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[2021] ZAGPJHC 122
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Orthotouch (Pty) Ltd v Delta Property Fund Limited (42987/2019) [2021] ZAGPJHC 122 (19 July 2021)
IN THE HIGH
COURT OF SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
DELETE
WHICHEVER IS NOT APPLICABLE
(1)
REPORTABLE: YES / NO
(2)
OF INTEREST TO OTHER JUDGES: YES / NO
(3)
REVISED
DATE
SIGNATURE
Case
no: 42987/2019
In the matter
between: -
ORTHOTOUCH
(PTY) LTD
Applicant
And
DELTA
PROPERTY FUND LIMITED
Respondent
JUDGMENT
N.E
NKOSI (AJ):
INTRODUCTION
[1]
The
applicant seeks leave to appeal against the whole judgment and order
of this Court handed down on the 19
th
of April 2021. The application is in terms of section 17 (1)(a)(i) of
the Superior Courts Act.
[2]
There
are three grounds
[1]
of appeal
raised by the applicant. These are stated under the following
headings:
(i)
the
finding pertaining to the period of delay, and the explanation
thereof;
(ii)
the
test pertaining to prospects of success; and
(iii)
the
evaluation of prejudice allegedly suffered by the respondent.
[3] The
respondent is disputing the merits of this application and in
addition has introduced two grounds
challenging the application.
These grounds concern the doctrine of peremption and the mootness of
the appeal.
[4] In
light of the number of issues raised by the respondent in its
opposition of the application
for leave to appeal and by consent, the
respondent undertook the duty to begin and argue against the
application.
LEGAL PRINCIPLE
[5] The
test for granting leave to appeal is stated in section 17 (1)(a)(i)
of the Superior Courts
Act
[2]
as
follows:
“
17
(1) Leave to appeal may only be given where a judge or judges
concerned are of the opinion that –
(a)(i)
the appeal would have a reasonable prospect of success”
.
[6] The
effect of section 17 (1) was explained in the decision of
The
Mont Chevaux Trust (IT2012/28) v Tina Goosen and 18 Others
[3]
case, where Bertelsmann J said:
“
It
is clear that the threshold for granting leave to appeal against a
judgment of a High Court has been raised in the new Act. The
former
test whether leave to appeal should be granted was a reasonable
prospect that another court might come to a different conclusion,
see
Van Heerden v Cronwright and Others
1985 (2) SA 342
(T) at 343H. The
use of the word “would” in the new statute indicates a
measure of certainty that another court will
differ from the court
whose judgment is sought to be appealed against
[4]
”.
[7] The
phrase “reasonable prospects” was considered in
Smith
v S
[5]
and Plasket AJA held that:
“
What
the test of 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 a trial court. In order to succeed, therefore, the
appellant must
convince this 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. More is required to be established
than that there is a mere possibility of success,
that the case is
arguable on appeal or that the case cannot be categorised as
hopeless. There must, in other words, be a sound,
rational basis for
the conclusion that there are prospects of success on appeal
”.
[8] In
its application for leave to appeal, and in particular in its
conclusion, the applicant submits
that:
“
Based
on the above grounds, the applicant submits that an appeal would have
reasonable prospects of success, and there is a reasonable
prospect
that another court
may
(my emphasis) uphold the appeal and grant an order in the following
terms:
“
(1) The
bar, imposed on the applicant through the notice of bar served on 27
August 2020, is uplifted.
(2)
The
applicant’s delivery of its notice of intention to amend on 4
September 2020 is condoned.
(3)
The
respondent shall pay the costs of this application
[6]
”.
[9] This
submission does not meet the test laid by section 17 (1) of the
Superior Courts Act. This fact was
brought to the attention of
applicant’s Counsel, who conceded and explained that it was not
what the applicant intended to
mention in its papers since the
applicable test is well established and known. That being said, the
notice of application for leave
to appeal remained unamended.
[10] This
application emanates from the Court’s refusal to uplift the
bar. Rule 27(1)
[7]
regulates the
procedure of uplifting a bar and provides that:
“
27(1)
In the absence of
agreement between the parties, the court may upon application on
notice and on good cause shown, make an order
extending or abridging
any time prescribed by these Rules or by an order of court or fixed
by order extending or abridging any
time for doing any act or taking
any step-in connection with any proceedings of any nature whatsoever
upon such terms as to it
seems meet
”.
