TWK Agriculture Holdings (Pty) Ltd v Hoogveld Boerderybeleggings (Pty) Ltd and Others

The respondents (plaintiffs) were shareholders of the appellant (defendant). On 7 January 2019, the defendant gave notice to shareholders of an annual general meeting. Notice was given of proposed special resolutions to amend the original Memorandum of Incorporation (MOI). On 5 February 2019, the defendant adopted resolutions to amend the MOI. As a result, the plaintiffs became related parties in terms of the amended MOI. The plaintiffs alleged this materially and adversely affected the preferences, rights, limitations and other terms of their shares. After complying with s 164 of the Companies Act 71 of 2008, the plaintiffs demanded that the defendant pay the fair value of their shares (the 'appraisal remedy'). The defendant declined. The plaintiffs then instituted action seeking payment of R120.00 per share or alternatively a determination of fair value. The defendant excepted to the amended particulars of claim on two grounds: (1) the 'class exception' - that there is no cause of action for an appraisal remedy unless the company has more than one class of shares (the pleadings averred only a single class); (2) the 'relatedness exception' - that the Deemed Relatedness did not have a material and adverse effect on the shares themselves, but only on the persons who owned the shares. The high court (Van Rensburg AJ) upheld both exceptions. The plaintiffs appealed to the full court, which upheld the appeal and dismissed both exceptions. The defendant was granted special leave to appeal to the Supreme Court of Appeal.

• Whether the dismissal of an exception by a full court is appealable to the Supreme Court of Appeal
• Whether the doctrine of finality prevents appeals from the dismissal of exceptions
• Whether the 'interests of justice' test should override the established rule that dismissal of exceptions is not appealable
• Whether precedent created by a full court's dismissal of exceptions creates an exception to the Maize Board rule

The appeal was struck from the roll. Each party was ordered to bear its own costs of the appeal.

The dismissal of an exception (other than an exception to jurisdiction) is not appealable to the Supreme Court of Appeal because it does not constitute a final judgment within the meaning of the doctrine of finality. The high court, having dismissed an exception, has not pronounced its final word on the legal issues raised - the same points of law can be raised and determined at trial. There is no legal obstacle to the trial court reconsidering and even adopting a different view on the legal issues. The doctrine of finality as articulated in Zweni v Minister of Law and Order, not the 'interests of justice' test, remains the central principle for determining appealability to the Supreme Court of Appeal. The 'interests of justice' test is appropriate for the Constitutional Court given its specific constitutional mandate under s 167 of the Constitution, but does not displace the doctrine of finality for appeals to the Supreme Court of Appeal. The Superior Courts Act 10 of 2013 did not change this established position. Section 16 determines to which court an appeal lies but does not define the class of appealable decisions - that remains for the Supreme Court of Appeal to decide according to established principle. The rule of law requires ascertainable and certain standards for appealability, which the doctrine of finality provides and which an open-ended 'interests of justice' test would undermine. The fact that a full court has dismissed exceptions and that the trial court would be bound by precedent to follow that decision (the 'problem of precedent') does not create an exception to the rule, as this would require special pleading in individual cases contrary to the rule of law. The proper course is for high courts to grant leave to appeal directly to the SCA in cases of upheld exceptions raising important points of law, thereby avoiding the problem of precedent.

The Court made several important obiter observations: (1) The dictum in Minister of Water and Environmental Affairs v Really Useful Investments No 219 (Pty) Ltd 2017 (1) SA 505 (SCA) suggesting that dismissal of an exception is appealable where it would be 'the last word' on the subject 'cannot stand' and should not be followed. (2) Recent decisions of this Court that may have been 'tempted into the general orbit of the interests of justice should now be approached with the gravitational pull of Zweni'. (3) While the Court must determine how best to discharge its constitutional mandate as a court of appeal, 'different types of matters arising from the high court may warrant some measure of appreciation that goes beyond Zweni or may require an exception to its precepts', but '[a]ny deviation should be clearly defined and justified to provide ascertainable standards consistent with the rule of law'. (4) The utility of the exception procedure 'can be very helpful, most especially to test whether a cause of action or defence is sustainable as a matter of law', but 'that utility generally diminishes if the dismissal of an exception were to be appealable'. (5) Rules for stated case or separation of issues provide alternative mechanisms for economically testing questions of law after exceptions are dismissed. (6) There is 'no constitutional requirement of congruence with the Constitutional Court on questions of appealability, nor does such congruence between this Court and the Constitutional Court have ineluctable institutional value'. (7) The Court expressed that while the 'class exception' turned entirely on a question of law, the 'relatedness exception' was 'more closely bound up with factual averments that have been pleaded' and even if good, 'it is not plain that the plaintiffs will not bring their ingenuity to bear to reformulate their case'. (8) The Court noted that the problem of precedent in this case arose because 'leave to appeal the decision of the high court to uphold the exceptions was granted to the full court. That was a misstep.' The proper course would have been to grant leave directly to the SCA.

This judgment provides definitive guidance on the appealability of dismissed exceptions in South African law. It reaffirms and clarifies the position established in Maize Board v Tiger Oats Ltd that the dismissal of an exception (other than jurisdictional exceptions) is not appealable to the Supreme Court of Appeal because it does not constitute a final judgment. The judgment is significant for: (1) Rejecting the creeping expansion of the 'interests of justice' test as the ultimate criterion for appealability to the SCA, distinguishing this Court's institutional role from that of the Constitutional Court; (2) Reaffirming the centrality of the doctrine of finality as articulated in Zweni v Minister of Law and Order; (3) Emphasizing rule of law values including certainty, predictability and ascertainable legal standards over flexible case-by-case assessments; (4) Clarifying that s 16 and s 18(2) of the Superior Courts Act 10 of 2013 did not change the established jurisprudence on appealability; (5) Disapproving the dictum in Really Useful Investments that suggested dismissal of exceptions could be appealable if they represented 'the last word'; (6) Providing guidance to high courts that leave to appeal from upheld exceptions should be granted to the SCA rather than to full courts to avoid the 'problem of precedent'; (7) Articulating the institutional and practical benefits of the rule against appealing dismissed exceptions. This case provides essential guidance on case management, the exception procedure, and the proper functioning of the appellate hierarchy in South African civil procedure.