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[2021] ZAGPJHC 677
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Allem Inc v Baard In re: Baard v Allem Incorporated (A5005/2021; 2016/44725) [2021] ZAGPJHC 677; [2022] 1 All SA 680 (GJ); 2022 (3) SA 207 (GJ) (12 August 2021)
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO:
A5005/2021
& 2016/44725
REPORTABLE:
YES
OF
INTEREST TO OTHER JUDGES: YES
REVISED.
In
the matter between:
DR
MAUREEN ALLEM
INC
Applicant
and
DR
ELSA SUSANNA CECILIA
BAARD
Respondent
In
re:
DR
ELSA SUSANNA CECILIA
BAARD
Appellant
and
DR
MAUREEN ALLEM
INC
Respondent
JUDGMENT
ENGELBRECHT,
AJ:
Introduction
1.
T
his
application in terms of Rule 30A(2) of the Uniform Rules concerns the
duty of an appellant to furnish security for costs. In
its notice of
motion, the applicant seeks an order to compel the respondent to
furnish security for costs as contemplated in Uniform
Rule 49(13)
within 5 days, failing which the applicant be authorised to apply for
the respondent’s appeal to be struck or
dismissed with costs.
In a draft order uploaded to CaseLines shortly before commencement of
the hearing, the proposed period for
compliance has been reduced to 3
days before the applicant’s entitlement to apply for the appeal
to be struck or dismissed
is activated. In argument Mr Novitz, who
appeared for the applicant, explained that the exigencies of the case
(which appear from
the discussion of the facts hereinbelow) call for
an order of compliance within such a short space of time.
2.
The application arises in the following circumstances.
2.1.
The respondent sought and, on 3 September 2020, obtained leave from
the Supreme Court of Appeal (SCA) to
appeal an order of my brother
Mtati AJ to a Full Bench of this Court. That order essentially
concerned the production of patient
details and other documents
sought by the applicant in the context of a restraint of trade
dispute. The details are immaterial
to the present application.
2.2.
The appeal is set down for hearing on 18 August 2021 by way of a
notice from the registrar dated 28 May 2021,
the respondent having
filed the record of appeal on 28 December 2020 and heads of argument
on 21 April 2021.
2.3.
Well before the record of appeal was filed, on 1 October 2020, the
respondent requested the applicant to
waive security for costs as
contemplated in Uniform Rule 49(13). This, apparently on the basis
that the respondent at that stage
considered herself bound under Rule
49(13) to furnish security unless she obtained a waiver or a court
order releasing her from
the obligation to put up security. Consent
to waive security was not forthcoming. Towards the end of October
2020 the respondent
then adopted the position that it was
unconstitutional to demand security under Rule 49(13), and her
attorneys communicated this
view to the applicant by way of a letter
of 22 October 2020. Unsurprisingly, the applicant expressed
disagreement with this position
in early November 2020, but the issue
of putting up security was not taken substantially further until the
applicant, on 31 March
2021, issued a notice in terms of Rule 30A
(the Notice). The respondent did not comply with the Notice; indeed,
on 6 April 2021
the respondent expressly informed the applicant that
she would not comply with the Notice. Then, on 21 April 2021, the
applicant
launched the present application.
3.
The applicant relies on the purported obligation expressed in
Rule
49(13) that an appellant furnish security for costs unless the
circumstances contemplated in that rule prevail, which they
do not in
the present instance, in the sense that no waiver nor court order
releasing the respondent from a duty to put up security
is in place.
The applicant insists on a right to demand security for costs, which
it submits has its source in Rule 49(13). The
applicant elected to
give effect to its asserted right by invoking the procedure in Rule
30A to compel compliance with Rule 49(13).
4.
This being an application in terms of Rule 30A(2), this Court
is
empowered to make such order thereon as it deems fit. Rule 30A(2)
confers a discretion on the court, which must be exercised
judicially
and upon a proper consideration of all the relevant circumstances,
which may include (i) the reasons for non-compliance,
(ii) whether
the defaulting party’s case appears to be hopeless; (iii) that
the defaulting party does not seriously intend
to proceed; and (iv)
prejudice to either party. This list is not exhaustive, but it is
indicative of the matters properly to be
taken into account in the
judicial exercise of discretion.
5.
The respondent opposes the application. She primarily bases
such
opposition on the reason for non-compliance, which is that the
respondent denies an obligation to furnish security. The respondent
asserts that (i) Rule 49(13) provides for an inflexible right to
demand security; (ii) Rule 49(13) is inconsistent with the provisions
of the Superior Courts Act 10 of 2013 (Superior Courts Act) and is
therefore of no force and effect; (iii) Rule 49(13) is
ultra
vires
the provisions of section
6(1)(m) of the Rules Board for Courts of Law Act 107 of 1985 (the
Rules Board Act); (iv) Rule 49(13)
is invalid in accordance with the
principle of legality; and (v) this Court has no jurisdiction to
grant the relief sought. She
also says that her case is not hopeless,
since the SCA granted her leave to appeal, and that she has every
intention to proceed
with the appeal, as is evident the steps taken
to ensure that the appeal has been set down for hearing on 18 August
2021. The respondent
further submits that the applicant cannot assert
prejudice in the circumstances.
6.
The registrar allocated the week of 10 August 2021 for the hearing
of
the application. In a “
Joint
Practice Note”
uploaded to
CaseLines on 2 August 2021, but not signed by Mr Guldenpfennig SC for
the respondent, it was pointed out that “
The
Appeal to which this Interlocutory Application relates, has been set
down for hearing on 18 August 2021. Accordingly, Judgment
herein is
required before such date”
. In
the circumstances, I directed that the application be the first to be
entertained on my roll for the week, at 10h00 on 10 August
2021. On
the morning of the hearing, the respondent uploaded to CaseLines an
amended “
Joint Practice Note”
signed by Mr Guldenpfennig SC, which added a gloss to the assertion
in the initial “
Joint Practice
Note”
that judgment was
required before 18 August 2021, as follows: “
The
Respondent submits that it is improper for the Applicant to
pressurize the Court for a judgment in a complex matter as the
present to deliver judgment expeditiously especially under the
circumstances where the Applicant dragged their feet in launching
this Application. The Applicant should have brought this application
prior to the filing of the record of Appeal by the respondent
on 28
December 2020 as contemplated in Rule 49(13) of the Uniform Rules of
Court”
.
7.
It is certainly undesirable for this court to be placed under
severe
time pressure to give a judgment that has the capacity to affect not
only the interests of the parties to this dispute,
but parties and
practitioners more generally, and which raises multifaceted and
complicated arguments for consideration. However,
the pressure is
partly brought to bear in consequence of the enrolment system.
Notably, at the time the present application was
launched, the date
for the hearing of the appeal had not been allocated. This court has
no choice but to grasp the nettle, and
to render the judgment
expeditiously. I am grateful for the assistance received from the
useful heads of argument and oral submissions
of Messrs Novitz and
Guldenpfennig SC.
8.
At
this juncture, I consider it appropriate to apologise for the length
of the judgment. I am reminded of a letter penned by William
Cowper
in 1704 in which wrote “
if
in this I have been tedious, it may be some excuse, I had no time to
make it shorter”
.
[1]
In any event, the issues raised demand a proper exegesis and
contextual evaluation: the parties are entitled to a comprehensive
understanding of the court’s reasoning that leads to the order
made, and other interested parties might find value in a
comprehensive consideration of the issues raised.
Rule
49(13)
9.
Given the basis for the application and the reasons advanced
for
non-compliance in the present instance, the necessary starting point
must be Rule 49(13).
10.
It provides:
“
(a)
Unless the respondent waives his or her right to security or the
court in granting leave to appeal or subsequently
on application to
it, has released the appellant wholly of or partially from that
obligation, the appellant shall before lodging
copies of the record
on appeal, with the registrar, enter into good sufficient security
for the respondent’s costs on appeal.
(b)
In
the event of failure by the parties to agree on the amount of
security, the registrar shall fix the amount and the appellant
shall
enter into security in the amount so fixed or such percentage thereof
as the court has determined, as the case may be.”
11.
