Caterpillar Financial Services of SA (Pty) Ltd v Mashele Projects and Services (Pty) Ltd (Leave to Appeal) (5209/2023) [2024] ZAMPMHC 56 (2 October 2024)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION (MIDDELBURG LOCAL SEAT)

CASE NO: 5209/2023

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED

DATE 02/10/2024

SIGNATURE

In the matter between:

CATERPILLAR FINANCIAL SERVICES OF

APPLICANT

SA (PTY) LTD

AND

MASHELE PROJECTS AND RESPONDENT

SERVICES (PTY) LTD

JUDGMENT: APPLICATION FOR LEAVE TO APPEAL

Coram: Langa J:

Introduction and Concise Facts

[1] These proceedings concern two interrelated applications namely, the application for leave to appeal and an application in terms of section 18(3) of the Superior Courts Act 10 of 2013 brought by the Respondent and Applicant respectively. Both applications are a sequel to the judgment and order granted by this court on 9 September 2024 in the main application involving the same parties namely, Caterpillar Financial Services South Africa Proprietary Limited, (“Caterpillar”), the Applicant and Mashele Projects and Services Proprietary Limited, (“Mashele Projects”), the Respondent. The latter is however now the applicant in the application for leave to appeal whereas the former is the applicant in the application in terms of section 18(3) of the Superior Courts Act 10 of 2013, (“the Act”). For convenience and ease of reference I will refer to the parties as they are cited in the main application.

[2] In the main application, Caterpillar sought vindicatory relief for the return of six Caterpillar Units, (“the Units”), which it is common cause are in the possession of Mashele Projects. The essence of Caterpillar’s case is that it is the owner of the said Units and therefore entitled to the return thereof as a result of Mashele Projects’ breach of the agreement and subsequent cancellation thereof. On 9 September 2024, after hearing the parties and reading the papers filed of record, this court decided the matter in favour of Caterpillar and granted an order that Mashele Projects return the six Caterpillar Units to Caterpillar within 24 hours of the service of the judgment and order on Mashele Projects. This is the order which Mashele Projects seeks leave to appeal against.

[3] The two applications were heard simultaneously on 27 September 2024. I will first deal with the application for leave to appeal and thereafter the application in terms of section 18(3).

Application for Leave to Appeal

[4] As stated above, the Respondent seeks leave to appeal the whole of the judgment and order granted by this court on 9 September 2024 in terms of which it is ordered to deliver the 6 Caterpillar Units to the Sheriff of the High Court within 24 (twenty-four) hours of the service of the order on the Respondent at its registered address. The order further provided that in the event of the Respondent failing to deliver the units as per order, the Sheriff of the High Court is authorised to take possession of the said Units from wherever she or he may find them and shall retain possession thereof until they are delivered to the Applicant or its duly authorised representative. The Respondent was further ordered to pay the costs of the application on

attorney and own client scale in line with the agreement.

Applicable legal principles

[5] It is trite that applications for leave to appeal are now governed by the provisions of Section 17 of the Superior Courts Act 10 of 2013. Although the Respondent relies on the provisions of s 17(1) (a)(i) and (ii) of the Act, it however also refers to section 17(1)(c) of the Act which clearly does not apply in this matter.

“Section 17 - Leave to appeal

(1) Leave to appeal may only be given where the judge or judges concerned are of the opinion that-

(a) (i) the appeal would have a reasonable prospect of success; or (ii) there is some other compelling reason why the appeal should be heard, including conflicting judgments on the matter under consideration;

(b) the decision sought on appeal does not fall within the ambit of section 16(2)(a); and

(c) where the decision sought to be appealed does not dispose of all the issues in the case, the appeal would lead to a just and prompt resolution of the real issues between the parties.”

