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[2021] ZAWCHC 83
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Department of Environmental Affairs, Forestry and Fisheries v B Xulu & Partners Incorporated and Others (6189/2019) [2021] ZAWCHC 83; [2021] 3 All SA 166 (WCC) (4 May 2021)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
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SAFLII
Policy
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case No:
6189/2019
In
the matter between:
THE
DEPARTMENT OF ENVIRONMENTAL AFFAIRS,
FORESTRY
AND FISHERIES
Second
Applicant
and
B
XULU & PARTNERS INCORPORATED
First Respondent
INCOVISION
(PTY) LTD
Second
Respondent
(Reg
No: 2017/157169/07)
SETLACORP
(PTY) LTD
Third Respondent
(Reg
No: 2017/21874/07)
FIRST
NATIONAL BANK OF SOUTH AFRICA
Fourth
Respondent
BARNABUS
XULU
Fifth Respondent
INVESTEC
BANK
Sixth
Respondent
REGISTRAR
OF DEEDS, PIETERMARITZBURG
Seventh
Respondent
REGISTRAR
OF DEEDS, CAPE TOWN
Eighth Respondent
In
re:
THE
DEPARTMENT OF AGRICULTURE,
FORESTRY
AND FISHERIES
First Applicant
THE
DEPARTMENT OF ENVIRONMENTAL
AFFAIRS,
FORESTRY AND FISHERIES
Second Applicant
and
B
XULU & PARTNERS INCORPORATED
First Respondent
THE
SHERIFF OF THE HIGH COURT
FOR
PRETORIA CENTRAL, MR TF SEBOKA N.O.
Second Respondent
STANDARD
BANK OF SOUTH AFRICA
Third
Respondent
FIRST
NATIONAL BANK OF SOUTH AFRICA
Fourth Respondent
BARNABUS
XULU
Fifth
Respondent
Hearing dates: 25
February, 9 and 19 March 2021
Judgment
date: 4 May 2021 (delivered via email to the parties’ legal
representatives)
JUDGMENT
– CONTEMPT OF COURT APPLICATION
PANGARKER,
AJ
Introduction
and Notice of Motion
1.
The second applicant, the Department of Environmental Affairs,
Forestry and Fisheries
(DEA)
,
seeks to hold the first respondent, B Xulu and Partners Incorporated
(BXI)
,
an incorporated firm of attorneys, and the fifth respondent, Barnabas
Xulu
(Mr
Xulu)
,
its principal member and director, in contempt of six civil Court
orders granted by the Western Cape High Court. The application
came
before me in the urgent fast lane Court on 25 February 2021 pursuant
to an order granted by Binns-Ward J on 27 November 2020,
that the
second applicant would be entitled to approach the urgent duty Judge
for an appropriate order
[1]
. No
relief is sought against the other respondents. I refer to Mr Xulu
and BXI at various instances in the judgment as “
the
respondents”.
2.
The orders which form the subject matter of the application were
granted by Judges
Rogers, Smith and Binns-Ward during 2019 and 2020.
Judge Smith is a Judge of the Eastern Cape Division of the High
Court
and was appointed by the Minister of Justice to act in the
Western Cape High Court Division during 2020.
3.
The relief sought in the Notice of Motion reads as follows:
1.
Dispensing with the forms and service provided for in the Uniform
Rules of Court
and directing that the application be heard on an
urgent basis in terms of Rule 6 (12)(a).
2.
Declaring the First Respondent, B Xulu and Partners Inc., and the
Fifth Respondent,
Mr Barnabas Xulu, in his capacity as the sole
director of the First Respondent and in his personal capacity to be
in contempt
of the following orders granted by this Honourable Court
under the above case number:
2.1
Paragraphs 3.2.1 and 3.2.3 of the order granted by Rogers J on 21
August 2019.
2.2
Paragraph 144 (e) of the order of 30 January 2020
[2]
.
2.3`
Paragraphs 1 and 3 of the order granted by Smith J on 5 October 2020.
2.4
Paragraph 4.1.6 of the order granted by Smith J on 12 October 2020
order as amended.
2.5
Paragraphs 6 and 7 of the order granted by Binns-Ward J on 25
November 2020.
2.6
Paragraph 4 of the order granted by Binns-Ward J on 27 November
2020.
3.
Imposing a fine, jointly and severally, on the First and Fifth
Respondents as
deemed appropriate by this Honourable Court.
4.