[11]
In
Standard
General Insurance CO Ltd v Eversafe Pty Ltd
[8]
the court said:
“
It
is well-established that an applicant for any relief in terms of Rule
27 has the burden of actually proving, as opposed to merely
alleging,
the good cause that is stated in Rule
27
(1) as a jurisdictional prerequisite to the exercise of the court’s
discretion. Silver v Ozen Wholesalers (Pty)Ltd
1954 (2) SA 345
(A) at
352G. The applicant for any such relief must, at least, furnish an
explanation of his default sufficiently full to enable
the Court to
understand how it really came about and to assess his conduct and
motives (Sibler v Ozen Wholesalers (supra at 353A)).
Where there has
been a long delay, the court should require the party in default to
satisfy the Court that the relief sought should
be granted. Gool v
Policansky
1939 CPD 386
at 390. This is, in my view, particularly so
when the applicant for the relief is dominis litis plaintiff
”
.
[12] The
Court has a discretion to condone any non-compliance with the Rules.
In order for the applicant to succeed
with its application, it must
show good cause why the bar should be uplifted and condonation should
be granted for its failure
to deliver its notice to amend its
particulars of claim in time. In
Nedcor
Investment Bank Ltd v Visser NO
[9]
,
Patel AJ (as he then was) said:
“
Rule
27(3) requires “good cause” to be shown by the plaintiff.
This gives the Court wide discretion. C Du Plooy v Anwes
Motors
(Edms) Bpk
1983 (4) SA 212
(0) at 216H – 217A). The
requirements are, first, that the plaintiff should at least tender an
explanation for its default
to enable the Court to understand how it
occurred. (Silber v Ozen Wholesalers (Pty)Ltd
1954 (2) SA 345
at
353A. Secondly, it is for the plaintiff to satisfy the Court that its
explanation is bona fide and not patently unfounded
”.
GROUND
OF APPEAL
The finding
pertaining to the period of delay, and the explanation thereof
[13] The
applicant’s notice of intention to amend was due on 3 September
2020 but was only delivered on 4
September 2020. The applicant missed
the bar deadline by approximately a day. The applicant submits that
the Court should confine
itself to this one-day lateness when
deciding whether to uplift the bar. In my judgment which I handed
down on 19 April 2021, I
indicated that the period of delay before
and after the bar must be explained by the applicant. I hold this
view because in the
history of this matter, the applicant failed on
several occasions to comply with the time limits, set by the Rules,
by itself and
by the court order. The explanation furnished by the
applicant is limited to the one-day lateness only.
[14] The
material periods of delay to be explained by the applicant are the
period before the bar, during the bar
and after the bar. The
applicant explained that the reason it failed to meet the deadline
set by the notice of bar was load shedding.
This explanation only
accounts for the events of the day before the expiry of the bar and
the one day after the applicant is effectively
bared from delivering
its notice to amend. It is common cause that the applicant received a
schedule for load shedding, warning
of possible electricity outage
during the period of the bar. There is no indication that some
precautionary measures were taken
to avoid any foreseen
inconveniences likely to be occasioned by electricity supply
interruptions. The period before the notice
of bar and some periods
during the bar were not explained. In my view the delay was
inadequately explained and consequently I remain
not inclined to
uplift the bar.
[15] Mr
Iles, appearing for the respondent, brought to my attention, a recent
decision of the Supreme Court of
Appeal in
Ingosstrakh
v Global Aviation Investments (Pty) Ltd and Others
[10]
which was handed down on 4 June 2021, about a month and a half after
I delivered my judgment and a few days before this appeal
was heard.
In that case, Makgoka JA held that:
“
With
regard to the explanation for the default, there are two periods of
default which Ingosstrakh must explain for its failure
to deliver a
plea. The first is before the notice of bar was served on it, and the
second relates to the period after the bar was
served. This is
because the notice of bar was served as a consequence of
Ingosstrakh’s failure to file its plea. With regard
to the
former, Igosstrakh served its notice of intention to defend the
action on 30 September 2015. It therefore had up to 28 October
2015
to file its plea. There is simply no explanation whatsoever why a
plea was not filed during the period
”.
