About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
1995
>>
[1995] ZASCA 74
|
|
Wellington Court Shareblock v City Council of Johannesburg, Agar Properties (Pty) Ltd v City of Johannesburg (704/93,705/93) [1995] ZASCA 74; [1995] 2 All SA 642 (A) (31 May 1995)
IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)
In the matter between:
704/93
WELLINGTON COURT SHAREBLOCK APPELLANT
and
CITY COUNCIL OF JOHANNESBURG RESPONDENT
705/93
AGAR PROPERTIES (PTY) LTD APPELLANT
and
CITY COUNCIL OF JOHANNESBURG RESPONDENT
CORAM: JOUBERT, BOTHA, NIENABER, VAN DEN HEEVER et OLIVIER JJA
HEARD: 8 MAY 1995 DELIVERED: 31 MAY 1995
JUDGMENT
/NIENABER JA
2
NIENABER JA:
There are two appeals before court. The first question is
whether they should be. In each the appellant concerned appeals against
the
dismissal of an exception that the respondent's particulars of claim disclosed
no cause of action. The exceptions were heard
together, and so were the appeals,
because the averments in the particulars of claim and the point in issue in the
exception were
essentially the same.
The respondent is an urban local authority duly constituted in terms of the
Local Government Ordinance, 17 of 1939 (Transvaal). The
two appellants are both
private companies. Each owns an immovable property within the respondent's
municipal jurisdiction, on which
a block of flats had been erected. The
respondent supplied the buildings with electricity, water and in the one case
also with gas.
In each set of particulars of claim it is alleged that
3
an agreement had come into existence between the respondent and
the
appellant concerned in terms of which the respondent would
supply the
building with electricity and water (and gas) for which
the appellant would
pay the respondent its "usual charge from time
to time"; that the respondent
duly supplied such commodities "in
terms of and pursuant to the agreement"; and that a balance
"calculated at the plaintiff's usual charge from time to time"
remained due to the respondent. The particulars of claim, save for
the reference to gas, concluded with an identical paragraph:
"In the premises and by virtue of the agreement, and the provisions of Local
Government Ordinance No. 17 of 1939, and the provisions
of the aforementioned
water and electricity by-laws the defendant is liable to the plaintiff for
payment of the aforesaid amounts
in respect of electricity, water and gas
supplied at the property."
The nub of both exceptions is that the
agreement as alleged does not conform to the formal and procedural requirements
of the relevant
by-laws for the conclusion of such an agreement; and that
4
being a creature of statute the respondent was in law unable to "deal with
the subject matter in any other way, for example by common
law agreement or
resolution". The agreement, being ultra virus the relevant by-laws and
regulations governing the supply of such
commodities to consumers, could not, so
it was averred, support a claim for payment. The particulars of claim
accordingly lacked
a sustainable cause of action.
The exceptions were heard by Eloff JP in the Witwatersrand Local Division. He
was prepared to assume, for the sake of the argument,
that the agreements were
indeed ultra vires. But on the authority of a line of cases (Laing v Caledon
Municipality (1909) 19 CTR
599; Bloemhof Village Council v Calder
1924 TPD 7
;
Barnard v Cilliers
1929 EDL 106
; SA Hotels Ltd v City of Cape Town
1932 CPD 229
;
Morland v Niehuas 1973(1) SA 240 (C)) he held that
"... where a local authority enters into a contract with a party
5
which, by reason of legal requirements, is invalid, that party, on being sued
for performance under the contract, and who received
benefits in consequence
thereof, cannot be heard to say the contract is invalid."
The
party receiving such benefit, he added, quoting from Dönges
and Van
Winsen, Municipal Law (2nd ed. 40), is estopped from
raising the defence that
such contract or regulation was ultra vires.
He concluded:
"I have given thought to the question whether a litigant may raise an estoppel
by way of answer to an exception. The basic rule is
that a party wishing to rely
on an estoppel must allege and prove it, (
Blackie Swart Argitekte v Van
Heerden
. 1986(1) SA 249 (AD) at 260 (I-J). I consider however, that it is
open to a litigant in the position of the plaintiff
in casu
to counter an
effort by means of an exception to rely on invalidity of a contract, by invoking
the equitable remedy of estoppel. I
believe the defendant is estopped from
relying on the alleged invalidity of the contracts described in the particulars
of claim."
In the result both exceptions were dismissed with
costs. Leave to appeal to this court was subsequently granted in both cases
6
by the court a quo.
When the matter was called in this court the only question debated, and on
which judgment was reserved, was whether the order made
was an appealable
"judgment or order" for purposes of s 20 of the Supreme Court Act 59 of 1959
("the Act").
This is an issue that has come before this Court not
infrequently of late, most notably in Zweni v Minister of Law and Order
1993 (1)
SA 523
(A). (See too Trope and Others v South African Reserve Bank
[1993] ZASCA 54
;
1993 (3) SA
264
(A); Caroluskraal Farms (Edms) Bpk v Eerste Nasionale Bank van Suider-Afrika
Bpk
[1994] ZASCA 23
;
1994 (3) SA 407
(A); Trakman NO v Livshitz and Others
1995 (1) SA 282
(A);
Jonas v Krok
[1994] ZASCA 177
;
1995 (1) SA 677
(A).)
