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[2016] ZAWCHC 184
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Daverveldt and Another v Kromhof and Another (3817/2016) [2016] ZAWCHC 184 (8 September 2016)
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IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE
DIVISION, CAPE TOWN)
Case No: 3817/2016
In the
matter between:
LUCAS ADRIANA HENRICUS
CORNELIA DAVERVELDT
First
Applicant
AGNES MARIA
ROS
Second
Applicant
and
HENRIETTE MARIJKE
HUBERS KROMHOF
First
Respondent
SMITH TABATA BUCHANAN
BOYES
Second
Respondent
Court:
Canca, AJ
Date
of Hearing:
25 August 2016
Date
of Judgment:
8 September 2016
JUDGMENT
INTRODUCTION
1.
This is an application for an
anti-dissipation interdict against the first respondent (“Kromhof”).
The effect
of the relief sought would prevent Kromhof from dealing
with a substantial portion of the proceeds of the sale of her house,
transfer
of which is due to take place on 1 October 2016.
2.
Kromhof is a Dutch national who, together
with her husband, have been living in this country as permanent
residents, with their
three minor children, since 2007.
3.
The applicants have instituted an action
against Kromhof and now seek an order directing the second
respondent, the attorneys attending
to the transfer of Kromhof’s
house, to retain an amount of R3 190 000,00 in their trust
banking account pending
finalisation of the action against Kromhof.
The action flows,
inter alia
,
from alleged latent and patent defects in a property the applicants
purchased from Kromhof.
THE APPLICANTS’
CONTENTIONS
4.
The applicants contend that, having sold
her remaining tangible asset of value in the country, Kromhof will
either spirit the funds
realised from the sale of her house from
South Africa or remove same from their potential grasp, should they
succeed in their action.
The order prayed for would not only
ensure that this Court retained jurisdiction over Kromhof but would
also ensure that the Court
was able to make an effective order
against her if the amount claimed was retained in the second
respondent’s trust account,
so the contention continued.
5.
The first respondent opposes the
application for the reasons set out hereunder. There is no
opposition by the second respondent
nor was there an appearance by it
at the hearing of the matter.
THE FIRST RESPONDENT’S
CONTENTIONS
6.
In brief summary, Kromhof’s
opposition to this application rests on the following:
(a)
the applicants’ averments in the
founding affidavit are bald, unsubstantiated, vague, legally suspect
and based on unfounded
beliefs;
(b)
the hurdle of making a
prima
facie
case has not been overcome;
(c)
the requirement of establishing a
well-grounded apprehension of irreparable harm should interim relief
not be granted and the ultimate
relief granted, has not been met; and
finally
(d)
Kromhof’s rebutting allegations
negate any inference of an intention to dissipate or hide her funds
so as to defeat the applicants’
claim. The rebutting
allegations also cast doubt on the prospects of success in the action
by the applicants, so the contention
continued.
THE LEGAL REGIME
7.
There are various threshold requirements an
applicant for an anti-dissipation order has to meet. The first
of which, given
the nature of the order sought, are most of the
standard requirements for an interim interdict. The
requirements for an interim
interdict are trite and include:
(a)
a
prima facie
right albeit open to some doubt,
(b)
a well-grounded fear of irreparable harm to
the applicant if the interim relief is refused and the ultimate
relief is granted eventually,
(c)
the absence of a satisfactory alternative
remedy, and
(d)
The balance of convenience favours the
grant of interim relief. See
Myflor
Investments (Pty) Ltd v Everett NO and Others
2001 (2) SA 1083
(C) at 1088 E-F.
Although
Knox D’Arcy
Ltd v Jamieson and Others
[1996] ZASCA 58
;
1996 (4) SA 348
(SCA) at 373D states
that the requirement of no alternative remedy (in an application for
interim relief) does not apply in the
case of an anti-dissipation
order, the rest of the requirements do.
8.
The second threshold requirement to be met
in order to obtain an anti-dissipation order, where the applicant
does not have any special
claim to the respondent’s property,
is for the applicant to convince the Court that “
the
respondent is wasting or secreting assets with the intention of
defeating the claims of creditors”
.
