Eke v Parsons

• Jurisdiction: South Africa

Eke v Parsons
2016 (3) SA 37 (CC)

2016 (3) SA p37

Citation	2016 (3) SA 37 (CC)
Case No	CCT 214/14; [2015] ZACC 30
Court	Constitutional Court
Judge	Mogoeng CJ, Moseneke DCJ, Cameron J, Froneman J, Jafta J, Madlanga J, Molemela AJ, Nkabinde J, Theron AJ and Tshiqi AJ
Heard	May 26, 2015
Judgment	September 29, 2015
Counsel	P Scott SC for the appellant.; J Huisamen SC for the respondent.

Flynote : Sleutelwoorde B

Practice — Judgments and orders — Settlement order — Settlement agreement made order of court — Nature — Permissible content — Manner of enforcement.

Practice — Judgments and orders — Order — Requirements for validity — C Approach to be adopted to flawed orders.

Headnote : Kopnota

Eke and Parsons entered into an agreement for the sale to Eke of Parsons' membership interest in a corporation. Eke defaulted on payment; Parsons instituted proceedings; Eke entered an appearance to defend; and Parsons D applied for summary judgment. Eke and Parsons then concluded a settlement agreement; a High Court made it an order; Eke breached its terms; and Parsons — as provided for in the order — enrolled the summary judgment application. Eke raised defences, which the High Court dismissed, and gave judgment for Parsons. Eke then applied for leave to appeal, which was refused, as was his application to the Supreme Court of Appeal, before the Constitutional Court granted leave on three issues: E

(1) The effect of making a settlement agreement an order of court. (Paragraph [6] at 42G.)

Held, that a court could only make an order of that part of a settlement agreement which could constitute a competent and proper order. For the order to be competent and proper the agreement captured in it would have F to (a) relate to the litigation; (b) accord with the Constitution, law and public policy; and (c) be of practical and legitimate advantage. (Paragraphs [25] – [26] at 48H – 49D.)

Once a settlement agreement had been made an order of court it was like any other order and to be interpreted as such. (Paragraphs [29] – [30] and [63] at 50B – F and 58E.)

As far as enforcement went, this could be by execution, contempt proceedings, G or in some other manner that the order permitted. An order entailing litigation before enforcement was not necessarily objectionable. (Paragraphs [31] – [32] and [35] – [36] at 50G – 51B and 52A – C.)

However, not all proposed orders had to be accepted by the courts: where necessary, they had to insist that the parties make changes, or, if need be, H reject a proposed order outright. (Paragraph [34] at 51G – H.)

Here the order — requiring, on Eke's non-compliance with its terms, that Parsons apply for summary judgment — was unobjectionable. (Eke, relying on Eastern Cape authority, had contended that the order was incompetent because it could not be immediately executed upon, requiring the said application for summary judgment before doing so.) (Paragraphs [9], [12] and [38] at 43C, 43H – 44B, and 52F.) I

(2) Whether it was competent in terms of Uniform Rule 32 to bring a second summary judgment application. Held, that while rule 32 did not provide for a second summary judgment application, the parties had agreed to dispense with the strictures of the rule, and the court had to give effect to their agreement. (Paragraphs [6], [39] and [41] – [42] at 42G, 53A – B, and 54A – C.) J

2016 (3) SA p38

A (3) Whether Eke's undertaking in the order to not oppose the application for summary judgment was enforceable, in the light of the right of access to court. Held, without deciding the issue, that Parsons had not in fact attempted to enforce the term, and that Eke had had an opportunity to raise defences, and had exercised it. (Paragraphs [6], [43], [46] and [49] at 42G, 54D, 55B – C and 55F.)

B Appeal dismissed. (Paragraph [52] at 56C.)

Jafta J agreed in part, and differed in part, with the main judgment, but ultimately reached the same conclusion — that Eke's appeal should be dismissed.

Jafta J agreed that a settlement order brought finality to litigation; gave rise to res judicata; was enforceable like any other order; and that the manner of its enforcement depended on the nature of the order itself. (Paragraph [53] at C 56D.)

He differed on the applicability of Uniform Rule 32 to the matter; and in his approach to the provision of the order preventing Eke opposing the summary judgment application. (Paragraph [53] at 56E.)

Held, on issue (1) as framed in the main judgment (the status and effect of a settlement order): that a settlement order — made in an exercise of the D inherent power of the High Court — had the same status and force as any other court order. (Case law, to the effect that there was a class of settlement agreement that was a mere recordal of the parties' agreement and not enforceable as a court order, was wrong.) Thus the settlement order granted here was like any other court order. (Paragraphs [6] and [57] – [58] at 42G and 57B – D.)

E But as an order it was fundamentally flawed: its terms were unclear; its purpose could not be readily ascertained from its language; it failed to bring the case to finality; and it could not be enforced. (A reading of it suggested the High Court accepted the dispute had been settled; and, absent the provision that Parsons re-enrol the summary judgment application on Eke's default, it could have been enforced by execution. The purpose of the re-enrolment provision was F thus unclear.) (Paragraphs [63] – [66] and [69] at 58D – 59E and 60B.)

To grant an order containing such a flaw would be a failure on the part of the court to properly exercise its discretion. (Paragraphs [74] – [75] at 61D – 61H.)

