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[2016] ZAFSHC 142
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Bezuidenhout N.O and Others v Mangaung Metropolitan Municipality (4254/2013) [2016] ZAFSHC 142 (25 August 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
Number : 4254/2013
In
the application between:-
STEPHANUS
ABRAHAM CLOETE
BEZUIDENHOUT
N.O
.......................................................................................................
1st
Applicant
ABEL
JACOBUS DU PLESSIS BENADE
N.O
..............................................................
2nd
Applicant
CHRISTIAAN
HENDRIK EARLE
N.O
..........................................................................
3rd
Applicant
WYNAND
JOHANNES FLEMMING
N.O
.....................................................................
4th
Applicant
DEIDRé
MILTON
N.O
.......................................................................................................
5th
Applicant
BAREND
JOHANNES STRAUSS
N.O
............................................................................
6th
Applicant
JOHAN
DANIëL SNYMAN
N.O
......................................................................................
7th
Applicant
[Cited
herein in their representative capacity as
Trustees
of the Eco Home Development Trust]
And
MANGAUNG
METROPOLITAN
MUNICIPALITY
........................................................
Respondent
JUDGMENT
BY:VAN ZYL, J
DELIVERED
ON:25 AUGUST 2016
[1]
The applicants previously instituted an application again the
respondent, which application served before me (“the main
application”). This is an application for leave to appeal by
the respondent against the order of costs which I issued in
the main
application when I dismissed the applicants’ application, but
ordered the respondent to pay the applicants’
costs on a scale
as between attorney and client. I will refer to the parties as in the
main application.
[2]
In terms of the respondents’ application for leave to appeal,
the application is based on the following grounds:
“
1.
In that there are special circumstances and the reasonable prospect
that another Court will come to a different conclusion regarding
the
exercise of the discretion by the Court in making the cost order;
2.
In that in granting the cost order the Court, with respect, failed to
exercise the discretion judicially, alternatively the Court
erred in
exercising the discretion on one or more or all of the following
grounds:
2.1
In awarding costs against the respondent when it was successful;
2.2
In the alternative, and on the basis of holding that the respondent
did not disclose or raised the issue of illegality before
the
application was issued, the respondent was still duty bound to oppose
the application on the basis of illegality and the cost
order
penalises the respondent for doing what it is in law compelled to do;
2.3
In that, alternatively, the issue was pertinently raised in the
answering affidavit. The applicants elected, notwithstanding
this, to persist with the application at own risk.
2.4
There are strong prospects of success that another Court will find
that the Court erred in exercising its discretion by not
considering
that the applicants, at their own peril, elected to file a replying
affidavit and to persist with arguing the matter
on an opposed basis,
thereby escalating the costs whilst the illegality and
non-determinability of the prize was pertinently raised.
2.5
The Court, whilst referring to the lapse of time, did not give proper
weight to the fact that the Applicants were also responsible
for
substantial delays in the process up and until 2013 and thus also
responsible for any financial prejudice they may or may not
suffer.
2.6
In that reasonable prospects of success exist that another Court will
conclude that respondent’s conduct does not, in
any event,
warrant a punitive cost order in light of the facts of the matter.”
[3]
The main application was instituted after the commencement of the
Superior Courts Act, 10 of 2013
, and the application for leave to
appeal is therefore to be dealt with in terms of
sections 16
and
17
of the said Act. The relevant extracts from the said sections read as
follows:
“
16
APPEALS GENERALLY
(1)
Subject to
section 15(1)
, the Constitution and any other law–
(a)
an appeal against any decision of a Division as a Court of first
instance lies, upon leave having been granted –
(i)
if the Court consisted of a single judge, either to the Supreme Court
of Appeal or to a full Court of that Division, depending
on the
direction issued in terms of Section 17(6)….
17
LEAVE TO APPEAL
(1)
Leave to appeal may only be given where the judge or judges concerned
are of the opinion that –
(a)
(i) the appeal would have reasonable
prospect of
success; or
(ii)
there is some other compelling reason why the appeal should be heard,
including conflicting judgments on the matter under consideration;
(b)
the decision sought on appeal does not fall within the ambit of
Section 16(2)(a); and
(c)
where the decision sought to be appealed does not dispose of all the
issues in the case, the appeal would lead to a just and
prompt
resolution of the real issues between the parties.
(2)
(a) …”
[4]
In
Tsosane v Minister of Prisons
1982 (3) SA 1075
(C) the Court dealt
with the principles to be observed in dealing with an application for
leave to appeal against an order as to
costs. Despite a
subsequent amendment to Section 20 of the Supreme Court Act, 59 of
1959, those principles were held still
applicable in
W
v S (2)
1988
(1) SA 499
(N) at 501 F – 502 C:
“
In
any application for leave to appeal where the only issue remaining
therefore is one of costs, it seems to me that one should
have regard
to what was said by King AJ (as he then was) in
Tsosane
and Others v Minister of Prisons and Others
1982
(3) SA 1075
(C), particularly at
1076E
- 1077B:
'It
is clear from this provision that the Legislature wished to
discourage appeals of this nature - see
Lendalease
Finance (Pty) Ltd v Corporacion De Mercadeo Agricola and Others
1976
(4) SA 464
(A)
at
488D;
Delmas
Ko-operasie Bpk v Koen
1952
(1) SA 509
(T)
at
510E - F.