[6] It is trite that the test for leave to appeal has changed substantially from the test ordained in terms of the repealed Supreme Court Act 59 of 1959. The current standard is captured succinctly in the case of The Mont Chevaux Trust (IT2012/28) v Tina Goosen and Others LCC14R/2014, (3 November 2014), at para 6, in which the Court stated that “the threshold for granting leave to appeal against a judgment of a High Court has been raised in the new Act and that in terms of the former test the question was whether or not there was a reasonable prospect that another court might come to a different conclusion, See Van Heerden v Cronwright and Others 1985 (2) SA 342 (T) at 343H. The use of the word “would’ in the new statute is indicative of a measure of certainty that another will differ from the court whose judgment is sought to be appealed against.”

[7] This position has since been confirmed in several decisions in other Divisions of the High Court. See Magashule v Ramaphosa and Others (2021/23795) [2021] ZAGPJHC 405 (13 September 2021); Nedbank Ltd v Steyn NO 2020 JDR 0754 (GJ); MEC Health, Eastern Cape v Mkhita (121/15) [2016] ZASCA 176 (25 November 2016). It is generally accepted that the current section is now more burdensome than its predecessor. Smith J in the Valley of the Kings Thaba Motswere (Pty) Ltd [2016] ZAECGHC 137 (10 November 2016) acknowledged the new standard created by section 17 but added that the contextual construction of the phrase “reasonable prospect of success’ still requires of the Judge, whose judgment is sought to be appealed against, to consider, objectively and dispassionately, whether there are reasonable prospects that another court may well find merit in argument advanced by the losing party.”

[8] Consequently, leave to appeal may only be granted if the court of first instance is of the opinion that the appeal would have reasonable prospects of success. There must therefore be merit in the applicant’s argument in support of the application for leave to appeal and the applicant must satisfy the court that the appeal would, not might, have reasonable prospects of success either on facts or the law. Furthermore, the peremptory provisions of Rule 49 (1) (b) require a litigant in an application of this nature to clearly and succinctly set out the grounds of appeal in unambiguous terms. Songono v Minister of Law and Order 1996 (4) SA 384. See also in this regard The Public Protector of South Africa v The Speaker of the National Assembly and Others (8500/2022), Western Cape Division, delivered on 3 November 2022.

[9] In MEC Health, Eastern Cape v Mkhitha (1221/15) [2016] ZASCA 176 (25 November 2016), the SCA held at para [17] that ‘An applicant for leave to appeal must convince the court on proper grounds that there is a reasonable prospect or realistic chance of success on appeal. A mere possibility of success, an arguable case or that one is not hopeless, is not enough’.

Grounds of Appeal

[10] As stated above, Rule 49(1) requires a party to clearly and succinctly set out the grounds of appeal in clear and unambiguous terms so as to enable the court and the respondent to be fully informed of the case the applicant seeks to make out and which the respondent is to meet in opposing the application for leave to appeal.

[11] Although the Respondent purportedly relies on the conflicting judgments for constituting compelling reasons why the appeal should be heard, these are not identified or specified, and it is therefore not clear what the Applicant’s case is on this point. In this regard the application for leave to appeal does not meet the Rule 49(1) requirement.

[12] I however proceed to consider the Respondent's grounds of appeal. It is clear that most, if not all, the grounds relied on are issues which have been dealt with in the main application. The application for leave to appeal is simply a rehash of the issues already dealt with comprehensively in the main application. Despite this, I will nevertheless deal with some of the grounds briefly hereunder.

[13] First, the issue of whether annexures "FA2" to "FA8" to the founding affidavit constitutes inadmissible hearsay evidence was dealt with and the argument thereabout dismissed. As I stated in the main application the fact the deponent to the founding affidavit in the main application was not present when the instalment sale agreement and the schedules thereto (annexures "FA2" to "FA8') were signed, is of no moment. As was clearly articulated by the Supreme Court of Appeal in Rees v Investec Bank Ltd 2014 (4) SA 220 SCA, first-hand knowledge of every fact is therefore not necessary in respect of an official who deposes to the affidavit on behalf of a financial institution or large corporation. The basis and sources of Mr Shihlomule's personal knowledge of the facts contained in the founding affidavit are adequately set out in the founding affidavit to the main application. There is therefore no merit in this ground.