Imposing a period of imprisonment, such as is deemed appropriate by
this Honourable
Court, on Fifth Respondent, Mr Barnabas Xulu,
suspended on condition that Mr Barnabas Xulu, surrenders his Porsche
911 Carrera
with registration [….] (“the Porsche”)
to the Sheriff, Cape Town, for safekeeping pending the finalisation
of the matters remaining under case number 6189/19 (including
appeals) no later than 17h00 hours on the date of the hearing of
this application.
5.
Directing that unless and until the First and Fifth Respondents have
purged
their contempt, that they are precluded from launching any
further applications against the applicants in relation to any
matters
involving, relating to or arising from the disputes and
judgements under case number 6189/19
[3]
.
6.
Directing the First and Fifth Respondents to pay the costs of this
application
on an attorney and client scale, and that until such
costs are paid and that until such costs are paid the First and
Fifth Respondents
are interdicted from launching any further urgent
interlocutory applications against the Applicants.
7.
Granting the applicants such further and/or alternative relief as
this Honourable
Court may deem fit.
Preliminary
issues
4.
I received the Court file shortly after 14h00 on 24 February 2021, a
day before
the hearing, and at that stage, no replying affidavit had
been filed
[4]
. Having apprised
myself of the application and the nature of relief sought, I
requested to see the legal representatives in chambers
before the
hearing as the record indicated that the respondents had applied for
rescission of the orders granted by the abovementioned
Judges and
that the application was to be heard by Zilwa J of the Eastern Cape
Division of the High Court, duly appointed to act
in this Division.
In chambers, Mr Xulu, whom I met for the first time, advised that he
was unrepresented. Mr Ndumiso of Ndumiso
Attorneys indicate that he
had a watching brief, and Mr Manuel, together with senior counsel Ms
Bawa and Mr Joseph, were present
on behalf of the second applicant. I
informed all present that the Court roll was very busy and that there
was an opposed urgent
application waiting to be heard at 14h00. At
that stage, Mr Xulu remarked, without elaborating, that he was of the
view that I
was not seized with the application - I address this
comment below before dealing with the merits of the application.
5.
I requested of the parties and legal representatives to consider a
postponement
of the contempt proceedings pending the determination by
Zilwa J of the application for declaratory relief and rescission.
Zilwa
J was also to hear the outstanding question of Mr
Xulu’s personal liability emanating from the order granted by
Rogers J on 30 January 2020 in the judgment
Department
of Agriculture, Forestry and Fisheries and Another v B Xulu and
Partners Incorporated and Others
(the
Rogers J judgment)
[5]
.
The respondents’ application for declaratory relief and
rescission was delivered on 22 February 2021, three days before
the
hearing of the contempt application
[6]
.
Mr Xulu and the legal representatives were excused to consider my
suggestion while I continued with the urgent Court roll.
Subsequently,
Mr Manuel advised that the parties could not agree on a
postponement and shortly after 12h00 on 25 February 2021, I proceeded
to
hear Ms Bawa’s submissions.
6.
Mr Xulu informed me that his legal representatives
[7]
had withdrawn the day before, that he was on his own and had no right
appearance in the High Court. I informed him that as a registered
legal practitioner (attorney)
[8]
who was the fifth respondent, he was entitled to represent himself.
Mr Xulu then indicated that more time was needed to prepare
for the
matter and that he had only received the replying affidavit during
the proceedings, although Ms Bawa submitted that the
replying
affidavit was served earlier. I requested of Mr Xulu to inform me of
the proposed time needed for legal representation
and the response to
Ms Bawa’s submissions. The indication was that the respondents
could not proceed on the day.
7.
After hearing an opposed request for a postponement, and mindful of
the serious
implications for the respondents were I to grant the
relief sought, my view was that Mr Xulu and BXI should be afforded an
opportunity
to secure legal representation. The further hearing of
the application was thus postponed to 9 March 2021 with orders
related to
legal representation. On 9 March, a further postponement
was requested, foreshadowed by earlier correspondence between Mr Xulu
and Mr Manuel that the respondents’ counsel was secured but not
available on the suggested dates exchanged between the parties.
The
correspondence did not indicate that the parties had agreed to a
postponement of the application. After hearing submissions,
I granted
a final postponement for legal representation and the further hearing
of the application on 19 March 2021 at 14h00. The
registrar provided
Mr Xulu and Mr Manuel with copies of the transcript of proceedings of
25 February 2021 particularly so that
the newly appointed counsel for
the respondents could apprise himself of the proceedings on the day.
8.
