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[2016] ZAWCHC 39
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Engelbrecht N.O and Others v Mohedien (2717/2015) [2016] ZAWCHC 39 (31 March 2016)
THE
REPUBLIC OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No: 2717/2015
DATE:
31 MARCH 2016
In
the matter between:
RYNO
ENGELBRECHT
N.O
...........................................................................................
First
Plaintiff
YUNUS
ABOO BAKER ISMAIL
N.O
.........................................................................
Second
Plaintiff
SHONA
LE ROUX-MARX
N.O
......................................................................................
Third
Plaintiff
And
RIYAZ
MOHEDIEN
................................................................................................................
Defendant
JUDGMENT
DELIVERED ON 31 MARCH 2016
BOQWANA J
Introduction
[1]
This is an application to compel the
defendant to furnish the plaintiffs with the particulars requested in
paragraphs 1 to 3 of
the plaintiffs’ request for further
particulars for the purpose of preparation for trial dated 31 July
2015; and for the
defendant to produce for inspection by the
plaintiffs, documents referred to in the Rule 35(3) Notice delivered
by the plaintiff
on 24 July 2015, in accordance with Rule 35 (6), or
to state on oath that such documents are not in his possession, in
which event
to state their whereabouts, if known to the defendant.
Failing compliance, the plaintiffs seek that they be authorised to
bring
an application for an order striking out the defence of the
defendant on the same papers. For convenience parties are referred to
as cited in the main proceedings.
[2]
The defendant applied for
condonation of the late filing of the opposing affidavit to this
application. The answering affidavit
ought to have been delivered by
no later than 19 January 2015 as per Court Order granted by agreement
between the parties on 8
December 2015. The defendant cites lack of
funds as the reason for the late filing of the answering affidavit.
The answering affidavit
was only delivered on 19 February 2015,
exactly a month after its due date.
[3]
In their replying affidavit deposed
to by their attorney, the plaintiffs opposed the granting of
condonation on the basis that the
defendant failed to explain how his
financial circumstances changed between 8 December 2015 when he
agreed to a timetable for delivery
of further pleadings and January
2016 when he was supposed to file answering papers. They allege that
they were prejudiced in that
they had to deliver replying papers
almost immediately in order to avoid a postponement and had prepared
their case on the basis
that no answering papers would be delivered.
The plaintiffs further submitted that the defendants should be liable
for wasted costs.
During oral argument, Mr Borgstrӧm, who
appeared for the plaintiffs, did not appear to be strongly taking
issue with the
application for condonation.
[4]
Having considered the explanation
given by the defendant and other considerations submitted by the
parties, I am satisfied that
condonation for the late filing of the
answering affidavit should be granted.
Background
facts
[5]
The plaintiffs are joint trustees of
the insolvent estate of Alwyn Bernardus Smit (‘Smit’),
who was finally sequestrated
on 8 April 2014. It is averred in the
particulars of claim that before the sequestration of his estate,
Smit made payments to the
defendant, alternatively for the benefit of
the defendant, in the amounts and on the dates set out in annexure
“PC2”
of the particulars of claim.
[6]
It is further alleged that each of
these amounts constituted a disposition of his property by Smit, as
contemplated in s 2 of the
Insolvency Act 24 of 1936 (‘the
Insolvency Act&rsquo
;); each of these dispositions was made at a time
when the liabilities of the insolvent exceeded the value of his
assets; each such
disposition was not made for value; alternatively
was made with the intention of preferring the defendant above other
creditors
of the insolvent and had the effect of doing so; and
constituted a disposition of his property as contemplated in
s 26
,
alternatively
s 29
, alternatively
s 30
of the
Insolvency Act, and
each liable to be set aside in terms of the
Insolvency Act.
[7
]
As regards the allegation that Smit
made payments to the defendant or for his benefit, the defendant made
the following allegation
in his plea: ‘
Defendant
bears no knowledge hereof, does not admit same and puts Plaintiffs to
the proof thereof
.’