Bearing
this in mind, the principles to be observed in arriving at a decision
in an application of this nature may be stated as
follows:
(i)
Such leave is not lightly given, the Court's disinclination derives
not only from the attitude of the Legislature as expressed
in the
aforesaid section, but also from the fact that costs are ordinarily a
matter of judicial discretion - see
Kruger
Bros & Wasserman v Ruskin
1918 AD
63
at 69 - and also because it is desirable, in the interests of the
parties and also in the overall interest of the administration
of
justice, that where the merits of a matter have been determined,
finality should generally be regarded as having been reached.
(No
doubt these factors also motivated the Legislature.)
(ii)
Thus the Court will not ordinarily grant leave to appeal in respect
of what has become a dead issue merely for the purpose
of determining
the appropriate order as to costs - see
Read
v SA Medical and Dental Council
1949
(3) SA 997
(T)
at
1026 - 7;
Jenkins
v SA Boilermakers, Iron & Steel Workers and Ship Builders Society
1946 WLD 15
at 18.
(iii)
The Court will, however, more readily grant leave where a matter of
principle is involved - see
Divine Gates
& Co v Press & Co
1931 CPD 143
;
Lakofsky v O'Reilly
1933 WLD 126
; cf
Langverwacht Farming Co
v Sedgwick & Co Ltd (2)
1942 CPD
155
at 168; and see also
Kruger Bros &
Wasserman v Ruskin (supra
at 69).
(iv)
The amount of costs involved should not be insubstantial, lest the
matter be regarded as altogether too trivial to engage the
further
attention of the Court.
(v)
The applicant for leave to appeal should have a reasonable prospect
of success on appeal in the sense that his case should be
fairly
arguable - see
Fouche
v Erlanger & Co
1920 CPD 76
;
Holmes
and Another v Lawrie
1927 OPD 223
;
Gray
v Goodwood Municipality and Others
1942 CPD 549
;
Ex
parte Registrateur van Aktes: In re Van den Berg NO v Registrateur
van Aktes
1975
(3) SA 321
(T).'
Admittedly
Tsosane's
case was decided before the amendment to s 20 of the Supreme Court
Act 59 of 1959 by the Appeals Amendment Act 105 of 1982 and
leave to
appeal is required now in all civil matters, not merely those
formerly dealt with by the previous provisions such as orders
as to
costs. Nevertheless, what is said in
Tsosane's
case seems to me to be appropriate in an enquiry such as the present
(1982
Annual Survey
at 429).”
The
Supreme Court Act has now been repealed by the
Superior Courts Act.
In
my view there is nothing in the
Superior Courts Act which
suggests
or necessitates a stance different from the aforesaid.
[5]
The following general principles are applicable to appeals on costs
only, as summarised in
Erasmus:
Superior Court Practice
,
(Electronic Version), D.E. van Loggerenberg, Volume 1, Part A2, at RS
1, 2016, A2-86:
“
In
awarding costs, a Court of first instance exercises a discretion and
a Court of Appeal will not readily interfere with the exercise
of
that discretion. The power of interference on appeal is limited
to cases of vitiation by misdirection or irregularity,
or the absence
of grounds on which a Court, acting reasonably, could have made the
order in question. A Court of Appeal cannot
interfere merely on
the ground that itself have made a different order.”
[6]
The findings I made on the basis of which I, in the exercising of my
discretion, deprived the respondent of its costs despite
having being
successful in its opposition of the main application are the
following:
“
[39]
It is evident from the totality of the papers before me, that the
respondent at no stage before the filing of the answering
affidavit
raised the issue of the illegality of the deed of sale on any of the
respective grounds raised in the answering affidavit.
It was only
once the applicants approached court that this issue was aired. The
applicants have been involved in negotiations with
the respondent
which was followed by the eventual conclusion of the deed of sale for
approximately thirteen years. After the conclusion
of the written
deed of sale, for so long as from 2006 till 2013, the respondent
never raised the issue of the selling price that
was to be revisited
nor of the illegality of the deed of sale, full well knowing that the
applicants are spending thousands or
even millions of rand based upon
the deed of sale and their intended township development.
[40]
I seriously disapprove of the said conduct by the respondent.
Although they had no other option but to oppose the current
application, the detriment for the applicants could have been
prevented if the relevant officials and employees who were involved
herein on behalf of the respondent at the time had properly performed
their respective duties.