On 19 March 2021, at 14h00, Mr Masuku SC appeared for BXI and Mr
Xulu. It seemed
from the opening remarks that Mr Masuku was
instructed directly by Mr Xulu, though I noted Mr Ndumiso also to be
present in Court.
Mr Masuku confirmed having been provided with the
transcript of proceedings of 25 February 2021, and his written heads
of argument
were handed up. Ms Bawa handed in a supplementary note on
the question of the imposition of a fine in contempt applications as,
in her view, she had overreached in her previous submissions on
fines
[9]
.
Mr Xulu’s
view that the Court was not seized with the matter
9.
Mr Xulu expressed in chambers and during the proceedings that that I
am “
not
seized with the matter”
[10]
.
He
did not elaborate but given the attachments to the answering
affidavit and his repetition of the view held, I deem it necessary
to
address this aspect in my judgment before considering the
application. I have had regard to the very lengthy history of the
dispute between the parties which I gleaned from the affidavits and
annexures in this contempt application. The only part of the
record
and Court file in case number 6189/19 which I have had regard to and
been provided with, is the contempt application which
starts at page
5071 of the record.
10.
It is common cause between the parties that pursuant to a written
request on 12 May 2020
by Western Cape High Court Judge President
Hlophe to the Minister of Justice and Correctional Services, Mr
Lamola MP, the latter
on 8 December 2020, appointed Zilwa J of the
Eastern Cape Local Division of the High Court to act as a Judge of
the Western Cape
High Court “
to
hear an application involving B Xulu and Partners Incorporated,
additional”
[11]
.On
19 March 2021, counsel for the respondents was ready to proceed with
argument and indeed never raised an issue that I
was, for some
or other reason, precluded from hearing the contempt application.
11.
In the absence of any clarification, I assume from the affidavits
that Mr Xulu’s view
is premised on the correspondence from
Judge President Hlophe to the Minister requesting the appointment of
Zilwa J to hear an
application as Smith J
[12]
“
may
not hear another application involving the parties”
[13]
.
Mr
Xulu’s view is reflected in paragraph 52 of his answering
affidavit where he states that the only Judge who may hear matters
involving BXI is Zilwa J who was lawfully appointed by the
Minister
[14]
. If indeed Mr
Xulu’s opinion is based on the correspondence referred to
above, then I respectfully disagree that Judge President
Hlophe’s
letter, read together with the Minister’s written appointment
of Zilwa J, is an indication that no other Judge
or Acting Judge of
the Western Cape High Court may hear a matter involving these
parties. In my respectful view, the correspondence
indicates that
Smith J could not hear any further matters or applications as he was
already seized with certain applications involving
BXI, and Zilwa J
was to hear
an
application
between the parties – that is, the personal liability issue
which stood over from the Rogers J judgment and the respondents’
rescission application.
12.
Furthermore, if Mr Xulu‘s view that I was not seized with the
matter is founded upon
Judge President Hlophe’s correspondence
dated 12 May 2020 to Judge President Mbenenge of the Eastern Cape
Division, wherein
Hlophe JP expresses that:
“
In my view
none of the Judges in the Western Cape High Court should
sit in the
matter”
[15]
,
then Mr Xulu’s
reliance is, with respect, misplaced for the following reason: it is
evident from the record that subsequent
to the abovementioned May
2020 correspondence, no less than three Judges of the Western Cape
High Court heard applications under
case number 6189/19. To
illustrate, on 16 October 2020, Magona AJ struck the respondents’
urgent application from the roll
[16]
;
on 28 October 2020, Slingers J dismissed another urgent application
brought by the respondents, and on 25 and 27 November 2020,
Binns-Ward J granted orders against the respondents.
13.
The contempt application was set down in the ordinary course on the
urgent Court roll of 25 February
2021, and pursuant to the order by
Binns-Ward J granted on 27 November 2020. Counsel for the respondents
did not raise an issue
on 19 March 2021 that I am somehow or the
other precluded from hearing the application and in the result, Mr
Xulu’s view
that I was not seized with the application, cannot
be sustained.
Further
developments
14.
Shortly before 10h00 on 19 March 2021
[17]
,
a Mr Ngcobo, candidate attorney at BXI handed to my registrar a
special petition to the Supreme Court of Appeal (SCA) in
respect of
the orders of Rogers J granted on 30 January and 10 September
2020
[18]
respectively. I was
informed that he was instructed to do so by Mr Xulu in order that I
am informed of the status of the matter.