[14] Likewise, the second ground of appeal predicated on the contention that at the Applicant failed to state how the arrears were computed was also fully dealt with in the judgment and so is the contention that the each of the schedules constitute a separate contract. At the risk of repeating what is stated in the judgment, the specific amount of arrears in respect of each individual schedule is irrelevant where vindicatory relief. See Caterpillar Financial Services South Africa (Pty) Ltd v Zero Azania (Pty) Ltd (57252/2021) [2023] ZAGPJHC 1119 (8 September 2023) para 18; Caterpillar Financial Services South Africa (Pty) Ltd v Azania Money Growth (Pty) Ltd (57254/2021) [2023] ZAGPJHC 1115 (8 September 2023) para 17).

[15] Further, it is clear from the express wording of the instalment sale agreement and the schedules thereto that the Respondent's assertion that each of the schedules constitute a separate contract is incorrect as fully stated in the judgment.

[16] Further, the ground of appeal that it was not established that the Respondent breached any agreement is without substance and merit. This defence is raised despite the fact that the Respondent not only made payment to the Applicant post termination of the instalment sale agreement, but it also proposed a settlement of the arrears on 24 May 2024. As articulated in the main judgment, the breach of the agreement was clearly established by the Applicant and cannot therefore be in contention.

[17] Lastly, the contention that the court erred in not referring the main application to oral evidence is also without any substance as the Respondent simply failed to establish any genuine and material dispute of fact regarding the jurisdictional facts pertaining to the rei vindicatio. Ownership and possession were not contested at all by the Respondent.

[18] In conclusion, I am satisfied that none of the grounds of appeal relied on by the Respondent sustain a conclusion that there is a reasonable prospect that another court would come to a different conclusion. The Respondent has in my view failed to meet the section 17 threshold to show that there is a measure of certainty that another court would come to a different conclusion. Further, no other compelling reason why the appeal should be heard has been established. There is in my judgment no reasonable prospect of success on appeal and the application for leave to appeal accordingly ought to be dismissed with costs on the attorney and client scale.

Application in terms of s 18(3) of the Act

[19] I now turn to the application in terms of s 18(3) of the Act which, I might add, is closely linked to the application for leave to appeal. The application for leave to appeal is pertinent and relevant here in that the Respondent's prospects of success in the application for leave to appeal have a direct bearing on the section 18(3) application. It must therefore be born in mind that this court has already found that there are no prospects of success on appeal.

[20] It is trite that in terms of section 18(1) of the Act, the general rule is that execution of an order which is subject to an application for leave to appeal or appeal, is automatically suspended pending the leave to appeal or appeal, whatever the case may be. However, section 18(3) of the Act constitutes an exception to this rule and provides that a party may obtain an order for the immediate execution of the order despite the leave to appeal or appeal provided it can demonstrate that exceptional circumstances exist justifying deviation from the general rule. The applicant must therefore show on a balance of probabilities, that it will suffer irreparable harm should the order to execute not be made. It must further be demonstrated that the respondent will not suffer any irreparable harm if the order is made.

[21] In casu the Applicant contends that the fact that it is being deprived the right of possession and benefit of the Units while it is the owner, in itself constitutes irreparable harm. Relying on Tshwane City v Afriforum and Another 2016 (6) SA 279 (CC), the Applicant argues that this deprivation ownership rights is presumed to be irreparable.

[22] In addition, the Applicant contends that the value of the Units in question are constantly deteriorating as it has proof that at least three of them are being utilised by the Respondent and the remaining three Units are also very likely being used by the Respondent. It alleges that in the last month alone, three of the Units were operational, cumulatively, for approximately 960 hours without being serviced as required by the agreement. The Applicant argues therefore that there is a consequent depreciation in their value in circumstances where these Units are the only security for the debt in excess of R20.6 million owed by the Respondent to the Applicant.

[23] The Applicant contends further that the Respondent will not suffer irreparable harm if the relief sought by the applicant is granted as it can for instance rent similar units from third parties to conduct any work for which such machinery is required.