[8]
With regards to the allegation that
the alleged payments constituted dispositions, his response was that:
‘
Defendant denies that any payment
that he ever received from the insolvent may have, at any time,
constituted a “disposition”
as contemplated herein.
’
[9]
He further denied any knowledge of
whether the liabilities exceeded Smit’s assets at the time the
alleged ‘dispositions’
were made.
[10]
In regard to the plaintiffs’
averments that each such disposition was not made for value or was
made with the intention to
prefer the defendant above other creditors
of the insolvent and constituted a disposition as contemplated in the
relevant provisions
of the
Insolvency Act; and
was liable to be set
aside, the defendant pleaded as follows: ‘
Defendant
bears no knowledge hereof, does not admit same and puts Plaintiffs to
the proof thereof.
In
amplification Defendant pleads that he has never received from
Defendant (sic), at any time material hereto, any payment without
value, made to him by the insolvent for the purpose of preferring one
creditor above the other, same having the effect of doing
so, and
that such payment, if received by the Defendant, may have constituted
a disposition as contemplated by the
Insolvency Act, and
further
denies that any such payment, if received; falls to be set aside.
’
[11]
On 31 July 2015, the plaintiffs
delivered a Request for Trial Particulars for the purpose of
preparing for trial, where full particulars
of all payments made by
Smit to the defendant or for his benefit at the time when these were
made from 1 January 2010 to 8 March
2014 were requested. I will not
state all the particulars requested in detail as those adequately
appear in the request for further
particulars document. What is
important to mention, however, is that the plaintiffs required full
particulars regarding each payment
made to the defendant by Smit
during the stated period. Reasons for such payments made were also
requested.
[12]
The defendant delivered his Reply to
the Plaintiffs’ Request on 12 October 2015 where he stated
that: ‘
Defendant indicated in its
plea that it “may” have received payments and “if”
same was received it would
not constitute payment without value.
Defendant can categorically state that it has received none of the
payments specified in
the Plaintiffs annexure “PC2”
’
[13]
The plaintiffs were not satisfied
with this answer hence the bringing of this application. Key to this
application is an affidavit
deposed to by Smit which is attached to
the founding affidavit. In it Smit alleges that he made 27 payments
to the defendant and/or
for the defendant’s benefit as set out
in annexure “PC2” of the plaintiff’s particulars of
claim. He attached
bank statements pertaining to the alleged 27
payments.
[14]
He alleges further that these
payments were made to the bank accounts nominated by the defendant.
Some of these alleged payments
had certain references to “M &
R Wholesalers” and “Fish City” and to an account
number [47.........].
These payments, he alleges, were made at the
request of the defendant.
[15]
It is submitted by the plaintiffs
that the particulars sought in the request are strictly necessary to
enable the plaintiffs to
prepare for trial and that the defendant
cannot refuse to provide such particulars based on a denial that any
payments were received
by him.
[16]
The plaintiffs were also not
satisfied with the defendant’s discovery affidavit. They
delivered a Notice in terms of
Rule 35(3) of the Uniform Rules
requiring the defendant to disclose and make available for
inspection:
‘
1.
All documents and correspondence relating to
any
payments made by or on behalf of the defendant to Alwyn Bernardus
Smit (‘the insolvent’) and payments received by
or on
behalf of the defendant from the insolvent
during the period 1 January 2010 to 8 March 2014.’
2. All statements in
respect of all bank accounts utilised for the payments or receipt of
payments referred to in 1.’
[17]
In reply to the Plaintiff’s
Notice in terms of Rule 35 (3) the defendant stated as follows:
‘
Defendant
has no documentation in his possession that reveals any payments made
to the Defendant and / or correspondence relating
to payments made by
the Defendant to Alwyn Bernardus Smit. Likewise the defendant
does not have any bank statements relating
to the payments
aforesaid
.’
