REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
Case Number: A10 / 2024
In the matter between
ONAGHAN INVESTMENTS NO .15 (PTY) LTD Appellant
(Applicanta quo)
and
ADVOCATE M.S. BANDERKER Respondent
(Respondent a quo)
Coram: Wille et Thulare, JJ
(Determined on the papers by agreement)
Delivered: 27 March 2024
JUDGMENT
THE COURT:
Introduction
[1] This is an appeal from the lower court at the instance of the applicant a quo.
We will refer to the parties as they were cited in the lower court. This is for clarity
and a better understanding of why the relief was not granted in the lower court to
benefit the applicant.1
1 The lower court refused a judgment regarding an “Unconditional Undertaking to Pay Including a Consent to Judgment”.
2
[2] The court of first instance initially made the document styled an ‘Unconditional
Undertaking to Pay Including a Consent to Judgment’ a court order. We say so
correctly. This is not disputed. This document was undoubtedly an undertaking by
the respondent to comply with his lease payment obligations with the applicant
regarding the offices from which he conducted his business.2
[3] The respondent then needed to comply with the terms and conditions of his
undertaking. This he did not do. After that, t he applicant piloted an application for a
judgment to be recorded against the respondent regarding the court rules applicable
in the lower courts.3
[4] The judicial officer in the court of first instance dismissed the judgment
application because he held the view that he lacked the necessary jurisdiction to
grant a judgment against the respondent. He believed that the undertaking , as
styled, was not a settlement agreement, and thus, he could not enter a judgment on
the undertaking in favour of the applicant against the respondent.4
[5] This appeal turns on a very narrow issue. This issue is whether the judicial
officer in the lower court erred by not granting judgment to the applicant's benefit by
failing to apply the correct principles of interpretation. More specifically, the issue is
whether the judicial officer had adequate regard for the ordinary wording of the rules
and the proper context of the se rules. This bears in mind that the undertaking had
already been made a court order by the court. The context is that another judicial
officer had made the undertaking an order of the court , and thus, the issue of
settlement was no longer a live issue when a request was made for the entry of a
judgment.5
Factual context
[6] More than two years ago, the applicant instituted action against the respondent
for arrear rental regarding his business premises. The respondent defended the
action. The respondent failed to file his plea timeously , and the requisite procedural
2 The chambers of the respondent. “Chamber 514, Fifth Floor, Huguenot Chambers, 40 Victoria Street, Cape Town”.
3 An application was made following the provisions of rule 27(9) (“the Rule 27(9) Application”).
4 The judicial officer was of the view that the undertaking did not comply with the wording set out in rule 29(9).
5 The undertaking had already been made an order of court by a different judicial officer.
3
notice was served to his attorneys. Still, no plea was filed, and the respondent was
ipso facto procedurally barred from filing his plea following the court rules.6
[7] The respondent then elected to settle his dispute with the applicant. He signed
an undertaking which provided, among other things as follows: [sic]
‘…The provisions of this agreement can be made an Order of Court by way of
Application in terms of the provisions of Rule 27 of the Magistrate Court Rules , and
to this end, I waive notice and service of any such application. I further acknowledge
and understand that in the event of any breach of this agreement , the Landlord shall
be entitled to levy execution in accordance with the notice of this agreement as an
order of court …’7
[8] After the conclusion of this agreement and written undertaking, the app licant
brought an application to record the undertaking as an order of the court. This was
successful, and the court recorded the undertaking as an order of the court.8
[9] The respondent should have made payment in terms of the undertaking but did
not do so. T he applicant accordingly chartered an application for judgment against
the respondent. The respondent opposed this application and delivered an affidavit
opposing the judgment application , and after that, the applicant filed a reply. The
respondent requested a postponement on the day of the judgment hearing to furnish
an undertaking to pay R300,000.00 to the applicant . This payment was subject to
the transfer of an immovable property . The appellant obliged the respondent’s
request for this indulgence because the app licant was placed in possession of a
letter from a firm of legal practitioners who purported to furnish a guarantee for
payment of R300,000.00 to the applicant against transferring a specific immovable
