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Vresthena (Pty) Ltd v City of Tshwane Metropolitan Municipality and Others (28250/2022) [2022] ZAGPPHC 697 (28 September 2022)

80 Reportability
Administrative Law
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Brief Summary

Leave to appeal — Application for leave to appeal against order compelling restoration of electricity supply — First Respondent contended that appeal had reasonable prospects of success based on constitutional mandate and municipal by-laws — Applicant argued lack of prospects and abuse of process — Court held that there were reasonable prospects that another court might reach a different conclusion, granting leave to appeal and ordering immediate execution of the original order pending the outcome of the appeal.

Comprehensive Summary

Summary of Judgment


1. Introduction


This judgment concerned two related interlocutory applications arising from an earlier urgent order granted in the main proceedings. The first application was an application for leave to appeal brought by the City of Tshwane Metropolitan Municipality (the first respondent in the main application) against the whole of an earlier judgment and order granted on 20 June 2022. The second was an application under section 18(3) of the Superior Courts Act 10 of 2013 brought by Vresthena (Pty) Ltd (the applicant in the main application), seeking enforcement of the 20 June 2022 order pending the outcome of the leave to appeal and any appeal.


The parties in the interlocutory proceedings were Vresthena (Pty) Ltd as the party opposing leave to appeal and as the applicant under section 18(3), and the City of Tshwane Metropolitan Municipality as the applicant for leave to appeal and respondent in the section 18(3) application. Although other respondents were cited in the main matter (including the Body Corporate of Zambezi Retail Park and various property entities), the operative disputes in this judgment concerned the contest between Vresthena and the City of Tshwane in relation to the restoration of electricity supply.


Procedurally, the court had granted urgent relief on 20 June 2022 after certifying the matter as semi-urgent, and it ordered (among other things) that electricity supply be restored to premises within China Mall in Pretoria North, which were leased out to businesses by Vresthena. Reasons for that order were furnished on 1 August 2022. The City filed a detailed notice of application for leave to appeal dated 6 July 2022. The court directed that the leave to appeal application and the section 18(3) application be heard together. The applications were argued on 6 September 2022, and judgment was delivered on 28 September 2022.


The general subject-matter of the dispute was the lawfulness and consequences of a municipal electricity disconnection linked to disputed arrears, including the impact of disconnection on commercial tenants and the extent to which the earlier reconnection order should be suspended or implemented pending appeal.


2. Material Facts


The material factual setting, as treated in this judgment, was that the City of Tshwane had disconnected electricity supply to premises associated with China Mall (Pretoria North), where Vresthena leased out premises to businesses. The urgent proceedings in June 2022 culminated in an order compelling the City to restore electricity supply to those premises.


It was central to the section 18(3) application that Vresthena alleged a continuing dispute about the quantum and enforceability of the arrears claimed by the City, including that a substantial portion of the claimed amount had prescribed and that the City had not reconciled the account in a manner that gave effect to that contention. The judgment recorded that this prescription-and-reconciliation issue had already been argued at the June 2022 hearing and that the June order was framed to cater for it, but that the issue remained unresolved.


On the harm alleged by Vresthena, the judgment accepted as material that, if the position remained unresolved during the period while appellate processes were pending, the economic livelihood of the businesses leasing the premises would remain affected, together with approximately 150 employees.


In opposing the earlier reconnection order (and in seeking leave to appeal), the City relied on its stance that the disconnection fell within its constitutional mandate and by-law framework, and it contended that the applicant had no constitutional right to be provided with electricity. The judgment treated these contentions as part of the dispute underlying the leave to appeal application, rather than as fact disputes requiring resolution on the section 18(3) application.


3. Legal Issues


The court was required to determine two central sets of legal questions.


First, in the leave to appeal application, the primary question was whether leave should be granted under section 17(1)(a) of the Superior Courts Act 10 of 2013, specifically whether the contemplated appeal would have reasonable prospects of success, or whether there was some other compelling reason why it should be heard. This was predominantly a question of law (the applicable statutory threshold) and the application of that legal standard to the case, informed by the court’s view of whether another court would differ.


