CIVIL PROCEDURE B

APPLICATIONS

 Application proceedings, also known as motion proceedings, are based upon the exchange of affidavits
and are thus intended to be disposed of without viva voce evidence
 The party bringing the application is known as the applicant and the party opposing the application, if
any, is known as the respondent
 The applicant commences proceedings by issuing a notice of motion, which serves to advise the
respondent of the applicant’s claim and the relief which the applicant seeks
 The notice of motion is usually accompanied by a founding affidavit, (a written statement under oath)
and sometimes one or more supporting affidavits or relevant documentation are attached to the
affidavit
 The respondent who wants to oppose the application must deliver an opposing affidavit (or answering
affidavit) in which he answers the allegations of fact contained in the founding affidavit
 If necessary, the applicant may then deliver a replying affidavit in order to address and respond to any
allegations contained in the answering affidavit

• Preliminary questions: is application the right procedure? Which court?

• Summons - action; notice of motion –
application

When to use them

• When the law requires it
• No material dispute of fact - Room
Hire Co v Jeppe Street
• Mag court: can only bring cases
allowed for in the MC - examples
• To appoint a curator ad litem
• For rescission or variation of a
judgment
• For separation of trials
• For removal of a case to the HC

Dispute of fact
In Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd it was decided as a general rule that the
choice between the procedures depends on whether a bona fide material dispute of fact should have been
anticipated by the party launching the proceedings:
o When such a dispute is anticipated, a trial action should be instituted;
o Otherwise motion proceedings are permissible in order to avoid the delay and expense involved
in a trial action

From this general rule, it follows that motion proceedings should not be instituted in:
o Claims for unliquidated claims
o Matters in which it is anticipated that a material dispute of fact will arise
o Claims for divorce

Notwithstanding the rule regarding anticipated disputes of fact, there are certain types of proceeding in
which application proceedings should always be used, i.e.:
o Insolvency proceedings
o Where a party seeks urgent relief
o Where legislation dictates so

Room Hire v Jeppe Street Mansions

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 After obtaining information the appellant was using the leased property for purposes of prostitution, the
respondent gave notice to the appellant terminating the latter's tenancy and requiring immediate vacation of
the premises.
The main question for decision is whether the learned Judge a quo erred in ruling that the application made
to him could properly be decided on affidavit in motion proceedings.

A person who chooses to proceed by motion runs the risk that a dispute of fact may be shown to exist. The
Court then has a discretion as to the future course of the proceedings. It may call viva voce evidence
under rule 9, or if that is not suitable it may send the parties to trial, or it may dismiss the application with
costs.
The crucial question is always whether there is a real dispute of fact. That being so, and the applicant being
entitled in the absence
of such dispute to secure relief by means of affidavit evidence, it does not appear that a respondent is
entitled to defeat the applicant merely by bare denials such as he might employ in the pleadings of a trial
action, for the sole purpose of forcing his opponent in the witness box to undergo cross-examination. A
bare denial by the respondent is not enough to prove a dispute nor is the respondent's mere allegation of
the existence of the dispute of fact conclusive of such existence.
The court set out the principal ways in which a dispute of fact arises
(a) when the respondent denies all the material allegations made by the various deponents on the
applicant's behalf, and produces or will produce, positive evidence by deponents or witnesses to the
contrary. This may be done by witnesses by way of affidavit.
(b) The respondent may admit the applicant's affidavit evidence but allege other facts which the
applicant disputes.
(c) He may concede that he has no knowledge of the main facts stated by the applicant, putting
applicant to prove them. The absence of any positive evidence possessed by a respondent directly
contradicting applicant's main allegations does not render a case such as this free of a real dispute of
fact.
Once the absence of such dispute is apparent, the applicant is entitled as of right to have his relief given
him speedily and cheaply on affidavits. The only discretion which the Court has is when the dispute of fact
is shown to exist and it is called upon to decide between employing Rule 9, on the one hand, and on the
other either dismissing the application or directing trial.

Held: There was a dispute of fact and the case was sent back to the court a quo to deal with it in one of the
3 ways (1) dismissal of application, (2) sending the case to trial or (3) ordering oral evidence under Rule 9.

THREE TYPES OF APPLICATIONS

1. 'On notice' applications:
• Involving notice to opponents

2. Ex parte applications:
• Applications without notice to opponent OR where there is no other opponent.
• Urgent - on an urgent basis

3. Interlocutory applications:
• Applications to achiever certain objectives during existing application/action proceedings

1. On notice applications
• NB- Just because notice of the application is given to the opposing party, does not mean the
application will be opposed in court.

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• The majority of 'on notice' applications heard in the HC are unopposed, because the respondent,
for whatever reason, decides not to instruct counsel to oppose the order which is being sought against
him/her/it

2. Interlocutory applications
• Do not initiate proceedings; incidental to already pending proceedings
• Example: applications to compel discovery of documents r.35(&).
• 2 procedural wrinkles
• 1. Generally ,Cant appeal.
• 2. General time frames in rules of court do not apply to interlockutory applications.( this is not in
rules but long accepted practice uphold by courts.
• Distinguished from normal applications:
• 'On notice' applications: notice of motion and supporting affidavits, served on respondent by the
sheriff
• Ex parte applications: no notice to opponent

• Note that some interlocutory applications can be made from the bar – eg. without any papers
• A common example is an application for leave to appeal at the end of a criminal trial, in terms of
s.316(4)(b) of the Criminal Procedure Act

Urgent applications
Relationship between ex parte and urgent applications
 Not the same, but frequently coincide
- Note that urgent applications are not necessarily heard ex parte , and ex parte applications are not
necessarily urgent.
- NB- Just because an application is urgent does not mean it is ex parte.
• HC Rule 6(12); MC Rule 55(5)

• Urgent apps are rare in the MC

• Urgent: application not able to comply with court rules relating to service and notice periods

• Applicant must inform court of:

• Reasons for application's urgency

• Why s/he cannot wait to get relief by way of normal application

• Applicant cannot create own urgency

• Urgency may justify relaxation of the rules of evidence ( eg. no time for getting affidavits so lead hearsay

evidence)
• Frequently, but not necessarily, ex parte

• HC Rule 6(12)(c): In very rare case , in an urgent application , there is a final order (not rule nisi)

granted in absence of respondent – the respondent can set down matter for reconsideration.
• NB: always check the Rules of Practice (not the same as the rules of Court) for your particular division

of the HC for additional/special rules applying to urgent applications. EG.Eastern cape high court rule
12(a)(i) promulgated by court notice 1 of 22 feb 2012.
• On the use of rule 6(12)© see: industrial development corporation of SA v Sooliman and others

2013 and the other cases referred to in that judgement

• NB. Get slides.

2. Ex parte applications
• When to bring ex parte application?
• The order requested does not affect another person
• The applicant is the only interested party to proceedings (ie. non-adversarial matter)
• Situations where immediate relief is essential because harm is imminent
• The nature of the relief sought is such that notice of the application to the other party will frustrate the
requested relief
• Situations where preliminary relief is essential in a proceeding that will later be followed up with notice to
opposition

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• Eg. if there is reasonable suspicion that the person having possession of property will destroy it if he is
given notice
• No ex parte applications allowed against the State - s 35 of the General Law Amendment Act of 1955
• Hence, even if the application is urgent, notice must be given to the State, State employees, provincial

governments and their employees

• Can shorten the time period

• Audi alteram partem - if the application affects another's rights, the court will invariably grant an interim
order, and specify a 'return date' when the Respondent must come to court to argue why a final order
should not be granted.
• This interim order is called a rule nisi
• Rule 6 (12)(c)

**Look at the back of the Uniform Rules of Court to see the right Form for an on notice (Form 2A) and an ex
parte application (Form 2)

Ex parte applications vs on notice applications

Most applications on notice Form 2(a)
- Application affecting someone elses interests-notice
- Audi alteram partem
Ex parte applications where no opponent
- Form 2.

NOTICE OF MOTION

• Bringing notice to somebody (Registrar or opponent) that you're going to make an application for an order
• Applicant = party bringing application
• and respondent= party against whom application is brought
• Ask who else must the notice to be addressed to/served on? Rule 6(9)
• Registrar of Deeds? Master?

In the HC
• 'On notice' notice of motion contains:

• Applicant's and respondent's identity and address

• Give respondent time limit

• Warn respondent - no notice of intention to oppose - matter set down - not less than 10 days after

service of notice of motion

• Exception - Rule 6(13)

• Informs respondent of relief/remedy sought by applicant

• Follow form 2(a) EXACTLY. Do not try be creative.

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HC ex parte notice of motion contains:
• Applicant's identity and address

• Informs Registrar of HC of the relief sought

• Follow Form 2 EXACTLY!

MC: equivalent forms are form 1(a) and Form 1 respectively

Exceptions to Form 2 and 2(a)

• Rule 43 application: notice of motion must follow the format specified in Form 17 - precursor to a

divorce
• Applications for restitution of conjugal rights: the notice of motion must follow the format specified in

Form 17A.

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 AFFIDAVITS

• NoM has to be supported by a founding affidavit, and if necessary, supporting affidavits

• Affidavit = a statement under affirmation/oath (sworn statement) that is signed/affirmed/sworn by the
person making the statement (deponent) before a commissioner of oaths

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Form and content
• Founding affidavit contains the main evidence in support of notice of motion

• Supporting affidavits: affidavits of witnesses who provide further evidence in support of the applicant's

version
• Confirming affidavit: affidavits of witness agreeing with another deponent's version

• Founding and supporting affidavits must cover all legal elements on which applicant relied, and evidence

of the supporting elements

• Must state the source of the applicant/deponent's information; this is so even if the allegation concerned

is confined to an assertion of belief

• See: Mears v African Platinum Mines Ltd and Others (1) 1922 WLD 48 at 55; Grant-Dalton v Win and

Others 1923 WLD

Mears v African Platinum Mines Ltd and Others (1) 1922 WLD 48 at 55
“Hearsay evidence, evidence of information and belief, is admitted in interlocutory applications, I do not
know that any rule has been laid down in these Courts as to the limitation of this admission. In the English
Courts such allegations are provided for by Rule of Court Order 38, Rule 3. But even there the allegation is
confined to an assertion of information and belief and the source of information and ground of belief must
be given. In the case of an urgent application the party cannot be expected to set forth his evidence on
affidavit. The Court does not admit as evidence that which is not evidence, but in order to prevent
irremediable injury, keep matters in status quo and do justice on an interlocutory application, the Court will
act on information and belief.”

Grant-Dalton v Win and Others 1923 WLD

Applying the above tests to this case, it will be seen, that there was no admissible evidence before the
Court of irreparable damage in accordance with the essentials laid down by Van der Linden. The
application was, in effect, an attempt to obtain the assistance of the Court in relieving the complainant of
part performance of his obligations under the deed of sale. There was no act of the respondent which was
causing irreparable damage to the applicant, and there was prima facie satisfactory evidence before the
Court that the respondent was financially strong enough to refund the small amount which would be paid
over in terms of the contract, and that he was in turn suffering damage in consequence of the non-fulfilment
of the terms of the agreement. The ordinary remedy by action was, in my opinion, the proper remedy
available to the applicant.
Rules should be discharged with costs.

• Founding and supporting affidavits must be attached to NoM

• Relevant docs should be attached to their respective affidavits as annexures
• See: Swissborough Diamond Mines v Government RSA 1999 (2) SA 279 (W) at 323-324

• Numbering of supporting docs: use initials of person and number after that: Joe Bloggs - JB1...
• "Every page of any affidavit, including annexures, must be initialed by the deponent and the
commissioner of oaths, except for the page on which he sign in full
• Rule 23(v) of Eastern Cape Rules of Practice

• However, if you forgot, you can give evidence that this was a mistake

• Do not depose to or even commission own client's affidavits - Rule 15(e) of EC Rules of Practice, and in
other HC Rules
• An attorney who deposes to an affidavit of a strictly formal nature (for e.g to identify the newspaper
cutting of a published order Get this bullet point from slides…

Authority to depose to the affidavit

• It happens regularly, especially in corporate litigants, that the opponent will challenged the deponent's

authority
• See: Ganes & another v Telecom Namibia Ltd 2004 (3) SA 615 (SCA) at para 19*

• Creative Car Sound & another v automobile radio dealers association 1989

• Firstrand Bank Ltd v Fillis 2010 (6) SA 565 (ECP)

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Firstrand Bank Ltd v Fillis and Another 2010 (6) SA 565 (ECP)

Just as the deponent to an affidavit in motion proceedings need not be authorised by the party concerned
to depose to the affidavit, so it is that the deponent to the verifying affidavit filed in terms of rule 32(2) of the
Uniform Rules of Court in summary judgment proceedings need not be authorised by the plaintiff to depose
to the affidavit.

Format of affidavit
• Establish legal capacity and jurisdiction over applicant

• "The contents of the affidavit are within my personal knowledge unless the contrary appears from

the context" - pre-empts allegations of hearsay

• Establish locus standi and jurisdiction of court over CoA

• Establish jurisdiction over person of respondent, if necessary - describe them as best you can,

especially if there are many of them (eg. squattors ["residents"] or Rule 14 firms/partnerships)

Inadmissible evidence in affidavits

1. Hearsay
• Affidavits may not contain hearsay evidence.
• Verifying affidavit (supporting affidavit).
• Urgent applications:
o Impossible to obtain verifying affidavits in time.
o Hearsay evidence permitted.
o Clearly indicate allegations are hearsay:
• Set out facts on which belief is grounded.
• How information was obtained.

2. Privileged communications
• Privileged from disclosure in all circumstances.
• Inadmissible in affidavits.
• Include:
o Statements made/written ‘without prejudice’.
o Communications between attorney and client.
o Certain communications between husband and wife.
o State privilege.

3. Matters excluded by court rules

 Scandalous, vexatious or irrelevant matter
o Scandalous - allegations that may/may not be relevant; worded to be abusive/defamatory
o Vexatious - may/may not be relevant; worded to convey intention to harass/annoy
o Irrelevant: allegations that do not apply to matter in hand and don't contribute to making a
decision in the matter

4. Matters excluded by court rules

 Inadmissible new matter - new information/issues not included in founding affidavits may not be
raised in replying affidavit

5. Matters excluded by use of inherent jurisdiction

 No exhaustive list; HC may use inherent jurisdiction to exclude matter to grant relief where rule
6(15) is silent
 Examples:
o Irrelevant attacks on credibility
o Argumentative matter - affidavits should not contain legal arguments

Striking out inadmissible evidence

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Rule 6(15): the court may, on application, strike out from an affidavit any matter which is scandalous,
vexatious or irrelevant, with an appropriate order as to costs. However, the shall not grant the order unless
it is satisfied that applicant will be prejudiced if strike-out order not granted.

Service
• Because it is not court procedure, it is easy to forget the important of service of the notice of motion and

founding affidavit, but service is a vital step in the process

• Applicant delivers an original and two copies of the notice of motion and founding affidavits to the

Registrar or clerk to be issued

• What does "issued" mean? Just that the Registrar stamps each copy of the papers, retains one copy and

opens a file for it, and returns the other stamped copies to the applicant (some Registrars insist on
keeping the original, so it is easier to have two originals)
• Registrar opens a file and provisionally allocates a case number

• When the stamped papers are given back, they have been issued and then need to be served

• If there is more than one respondent, include an extra copy of the papers for each additional respondent

• After the application papers have been issued, one of the stamped copies is served on each respondent

by the sheriff (sometime the CA if non-contentious issues)

• The sheriff then:

o Files the original notice of motion and affidavits with the Registrar (if the Registrar didn't keep the

original in the first place)

o Delivers the remaining copy of the papers and the return of service to the applicant

o Sheriff can serve paper on anyone living at the same address who is 16 years or older
- Note the recent judgement in Magricor (pty) ltd v border seed distributors. The judgement
dicscusses service in general, but it particulary impacts on the way companies must be served
The return of service
 A document provided by the sheriff which sets of when/where/how/on who s/he serves the papers

o See textbook pg 510 for example

 The sheriff may ask the respondent to sign or stamp the original notice of motion to confirm receipt, but

that is not obligatory

 If service is done by a CA, then the CA must get a signature/stamp/receipt from the respondent

Notice of intention to oppose

 On receipt of the notice of motion and founding affidavit, the respondent might (and often does) do

nothing, either because they decide there is not point fighting the case, or cannot afford legal advice, or is
frightened. There is also the possibility that the respondent did not receive the papers - eg. they were
served on a family member who then threw them away
 If respondent does decide to oppose, they must give notice within 5 court days

 There are exceptions - eg. if live out of certain radius

 The rules do not prescribe a format for the notice, but it is always brief and formal

 See pg 513 for example

No notice of intention to oppose?

 If the respondent does not deliver notice, the applicant can set the matter down on the unopposed roll for

hearing
 Hearing date must be not less than 10 court days after service of notice of motion on the respondent
rd
 Notice of set down to registrar – see pete (3 ed ) pg 572 for an example

 There is no rule obliging the applicant to chase up the respondent if no notice was filed, but it is a good

idea to confirm that s/he does not intend to oppose, before setting the matter down for hearing on the
unopposed roll (to avoid the situation where the respondent just turns up in court without having filed
anything)

Answering affidavit
• GET NEW SLIDES HERE
• Within 15 court days (in the HC) of filing notice of intention to oppose, and 10 days in the MC, the
respondent must file their answering affidavit
• Just as with the defendant's plea in action proceedings, the respondent:

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 • Deals with allegations and evidence in the applicant's affidavits paragraph by paragraph
• States allegations s/he admits or denies

• Sets out their version of relevant facts

• Can attach relevant documentary evidence

What if the answering affidavit raises a material dispute of fact?

• Room Hire v Jeppe Street Mansions 1949 (3) SA 1155 (T) at 1162

Rule 6(5)(g) of the Uniform Rules:

• When an application cannot properly be decided on affidavit, the court may either dismiss the

application, OR make an order it deems fit

• In particular, it may direct that oral evidence be heard to resolve any dispute or fact, and may

subpoena any witness

• The judge can also send the matter to trial

NDPP v Zuma 2009 (2) SA 277 (SCA) para 26

•

The judge's discretion depends on whether the applicant could have foreseen the material dispute of
•

fact
• If not foreseen, the court will often hear oral evidence, or order the conversion of the proceedings to

action proceedings
• If the material
dispute should have been foreseen, the court will usually dismiss the application, or apply the Plascon-
Evans rule

The Plascon-Evans rule at 634E-635D:

The appellant instituted motion proceedings against respondent alleging that respondent was using a mark,
which infringed appellant's registered trademark and also was wrongfully passing off its goods as being
those of the appellant. The appellant’s mark was Micatex, whereas the respondent’s mark was Mikacote.
The appellant proceeded with motion proceedings, however the affidavits revealed certain disputes of fact,
but the applicants still sought a final interdict without resort to oral evidence.
At 634E-635D:
"...where there is a dispute as to the facts, a final interdict should only be granted in notice of motion
proceedings if the facts as stated by the respondents together with the admitted facts in the
applicant's affidavits justify such an order... Where it is clear that facts, though not formally admitted,
cannot be denied, they must be regarded as admitted."
The court stated that this general rule requires some clarification and qualification. It is correct that, where
in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be
an interdict or some other form of relief, may be granted if those facts averred in the applicant's affidavits
which have been admitted by the respondent, together with the facts alleged by the respondent, justify such
an order.

