Pegma Thirteeen Investments (Pty) Ltd v Free State Development Corporation (2681/2006) [2008] ZAFSHC 154 (19 December 2008)

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[2008] ZAFSHC 154
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Pegma Thirteeen Investments (Pty) Ltd v Free State Development Corporation (2681/2006) [2008] ZAFSHC 154 (19 December 2008)

IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE FREE STATE
PROVINCIAL DIVISION)
Case No.: 2681/2006
In the case between:
PEGMA THIRTEEN
INVESTMENTS (PTY) LTD
Applicant
and
FREE STATE
DEVELOPMENT CORPORATION
Defendant
_____________________________________________________
JUDGMENT:
RAMPAI, J
_____________________________________________________
HEARD ON:
5 DECEMBER 2008
_____________________________________________________
DELIVERED ON:
19 DECEMBER 2008
_____________________________________________________
[1] This is an
application for leave to appeal. It is directed at the order I made
on the 18 September 2008 upholding the defendant’s
special plea.
The plaintiff’s notice of appeal for leave to appeal was duly filed
on the 7
th
October 2008. The application is opposed.
[2] After hearing
argument on Friday the 5
th
December 2008 I reserved judgement. I indicated that my decision and
the reasons underlying it would follow. This then is my
decision. I
refer to the parties as in the main action.
[3] The plaintiff
instituted an action against the defendant. The action is defended.
The defended filed its plea. Simultaneously
the defendant also filed
its special plea. The essence of the amended special plea was that
the defendant was an organ of state
entitled to be given a prior
notice of intended legal proceedings in terms of section 3(1), Act,
No. 40 of 2002. The plaintiff
did not give section 3(2) to the
defendant. It contended that the defendant was not an organ of
state, and therefore, not entitled
to such a prior notice. In the
end I found in favour of the defendant. It is that order which
precipitated these current proceedings.
[4] The issue which
arises in the case is whether the order whereby I upheld the special
plea is appealable or not. Mr. Pammenter
contended that it was
whereas Mr. Van der Walt contended that it was not. This is the
first important issue. The second issue
relates to the merits.
[5] Erasmus: Superior
Court Practice at A1-40/44 discusses section 20 of the Supreme Court
Act, No. 59 of 1959. The author points
out that under this section
leave to appeal was granted, among others, where a special plea
raised by the defendant was dismissed
– see paragraph 3 on p.A1-45.
In
CONSTANTIA
INSURANCE CO LTD v NOHAMBA
1986 (3) SA 27
AD at p. 36 Galgut JA (as he then was) said the
following about the effects of an order dismissing the defendant’s
special plea:
“…
the defendant asked for
separate and distinct relief. KROON AJ's judgment is a rejection of
the relief sought by defendant. Its
effect is a dismissal of the
special plea and an order that the "main action" only
proceeds. His decision, as far as
the trial was concerned, was final
and not interlocutory. To now hold that his failure to end his
judgment with the words "The
special plea is dismissed"
means that there is no judgment or order and therefore his decision
is not appealable, would in
my view be indefensible.”
[5] In
VAN
NIEKER AND ANOTHER v VAN NIEKERK AND ANOTHER
2008 (1) SA 76
SCA at paragraph 3 Van Heerden JA had this to say
about the test for appealability:
“
[3] In Zweni v Minister of Law and
Order
(1993 (1) SA 523
(A) at 531H - 533E), Harms AJA embarked on 'a
brief exposition and a critical review of some of the general
propositions commonly
(and sometimes loosely) advanced in the decided
cases' before summarising the following 'three attributes' of an
appealable judgment
or order (at 532J - 533A):
(F)irst, the decision must be final
in effect and not susceptible of alteration by the Court of first
instance; second, it must
be definitive of the rights of the parties;
and, third, it must have the effect of disposing of at least a
substantial portion
of the relief claimed in the main proceedings.”
[6] The
question as to when a court decision is interlocutory and thus not
appealable, or final and thus appealable is intrinsically
difficult –
CRONSHAW
AND ANOTHER v COIN SECURITY GROUP (PTY) LTD
[1996] ZASCA 38
;
1996 (3) SA 686
(AD) at 690 D – E per Schutz JA.
The
critical question as to precisely which judgment, orders or rulings
are appealable to a court with appellate jurisdiction continues
to
present persisting complexity.
MINISTER
OF SAFETY AND SECURITY AND ANOTHER v HAMILTON
2001 (3) SA 50
(SCA) paragraph 4 at 52B per Cameron JA.
The
appealability test as formulated in Zweni’s case, although easy to
state, is by no means always easy to apply.
VAN
NIEKERK AND ANOTHER
supra,
paragraph 5 at 77I per Van Heerden JA.
Indeed the issue as to
when an order is appealable and when not, is a very complex question.
Satisfactory outcomes are hard to
predict. This case is no
exception.
[7] Ordinarily
the relief of a special plea affords an expeditious end to a dispute
if it good in law. Its practical effect is
that the main action can
proceed no further. An order with such adverse impact on the main
dispute is usually final and, therefore,