The bundle was placed in the
file and while I noted the relief sought in the Notice of Motion, I
did not pay further attention
to the documents as I was due to start
the Court roll. At 14h00 I placed the candidate attorney’s
visit to chambers
on record. Mr Masuku SC was ready to argue the
respondents’ opposition, which then proceeded whereafter
judgment was reserved.
Brief
history of litigation
15.
The history of litigation between the parties in this matter is well
documented. On 6 June
2019 BXI obtained an order by consent for
payment of its invoices for legal services rendered in favour of the
Department of Agriculture,
Forestry and Fisheries
(DAFF
[19]
)
.
The services were alleged to have been rendered to the Marine Living
Resource Fund
(MLRF)
.
BXI subsequently levied execution when the DAFF failed to pay in
terms of the settlement agreement which was made an order of
Court,
and writs of execution were issued totalling slightly more than
R20 000 000, resulting in funds being removed from
different
departmental bank accounts to be paid to BXI, the execution creditor.
16.
On 5 August 2019, the DAFF applied for urgent relief in the Western
Cape High Court, seeking
to have the writs of execution and
attachment of money suspended pending the determination of relief in
part B (the second part
of the application). The service level
agreement, purportedly concluded between the DAFF and BXI, the
settlement agreement, the
Steyn J order of 6 June 2019 and the writs
were set aside, declared invalid and reviewed in terms of orders
granted by Rogers J
on 30 January 2020 under case number 6189/19
[20]
.
Mr Xulu was joined to the proceedings as fifth respondent, and the
first respondent was ordered to repay R20 242 472, 90
by 30
April 2020. Various applications followed, including the respondents’
recusal applications of Judges Rogers and Binns-Ward,
and
applications for leave to appeal, all of which were subsequently
dismissed.
17.
My understanding of the Rogers judgment
[21]
is that most of the DAFF’s functions were transferred to the
second applicant, the DEA, pursuant to May 2019, and the latter
was
joined to the proceedings without objection. The relief sought
against Mr Xulu is in his capacity as sole director of BXI as
well as
in his personal capacity.
Legal
principles
18.
Section 1 (c) of the Constitution of South Africa, 1996 recognises
the
supremacy of the
rule of law as one of the core values upon which South Africa
is founded.
Civil contempt, which is at the heart of this matter, is the crime of
disrespect
to the Court
and the rule of law
[22]
.
19.
Section 165 of the Constitution states that Courts are independent
and subject only to the
Constitution and the law which they must
apply impartially and without fear, favour or prejudice. No person or
organ of State may
interfere with the functioning of the Courts
[23]
.
Section 165 (5) makes orders of Court binding on all persons and
organs of State to whom/which it applies. Writing about the dignity
and authority of the Courts in
Pheko
and Others v Ekurhuleni City
[24]
,
Nkabinde J states at paragraph 1 of the judgement:
‘
It follows
from this that disobedience towards court orders or decisions risks
rendering our courts impotent and judicial authority
a mere mockery.
The effectiveness of court orders or decisions is substantially
determined by the assurance that they will be enforced.’
20.
In
Fakie
NO v CCII Systems (Pty Ltd
[25]
,
the SCA held that at its essence, contempt of a Court order is the
violation of the dignity, authority and reputation of the Court.
In
S
v Beyers
[26]
,
the Appellate Division (as it then was) held that the purpose of
contempt proceedings is not so much to punish the contemnor,
as it is
to protect the rule of law and prevent unlawful disrespect of
judicial authority. All contempt of Court may be punishable
as a
crime.
21.
A party seeking to hold an opponent in contempt of a civil Court
order has various relief
available to him/her/it. Until
Fakie
,
and more recently
Matjhabeng
Municipality v Eskom
[27]
,
there was much debate about the standard of proof to be applied in
civil contempt applications. After considering
Fakie
,
Pheko
and
Burchell
v Burchell
[28]
,
the Constitutional Court in
Matjhabeng
clarified the position as follows: the standard of proof must be
applied in accordance with the consequences of the remedies
sought
[29]
. If the relief
applied for is a declaratory order,
mandamus
,
structural interdict or similar civil remedy where the contemnor’s
right to freedom and security is not deprived, then the
civil
standard of proof - on a balance of probabilities - applies
[30]
.
Where the civil contempt remedies of committal to prison or the
imposition of a fine are sought, which impact on the contemnor’s
freedom and security of person, then the criminal standard - beyond
reasonable doubt - applies.
22.