The respondent's facts are the facts on which the case will rest.

GET PLASCON EVANS NEW SLIDES..

Requesting further particulars
• If the respondent needs further information, they may use Rule 35(12) in the HC or Rule 23(13) in the MC

to require the applicant to produce further documents for inspection

• Often used as a delaying tactic

• Forms 14 and 15 of the Uniform Rules of Court

Applicant's replying affidavit

• The applicant may, but is not obliged to, respond to the answering affidavit with a replying affidavit

• Applicant must deliver the replying affidavit within 10 court days after service of the respondent's

answering affidavit
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• Applicant deals with allegations and evidence in respondent's answering affidavit paragraph by paragraph
• Purpose: rebut the averments made in the answering affidavit
• New matter may not be introduced - the court will strike out new matter in the replying affidavit
• Pountas' Trustees v Lahanas 1924 WLD 67 at 68

• John Rodericks Motors Ltd v Viljoen 1958 (3) SA 575 (O) at 579D

• Union Finance Holdings Ltd v IS Mirk Office Machines 2001 (4) SA 842 (T)

Further affidavits
• After receipt of the applicant's replying affidavit, further affidavits are only permitted at the court's

discretion - Rule 6(5)(e)

• Go along with opponent and ask for a ruling whether affidavits can be filed

• If both agree, judge is more likely to allow it

• Only permitted in exceptional circumstances -

• Examples:

• New matter/something unexpected raised in replying affidavit

• Court instructs further affidavits to be filed

• New evidence comes to parties' attention at late stage

• Possibility of prejudice to respondent if further affidavits not allowed

Counter-applications and joinder

• HC Rule 6(7) and MC Rule 55(2)(a): respondents must use the counterclaims procedure in actions as a

guide when bringing a counter-application/joining another party to the application

• Counter-application is used if the respondent seeks relief beyond a mere dismissal of applicant's

application
• If you're not bringing a counter application for something else, you can only pray for the application to be

dismissed with costs

How to do the counter-application

• Respondent's answering affidavit also functions as the basis for the counter-claim

• Counter-claim's prayers are included in the answering affidavit

• Applicant's replying affidavit = replying affidavit in the application-in-convention and answering affidavit in

the application-in-reconvention

A's FOUNDING -----------> R's ANSWERING and FOUNDING IN COUNTERCLAIM --------> A's REPLYING
and ANSWERING IN COUNTERCLAIM -----------> R's REPLYING IN COUNTERCLAIM

Set down
• Rule 6(5)(f) in HC and Rule 55(1)(j) in MC

• Applicant should apply to the Registrar for set down within 5 days after the delivery of the answering

affidavit (if there is not replying affidavit), or five days of delivering the replying affidavit
• Note: rarely this speedy in practice

• Applicant then gives notice to the respondent that the matter has been set down for hearing

• Example at p 572

• If applicant fails to set the matter down, respondent may do so

• If respondent thinks he is going to win, he can go set the matter down and force applicant to go to court

• Applicant's responsibility to index and paginate the court file

Heads of argument
• HoA must be filed for all opposing applications (see Rule 8 of EC Joint Rules of Practice) and unopposed

applications where papers are more than 100 pages

• HoA must be filed at least 5 court days before the matter will be heard, and respondent must file heads at

least 3 court days before the hearing

Hearing
If no real dispute of fact has arisen:
• Court either grants order as prayed in notice of motion, or dismisses the application.
• Ex parte applications:

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 – Court may grant order prayed if satisfied that no other person’s rights affected and papers in
order.
– If third party’s rights affected, court usually issues a rule nisi and grants temporary relief.
Both parties come back to argue on the return day.

If dispute of fact:
• Court may decide on affidavits alone, using Plascon rule

• Court may refer the matter to oral evidence

• Court may refer the matter to trial

• Court may dismiss the matter with costs if it was glaringly obvious that there was a real dispute of fact

o Alternatively, the court may give no order at all - usually if A's papers are deficient, but the deficiency can
be relatively easily fixed
o Court will give applicant leave to renew application on same papers
o Court usually indicates shortcomings of pending application
o Effect: applicant may bring application again and costs normally awarded to the respondent

Summary judgement
Uniform rule 32
Mc rule 14
- Although this is an important topic it will only be briefly covered.
- Along with prov sentence , default judgements and judgement on confession, sum judgement is one
of the group of short-cut procedures which avoid the time and expense of a full trial
- The purpose of the application is to prevent the defendant from delaying proceedings when he/she
has no defense.
- The court is required to balance 2 conflicting interests
- - the plaintiff should not be forced to suffer the delay and expense of a trial
- Get slides.

PROVISIONAL SENTENCE

• A unique SA legal procedure

• See a summary of the historical origins of provisional sentence in:
• Ndamase v Functions 4 All 2004 (5) SA 602 (SCA)

• Barclays Western Bank v Pretorius 1979 (3) SA 637 (N) at 652

• An alternative to summary judgment

• A provisional sentence summons commences an extraordinary, hybrid and speedy procedure whereby a
plaintiff in possession of a liquid document may obtain a speedy judgment against a defendant for the
amount payable on the face of a liquid document
• Relatively rare in practice - attorneys seem to prefer to issue a standard summons and PoC, and then
apply for summary judgment rather than issue a provisional sentence summons
• Rule 8 of the Uniform Rules of Court, Rule 14A of the MC - person, by summons, is called upon to pay an
amount claimed
• Pete: 375-382; 516-517
• Prescribed format - Form 3
• Although it is a summons, which typically initiates action proceedings, it is dealt with in motion court,
following procedures that are closer to applications than to actions
• Called a summons, but not set down for trial - behaves as if it was a notice of motion

• Only available to creditors whose claim is based on a liquid document

• Liquid document: an unconditional, written acknowledgement of liability for a specified amount of

money, payment of which is due to the creditor

• Eg. a cheque, a promissory note, an acknowledgement of debt, mortgage bonds

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 • All negotiable instruments are liquid documents, but the class is bigger and includes non-negotiable
instruments
• Note: a deed of suretyship is not a liquid document - Volkskas v Scott 1981 (2) SA 471 (E)

• Note a recent document which clarifies that where two parties are indebted to each other, the debts

may only be set off against each other if both are liquidated claims (in the case, one of the debts
was for breach of contract so not a liquidated claim - Standard Bank v Renico Construction 2015 (2)
SA 89
• A claim based on a liquid document is always a liquidated claim, but a liquid document is not the same
thing as a liquidated claim
• A liquidated claim is a claim for a definite amount of money but it does not need to be evidenced by a
document
• Promissory note: unconditional agreement to pay a certain amount of money by a certain date
• The note will be the liquid document, but the claim to be paid X will be a liquidated claim
• When a person fails the pay the promised amount, Y can use a provisional sentence summons or issue
an ordinary summons and then apply for summary judgment
• A copy of the liquid document must be attached to the provisional sentence summons, and the original
should be made available in court
• Note: cannot use provisional sentence summons in SCC

Requirements for a provisional sentence

1. There is a debt due by the defendant, evidenced by a liquid document; and
2. That ex facie the document, defendant is liable on a balance of probabilities
3. In absence of any defence by defendant, the court will grant provisional sentence

If the defendant wants to defend

• Defendant must then file an answering affidavit (not a plea)

• The affidavit must:

• Set out the defendant's defence to the claim, and

• State whether the defendant admits or denies his or her signature on the liquid document

• Can oppose in two ways:

• Contend that ex facie, defendant is not liable

• For example, because the signature on the document is not theirs/an agent's; payment is contingent

on an event which has not taken place, or being complied with

• These defences put in issue the liquidity of the document; consequently the onus is on the plaintiff

to show on a balance of probabilities that, for example, the signature is that of the
defendant's/agent's, or that the conditions have been complied with
• Although the general rule is that no witnesses are called, the court may hear witnesses on the

authenticity of the defendant's signature - HC Rule 8(7), MC Rule 14A(7)

• Where the defendant raises any defence outside of the document, but contends that because of other

facts, he or she is not liable on the liquid document

• Onus is on the defendant (reverse onus) to show on a balance of probabilities that the plaintiff will

not succeed in the main case

• Defences outside the liquid document amounts to pleas of confession and avoidance

• Allied Holdings Ltd v Myerson 1948 (2) SA 961 (W) at 967-968

• Following receipt of the defendant's answering affidavit, the plaintiff may, but is not obliged to, file a

replying affidavit, which addresses points made in the answering affidavit

• If, prior to the date of the hearing, the defendant decides to admit liability, they can just pay and the

hearing will not take place

• Alternatively, the defendant can wait until the hearing and then admit liability, upon which the court will

grant a final judgment against the defendant [Rule 8(6)]

Hearing of the provisional sentence

• If the defendant wishes to oppose provisional sentence, counsel for plaintiff and defendant argue the

matter on the papers (as sif it was any other application, except for the limited possibility of calling a
witness on the authenticity of the defendant's signature)
• As with opposed applications, counsel must file heads

• Having heard argument from counsel, the court then decides whether to grant provisional sentence

13
• The critical deciding factor is essentially whether the defendant has a bona fide defence to the claim
• If the court refuses provisional sentence, the defendant must file a plea and the matter then proceeds via
the normal action proceedings route

If the court grants provisional sentence to the plaintiff, then the defendant has two choices:
1. Either, within 2 months of the grant of provisional sentence, pay the full amount of the judgment and
costs to the plaintiff, and then give notice that defendant intends to “enter the principal case” (ie.
proceed to trial)
o Defendant then files a plea, and trial follows
2. Alternatively, if the defendant is unwilling or unable to pay the judgment debt and costs within two
months, the provisional sentence judgment automatically becomes a final judgment after the
expiry of the two months.
o Plaintiff is then able to proceed immediately to execution against the defendant’s assets
o This is quite harsh if the defendant has a bona fide claim and you can't pay because you don't
have the money

As a result, is it constitutionally permissible?

Given that the procedure short-cuts the usual trial procedure, is the defendant denied a right to a fair
hearing in terms of s 34 of the Constitution?
SeeTwee Jone Gezellen (Pty) Ltd v The Land Bank 2011 (3) SA 1 (CC)
o Applicants (defendants) argued that although they had a valid defence against the claim, they were
precluded from entering into the principal case by the rules regulating PS as they could not lead oral
evidence before the PS judgment
o Held: in general as a procedure, PS is not an infringement of the constitutional right to a fair
hearing, but in this particular scenario, the PS offended the Constitution. This is when the D can
show that they are unable to satisfy the debt but there was a bona fide defence, an even balance of
prospects of success in the main case and a reasonable prospect that oral evidence at the main
trial may tip the balance of prospective success in the defendant's favour
o Hence, prove don't have money to pay but would enter into trial if they had the money to do so AND
the court must be of the view that the chances of trial are evenly balanced
o CC then said that notwithstanding the development of the common law, the applicants still failed as
the court found that the prospects of success were in favour of the Land Bank
o – get summary by cc media release/slides.

DEFAULT JUDGEMENTS (pete 243-252)

HC RULE 31
MC RULE 12

Intro
- Like summary judgement and provisional sentence, default judgement is a short-cut procedure that
denies the defendant their day in court
- Arises in two instances
- 1. Defendant does not file a notice of intention to defend (ie, they do n othing when they get
summons) most common scenario
- 2.
Procedures
- There are 3 different procedures for default judgement, depending on the facts of the case
- .
- 1. Summons is for a debt/liquidated claim – Rule 31(5)
- If the time limit for filing a notice of intention to defend, or a plea, has expired, the plaintiff can give 5
days notice to the defendant that plaintiff intends to apply for default judgment.
- If defendant still does nothing, plaintiff applies to the Registrar for default judgment. (No need to go
to court – purely administrative procedure).
-
- 2. Summons is not for a debt/liquidated claim (eg. A claim for delictual damages) – Rule 31(2)
- . If the time limit for filing a notice of intention to defend, or a plea, has expired, the plaintiff can
give 5 days notice to the defendant that plaintiff intends to apply for default judgment.
14
- If the defendant still does nothing, plaintiff sets the case down for hearing before a judge. Plaintiff
must lead evidence to prove their claim.
-
- .
- 3. Summons seeks execution against residential property
- .
- Rule 31(5)(b) and Rule 46A – we will come back to Rule 46A later in the course.
- Even though the summons is for a debt (invariably non-payment of mortgage bond instalments), the
case must be set down for hearing before a judge, who will require compliance with Rule 46A.
-
Interdicts Pete 453-467.
- What is an interdict
- A court order requiring someone to refrain from performing, or to perform, a particular act.
- Always obtained by way of application.

- 2 types of interdicts: prohibitory and mandatory interdicts:

- Prohibitory interdict: an order to stop/prevent someone from doing something.
- Mandatory interdict: an order to force someone to do something.
- Mandamus: mandatory interdict against public official.
-
- The purpose of all interdicts is the enforcement of rights. This can be done via:
- A final inderdict:
- -- Final order enforcing a right
- .
- An interim interdict (also called a rule nisi)(only have to prove prima facie right, have to prove a
clear right on return to court) (essentially a temp freeze of the situation)
- . Enforces a right for limited period until it is established whether or not the prima facie right in fact
a clear right.
- Applicant for an interim interdict need only advance prima facie evidence of the right.

- Jurisdiction to grant interdicts:

- -- Can be granted in both MC (s.30(1) Magistrates’ Courts Act) and HC (inherent jurisdiction).
-
- Purposes for which an interdict may be granted:
- Compel respondent to perform obligations in terms of a contract.
- Prohibit commission of a crime.
- Prohibit commission of a delict.
- Restrain infringements of owner’s rights of enjoyment of property.
- Prevent breach of a statutory provision.
- Restrain employee from passing employer’s trade secrets to business rival.
- Restrain person from passing off business as that of another.
- .
- Final Interdicts
- Requirements:
-
- Clear right on applicant’s part
- ‘Clear right’ as opposed to ‘prima facie right’ – two steps
- Confirming that the right exists in law;
- Proving that the right exists in fact.
-
- .
- Injury actually committed/reasonably apprehended
- Injury’ is not necessarily physical harm to applicant’s person/belongings or harm resulting in
financial loss;
- Interdict to prevent/stop commission of delict – facts must be alleged and proved to show that the
respondent’s conduct is wrongful.
- Requirements (continued)
o Injury actually committed/reasonably apprehended (continued)
 Injury either continuing or about to occur;

15
  Actual prejudice and potential prejudice;
 A reasonable person, when confronted with the facts, would expect injury to result;
 Injury need not be irreparable.
- Requirements (continued)
o No other satisfactory remedy available to applicant
 Court will not grant an interdict when another form of redress would be adequate or
would provide similar protection;
 There is no closed list of other satisfactory remedies.
- Requirements (continued)
o No other satisfactory remedy available to applicant (continued)
 The court will not grant interdict where the applicant is able to obtain suitable
compensation for the injury s/he fears. (Applicant should sue for damages).
Exceptions:
 Respondent is a “man of straw”;
 Injury is a continuing violation of the applicant’s rights;
 Difficult to assess damages caused by injury;
 Vindicatory application.
 But the court always retains a discretion.
- A good example of a case where the court decided to exercise its discretion and grant the interdict
even though a damages claim would be available to the applicant is: Heroldt v Wills 2013 (2) SA
530 (GSJ), esp. at paras [30] to [43].
- The court appears to be developing the common law to favour interdicts rather than delictual claims
for damages in cases of “Facebook defamation”.
- For a good local example of an interdict application, see: Ndlambe Municipality v Hero Telecoms
(784/2021) [2021] ZAECGHC 31 (23 March 2021) (available on SAFLII).
Interim Interdicts
• An application for an interim interdict may be the first part of a substantive application (the second
part being the hearing of the application for a final interdict), or it may be an interlocutory application
interposed in the middle of some other dispute between the parties, eg. Savage v Sisters of the
Holy Cross 2015 (6) SA 1 (WCC). (Interlocutory interdicts are sometimes called “temporary
interdicts”).
• The locus classicus which sets out the requirements for an interim interdict is: Setlogelo v Setlogelo
1914 AD 221, at 227.
• Requirements
• Prima facie right
• ‘on the face of it’
• Established as follows
• Identifying that the applicable right that exists as matter of law;
• Supporting right with allegations and supporting evidence on your version of
dispute.
• Well-grounded apprehension of irreparable harm if interim relief not granted and ultimate
relief granted
• Only able to show prima facie right – interim interdict if harm to applicant likely to be
‘irreparable’;
• Irreparable harm: any interference with the right that prevents applicant from
exercising the right.
• Requirements (continued)
• Balance of convenience in favour of granting interim relief:
• If only a prima facie right has been established, then:
• Applicant must show that the balance of convenience favours granting interim relief.
• Also taken into account:
• Applicant’s prospects of success;
• Potential prejudice against third parties.

APPEALS

16
See textbook p 339-373

The difference between an appeal and a review

 Appeal: a party to a case in which there has been a final judgment is dissatisfied with the court's
judgment on the basis either that the court got the law wrong, or got the facts wrong
 Review: a party is dissatisfied with procedure used by the court
 Appeal: merits of the judgment
 The judge will usually have reached his or her judgment in good faith an following correct procedures,
but the appellant still disagrees with the judge's interpretation of the law or facts, or both
 Appeal lies to a higher court with appeal jurisdiction
 The objective: to set aside the court a qou judgement or part thereof
 Not everything is appealable - as a general rule, a party may appeal against a judgment or order, not a
ruling
 The judgment or order must have the following aspects to be appealable:
o Final in effect - not susceptible to alteration by the court a quo
o Definitive of the parties' rights - must grant definitive and distinct relief, and
o Dispose of all or a substantial portion ...
 Examples of non-appealable rulings:
 A ruling on a preliminary point of law
 An order referring an application to oral evidence
 A discovery order
 An order granting a postponement

Where to find the rules

 Appeals are one of the few issues where you need to look at the Acts and Rules
o Superior Courts Act s 16-19
o Uniform Rules 49-52
o Magistrates' Courts Act s 82-88 and Mag rule 51
o criminal matter, Criminal Procedure Act apply mostly (sometimes others apply but most times
it’s the Criminal procedure Act.)