See the dictum of Harms ADP in
Carmel
Trading Co Ltd v Commissioner of South African Revenue Services and
Others
2008 (2) SA 433
(SCA) at para 3
where the learned Judge states that “
such
an order
[a preservation and
anti-dissipation order]
, which
interdicts a respondent from dissipating assets, is granted in
respect of a respondent’s property to which the applicant
can
lay no special claim. To obtain the order the applicant has to
satisfy the Court that the respondent is wasting or secreting
assets
with the intention of defeating the claims of creditors.
Importantly, the order does not create a preference for the
applicant
to the property interdicted.
”
9.
It is common cause that this application is
to preserve an asset that is not in issue between the parties.
The applicants
do not claim any proprietary or quasi-proprietary
right to the proceeds of the sale of Kromhof’s house.
10.
The Courts are loath to grant
anti-dissipation orders given the restrictions such orders place on a
person’s ability to deal
with his or her asset as he or she
wishes. A key question in this matter is whether the
applicants, have on the papers, advanced
a
prima
facie
case with regard to Kromhof’s
intention to secrete her assets so as to frustrate or defeat their
claim and in regard to their
right to the relief claimed in the
action?
THE MERITS
11.
Ms Davis, for the first respondent, as a
preliminary point, argued that the applicants’ founding
affidavit does not make out
a
prima
facie
case for the relief sought.
Consequently, the application ought to be dismissed on this ground
alone without the need to deal
with the disputes on the papers, so
the argument continued.
12.
Before I proceed to consider whether there
is merit to the point
in limine
,
it is convenient that I briefly deal with Kromhof’s application
in terms of Rule 6(5)(e) seeking leave to file a supplementary
answering affidavit.
13.
The purpose of the supplementary answering
affidavit, in summary, was to (a) deal with the contents of a
supplementary affidavit
filed by the applicants’ attorney which
Kromhof averred she only had sight of after she had deposed to her
answering affidavit;
(b) in clear terms set out in whose name the
proceeds from the sale of her house would be held and (c) correct a
bona fide
error
in her answering affidavit.
14.
Ms Ipser, for the applicants, opposed the
inclusion of Kromhof’s supplementary affidavit as part of the
papers arguing that
there were no special circumstances set out
therein, justifying the departure from the rule that only three sets
of affidavits
are allowed in motion proceedings.
15.
Following argument, I granted the requested
relief and allowed the inclusion of Kromhof’s supplementary
affidavit. I
was not persuaded that the supplementary affidavit
forming part of the papers would prejudice the applicants.
Whilst it is
true that departure from the general rule that only
three affidavits are allowed in motion proceedings is not granted
lightly,
it would, in my view, not serve the aims of justice if the
contents of such a supplementary affidavit are suppressed when they
would assist the Court when considering a matter with such drastic
consequences. Having disposed of this aspect of the matter,
I
now turn to consider the merits of the preliminary point raised by Ms
Davis.
16.
In advancing her argument that the
applicants have failed to establish a
prima
facie
case, Ms Davis, relying on the
test set out by Corbett J (as he then was) in
Bader
and Another v Weston and Another
1967
(1) 134 (C) at 143 F-G, argued that, viewed as a whole, the
allegations in the founding affidavit were such that a reasonable
person would not conclude that (a) Kromhof intended to secrete her
funds in order to defeat the applicants’ claim or that
(b) the
applicants’ prospects of success in the action were open to
serious doubt.
17.
It is appropriate at this stage to give a
very brief history of the dispute between the applicants and
Kromhof. As already
stated, Kromhof and her family are Dutch
nationals. Kromhof describes herself as a relocations
consultant who provides bespoke
services and packages to mainly
European clients wishing to relocate or emigrate to South Africa.
Part of the services she
offers is to identify suitable houses to
either purchase or rent to her client. She charges her clients
an agreed fee.
Having settled in South Africa, she built the
family home at 1 K. Lane (which is the one in respect of which relief
is sought by
the applicants) and subsequently built another house,
next to the family home, at 2 K. Lane (“the property”).
18.
