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IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

Case No: 55004/ 2012

26/5/2017

Not reportable

Not of interest to other judges

26/5/2017

In the matter between:

SLIP KNOT INVESTM ENTS 777 (PTY) LTD                                                         Applicant

and

MARTYCEL PROPERTIES CC                                                                  First Respondent

ADAMS & ADAMS                                                                                Second Respondent

 

JUDGMENT

 

LOUW, J

[1] The applicant has instituted an action against the first respondent, to whom I shall refer as the respondent, for payment of an amount of money which the applicant alleges is due to it in terms of an agreement concluded between the parties. The agreement relates to a commercial property known as Station Square. The trial was set down for hearing during the period 9 to 20 May 2016. On 3 May 2016, the respondent launched an interlocutory application in which it sought inspection of the applicant's financial documents. The applicant was concerned that the trial would as a result not be able to proceed, and launched a counter-application on 5 May 2013 in which it sought a variation of an earlier interdict order which had been granted by Prinsloo J on 11June 2013 ("the applicant's counter­ application"). The respondent's interlocutory application was resolved by agreement between the parties, which agreement was made an order of court by Kollapen J on 9 May 2016. Due to various issues between the parties, the trial did not commence and was postponed sine die. The applicant's counter-application was also postponed.

[2] The order granted by Prinsloo J inter alia provided that, pending the finalisation of the action, the respondent was interdicted from encumbering the property and was directed, in the event of it being sold, to cause an amount of RSO million to be paid into an interest bearing trust account and to cause the money to be retained in such trust account, subject to the respondent's right to make payment of the said money to the applicant at any stage prior to the finalisation of the action.

[3] On 17 May 2016, the respondent launched an application for the recusal of Kollapen J. The application was heard on 19 May 2016 and dismissed on 20 May 2016. That application is not relevant for present purposes. The applicant's counter-application was heard by Kollapen J on 15 June 2016 and judgment was reserved. On 11August 2016, the respondent launched a second application for the recusal of Kollapen J. The second recusal application was heard on 16 September 2016 and dismissed on 21 September 2016. Judgment in the applicant's counter-application was delivered on 30 September 2016. The order granted was the following:

1. The judgment granted by the honourable Judge Prinsloo on 11 June 2013 under case number 51915/2012 be varied by the addition of the following order :

1.1 That pending finalisation of the action instituted under case no 55004/12 ("the main application"):

1.1.1. The defendant is ordered to pay or ensure payment of the net rental income as described in this order ("the net rental income") earned during any particular month by the last day of that month into the interest bearing trust account of an independent firm of attorneys, being Adams and Adams Attorneys (Pretoria);'[1]

1.1.2. That the term "net rental income" referred to in paragraph 1.1.1 will mean the following :

1.1.2.1. All income of any nature whatsoever received from the properties described as Erven 316 and 317, Clarina extension 19, Registration Division JR, Province of Gauteng ("the properties");

1.1.2.2. Less all rates, taxes, costs in respect of water and electricity consumption, refuse removal and other imports, maintenance costs, management agent fees and any other reasonable costs arising out of any obligation to any tenant in particular in terms of any lease agreement and any common law duty to provide peaceful and undisturbed possession to any tenant ("the expenses");

1.1.3. Owners' statements reflecting the detail of all income in respect of the properties and all expenses and accordingly the calculation of the net rental income will be provided by no later than the end of each month in respect of each payment of net rental to the plaintiff's attorneys and to the independent attorney;

1.1.4. The defendant shall in addition be entitled to deduct from the income earned (described in 1.1.2.1 above) all payments made in terms of any valid tax obligation that the defendant owes to the South African Revenue Service including accrued or past taxes, provisional tax and value added tax and shall provide the independent attorney with documentary proof of all such payments made in deducting such payments from the income received;

1.1.5. This order shall be effective immediately and will commence applying to income received for the month of October 2016 and every month thereafter pending finalisation of the action under case number 5004/1012; The costs of the independent attorney will be paid out of the proceeds of the net income received by the independent attorney in terms of this order;

1.1.6. The independent attorney shall on a monthly basis provide the parties through their legal representatives, with a statement reflecting the details of all income received and expenses deducted, with the necessary supporting documentation, owners' statements, as well as the fees of the independent attorney, and the balance standing in the fund;

2. The costs of the application are reserved for future determination."

[4] The respondent thereafter launched applications for leave to appeal both of the orders made by Kollapen J. The applications were dismissed. The applicant proceeded to apply to the Supreme Court of Appeal (SCA) for leave to appeal the orders. Such leave was granted by the SCA on 6 March 2017.

