CASE LAW UPDATE

Facts: The applicants are institutions or rights group that advance the best interests of children, and who take up the cudgels for the youth on various issues that impact, or may impact negatively, on the constitutional rights of children. The contentious issue relates to harm to the environment and the resulting health issues. At heart was the South African government’s plan to procure an additional 1,500 megawatts of new coal-fired power stations, thus impacting upon the rights of current and future generations. Although the application was pointedly in respect of the health rights of children, the general effect of the intended procurement equally impacted on the health rights of the nation as a whole. The alleged main perpetrators of transgressing those rights are the respondents, in particular the first and second respondents: The Minister of Mineral Resources and the National Energy Regulator of South Africa (Nersa).

Application: A constitutional challenge to and a review of three decisions: The Integrated Resources Plan 2019 (IRP 2019) published by the Minister and relating to the addition of 1,500 megawatts of new coal-fired power to be added to the grid between 2023 and 2027; the determination published by the Minister, exercising his powers under section 34 of the Electricity Regulation Act 4 of 2006 (ERA) which sought to give effect to the IRP decision; and the decision by Nersa to concur in the Minister’s determination.

Discussion: The respondents were at a loss and hard pressed to show that adequate and appropriate consideration was given to the provisions of sections 24 and 28 of the Constitution in respect of the impugned decisions. A bald allegation was made to that effect by the first and second respondents. The Rule 53 record submitted by the respondents do not show adequate evidence, if at all, of their deliberations on any participation by representatives on behalf of the applicants, or at all, in respect of the effect on the constitutional rights of children. The Rule 53 record, as well as the first and second respondents’ evidence, is ominously silent on any considerations given to the effect that the additional 1,500 megawatt new coal-fired power will have on the environment and the health of the nation, in particular that of children, a clear indication that the first and second respondents did not comply with their constitutional obligations in that regard.

Findings: In the absence of proof of the consideration of the effect of the decision to permit an additional 1,500 megawatts of new coal-fired power to the grid on children, it stands to be reviewed on the principle of legality. There has been no compliance with the first respondent’s obligations under the Constitution. It is clear that the impugned decisions would impact negatively on the rights of children under section 24 (environment) and 28 (children) of the Constitution. The respondents, who bore the onus, did not discharge the obligation to show that, in the event that there would be limitations of these rights, that such limitations were reasonable and justifiable. The decision to concur by Nersa did not comply with its obligations under the Constitution in respect of the rights of children to the extent that the pled compliance with public consultations were inadequate under the particular circumstances. A mere lip service was paid thereto. Again, the lack of particularity of facts and supportive evidence points to a disregard of the second respondent’s obligations under the Constitution.

Order: The constitutional challenge to the decisions of the Minister and Nersa to include in the 2019 IRP an additional 1,500 megawatts new coal-fired power is upheld. The following decisions are declared to be inconsistent with the Constitution and unlawful and invalid: the determination published by the Minister of Mineral Resources to the extent that this includes provision for 1,500 megawatts of new coal-fired power; the concurrence published by Nersa; and the Integrated Resource Plan 2019. The decisions are reviewed and set aside to the extent that they make provision for 1,500 megawatts of new coal-fired power.

VAN DER WESTHUIZEN J

Facts: The applicant is Argon Asset Management, an authorised financial services provider which operates an investment management business. Mr Joxo was employed by Argon as its Deputy Chief Executive Officer and Head of Institutional Business. Joxo was issued with a notice to attend a disciplinary hearing to answer various allegations of misconduct which included: acting inappropriately towards the CEO and adopting an abusive and disrespectful attitude towards the CEO; failing to sign his KPA; launching the new company website without obtaining any feedback from the CEO; threatening to unilaterally hold a staff meeting to disclose his apparent unhappiness when the other members of Exco required further time to consider his proposed new management structure; deciding unilaterally to take a sabbatical without first raising this with the CEO and obtaining the required permission; and placing the company’s good name at risk by conducting himself in a manner that caused the SAPS to arrest him in Johannesburg.

Application: Following a disciplinary hearing, which was chaired by an external chairperson, Joxo was found guilty of the allegations against him. He was summarily dismissed. Joxo thereafter referred an unfair dismissal dispute to the CCMA. The commissioner held that Joxo’s dismissal was both substantively and procedurally unfair. He ordered Argon to reinstate Joxo and to pay him backpay equal to 6 months’ remuneration. The applicant seeks to review and set aside the award.