[16] As
it was in the
Ingosstrakh
decision, the applicant herein, in
order to succeed, needed to give an explanation accounting for the
period of delay before and
after the bar was served. The period after
the bar would include the period when the applicant is under bar and
when it is effectively
barred in order for the Court to consider the
request for the upliftment of the bar and condone the late filing of
the notice to
amend. The explanation given did not cover the full
period of delay and was inadequate.
PROSPECTS OF
SUCCESS
[17] In
my judgment I made the following finding -
“
In
the circumstances of this case, I am not persuaded by the magnitude
of the claim to find in applicant’s favour regarding
the
prospects of success. Instead, the effect of a poorly explained delay
impacts negatively on the prospects of success of the
action
”.
[18] Mr
Bekker, arguing for the applicant, submitted that the Court should
have made such finding having regard
to the applicant’s claim
contained in its notice of intention to amend its particulars of
claim. I do not agree with Mr Bekker’s
submission. The
applicant was before court applying for the upliftment of the bar and
condonation of the late delivery of the notice
to amend. Its failure
to meet the test in Rule 27(1) indeed affects the prospects of
success of its action because it has failed
to break through the
hurdle set by Rule 27 (1).
[19] In
relation to the prospects of success of the appeal referred to in
Section 17 (1), In
Van
Wyk v Unitas Hospital and Another
[11]
the court said:
“
Prospects
of success pale into insignificance where, as here, there is
inordinate delay coupled with the absence of a reasonable
explanation
for the delay”.
[20] In
light of the inordinate and poorly explained delay as well as the
fact that the applicant failed to satisfy
the test in Rule 27(1), I
remain not persuaded as I was, that the upliftment of the bar would
enable the applicant to deal diligently
with the deficiencies in its
action and propel the matter to finality.
THE EVALUATION OF
PREJUDICE
[21] The
respondent filed an answering affidavit in response to the
applicant’s application for the upliftment
of the bar and
condonation. Mr Ndlovu, the deponent, states at paragraph 5
[12]
“
I
point out, at the outset, that the respondent suffers prejudice
whilst this litigation persists. Whilst I do not have personal
knowledge of the prejudice which the respondent suffers by virtue of
delay. I rely on Marelise de Lange’s advices to me in
this
regard, who is a current director of the respondent whose
confirmatory affidavit is attached hereto with regards to the
prejudice
aspect referred to herein below”.
Ms
De Lange filed a confirmatory affidavit
[13]
.
Firstly, the prejudice refers to the delay and secondly, to the
respondent’s share price. Objectively, there is no doubt
that
the respondent suffers prejudice as a result of the applicant’s
failure to honour the time frames set by the Rules,
court order and
by itself.
[22] Concerning
the respondent’s share price, I was referred to the
respondent’s integrated annual
report for 2020, wherein a
contingency liability anticipated from the applicant’s claim
was disclosed to the shareholders.
The contingency liability is a
substantial amount which normally would cause volatility in the value
of a share which could be
good for investors and bad for other
investors.
[23] In
denying the existence of prejudice the applicant states in paragraph
6 and 7 of its replying affidavit
that:
“
6. It
is evident that the basis upon which the respondent alleges
prejudice, and based on which the respondent
seeks the dismissal of
the condonation application, is the fact that the respondent is a
public company and that as a result of
the action, there is
litigation pending against the respondent.
7. Self-evidently
this does not constitute actual prejudice, and it most definitely
does not constitute
prejudice as would justify the dismissal of the
condonation application, or the striking out of the applicant’s
claim
.”
[14]
[24] The
applicant’s submissions fail to acknowledge that the prejudice
claimed by the respondent is as a
result of the delay caused by the
applicant in finalising the mater and that the ongoing litigation has
affected the share price.
The prejudice is not based merely on the
fact that the respondent is a public company.