Nonetheless, despite the flaw, the parties would still have to comply with it, to the extent that they could ascertain what it required them to do. (Paragraphs G [66] and [75] at 59E and 61H.)

Held, as to issue (2) (the permissibility under Uniform Rule 32 of bringing a second summary judgment application), that the issue did not arise, because Parsons did not institute a second rule 32 application. Parsons had re-enrolled the summary judgment in terms of the order. (Paragraph [67] at 59F.)

Held, as to issue (3) (concerning the clause that Eke not oppose summary judgment), that the inherent power of the High Court included the power — as exercised here — to make an order barring access to court. H (Paragraphs [68] – [69] at 59I – 60B.)

Order in the main judgment — that the appeal be dismissed — supported. (Paragraph [76] at 62A.)

Cases Considered

Annotations

I Case law

Absa Bank Ltd v Lekuku [2014] ZAGPJHC 274: referred to

Arendsnes Sweefspoor CC v Botha 2013 (5) SA 399 (SCA): referred to

Barkhuizen v Napier 2007 (5) SA 323 (CC) (2007 (7) BCLR 691; [2007] ZACC 5): referred to

Brisley v Drotsky 2002 (4) SA 1 (SCA) (2002 (12) BCLR 1229; [2002] 3 All SA 363; J [2002] ZASCA 35): referred to

2016 (3) SA p39

Carmichele v Minister of Safety and Security and Another A (Centre for Applied Legal Studies Intervening) 2001 (4) SA 938 (CC) (2002 (1) SACR 79; 2001 (10) BCLR 995; [2001] ZACC 22): referred to

Chief Lesapo v North West Agricultural Bank and Another 2000 (1) SA 409 (CC) (1999 (12) BCLR 1420; [1999] ZACC 16): referred to

Claassens v Claassens 1981 (1) SA 360 (N): approved B

De Wet and Others v Western Bank Ltd 1977 (2) SA 1033 (W): referred to

Du Plessis and Others v De Klerk and Another 1996 (3) SA 850 (CC) (1996 (5) BCLR 658; [1996] ZACC 10): referred to

Engelbrecht and Another NNO v Senwes Ltd 2007 (3) SA 29 (SCA): referred to

Fakie NO v CCII Systems (Pty) Ltd 2006 (4) SA 326 (SCA) ([2006] ZASCA 54): referred to C

Federated Employers Fire & General Insurance Co Ltd and Another v McKenzie 1969 (3) SA 360 (A): referred to

Finishing Touch 163 (Pty) Ltd v BHP Billiton Energy Coal South Africa Ltd and Others 2013 (2) SA 204 (SCA): referred to

Firestone South Africa (Pty) Ltd v Genticuro AG 1977 (4) SA 298 (A): referred to D

Fose v Minister of Safety and Security 1997 (3) SA 786 (CC) (1997 (7) BCLR 851; [1997] ZACC 6): referred to

Hodd v Hodd; D'Aubrey v D'Aubrey 1942 NPD 198: referred to

Kgobane and Another v Minister of Justice and Another 1969 (3) SA 365 (A): referred to

Lane and Fey NNO v Dabelstein and Others 2001 (2) SA 1187 (CC) E (2001 (4) BCLR 312; [2001] ZACC 14): referred to

Leibowitz and Others v Schwartz and Others 1974 (2) SA 661 (T): referred to

Lujabe v Maruatona [2013] ZAGPJHC 66: referred to

Mansell v Mansell 1953 (3) SA 716 (N): considered

Mostert NO v Sable Group Holdings (Pty) Ltd [2013] ZAGPJHC 143: F referred to

MV Ivory Tirupati: MV Ivory Tirupati and Another v Badan Urusan Logistik (aka Bulog) 2003 (3) SA 104 (SCA): referred to

Mynhardt v Mynhardt 1986 (1) SA 456 (T): referred to

Ncoweni v Bezuidenhout 1927 CPD 130: referred to

Nino Bonino v De Lange 1906 TS 120: referred to G

Parsons v Eke ECP 1324/2013: upheld on appeal

Pheko and Others v Ekurhuleni City 2015 (5) SA 600 (CC) (2015 (6) BCLR 711; [2015] ZACC 10): referred to

PL v YL 2013 (6) SA 28 (ECG) ([2013] 4 All SA 41): applied

Republikeinse Publikasies (Edms.) Bpk. v Afrikaanse Pers Publikasies (Edms.) Bpk. 1972 (1) SA 773 (A): H referred to

Schierhout v Minister of Justice 1925 AD 417: referred to

Schultz v Schultz 1928 OPD 155: referred to

South African Broadcasting Corp Ltd v National Director of Public Prosecutions and Others 2007 (1) SA 523 (CC) (2007 (1) SACR 408; 2007 (2) BCLR 167; [2006] ZACC 15): referred to

Swadif (Pty) Ltd v Dyke NO 1978 (1) SA 928 (A): referred to I

Tasima (Pty) Ltd v Department of Transport and Others 2013 (4) SA 134 (GNP): overruled

Thutha v Thutha 2008 (3) SA 494 (TkH): overruled

Van der Walt v Metcash Trading Ltd 2002 (4) SA 317 (CC) (2002 (5) BCLR 454; [2002] ZACC 4): referred to

Van Schalkwyk v Van Schalkwyk 1947 (4)...