[5] During November 2016, while the respondent's applications for leave to the SCA were pending, the applicant launched the present application as an urgent application (which was dealt with as a semi-urgent application and by arrangement with the Deputy Judge President enrolled for 27 March 2017) in which it sought an order in the following terms:

"2. An order declaring:

2.1 That the order of the Honourable Mr Justice Kollapen on 30 September 2016 ("the interdict order"), is an interlocutory order, not having the effect of a final judgment, as envisaged in section 18(2) of the Superior Courts Act, 10 of 2013 ("the Act");

2.2 that the operation and execution of the interdict order is, in terms of section 18(2) of the Act, not suspended:

2.2.1. by the first respondent's pending application for leave to appeal the interdict order, which application for leave to appeal is dated 21 October 2016;

2.2.2. if such leave to appeal is refused, pending any application by the respondent to the Supreme Court of Appeal and/ or the Constitutional Court for leave to appeal;

2.2.3. if any of such applications are granted, pending the finalisation of any such appeals;

2.3 that the operation and execution of the interdict order is not suspended:

2.3.1. by the first respondent's pending application for leave to appeal the Honourable Mr Justice Kollapen's order dismissing the first respondent's second recusal application, which order was granted on 21 September 2016 ("the recusal order") and which application for leave to appeal is dated 23 September 2016;

2.3.2. if such leave to appeal is refused, pending any application by the respondent to the Supreme Court of Appeal and/or the Constitutional Court for leave to appeal;

2.3.3. if any of such applications are granted, pending the finalisation of any such appeals;

3. Alternatively to 2 above and in the event of this honourable court finding that:

(a)  the interdict order, or any part thereof, is not an order as contemplated in section 18(2) of the Act; and/ or

(b)  the operation and execution of the interdict order is suspended by the first respondent's pending application for leave to appeal the interdict order; and/ or

(c)  the operation and execution of the interdict order is suspended by the first respondent's pending application for leave to appeal the recusal order;

3.1 an order, as envisaged in sections 18(1) and 18(3) of the Act, declaring that the operation and execution of the interdict order, or any part thereof, not be suspended:

3.1.1. pending the first respondent's application for leave to appeal the interdict order and/ or pending the first respondent's application for leave to appeal the recusal order;

3.1.2. if such leave to appeal is refused in respect of either of those applications, pending any application by the respondent to the Supreme Court of Appeal and/ or the Constitutional Court for leave to appeal;

3.1.3. if any of such applications are granted, pending the finalisation of any such appeals;

4. In the event of the relief sought in paragraph 2 being granted, an order :-

4.1 declaring that the first respondent is found to be in contempt of the interdict order to the extent that it has failed and refused to:

4.1.1. pay or to ensure payment of the net rental income as described in the interdict order ("the net rental income") earned during October 2016 month by the last day of that month into the interest bearing trust account of the independent firm of attorneys, being Adams and Adams Attorneys (Pretoria);

4.1.2. provide to the applicant's attorneys and to the independent attorney owners' statements reflecting the detail of all income in respect of the properties and all expenses and accordingly the calculation of the net rental income by the end of October 2016 in respect of each payment of net rental;

4.2 imposing such penalty or sentence on the first respondent as the honourable court deems fit;

4.3 suspending the penalty or sentence in terms of 4.2 above pending payment of the net rental income and delivery of the owners' statements (as provided for in the interdict order), within 5 days from date of this order, by the first respondent to the second respondent, failing which, the sentence or penalty be implemented forthwith;

5. In the event of an Order being granted in terms of paragraph 3[2] above, granting the applicant leave on the same papers, duly supplemented to the extent necessary, to approach this court for an order in terms of prayer 3[3] above in the event that the first respondent fails to carry out any of its obligations in terms of the interdict order and in particular fails to pay over the net rental income and deliver the owner's statements (as provided for in the interdict order), within 5 days from date of this order;

