore morae
until
date of payment, shall immediately become due and payable by the
Tenant to the Landlord.’
The provisions of the
settlement agreement refute this ground of appeal.
(c)
The
third ground of appeal
The third ground of
appeal is that I erred in permitting the respondent to claim future
amounts under case number 886/2021P in the
light of the settlement
agreement. This is a point that I explored with Mr Reddy both during
argument in the opposed application
and in this application. It is
also canvassed in some detail in my judgment. The settlement
agreement determined the liabilities
of the first applicant to the
respondent at a certain point in time. It did not determine those
liabilities for all time. In the
light of the fact that the lease
continued to run, the first applicant would continue to incur
obligations to the respondent in
the future. In the event of those
future obligations not being met, there is, in my view, no bar to the
respondent claiming both
the past obligations, dealt with by the
settlement agreement, and the future obligations that obviously do
not fall within the
purview of that agreement. Sight must not be lost
of the fact that the respondent claimed these amounts in a fresh
application,
the second application, although still under the case
number 886/2021P, and it did not simply rely on the first application
that
led to the conclusion of the settlement agreement. This ground
of appeal is also unpersuasive.
(d)
The
fourth ground of appeal
The fourth ground of
appeal appears to suggest that I erred in concluding that the fact
that the parties executed an addendum to
the settlement agreement
rendered the settlement agreement not to be in full and final
settlement of the first applicant’s
obligations to the
respondent. I came to no such finding. The addendum merely led to the
revision of the amount claimed by the
respondent. But the fact that
the parties described the settlement agreement as being in full and
final settlement did not mean,
as stated above, that the first
applicant would not incur any future obligations to the respondent or
that the respondent would
not be able to claim those obligations
where they remained unpaid. There is no merit in this ground of
appeal.
(e)
The
fifth ground of appeal
The fifth ground of
appeal is that I erred in failing to acknowledge that the respondent
admitted that the first applicant had been
complying with its
obligations in terms of the settlement agreement and the addendum.
The respondent, in fact, stated the following:
‘
First Respondent
has failed to comply with its obligations in terms of the Order and
in particular its repayment obligations in
terms of the Settlement
Agreement, as amended by the Addendum.’
This ground of appeal,
accordingly, holds little attraction.
(f)
The
sixth ground of appeal
The sixth ground of
appeal is that I erred by placing reliance on the certificate of
balance put up by the respondent as it was
rendered unreliable by
virtue of the fact that it included amounts levied against the first
applicant’s account by the respondent
in respect of legal
costs. Mr Schaup conceded when the opposed motion was argued that
such costs ought not to appear in the certificate
of balance and
undertook the mathematical exercise of recalculating the amount
claimed by the respondent. The amount claimed was,
thus,
substantially reduced. As a matter of fact, I did not rely on the
certificate of balance but I relied upon the mathematical
recalculation performed by Mr Shaup. Mr Reddy was satisfied with the
accuracy of that calculation but, as was stated in the judgment,
did
not admit that applicants were, in fact, liable to the respondent in
that amount. The quantum of the indebtedness was not disputed
in the
papers, save for the allegation that it impermissibly included legal
costs and interest on those costs. Those charges were
removed from
the calculation and it is upon the sum of that calculation, performed
by Mr Schaup, that I arrived at the judgment
amount. This ground of
appeal is accordingly misplaced.
(g)
The
seventh ground of appeal
The seventh and final
ground of appeal deals with an allegation that I erred in failing to
uphold an allegation that the respondent
no longer existed and
therefore lacked
locus standi in judicio
. There was no
evidence adduced in this regard. There is no reference to such a
point in the answering affidavit. As Mr Schaup points
out, it first
appeared in the heads of argument delivered by the applicants. There
is, however, a chain of emails attached to the
answering affidavit.
In the last email attached, the following statement appears:
‘
As discussed,
Tower has been acquired by RDC Property Group.’
Based upon these brief
words, an alternative scenario was created by the applicants and
advanced only in argument that culminated
in the following statement
in the appearing in the applicants’ notice of application for
leave to appeal:
‘
. . . RDC Property
Group has acquired the Respondent, as such the respondent ceased to
exist.’
Such a conclusion is a
non sequitur
. Acquisition does not automatically lead to the
demise of the entity acquired. It was further argued by Mr Reddy that
the RDC Property
Group now owns all the assets of the respondent.
That may be so. If it is so, it has no bearing on the applicants’
obligations
to the respondent. The point has no prospects of
succeeding.
[10]
After a thorough consideration of the grounds upon which leave to
appeal is sought, I remain
unpersuaded that there are reasonable
prospects that another court would come to a different conclusion
than the one to which I
came, this being particularly so given the
facts that I found to be established and given the increased
threshold that applications
for leave to appeal now face.
[11]
The
purpose behind requiring litigants to obtain leave to appeal and not
simply allowing an automatic right of appeal to exist in
every matter
was set out in the matter of
Dexgroup
(Pty) Ltd v Trustco Group International (Pty) Ltd,
[4]
where Wallis JA said that:
‘
T
he
need to obtain leave to appeal is a valuable tool in ensuring that
scarce judicial resources are not spent on appeals that lack
merit.’
[12]
In my view, if leave to appeal were to be granted in this matter, the
appeal would fall
within the classification described by Wallis JA.
[13]
I accordingly make the following order:
The application for leave
to appeal is dismissed with costs.
MOSSOP
J
APPEARANCES
Counsel
for the first and second
: Mr. T. Reddy
applicants
Instructed
by
: Manley Incorporated
179 MacKenzie Street
Brooklyn
Pretoria
Counsel
for the respondent
: Mr. D. Schaup
Instructed
by:
: Cliffe Dekker Hofmeyer Incorporated
8
th
Floor,
Cliffe Dekker Place
11 Buitengracht Street
Cape Town
Date
of Hearing
: 7 March 2023
Date
of Judgment
: 9 March 2023
[1]
Public Protector of South Africa v Speaker of the
National Assembly and Others
(8500/2022)
[2022] ZAWCHC 222
(3 November 2022) para 14.
[2]
Ramakatsa
and Others v African National Congress and Another
[2021]
JOL 49993
(SCA)
para [10]
[3]
MEC for Health, Eastern Cape v Mkhitha and
Another
[2016] ZASCA 176
para 17.
[4]
Dexgroup
(Pty) Ltd v Trustco Group International (Pty) Ltd
2013 (6) SA 520 (SCA) para 24.