[24] Lastly, and importantly, the Applicant seeks an order that it takes possession of the Units for the purpose of protection and preservation thereof. To that extent it undertakes not to sell them immediately but to hold them in safekeeping pending the finalisation of the appeal process. Should the Respondent be successful in the appeal process, the Units are to be released back to the Respondent.

[25] Apart from challenging the urgency of the application, the Respondent, in a very terse answering affidavit, responded to almost all the allegations made by the Applicant in the section 18(3) founding affidavit by raising a bare denial. For instance, it states inter alia that 1) “it is expressly denied that all the facts as they appear in the applicant’s founding affidavit are true, 2) any issues raised or allegations made in the founding affidavit not expressly dealt with herein, or which is in contradiction with what is stated herein, is denied.”

[26] Concerning urgency, the Respondent contends inter alia that the urgency is self-created and inexplicably relies on the events which transpired prior to the judgment and order in respect of which leave to appeal is sought. The Respondent further refers to the breach of the agreement as well as the termination thereof without saying what the relevance thereof is in respect of urgency.

[27] Further, the Respondent contends that the Applicant failed to comply with the provisions of rule 6(12) in that it no urgency is disclosed at all in the founding affidavit.

[28] Concerning the alleged non-compliance with Rule 6(12) of the Uniform Rules of Court, it is patently untrue that no urgency is disclosed at all in the founding affidavit as alleged by the Respondent. It is clear that the Applicant deals with the issue of urgency right through the founding affidavit and further devotes about three pages on urgency alone. The Applicant deals in detail with the reasons for urgency and also explains why it will not be able to obtain substantial redress in the ordinary course. The Respondent’s contention in this respect is specious and ought to be dismissed.

[29] Further, it is a flawed argument that the events which transpired prior to the judgment and order being granted have a bearing on the urgency of the application in terms of s 18(3) of the Act. This contention does not make any sense at all, and it too should be dismissed.

[30] Lastly, the contention regarding the application for leave to appeal is of no moment as the application for leave to appeal is dismissed. It is however clear that this dismissal does not bring the matter to a close. It is still open to the Respondent to petition the President of the Supreme Court of Appeal and also approach the Constitutional Court for leave to appeal. This appeal process may take a long time to be finalised as correctly contended by the Applicant.

[31] Considering the above, I am of the firm view that the grounds relied upon by the Respondent to challenge the urgency of the application are devoid of any merit. The Applicant has, on the other hand, clearly demonstrated that the matter is urgent. The application therefore has to be proceeded with as an urgent application in terms of Rule 6(12).

[32] I now turn to the merits. It is clear that the applicant is the owner of the Units. It is further trite that the right of ownership and the correlative rights should be jealously protected by courts as stated in Oaklands Nominees (Pty) Ltd v Gelria Mining & Investment Co (Pty) Ltd 1976 (1) SA 441 (A)at 452.

[33] It is not disputed that the units constitute the only security the Applicant has for the debt in excess of R20 million owed to it by the Respondent. It has further been proved that the value of this security is being diminished by the utilization of the Units by the Respondent without servicing them and without making any payment to the Applicant from at least November 2023. That the value of the Units in question is constantly deteriorating could not be disputed by the Respondent.

[34] Likewise, there is uncontroverted evidence that at least three of the Units are being utilised by the Respondent and that in the last month alone, they were operational, cumulatively, for approximately 960 hours without being serviced as required by the agreement. Based on the undisputed evidence I find that there is indeed a consequent depreciation in the value of these Units as contended by the Applicant.

[35] I am accordingly satisfied that the Applicant has established that it will suffer irreparable harm should the Respondent be allowed to continue using the Units as this will inevitably diminish the value of the Units and deplete the Applicant’s security for the significant debt owed by the Respondent. The Applicant is in fact already suffering irreparable harm which will continue unless it is authorised to take possession the Units and retain them for safekeeping until the finalisation of the litigation.