6. Insofar as an order is made in terms of section 18(1) of the Act that:

6.1 the first respondent is ordered, if it intends to exercise its right of appeal in terms of section 18(4) of the Act:

6.1.1. to proceed with any appeal to the next highest court (as envisaged in terms of section 18(4)), if any, by delivering its notice of appeal within a period of 5 days from the date of the order in terms of section

6.1.2. to deliver the record of appeal in the form of indexed and paginated papers as served before this court, duly supplemented to the extent necessary, within 10 days of the granting of this order;

6.1.3. to deliver its heads of argument, if any, within 15 days of the granting of this order;

6.2 if the first respondent fails to take any of the steps set out in paragraph 6.1 above, then the appeal shall be deemed to have lapsed unless the court hearing the appeal orders otherwise;

6.3 that the applicant (sic) deliver its heads of argument within two days of delivery of the applicant's heads of argument;

6.4 the Registrar of Appeals is ordered to take all steps necessary to ensure the hearing of such appeal as a matter of extreme urgency as provided in section 18(4)(iii);

[6] The applicant contends that the order granted by Kollapen J, which was referred to by the parties as "the interdict order", is an order as contemplated by s 18(2) of the Superior Courts Act 10 of 2013 ("the Act") and that, as a result, the operation and execution of the order is not suspended by the respondent's appeal process. The respondent disputes this and contends that the order is an order as contemplated in s 18(1) of the Act.  Section 18 provides the following:

(1)  Subject to subsections (2) and (3), and unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision which is the subject of an application for leave to appeal or of an appeal, is suspended pending the decision of the application or appeal.

(2)  Subject to subsection (3), unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision that is an interlocutory order not having the effect of a final judgment, which is the subject of an application for leave to appeal or of an appeal, is not suspended pending the decision of the application or appeal.

(3)  A court may only order otherwise as contemplated in subsection (1) or (2), if the party who applied to the court to order otherwise, in addition proves on a balance of probabilities that he or she will suffer irreparable harm if the court does not so order and that the other party will not suffer irreparable harm if the court so orders.

(4)  If a court orders otherwise, as contemplated in subsection (1)­

(i) the court must immediately record its reasons for doing so;

(ii) the aggrieved party has an automatic right of appeal to the next highest court;

(iii) the court hearing such an appeal must deal with it as a matter of extreme urgency; and

(iv) such order will be automatically suspended, pending the outcome of such appeal.

(5)  For the purposes of subsections (1) and (2), a decision becomes the subject of an application for leave to appeal or of an appeal, as soon as an application for leave to appeal or a notice of appeal is lodged with the registrar in terms of the rules.

[7] It was common cause between the parties that the interdict order granted by Kollapen J is an interlocutory order. What is in dispute is whether the order was final in effect. It was submitted on behalf of the respondent that in granting leave to appeal, the SCA has conclusively found that the order is appealable and that that unavoidably entails that the SCA has found that the order has all the attributes of an appealable order, including the attribute that it is final in effect. I disagree with the submission. By granting leave to appeal, the SCA has not found that the order is appealable or that it is final in effect. In Trope and Others v South African Reserve Bank,[4] the Appellate Division said the following at 2676-F:

"Before the merits of the appeal can be considered the appellants must first show that the order of the Court a quo is appealable. The Court a quo granted the appellants leave to appeal to this Court on a number of grounds set forth in their notice of application for leave to appeal. Thereafter this Court granted the appellants further leave to appeal on certain additional grounds set out in the said notice, but subject to the respondent's right to argue that the order of the Court a quo is not appealable.

Leave to appeal is of course only one of the jurisdictional requirements for a civil appeal from a Provincial or Local Division sitting as a Court of first instance. The other is that the decision appealed against must be a 'judgment or order' within the meaning of those words in the context of s 20(1) of the Supreme Court Act 59 of 1959 (Zweni v Minister of Law and Order 1993 (1) SA 523 (A) at 5318- D)." The question whether a decision is an appealable 'judgment or order' is not always easy to determine, as appears from a number of authorities referred to in the Zweni judgment. It will serve no purpose to re-examine those authorities. It has been held in Zweni's case supra at 5321-5338:

'.A "judgment or order" is a decision which, as a general principle, has three attributes, first, the decision must be final in effect and not susceptible of alteration by the Court of first instance; second, it must be definitive of the rights of the parties; and, third, it must have the effect of disposing of at least a substantial portion of the relief claimed in the main proceedings (Van Streepen & Germs (Pty) Ltd case supra 1987 (4) SA 569 (A) at 586I-5878; Marsay v Dilley [1992] ZASCA 114; 1992 (3) SA 944 (A) at 962C-F). The second is the same as the o-stated requirement that a decision, in order to qualify as a judgment or order, must grant definite and distinct relief (Willis Faber Enthoven (Pty) Ltd v Receiver of Revenue and Another 1992 (a) SA 202 (A) at 2140-G)'."

[8] The question therefore remains: does the order have the effect of a final judgment? In Metllika Trading Ltd and Others v Commissioner, South African Revenue Service,[5] the Supreme Court of Appeal (SCA) stated, with reference to Zweni, that an interim interdict is appealable if it is final in effect and not susceptible to alteration by the court of first instance. It further confirmed, with reference to Zweni and South African Motor Industry Employers' Association v South African Bank of Athens Ltd[6], that in determining whether an order is final, it is important to bear in mind that not merely the form of the order must be considered but also, and predominantly, its effect.[7]

[9] It follows from what has been held in the decisions of the SCA referred to, that an order which is susceptible to variation by the court which granted the order, is not a final order. The interdict order which was granted by Kollapen J was itself a variation of a previous interlocutory order and is clearly itself susceptible to variation by, for example, ameliorating the effect of the order. The main complaint of the respondent about the existing order is that not all of the its deductible expenditure has been included in the order and that it will therefore operate at a loss if it complies with the order and will, as a consequence, face liquidation. The applicant has indicated that it will have no objection if further legitimate expenses of the respondent are added to those mentioned in the order. I was informed by counsel that the order granted by Kollapen J was made after considering submissions by counsel of both parties. It seems that the respondent neglected to mention all of its legitimate expenses. I see no reason why the order so granted cannot be varied either by agreement between the parties or on application by the respondent if it appears that the respondent is suffering hardship because the order does not provide for the deduction of all of its legitimate expenses.

[10] It was nevertheless contended on behalf of the respondent that the order is final in effect and therefore an order as contemplated in s 18(1) of the Act. The argument in this regard was that the respondent will be deprived of its legitimately earned money as long as it takes for the main action and any appeals pursuant thereto to be decided.  Reliance was placed in this regard on the judgments of the Constitutional Court in Tshwane City v Afriforum and Another[8] and Mathale v Linda and Another.[9] In Tshwane City, the court said the following with reference to the common law test for appealabilty as pronounced in Zweni :

"[40] The common-law test for appealability has since been denuded of its somewhat inflexible nature. Unsurprisingly so because the common law is not on par with but subservient to the supreme law that prescribes the interests of justice as the only requirement to be met for the grant of leave to appeal. Unlike before appealability no longer depends largely on whether the interim order appealed against has final effect or is dispositive of a substantial portion of the relief claimed in the main application. All this is now subsumed under the constitutional interests of justice standard. The overarching role of interests of justice considerations has relativised the final effect of the order or the disposition of the substantial portion of what is pending before the review court, in determining appealability. The principle was set out in OUTA[10] by Moseneke DCJ in these terms:

'This court has granted leave to appeal in relation to interim orders before. It has made it clear that the operative standard is the interests of justice. To that end, it must have regard to and weigh carefully all germane circumstances. Whether an interim order has a final effect or disposes of a substantial portion of the relief sought in a pending review is a relevant and important consideration. Yet, it is not the only or always decisive consideration. It is just as important to assess whether the temporary restraining order has an immediate and substantial effect, including whether the harm that flows from it is serious, immediate, ongoing and irreparable.'