[7]
I still maintain that the aforesaid findings are factually correct. I
also did not understand Mr Snellenburg, appearing on behalf
of the
respondent, to argue the contrary.
[8]
The aforesaid conduct by the officials of the respondent constituted
a failure to comply with their constitutional obligations
which was
the fundamental cause of the litigation in this matter. See
Treatment
Action Campaign v Minister of Health
2005 (6) SA 363(T)
.
[9]
The fact that the respondent was duty bound to oppose the main
application (like I duly found in paragraph 40 of my judgment),
does
not detract from the fact that it was the blameworthy conduct on
behalf of the respondent which caused the circumstances that
led to
the litigation.
[10]
Even if it is to be accepted that the applicants were also
responsible for some of the delays in the process up and until 2013,
one should be mindful of the fact that their persistence with the
protracted process was based on their
bona
fide
belief that they had concluded a
valid written deed of sale with the respondent. The respondent,
on the other hand, allowed
the process to continue without ever
during that period of time raising the issue of the selling price
that was to be revisited
and the illegality of the deed of sale.
The respondent also failed to take any steps to have the deed of sale
declared null
and void.
[11]
The applicants did indeed elect to file a replying affidavit and to
persist with the arguing of the matter on an opposed basis
even after
the relevant issues were pertinently raised in the answering
affidavit. However, the issue regarding the delegated authority
of Me
Abrahams which was also only raised in the answering affidavit for
the first time, became crucial to the applicants’
case.
It necessitated the applicants to have served a notice in terms of
Rule 35(12)
and (14) in order to properly respond to the said
allegations in the answering affidavit. The applicants could
obviously not have
foreseen that this issue would be raised by the
respondent and could therefore not have addressed it at any earlier
stage than
in the replying affidavit. This, in my view, was already
enough justification for the applicants’ decision to have filed
a replying affidavit. In any event and in view of the totality of the
particular facts and circumstances of this matter, the applicants
were also not unreasonable in their decision to have persisted with
the application in order to get certainty and finality in this
matter; moreover so in the absence of any steps by the respondent to
have the deed of sale declared null and void.
[12]
Regarding the grounds upon which I ordered costs on a punitive scale,
I stated as follows in paragraph 41 of my judgment:
“
[41]
In the exercising of my discretion, I deem it necessary and
appropriate to show my disapproval by means of a punitive costs
order. In addition I deem it fair and just to ensure in the
circumstances of this application that the applicants are properly
recouped for their legal costs, despite them having been
unsuccessful. See
NEL v WATERBERG
LANDBOUWERS KO-OPERATIEWE VEREENIGING
1946 AD 597
at 607”.
Also
see
Swartbooi and Others v Brink and
Others
2006 (1) SA 203
(CC) at par
[27].
[13]
In the circumstances and where the application was needlessly caused
by the fault and conduct on the part of the respondent,
I considered
the said order as appropriate in the circumstances of this matter.
The following
dictum
stated
in
the
Treatment Action Campaign
-judgment
,
supra
,
at 372 C – D, is in my view directly relevant to this matter:
“
[zRPz]
In
the circumstances, both in terms of the constitutional principles of
appropriate relief and just and equitable redress for
unconstitutional
conduct and in terms of the ordinary common-law
principles of liability for costs, the respondent should be ordered
to pay the
applicant's costs, notwithstanding the fact that the
applicant has withdrawn its prayers for the substantive relief
originally
sought in the application.
…
I
accordingly make the following order:
The
respondent is ordered to pay the applicant's costs of the application
on the scale as between attorney and client.”
[14]
In the circumstances I cannot find that the respondent has a
reasonable prospect of success on appeal. As was stated in
W
v S (2)
,
supra
,
at 502 I – 503 B:
“
Even
taking all those circumstances into account and even if another Court
may give lesser weight to the factors which have been
said in the
circumstances to have been overemphasised or given undue weight, the
question of costs nevertheless remains a discretionary
one and it
seems to me that another Court would, in the light of the remaining
considerations, be slow to interfere. I do not think
that there is a
sufficient basis for saying that there is a reasonable prospect that
another Court, having regard to the above-mentioned
factors in
Tsosane's
case, and even weighing the favourable factors to which I have
referred, will take a different view on the penal order as to costs.
It
follows, and the conclusion to which I have come, is that in the
circumstances the application for leave to appeal must be refused
and
I accordingly refuse it with costs.”
[15]
T
he respondent’s application
for leave to appeal against the order of costs, is dismissed with
costs.
C.
VAN ZYL, J
On
behalf of the Applicants: Adv PU Fischer SC
Instructed
by:
Bezuidenhouts
Inc.
BLOEMFONTEIN
On
behalf of the Respondent: Adv N Snellenburg SC
Instructed
by: EG Cooper Majiedt Inc.
BLOEMFONTEIN