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[2016] ZAKZDHC 32
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Extra Dimensions 121 (Pty) Ltd v Body Corporate of Marine SANDS and Another (9015/2014) [2016] ZAKZDHC 32 (26 August 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
CASE
NO: 9015/2014
DATE:
26 AUGUST 2016
IN
THE MATTER BETWEEN:
EXTRA
DIMENSIONS 121 (PTY)
LTD
.................................................................................
Applicant
And
BODY
CORPORATE OF MARINE
SANDS
............................................................
First
Respondent
REGISTRAR
OF DEEDS,
PIETERMARITZBURG
...........................................
Second
Respondent
JUDGMENT
DATE DELIVERED 26
August 2016
MASIPA
J:
Introduction
[1]
The Applicant seeks leave to appeal against my judgment of 5 February
2016 wherein its application was dismissed with costs.
[2] The
order in terms of the judgment, was as follows:
1.
The Applicant’s application is dismissed with costs
.’
[3]
The basis for this application is that another court could reasonably
have come to a different conclusion and granted an order
declaring
the special resolution invalid and that there are reasonable
prospects that an appeal will succeed.
The
Test for Granting Leave to Appeal
[4]
The relevant section applicable to this application is set out in s
17(1)(a) of the Superior Courts Act, 2013 (‘the new
act’)
which provides as follows:
‘
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
prospects of success; or
(ii)
there is some other compelling reason why the appeal should be heard,
including conflicting judgments on the matter under consideration;
’
[5]
Counsel for the Respondents Mr
Boulle
submitted that the Applicant’s
application was fatally defective in that it was based on the old
test being ‘that another
court could reach a different
conclusion.’ He argued that there was no application by the
Applicants to vary their grounds
of appeal and that since the test is
now stringent, the application for leave to appeal must be dismissed
with costs.
[6]
He relied on
Mont Chevaux Trust v Goosen
2014 JDR 2325 (LCC) where the court
stated that the threshold for granting leave to appeal against a
judgment of the High Court
has been raised in the Superior Court Act.
The court stated that the use of the word ‘would’ was
indicative of the
measure of certainty that another court will differ
from the court whose judgment is sought to be appealed against.
Mont
Chevaux Trust
was followed in
The
Daantji Community and others v Crocodile Valley Citrus Company (Pty)
Ltd and another
Case no: 75/2008
(Unreported) (LCC) and
Shelton v The
Statutory Council for the Print and Newspaper and Packaging Industry
and others
Case no: C650/14
(unreported) (LC).
[7]
In
S v Kruger
2014 (1) SACR 647
(SCA) the court stated the
following in paragraph 2:
‘
Before
dealing with the merits of the appeal, it is necessary at the outset
to deal with the test applied by the high court in granting
leave to
appeal to this court. Despite dismissing the appellant’s
appeal, the high court concluded that it was ‘possible’
that another court might arrive at a different conclusion and that
leave to appeal should not be ‘lightly refused’
where the
person concerned is facing a lengthy sentence of imprisonment. This
is an incorrect test. What has to be considered in
deciding whether
leave to appeal should be granted is whether there is a reasonable
prospect of success. And in that regard more
is required than the
mere ‘possibility’ that another court might arrive at a
different conclusion, no matter how severe
the sentence that the
applicant is facing.’
At
Para 3:
‘
The
time of this court is valuable and should be used to hear appeals
that are truly deserving of its attention. It is in the interests
of
the administration of justice that the test set out above should be
scrupulously followed.’
[8]
In her argument Ms
Mills
for the applicant sought to rely on
the provisions of s 17(1)(a)(ii). She submitted that it was apparent
that leave to appeal could
also be granted where there are
conflicting decisions. This was of course not one of the applicant’s
grounds of appeal. Mr.
Boulle
argued that there were no
conflicting decisions
[9]
I agree with Mr.
Boulle
that the test followed by the
applicant in applying for leave to appeal is incorrect. Despite the
defect being raised, there was
no application by the applicant to
amend its grounds of appeal. Ms
Mills
instead sought to
introduce this from the bar. Allowing this would be highly
prejudicial to the respondent whose case would reasonably
have been
prepared on the basis of the grounds raised in the applicant’s
papers.
[10]
The application for leave to appeal therefore falls to be dismissed
on this ground alone. However, should I be incorrect in
my
conclusion, I proceed to consider the merits of the application.
