High Court Appeals – when the wrong tree barks back

A case analysis on where, when, how and to whom an appeal should be brought

Introduction

For many High Court litigants, a court order granting the relief requested will be a final nail in the proverbial coffin.  Following months – if not years – of legal fees, very few unsuccessful parties to a suit will be possessed of the will (or finances) to fight on. However for those few who have such resources at their disposal, or perhaps are strengthened by a particularly just cause, there remains an avenue of last resort: the appeals process.

The exact procedure for an appeal differs according to the forum that the appeal is to be heard in, although the fundamentals remain. Typically, the party seeking to appeal a decision will be required to note their appeal within a certain time period. The party will have a further period of time from such notice within which to prosecute the appeal. Precisely what it means for an appeal to be prosecuted in the High Court is dealt with by Uniform Rule 50(4)(c) – which says that the appeal is deemed to be duly prosecuted upon application to the registrar, on notice to the other parties, for the allocation of a date for the hearing of an appeal.

The rules in application

The above requirements were brought to the fore in the matter of Francois v Barker 2013 (WCHC) 71, where the court (per Cloete J with Smith ACJ concurring) upheld the time frames stipulated by the rules and held that condonation for deviation therefrom was only obtainable from the court upon good cause being shown. It was further held that the failure to prosecute an appeal timeously would result in the appeal lapsing, notwithstanding the appeal having been timeously noted. This judgment, seemingly innocuous and uncontroversial, drew a strict distinction between the “noting of an appeal” and its “prosecution”, which distinction would be of material import in a further case argued before Cloete J nearly two years later.

Cash Crusaders Franchising (Pty) Ltd v Luvhomba Legal Axe CC and Others (1052/2013 , 2970/2013) [2015] ZAWCHC 132 (17 September 2015) [download link]

The facts of the matter were relatively simple:- Mr Tuwani Matthews Mulaudzi was a businessman, Executive Chairman and CEO of the “Luvhomba Group of Companies“, and the sole member of the first to fifth respondents in the original matter, each of whom was a close corporation and an erstwhile-franchisee of the applicant. The relationship between the parties having soured, Cash Crusaders Franchising (Pty) Ltd (as applicant) initiated arbitration proceedings against the respondents in accordance with each of their respective franchise agreements, for which Mr Mulaudzi had stood as surety and co-principal debtor.

Following the handing down of an arbitration award against the first to fifth respondents (with Mr Mulaudzi being held jointly and severally liable as the sixth respondent), and following an enforcement application in the Western Cape Division of the High Court (which was opposed by Mr Mulaudzi) the arbitration award was made an order of court. Mr Mulaudzi appealed this order to the Supreme Court, although his petition was unsuccessful.

Further litigation thereafter ensured between the parties in the Gauteng Division of the High Court, which litigation included an application to confirm the cancellation of the five franchise agreements and a further application to enforce the termination provisions of each of the five franchise agreements. In total, over a dozen court orders were obtained against Mr Mulaudzi and the five close corporations under his direct control.  Numerous bills of cost were also drawn and taxed in respect of the legal fees incurred by the applicant.

The applicant thereafter sought to execute on an array of capital claims and costs orders, accumulated throughout the process, unfortunately execution of the writs proved largely fruitless and the sheriff provided a nulla bona return of service. On the strength of the nulla bona return, the applicant waded once again into the waters of litigation – this time seeking Mr Mulaudzi’s sequestration. Mr Mulaudzi resisted the sequestration application claiming, quite astoundedly, that each of the matters giving rise to the capital claims and costs claims “had been appealed against“.

In support of this assertion, Mr Mulaudzi served upon the applicant’s attorneys six individual documents purporting to be “Notices of Appeal” against various matters in the Western Cape, South Gauteng and North Gauteng Divisions of the High Court, each of the “notices” being served under the heading of either the Supreme Court of Appeal or the Constitutional Court. Included in these was a “notice” purporting to be before the Constitutional Court and amounting to an appeal against the original Western Cape court order confirming the arbitration award. The “notice” was purportedly a composite notice of appeal against every order ever obtained by the applicant against the six respondents – something that Mr Mulaudzi clearly dreamed up.

It was the applicant’s assertions that all six of the so-called “notices” was defective in a number of ways. First, the original order had been handed down in May 2013 – over 2 years prior to notice of the appeal being given and a far cry from the 15 days stipulated in terms of Constitutional Court Rule 19(2). Secondly, no clear grounds for appeal had been set out in the “notices”, which constituted a failure in terms of Uniform Rule 49(1) (b) and 49(3). Finally, and perhaps most damning of all, the “notices” bore no stamp from either of the courts of appeal. Following telephonic enquiries to the Registrar of each of the courts, it was clear that there was no evidence that the “notices” had ever been filed.

The applicant, upon receipt of the purported “notices”, brought an application in the Western Cape Division for an order in terms of Uniform Rule 30 – setting aside the “notices” relating to the previous Western Cape Division matter as an irregular step. The application was opposed by Mr Mulaudzi and the other respondents; and eventually set down for hearing before Cloete J.

