Essence

Constructive eviction: When the legal process is abused the land claims court (LCC) is not prevented from expressing its displeasure by awarding  costs. So the LCC was not influenced by wrong principles or a misdirection on the facts, nor did it fail to exercise its discretion judicially.

Judgment

Khumalo v Twin City Developers (Pty) Ltd (328/2017) [2017] ZASCA 143 (2 October 2017).  Disallowed the appeal against the order of costs.

Judges

Coram: Tshiqi, Saldulker, Swain and Mathopo JJA and Molemela AJA.

Significance

The SCA rejected two submissions as not constituting exceptional circumstances justifying the consideration of costs only:
a) The fact that the LCC deviated from the established practice in the LCC of not ordering costs in land claim cases in the absence of special circumstances.
b) That the costs order did not take into account the fact that the appellants are rural persons who have not accumulated any wealth, and face the risk of losing any capital assets they may possess if burdened with a cots order.

Court summary

Appeal against costs – s 16(2)(a)(i) and (ii) of the Superior Courts Act 10 of 2013 – whether there are exceptional circumstances justifying a consideration of the matter with reference to the issue of costs – whether the Land Claims Court properly exercised its discretion in relation to the award of costs – appeal dismissed with costs.

Related legislation

Superior Courts Act 10 of 2013 section 16(2)(a) reads:

‘(i) When at the hearing of an appeal the issues are of such a nature that the decision sought will have no practical effect or result, the appeal may be dismissed on this ground alone.

(ii) Save under exceptional circumstances, the question whether the decision would have no practical effect or result is to be determined without reference to any consideration of costs.’

Quotations from judgment

. . . . .

Tshiqi JA (Swain and Mathopo JJA concurring):

[52] This appeal arises from an order of the Land Claims Court (LCC) in terms of which it dismissed an urgent application brought by the appellants against the respondents, with costs of two counsel. It found that it lacked urgency and that it had no jurisdiction to determine the matter. There is no appeal against the order on the merits. Consequently the LCC’s factual findings and its basis for finding that it had no jurisdiction to determine the application cannot be adjudicated in this appeal. The appeal is confined to the costs order. The first appellant (Mr Gweje Khumalo) aged 57, and the second appellant (Mr July Magubane) aged 60, hereinafter referred to as the appellants, are unemployed males who are residents at a farm known as Damascus 125, Registration Division HT, Mpumalanga (the farm) together with their families. It is common cause that the appellants are occupiers in the farm as contemplated in the Extension of Security of Tenure Act 62 of 1997 (ESTA). The farm was operated and managed by the second respondent, Wetlands Country Retreat (Pty) Ltd, which together with the first respondent, Twin City Developers (Pty) Ltd, were licenced to keep various species of game on the farm, including buffalo. The appellants kept their own livestock on the farm in terms of an agreement concluded between them and the previous owner of the farm. The third and fourth respondents elected to abide the decision of this court.

 

[53] On 14 August 2015 the appellants, through their attorneys, wrote a letter to the respondents’ attorneys complaining about the presence of the buffalo in the farm and stating, amongst others, that they considered the presence of the buffalo to be tantamount to ‘constructive eviction’. They also threatened to initiate legal proceedings against the respondents if the buffalo were not removed from the farm by a certain date. In response, the respondents’ attorneys denied the allegations concerning constructive eviction and said the following concerning the threatened legal action:

 

‘Our client has instructed us to inform your offices that you can proceed to initiate legal proceedings but we will reserve our rights in the matter as your clients are funded by the Department of Rural Development and Land Reform and our client is the one who is paying all of his legal costs out of his own pocket.

. . . .

This matter is going to Court shortly for the main application to be heard and you are welcome to combine the two matters on the same day at Court as there will be no delay of the main application in this matter.’

[54] It is common cause that the main application referred to was an eviction application by the respondents against the appellants that was already pending at the LCC. On 10 November 2015 the appellants, launched an urgent application in the LCC for an order interdicting the respondents from unlawfully evicting them and their family members from the farm without a court order; that the respondents be ordered to remove the buffalo from the farm; and for the third respondent – the director of animal health in the Department of Agriculture, Forestry and Fisheries – to be ordered to investigate whether the respondents had a permit to keep the buffalo on the farm and if so whether there was compliance with it. The appellants alleged that the court had jurisdiction to entertain the matter in terms of s 20 of ESTA.

 

[55] The matter came before Mpshe AJ who found that the urgent application had been launched ‘almost three months after establishing [the] danger on the farm’. On this basis he concluded that the application lacked urgency. He said:

 

‘There is no fibre of evidence that disease has since been found to be spreading, nor possible spread thereof, neither is there any tissue of evidence that either the Applicants [appellants] and/or children were at a certain stage challenged or attacked by the buffalo . . .’

He then said that it was ‘opportunistic’ for the appellants to include this prayer ‘knowing fully well that their eviction was pending’ before the court and that this was ‘mischievous’ and ‘frowned upon’. The judge stated further that ‘[i]t is not the mere naming of the issue . . . that will cloth[e] the court with jurisdiction’ and concluded that the LCC, as a specialist court, was limited to its enabling statute and did not have jurisdiction to deal with the application. In the result, he dismissed the appeal with costs of two counsel.

[56] As stated above, the appellants are not challenging any of the findings and conclusions of the court that the application was opportunistic and mischievous. There is also no challenge to the court’s finding that the LCC did not have jurisdiction to entertain the application. The appeal is confined to a consideration of the costs order.

