|
|
[Home]
[Databases]
[WorldLII]
[Search]
[Feedback]
South Africa: Supreme Court of Appeal |
[Database Search] [Name Search] [Recent Decisions] [Noteup] [Help]
Last Updated: 3 December 2005
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Reportable
CASE NO. 422/2004
In the matter between
DAVID LEIBOWITZ t/a LEE FINANCE Appellant
and
A T MHLANA AND OTHERS Respondents
____________________________________________________________
CORAM: MPATI DP, STREICHER, LEWIS, VAN HEERDEN and JAFTA JJA
HEARD: 16 NOVEMBER 2005
DELIVERED: 1 DECEMBER 2005
____________________________________________________________
Summary:
Jurisdiction – s 19(1)(a) & (b) of the Supreme Court Act 59 of 1959
– meaning of ‘causes arising’
– meaning of principal
place of business – submission to
jurisdiction.
______________________________________________________________________
JUDGMENT
____________________________________________________________
JAFTA JA
[1] This appeal concerns the jurisdiction of a high court. The first
to eighth respondents (‘the respondents’) instituted
an application
in the Transkei High Court for an interdict against three insurance companies
and the appellant. The appellant raised
an objection in limine to the
court’s jurisdiction. The court of first instance (Maya J) ruled that it
had no jurisdiction and dismissed the application
with costs. The respondents
appealed to the full court which held that the court of first instance had
jurisdiction, dismissed the
appellant’s point in limine with costs
and referred the matter back to the court of first instance to deal with the
merits of the application. The present appeal
is against the latter order with
the leave of this court.
[2] The background facts are briefly these. The
appellant is a businessman residing in Durban. In 1997 he carried on a
moneylending
business in that city. The respondents are teachers in the Transkei
where they also reside. In 1997 they applied, in Durban, for
loans of small sums
of money from the appellant. As was the practice in the appellant’s
business, he required that insurance
policy contracts be attached to such
applications as security. The respondents complied with this requirement and
later on they were
granted loans.
[3] In January 2001 the respondents brought
an urgent application against the appellant and the insurance companies for an
order restraining
them from facilitating or assisting in the cession, surrender
or utilisation of the policies that have a connection with the appellant;
declaring that purported cessions, surrenders, sureties and other contracts
relating to these policies are null and void; and directing
that the insurance
companies release from cession and reinstate policies that had been surrendered
or utilised by the appellant.
The case of the respondents is that they never
ceded their policies to the appellant and that they never gave him authority to
cede,
surrender or utilise the policies. They contend that his actions in this
regard were fraudulent and it is on this basis that the
order was
sought.
[4] As previously stated, the appellant resides in Durban, carried on
business and came into possession of the policies in Durban.
The contracts
relating to the policies were concluded in Durban. The insurance companies have
their principal places of business
in either Durban or Cape Town. Counsel for
the respondents submitted that the court of first instance had jurisdiction
because payment
in terms of the agreements of loan had to be collected in the
Transkei. However, in the light of the respondents’ cause of
action the
place where payment in respect of the loans had to be made is irrelevant. In any
event the acknowledgments of debt in
respect of the loans expressly provided
that payment had to be made in Durban.
[5] All the actions concerned took
place or may in future take place in either Cape Town or Durban in respect of
policies which were
handed to the appellant in Durban. In these circumstances
the court of first instance, in so far as the appellant was concerned,
could
only have had jurisdiction if he had consented to the jurisdiction of the court
or, in terms of s 19(1)(b) of the Supreme Court
Act 59 of 1959 (‘the
Act’) if the appellant had been joined to legal proceedings in respect of
which the court of first
instance had jurisdiction. The latter would be the case
if the insurance companies had their principal places of business within
the
area of jurisdiction of the court or if the insurance companies submitted to the
jurisdiction of the court.
[6] Subsections 19(1)(a) and (b) of the Act
provide:
‘19(1)(a) A provincial or local division shall have
jurisdiction over all persons residing or being in and in relation to all
causes
arising . . . within its area of jurisdiction and all other matters of which it
may according to law take cognizance . . .
(b) A provincial or local
division shall also have jurisdiction over any person residing or being outside
its area of jurisdiction
who is joined as a party to any cause in relation to
which such provincial or local division has jurisdiction or who in terms of
a
third party notice becomes a party to such a cause, if the said person resides
or is within the area of jurisdiction of any other
provincial or local
division.’
[7] In Gulf Oil Corporation v Rembrandt Fabrikante en
Handelaars (Edms) Bpk 1963 (2) SA 10 (T) at 17D-H Trollip J stated that
‘cause’ means an action or legal proceeding (not a cause of action)
and that ‘a cause arising within its area of jurisdiction’ means
‘an action or legal proceeding which, according
to the law, has duly
originated within the Court’s area of jurisdiction’. Further support
for this interpretation is
to be found in the Afrikaans text of s 19(1)(a) and
(b) where the words ‘gedinge wat . . . ontstaan’ and ‘geding
met betrekking waartoe’ are used as the Afrikaans equivalent for
‘causes arising’ and ‘cause in relation
to which’.
Trollip J concluded:
‘The result is that the Court’s jurisdiction
under sec. 19(1) is simply determined, as hitherto, by reference to the common
law and/or any relevant statute.’
This statement is quoted with
approval in Bisonboard Ltd v K Braun Woodworking Machinery (Pty) Ltd 1991
(1) SA 482 (A) at 486H-J.