Leave to appeal
General principle: in civil cases, there is usually an automatic right of appeal from judgments of MCs,
and there is no automatic right of appeal from judgments of the HCs

Appeals from MCs

• No leave to appeal required - appellant has right to appeal to HC ( MC ACT S83)

• Procedure: within 10 days after the judgment, appellant asks the mag for a written judgment. Mag has 15

days to provide a written judgment

• See Regent Insurance Co Ltd v Maseko 2000 (3) SA 983 (W)

• Appellant must then 'note' the appeal within 20 court days after receiving the written judgment

• Noting means giving notice to the clerk of the HC and respondent that the appellant tends to appeal

• Lodging of the appeal means that execution of the judgment is suspended

• Within 40 court days, appellant's attorney must set the appeal down in the HC (uniform rule 50(4) )

• Interest still clocks up

• Appellant must also prepare and file a record of the MC proceedings

• Proceedings need to be typed up, so if both parties agree, then only certain days can be requested to

be typed up
• If proof of being indigent, they can have the proceedings typed up free of charge

• The Registrar of the HC will then assign a date for hearing, which will be not less than 40 court days after

the date on which the application for set-down is made

• If the respondent wishes to cross-appeal, s/he must give notice within 10 days of receipt of the notice of

appeal (MC Rule 51(6)-(7)).

• In the event of a cross-appeal, the appeal and the cross-appeal are heard simultaneously by the appeal

court.

17
• Counsel for appellant and respondent file heads of argument (EC Rule of Practice 8).
• Appeal is heard by 2 judges of HC. Note that not all HCs hear appeals - eg. in the Eastern Cape all

appeals are heard in Grahamstown.

• If a party is still not satisfied – appeal to SCA.

• Leave to appeal to SCA required from same two HC judges who gave judgment.

• If leave to appeal is granted appellant must then follow procedures set out in SCA Rules 6 – 10A. Matter

is heard by 3 or 5 SCA judges.

• SCA is the final court of appeal for all non-constitutional issues.

• If the matter involves a constitutional point – decision may be taken on appeal from SCA to CC.

• ‘Short-cut’ appeals directly from a Mag Ct to the CC (see Peté pages 308-309). The discussion in the
textbook seems to suggest that it is possible for there to be a short-cut appeal process from the Mag Court
directly to the CC. This is highly unlikely ever to succeed in the real world. At the very least, a case which
starts in the Mag Court will go to a HC before going on to the CC.
• See: Moloi and others v Minister for Justice and Constitutional Development 2010 (2) SACR 78 (CC) as

an example of a failed attempt to leapfrog from the Mag Court to the CC.

Appeals from the HC

Note that there are four types of High Court judgment/order which cannot be appealed:
 Awarding maintenance pendente lite in matrimonial cases;
 Orders to contribute to costs in matrimonial cases;
 Orders for interim custody of children in matrimonial cases;
 Orders regarding interim access to a child pending matrimonial litigation.
 See: Superior Courts Act s.16(3).
 Appellant must apply to same judge(s) who gave judgment in the main case for leave to appeal against
his/her/their judgment. (Remember that there are a few instances where 2 or 3 judges must sit together
as a court of first instance – see EC Rule of Practice 19 (similar rule exists in other HC divisions))
 The principal consideration in granting or refusing leave to appeal is whether there is a reasonable
prospect of success on appeal. (See the unreported judgment in Ufudo Estate Agents v Rakel (Pty) Ltd
(on Jackal) for a brief discussion of this; see also: NUMSA v Jumbo Products CC 1996 (4) SA 735 (A))
 Leave to appeal will not usually be granted where a finding on appeal will have no practical effect. (And
if an appeal is heard, it may be dismissed on the grounds that a judgment will have no effect) – Superior
Courts Act s.16(2).
 See: Radio Pretoria v Chairperson, ICASA 2005 (4) SA 319 (CC), and Coin Security v SANUSO 2001
(2) SA 872 (SCA)

Process
 In straightforward matters, the party wishing to appeal may apply orally from the Bar for leave to appeal
at time judgment/order made.
 If there is no oral application for leave to appeal at time judgment/order made, the party wishing to
appeal must make a written application for leave to appeal within 15 days of judgment’s/order’s date
 Note that no heads of argument are required from counsel for applications for leave to appeal, even if
the application is opposed. (In exceptionally complex cases counsel may choose voluntarily to prepare
heads, or the judge may request them).
 Distinguish this from the hearing of the appeal itself, where heads of argument are required
 Lodge application for leave to appeal with registrar and serve copy on opponents.
 Registrar arranges a date for hearing of application – informs all parties.
 Application heard by judge(s) who presided at the trial of the matter being appealed against.
 Court may decide ex tempore, or give a written judgment, whether to grant or refuse leave to appeal
 If leave to appeal is granted, the appellant then files a notice of appeal (see example in Peté at page
560).
 If leave to appeal is refused, the aggrieved prospective appellant may apply in writing within 1 month to
the SCA for special permission to appeal – Superior Courts Act s.17(2)(b)-(f). (Although the Act does
not use the term, this written application is usually referred to as a petition)
 The petition to the SCA is addressed to the Judge President of the SCA.

18
 Respondent must lodge a written response (affidavit) with the SCA Registrar within 1 month after the
petition is served on him/her.
 Petition and response are then considered in chambers, purely on the papers which have been filed, by
two SCA judges. (ie. there is no hearing, and no argument by counsel)
 The SCA judges considering the petition may:
o Grant or refuse the petition; or
o Grant the petition in part (ie. specify that only certain aspects of the court a quo’s judgment may
be appealed); or
o Order that the petition be argued before them by counsel; or
o Refer the petition to a full SCA bench (5 judges) for consideration

Appeals from the HC

 An appeal against a judgment of one HC judge is heard by a "full court" of the provincial division of HC
within jurisdiction (the default position) OR the SCA (for important cases)
 S 16(1) and s 17(6) of the Superior Courts Act
 An appeal against the judgment of 2 or 3 judges must go to the SCA [s 16(1)(a)(ii)]
 It follows that a HC appeal from the MC must then go on to the SCA, not to a full court
 Anything to do with the validity of a will, or being struck off the role
 "Full court" is colloquially referred to as "full bench" or "full bench appeals"

Full court appeals - procedure

• Having set the appeal down, appellant must file 3 copies of the record with the Registrar and supply one

copy to the respondent (or 1 each if more than one respondent)

• If the appeal is purely on a question of law (no dispute of fact), the parties may agree to submit a written

statement of facts in terms of Uniform Rules 33 and 49(10). The purpose of this is to clarify issues and
shorten the appeal hearing
• Thus, only argue on the law

• Available in ordinary applications as well - not just appeals

• Useful when the parties are in 100% agreement on the facts

• If the appellant fails to deliver copies of the record within 40 days after the Registrar has accepted

application for a hearing date, the respondent may approach the court for an order that the appeal has
lapsed - Rule 49(7)(d)
• If that order is granted, the appeal may only be revived if the appellant applies to court and provides a

reasonable explanation for his or her tardiness

Appeals to the SCA

• Appeals from a judgment of a single HC judge may go to the SCA

• Appeals from judgments of 2 or 3 HC judges must go to the SCA

• Side issue: State may not appeal to full court - S v Mngoma. Criminal appeals by the State must go to the

SCA
• Procedure of these:

• Within one month of being granted leave to appeal to the SCA, the appellant must file a notice of appeal

with the SCA Registrar - SCA Rule 7(1)

• Appellant then has a further three months to file six copies of the record of proceedings of the court a

quo
• Note that the SCA Rule 8 contains detailed rules on the format and content of the record to be filed

• Appellant's counsel must deliver HoA within 6 weeks of the delivery of the record, and the respondent's

counsel must deliver heads within one month of filing of appellant's heads - SCA Rule 10
• Heads must be accompanied by a summary of issues in terms of SCA Rule 10A

• SCA Registrar then sets a date for hearing

• The default position is that cases are heard by 5 judges, but less complex cases, the President of the

SCA may order that 3 judges hear the appeal - S 13(1)

• Note that SCA Rule 14 imposes a two-hour time limit for oral argument, unless the senior presiding

judge allows longer time

Suspension of execution
19
• Execution of judgment is usually suspended pending appeal
• For strategic purposes, a losing party might try to prolong the appeal process for as long as possible in
order to delay the moment when s/he must finally comply with the judgment
• If the winning party makes an interlocutory application for execution not to be suspended, there is an
option to ask for an order of immediate execution
• Note: Road Accident Fund cases

Appeals to the CC

Four routes:
1. Sitting as a court of first instance - direct access cases
o Application by way of notice of motion supported by affidavit
o Such cases rarely success - Women's Legal Centre Trust v President of the RSA
 In respect of the application for direct access, that the power to grant litigants direct
access outside the CC's exclusive competence was one the CC rarely exercised, and
with good reason. It was loath to be a court of first and last instance, thereby depriving all
parties to a dispute of a right of appeal.
 It was also loath to deprive itself of the benefit of other courts' insights. In addition, a
multistage litigation process had the advantage of isolating and clarifying issues, as well
as bringing to the fore the evidence that was most pertinent to them.

2. Declarations of invalidity
o Declaration by HC or SCA that Act or President's conduct is of no force or effect
o HC can declare temporary interdict or other temporary relief pending CC decision
o Two ways a DoI will become before CC:
 Registrar of court which issued declaration of invalidity must refer order to CC registrar
within 15 days of order
 Either party may appeal against/apply for confirmation of DoI
 Kruger v President of RSA

3. Leapfrog from HC to CC
 HC makes decision on const matter - in interest of justice, proceeds straight to CC
 Will have to apply to CC for leave to appeal

4. Standard route from SCA to CC

 SCA made a decision on constitutional matter
 Will have to apply to CC for leave to appeal
 Arun Property Development

Note: CC has its own detailed procedural rules - see summary on textbook at 321-333

Procedure
• Leave to appeal lodged through application to the CC

• Logged with the registrar within 15 days of judgment

• Notice must be given to other party/parties

• Within 10 days, respondent may respond in writing as to whether they will oppose or not, and the

grounds of opposition

REVIEWS

• S 22 of the SC Act sets out the grounds on which a MC sets out the grounds on which a decision may be
reviewed:
• Absence of jurisdiction;
• Bias, malice, corruption of magistrate;
• Gross procedural irregularity;
• Admission of inadmissible evidence

20
• Various other pieces of legislation allow reviews of judgments of other persons/bodies, notably s 6 of
PAJA
• In addition, the HC has a common law review power over lower bodies, unless explicitly ousted by statute
• Eg. decisions of the Competition Tribunal may only be reviewed by the Competition Appeal Court, not

the HC - s 61(1) of the Competition Act

• If there is a statutory power, use it
• The line between appeals and reviews has become blurred since the judgment of Pepkor Retirement
Fund v Financial Services Board
• The effect of this judgment is that mistakes of fact by decision makers (but not by magistrates in MC
judgments, may be subject to review
• Ie. in so far as decisions by MCs, a mistake of fact is an appeal BUT any other decision makers can

take mistakes on fact on review

• Renaud advises to only use this when an appeal is not provided for

• Applies to all decision makers whose decisions could be appealed to the HC

Jurisdiction
 Courts are classified as either superior courts or inferior courts
 Superior: HC; inferior: below HC
 The importance of this dividing line is that not inferior courts has jurisdiction over other courts
 First port of call is HC
 Local divisions of HCs, except in Jhb, do not hear reviews
 All reviews are heard in the regional divisions
 Reviews of HC judgments must go to the SCA or CC
o Don't have the equivalent of a full bench for review like you do for appeal

Procedure
 Must use application procedure - Uniform Rule 53(1)
 Apply for review of the decision of a MC/tribunal/board/officer performing judicial or quasi-judicial or
administrative functions
 Notice of motion addressed to Mag, tribunal chairperson and all other parties
 NoM calls on the respondent to show cause why the decision or proceedings should not be reviewed
and corrected or set aside
 Upon receipt, mag must within 15 days of receiving the notice, dispatch to the registrar the record of
proceedings and reasons required by law or desires to give and notify applicant
 Applicant may amend application within 10 days of receiving the record of proceedings
 Within 15 days after receiving the NoM, the mag or any other party wishing to oppose the review must
give notice of intention to oppose to applicant - Rule 53(5)(a)
 Within 30 days after the 10 day period, mag or decision maker and any other opposing parties must
deliver answering affidavits to the applicant and the HC registrar
 Replying affidavits may then respond to answering affidavits in the same way as with all application
proceedings
 Respondent may place the record or parts thereof before the review court if applicant has chosen not to
 The reviewing court is not bound to the record of proceedings in court a quo as in an appeal because
the irregularity may not be apparent from record
 Because of the nature of reviews, witnesses can be called to substantiate a point

Time limits
 It is trite that at common law, there are no prescribed time limits for bringing review proceedings. This
rule also does not fix any time limit for bringing such an application. The courts require that such an
application must be brought within a reasonable time
o This rule applies to MC judgments and decisions of other bodies unless a specific statutory time
limit is imposed
o NB: s 7(1) of PAJA allows for only 180 days
o S 8 of the Immigration Act allows only 10 days to apply for reviews for people seeking asylum

21
 If the applicant fails to institute proceedings within a reasonable time period, the review court must
decide whether the unreasonable delay ought to be condoned
 In practice, HCs tend to be generous in allowing late reviews except in cases where the applicant for
review has been exceptionally dilatory
o See Khumalo v MEC for Education, KZN 2014 (5) SA 579 (CC) at para 42-52

Urgent reviews
 Depending on the circumstances, the judgment of inferior court may require urgent review
 In these cases, the normal Rule 6(12) urgency rules apply to the application for review
 In certain circumstances, the nature of the review application might justify the granting of interim
relief(ie. the reviewing court issues a rule nisi)

Outcome of the review application

 The reviewing court will either grant or refuse the application for review
 If the application is successful, the reviewing court may either set aside proceedings of the lower court
or decision maker and refer the matter back for reconsideration, OR the reviewing court may decide to
impose own decision in place of the reviewed decision

Appeal against review decision

 A HC judgment in a review application can be appealed to the SCA in the same way as HC judgments
in any other application
 See Dumani v Nair and Another 2013 (2) SA 274 (SCA)
 Standard appeal process

SUMMARY JUDGMENT

ASSIGNMENT

 By its very nature, SJ is an opposed application

 Use Applicant and Respondent
 Precedents in the textbook are wrong
 Shouldn't be a situation where it would be urgent
 Prayers:
o Summary judgment against the Respondent in the sum of...
o Interest thereon at a rate of X% from (date of service of summons) to date of payment.
o An order declaring the Respondent's property described as Erf 1234 Grahamstown
executable for the said sum.
o Costs of suit. (if in the mortgage agreement, then include "on the attorney and client scale")
o Further and/or alternative relief.
 The NoM must also give the name of the person who attests to the founding affidavit (Standard
Bank is not a person)

The following is in terms of the assignment:

Founding affidavit
 Deponent must explain who he or she is and state that they are authorised to depose to the affidavit
o There is no need to attach a copy of the authorisation
 Deponent must say that he or she has access to records of the applicant and has perused those
records
 Deponent must also say that, on the basis of the record:
o Verifies the cause of action contained in the summons and particulars of claim
o Confirms the correctness of all allegations made in the particulars of claim
o Confirms the amount owing by the Respondent to the Applicant
o Deponent should also refer to the annexed copy of the mortgage bond - Uniform Rule 32(2)

22
  Must include: "the Respondent has no bona fide defence and the notice of intention to
defend has been delivered solely for the purposes of delay."

Notice of intention to oppose

 Must be oppose, not defend
 Intention to oppose is for applications; intention to defend is for actions
 A very simple standard document saying the Respondent intends to oppose the application and that
the Respondent appoints the address of his or her attorney as the address which they will receive
further service of documents
 Give the name and address of the attorney

Answering affidavit
 Go for overkill because respondents often fail to put enough sufficient information
 In terms of the failure to send the s 129 notice, the respondent should focus on the fact that the
letter was never sent or never received
 Similarly, if the respondent can show on a balance of probabilities that the amount claimed is wrong,
the respondent will succeed

Summary judgments ctd

 An extraordinary procedure which allows a court to grant a final order in a defended action without a
trial
 Follows the institution of action proceedings and results hen the plaintiff suspects that the intention
to defend is solely to cause delay
 The court is required to balance two conflicting interests:
o The plaintiff should not be forced to suffer the delay and expense of a trial where the
defence has no merit
o The audi alterum principle
 The court must be very satisfied that the plaintiff has a clear case and that the defendant has failed
to establish a bona fide defence
 Normally quite clear to see whether a plaintiff has a claim and a defendant has a bona fide defence
 Can only be brought in cases where claim involves:
o A liquid document
o A liquidated amount in money
o Delivery of specific movable property
o Ejectment (rare, because of PIE)
 Plus, a claim for interests and costs which are ancillary to the main claim - Rule 32(1)

Procedure
 Summary judgment is an application heard in motion court
 NoM must be brought within 15 days of receiving the notice of intention to defend
 Respondent may give security for the whole amount claimed, and will then be able to enter the main
case and go to trial
 Registrar of the HC must be satisfied that the money has been paid
 Alternatively, if no security is given, respondent files notice of intention to oppose and an answering
affidavit
 Argued in motion court

The founding affidavit

• Applicants for summary judgment are frequently banks or finance companies. The affidavit is
deposed to by an employee of the bank / finance company.
• How much knowledge of the facts does that deponent need to have? See: Rees v Investec Bank
2014 (4) SA 220 (SCA) and Firstrand Bank v Huganel Trust 2012 (3) SA 167 (WCC). Court will
take a pragmatic view.
• The applicant succeeds or falls on the basis of the affidavit alone. No oral evidence may be led by
the applicant (Rule 32(4)).

23
Rees v Investec Bank 2014 (4) SA 220 (SCA)

Where an applicant for summary judgment was a corporation, the deponent to its affidavit did not need to
have first-hand knowledge of every fact comprising its cause of action: the deponent could rely for its
knowledge on documents in the corporation's possession.

Outcome of the hearing

If the Respondent either:
– Gives security to the applicant/plaintiff to the Registrar’s satisfaction for any judgment and
costs, OR
– Satisfies the court by affidavit or, with leave of the court by oral evidence, that s/he has a
bona fide defence

The Court will give leave to defend and the matter proceeds as if no application for summary judgment had
been made – (Rule 32(7)).
• If the Respondent does not provide security or satisfy court of a bona fide defence the court has a
discretion to grant summary judgment. (The discretion will invariably be exercised in the Applicant’s
favour in such an instance).
• The court may grant summary judgment for part of a claim and give leave to defend the remaining
part of the claim (Rule 32(6)(b)(ii)).

VARIATION AND RESCISSION OF JUDGMENTS

• Reading: Peté pages 269-280

Introduction
• The general rule is that the judge/magistrate who delivers a judgment becomes functus officio
immediately after the delivery of the judgment.
• The effect is that the judgment may not be altered or varied by the same presiding officer except in
exceptional circumstances:
– Correction of errors
– Rescission/cancellation

Variation in terms of common law

• The HC has common law authority to supplement/clarify/correct its own judgments.
• See: Firestone v Gentiruco 1977 (4) SA 298 (A) at 307C-G.
• HC may vary a judgment to:
– Include accessory/consequential matters which were inadvertently overlooked/court failed to
grant.
– Clarify judgment.
– Correct clerical/arithmetic/other error.
– Correct/alter/supplement costs order.
• The HC also has common law authority to rescind a default judgment, although this is rarely
invoked as parties generally use Rule 31(2)(b) rather than the common law.
• See: Government of the Republic of Zimbabwe v Fick and others 2013 (5) SA 325 (CC) at paras
[85]-[86] and Scholtz v Merryweather 2014 (6) SA 90 (WCC) at paras [11]-[19].