The
Merits
[11]
Ms
Mills
submitted
that the judgment in p
aragraph 37 refers to the correct
authority of
Natal Joint Municipal Pension Fund
v Endumeni Municipality
2012 (4) SA 593
(SCA) and
Bothma-Batho Transport (Edms)
Bpk v S Bothma & Seun Transport (Edms) Bpk
2014
(2) SA 494
(SCA) which s
tresses the use of ordinary grammar
and syntax of words and phrases. The provision to
s 32(4)
of the
Sectional Titles Act, 1986
required that an owner adversely affected
by a decision of the body corporate to make rules attached to the
vote or to the liability
thereof, such owner must provide written
consent. It was common cause that the applicant did not consent.
[12]
It was argued further that in their ordinary grammatical application,
the phrase ‘adversely affected’ pointed to
someone
affected adversely by a change in levies. It could have no other
meaning than to mean that a person that has to pay more
without
consenting to this. Ms
Mills
argued further that neither this
court nor Theron J in
Algar v Body Corporate of
Thistledown & Others
[2010] JOL
26140
(N)
stated what the meaning of the phrase was. The
ordinary meaning of the phrase in this case leads to someone paying
more.
[13]
She argued that the judgment in paragraph 38 stated that
Thistledown
took into account that when the legislature drafted the provisions of
s 32
(4), it had at its disposal the provisions of s24 (3) of the
1971
Sectional Titles Act which
required a unanimous vote of members
before changing the levy structure and that the provision made it
difficult, if not impossible,
for body corporates to change the basis
upon which levies could be increased. She referred to 25 (1)
Lawsa
2 ed para 340 read with para 305 and argued that it is presumed that
statute law does not alter existing law more than necessary.
Therefore, the legislature could not have sought to deviate
excessively from the previous legislation to allow body corporates
to
amend the levy provision in the absence of consent by owners. In
response to this, Mr.
Boulle
referred to his heads of argument
during the main hearing where he raised the presumption that the
legislature is familiar with
the court’s interpretation.
[14]
Ms
Mills
argued that the Act provides for precisely that which
the judgment says is absurd. In terms of the judgment, the Applicant
will
have to pay more than before the amendment despite not having
consented to this as required by the Act. The judgment states that
the Applicant now has to pay for what he benefits from. To interpret
adversely affected, one must compare the position before and
after
the resolution. The sole effect on the applicant is that instead of
being liable for 4.3%, he became liable to 10.3% while
the benefits
he enjoys remained the same. He is clearly adversely affected. The
judgment states further that it is unfair for one
owner to benefit at
the expenses of another contrary to the
Herald Investment
Share Block (Pty) Ltd and others v Meer and others; Meer v Body
Corporate of Belmont Arcade and another
2010 (6) SA 599
which
states that liability to pay levies is not based on who benefits
what. While the judgment states that it could not be the
intent of
the legislature for one owner to benefit, the legislature intended
precisely that by including the requirement of consent
by an owner.
[15]
The function of the court is to interpret legislation and not make or
change law (25(1)
Lawsa
para 403. Ms
Mills
submitted
that this judgment and
Thistledown
seemed to re-enact or
change the legislation. Legislation allowed for a majority of the
owners in the scheme to pass the resolution
adversely affecting the
right of one owner after he has been heard. The legislature clearly
intended to retain the provision since
it had an opportunity to
delete or omit it in the new act. One cannot simply ignore these
provision. She submitted that on a consideration
of all her
submissions, there is a good chance that another court could reach a
different conclusion.
[16]
There was therefore a strong probability that another court would
come to different conclusion. The
Thistledown
decision by
Theron J is bad law and conflicts with Wallis J in
Herald
Investments Share block
.
[17]
Mr.
Boulle
submitted that if the applicant’s argument
was to be accepted, this would lead to an interpretation which is not
fair and
equitable. He argued that the Applicant’s view departs
from the interpretation approach in
Natal Joint
Municipal Pension Fund v Endumeni Municipality
2012 (4) SA
593
(SCA). He submitted that the starting point in interpretation was
the language, grammar and syntax. Neither the ordinary meaning
nor
context dominate over the other. The context includes the general
ethos of the Sectional Title Act, 1986 to ensure a fair and
equitable
dispensation. This cannot be achieved if the Applicant’s
interpretation is followed.
[18]
He submitted that the question to ask is would another court come to
a different conclusion. In this regard, there are two
judgment
against the Applicant. Two courts found rightly that one cannot
petition against principles of fairness and equity which
is the
principal purpose of the 1986 act.
In
addition to the two judgment,
Lawsa
is
against the Applicant, PJ Badenhorst
Silberberg
& Schoeman’s The Law of Property
5
Ed at 19.5.1 is against the Applicant and Van der Merwe
Sectional
Titles, Share Blocks and Time-Sharing
Vol.
1 para 4-10(1)-(3) support the approach in
Thistledown
[19]
Paragraph 38 of the judgment captures the issue neatly by stating
that if the meaning of the phrase ‘adversely affected’
is
given the meaning suggested by the Applicant, the result would be
there can never be an increase as one person would block it.