[8] The court a quo held that the insurance
companies as well as the appellant submitted to the jurisdiction of the court of
first
instance by reason of the fact that they were parties to other proceedings
in the High Court, Transkei. The court a quo erred in
this regard. The fact that
a court has jurisdiction in respect of certain legal proceedings does not confer
jurisdiction on such
a court in respect of other legal proceedings. The onus of
proving submission was on the respondents. They failed to make out any
case
whatsoever that either the appellant or the insurance companies submitted to the
jurisdiction of the court of first instance.
The mere failure to oppose an
application, as in the case of the insurance companies, does not constitute
submission to the court’s
jurisdiction (see Du Preez v Philip-King
1963 (1) SA 801 (W) at 803A-H) and Girdwood v Theron 1913 CPD 859 at
862).
[9] The court a quo also held that the court of first instance had
jurisdiction over the insurance companies by reason of their principal
places of
business being within the Transkei. In Bisonboard at 499C-D this court
held that a company resides at its registered office as well as its principal
place of business. Relying on
Federated Insurance Co Ltd v Malawana 1986
(1) 751 (A) the court a quo held that where a company has a branch office within
the jurisdiction of the court that place should
be regarded as its principal
place of business for purposes of jurisdiction. However, in Malawana this
court interpreted rule 4(1)(a)(v) in terms of which service of a summons on a
company ‘shall be effected . . .by delivering
a copy . . . at its
principal place of business within the Court’s jurisdiction’ (758I-J
and 762A-E). It held that Federated
Insurance’s branch office in East
London was its principal place of business within the jurisdiction of the court
concerned
(762F). However, there is a vast difference between ‘a
company’s principal place of business’ and ‘a company’s
principal place of business within the court’s jurisdiction’. The
principal place of business of a company for jurisdictional
purposes is the
place where the central control and management of a company is situated
(Bisonboard at 496C). The court a quo, therefore, erred in holding that
the court of first instance had jurisdiction over the insurance companies
by
reason of their principal places of business being situated within the
Transkei.
[10] The appeal record was overburdened with material which was
wholly unnecessary for the adjudication of the present appeal. This
material
consists of heads of argument filed in the court below, papers in the
application for leave to appeal and other documents.
Such documents constituted
approximately half of the record placed before us. It was the duty of the
appellant’s attorneys
to ensure that such documents were excluded from
the record as required by Rule 8(9). That they failed to do and there is no
explanation
for the breach. In the light of repeated warnings issued by this
court in the past (Salviati & Santori (Pty) Ltd v Primesite Outdoor
Advertising 2001(3) SA 766 (SCA) and Zulu and Others v Majola 2002(5)
SA 466 (SCA) at 470B-E), I consider it appropriate to limit the costs to which
the appellant is entitled for the preparation
of the record to 50 per
cent.
[11] On 15 September 2005 the hearing of this appeal was postponed at
the request of the respondents. They had failed to file heads
of argument and
their counsel was not ready to argue the matter. We were then informed by
counsel that the respondents were not aware
of the date of the hearing because
they had not received the notice of set down. As a result counsel was only
instructed on the previous
day to draw heads of argument and to appear for
them.
[12] On granting the postponement this court ordered that the
respondents’ attorneys should furnish an explanation for their
unreadiness
and show why they should not be held liable for the costs of the postponement.
In his affidavit Mr Edward Bikitsha (the
respondents’ attorney) states,
contrary to what we were told on 15 September, that he received the notice of
set down. The
only explanation he now furnishes for the respondents’
state of unpreparedness is that he had not received the appellant’s
heads
of argument.
[13] Although the respondents’ attorney was, on his own
admission, aware of the date of hearing he took no steps in preparation
for it.
He had appointed correspondent attorneys in Bloemfontein for, inter alia,
receiving documents served. He did not enquire
whether the heads had been
delivered there, even after the appellant’s attorneys had, by a letter
dated 9 September, asked
for the respondents’ heads. He only made such
enquiry after he was advised by the appellant’s attorneys that such heads
had been delivered. The fact that the appellant’s heads had not been
delivered to him, in Mthatha, cannot be an excuse for
taking no steps at all. In
my view, his failure to act amounted to gross neglect of his professional
responsibilities. The attorney’s
tardiness is aggravated by the
conflicting reasons furnished. It is clear that this court was misled during the
hearing of the application
for postponement which resulted in wasted costs. The
blame for such costs lies entirely on the respondents’ attorney. It would
be unfair to expect the respondents to bear any part of those costs. I consider
it proper to order that the respondents’ attorney
must pay such costs
de bonis propriis and on the scale as between attorney and client.
[14] The following order is made:
1. The appeal is upheld with costs, save that the appellant is entitled to only 50 per cent of the costs of preparing the record.
2. Bikitsha and Associates are ordered to pay the costs of the postponement on 15 September 2005 de bonis propriis and on the scale as between attorney and client.
3. The order of the court a quo is set aside and replaced with the following order:
‘The appeal is dismissed with
costs.’
---------------------------------------
C
N JAFTA
JUDGE OF APPEAL
MPATI
DP )
STREICHER JA ) CONCUR
LEWIS JA )
VAN
HEERDEN JA )
SAFLII:
|
Terms of Use
|
Feedback
URL: http://www.saflii.org/za/cases/ZASCA/2005/126.html
.RTF of original document