Rule
49(13)(a) appears to be peremptory in its terms. On its plain
language, it envisages that security for costs must be given
by an
appellant unless one of two circumstances prevails, namely (i) either
that the counterparty has waived his or her right to
security; or
(ii) the court granting leave to appeal has released the appellant
from the obligation. The premise upon which Rule
49(13)(a) is based
is that a respondent in an appeal has a “
right
to security”
.
This is certainly the assumption from which the Full Bench in
TR
Eagle Air (Pty) Ltd v RW Thompson,
[2]
a judgment that I discuss hereinbelow, proceeded.
12.
Rule 49(13) did not always read as it does now. Prior to its
amendment on 29
October 1999, it provided that –
“
Unless
the respondent waives his right to security, the appellant shall,
before lodging copies of the record on appeal with the
Registrar,
enter into good and sufficient security for the respondent’s
costs of appeal. In the event of failure by the parties
to agree on
the amount of security, the Registrar shall fix the amount and his
decision shall be final.”
13.
However,
In
Shepherd
v O’Neill
[3]
the court reviewed a number of authorities and concluded that the
Rule in its then form was in conflict with the Constitution and
invalid. It stated that:
“
It
is clear from what is set out earlier in this judgment, that in
virtually every case where security is demanded of a litigant,
the
Court has a discretion whether to order that such security be put up.
As matters stand at present in terms of Rule 49(13) the
Court has no
power to either exempt an appellant from putting up security or to
interfere with the amount fixed by the Registrar.
There is much to be
said for protecting a respondent in an appeal from an impecunious
appellant who drags him from one court to
the other. On the other
hand to in effect bar access to a Court of Appeal because a deserving
litigant is unable to put up security
appears to me to be unfair and
in conflict with the provisions of the Constitution.
The
conflicting rights of the litigants can, in my view, be adequately
safe-guarded were the Court to be vested with the power to
determine,
in the exercise of its discretion, whether a particular appellant
should be compelled to put up security and in what
amount.
To
the extent that Rule 49(13) does not embody that power I consider it
to be in conflict with the Constitution and to that extent
invalid.”
[4]
14.
The court suspended
the declaration of invalidity in terms of section 172(1)(b)(ii) of
the Constitution for a period of three months
to enable the Rules
Board to correct the defect. The judgment appears to have led to the
amendment of October 1999.
15.
The applicant
accordingly submits that, post-amendment, Rule 49(13)(a) is not
inflexible, because it provides the Court with the
power to release
an appellant from the obligation to provide security and affords an
appellant the opportunity to approach the
court that granted leave
(here, the SCA) for an order dispensing with the requirement to
provide security.
Judicial
interpretation and application of Rule 49(13) post-1999
16.
In light of the arguments raised before me, it is prudent to rehearse
the judicial
treatment of Rule 49(13) in the available case law and
to consider the development of Rule 49(13) over the years. I cannot
assert
that the summary that follows is complete, but it is an
attempt to collate the history of treatment of section 49(13),
largely
in unreported judgments.
17.
Following the judgment in
Shepherd
,
which concerned the constitutionality of Rule 49(13) in its pre-1999
form, little attention appears to have been given to the
constitutionality of Rule 49(13) in its amended form. The only
notable exception to this is the oldest case among those that I
propose to discuss in this section.
18.
In
FirstRand
v Van der Merwe
[5]
(
FirstRand
),
an unreported judgment of Froneman J, then sitting as a judge of the
Eastern Cape Division of the High Court, the learned judge
considered
an application to set aside as irregular an earlier application aimed
at exempting an appellant from providing security
called for by the
respondent in the appeal. The appeal was, as is the case in the
present matter, with leave of the SCA. However,
in that case, the
appellant had made application to be released from the obligation to
put up security; it was not an application
to compel.
18.1.
At the outset, Froneman J expressed the view that “
after
hearing argument and upon further reflection it appears to me that
rule 49(13) may well be ultra vires and thus unconstitutional
”.
18.2.
The learned judge explained that “
there
is a … fundamental problem relating to rule 49(13), one that
ultimately favours the respondents, namely that they are
not obliged
at all to provide security in an appeal of this nature”.
18.3.
T
he
reasoning was premised in the first instance on the provisions of the
Supreme Court Act 59 of
1959 (Supreme Court Act): “
Section
20(5)(b) of the Act explicitly vests the court granting leave to
appeal from civil appeals in the High Court with
the
discretionary power to order the furnishing of security, but the Act
contains no such a provision in respect of a court granting
leave to
appeal from the High Court as a court of first instance in civil
appeals.”
18.4.
It is worth recording his reasoning in full:
“
The
rules of court are delegated legislation and if a rule does not fall
within the scope of its enabling legislation it is ultra
vires (
Harms,
Civil
Procedure in the Superior Courts
,
A
2.2
, 2002
ed.). The enabling statutory provisions for the old Appellate
Division rules and the Uniform Rules for the High Courts were
the now
repealed ss. 43(1) and 43(2)(a) of the Act. These provisions allowed
for the making of rules ‘for regulating the
conduct of the
proceedings’ in those courts in broad, permissive terms.
Security for costs was seen as a matter of practice
and not of
substantive law, with the result that an ultra vires challenge
to the old AD rule 6(2) and the old High Court
rule 49(13) (which
dealt with security for costs on appeal) was unlikely to have met
with any success.
Matters
have changed on two fronts.
The
enabling legislation is now to be found in the Rules Board for Courts
of Law Act 107 of 1985. Section 6(1)(m) of Act 107 of
1985 provides
that the Rules Board may make rules that regulate
‘
the
manner of determining the amount of security in any case where
it is required that security shall be given, and the form
and manner
in which security may be given.’ (my emphasis).
The
rules may thus not stipulate where security is required – the
legal obligation to provide security, or its obverse side,
the right
to require security from an opposing party, must be found elsewhere.
The
second change is the new constitutional context. An inflexible right
to demand security effectively infringes everyone’s
right of
access to justice under s.34 of the Constitution, as held in
Shepherd
v O’Niell
, above, at
1073C-D
.
Section
20 of the Act deals comprehensively with parties’ rights in the
appeal process from the High Courts. It provides for
a discretionary
power to order security in one case (appeals from appeals), but not
in another (appeals from the High Court of
first instance). The
common law cannot help either. The inherent power of the superior
courts to regulate their own process as
far as ordering security is
concerned is limited to controlling vexatious litigation – the
kind of litigation which is almost
by definition excluded where an
order granting leave to appeal is made.
The
Supreme Court of Appeal rules no longer contain a provision similar
to the old AD rule 6(2) which provided for an inflexible
right to
demand security. The present rule 9 dealing with security refers only
to the situation where the court granting leave
to appeal has ordered
the appellant to provide security. It thus falls within the enabling
provision of s.6(1)(m) of Act 107 of
1985.
In
my judgment the provisions of rule 49(13) do not fall with the limits
set by s. 6(1)(m).
In
so far as the provisions of the rule seeks to be the source of a
right to security it goes beyond the powers of regulation set
out in
s.6(1)(m) of Act 107 of 1985. If its claim is more modest, namely
that it merely assumes the existence of such a right,
it still
overreaches itself because there is no other source of such a right.
If
this reasoning is correct rule 49(13), even in its amended form, is
invalid. The cure, if needed, lies in amending the Act, not
the
rules. Although the invalidity stems from reasoning thus far couched
in terms of the common law ultra vires doctrine,
it in
effect amounts to a finding that the rule is invalid under the
Constitution according to the doctrine of legality (
Pharmaceutical
Manufacturers Association of SA and another: In re ex parte President
of the Republic of South Africa and others
2000(2) SA 675 (CC)
,
para
[50]
,
698D-F
).”
19.
In
Strouthos
v Shear
[6]
Daniels
J dealt with an application for an order directing the respondent to
lodge good and sufficient security for the applicant’s
costs of
appeal noted by the respondent. He noted that, in granting leave to
appeal, the Chief Justice (who gave the leave) “
did
not release the respondent wholly or partially from his obligation to
furnish security for the applicant’s costs of appeal
as
contemplated in Rule 49(13)(a) of the Uniform Rules of Court”
.
