van Oordt and Another v Gilbert (CA08/2019) [2019] ZAECGHC 75 (6 August 2019)

IN

THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION, GRAHAMSTOWN

CASE NO. CA 08/2019

Date heard: 2 August 2019

Date Delivered: 06 August 2019

In the matter between:

HENRY

ALEC VAN

OORDT

First Appellant

LORETTE

VAN OORDT

Second Appellant

and

SHAUN

RICHARD

GILBERT

Respondent

JUDGMENT

RUGUNANAN, AJ:

[1] On 6 July 2018, the following order issued from the Magistrates’ Court in Uitenhage:

“1) The application is dismissed.

2) The costs of the postponement on 6 June 2018 is awarded to the Applicant.

3) The costs of the Application each party to pay their own costs.”

[2] The issue on appeal to this Court concerns the two cost components of the order. The appellants (the respondents in the court a quo) contend that these are void because the magistrate committed a material error of law by failing to recognise that the proceedings

instituted by the respondent (as applicant a quo) were not subject to the limits of jurisdiction prescribed in the Magistrates’ Courts Act (“the Act”).[1]

FACTUAL

BACKGROUND

[3] Relevant to the issue at hand is the following chronology that emerges from the respondent’s founding affidavit in the court below: On 7 April 2018 the respondent accepted from the appellants an unconditional “Offer to Purchase” in which they agreed to purchase the respondent’s fixed residential property for the amount of R1 190 000,00.

[4] On 25 April 2018, upon being requested to sign transfer documentation at the office of the respondent’s conveyancing agent, the appellants informed the agent that they wished to rescind the sale due to a lack of funds. The respondent avers that he in turn instructed the agent to notify the appellants that they were in breach of their agreement with him.

[5] The papers however, disclose that on 27 April 2018 the respondent entered into a written “Agreement of Sale” in terms of which he agreed to purchase another fixed property subject, of course, to the sale of his residential property to the appellants. At the time, the conveyancing agent engaged by the respondent had also been engaged by the appellants to attend to the transfer and registration of a property that they had sold to someone else. In respect of this transaction, the agent secured an amount of R309 000 from the proceeds of the sale. Realising that the amount would be paid over by the agent to the appellants, the respondent instituted urgent application proceedings in the magistrates’ court in

which he sought to interdict payment to be made out of the agent’s trust account.

[6] An interim order was granted on 21 May 2018 against the appellants including the agent (who was cited as third respondent) and a rule nisi issued with the return date for 6 June 2018. On 6 June 2018 the matter became postponed to 6 July 2018, with costs in favour of the respondent. On 6 July 2018 the magistrate, having found that he did not have jurisdiction in the matter, dismissed the application

with an order that each party pays their own costs.

THE JURISDICTION ISSUE AND THE MAGISTRATE’S JUDGMENT

[7] The sections in the Act as set out below are relevant:

Section 30 of the Act provides as follows:

“30 Arrests and interdicts

(1) Subject to the limits of jurisdiction prescribed by this Act, the court may grant against persons and things orders for arrest tanquam suspectus de fuga, attachments, interdicts and mandamenten van spolie.”

Section 29(1)(g) provides as follows:

“29 Jurisdiction in respect of causes of action

(1) Subject to the provisions of this act and the National Credit Act, 2005 (Act 34 of 2005), the court, in respect of causes of action, shall have jurisdiction in-

…

(g) actions other than those already mentioned in this section, where the claim or the value of the matter in dispute does not exceed the amount determined by the Minister from time to time by notice in the Gazette.”

(own italicising)

[8] Accentuating the interrelationship between the two sections , the Supreme Court of Appeal in Botha v Andrade and Others [2] stated:

“On a proper reading of s 30(1) of the Act it is clear … that the magistrate’s power to grant the interdict is circumscribed. The section provides that a magistrate may grant certain orders, including interdicts, subject to the limits of jurisdiction prescribed by the Act. The search for the ‘limits’ referred to in s 30(1) leads one inevitably to ss 28 and 29 of the Act and the conclusion is … unavoidable that the qualification ‘subject to the limits of jurisdiction prescribed’ by the Act is a reference to s 29 (relating to the limits of jurisdiction in respect of matters referred to in the section) …

… the two sections (30 and 29) complement each other and where the limits of the magistrate’s jurisdiction are required to be determined in interdict proceedings, insofar as the value of the matter in dispute is concerned, the two sections ought to be read together. Section 29 speaks to the value of the matter in dispute and s 30 limits the jurisdiction of the magistrates’ court to the limit set out in s 29 … this accords with the limitation placed on the magistrates’ courts’ jurisdiction as a creature of statute.”

