David Leibowitz t/a Lee Finance v A T Mhlana and Others

The appellant, a moneylender residing and conducting business in Durban, granted loans to the respondents (teachers residing in the Transkei) in 1997. The loans required insurance policies as security, and all transactions occurred in Durban. In January 2001, the respondents brought an urgent application in the Transkei High Court against the appellant and insurance companies, seeking an interdict and declaration that purported cessions, surrenders and utilization of their insurance policies were fraudulent and null and void. The appellant raised an objection in limine to the court's jurisdiction. The court of first instance (Maya J) held it had no jurisdiction and dismissed the application. The respondents appealed to the full court, which reversed the decision and held that the court had jurisdiction. The appellant appealed to the Supreme Court of Appeal.

• Whether the Transkei High Court had jurisdiction over the appellant who resided and conducted business in Durban
• The interpretation of 'causes arising' in section 19(1)(a) and (b) of the Supreme Court Act 59 of 1959
• What constitutes 'principal place of business' for jurisdictional purposes
• Whether parties submitted to the jurisdiction of the court by participating in other unrelated proceedings in the same court

1. The appeal was upheld with costs, save that the appellant is entitled to only 50% of the costs of preparing the record. 2. Bikitsha and Associates (respondents' attorneys) were ordered to pay the costs of the postponement on 15 September 2005 de bonis propriis and on the scale as between attorney and client. 3. The order of the court a quo was set aside and replaced with: 'The appeal is dismissed with costs.'

1. A 'cause arising' within a court's area of jurisdiction under section 19(1)(a) of the Supreme Court Act 59 of 1959 means an action or legal proceeding that has duly originated within the court's area of jurisdiction according to law, not merely where a cause of action arises. 2. The 'principal place of business' of a company for jurisdictional purposes is the place where the central control and management of the company is situated, not merely where it has a branch office. 3. The fact that a court has jurisdiction in respect of certain legal proceedings does not confer jurisdiction on that court in respect of other unrelated legal proceedings. 4. Mere participation as a party in other proceedings before the same court does not constitute submission to jurisdiction for new and unrelated proceedings. 5. Failure to oppose an application does not, in itself, constitute submission to the court's jurisdiction.

The court made strong observations regarding the conduct of the respondents' attorney, noting that his failure to prepare for the hearing amounted to gross neglect of professional responsibilities, aggravated by providing conflicting explanations that misled the court. The court also commented on the persistent problem of appeal records being overburdened with unnecessary material contrary to Rule 8(9), despite repeated warnings issued by the court in previous cases such as Salviati & Santori (Pty) Ltd v Primesite Outdoor Advertising 2001(3) SA 766 (SCA) and Zulu and Others v Majola 2002(5) SA 466 (SCA).

This case provides authoritative guidance on the interpretation of section 19(1)(a) and (b) of the Supreme Court Act 59 of 1959 regarding jurisdictional requirements. It clarifies that 'causes arising' refers to where an action originates according to law, not merely where a cause of action arises. It establishes that 'principal place of business' for jurisdictional purposes means where central control and management is situated, not merely where a branch office exists. The case confirms that participation in other unrelated proceedings does not constitute submission to jurisdiction for new proceedings. It also reinforces standards for record preparation and attorney conduct, demonstrating the court's willingness to impose personal costs orders on attorneys for gross neglect.