[25] The
parties respectively referred to media articles in support or denial
of the existence of prejudice. What
is abundantly clear from the
article referred to by the respondent, is the fact that it is alleged
that the respondent owes the
applicant an amount of R165 million
whereas the applicant is in the process of business rescue. My
conclusion that “
the
possibility that the share price may have gone down in December 2019
as a result of litigation and to the prejudice of the respondent
can’t be ruled out
”
[15]
is not speculative but based on the fact that the applicant caused
delay in its litigation and the shareholders were aware of the
litigation. The prejudice was not artificial. It manifests itself
through applicant’s various failures to adhere to the time
limits and failure to show good cause for the delay.
PEREMPTION OF
APPEAL
[26] I
now turn to deal with the respondent’s two grounds challenging
this application and shall deal with
both simultaneously.
[27] A
party acquiescence in a judgment when its conduct after judgment is
delivered, is inconsistent with the
intention to appeal. The onus of
proof rests on the party alleging acquiescence and in doubtful cases
it must be held not to be
proven. Although peremption has its origin
in policy considerations similar to those of waiver and estoppel, the
question of acquiescence
does not involve an enquiry into the subject
of state of mind of the person alleged to have acquiescence in the
judgment. Rather
it involves a consideration of the objective conduct
of such person and the conclusion to be drawn therefrom
[16]
.
[28] The
applicant’s application to uplift the bar was dismissed when
the judgment was handed down on 19
April 2021. At that stage, the
course available to the applicant was to seek leave of the Court to
appeal the Court’s decision,
if it intended to challenge the
Court’s decision. Instead, on 22 April 2021, the applicant
issued and served a new action
identical to its proposed intention to
amend which is the subject matter of this appeal.
[29] The
message communicated by the applicant when issuing and serving the
new action is objectively clear. It simply
means that the applicant
has waived its right to appeal, it is not what the applicant intended
to do but what objectively is communicated.
[30] The
application for leave to appeal was filed seven days after the new
action was instituted. Even then it
was not clear what the applicant
intended to do. It was only the applicant who had the subjective
knowledge of the course it intends
to follow. The applicant’s
intention was made known only on 12 May 2021, after the respondent
had warned the applicant
that the right to appeal had been waived.
The new action has not been withdrawn whilst on the other hand the
applicant pursues
the appeal.
[31] In
making its intention known, the applicant replied to the respondent’s
letter and in essence argued
that if the appeal is successful, a
portion of its claim would be saved from prescription and therefore
to protect its interest,
it is pursuing both the appeal and the
action. This submission would have carried weight if the applicant
had prior to the institution
of the new action advised the respondent
and made its intention clear that the new action was purely for
convenience in the event
that the appeal fails. In that instance the
intention of the applicant would have been clear and the subsequent
course adopted
by the applicant would have been understood
objectively to mean a non- waiver of its right to pursue the appeal.
[32] Counsel
for the applicant referred to me the decision in
Road
Accident Fund v Hansa
[17]
where Nienaber JA dismissed the respondents peremption argument. At
paragraph 25 of the judgment, he said:
“
In
its answering affidavit the RAF explained that it followed that
procedure at the time ‘as a precautionary measure’
should
its current appeal prove to be unsuccessful. Far from an unequivocal
election not to proceed with its appeal (Natal Ruby
Union v Gould
[1998] ZASCA 62
;
1999 (1) SA 432
(SCA) at 443E – G), it exemplified a
determination to persist in it. In this Court counsel for the
plaintiff readily conceded
that he could not usefully pursue the
point and no more need be said about it”.
In
that case the Road Accident Fund clearly demonstrated its intention
to challenge the Courts decision and objectively pursued
its
intention, unlike in the present case, where the applicant opted for
a procedure inconsistent with the intention to prosecute
the
application for leave to appeal.
[33] In
its letter dated 6 May 2021, the respondent proposed to the applicant
to withdraw either the application
for leave to appeal or the new
action, failing which, it would argue that the applicant had waived
its right to appeal. It further
suggested to the applicant that
insofar as the applicant is unwilling to withdraw either the appeal
or the new action, the filing
of subsequent pleadings in the new
action be suspended. In reply to the proposal the applicant, in its
letter dated 12 May 2021,
agreed to the stay of further pleadings
pending the outcome of the application for leave to appeal.