The Deputy Chief Justice also dealt with the role of separation of powers in relation to appealability as follows:

'A court must also be alive to and carefully consider whether the temporary restraining order would unduly trespass upon the sole terrain of other branches of government even before the final determination of the review grounds. A court must be astute not to stop dead the exercise of executive or legislative power before the exercise has been successfully and finally impugned on review. This approach accords well with the comity the courts owe to other branches of government, provided they act lawfully. Yet another important consideration is whether in deciding an appeal against an interim order, the appellate court would in effect usurp the role of the review court. Ordinarily the appellate court should avoid anticipating the outcome of the review except perhaps where the review has no prospects of success whatsoever. '

[41] What the role of interests of justice is in this kind of application, again entails the need to ensure that form never trumps any approach that would advance the interests of justice. If appealability or the grant of leave to appeal would best serve the interests of justice, then the appeal should be proceeded with no matter what the pre-Constitution common-law impediments might suggest. This is especially so where, as in this case, the interim order should not have been granted in the first place by reason of a failure to meet the requirements. The Constitution and our law are all about real justice, not mere formalities. Importantly, the constitutional prescripts of legality and the rule of law demand that nobody, not even a court of law, exercises powers they do not have. Where separation of powers is implicated and forbids the grant of the order sought to be appealed against, the interests of justice demand that even an order that is not of final effect or does not dispose of a substantial portion of the issues in the main application, nevertheless be appealable."

[11] The abovementioned two judgments of the Constitutional Court dealt with the appealability of interim orders which had been granted by courts a quo. They did not deal with the provisions of s 18 of the Act. It was also not suggested by the respondent that the interests of justice played any role in the present matter. What was submitted, was that the Constitutional Court did not dispense with the requirement for appealability that an interlocutory order should be final in effect and that the grounds on which the Constitutional Court found that the interim orders granted by the courts below were final in effect, were comparable to the type of interdict order granted by Kollapen J . Idisagree. In Tshwane City, the interim order restrained the City Council from removing old street names and directing it to restore those names that had already been removed. In Mathale, the respondent had obtained an eviction order against the appellant in the magistrate's court to evict him from a property where he had been living for more than 20 years. The appellant appealed the eviction order, which appeal was still pending. The respondent successfully applied in the magistrates' court, in terms of s 78 of the Magistrates Courts Act 32 of 1944, for the eviction order to be implemented pending the finalisation of the eviction appeal. The fundamental question for the Constitutional Court to decide was whether, in general, s 78 orders and those concerning an eviction from one's home, in particular, were appealable. The court found that the order under consideration had the effect of a final judgment. This was in the light of: the fact that once a court permitted the execution order to be executed, pending an appeal, the appellant's right to occupy his home would be brought to an abrupt end; there was no guarantee that the appellant would be able to return to and continue living in the property he had been living in for the last 20 years; and the immediate and devastating effect the execution order would have when implemented, which would render the appellant homeless, causing immeasurable suffering and indignity. Given the finality of the order, the court held that it was appealable.

[12] It was submitted on behalf of the respondent that the respondent's right to use the money that it lawfully obtains is brought to an abrupt end and that the probabilities are that the respondent will be financially ruined by the implementation of the interdict order. I do not agree with the submission. The respondent's right to use the money is dependent on a finding that the respondent, and not the applicant, is entitled to the money. That is something which the trial court has to decide. As to the allegation that the respondent will be financially ruined by the implementation of the interdict order, the respondent has not placed persuasive evidence before the court for such a finding to be made on the probabilities. Furthermore, as already alluded to, the respondent can approach the court for the variation of the interdict order to include legitimate expenses which have not been included in the interim order which was made. If the interdict order is amended, either by agreement between the parties or on application by the respondent, that would address the respondent's concern about its finances.

[13] Reliance was also placed by the respondent on the following statement by the SCA in paragraph 24 of its judgment in Metlika Trading Ltd and Others v Commissioner, South African Revenue Service[11]:

"The order that steps be taken to procure the return of the aircraft to South Africa, as well as the other orders relating to the aircraft, were intended to have immediate effect, they will not be reconsidered at the trial and will not be reconsidered on the same facts by the court a quo."

[14] The argument on behalf of the respondent was that the interdict order in casu was also intended to have an immediate effect, that it will not be reconsidered at the trial and that it will not be reconsidered on the same facts. I again disagree. The nature of the interim order under consideration is quite different from the order granted in Metfika. In Metlika, the court of first instance had ordered the third appellant, a partnership in whose name a Falcon aircraft was registered, to take all the necessary steps to procure the return of the aircraft to South Africa. The aircraft had previously been operated inside and outside of South Africa. The effect of the order was that the aircraft had to be brought to South Africa and that it could no longer be operated outside of South Africa. The court held that, whether or not the aircraft should be returned to South Africa and whether or not the other orders relating to the aircraft should be granted, was not an issue in the action pending in which the interdict was granted. These issues would not be reconsidered at the trial and would not be reconsidered on the same facts by the court a quo. The court therefore found that the orders were final and accordingly appealable.