appealable. It speeds up a
litigation process and leads to a final determination of a side show
without a need to have the real
issues in the main dispute explored
and adjudicated. This reasoning is conversely implicit in
Constantia’s case
supra
.
[8] The
first attribute of an appealable order is that it must be final in
effect and not susceptible of alteration by the court
of first
instance. Put differently, the court which made the decision must
have no judicial power to reconsider such decision.
In legal
parlace, such court must be
functus
officio.
Both
counsels in this matter are
ad
idem
that, in this sense, my order has final effect. Therefore, it is
appealable.
[9] The
second attribute of an appealable order is that it must be definitive
of the rights of the parties. In the instant case,
the plaintiff,
the party that is now applying for leave to appeal, has already filed
an applicant to have its failure to give the
required notice to the
defendant condoned. The condonation application was filed long
before the defendant’s special plea was
adjudicated. Prior to the
order relating the special plea, the plaintiff had already filed an
application for leave to enrol its
condonation application, again,
should the defendant’s special plea be successful.
At one stage the
plaintiff wanted to have the adjudication of the defendant’s
special plea held over pending the outcome of its
application for
condonation – vide paragraph (f) of plaintiff’s amended
replication, p. 57, record.
[10] The
history of this condonation application has to be narrated. This is
how it all came about. The defendant amended its
original plea. The
amended plea incorporated a special plea. That it was an organ of
state. The plaintiff respondent to the
amended plea by way of
replication denying the defendant’s allegation that the defendant
was an organ of state. Shortly after
the delivery of the
replication, the plaintiff amended its replication. In its amended
replication the plaintiff pertinently prayed
that the plaintiff’s
condonation application must be decided first. It sounded like
putting the card before the horses.
[11] In
view of those facts, counsel for the defendant submitted that the
order in respect of which the plaintiff sought leave to
appeal was
not definitive of the rights of the parties and, therefore, the order
was unappealable. On behalf of the plaintiff’s
counsel submitted
that the pending condonation application was irrelevant in
considering whether or not to grant leave to appeal.
Mr. Pammenter,
heavily relying on the appellate decision in
CONSTANTIA
INSURANCE CO LTD v NOHAMBA
supra
contended that I needed to look no further than the order pertaining
to the special plea in order to determine whether such order
defined
the rights of the parties. So considered, counsel continued, the
order was final and thus appealable.
[12] The case of
Constantia is distinguishable. In that case unlike in the instant
case, there was no unfinished business in the
court of first instance
for the litigants involved. In the instant case the law has not yet
run its due high court process. Although
the special plea order, has
defined the rights of the parties its definitiveness is not of a
permanent nature. Such rights may
still be redefined through a
condonation process in this same court and not through an appeal
process at a higher level of adjudication.
[13] There
are two possible scenarios to consider as regards the condonation
application. If the plaintiff’s condonation application
succeeds,
the plaintiff will have no reason to go on appeal. The rights of the
plaintiff that were adversely affected by the special
plea order, may
still be redefined and reversed. A decision on the condonation
application will be permanently definitive of the
rights of the
parties. The effect of a successful application for condonation will
be that the main action should proceed. It
will effectively restore
the plaintiff’s right unless the defendant decides to appeal.
Should the defendant want to go on appeal
such a decision would
indeed be appealable. There would be absolutely no other remedy
available to the defendant.
[14] If the plaintiff’s
condonation application fails, the plaintiff will have all the reason
to go on appeal. The rights of
the plaintiff already adversely
affected by the special plea order would not be restored but would be
permanently denied in the
court of first instance. Such a definitive
decision of rights would be appealable. The plaintiff would have
absolutely no other
remedial avenue open in this court.
[15] Should
leave to appeal be granted to the plaintiff at this juncture an
untenable situation might arise. There will be two
court
adjudication processes pending in two different courts. Should the
plaintiff’s appeal be dismissed by the appellate court,
the
plaintiff will turn back to this court of first instance to pursue
the condonation application. The general rule of appeal
procedure is
that such peacemeal consideration of cases is impermissible.
Paragraph 6
VAN
NIEKERK AND ANOTHER v VAN NIEKERK AND ANOTHER
supra,
per
Van Heerden JA:
“
[6] In
considering the question of appealability, the underlying
consideration is that it is undesirable to have a piecemeal appellate