In
Fakie
,
the test for contempt of Court was stated as follows: whether the
breach was committed deliberately and
mala
fide
[31]
.
Mere
disregard of the order and non-compliance that is
bona
fide
,
such as occurred in
Consolidated
Fish Distributors (Pty) Ltd v Zive and Others
[32]
,
does not amount to contempt of a Court order. Thus, the
requirements for contempt are:
(a)
the existence of the order;
(b)
the order must be served on or brought to the notice of the
contemnor
[33]
;
(c)
non-compliance with the order; and
(d)
the non-compliance must be wilful and
mala
fide
.
[34]
23.
Once the applicant has proved the first three requirements, then the
respondent bears an
evidential burden in respect of wilfulness and
mala
fides.
[35]
If the respondent fails to establish reasonable doubt as to
wilfulness and
mala
fides
,
then his contempt would be established beyond reasonable doubt
[36]
.
In
Bezuidenhout
v Patensie Sitrus Beherend Bpk
[37]
,
it was held that an order of Court stands until it is set aside by a
Court of competent jurisdiction, and until then, it must
be obeyed
even if it may be wrong
[38]
.
Similar reminders about the validity of Court orders and their
binding nature even in the face of allegations that the orders
were
invalid or incorrectly granted may be found in more recent decisions
of
Minister
of Home Affairs and Others v Somali Association of South Africa
Eastern Cape (SASA EC) and Another
[39]
and
Department
of Transport v Tasima Pty Ltd
[40]
.
Discussion
24.
In the Notice of Motion, the DEA seeks civil remedies in the form of
a declaration of contempt
and a restriction on further litigation
(prayers 2 and 5), and suspended imprisonment and a fine, which are
criminal sanctions
(prayers 3 and 4) that impact on Mr Xulu’s
freedom and security. During argument in reply, Ms Bawa submitted
that the DEA
was not asking for imprisonment
per se
, but only
in circumstances where Mr Xulu fails to surrender his Porsche.
25.
Mr Xulu disputes the authority of the deponent to the founding
affidavit, Mr Cheslyn Liebenberg
[41]
.
Mr Liebenberg is the Director: Corporate Legal Support (Cape Town) of
the second applicant. Annexure CEL 47 is a written
authorisation by
the Acting Director-General of the national DEA, Mr Ishaam Abader,
delegating and authorising the Director: Corporate
Legal Support
(Cape Town) or a functionary acting in that position, to depose to an
affidavit and if necessary, any other affidavit
on behalf of the
Department in case number 6189/19
[42]
.
The document is signed and dated 5 November 2020 and clearly refers
to the litigation under this case number against BXI and Mr
Xulu.
I am accordingly satisfied that Mr Liebenberg was duly authorised to
institute the application on behalf of the DEA.
26.
The first requirement of existence of the order is fulfilled: there
is no dispute between
the parties that the six orders referred to in
paragraphs 2.1 to 2.6 of the Notice of Motion were granted. Mr Masuku
conceded this
undisputed fact at the outset of his argument. Quite
significantly, Mr Xulu as the deponent of the answering affidavit,
does not
dispute nor attack any of the annexures attached to Mr
Liebenberg’s founding affidavit, and furthermore, also does not
dispute
or deny non-compliance by BXI and himself with the orders but
raises certain defences which bear scrutiny.
27.
I am not called on to make any determinations as to the validity or
correctness of any of
the orders granted. In the paragraphs which
follow, I deal with each of the orders which the second
applicant alleges, BXI
and Mr Xulu, disobeyed.
Paragraphs
3.2.1 and 3.2.3 of the Rogers J order of 21 August 2019
28.
On 21 August 2019, Rogers J granted a
rule
nisi
by agreement between the DAFF, BXI and various banks in the DAFF’s
urgent application. BXI has at all stages been the first
respondent
in proceedings under case number 6189/19. Paragraph 3 of the order
reads as follows
[43]
:
Pending the
return day:
3.1
The First Respondent shall not take any further steps to execute the
judgement of Steyn J granted on 6 June 2019 and the suspension
of the
writs of execution and notices of attachment
issued pursuant thereto
shall be extended;
3.2
The First Respondent undertakes that
3.2.1
The R3 400 000 currently in a
FOREX suspense account at First
National Bank shall be put into an
interest-bearing account as provided
for in
section 86
(4) of the
Legal
Practice Act 28 of 2014
, the interest of
which shall be paid as ordered by the
Court hearing the matter;
3.2.2
In relation to the funds transferred to Setlacorp (Pty) Ltd
(“Setlacorp”)
[44]
during the period 5 July 2019
to 6 August 2019, the First Respondent,
and its director, Mr Barnabas Xulu, undertake that the cash on hand
as
held by Setlacorp as at 8 August 2019, being R94 553, will not be
disbursed, and that Setlacorp will make no disposal of assets and
property;
3.2.3
The
First Respondent shall not allow the balance of his trust account to
reduce to below R380 000;
and that the
aforestated shall prevail until the finalisation of the matter or a
court order permitting that the aforementioned
interdict be
discharged
[45]
.