Second, in the section 18(3) application, the question was whether the applicant had established the statutory requirements for an order that the June 2022 decision operate and be implemented pending the appeal process, namely exceptional circumstances, and irreparable harm to the applicant if the order did not operate, coupled with the absence of irreparable harm to the City if it did. This required an evaluative assessment of the factual consequences during the pendency of appellate proceedings, and thus involved the application of law to fact and a measure of value judgment in weighing harm.


4. Court’s Reasoning


On leave to appeal, the court approached the matter under sections 16 and 17 of the Superior Courts Act 10 of 2013, emphasising that section 17(1) permits leave only where the judge is of the opinion that the appeal would have a reasonable prospect of success (or where another compelling reason exists). The court endorsed the view that, after the enactment of section 17, the test is framed more stringently than under the prior regime, and that the statutory language requires asking whether another court would come to a different decision, not merely whether it could.


In motivating the applicable standard, the court referred to authority indicating that “reasonable prospects of success” presupposes a measure of certainty and requires a dispassionate assessment that an appellate court could reasonably reach a different conclusion, with prospects that are not remote but realistic. The court recorded the City’s grounds in broad terms, including arguments that the June order improperly constrained the City’s constitutional mandate (with reference to sections 152 and 153(a) of the Constitution) and that it failed to give proper weight to municipal by-laws, including the Electricity Supply By-laws and Credit Control by-law, and the contention that reconnection should not have been ordered without payment of arrears.


While acknowledging the applicant’s opposing submission that these issues had been settled in other courts (including higher courts), the court ultimately relied on its assessment of the arguments and its own earlier reasons delivered on 1 August 2022, concluding that there was a reasonable prospect that another court would differ from its decision on the constitutionality and the right-to-electricity questions as framed in the matter. On that basis, leave to appeal was granted to the Supreme Court of Appeal, with costs of the leave application to be costs in the appeal.


On the section 18(3) application, the court began from the statutory default position in section 18(1), namely that the operation and execution of a decision is suspended pending leave to appeal or appeal, unless a court orders otherwise. The court then set out the additional burdens imposed by section 18(3), namely that the party seeking execution must prove both exceptional circumstances and the requisite irreparable harm (that it will suffer irreparable harm absent execution, and that the other party will not suffer irreparable harm if execution is allowed).


The court treated “exceptional circumstances” as incapable of rigid definition, requiring a fact-specific evaluation, and it accepted that prospects of success in the pending appeal remain relevant: if prospects are doubtful, a court would be less inclined to grant relief under section 18(3). The court referred to the approach in Incubeta Holdings (Pty) Ltd and Another v Ellis and Another, emphasising that exceptionality must derive from the litigants’ actual predicament.


Applying these principles, the court accepted that the applicant’s articulation of exceptionality lay in the alleged prescription of a substantial portion of the debt claimed by the City, coupled with the City’s alleged failure to reconcile the account accordingly, and the continued impact of disconnection-related uncertainty on tenants’ businesses and employees. The court evaluated irreparable harm specifically within the period while the appeal remained pending, indicating that harm should be assessed in that temporal frame.


In weighing competing harm, the court reasoned that if the June order were implemented pending appeal, the City would continue to operate “as normal” and would therefore not suffer irreparable harm by virtue of implementation; and even if harm existed, it would not be as significant as the harm faced by the applicant and affected businesses. On a balance of probabilities, the court found that the balance favoured the applicant and that the electricity should be restored immediately, with authorisation for the applicant to reconnect should the City fail to do so.


On costs, the court reasoned that the rules permitted the applicant to bring the section 18(3) application and that it was opposed by the City. Costs were therefore ordered to follow the result in respect of the section 18(3) application, while the costs of the leave to appeal application were reserved as costs in the appeal.


5. Outcome and Relief


The court granted the City of Tshwane leave to appeal the June 2022 judgment to the Supreme Court of Appeal, and ordered that the costs of the leave application would be costs in the appeal.


The court also granted the applicant’s section 18(3) relief, directing that the court’s orders granted on 20 June 2022 would operate and be implemented with immediate effect pending the outcome of the appeal. The court further ordered that the City of Tshwane must pay the applicant’s costs of the section 18(3) application.