[18]
According to the plaintiffs it is
clear that payments were made to bank accounts nominated by the
defendant and that he cannot avoid
producing his personal bank
statements or bank statements in respect of other accounts conducted
by him in another name by simply
making a bald denial that any
payments were received by him.
[19]
It is submitted on behalf of the
plaintiffs further that the defendant’s answering affidavit
says very little and simply regurgitate
the vagueness that is
contained in the plea. It does not deal with the allegations
contained in Smit’s affidavit by denying
or admitting or even
giving an explanation thereto. Because of that, so argue the
plaintiffs, Smit’s allegations remain uncontroverted
and should
be taken as correct.
Analysis
[20]
The entitlement by a party to
particulars for the trial derives from Rule 21 of the Uniform Rules.
Rule 21 (2) provides that after
the pleadings have closed any party
may, not less than 20 days before trial, deliver a notice requesting
only such further particulars
as are strictly necessary to enable him
to prepare for trial. In terms of Rule 21 (4) ‘
[i]f
the party requested to furnish any particulars as aforesaid fails to
deliver them timeously or sufficiently, the party requesting
the same
may apply to court for an order for their delivery or for the
dismissal of the action or the striking out of the defence,
whereupon
the court may make such order as to it seems meet.
’
[21]
The
purpose of further particulars for trial is trite. It is to prevent
surprise, to ensure that a party is told with great precision
what
the other party is going to prove in order to enable his opponent to
prepare his case to combat counter allegations and not
to tie the
party down and limit his or her case unfairly at the trial.
[1]
[22]
It
has been found that the request would therefore relate to pleaded
issues and would not raise further or new issues between the
parties.
[2]
The purpose of
the request therefore is to clarify issues already defined in the
pleadings in order to facilitate better
preparation.
[23]
While
in general the purpose of particulars for trial is not to elicit
evidence or information which will be canvassed at the trial,
[3]
at times furnishing of particulars may involve disclosure of
evidence. Frequently the furnishing of particulars might result in
the disclosure of evidence and that has been held not to be a ground
for refusal of an order to compel particulars.
[4]
However, ‘
[n]o
hard and fast rule can be laid down as to the degree of particularity
that is required; the Court exercises its discretion
upon the facts
of each case; and the decision in one case is no safe guide to the
solution of another unless the relevant facts
are identical
.’
[5]
Ultimately the court retains a discretion as to whether it should
grant or refuse an order compelling discovery. A party is accordingly
not entitled to an order compelling a reply as of right should the
opposing party fail to deliver further particulars timeously
or
sufficiently. Such a party must set out information to enable the
Court to consider whether or not to exercise its discretion
in its
favour.
[6]
[24]
The second leg of the application to
compel deals with discovery and is intertwined with the request for
further and better particulars
as both deal with the payments
allegedly paid to the defendant by Smit as set out in annexure “PC2”
of the particulars
of claim. In this regard, much of the applicant’s
argument was devoted to the defendant’s failure to produce the
bank
statements required in terms of the plaintiffs’ Rule 35
(3) Notice and that uncontroverted evidence existed as evidenced by
Smit’s affidavit that payments set out in PC2 were made to the
or for the benefit of the defendant by Smit.
[25]
Rule 35(3) provides that if a party
believes that there are, in addition to documents or tape recordings
that have been discovered,
others which may be relevant to any matter
in question in the possession of any party thereto, the former may
give notice to the
latter requiring him to make same available for
inspection in accordance with sub-rule 6, or state on oath within ten
days that
such documents are not in his possession, in which event he
shall state their whereabouts, if known to him.