[7]
The
learned judge explained that:
[8]
“
Here
it is provided that the Court in granting leave to appeal 'or
subsequently on application to it. . . .' (as opposed to the Court to
which the appeal is is made, or the Court hearing the appeal) is
the Court designated to order the release of the appellant
from his
or her obligation to lodge security.
Since
leave to appeal was granted by the Supreme Court of Appeal, or
properly put, the President of that Court, it is only that
Court that
can conceivably release the respondent from his obligation to provide
security, and the Court hearing the appeal accordingly
does not have
jurisdiction to do so. This much follows from a proper reading of the
subrule. Should the appellant be so inclined
he could apply to that
Court for such relief. In considering such an application the Court
has a wide discretion which will be
judicially exercised. (See Chasen
v Ritter
1992
(4) SA 323
(SE)
; Chopra v Sparks Cinemas (Pty) Ltd and
Another
1973
(2) SA 352
(D)
and Mynhardt
v Mynhardt
1986
(1) SA 456
(T)
.) However, until such time as such an order is
obtained, the respondent is obliged to provide security, and this
must be done before
lodging copies of the record on appeal with
the Registrar in terms of subrule 13(a). The copies of the
record were lodged
on 1 February 2002. Since security was then not
lodged, the lodging of the copies of the record on appeal constitutes
an irregular
step within the meaning of Rule 30, and may accordingly
be set aside upon application. Should it be set aside the provisions
of
subrule 7(d), which provides that
'(i)f
the party who applied for a date for the hearing of the appeal
neglects or fails to file or deliver the said copies of the
record
within 40 days after the acceptance by the Registrar of the
application for a date of hearing in terms of subrule (7)(a) the
other party may approach the Court for an order that the application
has lapsed.'
apply.
Should security not be furnished, the record cannot be lodged, and
subrule (7)(c) cannot be given effect to.
Obviously
where no application is brought in terms of Rule 30 or where such an
application is refused for whatever reason, the appeal
will be
proceeded with, and a respondent will then have to move for the
appeal to be struck from the roll for want of compliance
with the
Rule as was done in Boland Konstruksie Maatskappy (Edms) Bpk v
Petlen Properties (Edms) Bpk
1974
(4) SA 291 (C)
. This does not mean that an appellant is
automatically released from his or her obligation to furnish
security.
As
explained earlier it is the respondent's case that he is entitled to
proceed, and that he may or may not apply for condonation
for his
failure to lodge security, and if he does so apply and that
application is refused, the applicant will then be entitled
to move
for the appeal to be struck from the roll. It is argued that
notwithstanding the fact that he has not been released from
that
obligation, the applicant is not entitled to demand security nor is
he obliged to lodge security. This approach renders the
rule a
nullity, and as said earlier, the respondent is clearly wrong. It is
for the respondent to apply for and obtain the release
from his
obligation to provide security.
The
applicant applies for an order directing the respondent to furnish
security. Strictly speaking such an order is not required,
since the
respondent is obliged in terms of the Rule to provide security. The
Rule does not provide for an order in the terms prayed.”
20.
The
judgment of the Full Bench in South Eastern Cape Local Division in
Nondwendwe
Kama and Others v Nombulelo Anoria Kama and Another,
[9]
dealing
with an appeal where no security was put up, noted “
Mr
Cole did not seek to argue that the respondents were not obliged to
furnish security nor could he have done so
in
view of the fact that Rule 49(13)(a) is couched in peremptory terms
.
Where security has not been furnished in terms of this rule such a
failure may have fatal consequences as the appeal may be struck
off
the roll and this is what will invariably happen in the absence of
condonation being granted”.
[10]
These
observations must be treated as
obiter
,
since the parties in the appeal came to an agreement that no security
would be put up, in the interests of proceeding with the
merits of
the appeal itself. However, it is clear that the Court considered
Rule 49(13) to be peremptory.
21.
In
Jyoti
Structures Africa (Pty) Ltd v KRB Electrical Engineers / Masana
Mavuthani Electrical and Plumbing Services (Pty) Ltd t/a KRB
Masana
[11]
the
respondent in an appeal applied to set aside as irregular certain
steps in terms of Rule 30(1), the filing of copies of the
record on
appeal and the making of an application for the hearing of the
appeal, and for an order declaring that the appeal had
lapsed. The
judgment records that “
In
following the steps required for the proper prosecution of the
appeal, the appellant omitted to furnish security for the appeal
in
terms of rule 49(13)”
.
[12]
It
is explained that “
The
appellant lodged copies of the appeal record with the Registrar, and
made application for the hearing of the appeal, without
entering into
‘good and sufficient security for the respondent's costs of
appeal’. It is common cause that the right
to security was not
waived by the respondent and the appellant was not released from that
obligation by the court”.
Within
three days of service upon the respondent of the appeal record, the
respondent served a notice in terms of Rule 30(2)(b),
asserting that
the failure to enter security resulted in the filing of the record
being an irregular step. A nominal amount was
then provided. The
learned judge was critical of this approach, and expressed the view
that, in the case of Rule 49(13), “
security
must
be furnished as a matter of course, without proof that it is
required,
unless
there is a waiver or a release from such obligation
”
.
[13]
Again,
the judgment proceeded from the premise that Rule 49(13) was
peremptory in its terms.
22.
All of these judgments were handed down prior to the promulgation of
the
Superior Courts Act. Accordingly
, they did not, and could not
have, dealt with the position on provision of security in the context
of the provisions of the
Superior Courts Act.
23.
On
14 December 2016 Tuchten J in the Gauteng Division, Pretoria, some
three years after the Superior Courts Act came into force,
rendered judgment in
Carpe
Diem Explorations (Pty) Ltd v Kasimira Trading 82 (Pty) Ltd.
[14]
Amongst
many other procedural problems plaguing the appeal was listed failure
to provide security under Rule 49(13).
[15]
The
appellant sought condonation for some of its failures and asked the
court to (i) release it from the obligation to furnish security
; or
(ii) order it to find such security in an amount to be determined by
the Court.
[16]
The
learned judge commented that:
“
The
failure to find security and to obtain a ruling on the failure to
find security before the appeal was due to be heard is of
a character
different to the other procedural non-compliances which I have
mentioned.
It
is the right of a respondent on appeal to go into an appeal secured,
at
least to the extent provided by the Rules, against the inability of
the appellant to pay costs if the appeal is unsuccessful.”
[17]
and
“
The failure to
provide an explanation as to why security should be dispensed with
and the failure to have the issue of security
resolved by application
to court before Kasimira incurred expense in opposing the appeal are
in my view sufficient by themselves
to justify the dismissal of the
application to dispense with security.”
[18]
24.
Notably, the judgment did not engage with the lawfulness of Rule
49(13), or
the implications of the promulgation of the
Superior
Courts Act upon
the right to demand security.
25.
In
December 2017, a Full Bench of the Gauteng Division, Pretoria issued
judgment in the matter of
Erasmus
v Absa Bank Ltd,
[19]
concerned
inter
alia
with
the question whether condonation for non-compliance with
Rule
49(13)(a)
was to be granted.
[20]
The
Court was apparently not called upon, and did not engage with the
meaning and constitutional validity of
Rule 49(13).
The Court simply
quoted
Rule 49(13)(a)
, noted that no security had been provided and
stated that “
Erasmus
must apply for condonation for the late filing of security”
.
[21]
The
Full Bench in
Erasmus
declined
to entertain the applicant’s argument that the court ought to
dispense with the requirement for security, on the
basis of
Rule
49(13)
providing that only the court granting leave to appeal can
release the appellant from the obligation to furnish security.
[22]
26.
In
October 2018, Mashile J in this Court gave judgment in
Eagle
Creek Investments 472 (Pty) Ltd v Focus Connection (Pty) Ltd and
Another.
[23]
Just
like in the present case, the respondent in an appeal invoked
Rule
30A
to seek an order to set aside as irregular the filing of an
appeal record and consequential steps.
[24]
The
facts in that case also have in common with the present case that the
leave to appeal in question had been granted by the SCA.
What
distinguishes that case from the present one, is that following the
grant of leave to appeal by the SCA, the respondent in
the appeal
applied for security for costs “
in
terms of
Rule 49(13)
”
.
The Registrar then fixed security for costs, but the appellant did
not provide security.