[15] The interim order granted in the present matter is purely a preservation order with the aim of preserving the rental income until the trial court decides which of the parties is entitled to the money which has been preserved In terms of the order, or any part thereof. It can be varied at the instance of either of the parties. In Atkin v Botes[12], the question raised in the appeal before the SCA was whether the grant of an interdict, which prevented a respondent from freely dealing with its assets in order to defeat a judgment the applicant believed it would obtain in due course in an action for damages, is appealable. The facts were summarised as follows in paragraph 2 of the judgment:

"In May 2009 the respondent, Botes, was shot with a firearm by the appellant, Atkin. On 5 February 2010 Botes instituted an action against Atkin for delictual damages arising from the shooting. On 26 February 2010 and at the suit of Bates, Van der Byl AJ in the North Gauteng High Court granted, ex parte, an urgent interim interdict with immediate effect. The interdict restrained Atkin's attorneys (the second respondent in the court a quo) from paying out the net proceeds of the sale of Atkin 's house, and directed them to invest such proceeds in an interest­ bearing account 'with an acknowledged bank' pending finalisation of Bates' action for damages. Atkin anticipated the return day. Makgoka J confirmed the interim order on 31 March 2010 and subsequently granted leave to appeal to this court".

[16] The court referred to the above quoted passage in Metlika and said the following:

"[11] It was not, with respect, necessary for the court to have followed the approach which it did. A challenge to a court's jurisdiction, which (as I have said) was the decisive issue in the appeal, is appealable simply because it concerns the competence of the court to grant the relief sought: Moch v Nedtravel (Pty) Ltd t/a American Express Travel Service 1996 (3) SA 1 (A)10E - 11B; Phillips and Others v National Director of Public Prosecutions 2003 (6) SA 447 (SCA) (2003 (2) SACR 410; [2003] 4 All SA 16) para 19. In any event, the decision in Metlika does not provide an answer in the present appeal inasmuch as the order made by the court a quo is, for the reasons which follow, capable of being altered by that court.

[12] Howie P said in Phillips, in the course of contrasting provisions of the Prevention of Organised Crime Act 121 of 1998:

'And in the case of a common-law interim interdict or attachment pendente lite there is no reason why, for sufficient cause, they would not, generally, be open to variation, if not rescission.'

This is just such a case. To borrow from the passage already quoted from Knox D'Arcy,[13] Atkin could approach the court a quo for an amelioration or setting-aside of the interdict because of the practical experience of its operation. According to Atkin, he was unemployed at the time the interdict was made final and he had sold his house to tide him and his dependants over until he obtained employment. The trial was due to commence earlier this month, ie some 18 months after the order was made, but we were informed from the bar that it had been postponed sine die. It may well be that Atkin could show that the continued operation of the order would work great hardship on him, his family, and his ex-wife and severely handicapped minor child whom he is obliged to maintain in terms of a court order. If so, he would be entitled to request the court a quo to reconsider the order and that court would be entitled to vary or even rescind it. For that reason the order made in the interdict proceedings cannot be said to have final effect. It is therefore not appealable."

[17] The present matter is also ''just such a case". There is, as I have said, nothing which would prevent the respondent from approaching the court to amend the interdict order in order to ameliorate its effect. The interdict order is therefore not final in effect. It is accordingly a decision as contemplated in s 18(2) of the Act. The interim order is therefore not suspended by the pending appeal of the first respondent to the Supreme Court of Appeal and the finalisation thereof. Nothing needs to be said at this stage about a possible application for leave to appeal to the Constitutional Court or about a pending appeal to that court as there are presently no such pending proceedings.

[18] The first respondent has filed a conditional counter-application, in the event of it being found that the interdict order is an order as contemplated in s 18(2) of the Act, that the operation and execution of the interdict order be suspended pending the finalisation of the appeal procedure. In terms of  s 18(2), the operation and execution of a decision that is an interlocutory order not having the effect of a final judgment and which is the subject of an application for leave to appeal or of an appeal, is not suspended pending the decision of the application or appeal, unless the court under exceptional circumstances orders otherwise, and subject to s 18(3).