Mr.
Boulle
argued that it could not be suggested that the
applicant was adversely affected by a change which achieves the
purpose of the Act
and is not unreasonable. In respect of the
reference made to
Herald Investments Share block
he submitted
that the facts in that matter are distinguishable as it dealt with
a
dispute about who is liable to pay for the cost of refurbishing three
lifts in a multipurpose building consisting of three floors
of
commercial premises, three floors of parking and fifteen floors of
residential flats. The judgment considers the phrase ‘exclusive
use’ as provided for in s 37(1) of the Act.
[20]
In respect of the Applicant’s criticism of the judgment on the
basis that it does not say what the meaning of ‘adversely
affected’ is, Mr.
Boulle
submitted that there was no
requirement to set out what falls within the meaning of ‘adversely
affected’. The requirement
was to determine whether the
Applicant was adversely affected which the judgment does. The
presumption that statutory provisions
are not presumed to alter
common law more than is necessary was followed in
Nedbank and
others v National Credit Regulator
and another
2011 (3) SA
581
(SCA) para 38.
[21] The
Court in
Novartis
SA (Pty) Ltd v Maphil
Trading
(Pty) Ltd
2016 (1) SA
518 (SCA) stated the law regarding principles of interpretation as
follows:
‘
[28]
The passage cited from the judgment of Wallis JA in
Endumeni
summarises the state of the law as it was in 2012. This court did not
change the law, and it certainly did not introduce an objective
approach in the sense argued by Novartis, which was to have regard
only to the words on the paper.
That
much was made clear in a subsequent judgment of Wallis JA in
Bothma-Botha
Transport (Edms) Bpk v S Bothma & Seun Transport (Edms)
Bpk
[2013]
ZASCA 176
;
2014
(2) SA 494
(SCA),
paras 10 to 12 and in
North
East Finance (Pty) Ltd v Standard Bank of South Africa Ltd
[2013]
ZASCA 76
;
2013
(5) SA 1
(SCA)
paras 24 and 25. A court must examine all the facts - the context -
in order to determine what the parties intended.
And it must do that
whether or not the words of the contract are ambiguous or lack
clarity. Words without context mean nothing.
[29] Referring to
the earlier approach to interpretation adopted by this court in
Coopers
& Lybrand and others v Bryant
[1995]
ZASCA 64
;
1995
(3) SA 761
(A)
at 768A-E, where Joubert JA had drawn a distinction between
background and surrounding circumstances, and held that only
where
there is an ambiguity in the language should a court look to
surrounding circumstances, Wallis JA said (para 12 of
Bothma-Botha
):
“
That
summary is no longer consistent with the approach to interpretation
now adopted by South African courts in relation to contracts
or other
documents, such as statutory instruments or patents. While the
starting point remains the words of the document, which
are the only
relevant medium through which the parties have expressed their
contractual intentions, the process of interpretation
does not stop
at a perceived literal meaning of those words, but considers them in
the light of all relevant and admissible context,
including the
circumstances in which the document came into being. The former
distinction between permissible background and surrounding
circumstances, never very clear, has fallen away. Interpretation is
no longer a process that occurs in stages but is essentially
one
unitary exercise [a reference to a statement of Lord Clarke SCJ in
Rainy
Sky SA v Kookmin Bank
[2011]
UKSC 50
, [2012] Lloyd’s Rep 34 (SC) para 21].
[30] Lord Clarke
in
Rainy Sky
in turn referred to a passage in
Society of
Lloyd’s v Robinson
[1999] 1 All ER (Comm) at 545, 551 which
I consider useful.
“
Loyalty to
the text of a commercial contract, instrument, or document read in
its contextual setting is the paramount principle
of interpretation.
But in the process of interpreting the meaning of the language of a
commercial document the court ought generally
to favour a
commercially sensible construction. The reason for this approach is
that a commercial construction is likely to give
effect to the
intention of the parties. Words ought therefore to be interpreted in
the way in which the reasonable person would
construe them. And the
reasonable commercial person can safely be assumed to be unimpressed
with technical interpretations and
undue emphasis on niceties of
language.”’
[22]
There is therefore a plethora of relevant authority confirming that
the correct interpretation was reached in determining this
matter.
Therefore there is no possibility that another court would come to a
different conclusion.
[23]
In the result, the following order is made:
1.
The application for leave to appeal is dismissed with costs.
Masipa
J
Heard:
16 May 2016
Delivered:
26 August 2016
Appearances
:
For
the plaintiff: Ms L Mills
Instructed
by: Richard Evans & Associates
For
the interested party: Mr A J Boulle
Instructed
by: B E S Agar and Associates.