[26]
Rule 35 (6) provides that a party
may by notice require the other party to make available for
inspection any documents or tape recordings
disclosed in terms of
sub-rules (2) and (3). The latter shall then, within five days,
deliver a notice in which he or she will
state a time within five
days of the date of delivery of the notice when the documents or tape
recordings may be inspected. The
party wishing to inspect shall be
entitled at the time therein stated and for a period of five days
thereafter, during normal business
hours and on any one of such days,
to inspect such documents or tape recordings and to take copies or
transcriptions thereof.
[27]
In terms of Rule 35(7) if a party
fails to discover or, having been served with a rule 35 (6) notice,
omits to give notice of a
time for inspection or does not allow
inspection, the party desiring discovery or inspection may apply to a
court, which may order
compliance with this rule and, failing such
compliance, may dismiss the claim or strike out the defence.
[28]
As to the request for further
particulars, the defendant denied knowledge of the plaintiff’s
claim that he received any payment
without value, and averred that if
any payment may have been received, such payment did not constitute a
voidable disposition which
fell to be set aside in terms of the
Insolvency Act. He
further put the plaintiffs to the proof of the
fact that payments were made to him and that such constituted
payments without value.
The defendant’s response to the request
for trial particulars, however, was that he received none of the
payments specified
in annexure “PC2” of the particulars
of claim.
[29]
Mr Borgstrӧm submitted that
the plea and the defendant’s reply to the request for further
particulars are contradictory
and that contradiction has not been
explained. In his words, no attempt is made to explain the change of
heart. According to him,
the defendant has delivered a deliberately
confusing, contradictory and evasive plea and the answers he provided
both to the discovery
and further particulars’ request are
insufficient.
[30]
It was accepted on behalf of the
plaintiffs that the defendant’s reply to the request for
further particulars constitutes
part of the pleadings. That being the
case, it is difficult to see how the response that : ‘
Defendant
can categorically state that it has received none of the payments
specified in Plaintiff’s
[sic]
annexure “PC2”
’
should not be accepted as the defendant’s answer to the
questions regarding payments that are alleged as those he
received
from the plaintiffs. The Defendant submits that to the extent that
there was any confusion in his plea regarding whether
or not payments
were received by him or for his benefit, he has made it clear that he
received none of the payments in PC2 which
form the foundation of the
plaintiffs’ claim.
[31]
The position would have been
different had the defendant not given a reply denying receiving
payments set out in PC2.
[32]
To the extent that a complaint is
raised that the plea was confusing or contradictory or vague and
embarrassing, that is a different
complaint. The plaintiffs did not
raise an exception regarding this. I agree that they were not obliged
to raise an exception;
they were within their rights to request
further particulars, which they did. Mr Borgstrӧm argued that
an exception would
have failed, in any event, because the plea was
not vague and embarrassing but deliberately evasive.
[33]
An answer which now forms part of
the pleadings has been delivered, which seeks to clarify averments
made in the plea (whether or
not the plaintiffs agree with the answer
is a different issue). I am not sure if matters can be taken beyond
that, and on what
basis could the court compel the defendant to give
answers on payments that he alleges he never received, i.e. those
listed in
PC2 of the plaintiffs’ particulars of claim, which
form the basis of the plaintiffs’ claim.
[34]
The
plaintiffs’ request for further and better particulars is
clearly based on Smit’s affidavit who seeks to show that
he
made the payments contained in PC2 to the defendant and illustrate
those by attaching bank statements to his affidavit.
The
averments in this affidavit did not form part of the pleadings. I
disagree that the Plascon-Evans rule
[7]
bears any relevance to these interlocutory proceedings. The court is
not called upon to resolve on the disputed evidence between
the
parties, at this stage. To ask the court to accept Smit’s
evidence as uncontroverted and to order the defendant to admit,
deny
or offer explanation on the basis of Smit’s affidavit would be
taking things too far, in my view. What compounds the
difficultly in
this case is that the defendant has offered a reply denying that
payments were made to him.
[35]
I therefore do not see how the
defendant can be forced to change his reply, based on the information
contained in Smit’s affidavit.