Discussion: It was common cause that the PIC was Argon’s largest and most important client, that Joxo failed to attend a PIC meeting and that the CEO was not notified that Joxo would not be present. Joxo’s version was clearly fabricated. The evidence and his versions put paid to his allegation that he was forbidden or precluded from attending PIC meetings. There can be no question that, all things being equal, the PIC would have expected Joxo to attend the meeting. The commissioner was bound to accept that: (a) Joxo did not have any valid excuse for his failure to attend the PIC meeting; (b) that he had concocted a fabricated version after the event in an effort at self-preservation; and (c) that, in so doing, Joxo had placed his interests above those of his employer. Joxo’s deception is particularly serious because, far from accepting responsibility for his actions, he sought to lay the blame with his subordinate for not informing the role-players of his non-attendance. No employer could reasonably be expected to retain the services of a senior executive who conducts himself in this manner.

Findings: Having regard to the PIC incident alone, it is difficult to see how a reasonable commissioner could not have concluded that dismissal was a fair outcome in the circumstances. However, when one considers the balance of the relevant facts surrounding Joxo’s conduct, this conclusion becomes irresistible. The relationship between Joxo and his superior, the CEO, had broken down, primarily on account of Joxo’s conduct. The commissioner’s failure to appreciate this is largely attributable to the blinkered or piecemeal approach he adopted to his assessment of the facts. There was a pattern of Joxo’s failure to comply with instructions. On their own, these infractions would not ordinarily warrant dismissal. However, they are indicative of an underlying disrespect for authority, specifically the CEO’s authority. The email correspondence establishes that Joxo had little or no respect for his superior. It was highly inappropriate and abusive of the CEO. Again, no employer could reasonably be expected to retain a senior employee who conducts himself in this manner. The situation only got worse at the special Exco meeting and the events that followed it. The WhatsApp was clearly a threat to hold the business hostage. The insubordination and disrespect harboured towards the CEO was manifest. In his own words, Joxo’s relationship with his superior and Exco had become “toxic”. It beggars belief, under these circumstances, that the commissioner could conclude that the necessary trust relationship between the parties had not irretrievably broken down.

Order: The arbitration award is reviewed and set aside. The award is substituted with a finding that Joxo’s dismissal was substantively and procedurally fair. There is no order as to costs.

LESLIE AJ

Facts: The plaintiff, a farmer, alleged that a member of the SAPS, acting within the course and scope of his employment with the defendant, threw a stun grenade at the plaintiff. The plaintiff alleged that the member threw the stun grenade at the plaintiff and other members of the public, without any reason or justification and in a reckless, negligent and unlawful manner, while he ought to have foreseen that if he acted in such a manner, such conduct might result in members of the public suffering injuries and that they may consequently suffer damages. As a result of the explosion of the stun grenade, the plaintiff suffered permanent damage. The defendant denies that the plaintiff sustained the injury in question because of any conduct by members of the SAPS. The defendant admitted that stun grenades were used by members of the SAPS at the time of the incident. The defendant further pleads that member of the SAPS used the stun grenades to disperse the crowd that forced its way into the magistrates’ court premises without permission. It is specifically denied that the members threw a stun grenade towards the plaintiff. The defendant pleads that the stun grenade was thrown towards the crowd.

Application: The plaintiff instituted action against the defendant, the Minister of Police, for damages arising from an assault perpetrated against him by a member of the SAPS when a stun grenade was thrown and detonated in close proximity of him, as a result of which he suffered permanent damage in the form of loss of hearing in both his ears. The plaintiff claims damages in the amount of R2,601,460.

Discussion: The plaintiff estimated that approximately 15 people were still present in Landdros Street. There were no violent behaviour or actions, nor any uproar or clashes between the SAPS and the farmers who attended the meeting. Many of the farmers and members of the public had already left the area. The fact that a stun grenade was thrown by Sergeant Sithole on the day of the incident is not in dispute. The evidence presented by the plaintiff pertaining to the events that unfolded on the particular day cannot be criticized. The plaintiff and the witnesses called by the plaintiff made a good impression and their evidence was clear, logical and reliable. No disruptive behaviour, nor any indication of havoc or chaos is visible on the video footage. There is no indication that a Nyala exited the gate at the side entrance of the court, and no indication that a Nyala followed in close pursuit of another Nyala. The video footage clearly and undoubtedly refutes the version presented by the defendant regarding the circumstances that existed at the time when the stun grenade was thrown by Sergeant Sithole. If approximately 80 to 100 people were standing in the vicinity of the side entrance, surely, they would have been distinctly visible on the video footage.

