South African Express Limited v Bagport (Pty) Ltd

Bagport provided baggage wrapping services to SA Express at various airports and claimed R4 748 373.60 for unpaid services through summons issued on 13 December 2016. Instead of opposing Bagport's application for summary judgment, SA Express proposed a settlement agreement drafted by its own attorney on instructions of its legal department. The settlement agreement was signed on 28 February 2017 by Bagport's HR/Payroll Manager and on 1 March 2017 by SA Express' CEO, with knowledge of its chief procurement officer and chief financial officer. SA Express failed to pay despite the settlement. Bagport applied under rule 41(4) to have the settlement made a court order, and SA Express opposed while counter-applying to declare the agreement invalid. Van Oosten J granted the order on 9 May 2018, directing payment with interest and attorney-client costs. SA Express belatedly applied for leave to appeal on 11 July 2018 (only after Bagport attached one of its aircraft), which was granted on 20 August 2018. SA Express failed to file a proper record within the prescribed time, leading to the appeal lapsing. Multiple defective attempts to file records followed due to the attorney's ignorance of the rules and reliance on an incompetent correspondent. A compliant record was only filed on 12 April 2019, about eight months after leave to appeal was granted.

• Whether condonation should be granted for the lapsing of the appeal due to failure to file a proper record timeously
• Whether the attorney's negligence and lack of experience constitute an acceptable explanation for non-compliance with court rules
• Whether the settlement agreement was invalid for non-compliance with SA Express' internal procedures
• Whether the settlement agreement was invalid for non-compliance with sections 38(2) and 68 of the Public Finance Management Act 1 of 1999
• Whether the settlement agreement should not be enforced on the basis of an alleged dispute about the quantum owed

1. The application for condonation and for the re-instatement of the appeal is dismissed. 2. The matter is struck off the roll with costs.

An attorney's lack of experience and failure to acquaint himself with the rules of court does not constitute a reasonable explanation for non-compliance with court rules, particularly where the negligence is gross and continual. Where breaches of court rules have been flagrant, condonation may be refused even where the blame lies solely with the attorney and regardless of the merits of the appeal. A litigant cannot escape the normal consequences of the relationship with an attorney of their choosing. Section 20(7) of the Companies Act 71 of 2008 protects persons dealing in good faith with a company from the company's failure to comply with internal procedural requirements, entitling them to presume compliance unless they knew or ought reasonably to have known of the non-compliance.

Plasket JA made strong observations about SA Express' conduct, describing it as "disgraceful" and noting it had "attempted to avoid its clear and admitted obligations in a most underhanded way." The court stated that better is expected of an organ of state, which should serve as a role model and display an acceptable level of commercial morality in its dealings with the public. The court cited Cameron J's statement in MEC for Health, Eastern Cape v Kirland Investments that organs of state have a duty "to tread respectfully when dealing with rights" even in commercial dealings. The court quoted extensively from the foreword to Herbstein and Van Winsen regarding the professional duties of legal practitioners, emphasizing that "where skill is required, lack of it is equivalent to negligence" and that undertaking work without reasonable efficiency due to lack of skill or diligence "is something very closely akin to obtaining money by false pretences."

This case reinforces important principles regarding condonation applications in South African appellate procedure: (1) inexperience of legal practitioners is no excuse for non-compliance with court rules; (2) attorneys have a duty to acquaint themselves with applicable rules or engage competent assistance; (3) litigants cannot escape consequences of their chosen attorney's negligence; (4) flagrant and continual breaches of rules may warrant refusal of condonation regardless of merits; (5) the entire period of delay must be reasonably explained. The case also confirms the protection afforded by section 20(7) of the Companies Act 71 of 2008 (codifying the Turquand rule) to third parties dealing in good faith with companies, preventing companies from relying on internal procedural non-compliance to avoid obligations. The judgment contains strong obiter regarding the duty of organs of state to display acceptable commercial morality and act as role models in their dealings with the public.