[25]
In
its discussion, the court referred to the pre-constitutional judgment
in
Boland
Konstruksie Maatskappy (Edms) Bpk v Petlen Properties (Edms) Bpk
[26]
to
the effect that “
if
security is not provided as stipulated in this Rule an appeal must be
struck off the roll”
.
[27]
The
court then invoked the judgment in
Jyoti
Structures Africa (Pty) Ltd
[28]
to
support its assertion that “
the
lodging of the record with the Registrar prior to the provision of
security constitutes an irregularity as envisaged in Uniform
Rule of
Court 30A”
.
[29]
In
the circumstances of the case – where provision of security had
been mandated and fixed by the registrar – the court
found that
the failure to provide security timeously precluded the appellant
from furnishing the registrar with the appeal record.
The furnishing
of the appeal record to the registrar was thus held to be irregular,
and set aside.
[30]
Since
the judgment concerns a case where security had been fixed, it is
distinguishable from the present case.
27.
On
22 November 2018, a Full Bench of the Limpopo Division, Polokwane,
gave judgment in the matter of
Mokhutamane
Kenneth Maake and Others v Chemfit Finechemical (Pty) Ltd.
[31]
The
judgment records that the respondent raised a point
in
limine
and
argued that the appeal be struck on the ground that the appellants
refused to put up security. The request for security was
said to be
based on
Rule 49(13)(a).
The court refused the application.
[32]
The
reasoning of the Court makes for interesting reading, and it is worth
quoting it in full for purposes of this judgment:
“
[15]
The reliance of [sic]
Rule 49(13)(a)
by the Respondent to demand
security for costs of this appeal is misplaced. As a general rule an
Appellant in the High Court, unlike
in the magistrate Court [sic], is
not required to furnish security for costs of an appeal. The
furnishing of security for costs
of an appeal is provided for an
exceptional requirement provided for in
Rule 49(12)
,
49
(13) and
49
(14). The latter Rules are a sequel to the repealed
Rule 49(11)
which dealt with the suspension of the operation and execution of an
order pending the decision of an application for leave to
appeal or
appeal. The operation and execution of a decision which is the
subject of an application for leave to appeal or of an
appeal, and
the suspension of such a decision are now provided for in
section 18
of the
Superior Courts Act 10 of 2013
. Upon the repeal of
Rule 49(11)
sub-rules (12), (13) and (14) were left extant.
[16]
The subrules left extant when subrule (11) was repealed provide as
follows:
[The court quoted Tule
49(12), 49(13) and 49(14)]
[17]
It is clear from the reading of
Rules 49(12)
,
49
(13) and
49
(14) that
all these Rules are subject to the repealed
Rule 49(11)
which is now
repealed by
section 18
of the
Superior Courts Act 10 of 2013
. This
simply means that an Appellant is required to furnish security for an
appeal only where there is an execution of a Court
judgment or order
pending an appeal. The circumstances in the present appeal do not
require the Appellants to furnish security
for costs of the appeal.
[18]
Even if there was an obligation on the Appellants to furnish security
for costs of appeal (we still maintain that
there is no such
obligation) this Court cannot uphold the Respondent’s point in
limine at this stage. If security for costs
is not lodged, the
lodging of the copies of the record on appeal with the Registrar
constitutes an irregular step within the meaning
of
Rule 30.
In the
appeal before us the Respondent failed to make or lodge an
application in terms of
Rule 30
calling upon the Appellants to remove
the cause of complaint. The application to struck [sic] the appeal
from the roll is accordingly
refused.”
28.
I am not convinced that
Rule 49(13)
must be taken to have fallen away
in the manner described, but this matters not for purposes of the
present judgment.
29.
In
May 2019, a Full Bench of the Western Cape Division considered an
application for an appellant’s appeal to be struck,
[33]
inter
alia
on
the basis that the appellant had failed to put up security before
filing the record.
[34]
The
facts of the case were peculiar, because the taxing master had not
yet fixed the amount of security, despite a request. Be that
as it
may, the Court explained that “
Rule
49
does not provide that should the appellant fail to furnish
security within the time period stipulated by the rule the appeal
shall
lapse. And any implication to such effect would in any event
probably be unconstitutional”
.
[35]
After
commenting on the misdirection of the taxing master, the Court held
that “
The
appropriate course for the applicant to have taken in the described
circumstances was to have approached the taxing master or
the
registrar and pressed for an early determination of the amount of
security to be provided. In the unlikely event of the registrar,
notwithstanding such an approach, unreasonably failing to discharge
her duty in terms of
rule 49(13)(b)
, the applicant would have been
entitled to approach the court for an order directing the registrar
to discharge the function provided
in terms of the subrule. Having
not taken the indicated steps, it was not appropriate in the given
circumstances for the applicant
to apply instead for the appeal to be
struck out
”
.
The application was dismissed.
30.
The
most recent judgment I have considered is that of
TR
Eagle Air (Pty) Ltd v RW Thompson,
[36]
an unreported judgment of a Full Bench of the Gauteng Division,
Pretoria. It concerns a case where a respondent raised non-compliance
by the appellants with
Rule 49(13)(a)
in heads of argument in the
appeal, contending that the appeal should be struck off the roll with
costs. Faced with a submission
by the appellant that the respondent
ought to have engaged the
Rule 30
procedure if it considered that the
failure to put up security was an irregular step, the Full Court
said:
“
Rule
49(13)
is peremptory. The rule does not place any responsibility on
the Respondent. The rule obliges the appellant to give security. The
rule does not give a court granting leave to appeal the discretion to
absolve an appellant from giving security when the record
is filed
with the Registrar. The Rule envisages that the respondent shall be
satisfied that sufficient security is given that his
costs will be
paid in the event of the appeal not succeeding. The rule entitles the
respondent to waive his right to such security.
The rule envisages an
instance where the court granting leave to appeal may release the
appellant wholly or partly from giving
security on application to it.
The latter may occur where the respondent has not waived his right
and, this will oblige the appellant
to place facts to the
satisfaction of the court why he or she should be released wholly or
partially from giving security when
filing the record of appeal.”
[37]
31.
The
court placed reliance on the judgments in
Strouhos
[38]
and
Boland
Konstruksie Maatskappy
[39]
,
and
concluded that:
“
In
this matter the second appellant is a practicing attorney who is
expected to have known better of the importance to provide security
for costs in the appeal and, the possibility of prejudice to the
respondent should no security be given. When the heads of argument
were served there was knowledge on his part that he had not complied
and he was forewarned. This in my view should have triggered
prompt
attention to either negotiate security and apply for condonation, or
alternatively to have the matter removed, to tender
wasted costs in
order to attend to compliance and condonation. I am of the view that
it is proper to strike the appeal off the
roll”.
The
duty and approach of this court
32.
This brief excursus on the judicial treatment of
Rule 49(13)
shows
that no court since the
Shepherd
judgment and the amendment to
Rule
49(13)
in 1999 has been directly called upon to adjudicate upon the
constitutional validity of
Rule 49(13).
Froneman J in
FirstRand
raised the issue
mero motu
,
provided reasoning for his conclusion that
Rule 49(13)
in its current
form may well be unconstitutional, and indicated an intention to
refer the matter to a Full Bench to allow for various
interested
parties, including the Rules Board and the Minister of Justice to
make submissions. However, it appears that the anticipated
hearing
before the Full Bench never eventuated. I could certainly find no
judgment, reported or unreported, of such a Full Bench.
In oral
argument before me Mr Guldenpfennig SC advised that attempts had been
made to find out from the attorneys involved in the
FirstRand
matter as to the outcome. The understanding that the respondent’s
legal team gleaned from this engagement was that the matter
became
settled between the parties, thereby obviating the need for the
referral.
33.
This appears to be the first case in which (i) the respondent in an
appeal invoked
Rule 30A
as a means to compel provision of security
where no order to put up security
was in
existence; and (ii) the appellant directly challenged the
constitutional validity of
Rule 49(13).
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34.
Where there is a challenge to a law on the basis that it constitutes
an unjustifiable
limitation of
section 34
, and it is found that the
law (or Rule, in the present case) limits the constitutional right,
consideration of section 36 of the
Constitution arises. The question
then to be asked whether, as a law of general
application,
Rule 49(13) constitutes a reasonable and justifiable limitation. This
court must engage upon that exercise in the absence
of an earlier
judgment in a matter where the alleged limitation of the section 34
right by Rule 49(13) in its current form was
raised.