If he alleges that he did not
receive the payments alleged in the particulars of claim, as he has
done so in his reply to the request
for further particulars, what
more can the court do in those circumstances? It seems to me the
issues raised in Smit’s affidavit
are indeed matters that
should be canvassed at trial. To the extent that the plaintiffs
are dissatisfied with the defendant’s
denial that he received
those payments or his alleged ‘change of heart’ as it
were between his plea and reply, those
are matters which he can be
cross- examined on. He would also have the opportunity to test Smit’s
allegations. I therefore
decline in these circumstances to exercise
my discretion in favour of the plaintiffs by granting an order
compelling delivery of
further particulars as sought by them in this
application.
[36]
Turning to the issue of discovery,
Mr Borgstrӧm argued that the court does not have to determine
whether payments were made,
all that is required is for the court to
compel the defendant to deliver the bank statements and if he does
not have those or if
they are not in his control or lost, to say so
under oath.
[37]
Whilst I have found that it would
not be appropriate to make an order on the basis of Smit’s
affidavit, I am persuaded by
the argument that it is not sufficient
for the defendant to state in a form of a notice that he has no
documentation in his possession
relating to any payments made by Smit
to him and that he does not have any bank statements relating to the
payments as aforesaid.
[38]
Putting aside Smit’s
affidavit, bank statements of all bank accounts for payments made by
or on behalf of the defendant to
Smit and payments received by or on
behalf of the defendant from Smit during the period 1 January 2010 to
8 March 2014, were required
by the plaintiffs in their
Rule 35
(3)
Notice dated 24 July 2015. I disagree with Mr Fisher when he says
that the plaintiffs have never asked for bank statements.
Annexure A
to the
Rule 35
(3) Notice bears that request, in my view.
[39]
Mr Fisher submitted that a request
to discover bank statements is justifiable but should have been done
before coming to court.
I do not follow this argument, Annexure
A of the plaintiffs’
Rule 35
(3) Notice is quite clear that
all
statements in respect of all bank accounts utilised for the payments
or receipt of payments referred to above
were requested. If any specificity was required by the defendant
about the bank statements required, nothing stopped him from asking
the plaintiff for further information in that regard. Instead he
filed a notice in response to the
Rule 35
(3) notice stating that he
had no such documents in his possession and likewise with the bank
statements. There was no indication
that he never understood what was
asked of him, he responded to the request by saying he did not have
the documents required.
[40]
The wording of
Rule 35(3)
notice
appears to be unequivocal, in my view. If the defendant had
misunderstood it as being too broad, unclear on unspecific he
should
have said so. The defendant never showed any misunderstanding
regarding what was required of him. He responded to the notice
by
stating that he did not have those in his possession by way of
notice. Furthermore, the claim is clearly about payments made
to him
or for his benefit by Smit as set out in PC2. Annexure A of the
Rule
35
(3) notice states which bank statements are required and for which
period.
[41]
In terms of
Rule 35
(3), the party
who believes that there are other documents which may be relevant to
any matter in question in the possession of
any party thereto, may
give notice to the latter requiring him to make the same available
for inspection in accordance with sub-rule
(6),
or
to state on oath within ten days that such documents are not in his
possession, in which event he shall state their whereabouts,
if known
to him
.
[42]
To
illustrate the importance of compliance with the rules dealing with
discovery, it has been held in relation sub-rules 1 and 2
of
Rule 35
that even an attorney cannot make discovery required on affidavit on
behalf of his client, except in very special circumstances
and the
attorney is in a position of his own personal knowledge to make a
comprehensive affidavit.
[8]
In
regard to the relevant sub-rule (3), objections to an attorney
deposing to the discovery affidavit were held to be equally valid
as
in sub-rules 1 and 2.