29.
It is the DEA’s case that pending the finalisation of the
principal proceedings between
the parties or the granting of an order
permitting the discharge of the interdict, BXI was obliged to
preserve the R3 400 000
in an attorney’s trust
investment account, and secondly, the balance of its trust account
could not drop below R380 000.
The submission is that BXI failed
to comply with paragraph 3.2.1 by having the money credited to what
appears to be a business
account, and from March 2020, it utilised
the funds for various BXI and personal expenses of Mr Xulu.
30.
Mr Xulu admitted during the proceedings before Rogers J that
R3 400 000 of the
more than R20 000 000 paid to
BXI pursuant to the execution against the DAFF was still available,
and the intention was
to pay certain disbursements which BXI had
incurred on behalf of the applicants. According to him, BXI had
complied with the August
2019 order by retaining the funds “
in
the bank account”
[46]
.
The defence to the contempt allegation is that proceedings regarding
the R3 400 000 were finalised on 30 January 2020
when
Rogers J ordered BXI to pay the R20 242 472, 90 to the
applicants which amount included the R3 400 000. In the
respondents’ view, the order of 30 January 2020 automatically
discharged the August 2019 interim order in respect of the R3 400 000
and the R380 000 and therefore the order cannot (or could not) be
enforced as it had lapsed when the main application was finalised
by
Rogers J on 30 January 2020
[47]
.
31.
BXI was legally represented when the 21 August 2019 order was granted
by agreement between
the parties. The requirement that the order came
to the notice of BXI and thus Mr Xulu, is fulfilled. Whether the
order is correct
or not is not the issue. Certainly, from the
ordinary meaning of the words in the order, paragraphs 3.2.1 and
3.2.3 would remain
until discharged by a Court or until finalisation
of the matter. Paragraphs (j) to (l) of the Rogers J order of 30
January 2020
made it clear that a
rule nisi
was granted
calling on Mr Xulu to show cause on a further date why he should not
be held liable to pay the R20 242 472,
90, jointly and
severally, with BXI. On my understanding, the 30 January 2020 order
did not finalise the matter as the outstanding
issue of Mr Xulu’s
personal liability was yet to be decided.
32.
From CEL 31 attached to the founding affidavit, one sees that
R3 400 000 described
as “
Forex
Holding”
was credited to
BXI’s
First National Bank (FNB) Money on call account number 62587777073
on 23 August 2019
[48]
. The
balance in the account remained at R3 400 000 until 19
March 2020, whereafter various payments were made in respect
of Mr
Xulu personally, BXI staff, various counsel, Millar and Reardon
attorneys
[49]
and rates and
levies in respect of Mr Xulu’s residences in Fresnaye and
elsewhere. The closing balance on 30 September 2020
was R244 720,
78
[50]
. I point out that the
summary of transactions and schedule of interest calculated on actual
transactions are not disputed
[51]
.
33.
Section 86 (4) of the Legal Practice Act
[52]
(the
Act)
states that:
A
trust account practice may, on the instructions of any person, open a
separate trust savings account or other interest-bearing
account for
the purpose of investing therein any money deposited in the trust
account of that practice, on behalf of such person
over which the
practice exercises exclusive control as trustee, agent or stakeholder
or in any other fiduciary capacity.
The evidence clearly
points to the conclusion that the R3 400 000 was not placed
in a trust account as ordered in paragraph
3.2.1, and certainly not
in accordance with the requirements of
section 86
of the
Legal
Practice Act.
34.
BXI
’s trust account in terms of
section 86
(2) of the Act is
held under
account
number 62587780141
[53]
which is not the account into which the R3 400 000 was
paid. The order states that the R3 400 000 must be
preserved as ordered in terms of the Act “
until
the finalisation of the matter or a court order permitting that the
aforementioned interdict be discharged
”
[54]
.