35.
In the present case, there is also a challenge to Rule 49(13) on the
basis of
want of legality, based in the provisions of
section 51
of
the
Superior Courts Act and
section 6(1)(m)
of the Rules Board Act.
As I have indicated, apart from the judgment in
FirstRand
,
no court has grappled with the legality of Rule 49(13) and this fact
also enjoins this court to treat with caution statements
made in
earlier judgments, which assume such legality.
36.
The essence of the respondent’s position in the present
instance is that
this court must reach the conclusion that Rule
49(13) is constitutionally invalid. If I were to take up the
invitation to hold
that Rule 49(13) is so invalid, this would have
significant implications, not only for the parties to this
application, but for
appeal litigants more generally and also for the
Rules Board and the Minister of Justice.
37.
Part
of the problem in this respect is that the respondent did not file a
Rule 16A notice when raising the constitutional points
it relies on.
Rule 16A(1)(a) provides that “
Any
person raising a constitutional issue in an application …
shall give notice thereof to the registrar at the time of filing
the
relevant affidavit …”
,
and Rule 16A(b) requires of such a notice to “
contain
a clear and succinct description of the constitutional issue
concerned”
.
The purpose of Rule 16A is to “
bring
cases involving constitutional issues to the attention of persons who
may be affected by or have a legitimate interest in
such cases, so
that they may take steps to protect their interests by seeking to be
admitted as amici curiae with a view to drawing
the attention of the
court to relevant matters of fact and law to which attention would
not otherwise be drawn”
.
[40]
Generally, the failure to file a rule 16A notice prior to the hearing
results in a postponement of the hearing,
[41]
so that interested and affected persons may be granted the
opportunity to make a contribution to the debate. Given the time
constraints
in this matter, postponement was not an option open to
this court. The consequence of the respondent’s omission is
that it
“
deprived
other interested parties … of the opportunity to intervene as
parties to the dispute or seek admission as amicus
curiae”
.
[42]
38.
In
De
Lange
the
Constitutional Court did not consider the omission as a sufficient
reason to deny leave to appeal.
[43]
It is also not a sufficient reason in the present instance for this
court to engage upon the constitutional arguments raised by
the
respondent. This is because the pleadings and submissions before this
court compel me to interpret and apply Rule 49(13). This
requires
consideration of the provisions of the Constitution as section 39(2)
of the Constitution instructs. As O’Regan J
explained in
Giddey
NO v JC Barnard and Partners:
[44]
“
A
court that fails to consider the relevant constitutional provisions
will not have properly applied the rules at all”
.
Put differently, this court is enjoined to consider the
constitutional issues in any event, even in the absence of a
constitutional
challenge squarely being raised or where a Rule 16A
notice has not been filed.
39.
This, of course, does not mean that the court must rise to the
occasion and
accept the invitation to make an order of constitutional
invalidity. The issue is one of ripeness: a
ccording
to Ackerman J, ripeness is a justiciability doctrine stemming from
the principle of avoidance of constitutional issues:
“
While
the concept of ripeness is not precisely defined, it embraces the
general principle that
where
it is possible to decide any case
,
civil or criminal,
without
reaching a constitutional issue, that is the course which should be
followe
d”
.
[45]
40.
In other words, even if the court accepts the correctness of the
respondent’s
submissions on constitutional validity, it must
enquire whether the dispute between the parties can be resolved
without reaching
the constitutional issue. In the circumstances
presented by the present case, I consider it appropriate to engage
upon the constitutional
enquiries first, before embarking on the
examination of whether the case may be decided without reaching the
constitutional issues
for purposes of the determination to be made
under Rule 30A(2).
Rule
49(13) and the access to court right
41.
Section
34 of the Constitution
provides
that everyone has the right to have a dispute that can be resolved by
the application of law decided by a court or tribunal
in a fair
public hearing. It is an important right, “
foundational
to the stability of an orderly society”
,
as Mokgoro J explained in
Chief
Lesapo v North West Agricultural Bank and Another.
[46]
Being
of such importance, there is no basis to suggest that the right to
access to court must be considered simply as access to
a court of
first instance. The Court in
Shepherd
,
[47]
in
declaring Rule 49(13) in its previous form constitutionally invalid,
implicitly accepted this.
42.
In accordance with section 36 of the Constitution, that right may be
limited
only in terms of law of general application, to the extent
that the limitation is reasonable and justifiable in an open and
democratic
society based on dignity, equality and freedom, taking
into account relevant factors: (i) the nature of the right; (ii) the
importance
of the purpose of the limitation; (iii) the nature and
extent of the limitation; (iv) the relation between the limitation
and its
purpose; and (v) less restrictive means to achieve the
purpose.
43.
Section 34 must also be read with
section
171 of the Constitution, which provides that
“
All
courts function in terms of national legislation, and their rules and
procedures must be provided for in terms of national legislation
”.
Implicit in section 171 is constitutional sanction for rules and
procedures. The national legislation envisaged in section
171, for
present purposes, must be taken to be the
Superior Courts Act and
the
Rules Board Act, the provisions of which I discuss more fully below.
There is no question that the Uniform Rules, of which
Rule 49(13)
form part, are those contemplated in section 171.
44.
As
the Constitutional Court pointed out in
Giddey
[48]
“
for
courts to function fairly, they must have rules that regulate their
proceedings. Those rules will often require parties to take
certain
steps on pain of being prevented from proceeding with a claim or
defence. A common example is the rule regulating the notice
of bar in
terms of which defendants may be called upon to lodge their plea
within a certain time failing which they will lose the
right to raise
their defence. Many of the rules of court require compliance with
fixed time limits, and a failure to observe those
time limits may
result, in the absence of good cause shown, in a plaintiff or
defendant being prevented from pursuing their claim
or defence. Of
course, all these rules must be compliant with the Constitution. To
the extent that they do constitute a limitation
on a right of access
to court, that limitation must be justifiable in terms of section 36
of the Constitution. If the limitation
caused by the rule is
justifiable, then as long as the rules are properly applied, there
can be no cause for constitutional complaint”.
In
the same vein, the Constitutional Court held in
Dormehl
v Minister Of Justice And Others
[49]
that
not every procedural requirement constitutes an infringement on the
right to access to Court.
45.
Insofar
as Rule 49(13) presents a bar to access to court at the appeal level,
it does appear to infringe upon the access to court
right. In
Shepherd
v O’Neill
[50]
the Court recognised that “
to
in effect bar access to a court of appeal because a deserving
litigant is unable to put up security appears to me to be unfair
and
in conflict with the provisions of the Constitution”
.
46.
However, a limitation analysis suggests that it may be considered a
justifiable
limitation, as follows:
46.1.
The
Rule exists in accordance with the provisions of national legislation
(specifically
section 51
of the
Superior Courts Act which
provides
for the retention of Rules in place before that statute was
promulgated and
section 6(1)
of the Rules Board Act, which confers
upon the Rules Board the power to make and amend rules). On the
principle of subsidiarity,
it is the provisions of these statutes
that must be applied to assert the access to court right, and not
section 34 directly.
[51]
46.2.
The Rules themselves constitute law of general application within the
meaning of section 36 of the Constitution.
46.3.
The bar is not absolute: the appellant is able to escape the
requirement of providing security either by agreement with the
respondent or by making an approach to court. Accordingly, the
limitation on the access right is not inflexible. The Constitution
demands a reading of provisions such as these with proportionality in
mind, and provision for security to protect the interests
of one’s
counterpart in litigation is not a disproportionate limitation on the
access to court right.
47.
In these circumstances, it is not open to this Court to conclude that
Rule 49(13)
infringes upon the access to court right in a manner that
is not justifiable in an open and democratic society. However, that
conclusion
is subject to a consideration whether Rule 49(13) may be
constitutionally invalid for want of compliance with the doctrine of
legality.
For a law of general application justifiably to limit the
access to court right, it must of course be one that is consistent
with
the rule of law. It is to that consideration that I now turn.
Rule
49 and the legality requirement
48.