[19] In order to succeed with such counter application, the first respondent therefore has to prove that there are exceptional circumstances which justify such an order. In terms of s 18(3), the first respondent in addition has to prove, on a balance of probabilities, that it will suffer irreparable harm if it is not so ordered and that the applicant will not suffer irreparable harm if it is so ordered.

[20] In Seatrans Maritime v Owners, MV Ais Mamas,[14] Thring J said the following in regard to the phrase "exceptional circumstances":

"What does emerge from an examination of the authorities, however, seems to me to be the following:

1. What is ordinarily contemplated by the words 'exceptional circumstances' is something out of the ordinary and of an unusual nature; something which is excepted in the sense that the general rule does not apply to it; something uncommon, rare or different; 'besonder', 'seldsaam', 'uitsonderlik', or 'in hoe mate ongewoon'.

2. To be exceptional the circumstances concerned must arise out of, or be incidental to, the particular case.

3. Whether or not exceptional circumstances exist is not a decision which depends upon the exercise of a judicial discretion: their existence or otherwise is a matter of fact which the Court must decide accordingly.

4. Depending on the context in which it is used, the word 'exceptional' has two shades of meaning: the primary meaning is unusual or different; the secondary meaning is markedly unusual or specially different.

5. Where, in a statute, it is directed that a fixed rule shall be departed from only under exceptional circumstances, effect will, generally speaking, best be given to the intention of the Legislature by applying a strict rather than a liberal meaning to the phrase, and by carefully examining any circumstances relied on as allegedly being exceptional."

[21] Referring to what was said by Thring J in Seatrans, Sutherland J said the following in Incubeta Holdings (Pty) Ltd v Ellis:[15]

"[18] Significantly, although it is accepted in thatjudgment that what is cognisable as 'exceptional circumstances' may be indefinable and difficult to articulate, the conclusion that such circumstances exist in a given case is not a product of a discretion, but a finding of fact.

[19] The survey of the authorities addressed by Thring J included a broad range of circumstances, and his summation or compendium appears to be of universal application. Nevertheless, it seems to me, to be necessary to express caution about importing from one kind of enquiry into another kind of enquiry an understanding of a familiar phrase. It is important to appreciate that Thring J was not addressing the phrase in s 18 of the SC Act but in the provisions of s S(a)(iv) of the Admiralty Regulation Act 105 of 1983, which confers a power upon a competent court to direct an examination of various things in order to procure evidence.

[20] A given phrase in any statutory provision has a function specific to that provision and to that specific statute and the primary aim of the interpreter is to discover the function it performs in that specific context. It may perform a different function in another statute and one must avoid being seduced by beguiling similarities.

[21] The context relevant to s 18 of the SC Act is the set of considerations pertinent to a threshold test to deviate from a default position, ie the appeal stays the operation and execution of the order. The realm is that of procedural laws whose policy objectives are to prevent avoidable harm to litigants. The primary rationale for the default position is that finality must await the last court's decision in case the last court decides differently - the reasonable prospect of such an outcome being an essential ingredient of the decision to grant leave in the first place. Where the pending happening is the application for leave itself, the potential outcome in that proceeding, although conceptually distinct from the position after leave is granted, ought for policy reasons to rest on the same footing."

[22] Necessarily, in my view, exceptionality must be fact-specific. The circumstances which are or may be 'exceptional' must be derived from the actual predicaments in which the given litigants find themselves. I am not of the view that one can be sure that any true novelty has been invented by s 18 by the use of the phrase. Although that phrase may not have been employed in the judgments, conceptually the practice as exemplified by the text of rule 49(11), makes the notion of the putting into operation an order in the face of an appeal process a matter which requires particular ad hoc sanction from a court. It is expressly recognised, therefore, as a deviation from the norm, ie an outcome warranted only 'exceptionally'."