[34] I
agree with the respondent’s contention that the applicant’s
actions are inconsistent with a
party that is dissatisfied with the
judgment and intends to appeal. This therefore means that the
application for leave to appeal
is moot, particularly, in the
circumstances of this case where a new action has been instituted
before an appeal has been launched.
In terms of
section 16(2)(a)
of
the
Superior Courts Act 10 of 2013
this application should be
dismissed because it would have no practical effect or result.
CONCLUSION
[35] It
is my considered view that the appeal has no reasonable prospects of
success and should be dismissed. In
the circumstances, I make the
following order:
1.
The
application for leave to appeal is dismissed with costs, including
the costs occasioned by the employment of two Counsel.
NE
NKOSI, AJ
Acting
judge of the
High
Court
Date of
hearing
: 23 June 2021
Date
of Judgement : 19
July 2021
For
the applicants
: A Bester (SC);
M
Mostert
Instructed
by
: Kyriacou Incorporated
For the
Respondent : KD ILES
(SC)
A
Saldulker
Instructed
by
: Bowmans
Gilfillan Inc
[1]
Caselines 012 – 2.
[2]
Superior Courts Act No. 10 of 2013
.
[3]
The Mont Chevaux Trust (IT2012/28) v Tina Goosen
and 18 others (LCC14R/2014) at para 6.
[4]
The Mont Chevaux Trust (supra) at para 6.
[5]
Smith v S (475/10)
[2011] ZASCA 15
;
2012 (1) SACR
567
(SCA) (15 March 2011) at para 7.
[6]
Caselines 012 – 7 at para 11 “conclusion”.
[7]
Uniform Rules of Court Rules regarding the
conduct of the proceedings of the several provincial & local
divisions of the High
Court of South Africa.
[8]
Standard
General Insurance Co Ltd v Eversafe (Pty) Ltd
2002 (3) SA 87
(w) at 93. See also Sanford v Haley NO
2004 (3) SA 296
(c) at 302.
[9]
Nedcor Investment Bank Ltd v Visser NO
2002 (4) SA 588
(T) at 591.
Also see Herbstein & Van Winsen, The Civil Practice of the High
Court of South Africa Fifth edition Vol 1 at
pp 723. Also see
Ingosstrakh v Global Aviation Investments (Pty) Ltd and Others
(934/2019)
[2021] ZASCA 69
(4 June 2021) at para 21, Van Wyk v
Unitas Hospital (CCT12/07)
[2007] ZACC 24
,
2008 (2) SA 472
(cc) at
para 22.
[10]
Ingosstrakh v Global Avaiation Investments (Pty)
Ltd and Others (934/2019)[2021] ZASCA 69 (4 June 2021) at para 21.
[11]
Van Wyk v Unitas Hospital and Another (Open
Democratic Advice Centre as Amicus Curiae)
[2007] ZACC 24
,
2008 (2)
SA 472
at
[33]
; see also Standard Bank of South Africa Ltd v Erasmus
(56672/2013) [2016] ZAGPPHC 126 (23 March 2016) at para 14.
[12]
Caselines 001 – 63 at para 5.
[13]
Caselines 001 – 84.
[14]
Caselines 001 – 145.
[15]
Caselines 024- 10 at para 25.
[16]
South African Railways and Habours
1920 AD 583
at 594; Standard Bank
v Estate Van Rhyn
1925 AD 266
at 268; Gentiruco AG v Firestone SA
(Pty) Ltd
1972 (1) SA 589
(A) at 600 A – D; Natal Rugby Union
v Gould [1998] ZSCA 62
[1998] ZASCA 62
; ,
1999 (1) SA 432
(SCA) at 443 F – D;
Samancor Groups Pension Fund v Samancor Chrome and Others
2010 (4)
SA 540
(SCA) at 546 para 25 and Qoboshiyane NO and Others v Arusa
Publishing Eastern Cape (Pty) Ltd and Others
2013 (3) SA 315
(SCA)
at 318.
[17]
Road Accident Fund v Hansa
2001 (4) SA 1204
(SCA).