The reasons for non-compliance in the present instance proceed from
the submission
that Rule 49(13) is unconstitutional for want of
compliance with the doctrine of legality. The argument finds its
basis in, and
follows the logic of the
FirstRand
judgment in which Froneman J
expressed the view that Rule 49(13) “
may
well be ultra vires and thus unconstitutional”.
This,
essentially because the Rules Board Act does not confer power on the
Rules Board to stipulate the circumstances in which security
is
required, so that the Rule is invalid and unconstitutional under the
doctrine of legality.
49.
As indicated above, the referral anticipated by Froneman J came to
nothing.
The judgment is not reported and it has not been followed in
any other judgment that this court could find. In any event, the
judgment
in
FirstRand
reflected
upon the position at a time before the
Superior Courts Act was
promulgated. The Court in
FirstRand
specifically considered the absence
from section 20(5)(b) of the Supreme Court Act of a discretionary
power to order the furnishing
of security where leave to appeal is
granted from the High Court as a court of first instance in civil
appeals. It seems to me
that the matter of the legality of Rule
49(13) must be considered afresh in view of the changed legislative
position.
50.
As foreshadowed in the previous section, the two main statutes
relevant to the
consideration in this context are the
Superior Courts
Act and
the Rules Board Act.
51.
Section 16
of the
Superior Courts Act regulates
appeals. It provides
in
section 16(1)(a)(i)
that an appeal against any decision of a
Division as a court of first instance lies, upon leave having been
granted, if the court
consisted of a single judge, either to the SCA
or to a full court of that Division, depending on a direction issued
in terms of
section 17(6).
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52.
In
accordance with
section 17(2)b)
of the
Superior Courts Act, leave
to
appeal may be granted by the SCA upon application to that court.
Section 17(2)(c)
provides that such an application must be considered
by two judges of the court who may, in accordance with
section
17(2)(d)
dispose of the application without oral argument. The
decision to grant or refuse leave to appeal is final.
[52]
Under
section 17(5)
, any leave to appeal may be granted subject to
such conditions as the court may determine. Whether such conditions
may be taken
to include that an appellant furnish security for costs,
is uncertain: notably, the
Superior Courts Act does
not provide that
the SCA has power to order an appellant to provide security for the
respondent’s costs of appeal in any
of the circumstances under
the statute where the SCA is empowered to grant leave to appeal.
53.
This brings us to the Rules.
Section 51
of the
Superior Courts Act
provides
that the rules applicable to the SCA and the High Court
immediately before the commencement of the
Superior Courts Act
“
remain
in force to the extent
that they are not inconsistent with this Act, until repealed or
amended”
. The rules are of
course the Rules promulgated by the Rules Board under the Rules Board
Act, which include Rule 49(13) that is
the subject-matter of the
current debate. Those rules, which regulate the practice and
procedures in litigation, may in accordance
with section 6(1)(m) of
the Rules Board Act include regulation on “
the
manner of determining the amount of security in any case where it is
required that security shall be given, and the form and
manner in
which such security may be given”
.
54.
The Rules Board Act does not confer upon the Rules Board the power to
regulate
the circumstances in which security may be demanded; rather
it confines the power to regulation of procedure in cases where
security
may be demanded. If the Rules Board does not enjoy the power
under the Rules Board Act to limit access to court in the form of
security for costs, then any rule issued by the Rules Board that
purports to set out when security for costs is required is unlawful,
unless the obligation in the Rules finds its basis in another law.
55.
The
authors of
Herbstein
and Van Winsen: Civil Practice of the High Courts and the Supreme
Court of Appeal of South Africa
[53]
make
the point that “
The
subrule seems to presuppose that in the event of any appeal an
appellant has an obligation to provide security for the respondent's
costs of appeal and the respondent has a right to receive such
security. However, at present, there does not seem to be any such
statutory obligation or right”.
In
other words, t
he
obligation in Rule 49(13) to furnish security for costs before the
record is filed does not have its origin in any other law.
56.
Indeed,
insofar as it purports to impose a requirement that security be
furnished in cases where the SCA has granted leave to appeal,
it is
inconsistent with section 17(5) that envisages it for the court
considering the application for leave to appeal to set conditions
for
the prosecution for the appeal and not for any Rules to impose such
conditions. If there is such an inconsistency,
section 51
of the
Superior Courts Act results
in
Rule 49(13)
not remaining in force.
Harms
Civil
Procedure in the Superior Courts
,
[54]
commenting on security for costs under
Rule 49(13)
explains that:
“
In
any event, it is arguable that the requirement of security by the
rule may be
ultra
vires.
The
only security that could have been demanded was that provided for
under section 20(5)(b) of the Supreme Court Act. All that
Act 10 of
2013 stipulates in this regard is: s 25: If a plaintiff in civil
proceedings in a Division resides within the Republic,
but outside
the area of jurisdiction of that Division, he or she shall not by
reason only of that fact be required to give security
for costs in
those proceedings. However, section 51 of Act 10 of 2013 stipulates
that:
Rules
in existence immediately before commencement of Act.—The rules
applicable to the Constitutional Court, Supreme Court
of Appeal and
the various High Courts immediately before the commencement of this
section remain in force to the extent that they
are not inconsistent
with this Act, until repealed or amended.”
57.
Even if Rule 49(13)(a) were considered not to be inconsistent with
section 17(5)
of the
Superior Courts Act, the
imposition of a duty on
an appellant to furnish security would still be
ultra
vires
the powers of the Rules Board
under
section 6(1)
of the Rules Board Act.
58.
In these circumstances, Rule 49(13) ought not to be read as imposing
an obligation
to furnish costs. It must be read restrictively as
operating only where the respondent is able to assert a right to
security derived
from another source, such as a court order. If not
read restrictively in this manner, it is not capable of being upheld
as a law
of general application that legitimately limits the access
to justice right. It would have to be set aside for want of
compliance
with the doctrine of legality.
59.
However, as foreshadowed in the introductory part of this judgment,
the conclusion
of constitutional non-compliance ought not to be
reached for if the determination in the case before me can be made
without recourse
to the constitutional question. It is to that
analysis that I now turn.
Consideration
of the Rule 30A application
60.
In the present instance, we are concerned with a matter where the
SCA, under
its powers in terms of section 17(2)(b), was approached
for and granted leave to appeal. As indicated, section 17(5) empowers
the
court in such circumstances to set conditions to attach to a
leave to appeal. Logically, it would seem to me that, since the SCA
was the court that considered the application for leave to appeal,
its adjudication of the application would have to be regulated
by the
rules applicable to processes in that court.
61.
The SCA Rules regulate applications for leave to appeal in Rule 6.
The rule
provides that it applies to all applications for leave to
appeal. Rule 9(1) of the SCA Rules provides that, “
If
the court which grants leave to appeal orders the appellant to
provide security
for
the respondent’s costs of appeal, the appellant shall, before
lodging the record with the registrar, enter into sufficient
security
for the respondent’s costs of appeal and shall inform the
registrar accordingly”
. Rule
9(1) suggests that, in cases where leave to appeal is granted by the
SCA under its rules, the precondition for a demand that
security be
given must be an order by the SCA that it be done. I am of the view
that Rule 49(13) does not find application, because
the order is one
made by the SCA. And under that order there is no entitlement that
must be waived and the order granting leave
to appeal by implication
absolved the respondent from any duty to furnish costs.
62.
In
Strouthos
v Shear
[55]
Daniels J recognised the Rule 49(13) provides that “
the
Court in granting leave to appeal ‘or subsequently on
application to it …’ (as opposed to the Court to which
the appeal is made, or the Court hearing the appeal) is the Court
designated to order the release of the appellant from his or
her
obligation to lodge security
”
.
[56]
In that case, the Court considered that, since the SCA had granted
leave to appeal, “
it
is only that Court that can conceivably release the respondent from
his obligation to provide security, and the Court hearing
the appeal
accordingly does not have the jurisdiction to do so”
.
[57]
The nub of the finding is that it is the Court that granted leave
that has jurisdiction over the question whether security may
be
demanded or not. The source of the respondent’s entitlement to
demand security, as contemplated in Rule 49(13) would be
an order of
the SCA. If there is no such order, there is no entitlement that sets
in motion the procedure in Rule 49(13).