 

[57] It is trite that a court of first instance has discretion to determine the costs to be awarded and that a court of appeal can only interfere with the exercise of that discretion if it has not been exercised judiciously or was influenced by wrong principles or a misdirection on the facts.[46] The jurisdiction of this court is guided by amongst others s 16(2)(a) of the Superior Courts Act 10 of 2013 which reads:

 

‘(i) When at the hearing of an appeal the issues are of such a nature that the decision sought will have no practical effect or result, the appeal may be dismissed on this ground alone.

(ii) Save under exceptional circumstances, the question whether the decision would have no practical effect or result is to be determined without reference to any consideration of costs.’ (My emphasis.)

[58] In Mgwenya NO & others v Kruger & another,[47] the first respondent, an ordained pastor in the services of the Apostolic Faith Mission Church of South Africa, whose pastoral status was terminated by the Church passed away before the hearing of the appeal. In view of the demise of the first respondent, the appellants conceded that there were no live issues remaining between the parties and that the appeal and any order made thereon would have no practical effect or result. The appellants however contended that the church would be saddled with the costs orders made in favour of the first respondent and this would be most ‘unfair’ to the church. Not persuaded that these were exceptional circumstances, the court said the following in para 8:
‘In MV Ais Mamas Seatrans Maritime v Owners, MV Ais Mamas & another 2002 (6) SA 150 (C), Thring J conducted a comprehensive inquiry as to the meaning of “exceptional circumstances” in our case law. The conclusion reached at 156H-J, with which I am in agreement, is that “[w]hat 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 . . .”
“Moreover, when a statute directs that a fixed rule shall only be departed from under exceptional circumstances, the Court, one would think, will best give effect to the intention of the Legislature by taking a strict rather than a liberal view of applications for exemption, and by carefully examining any special circumstances relied upon.”’

 

[59] In this matter Counsel for the appellant conceded that the appeal and any order concerning costs will have no practical effect. However he submitted that the following factors constitute exceptional circumstances which justify the consideration of costs only:
a) The fact that the LCC deviated from the established practice in the LCC of not ordering costs in land claim cases in the absence of special circumstances.
b) That the costs order did not take into account the fact that the appellants are rural persons who have not accumulated any wealth, and face the risk of losing any capital assets they may possess if burdened with a cots order.

 

[60] As to the first submission, it is common practice that the LCC has consistently refrained from awarding costs in appropriate matters, unless special circumstances exist.[48] This is a salutary practice which has been endorsed by this court.[49] The practice adopted at the LCC is influenced primarily by the fact that matters that fall within the jurisdiction of that court stem from social interest litigation. This matter is however different from the other matters in that although the appellants claimed that the court had jurisdiction to entertain it in terms of ESTA, the court found that the application was ‘opportunistic’, ‘mischievous’ and that it did not fall within its jurisdiction. It also said that the mere allegation that it had jurisdiction was insufficient to qualify the matter as such. There was no appeal against the court’s finding on this issue. There was also no appeal against the factual findings of the court that there was no merit to allegations of the threat of diseases to the appellant’s livestock, and the alleged danger posed by the buffalo to the appellants and their families. It concluded that the application was not urgent and that no case was made for constructive eviction. In the absence of an appeal against all these findings, it is impermissible for the appellant to rely on these allegations to justify its appeal on a consideration of costs only. Put differently, in instances where an appellant has elected not to appeal against the merits and the factual findings of a lower court, an appeal court is not at liberty to interrogate the correctness thereof.

 

[61] This then takes me to the second submission: that the award of costs should be set aside simply on the basis that the appellants are indigent and that they were acting in the best interests of their families. This ground also lacks merit. As stated above, the court was not persuaded that the appellants were acting in the interests of their families. Instead the court said that there was no substance to the allegations concerning the spread of disease[s] and that the buffalo posed any danger to the families. Regarding their socio-economic status, it is trite that an award of costs is not based solely on the socio-economic status of a particular litigant but rather on the nature of the matter.[50] To illustrate the fallacy in the appellant’s argument, if the application had been brought in a court with competent jurisdiction, the general rule that costs follow the result would probably have been applied and the appellants would probably not raise the issues being raised before us. Moreover, s 18(b) of ESTA provides that ‘[a] court may, in addition to other powers set out in this Act . . . make such orders for costs as it deems just.’ Nothing therefore prevents the LCC, in the event of an abuse of the court’s process, as it held was the case in this matter, from expressing its displeasure through an award of costs against the offending litigant. It thus cannot be said that the court was influenced by wrong principles or a misdirection on the facts, nor that it did not exercise its discretion judicially.[51]

[62] For all those reasons there are no exceptional circumstances justifying this court to have regard only to the consideration of costs. The appeal must therefore fail. With regard to the costs of the appeal, there is no basis for deviating from the general rule that the appellants, as the unsuccessful parties, should bear the costs of the appeal. The appellants were aware of the provisions of s 16(2)(a) of the Superior Courts Act and the sentiments expressed by the LCC concerning what it perceived to be an abuse of that court’s process. They nevertheless persisted with the appeal.

 

[63] The conclusion by this court should not be construed to mean that this court does not endorse the salutary practice of not awarding costs in appropriate matters. As stated above, this matter is different because the LCC found the application to be an abuse of the court’s process and these findings were no appealed against. The conclusion should also not be construed to mean that this court has closed its eyes to the fact that the appellants are part of a disadvantaged group of society, for which the Land Reform legislation was promulgated; and the reality that litigation such as this one is mainly funded by the public purse. But, as Counsel for the respondent correctly submitted, the respondents have been dragged to court, at their own expense, to face what the LCC held was an application that had to be frowned upon.

 

[64] I make the following order:
The appeal is dismissed with costs.