During March 2014 the parties concluded a
sale agreement in terms of which the applicants would purchase the
property for R12 740 000,00
and that transfer would be
effected by no later than 1 November 2014. It is worth pointing
out that the property was sold
voetstoots
and that Kromhof warranted that
the property’s improvements and fixtures were in a good state
of repair. The applicants,
following an amendment to the sale
agreement concluded on 30 August 2014, took early occupation of the
property. Annexed
to the sale agreement was a list setting out
defects the parties agreed needed fixing. Transfer of the
property was effected
during September 2014.
19.
During April 2016 the applicants issued
summons out of this Court claiming,
inter
alia
, that:
(a)
having discovered numerous latent and
patent defects in the property, the cost of remedying same amounting
to R1 331 805,17,
Kromhof, as a buyer and seller of
immovable property in the ordinary course of her business, fell
within the provisions of the
Consumer Protection Act, 68 of 2008
(“the CPA”). Citing sections 55 (2) (b) read with
section 55 (5) (a) of the
CPA, the applicants contended that as
consumers, they were entitled to receive goods that were of good
quality, in good working
order, free of defects, regardless of
whether the product’s failure or defect was latent or patent or
whether it could have
been detected by a consumer before taking
delivery thereof. The effect of the aforesaid section of the
CPA was to,
inter alia
,
exclude the
voetstoots
clause.
(b)
in the alternative, and in the event of the
CPA not being applicable, the applicants still lay claim to the sum
of R1 331 805,17
on the basis that Kromhof had fraudulently
and with bad intent concealed the defects or had knowingly
misrepresented their absence;
and finally, should the Court not find
in their favour in respect of the aforementioned claims, then,
(c)
the applicants aver that they would have
paid only R10 000 000,00 for the property and therefore
demand the difference
between what they paid for the property and
what they would have paid, namely the sum of R2 740 000,00.
20.
It is common cause that Kromhof is
defending the action instituted against her by the applicants.
In her papers in this application
and in her Plea in the action,
Kromhof denies falling under the definition of an estate agent or
being a speculator in property.
The property sold to the
applicants was built for occupation by her parent, who subsequently
preferred to live elsewhere.
Kromhof, further pleads that
R250 000,00 of the purchase price paid by the applicants remains
in the trust account of their
attorneys, which money was to be
utilised by them to effect repairs to the defects listed as at 30
August 2014. Kromhof has
also instituted counter claims in
excess of R220 000,00 against the applicants.
21.
It is not necessary for purposes of this
judgment to evaluate the respective parties’ chances of success
in the action.
However, this background gives body to the point
in limine
argument raised by Ms Davis, which I now proceed to consider.
22.
In attacking the applicants’ case
with regard to Kromhof’s intention to secrete her assets, Ms
Davis argued that the
mere fact that Kromhof sold her home, replacing
one form of asset with another, namely money, is insufficient,
without more, to
warrant an inference that such a sale was concluded
with the purpose of liquidating her assets so as to spirit same from
the jurisdiction
of this Court and thus defeat the applicants’
claim.
23.
According to the founding affidavit, the
applicants’ case was based on,
inter
alia
, the sale of the 1 K. Lane
property being Kromhof’s only tangible asset of any value in
South Africa, their belief that,
following interactions with Kromhof
and her husband, their alleged fraudulent misrepresentations to them
(as to the state of the
property) and Kromhof’s failure to
comply with certain contents of their attorney of records’
letter dated 16 May 2016.
It is convenient that I quote
portions of this letter. The relevant paragraphs of the letter
addressed to Kromhof’s
then attorneys’ Morkel & De
Villiers reads as follows:
“
RE:
LUCAS DAVERVELDT & AGNES ROS / HENRIETTE KROMHOF – CASE NO
3817/16
We wish to advise that
it has come to our client’s attention that:
1.
Your client has sold her house on
Monday, 9 May 2016 (despite her repeated contentions that it was not
on the market);
2.
Your client’s oldest child is
receiving (or is about to receive) tertiary education in Holland;
3.
Your client’s youngest child
is also to be relocated to Holland for secondary education in the
foreseeable future;
4.
Your client intends to leave South
Africa; and
5.
Your client will have no tangible
assets in South Africa upon registration of transfer.