63.
That being so, I find myself in respectful disagreement with the
conclusion
of the Court in
Strouthos
that it is appropriate, in a case where the SCA has granted leave to
appeal without requiring costs, and where the respondent has
not made
application to the SCA for an order that security by lodged, for a
respondent to invoke Rule 30 (or Rule 30A, as is the
case in the
present instance) to set the filing of the record aside as an
irregular step. Why should it be deemed irregular for
an applicant to
file a record without furnishing security of the Court granting leave
to appeal did not impose an obligation to
give security? Why should
it be irregular to proceed with the filing of the record in the
absence of security if the respondent
made no application to the
Court granting leave to appeal (here the SCA), to issue an order for
security to be furnished?
64.
The problem that I have with an analysis that allows the High Court
effectively
make an order compelling an appellant to supply security,
whether in consequence of the Rule 30 procedure adopted in
Strouthos
,
or pursuant to the Rule 30A procedure adopted in the present
instance, is that it splits the jurisdiction to determine whether
security for costs ought to be granted between the SCA and the Court
to which leave to appeal is granted on the simple basis of
the
identity of the applicant. How can it be that the SCA retains the
exclusive jurisdiction and authority to release an appellant
from the
obligation to furnish costs, but that the High Court can be said to
be empowered to order that security be given. The
orders contemplated
are two sides of the same coin.
65.
It seems to me that, once it is accepted that this Court is not
empowered to
release an appellant from an obligation to furnish
costs, then it can equally not be empowered to compel the furnishing
of costs,
or, as it were, set conditions for the prosecution of the
appeal in addition to the conditions set by the SCA under
section
17(5)
of the
Superior Courts Act. Since
the SCA enjoys the statutory
power to set the conditions, the High Court would be usurping the
powers of the SCA as contemplated
in
section 17(5)
if it were to
compel the furnishing of security. I am of the view that, if this
court allows the applicant to rely on the provisions
of
Rule 30A
to
grant an order that
Rule 49(13)
be complied with and security for
costs be given, the effect would for this court to arrogate for
itself a power that it does not
otherwise have.
66.
I
am not convinced that the
Rule 30A
procedure is appropriately
invoked. The effect of
Strouthos
is
that this Court cannot release the respondent from the obligation to
furnish security. That means, once the application in terms
of
Rule
30A(2)
is brought, the Court’s discretion is fettered, so that
it has no choice to grant the compelling order, for to do otherwise
would be to release the appellant/respondent from the obligation to
put up security, which the court does not enjoy jurisdiction
to do.
And that cannot be right. As Hefer J explained in
Shepstone
& Wylie and Others v Geyser NO,
[58]
“
Because
a Court should not fetter its own discretion in any manner and
particularly not by adopting an approach which brooks of
no departure
except in special circumstances, it must decide each case upon a
consideration of the relevant features, without adopting
a
predisposition either in favour of or against granting security
.”
[59]
The same consideration must apply in a case where provision of
security is sought to be compelled.
67.
I
am of the opinion that, where the SCA, in granting leave to appeal,
did not set a requirement that the appellant provide security
and the
respondent considers that it would be appropriate for security to be
provided, it would be for the respondent to approach
the SCA for an
order to such an effect. Put differently, it would only be once the
respondent in an appeal brought an application
and obtained an order
that it could then invoke
Rule 30A
for want of compliance with the
obligation created under that provision. These views are inconsistent
with the views expressed
by the Full Bench in
TR
Eagle Air (Pty) Ltd v RW Thompson,
[60]
which
considered that “
Rule
49(13)
is peremptory. The rule does not place any responsibility on
the Respondent. The rule obliges the appellant to give security”
.
[61]
However, the Full Bench in
TR
Eagle Air
made
this statement without engaging with the meaning of
Rule 49(13)
in
the context. The Court certainly did not engage upon the implications
of the promulgation of the
Superior Courts Act.
68.
Be
that as it may. Whether or not I am right on the analysis of the
provisions of the
Superior Courts Act and
the Uniform Rules, the
central question for me to consider is simply whether I should
exercise the discretion that I enjoy under
Rule 30A(2) in favour of
the applicant if, as the applicant asserts that I do have
jurisdiction to make an order in consequence
of the Rule 30A
application. That discretion is wide, and this Court must take all
relevant considerations into account.
69.
As regards the reason for non-compliance in the present
instance, it was
on the basis of an attack on Rule 49(13). The view
that I have expressed is that there is merit to the attack. However,
even if
this Court were to disagree with the submissions made, it is
apparent that the respondent in this application did not recklessly
fail to comply with a Rule of Court: it had a reason for doing so and
it expressed that reason to the applicant from at least 22
October
2020.
70.
More
importantly, in accordance with section 173 of the Constitution, the
High Court “
has
the inherent power to protect and regulate their own process …
in the interests of justice”
.
The Constitutional Court confirmed in
S
v S
[62]
that “
where
strict adherence to the rules is at variance with in the interests of
justice, a court may exercise its inherent power in
terms of s 173 of
the Constitution to regulate its own process in the interests of
justice”
.
I must accordingly exercise judicial discretion in the circumstances
of the case to determine whether strict adherence to Rule
49(13)
ought to be compelled, or whether I can, in the interests of justice,
decline so to compel.
71.
In the present case the respondent raised the alleged
unconstitutionality of
Rule 49(13) on 22 October 2020. Then, on 6
November 2020, the applicant made the demand that security for costs
be given. The applicant
took no further steps to compel the
respondent to furnish security and only raised the respondent’s
failure to provide security
again on 11 February 2021, more than a
month (i)
after
the appeal record had been lodged with the registrar of this court in
accordance with the prescribed time period for lodging of
the appeal
record; and (ii) the respondent had applied to the registrar, in
terms of Rule 49(6), for a date for hearing of the
appeal, both of
which happened on 28 December 2020.
72.
On 12 February 2021, the very next day, the respondent brought to the
attention
of the applicant the fact that the registrar had allocated
an appeal case number and once more recorded denial of the obligation
to furnish security. The applicant’s response was to re-assert
its stance that security was to be given. Yet, it did nothing
for
more than a month. It was only on 31 March 2021 that it served the
Notice upon the respondent. And then, when the respondent
made it
abundantly clear on 6 April 2021 that no security for costs would be
forthcoming, the applicant waited until 23 April 2021
to bring the
present application. This, despite the fact that the time period for
compliance of the Notice had already run out
on 16 April 2021.
73.
The result of the applicant’s delay in bringing an application
that would
conclude in the respondent being compelled to furnish
security for costs for months after the applicant knew from
correspondence
that the respondent denied an obligation to furnish
security had the undesirable consequence that this matter, which
raised constitutional
issues (as anticipated) came before me on 10
August 2021, a mere 6 court days before the day on which the appeal
is to be heard.
The order sought of me (as now expressed in the draft
order), if granted, would allow the respondent to file security
within 3
days and, if not, for the applicant to supplement its papers
and apply for the applicant’s appeal to be struck or dismissed.
All of this cannot be achieved in time for the issues to be disposed
of before the date allocated for the appeal, even though this
Court
has acceded to the request that judgment be given expeditiously, and
absorbed the pressure of rendering a judgment on these
complicated
debates without delay.
74.
in
MV
Navigator (No 2): MV Navigator and Another v Wellness International
Network Ltd
[63]
Louw J, there dealing with SCA Rule 9(1) and referring to the words
“
before
lodging the record”
commented
that the language indicates that “
the
application must be brought at the time of the application for leave
to appeal or soon thereafter, but before the record is
lodged and
that security must be provided before the record is lodged”
.
[64]
That position seems to be correct when regard is also had to Rule
47(1), which permits a party “
entitled
and desiring to demand security for costs”
to
give notice of such a demand “
as
soon as practicable after the commencement of proceedings”.
75.
The
SCA in
Buttner
v Buttner,
[65]
confronted
with an application for security for costs under SCA Rule 11(1)(b),
considered that “
the
application for security for costs at this very late stage of
proceedings, when the bulk of the costs of appeal have already
been
incurred, was misconceived and futile”
.
Accordingly, the SCA dismissed the application with costs.