property. This sum was a surplus amount earmarked for the applicant. This
payment was not made, and eventually, after more than two months, the respondent
only paid R50,000.00 as a partial payment towards his agreed indebtedness to the
applicant.9
Consideration
6 The then respondent’s attorneys of record then withdrew as his attorneys of record.
7 Of significance were the provisions of clause 2.9 which are referenced above.
8 Magistrate Khan made the undertaking an order of court under rule 27(6) on 23 March 2021.
9 This payment was made on 31 May 2023.
4
[10] The e ntitlement to judgment following the rules contemplates two essential
requirements: (a) there must be an extant order providing for the debtor to fulfil an
obligation, and (b) the debtor must have breached that obligation. The applicant
contends it squarely met both requirements.10
[11] It was not disputed that the respondent breached the terms of th e extant order
by failing to pay his rental obligations that fell due. The only possible avenue of
escape for the respondent was his somewhat belated argument about the applicant's
misrepresentation as to the extent of the respondent’s indebtedness. Significantly,
the respondent did not squarely dispute his indebtedness.11
[12] The appellant re -enrolled the judgment application for hearing because the
respondent failed to make full payment or furnish any details about the alleged
property transfer. The judicial officer dismissed the application for judgment, and the
respondent remains in occupation of the leased business premises.12
[13] The applicable rules that bear scrutiny are indicated as follows:
‘…(6) - (a)…before judgment to record the terms of any settlement agreed to by the
parties to a proceeding without entry of judgment ….if the terms of settlement so
provide, the court may make such settlement an order of court…’
‘…(9) - (a)…terms of a settlement agreement which was recorded in terms of subrule
(6) provide for the future fulfilment by any party of stated conditions and such
conditions have not been complied with by the party concerned, the other party may
at any time on notice to all interested parties apply for the entry of judgment in terms
of the settlement…’13
[14] For this interpretative process, w e are enjoined to begin by employing the
principles applicable to the general interpretation of rules and the words that make
up the se rules. It is now well -established that the process of interpretation is not
simply objective but is a unitary process in which one must take account of both
textual and extra-textual aspects.14
10 An order of the court was in place and the respondent was in breach of the terms of the existing order.
11 This argument is complex to understand as the respondent is an experienced legal practitioner.
12 This occupation is in the absence of the agreed rental payments.
13 The portions of rule 27(6) and rule 27(9) of the rules regulating the conduct of proceedings in the Magistrates’ Courts.
14 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA), at para 18.
5
[15] The respondent did not dispute that his undertaking could be made an order of
the court. His contentions were limited to the averment that he was allegedly misled
as to the extent of his indebtedness. Thus, the refusal to grant a judgment
notwithstanding the extant court order (and the undisputed breach thereof) was an
issue that did not arise on the merits of what was required to be adjudicated before
the judicial officer in the lower court.15
[16] Put another way, parties to a dispute must define the issues in their pleadings ,
and the court must adjudicate those issues in dispute. The judicial officer in the
lower court raised an irrelevant issue because it was common cause that the
undertaking had already been made an order of the court. The adjudication differed
from whether the undertaking constituted a settlement agreement, as the order
application had already definitively determined this issue.16
[17] The only alive issue of any merit before the judicial officer in the lower court
judgment application was whether the respondent had breached the terms of the
undertaking (which was made an order of the court), thus entitling the app licant to
judgment. In our view, the court of first instance materially misdirected itself by
traversing an issue that needed to be raised in the pleadings and relevant to the
issue before the judicial officer for the adjudication of the judgment application.17
[18] The contextual wording must also inform us regarding interpreting the relevant
rules for withdrawal, dismissal, and settlement of matters in the lower courts. The
rule does not refer to a settlement agreement. By contrast, it refers to recording the
terms of any settlement that a court may issue through an order. The significance of
this is that the focus is on the terms of the document in question . After all, it is only
after considering the terms of the agreement reached between the parties that a
judicial officer can determine whether a matter has been settled. The sty le and
formulation of the agreement are less critical. More important are the terms of the