disposal of the issues in litigation and that it is advisable to
limit appeals to certain 'orders'. (See, eg, Pretoria Garrison

Institutes v Danish Variety Products (Pty) Ltd
1948 (1) SA 839
(A) at
866 - 71; Guardian National Insurance Co Ltd v Searle NO
1999 (3) SA
296
(SCA) at 301B - D.)”
[16] It
is crystally clear that the plaintiff will not abide by the outcome
of the appeal. The plaintiff wants to go up on appeal
first but also wants to keep the condonation application alive down
here as a fall-back plan in case its appeal fails. In these

circumstances I cannot see how an appeal, if leave to appeal is
granted at this early stage, will necessarily lead to a more
expeditious
and cost-effective final determination of the special and
collateral dispute, let alone the main dispute between the parties
and
decisively contributed to its final solution (
PRIDAY
t/a PRIDE PAVING v RUBIN
1992 (3) SA 542
(CPD) at 548H - I, which was quoted with approval in
Zweni
supra
at 532A.
[17] It
must be stressed that this is not a case of a plaintiff or litigant
who initially wanted to bring a condonation application
but later
decided to abandon or withdraw it in order to have the defendant’s
special plea decided on appeal once and for good.
What the plaintiff
really wants is firstly to drag the defendant to the court with
appellate jurisdiction in connection with the
special plea order.
Secondly, if such an appeal fails, to drag the defendant back to this
court of first instance in connection
with the condonation
application. Thirdly, if such an application fails, to drag the
defendant once again to the court with appellate
jurisdiction in
connection with the condonation application. This clearly
demonstrates piecemeal disposal of disputes by way of
an appeal
procedure. Such an fragmented appellate procedure is not only
expensive but also inexpedient to all concerned including
the two
courts. In the instant case I can find virtually nothing to justify
the procedure the plaintiff seeks to embark upon.
[18] Quite
often the balance of practical convenience dictates that the case as
a whole be brought to its logical conclusion at
the first level of
its adjudication process and that the whole case then be taken on
appeal.
TAKE
AND SAVE TRADING CC AND OTHERS v STANDARD BANK OF SA LTD
2004 (4) SA 1
(SCA), paragraph 4.
“…
there are
still sound grounds for a basic approach which avoids the piecemeal
appellate disposal of the issues in litigation. It
is unnecessarily
expensive and generally it is desirable, for obvious reasons, that
such issues be resolved by the same Court and
at one and the same
time.”
GUARDIAN
NATIONAL INSURANCE CO LTD v SEARLE NO
1999 (3) SA 296
(SCA) at 301 B – C per Howie JA.
[19] The
plaintiff’s condonation application is therefore one of the
relevant factors to be taken into account, together with
others, in
considering whether or not the order I made in connection with the
defendant’s special plea was definitive of the
rights of the
parties. In my view the court is entitled to look beyond the order
it made in connection with the defendant’s
special plea in order to
ascertain whether such order has a definitive attribute. As I see
it
,
whatever definitive attribute the order might have had was
substantively eroded by the plaintiff’s unwavering and serious
determination
to pursue its condonation application. On the facts, I
have come to the conclusion the order was not definitive. An
indefinitive
order is not appealable, Zweni
supra.
[20] The
third attribute of an appealable order is that it must have the
effect of disposing of at least a substantial portion of
the relief
claimed in the main process. I do not whish to labour this aspect of
the enquiry. Suffic
e
to say on the facts before me and in view of the conclusion I have
reached in respect of the second attribute, it becomes academic
to
consider the third attribute. This is so because an order is
appealable provided it is shown to have all three attributes of

appealability. If one of the three attributes is not proven, as in
this case, then the order is not appealable.
[21] For
the reasons advanced in this judgment I have come to the conclusion
that it would be premature at this juncture to grant
the plaintiff
leave to appeal against the order. The plaintiff’s application for
condonation is still on track. Therefore,
the plaintiff is at
liberty to prosecute the condonation application to its logical
conclusion in this court. The avenue of appeal
is not currently open
to the plaintiff but remains available. Should such condonation
application fail, the court order relative
to such condonation
application shall have permanently definitive impact on the rights of
the respective parties. It shall also
have disposive effects on the
entire main dispute.
[22] In
the circumstances I am inclined to refuse leave to appeal. However,
it does not follow from my inclination that the plaintiff’s
leave
to appeal falls to be dismissed. I deem it unwise and inappropriate
to do so, given the peculiar circumstances of the case.
The
plaintiff’s current application for leave to appeal is premature.
No need to consider it on the merits now. I would, therefore
let it
stand over for the time being. It will be heard, if needs be, after
its condonation application has been adjudicated upon.
[23] Now only one aspect
remains – the costs. The plaintiff brought this matter to court.
The defendant opposed the matter.
In the final analysis my ruling
favours the defendant. Since it has emerged a successful party the
defendant is entitled to the
fruits of its success. The plaintiff
has to be saddled with the inevitable burden of paying the
defendant’s wasted costs occasioned
by this premature and abortive
application.
[24] Accordingly I make
the following order:
24.1 The
plaintiff’s application for leave to appeal stands over for
adjudication after the hearing of its pending application
for
condonation.
24.2 The
order pertaining to the defendant’s special plea is currently not
appealable.
24.3 The plaintiff is
directed to pay the defendant’s taxed costs relating to this
application for leave to appeal.
______________
M. H. RAMPAI, J
On behalf of the
plaintiff: Adv. C. J. Pammenter SC
Instructed
by: Naudes
BLOEMFONTEIN
On behalf of the
defendant: Adv. D. J. van der Walt
Instructed by:
Symington & De
Kok
BLOEMFONTEIN
/em