In my view, at the very least, this would mean that BXI had to
preserve the R3 400 000 until Smith J discharged it on
5
October 2020. However, instead of preserving the funds, BXI depleted
the R3 400 000 to a large extent and failed to
pay over the
interest as ordered. In my view, the DEA has proved
non-compliance with paragraph 3.2.1 of the order.
35.
I turn then to paragraph 3.2.3 of the August 2019 order which ordered
BXI to maintain the
balance of its trust account at not less than
R380 000. Mr Liebenberg refers to the trust bank statements
attached as CEL
34.1, which must naturally be read with the schedule
setting out the transactions on the bank statements (CEL 34). Despite
diligent
search, CEL 34.1 is not attached to the founding affidavit.
Given the surfeit of applications between the parties following on
the August 2019 order, the probabilities are that BXI’s trust
account statements form part of another application
contained in the rest of the Court file. My view is fortified by
paragraphs 98 to 100 of the Rogers J judgment, where the learned
Judge explains that BXI provided extracts of its trust account and a
summary to clarify the transactions and entries in that account
[55]
.
The absence of the trust account bank statements is in my opinion,
not detrimental to the application as Mr Xulu does not question
the
accuracy nor correctness of the schedule indicating BXI’s trust
account transaction summary from 21 August 2019 to 31
October 2020.
Furthermore, it is evident from the very detailed founding affidavit
that the summary and schedule were exchanged
previously.
36.
From an assessment of CEL 34, the following balances are apparent
from BXI’s trust
account for the period 21 August 2019 to 4
October 2020:
Date
Trust Account
Balance
21 Aug 2019
R866 033, 17
2 Nov 2019
R350 865,97
18 Dec 2019
R375 761,67
26 Feb 2020
R308 327, 67
27 Feb 2020
R307 702, 67
15 Aug 2020
R356 466, 29
3 Sep 2020
R106 466, 29
1 Oct 2020
R46 466, 29
From the above
table, one sees that on no less than seven occasions between Rogers J
granting the order on 21 August 2019 and Smith
J discharging
paragraphs 3.2.1 and 3.2.3 thereof in October 2020,
the
balance in BXI’s trust account fell below R380 000
.
37.
The detail regarding the recipients of the various payments and
transactions made from the
account is not relevant to this
application. More importantly, there is absolutely no explanation
tendered by Mr Xulu as to why
the trust account balance fell below
R380 000, except the same argument that the August 2019 order
was discharged by the judgment
of 30 January 2020. My comments on
this submission in relation to paragraph 3.2.1 of the August 2019
order apply equally to paragraph
3.2.3. However, even on the
“
discharge of the 2019 order”
argument, my finding
of non-compliance would remain because the trust account balance fell
below the R380 000 threshold on 2 November
and 18 December 2019,
respectively.
38.
The pertinent question is whether BXI acted wilfully and in bad faith
in respect of non-compliance
of paragraphs 3.2.1 and 3.2.3 of the
abovementioned order. BXI agreed to the order and was thus fully
aware, through Mr Xulu, of
the content and ambit thereof. Yet, that
fact notwithstanding, it failed to preserve the R3 4000 000 as
ordered and its non-compliance
continued when it disbursed monies in
trust to such an extent that the account balance fell below R380 000
on seven occasions
[56]
. BXI
could raise reasonable doubt about wilfulness if it could show that
there was a misunderstanding about the meaning of the
order
[57]
,
but this is not the case here as the order was taken by agreement and
at a time when BXI was legally represented. Furthermore,
paragraph 3
remained in effect until the matter was to be finalised or the
discharge of the interdict. On my understanding, the
matter (Mr
Xulu’s personal liability) has not yet been finalised and the
discharge of paragraphs 3.2.1 and 3.2.3 occurred
on 5 October 2020 on
an unopposed basis. Thus, the submission that the August 2019 order
was discharged by the January 2020 order,
serves as no answer to
the case against BXI, which has ignored the general principle that
all Court orders, whether
correctly or incorrectly granted, are
required to be obeyed until they are set aside by a Court of
competent jurisdiction
[58]
. It
is not open to a litigant, including an attorney or law firm, against
whom an order is granted, to pick and choose whether
he wishes to
comply with the Court order. He is obligated to do so as the order
binds him, whether he believes that the order was
incorrectly granted
or not.
39.
In my view, BXI has failed to establish reasonable doubt as to
whether its non-compliance
was wilful and
mala
fides.
I am indeed satisfied that BXI’s
non-compliance in respect of paragraphs 3.2.1 and 3.2.3 amounts to
wilful and
mala fide
conduct which is established beyond reasonable doubt.