In the circumstances
our clients demand that adequate security for the capital and costs
be provided in the sum of R3 190 000,00
together with
interest to accrue on an interest bearing trust account, by way of an
irrevocable undertaking by your firm, alternatively
a bank guarantee,
to be provided to us within 7 days hereof, failing which our client
shall be left with no alternative than to
apply for an urgent
interdict …”
24.
Kromhof, in dealing specifically with the
allegations set out in the above quoted letter states in brief
summary that: She
and her family have deep roots in South
Africa and regard the Western Cape as their permanent home.
They have three children,
two boys aged 15 and a girl aged 17, who
intends studying at the University of Stellenbosch next year 2017.
She and her husband
have established businesses in the country and,
having an autistic child, set up The Cape Autism Charity Trust of
which they are
trustees and active fundraisers. Pointedly, she
avers that one of their sons only completes his grade 12 in December
2019
and that if they were to consider leaving South Africa, this
would only happen after he had completed his schooling here, possibly
after 2020.
25.
The difficulties with the applicants’
averments set out in their founding affidavit are several. As
correctly argued
by Ms Davis, there is no substantiating evidence
that Kromhof sold her house with the purpose of removing the proceeds
thereof
from South Africa. There is also no such an allegation
in the founding affidavit. Mere belief by the applicants,
following
interaction with Kromhof without furnishing details
regarding those interactions, is not sufficient as was contended for
on behalf
of Kromhof, to meet the requirement of
prima
facie
proof in applications of this
nature. The vague, bald and unsubstantiated allegations on
which the applicants have based their
case, simply does not show that
Kromhof has the required state of mind that, viewed holistically,
there is sufficient evidence
before me to grant the relief sought.
Even the allegation as to Kromhof’s fraudulent
misrepresentation lacks a factual
foundation as no evidence is put up
to show that there are defects in the property from which I can draw
an inference that Kromhof
was possibly aware of such defects but
failed to disclose them. In fact, Kromhof specifically states
in her supplementary
affidavit that the funds will be invested in her
name with Investec Bank until she requires the funds in order to
purchase another
property which is to their liking.
26.
The applicants have failed to establish a
prima facie
case
that Kromhof “
is wasting or
secreting assets with the intention of defeating the claims of
creditors
” nor that there is a
well-grounded fear that she might do so.
27.
For all the reasons set out above I come to
the conclusion that the point
in limine
is sound and thus, must be upheld.
28.
Having found merit in the point
in
limine,
there is no need for me to
pronounce on the second argument advanced by Ms Davis, namely that
the applicants’ claim was legally
dubious and open to serious
doubt.
29.
Ms Davis, during the course of her
argument, sought to persuade me that a sufficiently strong case had
been made out by Kromhof
to warrant a punitive costs order. The
foundation for this argument was that the application was vexatious
due to it being
plainly misconceived and manifestly lacking arguable
merit. The fact that the applicants’ replying affidavit,
not only
contained new matter, argument and allegations impugning
Kromhof’s character and reputation was based on inadmissible
hearsay,
bolstered the need for censure, so the argument continued.
30.
Instances where the Courts have mulched a
litigant with a punitive costs order are trite and need not be
repeated here. The
leading authority dealing with the
circumstances in which attorney and client costs may be awarded, is
AC Cilliers Law of Costs
published
by LexisNexis. See para 4.13 of the updated version of the
book, Service Issue 33 dated April 2016, dealing with
vexatious and
frivolous proceedings and para 4.15 which lists other kinds of
blameworthy conduct.
31.
It is clear from the learned author’s
commentary that the grant of a punitive costs order is only awarded
in certain limited
instances.
32.
It is also manifest from the papers that
the relationship between the protagonists in this matter has
degenerated from that of friendly
neighbours to what Kromhof avers
has necessitated her selling her house so as to put distance between
her and the applicants.
Notwithstanding very able argument by
Ms Davis, I am not persuaded that the actions of the applicants, on
the facts before me,
justify a departure from the general rule.
33.
In the result, I order as follows:
The application is
dismissed with costs on the party and party scale.
---------------------------
CANCA,
AJ
Appearances
For the
Applicants
:
Adv M Ipser
Instructed
by
: Schliemann
Inc.
For the First
Respondent :
Adv D Davis
Instructed
by
: Korbers
Inc.
Cape Town