In South African civil procedure, a consistent principle applies to exceptions: when a court upholds an exception, that ruling is generally appealable. Conversely, where an exception is dismissed, it typically is not appealable at that stage. This distinction exists because the issues raised in a dismissed exception can still be reargued during trial proceedings.

This principle came under renewed scrutiny in the Supreme Court of Appeal (SCA) in Bloemfontein in the matter of TWK Agriculture Holdings (Pty) Ltd v Hoogveld Boerderybeleggings (Pty) Ltd (Case No. 273/2022). The dispute began in the Middelburg High Court, where the defendant’s exceptions were initially upheld. That decision was then overturned by the Full Court, which ruled in favour of the plaintiff. In response, the defendant pursued an application for special leave to appeal to the SCA.

Although two judges of the SCA granted the special leave application without oral submissions, the full bench later clarified that it was not bound by the earlier grant. The appellant still had to convince the full court that the leave had been correctly granted.

Background and Legal Context

At the heart of the matter was a private company with only one class of shares. The company amended its Memorandum of Incorporation (MOI) to broaden the scope of “related persons”, in line with the procedures set out in the Companies Act 71 of 2008. A group of minority shareholders, discontent with the amendment, instituted action alleging that their appraisal rights under section 164 (read with section 37(8)) of the Act had been triggered.

In response, the defendant raised two exceptions to the particulars of claim. First, it contended that section 164 does not apply where there is only one class of shares. Second, even if it did apply, the provision would only be triggered if all rights attached to all shares in that class were affected, which, according to the defendant, was not the case here, as only a subset of shareholders objected.

Legal Issue and Argument Before the SCA

The SCA was called upon to determine whether appraisal rights under section 164 can arise in a company with a single class of shares, a question that had not previously been decided in reported jurisprudence. Both parties urged the court to deal with the issue due to its legal significance and broader implications.

The appellant further argued that if the SCA declined to entertain the appeal, the matter would revert to the trial court, which would be bound by the Full Court’s interpretation. Accordingly, it was submitted that the SCA’s intervention was necessary to clarify the law and serve the interests of justice.

The SCA’s Reasoning and Outcome

The SCA, however, approached the matter from a different angle. It assessed whether the appeal met the threshold for appealability, particularly in light of the finality doctrine. The court emphasised that unless the decision being appealed has the effect of bringing the litigation to a close or has definitive consequences. It should not typically be subject to appeal at that stage.

The court concluded that the Full Court’s decision did not meet the required standard for appealability. As a result, despite the earlier grant of special leave by two SCA judges, the full bench found that the matter was not properly before it and accordingly struck the appeal from the roll.

Key Takeaways for Attorneys

For litigation practitioners, particularly correspondent firms in Bloemfontein handling High Court matters across jurisdictions, this judgment serves as a strong reminder:

• The appealability of interlocutory decisions, such as rulings on exceptions, remains tightly confined.
• Even where special leave to appeal is granted, the SCA retains discretion to assess whether the appeal is properly before it, applying the “interests of justice” standard.
• Practitioners must weigh carefully whether an appeal is the appropriate route or whether to proceed to trial and revisit the issue there.

Should you require assistance with exceptions, appeals, or correspondent court appearances in Bloemfontein, our office is equipped to assist promptly and professionally.