Cases Cited


Mont Chevaux Trust v Goosen and 18 Others 2014 JDR 2325 (LCC).


S v Notshokovu 2016 ZASCA 112.


S v Smith 2012 (1) SACR 567 (SCA).


Incubeta Holdings (Pty) Ltd and Another v Ellis and Another 2014 (3) SA 189 (GJ).


Legislation Cited


Constitution of the Republic of South Africa, 1996 (sections 152 and 153(a)).


Superior Courts Act 10 of 2013 (sections 16, 17, 18(1), and 18(3)).


Municipal legislation in the form of the City of Tshwane’s Electricity Supply By-laws and Credit Control by-law (as referenced in the parties’ submissions).


Rules of Court Cited


No rules of court were cited in the judgment.


Held


The court held that the City of Tshwane established that there was a reasonable prospect that another court would reach a different conclusion on appeal, and therefore leave to appeal to the Supreme Court of Appeal had to be granted.


The court further held that, notwithstanding the grant of leave to appeal and the default suspension of operation under section 18(1), the applicant satisfied the requirements of section 18(3) because exceptional circumstances were shown (including the unresolved dispute about prescribed debt and the continuing impact on tenant businesses and employees) and the balance of irreparable harm favoured immediate implementation of the June 2022 reconnection order pending appeal.


LEGAL PRINCIPLES


The judgment applied the principle that leave to appeal under section 17(1) of the Superior Courts Act 10 of 2013 may be granted only when the court forms the opinion that the appeal would have a reasonable prospect of success (or there exists another compelling reason), reflecting a more stringent threshold than under earlier legislation and requiring a realistic, non-remote prospect that another court would come to a different outcome.


The judgment applied the principle that section 18(1) creates a default suspension of operation and execution of a decision pending leave to appeal or appeal, but that section 18(3) permits deviation from that default only where the applicant proves exceptional circumstances and also proves irreparable harm if the order does not operate, coupled with the absence of irreparable harm to the opposing party if it does operate.


The judgment further applied the principle that exceptional circumstances under section 18(3) are fact-specific and must be derived from the litigants’ actual predicament, and that the assessment of irreparable harm is directed to the period while appellate proceedings are pending, with a comparative evaluation of prejudice to each side informing the court’s discretion.

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[2022] ZAGPPHC 697
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Vresthena (Pty) Ltd v City of Tshwane Metropolitan Municipality and Others (28250/2022) [2022] ZAGPPHC 697 (28 September 2022)

IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case
No:
28250/2022
REPORTABLE:
NO
OF
INTEREST TO OTHERS JUDGES: NO
REVISED
28
SEPTEMBER 2022
In
the matter between:
VRESTHENA
(PTY) LTD
Applicant
And
THE
CITY OF TSHWANE METROPOLITAN
First
Respondent
MUNICIPALITY
THE
BODY CORPORATE OF ZAMBEZI RETAIL
Second
Respondent
PARK
ZAMBEZI
RETAIL PARK INVESTMENTS (PTY) LTD
Third
Respondent
THUMOS
PROPERTIES (PTY) LTD
Fourth
Respondent
RJ
PROPERTIES (PTY) LTD
Fifth
Respondent
JUDGMENT
IN APPLICATION FOR LEAVE TO APPEAL AND S 18(3) APPLICATION
NDLOKOVANE
AJ
INTRODUCTION
[1.]
The First Respondent (“the City of Tshwane”) in the main
application applies for leave to appeal to the Supreme
Court of
Appeal, against the whole judgment and order I handed down on urgent
basis on 20 June 2022, after certifying the matter
as semi-urgent and
inter alia
compelling the first respondent, to restore the
electricity supply to the properties leased out to businesses by the
applicant
within China Mall, situated in Pretoria North. The
application for leave to appeal is opposed by the Applicant (in the
main application),
who has also instituted an application in terms of
s 18(3)
of the
Superior Courts Act 10 of 2013
as amended (the Act). I
directed that both these applications be heard on the same time and
parties to file the respective heads
of arguments in both. It is
those two applications that arises for determination.
[2.]
For the sake of convenience, I will refer to the parties as they are
cited in the main judgment. After delivery of the judgment
on 20 June
2022, reasons for the order and judgment were sought and same were
delivered on 1 August 2022, before the First Respondent
could receive
the reasons as sought, they proceeded and filed a detailed notice of
application for leave to appeal which contained
the grounds of
appeal.
[3.]
The First Respondent submitted that the application is based on the
contention that the appeal has reasonable prospects of
success in
terms of the provisions of
section 17(1)(a)
of the Act.
[4.]
The Applicant on the other hand contends that the application for
leave to appeal has no prospects of success and amounts to
an abuse
of court processes.
The
test in an application for leave to appeal
[5.]
Applications for
leave to appeal are governed by
sections 16
and
17
of the Act.
Section 17(1)
of the Act provides:
“
(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.
”
[6.]
With the enactment of
section 17
of the Act, the test has now
obtained statutory force and is to be applied using the word “
would”
in
deciding whether to grant leave. In other words, the test is would
another court come to a different decision. In the unreported