[22] The exceptional circumstances on which the respondent relies, is that if it is unable to pay its legitimate expenses, it will be financially ruined unless the operation and execution of the interdict order is suspended. This is also the ground on which the respondent relies to prove that it will suffer irreparable harm if the order is not suspended. It was also submitted that the respondent will be deprived of legal counsel as a result of the interdict order as it will not be able to pay its legal representatives and that this will potentially have disastrous consequences for the respondent's conduct of the case. But, to repeat what I have said before, the respondent is able to address its inability to pay any legitimate expenses by applying for the variation of the interdict order to include further legitimate expenses. The plaintiff has indicated that it will have no objection to such a variation. Any harm which the respondent will suffer, is therefore not irreparable. In view of this conclusion, it is not necessary to consider whether the respondent has proved that the applicant will not suffer irreparable harm if the interdict order is suspended.

[23] The next issue in respect of which the applicant, in terms of its notice of motion, requires an order to be made is whether or not the operation and execution of the interdict order is affected by the respondent's pending appeal to the SCA against the dismissal on 21 September 2016 of the second recusal application.

[24] The respondent did not, in my view correctly so, present any argument in respect of this issue. I agree with the submission on behalf of the applicant that the fact that leave to appeal the dismissal of the second recusal order has been granted by the SCA does not affect the interdict order. They are two separate orders, both of which are subject to a pending appeal.

[25] The last order sought by the applicant is an order declaring the respondent to be in contempt of the interdict order to the extent that it has failed and refused to pay or to ensure payment of the net rental income as described in the interdict order earned during October 2016 by the last day of that month into the interest-bearing trust account of the independent attorneys and to provide the applicant's attorneys and the independent attorneys with owners' statements reflecting the detail of all income in respect of the properties and all expenses and accordingly the calculation of the net rental income by the end of October 2016 in respect of each payment of net rental.

[26] The requisites of contempt are the order; service of the order on the respondent or that it has been brought to the notice of the respondent; non-compliance with the order; and wilfulness and mala fides beyond reasonable doubt.[16] Once an applicant has proved the order, service or notice, and non-compliance, the respondent bears an evidential burden in respect of wilfulness and ma/a fides. Should the respondent fail to advance evidence that establishes a reasonable doubt as to whether non-compliance was wilful and mala fide, contempt is established beyond reasonable doubt.[17]

[27] The respondent denies that it acted intentionally and mala fide in not complying with the interdict order. It relies in this regard on legal advice which it obtained that the interdict order falls within the ambit of s 18(1) of the Act. The applicant, relying on Heg Consulting Enterprises (Pty) Ltd and Others v Siegwart and Others,[18] contends that, when relying on a defence of legal advice to disprove wilfulness and ma/a fides, it is incumbent upon a respondent to set out the circumstances relevant to the giving of such advice.

[28] The question whether the interdict order is an order in terms of s 18(1) or 18 (2) of the Act was strenuously argued by counsel on both sides, with extensive reference to decided cases. I have little doubt that the respondent was advised by its legal representatives that the interdict order was an order as contemplated in s 18(1) of the Act and that the respondent's legal representatives were bona fide when giving such advice. That being the case, a conclusion that the respondent's non-compliance with the interdict order was intentional and ma/a fide is not justified. I fail to see how the setting out of the circumstances relevant to the giving of such advice could, in the present matter, take the matter any further. In the result, the applicant's contempt application must fail.

[29] I accordingly grant the following orders:

1. A declaratory order in terms of paragraph 2.1 of the applicant's notice of motion.

2. An order that the operation and execution of the interdict order granted on 30 September 2016 is not suspended pending the finalisation of the first respondent's pending appeal to the Supreme Court of Appeal against the granting of that order, or the finalisation of the first respondent's pending appeal to the Supreme Court of Appeal against the dismissal of the first respondent's second recusal application on 21 September 2016.

3. An order in terms of paragraph 5 of the applicant's notice of motion, save that the reference therein to paragraph 3 and paragraph 4 shall be read as a reference to paragraph 2 and paragraph 3 respectively, and that the period of 5 days mentioned therein shall be 15 days.

4. The first respondent is ordered to pay the applicant's costs of the application, such costs to include the costs of two counsel.

5. The first respondent's counter-application is dismissed with costs, such costs to include the costs of two counsel.

 

Appearances:

For applicant: Adv. A C Botha and Adv. J F Pretorius

Instructed by: Sim & Botsi AttorneysInc, Johannesburg

For first respondent: Adv. S D Wagener SC

Instructed by: Coetzer & Partners, Pretoria

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