Firestone v Gentiruco 1977 (4) SA 298 (A)

Once a court has duly pronounced a final judgment or order, it has itself no authority to correct, alter, or
supplement it. The reason is that it thereupon becomes functus officio : its jurisdiction in the case having
been fully and finally exercised, its authority over the subject-matter has ceased.
There are, however, a few exceptions to that rule [see above]. This list is not exhaustive. On the
assumption that the court has a discretionary power this should be sparingly exercised, for public policy
demands that the principle of finality in litigation should generally be preserved rather than eroded.

24
Scholtz v Merryweather 2014 (6) SA 90 (WCC)

This court has inherent powers of rescission under the common law, provided that 'good' or 'sufficient'
cause therefor has been shown by an applicant

Our courts have often said that the phrase 'good cause' defies comprehensive definition: since it involves
the exercise of a judicial discretion, it requires a flexible approach involving broad principles of justice and
fairness, and a consideration of all the relevant facts and circumstances of the case as a whole.

In practice, however, there have traditionally been two requirements which an applicant is generally
expected to establish to succeed in a rescission application
- a reasonable explanation by the applicant for the default, and
- a bona fide defence which has some prospects of success.

It is not sufficient if only one of these two requirements is met; for obvious reasons a party showing no
prospect of success on the merits will fail in an application for rescission of a default judgment against him,
no matter how reasonable and convincing the explanation of his default.

Government of the Republic of Zimbabwe v Fick and others 2013 (5) SA 325 (CC)

At common law the requirements for rescission of a default judgment are twofold. First, the applicant must
furnish a reasonable and satisfactory explanation for its default. Second, it must show that on the merits it
has a bona fide defence which prima facie carries some prospect of success. Proof of these requirements
is taken as showing that there is sufficient cause for an order to be rescinded. A failure to meet one of them
may result in refusal of the request to rescind.

Rescission in terms of common law

• Besides default judgments, a court may rescind any judgment in terms of the common law in cases
of:
– Fraud.
– Justus error (on rare occasions).
– New documents discovered.
– Justice and fairness.

Variation/rescission in terms of Rule 42(1)

• Court may mero motu or on application by any party, rescind or vary any order.
• The common element is that there must have been an error.
• Variation is allowed in the following instances:
– Order/judgment erroneously sought/erroneously granted in affected party’s absence. Eg.
National Pride Trading 452 v Media 24 2010 (6) SA 587 (ECP).
– Order/judgment where there is ambiguity/patent error/omission. Eg. Mncora v Butters [2013]
3 All SA 330 (ECP).
– Order/judgment granted due to mistake common to the parties. Eg. Road Accident Fund v
Mouton 2003 (5) SA 212 (W).

Rescission in terms of Rule 31(2)(b)

• (And reconsideration in terms of rule 31(5)(d))
• Rule 31(2)(b): only operates in respect of default judgments granted:
– In respect of claims not for a debt/liquidated demand, and
– Where the defendant failed to deliver appearance to defend/enter a plea. (see Rule 31(2)
(a)).
• Applications for ‘reconsideration’ i.t.o. 31(5)(d) are treated the same as applications for rescission.
• Court has discretion to set aside if defendant shows good cause for rescission (ie a reasonable
explanation for default).
• Appellant must show default was not wilful – wilful default exists where:
– Defendant has knowledge that action is being brought against him, and
25
 – Defendant deliberately refrains from entering appearance to defend, and
– Defendant appreciates the consequences of failing to deliver appearance to defend/enter a
plea.
• See: Harris v ABSA Bank Ltd t/a Volkskas 2006 (4) SA 527 (T) at paras [6]-[11].
• On “good cause” generally, see: Brangus Ranching v Plaaskem 2011 (3) SA 477 (KZP) at para [19]
and paras [28]-[30].

Brangus Ranching v Plaaskem 2011 (3) SA 477 (KZP) at para [19] and paras [28]-[30]

A consideration of the various cases on the subject of good cause shows that there is an understandable
reluctance to give the phrase a circumscribed and inelastic meaning and it is, I think, clear that each case
must stand on its own facts. It appears, however, to be generally accepted that good cause cannot be held
to be satisfied unless there is evidence not only of the existence of a substantial defence but, in addition, of
a bona fide desire by the applicant to raise the defence if the application is granted.

 In addition to showing that the default was not wilful the applicant for rescission must show, prima
facie, the existence of a bona fide defence.
 The court will not use its discretion to grant rescission unless defendant can show a substantial
defence to the claim that is good in law. Merely claiming to have a defence is not enough. Applicant
must set out the nature and salient details of the defence.
 The existence of a bona fide defence is insufficient. It must also be clear that the applicant actually
intends to use that defence.
 For this reason the affidavit supporting the application must set out defendant’s reasons for default
and his defence in sufficient detail. (If in doubt, put too much information rather than too little in the
affidavit).

Consent to variation/rescission?
• Note that an order cannot be rescinded/ varied merely because all parties to the litigation ask for it
to be rescinded/varied. If there is no error or other lawful basis to rescind or vary, the order must
stand.

EXECUTION

 P 334-354
 Also bear in mind the National Credit Act and the Consumer Protection Act
 judgments may be cateogrised as judgments sounding in money (ad pecuniam solvendam) and
judgments which are not sounding in money
 ONLY interested in judgments sounding in money, because they don't apply to the other category
 Sometimes monetary aspects to the other category - like costs - so the line isn't as clean as that

Definition
 Execution is the term describing the process by which the judgment debtor's property is seized by the
sheriff and sold in order to raise money necessary to satisfy the judgment debt
 Writ of execution: the document issued by the registrar/clerk which authorises the sheriff to attach the
judgment debtor's property
 Warrant of execution: MC equivalent of a writ
 Sale in execution: the sale of judgment debtor's property, usually by public auction

Procedure
• Different rules for execution

• Go for movables before immovables

• Mortgage exception: get order saying they can go after immovables (the property ) so you don't have to

attach movables first

Attachment and sale of movables

26
 A judgment will often prescribe the date by which payment must be made, but if it does not, the creditor
must give the debtor a reasonable time to pay
 If the debtor has not paid, the creditor can approach the Registrar to issue a writ of execution in terms
of Form 18 of the Rules
 Having had the writ issued, the creditor's attorney then takes it to the sheriff for execution
 The sheriff goes and demands payment of the debt
 If the debtor pays the amount due, the sheriff takes the money and that is the end of the matter
 If the debtor cannot pay, the sheriff asks the debtor to point out movable property which the sheriff may
attach. If insufficient property is pointed out, the sheriff may search and seize additional property
belonging to the debtor
 The sheriff makes an inventory of the property and takes it into his/her possession

What may not be attached

 S 39 of the repealed Supreme Court Act set out a list of property that may not be attached including
beds, bedding, clothes, food and tools of the debtor's trade
 S 45 of the new SC Act envisages a new list of non-attachable goods will be prescribed, but s 45 has
not been brought into force (and no list has been prescribed)
 Hence, the matter is currently in limbo, but in practice, the sheriffs are just continuing to use the s 39 list
until a new list is prescribed

The other option for the debtor

 To avoid having possessions seized, she or he can arrange for someone else of credible financial
standing to stand surety for the debt
 If the debtor does not either pay the debt, or deliver the goods to te sheriff by the date of the sale in
execution, then the surety becomes liable to pay

Attachment and sale of movables

 The sale in execution takes place no less than 15 court days after the attachment
 What if the debtor has no movable property to attach? The sheriff files a nulla bona return with the
Registrar and the creditor's attorney
 If the debtor has movable property, the creditor can then proceed against that property

Third party claims

 What if someone else claims to own the property which the sheriff seeks to seize? Eg. the debtor lives
in a shared house, and one of his house-mates claims to own all the furniture
o See Rule 45(3)(c)(i)
 The sheriff must consult the judgment debtor, who can agree that the property is not the debtor's and
therefore cannot be attached
 if the credit does not agree, the sheriff will file an interpleader notice in terms of Rule 58
 The interpleader notice is accompanied by an affidavit by the sheriff
 The sheriff files the interpleader notice and affidavit saying that he/she is unsure whose property it
belongs to, but these are the circumstances of the case
 The person claiming ownership of the property (and the creditor if they wish to do so) then file affidavits
setting out their claim to the property
 The matter is then set down for hearing and argued as an opposed application

Incorporeal possessions
 Rule 45(8): refers to property such as shares in a company, leases, and unfinalised legal claims, in
terms of which the judgment debtor has some financial interest or claim
 Such property can only be attached once the sheriff has given notice to all interested persons ( eg. the
company secretary for shares)

Attachment of money due to the debtor

 This applies where the debtor has no, or insufficient, property to satisfy the judgment debt, but there is
money due to him/her which is either a debt due to the debtor, or salary/wages due to the debtor
 Hence, it is necessary to distinguish between HC procedure and MC procedure
27
Money due - HC
 The Uniform Rules do not distinguish between debts due to the debtor and salary/wages due to the
debtor
 In either case, the sheriff serves a notice on the third party (debtor's debtor - eg. employer) - referred to
as the garnishee - to pay over the money to the sheriff instead of to the judgment debtor

Money due - MC
• Differentiates between debts due to the debtor, and salaries and wages due to the debtor

• In the case of salary/wages, the clerk issues an emoluments attachment order at the request of the

judgment creditor
• The order is served on the debtor's employer by the sheriff

• Follow Form 38 of the MC Rules

• The emoluments attachment order requires the employer to pay over a certain amount each

week/monthly to the creditor's attorney until the debt has been paid off
• If the debtor will not have enough money left each week/month to provide the basis of life for his/her

family, the debtor can approach a court to have the order varied
• If the judgment debtor changes his/her employment before the debt is paid, there is not need for a new

order
• A copy of the original order is served on the new employer, who is then bound by it

• If employer forgets to deduct the money: remind employer to pay

• If it's not an honest mistake on the employer's part and refuses to deduct the money, creditor can get an

order to seize employer's goods

• If the judgment creditor wants to attach money due to the debtor other than salaries or wages, then the

creditor must bring an application in the MC for a garnishee order in terms of MC Act s 72 and MC Rule
47
• The debtor and/or the garnishee may oppose the application

• If the order is granted, it follows the format prescribed in Form 39

• The garnishee must pay over the debt to the judgment creditor's attorney

• If the garnishee does not dispute the debt which h/she owes to the judgment debtor, and does not pay

the debt to the creditor, the creditor can then proceed to execute against the garnishee's property

Jurisdiction
The application for an EAO must be in the MC which has jurisdiction over the employer, unless the
employer is the State in which case the application must be made to the MC which has jurisdiction over the
debtor

Terminology
 Form 38 refers to employer in EAO as garnishee
 Just beware what they are actually referring to

Attachment and sale of immovables

 Usually HC matters because the amount of money involved usually pushes you into HC jurisdiction
 Uniform Rule 46; MC Rule 43
 The general rule: the debtor must first execute against movables/incorporeal property, and only if they
are insufficient, then execute against immovables
o Rule 46(1)(a)(i)
 The exception: specially executable property, where the creditor can execute immediately against the
movable property
o It is a standard prayer when suing on a mortgage debt, to ask for the mortgaged property to be
declared "specially executable"

Primary residences
 Rule 46(1)(a)(ii) requires a court to "consider all the relevant circumstances" before declaring a debtor's
primary residence to be specially executable

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 In practice, it is usually only if the household includes children, who will become homeless as a result of
execution, that this requirement operates to the debtor's advantage
 However, even children aren't going to save the house forever
 Keep appealing to stay execution
 Jaftha v Schoeman 2005 (2) SA 140 (CC)
 Mkhize v Umvoti Municipality 2012 (1) SA 1 (SCA)
 Standard Bank v Bekker 2011 (6) SA 111 (WCC)
 In reality, it is difficult for a debtor who cannot pay his/her mortgage bond installments to prevent
attachment and sale of the house
 The debtor's best hope is probably s 85 of the National Credit Act - a declaration of over-indebtedness
and rescheduling of the debt repayments

Standard Bank v Bekker 2011 (6) SA 111 (WCC)

Due to conflicting judgments and an amendment to rule 46 of the Uniform Rules, it had become unclear
what information a bondholder had to place before a court to enable it to decide whether to grant a writ of
attachment and sale in execution of a judgment debtor's home.
The issues:
1. What were the 'relevant circumstances' to which a court had to have regard before ordering
execution against mortgaged property specially hypothecated to satisfy the debt secured by
such mortgage?
Although no definitive answer could be given to this question, relevant circumstances included evidence of
an infringement of constitutional rights or an abuse of process, as well as evidence in support of any
contention by the bondholder that an alleged or demonstrated infringement was justifiable.
2. By whom did such circumstances have to be pleaded?
Allegations that execution would infringe the judgment debtor's constitutional rights or that the application
for a writ of execution to issue was an abuse had, in principle, to be pleaded by the judgment debtor, and
any rebutting allegations by the bondholder.
3. Did the new rule 46(1) have the effect of setting up any substantive requirement on the part of
the plaintiff in order to obtain the relief sought?
The amended rule 46(1)(a) did not give rise to new substantive obligations on bondholders seeking orders
for execution against the hypothecated property. The proviso made it clear that execution against the
judgment debtor's primary residence (home) entailed a potential infringement of the right to housing and
could therefore occur only under judicial oversight.
As far as procedural requirements were concerned, bondholders had — apart from special requirements
relating to proceedings instituted in terms of the NCA — to comply with the following guidelines:
(a) Where a declaration of special executability was sought ancillary to the judgment in the money
claim, the bondholder had to indicate in the summons whether or not execution was being sought against
the judgment debtor's home. If the bondholder was unable to do so because of lack of knowledge, that had
to be stated in the summons.
(b) Where the bondholder was able to state that the property was not the debtor's home, the matter
had, where possible, to be disposed of via the registrar. In such cases the bondholder had to submit to the
registrar an affidavit confirming the fact that the property was not the debtor's home.
(c) Where the property might be the debtor's home, and the secured debt was repayable in periodic
instalments, it could be to the advantage of the bondholder to assist the court by stating the amount of
arrears; and where this was relatively low, by stating why it was resorting to direct realisation of the
security.

Mkhize v Umvoti Municipality

The plaintiff claims that the sale in execution of the immovable property was invalid because the warrant
authorising execution was issued by the clerk of the magistrates' court and without the judicial supervision
required by Jaftha. In Jaftha, the Constitutional Court held that s 66(1)(a) of the Magistrates' Courts Act was
unconstitutional in some respects. It remedied the defects by reading in words into the subsection providing
for judicial oversight of the process of execution against immovable property. The order of
unconstitutionality made in Jaftha was not qualified and is retrospective from the date of commencement of

29
the Constitution. The relevant events giving rise to this case all occurred before the judgment in Jaftha was
delivered.

The order made in Jaftha is aimed at preventing the infringement of the right to adequate housing. This is
the sole purpose of requiring judicial oversight in all cases of execution against immovable property. Rule
46 of the Uniform Rules, as amended, is consistent with the order in Jaftha. Judicial oversight is especially
required in cases where there is absence of formal opposition and where the debtor is in default or where
he or she is ignorant of his or her rights. But it does not follow that the absence of judicial oversight will
render the procedures followed, eg the issue of a warrant for execution and the subsequent sale in
execution, invalid in all cases.

Held: It was found that the immovable property concerned was not the plaintiff's home, nor was it
suggested that he did not have access to adequate housing. The purpose of the judicial oversight ordered
in Jaftha is to protect the right to adequate housing. Where, as in this case, the right to adequate housing is
not engaged, invalidity does not necessarily follow.

Procedure
 The judgment creditor's attorney applies for a writ of attachment using Form 20 of the Uniform Rules
 If the movable property is not the debtor's primary residence, the Registrar can issue the writ
o The creditor must provide an affidavit saying it is not the debtor's primary residence
o There are cases of dishonest attorneys falsely claiming that the property is not the primary
residence - can be struck off for malpractice
 If it is the primary residence, then the application for a writ must be made to court, giving notice to the
debtor who may oppose the application
 The writ is served on: the owner, the occupier and the Registrar of Deeds
o The sheriff also calls for preferent creditors to state their claim against the property
 SARS has first bite
 Second bite: the local municipality which may have a claim for rates
 Sheriff then conducts the sale of the property
 See Rule 46(7-13) for the procedure
 Sheriff draws up a plan for the distribution of the proceeds amongst creditors and any creditor can
object and have the plan reviewed by a judge
 Once any objections have been dealt with, and the transfer has been registered in the buyer's name,
the sheriff pays out according to the plan

What if the owner/occupier refuses to vacate the property?

 Once the property has been attached, the owner/occupier must be given a reasonable period of 4-6
weeks to move out
 If the owner/occupier refuses, s/he is deemed an unlawful occupier and the judgment creditor can seek
an eviction order in terms of PIE

ABSA Bank v Murray 2004 (2) SA 15 (C)

What if the owner / occupier refuses to vacate the property? Once the property has been attached, the
owner / occupier must be given a reasonable period (say 4 to 6 weeks) to move out. If the owner / occupier
refuses, s/he is deemed an unlawful occupier, and the judgment creditor can seek an eviction order in
terms of PIE.

Nduna v ABSA Bank 2004 (4) SA 53 (C)

The applicant sought the review and setting aside of an eviction order in terms of the Prevention of Illegal
Eviction from and Unlawful Occupation of Land Act 19 of 1998 (“PIE”) emanating from the Magistrates’
Court. The basis of the application was the argument that the Magistrates’ Court lacked jurisdiction to make
the order. The applicant argued that section 29(1)(b) of the Magistrates' Court Act 32 of 1944 only
conferred jurisdiction in ejectment actions and not in ejectment applications.

30
Held – The Court had, in the past, assumed (without deciding) that the Magistrates’ Court had jurisdiction
in ejectment applications. There was no basis to depart from that assumption, which had been correctly
made (Pedro and others v Greater George Transitional Council [2001] 1 All SA 334 (C) followed). Section 9
of PIE empowered Magistrates’ Courts to “issue any order or instruction or to impose any penalty
authorised by the provisions of this Act”. The preamble to the Act, as well as sections 4(1) and 5 thereof,
reinforced the conclusion that the intention of the legislature was to confer jurisdiction on the Magistrates’
Courts to hear ejectment proceedings, whether brought by way of action or application.
Application dismissed with costs.

Superannuation of judgments
 **Note: t/b out of date as 2014 amendment of rules
 Now: execution of HC judgment can take place any time within 30 years after judgment has been
granted
 Rules have not changed for the MC: execution must take place within 3 years from the date of
judgment, or from the date of the last payment made in terms the judgment (if the debtor has made
partial payment)
 If the judgment creditor wants to execute after more than 3 years, he or she must bring an application
for an order reviving the judgment
o See Louw v Riverside Ranches
o Once it is revived, then it is revived, and you can fall back on the 30 year time
 Need an explanation for revival of the order
 Must give notice to the other party
 In addition to the three year rule, there are further rules relating to sales in execution of immovable
property which has been attached following a MC judgment
o See MC act 66(4) ad (5) and September v Nedcor Bank
 If the property is subject to a preferent claim, (eg. rates) then the sale in execution must take place
within a year after the attachment

31
 Debt collection

Who may collect debts?