decision of the
Mont
Chevaux Trust v
Goosen
& 18 others
,
[1]
the land claims court held,
albeit
obiter
,
that the wording of the subsection raised the bar for the test that
now has to be applied to any application for leave to appeal.
In
S
v Notshokovu
,
[2]
it was held that an appellant faces a higher and stringent threshold
in terms of the Act comparted to the repealed Supreme Court
Act 59 of
1969.
[7.]
It is noteworthy that the phrase “
reasonable
prospects of success
”
in s 17(1) of the Act presupposes a measure of certainty that the
court of appeal would reach a different outcome. What
the test
reasonable prospects of success postulates is a dispassionate
decision based on the facts and the law that a court of
appeal could
reasonably arrive at a conclusion different to that of the trial
court.
[3]
In order to succeed,
the appellant must convince the court on proper grounds that he has
prospects of success on appeal and that
those prospects are not
remote but have a realistic chance of succeeding.
[4]
[8.]
In the present matter, I would have to determine whether another
court would (my emphasis) come to a different decision.
[9.]
The grounds where upon the appeal is based are set out in the notice
of application for leave to appeal dated 06 July 2022
as 13 aspects
and have been grouped into categories in the heads of arguments of
the applicant. I intend not to repeat same in
this judgement as they
will form part of the record. Instead, I will summarise them and
their respective responses as follows:
9.1
That I erred in disallowing the first respondent to fulfil the
constitutional mandate as envisioned in section 152 and 153(a)
of the
Constitution of the RSA. Also, in ordering the reconnection of the
electricity without ordering any payment of the arrears,
I erred and
did not pay cognisance of the provisions of the Electricity Supply
By-laws and the Credit Control by-law of the first
respondent, being
the City of Tshwane. Therefore, the disconnection was within the
constitutional framework, so the City of Tshwane’s
submissions
goes. To the extent that the applicant has no constitional right to
be provided with electricity.
9.2
In contrast, the applicant contends that
the
interpretation of the relevant legislation, the municipalities duties
and residents’ rights have been settled by numerous
courts,
including a Full Bench, Supreme Court of Appeal and the
Constitutional Court. There is no reason, nor has any been provided,

by the first respondent why an appeal court needs to entertain these
issues again. The first respondent has not advanced any grounds
in
its leave to appeal in support of the existence of compelling reasons
why the appeal should be heard by another Court in terms
of
section
17(1)(a)(ii)
of the
Superior Courts Act, so
does the applicant’s
submissions and contentions goes as captured in their heads of
arguments.
[10.]
Adv N Erasmus as the record will reveal, made several submissions in
relation to whether or not leave to appeal be granted
to the SCA as
there exist reasonable prospects that the SCA would come to a
different conclusion, in the alternative, that the
present matter is
of sufficient public importance, which raises novel issues worthy of
attention of the SCA.
[11.]
Having considered the arguments presented by the parties and the
reasons captured in my judgement handed down on the 01 August
2022
which forms part of this record in respect of the constitutionality
and the right to electricity, I am of the view that there
is a
reasonable prospect that another court would differ with me.
Consequently, leave to appeal ought to be granted to the Supreme