Findings: The action of the SAPS in throwing a stun grenade at the time when the plaintiff stood next to the Land Rover, was conclusively wrongful. The conduct of Sergeant Sithole cannot be described to have been necessary in order to disperse a dangerous crowd, nor was a legal interest of the defendant endangered in any way. A dangerous situation did not exist, nor was such a situation imminent at the time when the stun grenade was thrown. The harm that was caused to the plaintiff was not caused in circumstances of necessity. Sergeant Sithole acted unreasonable under the prevailing circumstances. The video footage clearly supports the version presented by the plaintiff that a dangerous situation did not exist, nor was such situation imminent at the time when the stun grenade was thrown by Sergeant Sithole. The plaintiff sustained physical injury as a consequence of the conduct of the defendant's employee. This gives rise to an inference of wrongfulness and there exists no justification or excuse for the infliction of such injury. The causing of bodily harm to the plaintiff was wrongful. The harm was clearly foreseeable and ought reasonably to have been avoided. In the circumstances it was negligent to act in such a way. In absence of a lawful excuse for the detonation of the stun grenade, and none has been established, the conduct of the defendant was both wrongful and negligent.

Order: The defendant is held liable for the damages that the plaintiff has suffered. The defendant shall pay an amount of R757,561 to the plaintiff.

VAN RHYN J

Facts: Mr Smith lodged four claims with the Fund for the reimbursement of the loss that he suffered as a result of the theft committed by Mr Stephens of money that Mr Smith entrusted to the firm, represented by Mr Stephens, in the course of his duties in the firm. After the Fund had rejected Mr Smith’s claims, he instituted an action in the High Court against the respondent, the Legal Practitioners’ Fidelity Fund Board (the Board). The High Court dismissed all four claims. Mr Smith alleged that he entrusted R1 million to the firm. In claim 2 he alleged that a firm of solicitors paid £50,000 (R900,000) for his benefit into the trust account. He alleged that the payment was entrusted to the firm. In claim 3 he alleged that he entrusted R4 million to the firm and in claim 4 he alleged that he entrusted R2,7 million to the firm. Mr Smith alleged that, at all relevant times, the firm was represented by Mr Stephens; it came to his knowledge in March 2018 that Mr Stephens had stolen the sums of money referred to in each claim; and that, as a result of the theft, he suffered pecuniary loss of R1 million, R900,000, R4 million and R2,7 million respectively.

Appeal: Mr Smith appeals to this court against the finding of the High Court. He appeals against the finding that the Legal Practitioners’ Fidelity Fund is not liable to reimburse him in respect of the loss that he suffered as a result of the theft of the money. The High Court made that finding on the basis that Mr Smith instructed the firm, represented by Mr Stephens, to invest the money on his behalf.

Discussion: In each of the claims, Mr Smith suffered pecuniary loss as a result of theft committed by Mr Stephens, the firm’s employee, of money that Mr Smith paid or caused to be paid into the trust account and that such payment was made to Mr Stephens in the course of his duties in the firm. The question to be answered is whether Mr Smith entrusted the money to the firm or Mr Stephens when he paid or caused it to be paid into the trust account. Subject to section 47(1) of the Attorneys Act 53 of 1979, the Fund must reimburse Mr Smith if he entrusted those payments to the firm or Mr Stephens. The converse is that Mr Smith would not be entitled to reimbursement if those payments did not amount to entrustment. The fact that money is paid into a trust account does not necessarily satisfy the first element, as such payment does not mean that it is trust money. In the case of an attorney and his or her client, one must look at the intention of the client when he or she placed the money in the attorney’s possession to determine the issue of entrustment.

Findings: The High Court was correct in its finding that Mr Smith failed to prove that he entrusted the R1 million to Mr Stephens or the firm. When Mr Smith paid the R1 million into the trust account, he knew that the money would soon thereafter be paid to Flake Ice. He intended the money to be paid to Flake Ice in the discharge of his obligation in terms of the loan agreement. The evidence shows that the payment of the R4 million into the trust account was immaterial, since Mr Smith’s intention was to purchase 66% of the CP Crane Hire claim with that amount. All he intended to do when he paid the money into the trust account was to discharge his obligations in terms of the agreement to purchase that percentage of the claim. The High Court found that Mr Smith did not entrust the R2,7 million to the firm or Mr Stephens when he paid that amount into the trust account. It found that he invested in Sun-Down Red with the intention of achieving a profit. The evidence shows that at no stage did Mr Smith intend the R2,7 million to be held by the firm for any length of time. He understood the agreement to be that, on receipt of the money, the firm would transfer the money to Sun-Down Red, which would purchase the book debt from Trudon. The court agrees that Mr Smith established that he entrusted the R900,000 to the firm. It does not agree that the entrustment came to an end in June 2017. By then the money which had been entrusted to the firm had already been stolen by Mr Stephens.

Order: The appeal is allowed in part. The order of the High Court is set aside and substituted. The plaintiff’s first, third and fourth claims are dismissed. The plaintiff’s second claim is upheld. The defendant shall pay R900,000 to the plaintiff, with interest thereon at the rate of 10,25% per annum.

BLOEM AJA (MOCUMIE JA, MABINDLA-BOQWANA JA, MOLOPA-SETHOSA AJA and MOLITSOANE AJA concurring)