 Debts may obviously be collected by the creditor or his/her employee

 Professional debt collectors must either be:
 Attorneys or employees of attorneys; or
 Registered debt collectors in terms of the Debt Collection Act

When to use MC Act s 65-65M

 So-called s 65 procedure may be used as an alternative to the standard execution and

attachment procedures, or following the standard execution procedures in cases where
those procedures have failed to yield sufficient property to satisfy the judgment debt
 It is particularly useful in cases where the creditor suspects that the debtor is hiding assets
or income
 Although an MC procedure the can be used to collect debts due in terms of both MC and
HC judgments
 The core feature is set out in s 65A(1)(a): the debtor is required to appear before a
magistrate who will enquire into the debtor's financial position and make "such an order as
the court may deem just and equitable"
o Inquisitorial process where the magistrate questions the debtor
 Applies to natural and juristic persons
o If juristic, a representative needs to represent it
 S 65 procedures cannot be used against state or organs of state
o Rather use the procedures set out in s 3 of the State Liability Act

What order can be made?

 The method of enquiry set out in s 65D(1), (4) and (5) - it is essentially inquisitorial
 The "just and equitable" order may take the form of an order to pay the whole judgment
debt immediately, or by a certain date
 But more often that not, it will either be an order to pay the debt in installments, which the
debtor can afford, or it will be an emoluments attachment order

If the debtor fails to appear

 If the judgment debtor fails to appear at the s 65 hearing (a specific offence), a warrant
may be issued for their arrest
 When the debtor has been arrested, he or she is brought to court and may then be charged
with, or convicted of, the offence of failing to appear at the enquiry, and will then further be
held at court while the s 65 enquiry takes place

Collection fees
 The attorney receiving the instalment pursuant to a s 65 enquiry, or payments in terms of
an EAO, is entitled to charge a collection fee of 10%, subject to a maximum fee of R369 per
instalment

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 ADMINISTRATION ORDERS

What are administration orders?

"Administration has been described as a modified form of insolvency suited to dealign with
relatively small estates where costs of sequestration proceedings would exhaust the estate... the
aim of an administration order is to assist a debtor over a period of financial embarrassment
without the need for sequestration."
- Fortuin v Various Creditors
 A mini-insolvency

Procedure

 Application in the MC brought by the debtor

 S 74(1) of the MC Act provides a debtor with less than R50 000 worth of debts, who is
unable to pay them, may apply for an order "providing for the administration of his estate
and for the payment of his debts in instalments or otherwise
 The format of the application is prescribed by MC Form 44
 S 74A specifies all the documents and information which the debtor must provide in support
of the application
 One of the most important documents is the "statement of affairs" which must follow the
format prescribed in MC Form 45
 S 74B allows the court, or any creditor, to interrogate the debtor at the hearing of the
application concerning the debtor's assets, liabilities, income etc

Procedure
 S 74A specifies that all the documents and information which the debtor must provide in
support of the application
o One of the most important - a statement of affairs - which must follow the prescribed
format set out in MC Form 45
 S 74B allows the court, or any creditor/creditor's attorney, to interrogate the debtor at the
hearing of the application concerning the debtor's assets, liabilities, income etc.
 If the court is satisfied that the debtor is indeed unable to pay his or her debts, the court will
grant an administration order (MC Form 51 and set out in s 74C), and appoint an
administrator in terms of s 74E
 The order will either order the debtor to pay over a certain amount to the administrator each
week/month, or will provide for an emoluments attachment order (s 74D), or both
o Debtor needs to employed for EAO
o Otherwise debtor must just pay over to administrator

The effect of the order

 Contained in s 74P:
o Firstly, as long as the administration order is in effect, no creditor shall have a
remedy against the debtor or his property for collecting money owing, except
in regard to a mortgage bond
o Secondly, any court in which proceedings have been instituted against a debtor,
shall, upon receiving notice of administration order, suspend such proceedings
o Thirdly, the lodging of the application, together with the statement of affairs,
interrupts prescription of the debtor's debts

33
  The effect of this is that a debt cannot prescribe for as long as the debtor is
under administration, or for at least one year after administration has
terminated
 It actually may work against the debtor according to the one-year continuing
of prescription when there is an obstacle
o Note that a credit agreement or a moneylending contract in which a debtor purports
to agree not to apply for an administration order, is which excludes the debt from the
terms of any administration order, is unenforceable because it is contrary to public
interest
 See Bafana Finance Mabopane v Makwakwa 2006 (4) SA 581 (SCA)
The administrator
 The appointment is personal, so it cannot be transferred to another person or entity without
permission from a court
o See Stander v Erasmus 2011 (2) SA 320 (GNP)
o Frequently, the applicant debtor's own attorney is appointed as the administrator
o This is often because the attorney will work for "free" in terms of the application if
they can be the administrator - this can lead to a conflict of interest because it is in
the attorney's interest that the debtor remains under administration for as long as
possible
 See Zwarts v Thulo 2010 WHC
 Dlamini v Maharaj 2010 PHC [both available on saflii as unreported]
Duties of the administrator
 Obliged to collect the money received from the debtor or debtor's employer, and distribute
the money in terms of that order at least once every three months
o Hence the administrator can hold the money if only being paid in very small amounts
 The administrator must lodge an account of the money received and distributed to the clerk,
unless there has been no money received
o See African Bank v Jacobs
 The administrator may seize and sell some of the debtor's assets, if authorised to do so by
the court
 The administrator's fees are set out in s 74L
o Frequently the cause of dispute because of the desperation of the debtor
o Fees are capped at 12,5% of the amounts collected, plus costs (which probably will
reach up to about 20% of the money)
 See Weiner v Broekhysen 2003 (4) SA 301 (SCA)
 African Bank v Wiener 2005 (4) SA 363 (SCA)
Termination of administration
 In the usual course of events, the debtor's debts will eventually be paid off, and the
administrator will lodge a certificate with the clerk confirming it, and the admin order will
then lapse
 Alternatively, the debtor or "any interested party" may apply to have the administration
order suspended/amended/rescinded in terms of s 74Q
o Application will probably be opposed by the administrator if it is by the debtor
o "Any interested party" - probably creditors who want to execute against the debtor's
property
 If the administration order is rescinded, any orders are automatically revived
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 o Hence, judgment order which was suspended can immediately go execute
 Creditors have to have copy of application for rescission served on them, but do not need to
be named as respondents

THE INSOLVENCY ACT

Voluntary surrender
What is it?
 Use if your debts are over R50 000, because admin order is better for less than that - no
order specifically stating that though

Who may apply?

 The debtor (or his or her agent)
 Note: in the case of a couple married in COP, both spouses must apply jointly
for the surrender of their joint estate
 The executor of an insolvent deceased estate
 The curator bonis of an insolvent person who is incapable of managing his or her own
affairs
 Prodigal or someone of unsound mind
 All the members of a partnership (jointly) in the case of an insolvent partnership

The form of the application

 An application for voluntary surrender is an ex parte application on notice to creditors

o Doesn't make creditors respondents, but just need to have notice of the application
o Creditors can oppose the application by filing answering affidavits, although they
don't have to be respondents
o Unusual procedure
 The other common example of an ex parte on notice application is an application for
admission as an attorney or advocate
o On notice to Law Society if attorney
o On notice to Bar if advocate
o Law Society and Bar can also file answering affidavits without being respondents

What does the prayer look like?

 The prayer in the notice of motion simply asks that "the surrender of the applicant's estate
be accepted"
 Standard Insolvency t/b by Hockly: example at 307-310

Requirements
In order to get an order accepting the voluntary surrender, the applicant must show:
1. The debtor's estate is in fact insolvent
o Note: assets exceed liabilities - insolvency test
2. There will be sufficient free residue to meet the costs of sequestration
3. Sequestration will be to the advantage of creditors

First req: the debtor’s estate is, in fact, insolvent

 The applicant is most often the debtor himself/herself, so should be in a position to
demonstrate that he or she is insolvent
 Annex a comprehensive statement of affairs and the relevant supporting documents to the
founding affidavit in the application

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  Originals should be available in court

Second req: sufficient free residue to meet the costs of sequestration

 The free residue is that part of the debtor's estate which is left after all secured and
preferent creditors have been paid
 Example of a secured creditor: the bank which hold a mortgage bond over the debtor's
immovable property
o Preferent creditors: SARS and municipality
o Note: bank has first bite over property which it has a mortgage bond with, then SARS
 How much is enough? There is no rule
o The figure that you tend to see is R5000
o If there is no free residue, you can't voluntarily surrender your estate

Third req: sequestration will be to the advantage of creditors

 Note the word "will": different from the req in the case of compulsory sequestration
 This can be interpreted as requiring that the applicant shows unequivocally that the creditor
will be better off as a result of the voluntary surrender than they would be otherwise
 See Hillhouse v Stott 1990 (4) SA 580 (W) at 582-585

Preliminary steps as the debtor

 First thing: work out whether debtor is insolvent
 Second: prepare a statement of affairs
o Statement takes the form of an affidavit and the format prescribed by Form B of
Schedule 1 of the Insolvency Act
o The statement lists all the debtor's assets, liabilities, personal information and
explains how he/she came to be insolvent
 Third: a debtor who wishes to voluntarily surrender must publish a notice of surrender in
the GG and in a newspaper which circulates in the district
o Or, if the person is a trader, in the district where s/he carries on business
o The notice must be published between 14 and 30 days prior to the date of the
hearing of the application in the High Court
 Fourth: within 7 days of publication of the notice, the debtor must send a copy of the
notice to every known creditor, provide a copy of the notice to the debtor's employers (or
union, if there is one), and send a copy to SARS
o Time limits are strictly enforced
o Both newspaper, full-page in GG and registered slips of sent notices must be
available in court
 Fifth: lodging statement of affairs with the office of the Master of the HC
o As soon as notice of surrender has been published and posted to creditors
o If debtor is resident an area which falls under the jurisdiction of the HC, but not in the
same MC jurisdiction of the HC, then must be lodged there as well
 Eg. debtor lives in Bedford - lodge with Grahamstown Master of HC and
Bedford MC
o If the statement is not lodged, or lodges a statement and then fails to appear in court
on the date of hearing, the act constitutes an "act of insolvency" which will allow a
creditor to apply for compulsory sequestration of the debtor

Effect of publication of the notice of surrender

 Has the effect of staying all proceedings which are already underway against the debtor
 So even if a creditor has already got judgment, that judgment cannot be executed

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  This is to prevent more aggressive creditors from obtaining an unfair advantage over other
creditors who wait for proper procedure

Opposition to application
 Although the format of the application is ex parte, it must be served on creditors and
employees of the debtor (or employee's union)
 A creditor wishing to oppose should deliver an answering affidavit at latest 5 court days
before the hearing
o In practice, an application to oppose in terms of Uniform Rule 6(4)(b) is not usually
required for voluntary surrender cases
 This practice varies from one HC to another

The hearing
 Unless there is opposition, it is normally very brief as judge should have considered
application before hearing
 It rarely happens, but the court may order the debtor to appear in person for any questions
 The court’s discretion:
o Even if the debtor has satisfied the requirements for voluntary surrender, the court
still has a discretion whether to accept the surrender. One of the cases where the
court may refuse the application will be if the National Credit Act would provide a
more appropriate solution to the debtor’s problems. See: Ex Parte Ford and two
similar cases 2009 (3) SA 376 (WCC)

Appeals
 It is clear from s 150 of the Insolvency Act that the refusal to grant an application for
voluntary surrender cannot be appealed
 The granting of the application can however be appealed by any interested party
o Typically a creditor who believes that s/he will be worse off with voluntary surrender
than if s/he had got judgment and executed against the debtor’s assets
 The appeal process is basically the same as the appeal process for a standard opposed
application
o People who are not parties to the original application can appeal (eg. employees or
creditors) - unusual

Compulsory sequestration

 The second of the two main routes of sequestration of an individual's estate (often called
'bankruptcy')
 Unlike with admin orders and voluntary surrender, compulsory sequestration proceedings
are initiated by the creditor rather than by the debtor
 Differentiated by simply executing against their property in that this is a more extreme
version of execution
o Creditor should choose which procedure to follow based on what will be best to
recover the debt

Requirements
The court hearing the application must be satisfied that:
 Applicant entitled to apply for the sequestration of the debtor's estate
 The debtor has committed an act of insolvency, or is in fact insolvent
 There is reason to believe that sequestration will be to the advantage of creditors

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6. Applicant has locus standi (entitled to apply)
 Initiated either by:
o A single creditor with a liquidated claim (including a judgment) of not less than R100
OR
o Two or more creditors who have liquidated claims which amount collectively to at
least R200

2. The debtor has committed an act of insolvency, or is insolvent

 Hard to know as a creditor
 Thus, there are certain acts of insolvency which, if performed by the debtor, are accepted
as indicative of the debtor's insolvency, and on the basis of which the creditor can bring the
application

These acts of insolvency are set out in s 8 of the Act:

1. Absence from the Republic, or from the debtor's dwelling, with the intention to avoid
payment of debts
o Applicant must prove both the absence of at least 21 days, and the intention
 Intention can be proved by inference from other proven facts

2. Court has given judgment against the debtor, and debtor has failed to satisfy the
judgment and sheriff has found not, or insufficient property to satisfy the judgment

3. The debtor has made or attempted to make a disposition preferring one creditor over
another
o Eg. the debtor has sold their one substantial asset to repay one creditor, whilst
ignoring the others
o Can have disposition set aside

4. Debtor has removed property with intention to prejudice creditors, or to prefer one
creditor over another
o Unlike the previous category, a disposition is not needed
o Eg. debtor takes his valuable possessions to a foreign country - the intention to
prejudice creditors can be inferred from that act

5. The debtor makes, or offers to make, an arrangement with any of his or her creditors to
release the debtor wholly or in part from his or her debts
o Eg. Debtor says: if I pay 50%, you must write off 50%. If you don't accept, I will
voluntarily surrender my estate, and you will get less because of the legal costs

6. The debtor has published a notice of voluntary surrender, but has failed to lodge a
statement of affairs, or having lodged the statement, fails to apply to court on the specified
date for the surrender of the estate

7. The debtor has given notice in writing to any of his or her creditors that the debtor is
unable to pay the debt owing to the creditor
 The debtor has published a notice that he or she intends to transfer ownership of
business to someone else, and thereafter is unable to pay all of his or her debts
o Aimed at sole traders
o ...

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3. Reason to believe that the sequestration will be to the advantage of creditors
 Note that the test is different from the test for voluntary surrender
 Creditor means a substantial proportion of creditors, not necessarily every single creditor
 'Advantage' means that the sequestration must yield more than a negligible dividend
 General consensus is that 5c/R1 is negligible
 Note that it is only necessary to show “reason to believe”, so unequivocal proof of
advantage is not necessary
 Essentially, the applicant must demonstrate that the majority of creditors will be better off as
a result of sequestration than if there is no sequestration
o The onus of proof is on the creditor bringing the application

Preliminary steps
 The creditor wishing to bring the application must lodge security for the costs of the
application with the Master of the HC
 This is to discourage spurious applications by creditors who either seek a tactical
advantage over the debtor in trying to recover a debt, or who merely want to damage the
debtor's reputation
 Master gives certificate which must be annexed
 Security will be used if there is an adverse costs order against the creditor

Malicious/vexatious applications
 In addition to security, s 15 allows a court to determine damages the debtor has suffered if
a debtor can show that the application has been made maliciously or vexatiously (eg. to
cause embarrassment)
 Court can award the damages to the debtor against the applicant
 Usually the judge would order the debtor to appear and answer questions
 No need to get summons for a delictual action

Procedure
 S 10-12 of the Act requires the application for sequestration to be a two-step procedure: an
initial application for provisional sequestration, followed by an application for provisional
order to be confirmed as a final order for sequestration
 Provisional order made on notice to debtor, citing the debtor as the respondent
o If debtor has fled, application should be brought with substituted service
 Copies of the notice of motion and founding affidavits must be served on the Master and all
other interested parties, including creditors and the respondent's employees
o If the employees are part of a union, serve it on the union
 The Master may, but does not have to, submit a report to court if he or she is aware of
anything relevant eg. someone else has already applied for sequestration of the debtor's
estate

What is in the notice of motion?