[9] At the time of the institution of the proceedings in the magistrates’ court the jurisdictional limit of “the claim or the value of the matter in dispute” including other specific matters referred to in section 29, was R200 000 as determined in the Gazette.[3]

[10] The record reflects that the magistrate was fully cognisant of the fact that the respondent sought interdictory relief under section 30 of the Act, but failed to appreciate its interplay with section 29 particularly where, on the respondent’s papers, the amount of R309 000 represented “the claim or the value of the matter in dispute” within the terms of reference of section 29(1)(g) of the Act.

[11] The extended narrative of events in the judgment and, the magistrate’s approach to the issues attendant on the costs orders are to say the least, perplexing. Indicative in the reasoning employed in the judgment is the emphasis placed on procedural formalism in terms of what the appellants, in the view of the magistrate, were obliged to have done under Rule 55(1)(g).[4] This was done at the expense of overlooking the patently obvious and substantive issue of the magistrate’s jurisdictional competence to have entertained the matter. In my view, an appreciation of the issue ought to have been foremost in the mind of the magistrate when the rule nisi was initially sought on 6 June 2018. In that event the respondent’s application should have been dismissed outright.

[12] It follows that the attendant costs orders cannot be correct and are overridden by the jurisdiction issue. To allow them to stand would result in the magistrates’ court exercising parallel jurisdiction with the High Court which has no jurisdictional limit at all in interdict proceedings. This is clearly a situation that could never have been contemplated by the legislature. [5]

COSTS

[13] The general principle is that costs follow the event – the successful party is ordinarily entitled to costs against the unsuccessful party. The appellants’ Notice of Appeal set out, inter alia, the ground of appeal that in issuing a costs order the magistrate assumed an authority for which he had no jurisdiction. The notice

unmistakably conveyed that the costs component of the magistrate’s order was at all times the lis between the parties. The respondent made no appearance in this appeal but filed a Notice to Abide the decision of this Court. The notice states that the respondent “nevertheless reserves the right fully to participate in the proceedings, and to deliver an affidavit and to advance argument.” Seemingly, the respondent may well have been under the impression (or perhaps even advised) that the Notice to Abide rendered him immune from an adverse costs order. This, in my view, did not dispose of nor did it amount to an abandonment of the lis. For the respondent, recourse ought to have been had to section 86(1) of the Act which expressly envisages the abandonment of “any part” of a judgment.[6] Had that been done, this appeal would have been unnecessary as the respondent would have conceded to the appellants the only relief they were entitled to seek from this Court (see Durban City Council v Kistan 1972 (4) SA 465 (N)).

[14] In the result I order as follows:

(i) The appeal is upheld with costs.

(ii) Paragraphs 2 and 3 of the magistrate’s order given on 6 July 2018 are set aside and substituted with the following order:

“The application is dismissed with costs.”

________

S.

RUGUNANAN

ACTING

JUDGE OF THE HIGH COURT

SMITH J:

I agree. It is so ordered.

_____

J. E. SMITH

JUDGE

OF THE HIGH COURT

Appearances:

For the Appellants: Adv.

B Dyke SC

Instructed by Leon Keyter Attorney

Makhanda / Grahamstown

For the Respondent:

No Appearance

[1] Act No. 32 of 1944

[2] [2008] ZASCA 120; 2009 (1) SA 259 (SCA) paragraphs [13] and [14]

[3] Government Notice 217 of 27 March 2014 (Government Gazette 37477 of 27 March 2014)

[4] of the Rules Regulating the Conduct of the Proceedings of the Magistrates’ Court

[5] Botha v Andrade and Others [2008] ZASCA 120; 2009 (1) SA 259 (SCA) at 263 F

[6] In section 1 of the Act “judgement” is defined in civil cases as including “a decree, a rule and an order.”