The judgment in Zweni's case did not purport to lay down new law. It was an
attempt to correlate and synthesize the current law in
the light of the
amendment to s 20 of Act 59 by s 7 of the Appeals Amendment Act 105 of 1982.
What it does make plain is
7
that the appealability of any decision given during the course of proceedings
is not contingent solely on the discretion of the trial
judge in granting leave
to appeal. To be appealable the decision primarily has to be a "judgment or
order" (532F-G) and a judgment
or order is a decision with certain attributes,
the first of which is that it must be final in effect, that is to say, not
susceptible
of alteration by the court of first instance (532J; 535G). That was
the very criterion, before the amendment to s 20 of the Act was
introduced, for
differentiating between interlocutory orders appealable as of right and simple
interlocutory orders appealable only
with leave (cf South Cape Corporation (Pty)
Ltd v Engineering Management Services (Pty) Ltd
1977 (3) SA 534
(A) 549G-H;
South African Motor Industry Employers' Association v South African Bank of
Athens Ltd
1980 (3) SA 91
(A) 96H-97A). It follows that the statutory
reformation notwithstanding past cases still make good law (cf Van Streepen
& Germs
(Pty) Ltd v Transvaal
8
Provincial Administration 1987(4) SA 569 (A) 584D-E).
One such case was Blaauwbosch Diamonds Ltd v Union Government (Minister of
Finance)
1915 AD 599.
That, like the
present, was an appeal brought before this court against the
dismissal of an exception by the supreme court that a declaration
disclosed no cause of action. It was held that the decision, not
having the effect of a final or definitive sentence, was interlocutory
and hence in order to be appealable required prior leave to appeal.
According to Innes CJ at 601:
"... a convenient test was to inquire whether the final word in the suit had
been spoken on the point; or, as put in another way,
whether the order made was
reparable at the final stage. And regarding this matter from that standpoint,
one would say that an order
dismissing an exception is not the final word in the
suit on that point that it may always be repaired at the final stage. All the
Court does is to refuse to set aside the declaration; the case proceeds; there
is nothing to prevent the same law points being re-argued
at the trial; and
though the Court is hardly likely to change its mind there is no legal obstacle
to its doing so upon a consideration
of fresh
9
argument and further authority."
(See too MBA v .Southern
Insurance Association Ltd
1981 (1) SA 122
(Tsk) 127E-H; Elida Gibbs (Pty) Ltd v
Colgate Palmolive (Pty) Ltd (2)
1988 (2) SA 360
(W) 364F-G.)
Counsel for the appellants conceded that but for two considerations the
reasoning in the Blaauwbosch Diamonds Ltd case supra was directly
in point and
thus conclusive of the present matter.
The first consideration mentioned was that Eloff JP in the dictum quoted
earlier on estoppel made a finding of fact and that this
finding was res
judicata between the parties; hence this case did not fit into the niche of
Blaauwbosch Diamonds Ltd supra.
I am unable to agree. Eloff JP was deciding an exception. He heard no
evidence and consequently could make no findings, let alone
a Ending which bound
both the parties and the court itself.
10
The reference in the dictum to estoppel was no doubt an attempt to suggest a
juristic rationale or analogy for the rule which he extracted
from the cases
cited and applied to dispose of the exception. It was a theorem about a rule of
law, not a finding about a dispute
of fact.
The second consideration mentioned by counsel for the appellants was that
this court in recent years heard and disposed of appeals
against an exception
being dismissed for lack of a cause of action without querying their
appealability. Examples cited were
1988 (3) SA 122
(A) and Proud Investments (Pty) Ltd v Lanchem International
(Pty) Ltd
[1991] ZASCA 60
;
1991 (3) SA 738
(A). In neither of these matters was the spectre of
appealability raised or considered. These cases accordingly cannot serve as
authority
for the proposition that the present appeals are properly before
court. As was stated in the Blaauwbosch Diamonds Ltd case supra
at 603:
11
"It has been brought to our notice that on a former occasion an appeal from an
order dismissing an exception was entertained by this
Division without the
special leave of the Court below. The point was apparently overlooked, and the
matter dealt with per incuriam;
that is no reason for now disregarding what was
then unnoticed."
Neither of the considerations mentioned by
counsel is convincing. But there is a third consideration which does deserve
attention.
It is a two-fold one. The first aspect of it is that the appellants
were anxious to have the law point which is formulated in their
exceptions
tested in limine; and the respondent, as indeed the court a quo, co-operated by
acceding to a procedure which was patently
irregular. The second aspect is that
in determining the appealability of a decision the emphasis is on effect rather
than on form
(Zweni v Minister of Law and Order supra 532H-I).
As far as form is concerned these exceptions, in a sense, are exceptional.
