Municipality of Port Elizabeth v Smit

The respondent (Smit) stepped onto a manhole cover on a pavement in Port Elizabeth. The cover tilted crossways and she fell into the manhole, sustaining injuries to her leg. The appellant municipality was responsible for over 200,000 manhole covers in the city. The manhole cover consisted of a concrete slab banded in metal, which rested on a metal frame set into the pavement. When securely placed, it was supported on three sides by the frame. However, the cover had been displaced so that it rested diagonally across the manhole with more than one side unsupported, causing it to tilt when stepped upon. The magistrate's court awarded Smit R9,000 in damages. The Eastern Cape Division dismissed the municipality's appeal, with Nepgen J finding negligence in the failure to provide manhole covers with hinges. The municipality appealed to the Supreme Court of Appeal. After leave to appeal was granted, the parties entered into a settlement agreement whereby the respondent withdrew opposition to the appeal, the appellant would prosecute at its own risk and expense, and regardless of the outcome, the respondent would not be affected financially (either being indemnified if the appeal succeeded, or waiving her right to the judgment amount and costs if it failed).

• Whether the Court has power or discretion to entertain an appeal where all disputes between the parties have been resolved by agreement and there is no longer any live controversy between them
• Whether section 21A(1) of the Supreme Court Act 59 of 1959 applies where there is no subsisting lis between the parties
• Whether the Court should exercise its discretion to hear an appeal on its merits purely to resolve a point of principle or to set aside a precedent, where there is no remaining dispute between the parties
• Whether the municipality was negligent in failing to affix hinges to manhole covers

The appeal was dismissed with costs under section 21A(1) of the Supreme Court Act 59 of 1959.

Where parties to litigation have settled all disputes between them by agreement after leave to appeal has been granted, such that the outcome of the appeal will have no practical effect on either party or their relationship inter se, a court has discretion under section 21A(1) of the Supreme Court Act 59 of 1959 to dismiss the appeal on that ground alone, even if one party wishes to pursue the appeal to establish a point of principle. In exercising this discretion, relevant considerations include: (1) whether there remains any live controversy or lis between the parties; (2) whether the judgment sought to be overturned establishes a binding precedent of general application or is confined to its specific facts; (3) whether any decision would be based on argument from only one side rather than fully contested adversarial argument; and (4) the absence of any practical interest by the party who obtained the favorable judgment in maintaining it. The essential quality of an appeal is that there should exist between the parties a matter in actual controversy which the court undertakes to decide as a living issue.

The Court made several obiter observations: (1) It assumed without deciding that a court has discretion to entertain an appeal under s 21A where there is no subsisting lis between the parties, leaving open the question of whether the court has any power at all in such circumstances. (2) The Court noted the distinction drawn in English law (R v Secretary of State for the Home Department, Ex parte Salem) between public law and private law matters, where courts may have discretion to hear appeals in public law matters even without a lis, but expressed the view that this distinction may be founded on expedience rather than principle. If a court has no power to hear appeals without a lis, this should apply equally to public law; conversely, if discretion exists, it should extend to private law disputes as well. (3) The Court observed that the Court a quo's finding that the municipality had failed to establish that fitting hinges would impose an unreasonable financial burden was a finding of fact specific to the evidence led at that trial, and suggested that different evidence in future cases could lead to different results. (4) The Court emphasized the desirability that judgments of the Supreme Court of Appeal be the product of thorough consideration of forensically tested argument from both sides.

This case is significant in South African civil procedure for clarifying the approach courts should take when parties settle their disputes after leave to appeal has been granted. It establishes that even if a court has discretion to hear an appeal where there is no remaining lis between the parties, it will generally decline to exercise that discretion, particularly where: (1) the party who obtained the favorable judgment has completely abandoned any interest in maintaining it; (2) the purported 'point of principle' is fact-specific and does not create a binding precedent of general application; and (3) only one party would be presenting arguments. The case reinforces the principle that courts decide live controversies between parties, not abstract legal questions. It also clarifies the operation of section 21A(1) of the Supreme Court Act and provides guidance on when appeals become academic or moot. The case demonstrates the limits of appellate jurisdiction when the adversarial system breaks down due to settlement.