The first question posed to court was one in limine – Did the High Court have jurisdiction to rule on the matter to set aside a purported “Notice of Appeal” to the Constitutional Court as an irregular step?

It was argued by Mr Mulaudzi that, following the High Court ruling in having the arbitration award made an order of court, and the subsequent petition to the Supreme Court of Appeal, the status of the case had overtaken the High Court’s jurisdiction in the matter. Given that an appeal had now been noted before the Constitutional Court, it was for that court alone to decide whether or not the “notice” given was irregular.

Counsel for the applicant drew the court’s attention to the ruling in South African Druggists Ltd v Beecham Group 1987 (4) SA 876 (TPD), a decision of the full bench of the former Transvaal Provincial Division. In Beecham, a disgruntled respondent had noted an appeal to the then Appellate Division. The applicant successfully brought a Rule 49 (11) application to enforce the court a quo’s ruling pending the outcome of the appeal. The respondent delivered a further application for leave to appeal, this time against the Rule 49 (11) order, which was also filed at the Appellate Division.

In Beecham, as with the present case, the applicant sought to have the notice of appeal set aside as an irregular step. The respondent submitted that as the appeal had already been noted, and that steps had been taken to prosecute it, only the Appellate Division was competent to consider the validity of the appeal. Support for this contention was sought in the matter of Campbell and Others v Monto and Another 1952 (3) SA 82 (T).

Eloff DJP, writing for the majority in Beecham, was not persuaded and instead relied on the following dictum from Colman J in D & H (Pty) Ltd v Sinclaire 1971 (2) SA 157 (W):

In the present case the appeal has not yet been prosecuted, still less set down for hearing, and that, to my mind, is a distinguishing feature. The notice of appeal has of course been filed in this Court, and no other Court has as yet become seized with the matter. In view of the fact that the noting of an appeal stays execution, it will sometimes be a matter of importance to the party who has been successful at first instance that he be able to approach some tribunal urgently with an application to set aside the notice of appeal if it is defective. It seems to me that, pending prosecution of the appeal, the only tribunal which can entertain such an application is the Court in which the notice of appeal was filed.

This view corresponded with Cloete J’s own, as displayed in Francois v Barker, in acknowledging the distinction between a noted appeal and a prosecuted appeal – but it went even further. It observed that pending the prosecution of the appeal in the appellate court, it was perfectly permissible for the court a quo, at which the appeal had been noted, to rule on the appeal’s validity. The scope for considering irregularity was therefore broadened to include not only a notice of appeal filed with the court from which the order had emanated, but also a notice of appeal filed with a higher court, where such higher court had not yet become seized therewith. By filing the notice at the High Court, Mr Mulaudzi had placed the case before that court and that court alone, thereby empowering it with jurisdiction.

This position gained traction in light of the ruling in Participation Bond Nominees v Mouton and Others (3) 1978 (4) SA 508, where it was held that the provisions of Uniform Rule 30 were available to “any party to any cause”. It was argued that when proceedings in the court were ended, this rule could no longer have application – there being no “cause”. The court rejected this restrictive interpretation, and held that so long as there was outstanding satisfaction for any party, including the execution of a writ or the outcome of an appeal, there would still exist a “cause” for the purposes of the rule.

In light of the above authority, and with specific regard given to the fact that Mr Mulaudzi had, contrary to his own specific oral averments made to Cloete J during the argument of the matter, failed to file his “Notice of Appeal” at the Constitutional Court, Cloete J found that the High Court was indeed possessed of sufficient jurisdiction to decide on the matter.

On the facts, it was therefore found that the “notices”, irrespective of having not been properly filed, did not accord with the specifications laid out in the rules of court, and that their failures were sufficient to cause prejudice to the applicant. The “Notices of Appeal” pertaining to the proceedings before the Western Cape Division of the High Court were therefore set aside as being irregular.

Mr Mulaudzi thereafter applied for leave to appeal against this order, but was unsuccessful as Cloete J did not consider that any other court would have been able to reach a different conclusion.

Conclusion

Although the ruling handed down by Cloete J in the above matter is of substantial academic interest, the real question is what practical effect it is set to have. Unfortunately, the answer so far is: very little. Following the High Court’s ruling in the Rule 30 application, Mr Mulaudzi proceeded to file his “Notices of Appeal” together with a founding affidavit, as he had professed to have done already, with the Registrar of the Constitutional Court.

Although Mr Mulaudzi’s appeal was dismissed out of hand by the Constitutional Court (Download Court Order), the court made no mention of Cloete J’s ruling on the irregularity of the original “notices”. Notwithstanding the absence of any judgment from the highest court in the land, academics and professionals alike may well consider that the mercurial field of civil litigation, and in particular the appeal process, has become that little bit more certain.

Note: This article has been written by Alex Tarr, under the guidance and supervision of Selwyn Zackon.

Note: The original of this article appears on Ashersons Attorneys website, here.