Summary of Judgment

1. Introduction

This judgment concerns an application for leave to appeal brought in the High Court of South Africa, Gauteng Local Division, Pretoria. The application was heard and decided by Nair AJ.

The parties to the proceedings are Catherine Helen Thompson and Couples Investment CC as the applicants, and Krugel Heinsen and First Rand Bank Limited as the respondents.

The procedural context was that the applicants’ substantive application had been dismissed on 4 January 2019. The present decision (dated 10 July 2019) determines whether leave should be granted to appeal against that dismissal, with reference to the statutory threshold for leave to appeal in terms of the Superior Courts Act 10 of 2013.

The general subject-matter underlying the dispute, as it emerged from the grounds advanced for leave to appeal and the court’s brief engagement with them, related to alleged liability arising from two agreements (including a settlement agreement and a mandate) and complaints concerning the payment out of money and the consequences said to flow from one respondent’s conduct, including a contention that there had been an improperly identified dispute of fact.

2. Material Facts

The court treated as material and essentially common cause, for purposes of deciding leave to appeal, that the applicants’ application had already been dismissed and that the present proceedings were confined to whether the statutory requirements for leave to appeal were met under section 17(1) of the Superior Courts Act.

A further material factual premise relied upon by the court was that two agreements were implicated in the matter. The court specifically referred to a settlement agreement, and it accepted (as emerging clearly from that settlement agreement) that the first respondent was not a party to it. On this basis, the court regarded the applicants’ attempt to obtain relief for breach of the settlement agreement against both respondents as legally problematic at least insofar as it implicated the first respondent.

In addition, the court treated as material that there was a mandate between the applicant(s) and the first respondent, but that in relation to this mandate the applicants had not pleaded a cause of action that the mandate was breached, and negligence was not pleaded as part of that claim. This pleading deficit was relied upon by the court in assessing the viability of the applicants’ complaints directed at the first respondent.

The judgment did not resolve the underlying factual disputes on their merits. Instead, it concentrated on whether one specific complaint about the court’s earlier treatment of an alleged dispute of fact warranted appellate scrutiny under the elevated statutory test.

3. Legal Issues

The central legal question was whether the applicants satisfied the requirements for leave to appeal as set out in section 17(1) of the Superior Courts Act 10 of 2013, in circumstances where leave “may only be given” if the statutory threshold is met.

This was primarily a question of law and the application of law to the procedural posture of the case, namely the correct standard for granting leave to appeal and whether the applicants’ proposed grounds of appeal met that standard. It also involved an evaluative assessment of whether the contemplated appeal would have a reasonable prospect of success, or whether there was some other compelling reason why the appeal should be heard, but the judgment focused on the “reasonable prospects” inquiry.

Within that framework, the court had to decide whether any of the grounds advanced by the applicants disclosed a basis meeting the section 17(1) threshold. In particular, the court isolated one ground as potentially meeting the test, namely the complaint that the earlier dismissal had been based on an “ostensible” dispute of fact.

4. Court’s Reasoning

The court began by setting out the governing statutory framework in section 17(1) of the Superior Courts Act and emphasised that leave to appeal is now permitted only when the statutory criteria are met. In doing so, the court aligned itself with prior authority explaining that the threshold for leave to appeal has been raised under the Superior Courts Act, and that the wording of the provision—especially the use of “would” in relation to prospects of success—signals a more stringent standard than the earlier common-law approach.

In support of this approach, the court referred to authority discussing the shift from the previously applied test (whether another court may come to a different conclusion) to the current requirement that there be a reasonable prospect that another court would differ. The court treated these authorities as confirming that leave to appeal is no longer granted on a relatively permissive basis and that the statutory criteria must be applied with rigour.

Turning to the applicants’ grounds of appeal, the court stated that the issues raised were addressed in the earlier judgment and that the prior judgment had explained why no liability accrued to the first respondent. The court further noted that the earlier judgment had delineated between the respondents and the claims directed against each.

The court accepted the respondents’ opposition as having merit, particularly by pointing out that the relief sought for breach of the settlement agreement was pursued against both respondents even though, on the face of the settlement agreement, the first respondent was not a party to it. The court also considered it material that, in relation to the mandate between the applicant(s) and the first respondent, the applicants’ cause of action had not been pleaded as a breach of the mandate and negligence had not been pleaded, which undermined the applicants’ attempt to place responsibility on the first respondent on that basis.

Despite these findings against the applicants on most grounds, the court drew a distinction in relation to one ground. It held that the ground complaining that the court had erred by finding a dispute of fact regarding whether the second respondent acted intentionally and erroneously, and then dismissing the claim on the basis of that “ostensible” dispute of fact, met the section 17 threshold. On this narrow basis, the court exercised its discretion to grant leave to appeal, indicating that this specific issue justified appellate consideration under the applicable test.

5. Outcome and Relief

The court granted the application for leave to appeal, but only on the ground identified as the one raised in paragraph 11 of the application for leave to appeal, namely the contention relating to the alleged erroneous reliance on an “ostensible” dispute of fact.

The order did not grant leave on the other grounds advanced by the applicants, and the judgment reflects that the grant of leave was confined to the single identified ground.

No separate or express costs order is recorded in the order as set out in the judgment.

Cases Cited

South African Breweries (Pty) Ltd and The Commissioner of the South African Revenue Services (3234/15) [2017] ZAGPPHC 340.

Commissioner of Inland Revenue v Tuck 1989 (4) SA 888 (T).

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

Van Heerden v Cronwright and Others 1985 (2) SA 342 (T).

Legislation Cited

Superior Courts Act 10 of 2013, section 17(1).

Superior Courts Act 10 of 2013, section 16(2)(a).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that the statutory threshold for leave to appeal under section 17(1) of the Superior Courts Act is stringent and that leave may be granted only where the appeal would have a reasonable prospect of success (or another compelling reason exists).

The court held further that, while the respondents’ opposition had merit on several of the applicants’ stated grounds (including issues relating to the settlement agreement and deficiencies in the pleaded case regarding the mandate and negligence), one ground justified the grant of leave to appeal. That ground concerned the contention that the matter had been dismissed on the basis of an ostensible dispute of fact.

Accordingly, leave to appeal was granted only on that confined basis.

LEGAL PRINCIPLES

Section 17(1) of the Superior Courts Act 10 of 2013 sets an elevated threshold for leave to appeal by providing that leave may only be given where the statutory requirements are met. The test requires a court to be satisfied that the appeal would have a reasonable prospect of success or that some other compelling reason exists, and related statutory qualifications also apply.

The authorities referenced in the judgment were treated as establishing that the Superior Courts Act has raised the threshold from the earlier approach of whether another court might come to a different conclusion, to an approach that, by the use of the word “would”, indicates a greater degree of certainty that another court will differ from the court whose judgment is sought to be appealed.

In evaluating leave to appeal, the court may consider whether a proposed ground is undermined where, on the court’s view of the record and pleadings, a party sought relief against a non-party to an agreement, or where the pleaded case does not articulate the cause of action relied upon (including where negligence is not pleaded in relation to an alleged breach of a mandate), while still granting leave on a narrowly identified ground that meets the statutory threshold.