agreement. What carries weight is whether there are terms agreed to between the
15 Fischer and Another v Ramahlele and Others 2014 (4) SA 614 (SCA) paras [13] to [15}
16 Molusi v Voges NO and Others 2016 (3) SA 370 at [28].
17 Minister of Defence and Military Veterans and Another v Kume and others 2024 JDR 0457 (GP).
6
parties that bring about the settlement of the disputes between the parties with
sufficient clarity.18
[19] The essential features of the undertaking undoubtedly recorded that the parties
demonstrated a willingness to be flexible and compromise on specific aspects of
their original agreement. Put another way, they each addressed their underlying
concerns, which led to the dispute in the first place , and they found a middle ground
and accommodated each other's needs.19
[20] Significantly, in this case, the agreement struck explicitly provided that it may
be made an order of court . Moreover, the undertaking compromised the applicant’s
underlying action, rendering it res judicata . It matters less what the agreement's
heading was as the lower court was enjoined to consider the substance of the
settlement agreement.20
[21] Issue estoppel applies where an issue of fact or law is essential to a prior final
judgment. Our courts have recogni zed that a strict application of issue estoppel
could result in unfairness in some unusual circumstances . However, this is typically
applied in cases where the nature of the issue is in dispute or at least open to some
doubt. The nature of the issue was never in any doubt in this case. The court a quo
itself could raise no issue with the undertaking. After all, the undertaking was made
an order of the court . Some very recent jurisprudence has fortified our views on this
connection.21
[22] Issue estoppel developed precisely because requiring sameness between the
two causes of action allows parties to re -litigate the same issue by garbing these up
in different causes of action. The authority not to apply issue estoppel for reasons of
justice and equity must be evaluated regarding the Henderson principle. This
principle provides that when a given matter becomes a subject of litigation , the
following basic principles find application, namely:22
‘…the court requires the parties to that litigation to bring forward their whole
case, and will not (except under special circumstances) permit the same parties
18 One of the crucial issues would be if the parties have agreed to a compromise.
19 The parties also preserved their relationship going forward.
20 The court must determine whether the parties have, in substance, settled the dispute between them.
21 Standard Bank of South Africa Limited v Swartz and Others (Case no 1175 /2022) [2024] ZASCA 28 (22 March 2024)
22 Henderson v Henderson (1843) 3 Hare 100 at 114-115, [1843-1860] All ER Rep 378 at 381-2.
7
to open the same subject of litigation in respect of a matter which might have
been brought forward as part of the subject in the contest, but which was not
brought forward, only because they have, from negligence, inadvertence, or
even accident, omitted part of their case…’
[23] This doctrine has been fully assimilated into our law. By entering into the
undertaking and allowing it to have an order made by the court , the respondent
euthanized his case in connection with the issue of his challenge to the terms of the
undertaking.23
[24] The focus of emphasizing substance over form in a legal argument is
prioritizing a case's essential elements and underlying principles rather than getting
caught up in technicalities or procedural requirements. It involves giving more
weight to the argument's substance, merits, and fairness rather than strictly adhering
to formalities or superficial aspects of the law. Emphasizing substance over form
aims to achieve a just and equitable outcome. It recognizes that the purpose of the
law is to serve justice and protect the rights of individuals rather than becoming
overly rigid and procedural.24
[25] This approach allows for a more comprehensive analysis of a legal dispute's
facts, principles, and consequences, ultimately leading to a more fair and equitable
resolution. In our view, there existed a dearth of evidence supporting the
respondent’s argument that he did not compromise and settle his dispute with the
applicant in the form of the undertaking.25
Costs
[26] This species of judgment application remedy is to simplify matters if the
required conditions are met. The costs must follow the outcome because the
respondent had no shields against the judgment application. What remains is the
scale of the costs to be levied against the respondent. It must be so that the
applicant can no longer rely on the terms of the lease agreement, which contained
an attorney and client scale of costs provision. This is so because the initial cause of
action has now fallen away and been overtaken by the agreed terms and conditions
23 This must be so also for the issue of the finality of the extant litigation.
24 The fact that the words ‘settlement’ agreement were omitted from the undertaking was completely irrelevant.
25 The terms of the agreed undertaking were clear and unambiguous.
8
set out in the undertaking. However, the undertaking signed by the respondent
specifically recorded an agreed provision that should the respondent breach the
terms of the undertaking, he would be liable for the costs on the attorney and client
scale.26
Order
[27] We are not persuaded that the undertaking provides for the immediate eviction
of the respondent and an automatic rent interdict on the papers as they present.
Instead, it records a right afforded to the applicant to obtain vacant possession of the
premises. The undertaking does not reference an automatic rent interdict. For all
these reasons, the appeal is upheld, and the order in the lower court is set aside and
replaced with the following order.
1. The application in terms of Rule 27(9) is granted.
2. Judgment is granted in favour of the applicant against the
respondent for payment as follows:
2.1 R101 051.80 being the balance due in respect of
arrear rental as of February 2021; and
2.2 R275 404.79 for rentals between March 2021 until
and including January 2023.
3. Payment of interest on the total outstanding amounts
referred to above is calculated at 1% above the prime rate
of Investec Bank Limited from time to time, calculated
from 1 December 2022 until the date of final payment,
both days inclusive.
4. Cancellation of the lease agreement between the parties
is confirmed.
5. The respondent will pay the costs of this application,
including counsel costs , on the scale between the
attorney and client, as taxed or agreed.
26 Clause 2.6 of the undertaking.
9
WILLE, J
I agree:
THULARE, J