 The NoM asks for an order that the respondent be provisionally sequestrated, and that a
rule nisi to be issued calling on the respondent to show why he or she should not be finally
sequestrated on a specific future date
 Can be urgent, but the majority are not urgent
o Circumstances which would warrant it: debtor is about to do something that would
prejudice creditors
 Must be as comprehensive as possible to establish the requirements for the granting of an
order

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  For the provisional sequestration order, the court needs only to be satisfied that a prima
facie case for sequestration has been made on one of the three requirements

Service of the rule nisi

 Once the provisional order has been issued, it must be served on the debtor, the debtor's
employees (or their union) and SARS
 If the debtor cannot be found, the court may - as part of the provisional order - can give
instructions for substituted service of the order
o Eg. publishing in newspaper where the debtor is believed to be

Opposition of the application

 The debtor may him or herself, or any other interested party, may oppose either the
application for provisional sequestration, or the application to confirm the rule nisi and grant
a final order of sequestration, or both
 The party wishing to oppose must file answering affidavits at least five days before the
hearing

Final sequestration
 On the return day of the rule nisi, the applicant needs to show on a balance of probabilities,
that the requirements for sequestration have been met
o The rule nisi will then either be confirmed, or if not granted, it would have been
discharged
 These are the same three requirements as for the provisional order, but the standard of
proof is higher (prima facie as opposed to balance of probabilities)
 If there is no opposition from the debtor or anyone else, the hearing will often be little more
than a formality

Friendly sequestrations
 A friendly creditor seeks to do the debtor a favour by applying for the debtor's sequestration
 There is usually collusion between the debtor and the friendly creditor to achieve this
objective
o Eg. in voluntary surrender, you have to show that sequestration will be to the
advantage of the creditors, as opposed to compulsory, where you only have to prove
there is reason to believe that it will be to the advantage of creditors
o Although not prohibited outright, friendly sequestrations are frowned upon, and will
be looked at carefully by a court which becomes aware that the application is a
friendly one
o Have to be very careful with drafting, and probably best to say outright that it is a
friendly sequestration, but notwithstanding this, the order should still be granted
o Issue is normally demonstrating advantage to creditors, as the whole reason for the
application is to help the debtor escape from the clutches of his or her creditors

Cases
Esterhuizen v Swanepoel 2004 (4) SA 89 (W) - features of a friendly sequestration
 Debt is normally a small loan expressed in round numbers
 No explanation given for the background to the loan
 Sequestrating creditor is very often a friend or a family member
 Risk of the debtor repaying the loan has never been discussed, even though the debtor was
probably in dire financial straits
 The loan is completely illogical
 Never security for the loan - unsecured
 Never a paper trail - usually claim that it was made in cash
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  Debtor is in dire financial straits immediately afterwards
 Very soon afterwards, the debtor will notify the debtor of failure to repay the loan, usually by
a letter - the act of insolvency
 Never any correspondence between attorneys
 Creditor seems oblivious to the fact that they won't recover anything
De Beer v Coverdale [unreported]
Huntrex 337 (Pty) Ltd t/a Huntrex Debt Collection Services v Vosloo and another 2014 (1) SA 227
(GNP)

THE VESTING OF THE INSOLVENT'S ESTATE IN THE TRUSTEE

The trustee - voluntary surrender

From the minute the order is granted, the insolvent's estate vests in the Master
 The Master will then appoint a trustee of the insolvent's estate in terms of s 18 of the
Insolvency Act, whereupon the estate will vest in the trustee
 The trustee is often someone appointed by the insolvent persons

The trustee – compulsory sequestration

 As soon as a provisional order is made, the Master will appoint a provisional trustee
 Usually two trustees
 As soon as the final sequestration order has been made, the Master will call a meeting
of the creditors to elect a permanent trustee (who may or may not be the same person as
the provisional trustee)
 Although the trustee is elected by the creditors, his/her appointment becomes valid only
when confirmed by the Master
o The Master may refuse to confirm the appointment if, for example, the Master
believes the person to be incompetent
o Similar to inter vivos trusts
o No power to do anything until then

Vesting of the estate for both

 As soon as the trustee (in the case of voluntary surrender) or the provisional trustee (in the
case of compulsory sequestration) has been appointed, the insolvent’s estate vests in that
trustee.
o In other words, the trustee becomes the owner of all of the insolvent’s assets, and is
charged with the task of selling those assets and distributing the proceeds among
the creditors

Excluded assets:
 Certain assets of the insolvent are excluded from forming part of the estate which passes to
the trustee
 The most important of these are:
o A reasonable quantity of clothing, bedding, necessary household furniture, and tools
of the insolvent's trade
o So much of the insolvent's salary/wages as are necessary for the insolvent and his
or her dependents to live (surplus income goes to the trustee)
o Proceeds of pension funds and life insurance policies to which the insolvent is
entitled
o Damages received by the insolvent as compensation for defamation or personal
injury(eg. RAF claims)
o Property which the insolvent holds in the capacity of a trustee (eg. if attorney)

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  Unless the trust is a sham

The solvent spouse

 If in COP, they become insolvent together
 In non-COP situations, the insolvent spouse might be tempted to transfer property to a
solvent spouse to avoid the property falling into the insolvent's estate
 "Spouse": married out of COP OR partner in a registered civil union OR spouse in
customary marriage OR unmarried heterosexual cohabiting partners

The effect on the solvent spouse:

 S 21(1) of the Insolvency Act vests all the property of the solvent spouse in the insolvent
spouse's trustee
o The solvent spouse must then lodge a statement of his or her affairs with the trustee
in order to prove that the property has not been fraudulently transferred from the
other spouse
o Once of the solvent spouse proves that his/her property falls within ...
 The categories are:
 Property acquired before marriage OR before 1 October 1926
 Property acquired by a solvent spouse under a marriage settlement (rare)
 Property acquired by the solvent spouse during the marriage by a title valid as
against the creditors of the insolvent
 Ie. Property the solvent spouse has bought with his or her own money
 Life insurance policies which are protected by the Insurance Act 27 of 1943
 Property acquired with, or with the income or proceeds of, property referred to
the above
 If the trustee and the solvent spouse cannot agree, the solvent spouse can bring a HC
application for the release of the property from the trustee’s control

Harksen v Lane:
 Mr Harksen landed up insolvent
 Lane was a co-trustee, and went after Mrs Harksen's assets
 She challenged the constitutionality of s 21 of the Insolvency Act on the basis that it
infringed her right to equality (treats her differently from other people who had had dealings
with her husband) and right to property
 Brought in terms of the 1993 Constitution, although the same principles applied
 By a 5 to 4 majority, the CC found that although s 21 discriminates against a solvent
spouse, the discrimination is justifiable
 The majority also found that the section did not unfairly deprive the solvent spouse of her
property

The trustee's powers and duties

 Immediately upon the granting of the sequestration order, the sheriff is required to make an
inventory of all the insolvent's property (including material property like shares in
companies)
 The trustee then takes possession and control of the property and all the insolvent's
financial records and documents, including electronic records
o See Le Roux v Viana - it may be hard drives and computers, or even no papers

Concealed property

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  If the trustee believes that the insolvent has concealed property, the trustee can apply to a
magistrate for a warrant authorising search and seizure
 Although the Act does not say so, the trustee should give notice to any affected third party
(eg. the occupant of the building where the search for the insolvent's property will be
conducted)

Claims of the creditors

 The Master calls the first meeting of the insolvent's creditors, at which the trustee is formally
elected and the creditors should submit proof of their claims against the insolvent
 If a creditor does not attend the meeting, or cannot provide proof at the first meeting, s/he
still has the opportunity to prove his/her claim at a later stage
 Following the first meeting, which is called by the Master, the trustee calls a second
meeting
 At this second meeting, the creditors have a second opportunity to prove their claims
 The trustee also gives a report on the affairs and conditions of the estate
 If creditors still have not proved their claims, they have a further three months from the date
of that meeting to submit claims to the trustee

Interrogation of the insolvent

 The insolvent him or herself is required to attend the first and second meetings of creditors
 At any meeting (but usually the second one), the insolvent may be required by the trustee
to answer questions under oath by regarding his or her assets or affairs
 Questions may be posed by the trustee and or any creditor
 Note: don't get confused by s 65A interrogations of the MC Act - this is s 65 interrogations
of the Insolvency Act

Voidable transactions
 Besides collecting all the insolvent's assets in order to sell them and distribute the proceeds
to the creditors, the trustee can also apply to the HC for orders setting aside certain
transactions which the insolvent entered into prior to sequestration - s 26-32

The most importance of these transactions:

Distributions without value (s 26)
 Essentially equals gifts (which would include genuine charitable donations) made by the
insolvent
 If the transfer of assets was made more than two years before the date of sequestration,
the onus is on the trustee to prove that immediately after the transfer was made, the
insolvent's liabilities
 Ie. the person had assets of X, and then made a gift transfer of X, then went into insolvency
= the trustee can get the money back
o Must be the critical transfer which tipped them into insolvency
 If made less than two years before the date of sequestration, the onus is on the beneficiary
to prove immediately after the transfer was made that the insolvent's liabilities did not
exceed his or her assets
o If the beneficiary proves that, the transfer will not be set aside
o If the beneficiary fails to prove that, the transfer will be set aside

Dispositions with value [s 29(1)]

Dispositions causing someone to go into insolvency
 Every disposition of his property made by a debtor not more than six months before the
sequestration of his estate...which has had the effect of preferring one of his creditors
above another, may be set aside by the court if, immediately after the making of such
43
 disposition, the liabilities of the debtor exceeds the value of his assets, unless the
person in whose favour the disposition was made proves that the disposition was made in
the ordinary course of business and that it was not intended thereby to prefer one
creditor over another.
o Note again: the sale must tip you into insolvency
 Eg. selling the asset for less than its market value, and you're insolvent after it

Meaning of disposition:
S 2: any transfer or abandonment of rights to property and includes a sale, lease, mortgage,
pledge, delivery, payment, release, compromise, donation or any contract therefor, but does not
include a disposition in compliance with an order of the court; and "dispose" has a corresponding
meaning.”

See: Gazit Properties v Botha 2012 (2) SA 306 (SCA)

Dispositions made by people who are already insolvent

 S 30 deals with situations where someone is already insolvent, where a disposition is made
with the intention of preferring one creditor over another
 The court may set it aside on application by the trustee
 Intention is critical
 See Venter v Volkskas

Realisation of assets
 Having obtained control of the insolvent's assets, the trustee's primary duty is to sell the
assets in the manner approved by creditors and then distribute the proceeds among
creditors
 Approval of creditors is usually given at the second meeting of creditors

Ranking of creditors

Creditors can be divided into three classes, each of which have different rights and duties in
relation to property:

 Secured creditors
o These are creditors who have rights over a specific assets as security for a specific
debt owed by the insolvent
o Eg. a mortgage bond over a fixed property, or a pledge of specific assets as security
for a loan
o The secured creditor has the first claim against the proceeds of that particular asset
o First in the sense of coming before any other creditor, but there are various
expenses and fees which must be first paid out of the proceeds,
 Includes the trustee's fees in respect of dealing with the asset, and municipal
rates and taxes
 Municipality -> trustee -> bank

 Preferent creditors
o Do not have a claim on a specific asset, but from the general proceeds, they have
preference with getting their money first
o Includes SARS, employees and trustee

 Concurrent creditors
o Ordinary creditors or unsecured creditors
o These are the creditors who are neither secured nor preferent
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 o It is these who must receive a non-negligible dividend when considering whether the
sequestration will be to the advantage of creditors
 More than 5c in the rand - although this is not a rule, it is a general guideline

TEST FEEDBACK
Question 1:
Appeals
 Focus on merits (facts/law)
 Strict time limits
 Application for leave required if appeal from HC
 No leave required from MC
 Appellant bound to reocrd of proceedings in court a quo
Reviews
 Focus on procedure in court a quo
 No fixed time limit for reviews from MC
 Fixed time limit for some admin review (180 days)
 No application for leave required
 Not bound by record in court a quo
Question 2
 Interlocutory applications from the Bar and urgent applications where there is no time to
draft papers
Question 3
 Allow limited oral evidence or convert to trial proceedings or apply the Plascon-Evans rule
or dismiss the application. Main influence will be the degree of foreseeability of the dispute.
Question 4
 Liquid document: unequivocal written acknowledgment of debt - eg. a mortgage bond. Can
get provisional sentence
 Liquidated claim: a claim sounding in money. Can get summary judgment but no provisional
sentence. All claims on liquid documents are liquidate claims, but not vice versa.
Question 5
 Maintenance pendente lite which the client cannot afford. Critical point - these are not
appealable. So the client has three options: review, if he can show irregularity; variation ito
Rule 42 or common law; rescission ito Rule 42 or common law
Question 6
 Procedure for attachment and sale of immovable property (4 marks). First issue: has the
property been declared specially executable? Next issue: give debtor a reasonable time to
pay. IF no payment, get a writ of execution. Next issue: two different procedures depending
whether a primary residence or not. NB: getting the property declared specially executable
does not mean that you don't need to get a writ.

COSTS

 T/b: 285-294

The purpose of costs

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  Costs are awarded to a successful party in order to indemnify him for the expense to which
he has been put through having been unjustly compelled either to initiate or to defend
litigation, as the case may be
 Owing to the ncessary necessary operation of taxation, such an award is seldom a
complete indemnity; but that does not affect the principle on which it is based”.
o Texas Co (SA) Ltd v Cape Town Municipality 1926 AD 467 at 488

Sources
 In the discretion of the court
 No specific statutory rule
 "The rule of our law is that all costs - unless expressly otherwise enacted - are in the
discretion of the judge. His discretion must be exercised judicially..." – Kruger

Among the most important of the specific statutory rules on costs are:
 Rule 43(7-8): sets out the procedure for maintenance pendente lite and interim custody of
children
o One of those rare applications that has its own unique notice of motion
o The fees which may be charged are prescribed
 S 21 of the Maintenance Act, which provides for the State to be ordered to pay costs of
paternity in some cases

Statutory rules on costs

 S 32(2) of NEMA specifically allows a court not to grant costs against an unsuccessful
litigant who has acted unreasonably out of a concern for the public interest or in the interest
of protecting the environment, and had made due efforts to use other means reasonably
available for obtaining the relief sought
 For the application of this rule, see Wildlife and Environmental Society of South Africa v
MEC for Economic Affairs, Environment and Tourism, Eastern Cape 2005 (6) SA 123 (E) at
132–133

Costs against whom, and in favour of whom?

 General rule: costs may only be awarded in favour of a party/parties to the litigation, and
against another party or parties to the litigation
o Eg. If X, Y and Z are co-defendants in an action, and after judgment only Y takes the
decision on appeal, then the costs in the appeal can only be awarded to or against
Y, notwithstanding that X and Z may benefit from the outcome of the appeal.
 Rare exception: a court may award costs to or against a non-party where that party is the
"real" litigant who is hiding behind a nominee - see EP Property Projects v Registrar of
Deeds, Cape Town 2014 (1) SA 141 (WCC)
 General rule: costs are not awarded against people litigating in an official capacity,
but that rule is not absolute and may be departed from if circumstances justify it
o See ABSA Bank v Robb and Coetzee v National Commissioner of Police

ABSA Bank v Robb

In issue in this case was whether a debt counsellor under the National Credit Act – who had
withdrawn an application for debt review – had to pay the opposing party's costs.
Its facts were that a debt counsellor applied to a magistrates' court for the debt review of Mr and
Ms C. A bank opposed the application, contending that the counsellor had incorrectly concluded
that the Cs were over-indebted. It spelt this out in its answering affidavit. Three months later, on
the day before the hearing, the counsellor withdrew the application and refused to pay the bank's
costs. This led the bank to apply to the magistrates' court for them. They were refused, though, on
the principle that costs ought not to be awarded against a functionary performing a statutory

46
function, where that individual acts properly and bona fide. The bank appealed to a high
court, contending that the magistrate had erred: it ought to have applied the principle that a party
withdrawing a matter pays the other's costs unless exceptional circumstances justify it not
doing so.
The high court found for the bank. It noted that courts over the years had qualified the principle
that costs not be awarded against a statutory functionary, those courts recognising that the
principle ought not to be a rigid one, fettering a court in its discretion as to costs. Moreover, there
were no exceptional circumstances justifying departing from the principle that the withdrawing
party pay the other's costs. And awarding costs would caution debt counsellors generally to
properly apply the law before making applications for debt review.

Coetzee v National Commissioner of Police

Coetzee had been travelling in Jhb with his family when people, who appeared to be dressed as
Metro Police officials, waived him down. He thought it might be imposters when one of them came
carrying pepper spray. He indicated that he would stop at the nearest police station and continued
driving. They then followed him, roughly arrested him and refused to grant him police bail,
although they would ordinarily do so in the circumstances.
Held as to costs:
A government official in a particular position can be ordered to pay costs de bonis propriis under
certain circumstances as a result of such an official's actions, and in particular where the actions of
the official were unlawful and where it caused the litigation and the costs in respect thereof. That is
particularly so where relief that is sought as a result of such actions is opposed by such
individuals, which should never have been opposed. The taxpayer should not be the liable party to
pay for unlawful, indiscriminatory and illegal actions committed by government officials. The time
has come to consider costs orders de bonis propriis against public officials acting in bad faith and
causing unnecessary legal costs and litigation, for their opponents, for the general public and for
taxpayers. And the time has come for courts to impose the full extent of the law upon government
officials who arrogantly act in breach of the constitutional imperatives, who act with impunity and
who are not taken to task by government, mostly because of inability, unwillingness or political
reasons.
The authorities provide ample justification and authority for the court to grant appropriate relief as
contemplated in s 38 of the Constitution, which would act as a deterrent for those responsible, and
for others, to act within their constitutional obligations, and to serve the country and its people,
rather than to serve themselves. Any public official (in casu police officers in the South African
Police Service and certain Metro Police officers from Pretoria) who knows that he would be
ordered personally to pay costs of any court application or litigation flowing from his unlawful
actions, will think twice before acting in the manner and fashion that those responsible in this
matter have acted. Only in the event of those responsible not being able to pay the full costs of the
parties to the litigation, should the taxpayer be called upon to make good any payment of costs to
a person who has been wronged and whose rights have been infringed.

The general rule

 In the absence of statutory provisions or special circumstances, costs follow the event - in
other words, the loser pays the winner's costs
 The court always retain a discretion to deprive a successful party of an award of costs, but
will only do so if the facts warrant it
o Merber v Merber and Equity Aviation Security Services v CCMA
 In exceptional cases, a successful party may either be deprived of costs (the court makes
no order as to costs, so each party pays their own costs), or in extreme cases even ordered
to pay the losing party’s costs

Merber v Merber

47
In an action by the appellant for a decree of divorce based on adultery, the trial Court granted
absolution from the instance with costs. In an appeal, appellant contended that the respondent's
conduct had been such as to have justified a belief in the plaintiff's mind that adultery had been
committed and that she should therefore not have been ordered to pay her husband's costs. It
appeared that the trial Judge had taken into consideration the facts which the appellant contended
entitled her to an order depriving the respondent of his costs.
Held:
As there was no proof for the belief that adultery had been committed, it was correct that the order
for costs should stand.
A trial Court is entitled to deprive a successful party of his costs if (1) he has brought about the
litigation or (2) he has done something connected with the institution or the conduct of the suit
calculated to occasion unnecessary litigation and expense or (3) he has done some wrongful act
in the course of the transaction of which the plaintiff complains.

Equity Aviation Security Services v CCMA at 58:

As to the matter of costs, counsel on behalf of Equity contended that Mr Mawelele should pay his
own costs. In effect, this argument suggests that a successful litigant will be burdened with the
costs occasioned by an unsuccessful review application and appeal. The argument has no
merit. Mr Mawelele has had to suffer at the instance of Equity. He waited for almost six years for
the dismissal dispute to be finalised. Although he was reinstated on 1 July 2007, he has not
received payment for the period during which he was unemployed. In my view, considerations of
the interests of justice and fairness dictate that Equity should pay Mr Mawelele's costs on the
appeal to this court.

Examples of such exceptional cases include:

Extravagant claims
Claims (particularly damages claims) which are extravagant or unreasonable, and where the
extravagant or unreasonable nature of the claim has led to the incurring of unnecessary costs,
may lead to the successful plaintiff being deprived of his/her costs.
See: Kazungula Irrigation Co Ltd v Minister of Lands and Natural Resources 1974 (4) SA 482 (RA)

Kazungula Irrigation Co Ltd v Minister of Lands and Natural Resources

The object of introducing the proviso to section 14 (1) of the Act, to the effect that the court shall
not award costs to a claimant who has submitted a claim which is not a reasonable one, was to
provide a curb on the making of grossly exaggerated claims in an endeavour to persuade the
Government to offer more than the land is worth. In deciding whether or not a claim is
"reasonable", it is not enough merely to enquire whether it was excessive having regard to the
sum eventually awarded. The court has to have regard to all the surrounding circumstances
Held:” that the claims were not "unreasonable" within the A meaning of section 14 (1) of the Act
and that the compensation court should not have deprived the claimants of their costs.

Nominal or technical success

A party who succeeds on a nominal or technical basis, but without any real substantive success,
may be deprived of his/her costs.
See: Fraser v De Villiers 1981 (1) SA 378 (D) (plaintiff succeeded, but only awarded R5 damages,
and no order as to costs).