For one thing it would appear as if they were only
12
taken after there had been a full exchange of pleadings, including a
replication by the respondent to each appellant's plea. What
these pleadings
contain one does not know for it was expressly agreed between the parties that
all the documents except for the particulars
of claim and the exceptions be
excluded from the papers before the court a quo. For another thing the court a
quo was asked to augment
the averments contained in the pleadings before it by
having regard to extraneous material, more particularly the provisions of
certain
by-laws which in the ordinary course would require proof (cf Raad vir
Kuratore vir Warmbad Plase v Bester
1954 (3) SA 71
(T); Serobe v Koppies Bantu
Community School Board
1958 (2) SA 265
(O); Benator NO v Worcester Court (Pty)
Ltd
1983 (4) SA 126
(C)). And finally Eloff JP short-circuited the whole
procedure by assuming the correctness of the point taken on exception but
refuting
it with an alien one. The product is a hybrid procedure, part
exception, part point in limine, part stated case.
13
What the court a quo, with respect, should have done was to grasp the nettle
and decide the exception. If it decided instead of assumed
that the point was
good, the exceptions would have succeeded and the orders granted would doubtless
have been appealable (cf Elgin
Brown & Hamer (Pty) Ltd v Industrial
Machinery Suppliers (Pty) Ltd
[1993] ZASCA 55
;
1993 (3) SA 424
(A)). The respondent, failing an
appeal or an appeal failing, would then have been given leave to amend its
particulars of claim
(cf Group Five Building Ltd v Goverment of the Republic of
South Africa
[1993] ZASCA 4
;
1993 (2) SA 593
(A) 602C-I). And if it did so by invoking the rule
relied on by Eloff JP that would have highlighted the issue whether the rule was
sound; if so, whether it was akin to estoppel; if so, whether it could be
assimilated into the respondent's cause of action (cf Union
Government v
National Bank of South Africa Ltd
1921 AD 121
128); or whether there was not
perhaps an entirely different rationale for the rule, such as enrichment.
(Needless to say I
14
express no view on any of these postulates.) If, on the other hand, the point
taken on exception was held to be bad the exceptions
would have been dismissed
on that ground and the decisions would not have been appealable, for the reasons
stated in the Blaauwbosch
Diamonds Ltd case supra.
But matters did not run
that course. Even so, and notwithstanding the subversion of the point taken on
exception and the other procedural
innovations mentioned, the present
proceedings remained, in form, in effect, and in the relief claimed, nothing
more than exceptions
that were dismissed. Had they been cast as stated cases in
which the parties agreed that if the appellants' point failed judgment
in an
agreed sum would be entered in favour of the respondent and if it succeeded the
respondent's claim would be dismissed, the
ultimate decision, whichever way it
went, would have been "a judgment or order" and as such appealable in principle:
it would have
been final in effect, definitive of the rights of the parties
15
and it would have disposed of the relief claimed in the main proceedings (cf
Zweni's case supra 532J-533A). By way of contrast no
relief was claimed in this
case which would be definitive of the rights of the parties if the exceptions
should fail. As such the
present proceedings are not comparable to a separately
adjudicated special plea which, even if dismissed, would dispose of a special
defence which is unrelated to the merits of the main proceedings (cf Constantia
Insurance Co. Ltd v Nohamba
1986 (3) SA 27
(A) 35E-36I; Caroluskraal Farms
(Edms) Bpk v Eerste Nasionale Bank van Suider-Afrika Bpk
[1994] ZASCA 23
;
1994 (3) SA 407
(A) at
415B-416D). Nor is this the sort of case where it is incontrovertible on the
papers that the ultimate relief claimed in the
action, or a special defence
which will be destructive of such relief (cf Makhoti v Minister of Police
1981
(1) SA 69
(A)), hinges solely on the point taken in the exception. Here, the
exceptions having been dismissed, the actions are to continue
to trial. Final
relief will only follow if the respondent
16
proves the remainder of its cases against the two appellants. For the reasons
stated in the Blaauwbosch Diamonds Limited judgment
supra, the court of first
instance would be at liberty if so minded or persuaded to reconsider the issues
raised in the judgment
of Eloff JP. His decision was not binding on the parties
inter se or on the court itself. Whether the court a quo does so or not,
the
points raised in the exceptions will only become appealable once judgments have
been pronounced one way or the other. In short,
the mechanism chosen by the
appellants and concurred in by the respondent to have the validity of the
agreements tested as a preliminary
issue by way of exception, suffers from the
flaw that it would only have been appealable if the decisions went against the
respondent.
The appeals must accordingly be struck off the roll. There was some debate
whether the respondent, being a party to the abortive procedure
before this
court, should be mulcted in costs. It
17
is true that the respondent did not appreciate the significance of
the
non-appealability of the present proceedings until shortly before
the
hearing of the appeal. But as was rightly pointed out on its behalf
the appellants, when the matter was raised, persisted in their
argument that the appeals were properly before court. Even if the
respondent had raised an objection at an earlier stage it does not
follow that the appellants would have capitulated. I have not been
persuaded that there is sufficient reason for departing from the usual
rule that costs should follow the result.
Each of the two appeals is struck off the roll with
costs
including the costs of two counsel.
P M Nienaber Judge of Appeal Joubert JA ) Botha JA ) Concur Van den Heever
JA) Olivier JA )