In Lebashe Investment Group (Pty) Ltd and Others v United Democratic Movement and Another ("Lebashe"), the Supreme Court of Appeal ("SCA") considered the appealability of an order dismissing an exception.
The nature of an order dismissing an exception
An order dismissing an exception is classified as an interlocutory order. In general, interlocutory orders are not appealable. This is because fragmenting a case through appeals on individual aspects before the matter is fully resolved in the court of first instance is undesirable.
The SCA, in TWK Agriculture Holdings (Pty) Ltd v Hoogveld Boerderybeleggings (Pty) Ltd and Others, held that an order dismissing an exception is not appealable. Notwithstanding this, the Constitutional Court, in Mineral Sands Resources (Pty) Ltd and Others v Reddell and Others, held that the appealability of an order dismissing an exception is dependent on whether it is in the interests of justice to grant leave to appeal.
Background to Lebashe
The Lebashe Investment Group and various fund managers ("the claimants") filed a defamation lawsuit on 15 August 2018, seeking ZAR2 million in damages from the United Democratic Movement ("UDM") and its President, a Member of Parliament. The claim was based on two allegedly defamatory publications: a letter from the UDM President to the South African President, made public, and a post on the UDM's X account, where the claimants were called "hyenas". Both publications suggested that the claimants were involved in corruption related to the Public Investment Corporation ("PIC").
In the plea, the UDM and its President denied that the publications were inherently defamatory or that it was published wrongfully or with the intent to injure. The primary defence was that the publications simply highlighted serious allegations of misconduct.
South Africa's President initiated an investigation into the affairs of the PIC. The PIC report was released on 13 December 2019. The UDM and its President then amended their plea on the eve of the trial in the court of first instance. The amendment was extensive, containing verbatim excerpts from the PIC report.
The claimants took issue with the amended plea and raised an exception to it on the grounds that it:
- Lacked averments which were necessary to sustain a defence as the contents of the PIC report were irrelevant to the meaning of the two publications;
- Would result in them being unable to plead meaningfully;
- Would result in the trial, expected to last two days at most, to extend over several weeks, prejudicing the claimants, resulting in a waste of resources and creating "havoc" at trial;
- Contained mixtures of evidence and opinion, which cannot be incorporated into a plea as facts; and
- Creates confusion and uncertainty regarding what other possible defences the UDM and its President sought to rely on, rendering the plea vague and embarrassing.
The court of first instance dismissed the exception with costs.
SCA's findings in Lebashe
The SCA held that an appeal should proceed, whether in relation to an interlocutory order or not, where the granting of leave to appeal serves the interests of justice. The dismissal of an exception may thus be appealable if the circumstances of the case warrant it.
Various factors have to be considered when determining the appealability of a matter. These include whether the relief granted was final in effect, definitively determined the rights of the parties and whether it disposed of a substantial portion of the relief claimed. In addition, considerations such as convenience, timing, delay, expedience and the avoidance of piecemeal appeals also play a crucial role.
An order dismissing an exception is typically not considered final unless the exception challenges the court's jurisdiction. The SCA saw the court of first instance's decision as interim in nature as the issue could still be addressed during the trial with new arguments and evidence. The trial court also had the discretion to reconsider or modify its previous ruling. Therefore, the SCA saw the appeal as premature since the trial court had not yet finalised the matter, and the order did not resolve the parties' rights or significantly affect the main proceedings.
The extension of the trial and uncertainty of defences would be eliminated by a request for trial particulars and a pre-trial conference. This would narrow the issues between the parties and promote the effective disposal of the litigation. The SCA held that the claimants did not demonstrate any irreparable prejudice that could not be remedied within the framework of the Uniform Rules of Court. The SCA did not see the claimants' arguments as supporting the contention that the order is appealable. In contrast, allowing the appeal would result in piecemeal adjudication, prolonged litigation and a waste of judicial resources and costs.
Conclusion
The SCA dismissed the appeal with costs, including the costs of two counsel. The order of the court of the first instance dismissing the exception remained in place.
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