[36] The Applicant has further demonstrated that the Respondent will not suffer irreparable harm if the relief sought is granted. The Respondent has options such as the renting similar Units from third parties to conduct any work for which the Units are required. Furthermore, considering the relief sought, in particular the preservation order in paragraph 4 of the Notice of Motion, it cannot be concluded that the Respondent will suffer irreparable harm if the order is granted. In Zero Azania (Pty) Ltd in Caterpillar Financial Services SA (Pty) Ltd and a Similar Appeal 2024 (2) SA 574 (GJ), the court in similar circumstances as in casu held that the respondent would not suffer irreparable harm.

Conclusion

[37] I am of the view that to allow the Respondent to continue using the Units to generate an income while not paying will amount to a mockery of the judgment already made in favour of the Applicant on 9 September 2024. Furthermore, considering the history of the matter and the facts, it is clear that Respondent is involved in dilatory tactics aimed at delaying the matter for as long as it is possible. This includes the filing of what is essentially a meritless application for leave to appeal in respect of which this court has already made a finding that there are no prospects of success on appeal.

[38] It is further trite that the prospects of success on appeal remain a relevant factor in the determination of the section 18(3) application as clarified in the matter of University of the Free State v Afriforum 2018 930 SA 428 (SCA) at para 14-15. The fact that this court has found that the appeal has no prospects success is pertinent and relevant to this

application in terms of section 18(3). As already stated in the preceding paragraphs, the deprivation of the right of ownership is presumed to be irreparable and the Applicant’s right of ownership evidently warrants protection by this court.

[39] In the light of the above, I conclude that the application for leave to appeal should be dismissed with costs and the application in terms of s 18(3) of the Act be granted with costs. As regards the costs, the parties’ agreement made provision for costs to be on attorney and client scale in the event of litigation between the parties. The costs should therefore be in line with the agreement.

Order

[40] I accordingly make the following order:

1. The application for leave to appeal is dismissed with costs on an attorney and client scale;

2. It is determined that the application in terms of section 18(3) of the Superior Court Act 10 of 2013 is urgent in line with Rule 6(12) of the Uniform Rules of Court and is disposed of as such;

3. It is ordered in terms of section 18(3) of the Superior Court Act 10 of 2013 that the operation and execution of the Judgment and Order of this court granted on 9 September 2024 is not suspended pending appeal or the expiry of the time period for the launching of any petition or appeal by the Respondent;

4. The Sheriff of the High Court is directed and authorised to take immediate possession of the Units listed in paragraphs 4.1 - 4.6 below, from wherever he/she may find them and to retain possession thereof until they are delivered to the Applicant or its duly authorised representative:

4.1. a Caterpillar Medium Wheel Loader 966 with serial number F[...];

4.2. a Caterpillar Medium Track Type D8 with serial number D[...];

4.3. a Caterpillar SEM 6600D with serial number S[...];

4.4. a Caterpillar Articulated Truck 730 with serial number 3[...];

4.5. a Caterpillar Medium Track Type D8 with serial number M[...]; and

4.6. a Caterpillar Medium Wheel Loader 966 with serial number F[...].

5. It is further ordered that the Applicant shall retain possession of the said Units at a location to be elected by the Applicant, where they shall be held in safekeeping and shall not be sold by the Applicant or anyone, until the appeal process has been finalised, alternatively, until the expiry of the time period for the launching of any future or subsequent appeal (s) has lapsed.

6. The Respondent is ordered to pay the costs of the application in terms of section 18(3) of the Superior Court Act 10 of 2013 on an attorney and client scale.

MBG LANGA

JUDGE OF THE HIGH COURT

Appearances:

For the Applicant: Advocate PG Louw Instructed by: Werksmans Attorneys For the Respondent: Advocate DP Viller Instructed by: Mohala Moifo Attorneys Inc. Date heard: 27 September 2024 Date delivered: 02 October 2024

This judgment was handed down electronically by circulation to the parties’ representatives by email. The date for hand-down is deemed to be the 2 October 2024 at 14h00.