[9]
It
was held in
Rellams
(Pty) Ltd
supra that ‘
Rule
35
(3) concerns documents not yet discovered and
clearly
contemplates an affidavit other than and additional to one made under
Rule 35
(1)
….[
t]he
plaintiff is at least entitled to be informed in proper form if the
documents called for are in the defendant’s possession
and if their relevance is being disputed. This has not been done and
the application calling upon the defendant to comply with
Rule 35
(3)
should accordingly have been granted.
’
[10]
(Underline for emphasis)
[43]
It follows therefore that replying
to the plaintiffs’ notice in terms of
Rule 35
(3) by way of a
notice or a document through an attorney cannot constitute sufficient
response and is not compliant with the rule.
Rule 35
(3) clearly
contemplates an affidavit by the defendant and stipulates that the
plaintiffs must require the defendant to, inter
alia, ...
state
on oath
within
ten days that such documents are not in his possession, in which
event he shall state their whereabouts, if known to him
.
In the circumstances, relief sought for compliance with
Rule 35
(3)
must succeed.
[44]
On the issue of costs, it seems
appropriate, in my view, to leave that issue for determination at a
later stage by the trial court
in view of my findings on the relief
sought. Same should apply with regard to the condonation application.
[45]
I therefore make an order as
follows:
1.
Late filing of the answering affidavit is
condoned.
2.
The application for relief directing the
defendant to furnish the plaintiffs with the particulars requested in
paragraphs 1 –
3 of the plaintiffs’ request for further
particulars for the purpose of preparation for trial dated 31 July
2015 is refused;
3.
The application in respect of the
Rule 35
(3) discovery relief against the defendant succeeds and the defendant
is directed to, within ten days of this order, produce for
inspection
by the plaintiffs in accordance with
Rule 35
(6), the documents
referred to in the plaintiffs’
Rule 35
(3) Notice dated 24 July
2015, or to state on oath that such documents are not in his
possession, in which event to state their
whereabouts, if known to
the defendant.
4.
Costs are to stand over for later
determination.
N
P BOQWANA
Judge
of the High Court
APPEARANCES
For
the Plaintiffs: Adv D Borgstrӧm
Instructed
by: Biccari Bollo Mariano Inc., Cape Town
For
the Defendant: Adv W Fisher
Instructed
by: Sylvester Vogel Attorneys, Rondebosch c/o Keith Hamblin &
Co., Cape Town
[1]
Thompson
v Barclays Bank DCO
1965
(1) SA 365
(W) at 369D-E; Lotzoff v Connel and another
1968
(2) SA 127
(W) at 129 C- D;
Erasmus,
Superior Court Practice, Second Edition, Van Loggerenberg , Volume 2
at DI-252
[2]
See
Swissborough
Diamond Mines (Pty) Ltd and Others v Government of RSA and Others
1999 (2) SA 279
(TPD) at 317 D
[3]
Carte
v Carte
1982
(2) SA 318
(D) at 319 C-D
[4]
Brett
v Schultz
1982 (3) SA 286
(SE) at 292H-293B and
Lotzoff
v Connel and another
supra
at 129 D-E.
[5]
South
African Railways and Harbours v Deal Enterprises (Pty) Ltd
1975 (3) SA 944
(W) at 947 D - E
[6]
Szedlacsek
v Szedlacsek; Van Der Walt v Van Der Walt; Warner v Warner
2000
(4) SA 147
(E) at 150 A-B
[7]
Plascon-Evans
Paints (TVL) Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) ; [1984] 2 All 366 (A)
[8]
Erasmus
Superior Court Practise
,
Second Edition, Van Loggerenberg, Volume 2, Juta D1- 459
[9]
See
Rellams
(Pty) Ltd v James Brown & Hamer Ltd
1983
(1) SA 556
at 558 G – 559D and
Richardson’s
Woolwasheries Ltd v Minister of Agriculture
1971 (4) SA 62 (E)
[10]
Rellams
(Pty) Ltd v James Brown & Hamer Ltd
supra
at 559 C - D