Court of Appeal and the costs of the application for leave to appeal,
be costs in the appeal.
[12.]
That brings me to the application in terms of
s 18(3).
The
execution of the reinstatement order
[13.]
Section 18(1) of the Act provides that the execution of a decision
which is the subject of an application for leave to appeal,
is
suspended pending the decision of that application or the appeal,
unless the court under exceptional circumstances orders otherwise.
In
terms of s 18(3), the party who applies for execution of the decision
must in addition prove that it will suffer irreparable
harm if the
court does not make an execution order, and that the other party will
not suffer irreparable harm if it does. An applicant
must therefore
prove both exceptional circumstances and the requisites of
irreparable harm.
[14.]
It is impossible to lay down precise rules as to what constitutes
exceptional circumstances. Each case must be decided on
its own
facts. The prospect of success in the pending appeal is a relevant
consideration and if it is doubtful, a court deciding
an application
under s 18(3) would be less inclined to grant it.
[15.]
In
Incubeta
Holdings (Pty) Ltd and Another v Ellis and Another
,
[5]
Sutherland J had the following to say about exceptional
circumstances:
“
Necessarily
in my view exceptionality must be fact-specific. The circumstances
which are or may be ‘exceptional’ must
be derived from
the actual predicaments in which the given litigants find
themselves.
”
[16.]
It is noteworthy that in the present case what the Applicant sought
to articulate as exceptional is that a substantial amount
of amount
the City of Tshwane claims to be owed has since prescribed, and the
latter would not reconcile its account to give effect
to this amount
and instead seeks payment for the entire debt from the applicant.
This issue was also argued before me on the 20
June 2022, the order I
granted catered for this, despite that, the issue remain unresolved.
To the extent that, if the status
quo
remains unresolved the
economic livelihood of the businesses leasing the properties as
tenants together with about 150of its employees
remains affected.
[17.]
In my view the irreparable harm (if any) to be suffered by the
parties should be viewed in the light of the period when the
appeal
is still pending and not at any period after that. However, should
the order be put into operation, the First Respondent
would continue
to operate as normal and therefore would not suffer any irreparable
harm by virtue of the operation of the order
and will find stability
while the appeal is pending. Even if I am wrong on that, the harm
that it will suffer, will not be as that
suffered by the applicant.
[18.]
In the circumstances after considering the papers and hearing of all
addresses and submissions by parties, I am of the view
that the
balance of probabilities favours the Applicant in the circumstances,
that the order that should be granted is that, the
electricity to the
premises should be restored immediately failing which that the
applicant be authorised to reconnect same, again.
Costs
[19.]
That then brings me to the aspect of costs. The rules make provision
for the Applicant to bring such an application, he has
done so. The
First Respondent did oppose the application, consequently the costs
ought to follow the result.
[20.]
Consequently, the following orders will issue:
(a)
The First Respondent is granted leave to appeal the judgment
delivered on 20 June 2022 to the Supreme
Court of Appeal.
(b)
The costs of the application for leave to appeal will form part of
the costs in the appeal.
(c)
It is hereby ordered and directed that in terms of the provisions of
s 18(3) of the Superior Court Act
10 of 2013 as amended, this court’s
orders granted on 20 June 2022, shall operate and be implemented with
immediate effect
pending the outcome of the appeal instituted by the
First Respondent.
(d)
The First Respondent shall pay the Applicant’s costs of the s
18(3) application.
N
NDLOKOVANE AJ
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
Delivered:
this judgment was prepared and authored by the judge whose name is
reflected and is handed down electronically and by
circulation to the
parties/their legal representatives by email and by uploading it to
the electronic file of this matter on Caselines.
The date for handing
down is deemed to be 28 September 2022.
APPEARANCES:
FOR
THE APPLICANT:                                                 ADV.

M LOUW
FOR
THE FIRST RESPONDENT:                                 ADV.

N ERASMUS
DATE
HEARD:                                                              06

SEPTEMBER 2022
DATE
DELIVERED:                                                      28

SEPTEMBER 2022.
[1]
2014
JDR 2325 (LCC) para 6.
[2]
[2016]
ZASCA 112
para
7.
[3]
S v Smith
2012 (1) SACR 567
, 570 para 7.
[4]
Supra.
[5]
2014 (3) SA 189
(GJ) para 22.

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