Fraser v De Villiers 1981 (1) SA 378 (D)

In an undefended action claiming damages for adultery with and enticement of plaintiff's wife the
Court found that there was no evidence of enticement, that there was no causal connection
48
between the admitted adultery and any loss of consortium, that plaintiff had falsely denied his own
adultery, that he had manufactured evidence in a deliberate attempt to mislead the Court, that he
had failed to disclose material facts which the Court had to know of in order to arrive at a just
decision with regard to the quantum of the damages and that he had failed to prove that he had
suffered any distress or injuria whatsoever.

Held, that plaintiff should be awarded nominal damages in the sum of R5 for the adultery. For the
rest the claim was dismissed with no order as to costs.

Unjustified motion proceedings

Where an applicant knows of a material dispute of fact, but nevertheless launches motion
proceedings rather than action proceedings, the application may be dismissed with an order that
the applicant pay the respondent’s costs.
See: First Consolidated Leasing and Finance v Marthinus 1979 (4) SA 363 (NC).

First Consolidated Leasing and Finance v Marthinus 1979 (4) SA 363 (NC).
If motion proceedings are bought when there is clearly a dispute of fact- costs may be
awarded against the applicant.
The applicant bought motion proceedings against the respondent, for an order to attach a certain
machine. The appellants allege that there was a contract, whereas the respondent denies the
contract and that he agreed to it’s terms.

Held, the Court was here dealing with an instance in which a party was seeking to establish the
existence of a contract to be regarded as valid despite dissensus. Such a contract was putative
and only afforded efficacy if estoppel came into play. Then, and then only, did applicant's right to
possession of the property referred to in that "contract" arise.
As applicant had been aware that respondent disputed the validity of the agreement before
launching its application, that the application should be dismissed with costs.

Misconduct
Misconduct by a party will normally lead to an award of costs against that party, or deprivation of
costs, even if they are the successful litigant.
See, for example: Indigo Sky Gems (Pty) Ltd v Johnston 1998 NR 152 (HC) and the other cases
referred to therein, and Antares International Ltd v Louw Coetzee & Malan Inc 2014 (1) SA 172
(WCC) at paras [64]-[65].

Sky Gems (Pty) Ltd v Johnston 1998 NR 152 (HC)

The applicant had sought an order from the respondent to return a company vehicle after he had
left the company's employment. The respondent had returned the vehicle at the last minute. The
applicant sought an order for costs on an attorney and client scale.
Once the vehicle had been returned the conduct of the respondent in failing to tender costs on a
party and party basis and putting the applicant to the unnecessary expense and trouble of coming
to court to obtain a costs order was vexatious conduct in the wider sense of that word.

The Court awarded costs on a party and party scale up to the notice of set down (his
conduct was not unreasonable until after this point) and costs on an attorney and client
scale after service of the notice of set down.

Antares International Ltd v Louw Coetzee & Malan Inc at paras [64]-[65]

49
Although I intend to refuse the application, I do not think in the peculiar circumstances of this case
that LCM should be granted costs against the applicants. Although in the event the applicants
have failed to establish their own right to obtain relief, their application has brought to the court's
attention a threatened violation of an attachment authorised by an earlier order of this court. LCM
had no right to sell or threaten to sell the aircraft. Given that LCM's unlawful conduct precipitated
the application and that this judgment is likely to have a salutary effect in reminding LCM and the
sheriff of their respective rights and duties, I think it would be just that the parties bear their
own costs.

The court made the following order:

(a) The application is dismissed.
(b) The parties are to bear their own costs, including all costs reserved in the earlier orders
made in this application.

Type of costs orders

Party and party costs
 This is the standard and most common costs order
 When a court simply awards “costs” it means party and party costs
 This almost never means all the costs, but rather the taxed bill of costs, by the taxing
master of the High Court, based on the prescribed tariffs
 So the winning party who is awarded costs will still have to pay his/her attorney and
advocate the surplus over the taxed costs

Attorney and client costs

 This awards costs at a higher scale than party and party costs, and normally arises in one
of two situations: either to express the court’s displeasure with the manner in which a
party has conducted their case (eg. Rustenburg Gearbox Centre v Geldmaak Motors 2003
(5) SA 468 (T)),OR where the parties have agreed to costs on this scale (eg. Standard
Bank v Hunkydory Investments (No 2) 2010 (1) SA 634 (WCC))
 There is, surprisingly, no clear rule on how attorney and client costs are calculated
 They clearly do not cover all of the successful party’s costs, but are rather the taxed costs
with taxation being done on a generous basis
o See: Aircraft Completions Centre v Rossouw [2003] 3 All SA 617 (W) at 541

Rustenburg Gearbox Centre v Geldmaak Motors 2003 (5) SA 468 (T)

The appellants had not complied with the procedural requirements in the Rules of Court. The
Appellant had to set forth his prospects of success on appeal, they simply gave a bald submission
– which was insufficient for the court of appeal. The court found that there had been a gross
noncompliance with the Rules and the Court of appeal had been burdened by
the unnecessary explosion of papers in various applications for condonation and the amendment
of the notice of motion in the application for condonation. The court rejected the application for
condonation and found that ‘such conduct surely warrants the displeasure of this Court by an
exemplary order of costs’. The Court ordered the appellant and/or its
attorneys to pay the respondent's costs on the scale as between attorney and client.

Standard Bank v Hunkydory Investments (NO 2) 2010 (1) SA 634 (WCC)

The bank sought a summary judgment against the defendant on the strength of 4 mortgage
bonds.
The court held that the defendant is to pay the plaintiff's costs of suit on the scale as
between attorney and client as provided for in clause 1.1.3 of the bonds

50
* Although the courts do not generally order costs against a litigant who has unsuccessfully
asserted fundamental rights against the State, there is no inflexible rule to that effect. Costs will be
awarded where there are dilatory constitutional challenges, and the litigant persists in challenging
the matter when it is unreasonable.

Aircraft Completions Centre v Rossouw [2003] 3 All SA 617 (W) at 541

When a court makes the “extraordinary or exceptional” order that one party is to pay the costs of
his opponent ‘taxed as between attorney and client’, the court’s aim is not to make the debtor
suffer (even though his conduct is reprehensible). On the contrary the court’s intention, when it
makes such a special order, is that the costs creditor should receive a fuller indemnity than a party
and party taxation would provide, for all additional reasonable costs to which the defendants’
conduct may have put the costs creditor.
This means that in an inter-party taxation, on a scale as between attorney and client, any and
every item on the bill can, if it has been inflated in consequence of the reprehensible conduct of
the costs debtor, be taxed with greater generosity to the costs creditor than in a party and
party taxation. It also means that every item on the bill should receive the taxing master’s
consideration for that purpose.
If, for instance, the taxing master is satisfied that the unworthy conduct of the costs debtor caused
the costs creditor reasonably to have more or longer consultations with his legal advisers than
would have been allowed in a party and party taxation, the costs of those extra or lengthier
consultations should be allowed against the costs debtor in a taxation as between attorney and
client (except to the extent that an injustice may be done to the costs debtor.) If the legal
advisers of the costs creditor have charged fees at rates exceeding the tariff in Rule 70, the taxing
master should consider allowing rates exceeding the tariff, provided that they are not
unreasonable in the particular circumstances and that they do not inflict injustice upon the costs
debtor. That was the intention of the court that made the special order, unless it expressed its
intention otherwise.

Attorney and own client costs

An exceptionally punitive scale of costs, essentially intended to indemnify the successful party for
all his or her costs
o Such costs orders generally express the court’s extreme disapproval of the losing
party’s conduct
o See, for example, Rath v Rees 2007 (1) SA 99 (C)

Rath v Rees 2007 (1) SA 99 (C)

The applicant had been granted an Anton Piller order, in the form of a rule nisi, that was directed
at preserving evidence of allegedly defamatory material appearing on a website authored by the
respondent. The court found that circumstances of the present case were not such that the order
granted constituted a reasonable and justifiable limitation on the respondent's right to privacy. The
applicant had abused the Anton Piller procedure since he had at all relevant times been aware of
the identity of the respondent as the author of the website, and the application for the order had
therefore been unnecessary. The application had clearly been brought with the ulterior motive of
acquiring a preview of material which the respondent would have been called upon to discover in
the ordinary course of the applicant's proposed action for defamation.

Held: the application should not have been brought and the order should not have been granted,
and as to costs, that the applicant had to pay the costs on the attorney-own client scale.

Costs de bonis propriis

51
  Where problems in a case arise out of the conduct of the legal representative, rather
than the party to the litigation, the court has the power to order the legal representative to
pay the other side’s costs out of his/her own pocket
 This is a discretion which is not always exercised
o See, for example, MEC for Economic Affairs v Kruisenga 2008 (6) SA 264 (Ck)
where the unsuccessful applicant paid punitive costs even though it was the attorney
who was guilty of misconduct
 Only awarded in cases of serious negligence or dereliction of duty by the legal practitioner
o See: Waar v Louw 1977 (3) SA 297 (O) (sets out the circumstances where such
orders should be made)
o SA Liquor Traders’ Association v Gauteng Liquor Board 2009 (1) SA 565 (CC) at
paras [46]-[54]
o Tasima v Department of Transport 2013 (4) SA 134 (GNP)
 Although we tend to think of costs de bonis propriis as being paid by legal practitioners, it is
also possible for such orders to be made against other persons who would not ordinarily
have to pay costs out of their own pockets
o For example, executors of deceased estates (where costs would ordinarily be paid
out of the estate), may be ordered to pay costs de bonis propriis in cases where they
have engaged in unreasonable or wasteful litigation on behalf of the deceased estate
o Such orders are rare, but they do occur
 See, for example: Conradie v Smit 1966 (3) SA 368 (A)
 Trustees, whose litigation costs would usually be paid out of the trust on whose behalf they
litigate, may similarly be ordered to pay costs de bonis propriis in cases where they have
acted negligently or unreasonably
o See, for example, Boyce v Bloem 1960 (3) SA 855 (T)
o Applies both to trustees of inter vivos trusts, and to trustees of insolvent estates
 See: Naidoo v Matlala NO 2012 (1) SA 143 (GNP)

MEC for Economic Affairs, Environment and Tourism v Kruisenga and Another
In an action for damages in delict, the defendant's (applicant's) legal representatives, both at the
pre-trial conference and later at the trial, conceded liability on the merits and gave an undertaking
to pay the amounts claimed under certain heads of damage. An order that the applicant was to
pay the admitted damages was made by consent and the hearing postponed. The applicant, with
a view to reopening his case on the merits, then launched an application.
The application was brought under the common law on the ground that, consistent with a
departmental practice, his State attorney had lacked specific authority to concede the merits
of the action or to agree to payment of sums claimed under certain heads of damage. The
attorney concerned testified that he had been instructed, in general, to conduct the
litigation, but conceded that he had not received any express instruction to settle the
merits.
Held: This application was brought about entirely as a result of the improper conduct of the
applicant's attorney. The court agreed with counsel for the respondents that the costs order should
reflect the court's disapproval of that conduct. The applicant is ordered to pay the costs of this
application on the attorney-and-client scale.

Waar v Louw
Section 48 (d) of the Magistrates' Courts Act confers on a magistrate the power to make an order
of costs on the attorney and client basis, but it should be exercised with discretion, according
to the circumstances, and not arbitrarily. It is an unusual order which should not be easily
granted, the more so where both parties have erred.
The tendency in time past was to make attorneys pay for their mistakes by means of an order of
costs de bonis propriis. And the reason for such an order against an attorney is quite clear. The
office of attorney is a high and responsible office. Mistakes which an attorney makes in litigation
52
and which result in unnecessary costs should, therefore, not lightly be overlooked. And a litigant
should not always be obliged himself to pay the costs which have been caused by the negligence
of his attorney. But too strict action should not be taken against an erring attorney. The
administration of justice is sometimes an irritating discipline, and even the most skilful practitioners
can make mistakes which cause unnecessary costs. The attorneys' profession should not be
moved by too lenient an attitude to loosen the reins, but should also not be demoralised by too
much cracking of the whip. As usual, in the affairs of man, the middle course is the best. The
circumstances under which a court can make an order of costs de bonis propriis against
an attorney should be reasonably serious, as, e.g., dishonesty, wilfulness or negligence of
a serious degree.

SA Liquor Traders’ Association v Gauteng Liquor Board at paras [46]-[54]

The question arises, however, as to the scale on which such a costs order should be made. The
applicants point to the dilatory and unhelpful manner in which the MEC and his officials conducted
the litigation both in the High Court and in this court until after the court made its order on 2 March
2006. Although there can be no doubt that some of the fault for that conduct is to be laid at the
door of the third respondent's attorneys, as I shall set out below, in my view the MEC bears
responsibility for that conduct as well. His legal advisers were in possession of many of the
documents and failed to take appropriate steps to ensure that the litigation proceeded smoothly
and properly. The MEC must be responsible for the conduct of his legal advisers.

A court will ordinarily show its displeasure at the manner in which a litigant
has conducted himself during litigation by an award of costs on the attorney
and client scale. The MEC, as an organ of State, bears a special obligation to
ensure that the work of courts is not impeded. Moreover, in this case the
applicants have been seeking relief in respect of a provision in a statute which
is clearly vague on its own terms and therefore inconsistent with the
Constitution. Their attempts have been bedevilled by the manner in which the
litigation has been approached by the MEC and, in particular, his legal
representatives, including his own departmental legal advisers as well as the
State attorney. In all these circumstances, this is an appropriate matter for
costs to be awarded against the MEC on the attorney and client scale.

The final issue to be considered relates to the wasted costs of the hearing on 2
March 2006, where the MEC did not appear, as requested by the court, because
a junior attorney in the State attorney’s office had failed to inform him of the
request. The affidavit lodged on behalf of the individual attorney handling the
matter indicates that she did not read the communication from the court but
merely filed it, considering it to be an 'update'. It is serious because as a
matter of common practice it is the State attorney who is briefed by the
government when it is involved in litigation. Given the government's
responsibility to assist the work of courts, a lapse of this sort in the State
attorney's office gives cause for grave concern

An order of costs de bonis propriis is made against attorneys where a court is

satisfied that there has been negligence in a serious degree which warrants an
order of costs being made as a mark of the court's displeasure. An attorney is
an officer of the court and owes a court an appropriate level of professionalism
and courtesy. Filing correspondence from the Constitutional Court without first

53
reading it constitutes negligence of a severe degree. Nothing more need be
added to the sorry tale already related to establish that this is an appropriate
case for an order of costs de bonis propriis on the scale as between attorney
and client. The order is made against the office of the State attorney, not
personally against the attorney concerned. This court's displeasure is primarily
directed against the office of the State attorney in Pretoria whose systems of
training and supervision appear to be woefully inadequate.

Tasima v Department of Transport

Tasima and the DoT were involved in a contractual dispute. They eventually agreed on a draft
order that was made an interim order of the high court. Tasima, having concluded that the DoT
wasn't complying with the interim order, launched an application asking for an order declaring the
DoT and its director-general (DG) (the second respondent) to be in contempt and committing the
DG to prison. In the same application Tasima also asked the court to direct the DoT to grant
certain 'necessary' authorisations and approvals. The respondents, represented throughout by Ms
L of the Office of the State Attorney, Pretoria, failed to deliver answering affidavits. The high court
dismissed the contempt application on the grounds that the interim order was not a proper
mandamus and that mala fides were in any event not proved.
Tasima was granted leave to appeal to a full bench and requested an expedited date of hearing.
Tasima's attorneys, acting on the court's instructions, emailed Ms L for her comments on an
expedited hearing. No response to this or several related emails was forthcoming. On the
expedited date the respondents applied for a postponement. In her affidavits to the application for
postponement Ms L alleged that the expedited hearing had been arranged by Tasima's attorneys
to her exclusion, and falsely insinuated that they had misled the court into believing that the
arrangements had taken place with the consent of the respondents. She subsequently conceded
that she had not read the emails addressed to her by Tasima's attorneys. She blamed her lack of
preparation on the 'dysfunctional' condition of the office of the state attorney and the failure of
Tasima's counsel to directly arrange an appeal date with the DoT's counsel.
Held: Ms L's handling of the matter was wholly unprofessional and grievously prejudicial to the
administration of justice. Moreover, the dysfunctionality she referred to tended to show that the
Office of the State Attorney, Pretoria, was unable to comply with its constitutional and statutory
obligations. The impugned conduct, established from Ms L's own affidavits, had destroyed any
basis for good cause for the postponement of the appeal, which would be denied. The present
judgment would be forwarded to the Minister of Justice, the Parliamentary Portfolio Committee for
Justice, and the Law Society of the Northern Provinces, with a request that the Law Society
investigate the conduct of Ms L and the office of the state attorney as disclosed in the judgment. In
view of her deplorable behaviour, and in particular the misguided attack on the probity of Tasima's
representatives, a costs order de bonis propriis would also be made against Ms L.
As to the merits of the appeal: The interim order did no more than to record the terms of the
agreement between Tasima and the DoT. It was thus not a direction by the court to implement the
agreement on pain of contempt. In any event, the interim order merely echoed the obligations
contained in the agreement between the parties, and thus did not identify the DoT's C obligations
to the court with the specificity required for non-compliance to be visited with committal for
contempt. Although Tasima would thus be unsuccessful in its appeal on the contempt issue, it was
nevertheless entitled to the requested order directing the DoT to provide the 'necessary'
authorisations and approvals. Appeal upheld in part.

Conradie v Smit
Under her will the testatrix had bequeathed a farm as follows: '(a) To my daughter E . . . four
hundred and forty-seven morgen of the farm Ouersgift . . . with the necessary improvements

54
thereon. (b) To my son J the remainder of the farm Ouersgift.' One of the co-executors had
refused to give transfer to the daughter of that portion of the farm on which the improvements
were: the other executor had supported the claim of the daughter and had not entered an
appearance to defend the action brought by the daughter. It appears from the evidence that at the
time of the execution of the will there were appurtenances on the farm which consisted of a
dwelling house which was then occupied, a shed and a kraal. Now there were only ruins left. A
trial Court had given judgment in favour of the daughter and had ordered the executor and the
son, who was a co-defendant, to pay the costs of the action and that the executor had to pay his
portion of the
costs de bonis propriis. Prior to the appeal against this judgment the executor had died.
Held, that the word 'verbetering' (improvement) had reference to the homestead. Held, further, that
the bequest was clear and that a division could be made with certainty.
Held, further, that the Court would not interfere with the exercise of the trial Court's discretion in
regard to the order as to costs.
The question whether the one executor could act as defendant without his co-executor, without
leave of the Court having been granted, raised but not decided.
The decision in the Orange Free State in Smit v Conradie and Others, confirmed.