[66]
76.
When read together, Rule 47(1) and the judgments in
MV
Navigator
and
Buttner
lend support to the conclusion that applications for security for
costs must be launched at an early stage. Here, it was open to
the
applicant, in opposing the application for leave to appeal to the
SCA, to ask for an order that security be given in the event
leave
were granted. The papers in the application for leave to appeal to
the SCA are not before this Court, but the submission
before me is
that the applicant did not ask for security in opposing the
application for leave to appeal, apparently because the
respondent
had not included in its application for leave a request that it be
released from a security obligation. The applicant
could equally have
raised the demand for security for costs when the respondent filed
the notice of appeal on 2 October 2020. It
did not. The next
opportunity came when the respondent, on 22 October 2020, insisted
that it would be unconstitutional for the
applicant to demand
security. On none of these occasions did the applicant commence
proceedings to compel security for costs.
77.
I appreciate that parties should not approach court unnecessarily if
interlocutory
matters are capable of resolution between the parties,
as Mr Novitz submitted in oral argument. However, to restate one’s
position “
ad nauseam”
in correspondence, as the applicant’s attorney put it in a
letter of 12 February 2021, in a case where the counterparty has
unequivocally challenged the duty to comply with a rule on a
constitutional basis constitutes a futile attempt to avoid an
approach
to court. I do not consider it to be in the interests of
justice to order compliance with the procedural prescripts of Rule
49(13)
at this late stage.
78.
To grant the order at this point, days before the appeal is due to be
heard,
would result in prejudice to the respondent. Any prejudice
that the applicant might suffer now as a consequence of the
respondent’s
failure to furnish security is all of its own
making, because it did not approach this Court with due expedition.
It elected to
incur further costs in pursuit of compelling the
respondent to furnish security, without due expedition.
79.
I am fortified in my decision to exercise my discretion in favour of
the respondent
by virtue of my agreement with the respondent’s
submission that this cannot be a case where the merits of its appeal
can
be considered as so hopeless that it would warrant precluding it
from pursuing the appeal if security were not furnished. After
all,
the SCA deemed this an appropriate case for leave to appeal be
granted.
80.
I therefore propose to exercise my discretion in favour of the
respondent, and
decline to compel compliance with any requirement
that security be put up as may exist.
81.
However, I do not consider it appropriate to issue a punitive costs
order, which
the respondent sought in pleading. It is true that the
applicant delayed in bringing the application, but that alone does
not warrant
a punitive costs order. The applicant was entitled to
rely on Rule 49(13) and not to simply accept the respondent’s
assertions
on constitutionality. The matters raised in this
application were novel and worthy of debate. It would be improper to
visit a punitive
costs order upon the applicant in such
circumstances. Mr Guldenpfennig SC accepted this in oral argument.
Conclusion
82.
I am of the view that there is a legitimate basis for the challenge
to Rule
49(13) on the basis of the doctrine of legality. In the
circumstances of this case, it was unnecessary for this Court to make
an
order to that effect. Put differently, as the reasoning
hereinabove shows, this Court was able to resolve the dispute between
the
parties without reaching the constitutional issue. However, the
concerns about the legality of Rule 49(13) are ripe for consideration
by the Rules Board and the Minister of Justice and Constitutional
Development. Arrangements will be made for this judgment to be
brought to the attention of these interested parties.
83.
In the present instance, the application falls to be dismissed on one
of two
grounds:
83.1.
either that this Court does not enjoy the jurisdiction to entertain a
Rule 30A(2) application to compel security where the
SCA has granted
leave to appeal without making provision for security, because in
such an application this Court would have to
engage upon the question
of whether an appellant ought to be released from an obligation to
furnish security, in respect of which
this Court does not enjoy
jurisdiction;
83.2.
or, if the Cou
rt does enjoy
jurisdiction, a judicial consideration of the relevant factors does
not lead to the conclusion that security ought
to be compelled in the
circumstances of the case.
84.
In the circumstances, I make the following order:
“
The
application is dismissed with costs, such costs to include the costs
occasioned by the employment of senior counsel
”.
M
ENGELBRECHT
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Electronically
submitted therefore unsigned
Delivered:
This judgement was prepared and authored by the Judge whose name is
reflected and is handed down electronically 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
hand-down is deemed to be 12 AUGUST 2021.
Date
of hearing:
10
August 2021
Date
of judgment:
12
August 2021
Appearances
For
the applicant:
Adv M Novitz
Instructed
by:
Schindlers Attorneys
For
the respondents:
Adv S Guldenpfennig SC
Instructed
by:
Corne
Guldenpfennig Attorneys
[1]
https://quoteinvestigator.com/2012/04/28/shorter-letter/
.
[2]
2021
JDR 0699 (GP).
[3]
2000
(2) SA 1066 (N).
[4]
Emphasis
supplied.
[5]
[2002] ZAECHC 23
, accessible at
http://www.saflii.org/za/cases/ZAECHC/2002/23.html.
[6]
2003
(4) SA 137 (T).
[7]
At
138B.
[8]
At
140F/G.
[9]
Case
No 1357/2005 (Judgment of 6 September 2007).
[10]
Emphasis
supplied.
[11]
2011
(3) SA 231 (GSJ).
[12]
At
para 3.
[13]
At
para 7. Emphasis supplied.
[14]
Case
No A601/14, accessible at
http://www1.saflii.org/za/cases/ZAGPPHC/2016/1099.pdf.
[15]
At
para 7.
[16]
At
para 8.
[17]
At
para 12. Emphasis supplied.
[18]
At
para 14.
[19]
(A982/13)
[2017] ZAGPPHC 890 (8 December 2017).
[20]
At
para 2.
[21]
At
para 5.
[22]
At
para 6.
[23]
(A5007/2018)
[2018] ZAGPJHC 576 (19 October 2018),
accessible
at http://www.saflii.org.za/za/cases/ZAGPJHC/2018/576.html.
[24]
At
para 1.
[25]
At
para 3.
[26]
1974
(4) SA 291 (C).
[27]
At
para 10.
[28]
Supra
.
[29]
At
para 12.
[30]
At
paras 16 and 19.1.
[31]
[2018]
ZALMPPHC 71.
[32]
At
para 18.
[33]
At
para 3.
[34]
At
para 4.
[35]
At para 33.
[36]
2021
JDR 0699 (GP).
[37]
At
para 18.
[38]
Supra.
[39]
Supra
.
[40]
Phillips
v South African Reserve Bank and others
2013
(6) SA 450
(SCA) at para 31 and the authorities there cited.
[41]
See
for example
Johannesburg
Metropolitan Municipality v Gauteng Development Tribunal and Others
(Mont Blanc Projects and Properties (Pty) Ltd
and Another as amici
curiae)
[2008] ZAGPHC 30
;
2008
(4) SA 572
(W) at para 2.
[42]
De
Lange v Presiding Bishop of the Methodist Church of Southern Africa
for the Time Being and another
2016
(2) BCLR 1
(CC) (
De
Lange
)
at
para
30.
[43]
Id
.
[44]
2007 (5) SA 525 (CC).
[45]
National
Coalition for Gay and Lesbian Equality and Others v Minister of Home
Affairs and Others
2000
(2) SA 1
(CC)
at
para 21. Emphasis supplied.
[46]
1999
(12) BCLR 1420
(CC) at para 22.
[47]
Supra.
[48]
At para 16
[49]
2000 (2) SA 987 (CC).
[50]
Supra
at
1073C.
[51]
S
v Mhlungu
[1995] ZACC 4
;
1995
7 BCLR 793
(CC);
1995 3 SA 867
(CC) para 59.
[52]
Superior
Courts Act s
17(2)(f).
[53]
5 ed
Juta
2009 at p 1167.
[54]
At
B49.29.
[55]
Supra
.
[56]
At
140G.
[57]
At
140H.
[58]
1998
(3) SA 1036
(SCA)
[59]
At
1045I – 1046A.
[60]
Supra
.
[61]
At
para 18.
[62]
2019
(6) SA 1
(CC) at para 58.
[63]
2004 (5) SA 29 (C).
[64]
At
34F.
[65]
2006
(3) SA 23 (SCA).
[66]
At
paras 40 and 43(a).