Boyce v Bloem
Where there has been a personal release of one of a number of co-debtors in solidum, the debt is
extinguished as to the part of the person to whom the discharge was given and the others remain
bound for the remainder. Whether the release is gratuitous or for consideration, and whether the
consideration is the full amount afterwards found to be due, or a lesser or greater amount, the
nexus between the released debtor and the creditor disappears. The joint liability of the other co-
debtors is C reduced as a result of the compromise, by at least the whole amount of the released
debtor's proportionate share, and if the amount paid by the latter is greater than that share, then
by that amount, because the common creditor has received such sum on account of the total debt
and is not entitled to claim from the other co-creditors more than the balance.
Trustees are liable severally and in solidum for loss arising out of negligence or breach of trust. It
is no excuse for a person who by virtue of his office is required to make enquiry, to allege
ignorance, and he who ought to know is just as much in culpa as he who knows, and he who
neglects to know that which he ought to know is not to be excused. A trustee does not entitle
himself to relief by proving that he has acted reasonably and honestly - he must show that in all
the circumstances he ought fairly to be excused, and the bad advice of attorneys is no defence. In
determining the degree of care required of a trustee, all the circumstances of the particular case
must be taken into account.
E Where the beneficiary under a trust has established negligence on the part of the defendant
trustees causing loss, the Court must make an assessment of damages even if such assessment
is not capable of calculation with mathematical certainty; and where he has established that they
acted negligently and unreasonably, it is proper that they should be mulcted in costs de bonis
propriis to the extent to which he has succeeded in his claims.

Naidoo v Matlala
The second- and third-respondent spouses made an ex parte application, shortly after the sale in
execution of their jointly owned immovable property — but before its transfer to the purchasers
(the applicants) — for the acceptance of the voluntary surrender of their joint estate. The
application, which was granted, was launched without notification to the applicants. The property
G in question was subsequently transferred to the applicants, who, when informed that the
provisional trustee in the surrendered insolvent estate (the first respondent) would seek the
annulment of the sale in execution and transfer, launched the instant application for the rescission
of the court's acceptance of the voluntary H surrender and the consequent sequestration order.
The sequence of events was accordingly as follows: (1) sale in execution; (2) application for
surrender; (3) acceptance of surrender (sequestration order); (4) transfer of property; and (5)
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application for the rescission of the sequestration order. The first respondent, who had throughout
been uncooperative and loath to respond to enquiries made by the applicants' attorney, opposed
the application by raising purely technical/procedural points and issuing bald denials of averments
made in I applicants' papers. The questions to be answered by the court were (1) whether the
applicants had locus standi to bring the application; and, if so, (2) whether the application should
succeed.
The following statutory provisions were relevant to the case: Section 149(2) of the Insolvency Act
24 of 1936, which provided that the court could 'rescind or vary any order made by it under the
provisions of this Act'; and rule 41(1) of the Uniform Rules, which provided that the court was
entitled 'meru motu or upon the application of any party affected, (to) rescind or vary . . . an order
or judgment erroneously sought or erroneously granted'.

Held: An application for the rescission of a sequestration order would be allowed — under the
above-mentioned statutory provisions or at common law — where, inter alia, it appeared that it
had been erroneously granted because material facts were withheld from, or deliberately
misrepresented B to, the court, or where it had been sought ex parte without notice to an
interested party. An applicant had to show locus standi in the sense of a direct and substantial
interest sufficient to have entitled him to intervene in the original application for sequestration. The
present applicants satisfied this requirement since the effect of the sequestration order had been
to vest dominium of property which had been sold to them in the insolvent estate, and by
extension in the first respondent (as trustee). Had they received notice of the application for
surrender, they could have opposed it and shown at the very least that there would be no
advantage to creditors. Since the first respondent intended to set aside the sale and transfer of the
property to the applicants, they had an interest in the rescission of the sequestration to prevent
this from happening.

As to the merits of the application: it was clear that the second and third respondents' application
for voluntary surrender was based on a doubtful valuation of the property in question; that they
had abused the process in order to defeat its transfer to the applicants; that they had in
furtherance of this goal fraudulently concealed the sale in execution from the court and application
for surrender from the applicants; and that the requirements for rescission set out above were thus
satisfied.

Accordingly, the application would be granted, with costs awarded against the first respondent (the
trustee) on the scale as between attorney and client on account of his vexatious and disingenuous
opposition to the application.

Interim costs
Interlocutory proceedings
 An interlocutory application obviously gives rise to costs on both sides
 When granting or refusing such an application, it is usual for the court to make one of two
costs orders: either that the costs of the interlocutory application are reserved, or that they
will be costs in the cause.

Reserved costs
 “Costs are reserved” means that at the end of the main case of which the interlocutory
application forms part, the legal representatives for the parties will have to present
argument as to who should pay the costs of the interlocutory application. It could be that the
successful party is awarded costs in the main case, but has to pay the unsuccessful party’s
costs in respect of the interlocutory application.

Costs in the cause

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  An order that costs in the interlocutory application will be “costs in the cause” simply means
that whoever is awarded costs in the main case will also be entitled to costs in the
interlocutory application.
 This means that counsel for the parties will not need specifically to argue the costs in
respect of the interlocutory application, when they get to the end of the main case.

Other interim costs orders

 Even though costs in an interim application will normally be either “reserved” or “in the
cause” the court retains a discretion to make any other costs order.
 A definitive award of costs at the interim/ interlocutory stage should only be made in
exceptional cases
o See: EMS Belting Co v Lloyd 1983 (1) SA 641 (E). This applies particularly where an
interim interdict is granted.

EMS Belting Co v Lloyd

There are sound reasons for not granting the costs of an interdict pendente lite to a successful
applicant in the absence of exceptional circumstances. While it can be said that such an applicant
has achieved substantial success, such success is of a limited and temporary nature, often based
upon a balance of convenience, and even despite a serious dispute of facts on the papers. It is
implicit in an order granting a temporary interdict that such order, and the relief consequent
thereon, will fall away should the applicant be unsuccessful in the trial. It would, in such a case, be
unjust to compel the defendant in the trial to bear the costs of an interdict to which the plaintiff may
subsequently be shown to have been not entitled.
The Court found that the aforegoing considerations remained applicable even where there had
been a prayer for costs against the defendant, and the defendant had not specifically argued that
costs should be reserved or made costs in the cause. An order to which a litigant is not entitled
and which is not based on accepted principles, should not be allowed to stand merely because his
opponent, whether by oversight or otherwise, does not object thereto. It is of course otherwise if
the opponent specifically consents to a particular order.
The various costs orders which may be made where a party enjoys partial success on appeal also
discussed.

BUT
 The position appears to be different where an application for an interim interdict is refused
o In such cases, the successful respondent should be awarded his/her costs
o See: Knox D'Arcy Ltd v Jamieson 1996 (4) SA 348 (A) at 380-381

Knox D'Arcy Ltd v Jamieson

The position of a successful respondent, it seems to me, is essentially
different, particularly in a case like the present. The respondents have
successfully resisted an application for an interdict. Whatever happens at the
trial, this situation will not be reversed. And even though the trial might show
that certain aspects of the petitioners' case was stronger than disclosed by
the papers before us, many of the features relied upon by the Judge below, and
by us, for refusing an interdict will not as such be issues at the trial, and need
not be reconsidered. I consider therefore that the order for costs in the Court a
quo was correct.

Tariffs of costs
The Tariffs
 The starting point for costs are the tariffs which appear in Rule 70 of the Uniform Rules of
Court and in Annexure 2 of the Magistrates’ Court Rules. Note that the amounts which
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 appear in the tables which form part of Rule 70 must be doubled (see Rule 70(10)). These
are the standard party and party costs which will be awarded against an unsuccessful party.
 It will be clear that in the majority of cases, the actual fees billed by the attorney and
advocate will be much higher than the tariff. The successful party to whom costs have
been awarded will still have to pay his/her costs in excess of the tariff.
 Example
 X wins a case against Y, and is awarded costs on the party and party scale.
 X incurred legal fees of R10000, and Y incurred legal fees of R15000.
 Y will have to pay all her own costs (R15000) plus X’s taxed costs, which the taxing master
determines as R4000. So Y pays R15000 to her attorney plus R4000 to X’s attorney, and X
must pay the remaining R6000 to his attorney.

The Taxing Master

 The taxing master is a public official, within the office of the Registrar of the High Court. The
taxing master’s job is to “tax” bills of costs, in other words to strike out items which cannot
be justified and to reduce other items in accordance with the tariffs.
 Taxation is not an exact science, but rather includes an element of discretion.
 A party may have their own bill of costs taxed (only if there was no prior agreement with the
attorney/advocate relating to costs), or the bill of the opposing party which they are required
to pay in terms of a costs order.
 The taxing master’s decision may be taken on review to the High Court. See, for example:
Harris v Wheeldon, Rushmere & Cole, and Gentech v Zimmer (both unreported, on Jackal).
 See also: Hennie de Beer Game Lodge v Waterbok Bosveld Plaas 2010 (5) SA 124 (CC),
where the CC states that the purpose of taxation is “to afford reasonable remuneration for
work necessarily and properly done.”

Avoiding taxation
 Attorneys should try to avoid having their own clients submit their bills to taxation.
 The simple way to do that is to enter into a clear and binding (and obviously fair!) fee
agreement with the client prior to commencing the work
 In those cases, the taxing master, and a court, are highly unlikely to interfere with the fee

Contingency fees
 Although it could be argued that it is not properly part of the law of costs, it is important to
be aware of the Contingency Fees Act
 The Act regulates the "no win-no fee" agreements between lawyers and clients
 The general principle is that if the client loses, the lawyer gets nothing, but if they do, the
fees are doubled
 Probably improve access to justice
 Have to be set out in a written agreement with the client, which should be signed before
significant costs have been incurred
 The vast majority of contingency fee agreements arise in the context of actions against the
RAF, and it is important to be aware that many judges dislike practitioners who are
perceived to be milking the system in RAF cases
 There are detailed rules on contingency fees imposed by the Law Society and the General
Council of the Bar - many attorneys are struck off the role for not following these rules
o See Ndlovu v Minister of Home Affairs [para 1-4] and Tjatji v RAF

Ndlovu v Minister of Home Affairs 2011 (2) SA 621 (KZD) at paras [1]-[4]
In the course of a public lecture, a judge expressed scepticism about the claim that contingency
fees afforded access to justice for those who could not otherwise afford it. He stated that, while he
was not in principle opposed to I a system of contingency fees, such a system required
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safeguards to prevent it being exploited by legal practitioners who might see in it an opportunity to
enrich themselves. The lecture was published in a law journal and later came to the attention of
the applicant, whose case had come before the judge, and in which judgment pended. The
applicant's lawyers were acting in the case on the basis that they would not charge the applicant
for their services, but depended solely on the costs order being made in his favour in order to
secure remuneration.
The applicant applied for the recusal of the judge, contending that a reasonable person would
reasonably apprehend bias on the part of the judge in addressing the question of costs in the
applicant's application. His concern was that the judge held a fixed view on the costs order he
sought, and that the views expressed in the lecture were a prejudgment of the point he would be
required to decide in the applicant's case.

Wallis J’s criticism of contingency fees in the lecture:

While on the topic of fees we should beware of following the example of those jurisdictions where
contingency fees are the major source of revenue for plaintiffs' lawyers. It is no coincidence that
those are the most litigious societies on the planet. And you must not believe the explanation that
this affords access to justice for those who could not otherwise afford it. If it does, that is a mere
by-product of what is described by lawyers in the corridors of the courts as drumming up trade.
Once again a well-meaning endeavour to assist those who cannot afford legal services provides a
perverse incentive for lawyers to profit. This takes a variety of forms. It occurred in our own local
courts in relation to cases on behalf of persons claiming social security grants. There was a
natural sympathy for the applicants that disguised what was really happening, which was that
governmental inefficiency was exploited to provide a not inconsiderable source of revenue to the
legal practitioner riding the bandwagon. Let me mention briefly what happened when the court put
an end to this by introducing a practice directive governing such cases.

A year later I was asked to reconsider that practice directive but the evidence led before me
showed unequivocally that people having grievances about social security grants were having
their problems resolved quicker by following the directive than they had by pursuing legal
proceedings. And of course the taxpayer was being saved vast sums in legal fees.

This is an inevitable consequence of a system of contingency fees. Lawyers will seek out
potentially vulnerable targets and then find litigants to pursue them. The litigants hope to benefit
from an award and the lawyer hopes to take as much as possible by way of contingency fees.
How many smokers really benefited from the enormous settlements negotiated in litigation against
the tobacco industry in the United States? Every lawyer involved did, and the extent of the benefit
was enormous. I, and many colleagues, listened amazed at a presentation at an International Bar
Association conference a few years ago by one of the lead firms in that litigation, which, even
before the payment of the settlement sum paid every employee of a large firm of attorneys a
bonus from the proceeds. And yes, I do mean every employee — clerks, messengers, janitors and
telephonists. And this was done before the partners took their cut. The pattern we have
encountered here in regard to social security and home affairs cases is currently being repeated in
the United Kingdom in cases involving claims against housing authorities, where the claims are
modest but the lawyers' fees are much greater. We need to cry out that there is a vast difference
between providing access to justice and the enrichment of lawyers. Whilst I am not in principle
opposed to some system of contingency fees it requires safeguards to prevent its exploitation by
those who see in it an opportunity to enrich themselves by gaming the system.

Tjatji v Road Accident Fund

In each of three actions that had been set down for trial the parties wished to have the terms of an
offer of settlement made an order of court. In each instance the plaintiff's legal representative
acted on a contingency fee basis in terms of a contingency fee agreement. When it transpired that
these were invalid for non-compliance with the requirements of the Contingency Fees Act H 66 of
59
1997 (the Act), the parties purported to enter into new contingency fee agreements. The plaintiffs
contended that, since the Act was silent as to when and at what stage of the proceedings a
contingency fee agreement may be entered into, it was thus permissible to enter into such
agreement at any stage of the proceedings, as long as success, or what the parties consider to be
success, had yet to be achieved.
Held: Although the Act did not stipulate when a contingency fee agreement may be entered into,
there were textual indications that such an agreement had to be entered into at a sufficiently early
stage of the proceedings so as to enable the requirements of the Act to be complied with. What
constituted a sufficiently early stage of the proceedings was a question of fact. Much would
depend on the nature of the proceedings and whether, when the J contingency fee agreement was
entered into, it was reasonably possible to comply with the prescripts laid down in the Act. In each
of the present cases A the new fee agreements were only entered into after the legal practitioners
concerned had commenced to act on a contingency basis and when disbursements had already
been incurred. This was contrary to the provisions of ss (3)(2) and (3)(4) of the Act, which required
that legal practitioners may not act on a contingency basis unless they had signed a B written
agreement to that effect, and had delivered a copy thereof to the client upon the date on which
such agreement was signed. There were also no indications in the affidavits filed of record that the
matters set out in s 3(3)(b) of the Act had been complied with before the new contingency fee
agreements were entered into, as it should have been for legal practitioners to become entitled to
act on contingency.
Held, further: On the face of it the new contingency fee agreements appeared to be valid, as the
prescribed form of agreement had been used. In substance, however, they were invalid, as a
result of the failure by the parties to observe the requirements of the Act. Despite not stating so
expressly, the Act undoubtedly visited non-compliance with invalidity. In addition, the D intention in
entering into the new contingency fee agreement in each case was to retrospectively validate the
contingency fee agreements that were entered into in violation of the Act. This could not be done.
It was trite that an agreement which was a nullity could not be rectified so as to become a valid
contract.

Counsel's fees
 Advocates' fees
 The general rule: the attorney is responsible for the advocate's fees, regardless of
whether the client has paid the attorney
 It is important for attorneys to have sufficient "cover" for the fees - ie. that the client has
deposited enough money in advance in the trust account to pay the advocate
 Advocates can have a firm of attorneys "blacklisted" from the Bar which is circulated
amongst advocates to warn them about accepting briefs from that firm

Costs of two counsel

 If the case is sufficiently complicated to justify employing two advocates (senior - silk - and
junior - normal) then the court
 Where a silk (SC) and a junior are employed, the silk will negotiate the fee, whether daily or
hourly
 The junior will then charge two-thirds of whatever the silk has charged
 Taxing masters will tax the bill of costs and then award the silk a tax, and then award the
junior 50% of the silk's fee
 The discrepancy is covered by the client
 If the case does not justify the employment of two counsel, the court has a discretion not to
award the costs of two counsel - Wanderers Club

Wanderers Club v Boyes-Moffat

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There is no general rule that costs of two counsel must always be allowed in
all interlocutory applications relating to a main application or action that
deserves two counsel. The general principle regarding the award of costs is
well settled: it is entirely a matter for the discretion of the court, which is to be
exercised judicially upon a consideration of the facts of each case, and in
essence it is a matter of fairness to both sides.

Collapse fees
 If an advocate has set aside a day or days to conduct a trial, and the trial is settled shortly
before the hearing date, many advocates will charge a "collapse fee" which is meant to
compensate the advocate for the fact that she or he will have turned away other work for
that day
o See Fluxmans Inc v Lithos Corporation - attorneys won, and clients had to pay
"collapse fees"
 Clients don't like paying collapse fees, so sometimes attorneys have to litigate to get it out
of the client

Fluxmans Inc v Lithos Corporation

A firm of attorneys sued its former client (and its director) for the outstanding balance of its agreed
fee and fees disbursed to counsel, including an agreed G collapse fee. The defendants disputed
liability on various grounds, including that the advocates' collapse fees were unreasonable. A
complaint had previously been lodged with the Bar Council and a fee tribunal duly appointed, from
which the defendants had subsequently withdrawn participation. The tribunal had nevertheless
proceeded with the enquiry, finding that the fees charged were in order and dismissing the
complaint.
The court discussed the nature of collapse fees and how the reasonableness of such was to be
determined. In this regard the South African Bar's Code of Professional Conduct, rulings of the
Johannesburg Bar, direction from the fees committee and outcome of the aforementioned Bar
Council enquiry were examined.
Ultimately the court could not find any fault with the findings and approach of the tribunal to the
question, holding that some deference was in any event due to the professional body's view on the
question of reasonableness of fees. Ordinarily the court was not to be asked, at first instance, to
decide whether the fees of counsel were reasonable: such was the task of the regulator body,
whose decisions were subject to review by a court.
In the circumstances the court concluded that there was no basis upon which to find that the
counsel had breached the Bar Rules or overreached their clients and the collapse fees were
accordingly reasonable.

THE EXAM

Wednesday the 10th of June at 2pm in the GH Veranda - just check late changes to the venue

Format
- 2 hours
- Planning paper
- Counts 70%
- 70 marks
- 6 questions, all compulsory - test was the style and number of questions we should expect
- 10 mark question = about 17 minutes (1.7 minutes p/mark)

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- Question 1 [12 marks]: problem question (scenario) designed to test your basic understanding of
application proceedings - the why and how of application proceedings
- Q 2 [14 marks]: a problem question which deals with a specific type of application. The instruction in this
question is: "set out exactly what you will do in order comply with your client's instruction". Go through
every single step of what you're going to do to get the order your client wants. Don't be vague!!
- Q 3 [8 marks]: provisional sentence
- Q 4 [ 14 marks]: an expanded version of one of your test questions
- Q 5 [10 marks]: on attachment and execution
- Q 6 [12 marks]: costs - read slides and cases - use to illustrate what you are talking about with the cases

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