In
the result, I find that BXI is in contempt of the aforementioned
paragraphs of the Rogers J order of 21 August 2019.
Paragraph
144 (e) of the Rogers J order of 30 January 2020
40.
The orders of 30 January 2020 were granted pursuant to a judgment in
an opposed matter.
Paragraph 144 (e) ordered BXI to pay the
applicants by Thursday, 30 April 2020, the amount of R20 242
472, 90 which it received
pursuant to the invalid writs of execution
and notices of attachment, subject to any set off arising from
paragraph (g) of the
order. Paragraph (f) directed the applicants to
proceed with verification of BXI’s invoices and to provide a
report by 9
April 2020
[59]
. It
is common cause between the parties that the applicants proceeded to
have a writ of execution issued for the R20 242 472,90
[60]
.
The parties were legally represented and the respondents had
knowledge of the order.
41.
Mr Masuku submitted that this order is a money judgment and as the
applicants proceeded
by way of execution, committal for contempt is
inappropriate to enforce compliance with such an order. Ms Bawa
submitted that the
applicants were not seeking contempt because BXI
or Mr Xulu had not made payment of the R20 million; if they had, they
would have
proceeded with liquidation or sequestration proceedings
but that the DEA’s focus was the preservation of the
R3 400 000.
I understand Ms Bawa’s submissions to be
a concession that an order for contempt of Court cannot be granted in
respect of
non-payment of a money judgment, but she has argued that
on the civil standard of proof, a declaration of contempt is still
competent.
42.
In terms of the common law there is a distinction between orders
ad
solvendam pecuniam,
which
relate to the payment of money, and orders
ad
factum praestandum,
which
requires a person to perform a certain act or refrain from a
specified action. Failure to comply with an order to pay money
was
not regarded as contempt of Court whereas failure to perform or
refrain from a specified action was contempt of Court.
[61]
The authors Herbstein and Van Winsen in
The
Civil Practice of the High Courts and Supreme Court of Appeal of
South Africa
[62]
,
regarding a discussion on the applicability of contempt proceedings,
confirm that committal for contempt is not appropriate enforcement
for orders
ad
pecuniam solvendam
[63]
.
43.
It is common cause that BXI has failed to comply with the order to
pay the R20 242 472,
90. On my understanding of the
authorities, the issue of competency of contempt proceedings for
orders
ad
pecuniam solvendam
seems to apply where the purpose of the contempt proceedings is
committal to prison or a criminal sanction
[64]
.
I do not understand the common law rule to exclude a declaration of
contempt (the civil remedy) where there is wilful and
mala
fide
non-compliance with an order for the payment of money. The
declaration is not, in my view, concerned with the enforcement of the
money order or punishment, but rather a declaration of disobedience
of the order.
44.
From the evidence, I find on a preponderance of probabilities that
BXI has indeed wifully
and deliberately failed to comply with
paragraph 144 (e) of the Rogers J order. The money was dissipated and
as at the date of
this hearing, has not been paid.
In the
circumstances, a declaration of contempt in respect of non-compliance
with paragraph 144 (e) is competent
.
Paragraphs
1 and 3 of the Smith J order of 5 October 2020
45.
Paragraph 1 of the order granted on 5 October 2020 discharged
paragraphs 3.2.1 and
3.2.3 of the August 2019 order and BXI was
ordered to pay to the State attorney, Cape Town by no later than
close of business on
the same day: R3 400 000 together with
interest as would have been earned in an account specified in terms
of
section 86
(4) of the
Legal Practice Act from
21 August 2019 to
date of payment, and R 380 000 together with interest from the
trust account from 21 August 2019 to date
of payment. In terms of
paragraph 3, BXI was to provide to the applicant's attorney a full
copy of the relevant bank statements
reflecting the interest earned
in respect of these accounts from 21 August 2019 to date of payment.
At the time that Smith J granted
this order, BXI was represented by
Millar and Reardon. Mr Manuel served a copy of the order per email on
the attorneys on 6 October
2020
[65]
,
and in light thereof, I find that the notice requirement has been
fulfilled.
46.
It is common cause that these amounts were not paid as ordered and
thus non-compliance has
been established. In my view, paragraphs 1.1
and 1.2 of the Smith J order is for payment of money, and thus it too
constitutes
an order
ad pecuniam solvendam.
The funds were
largely dissipated, knowingly in contravention of the order, and I am
accordingly satisfied that on a balance of
probabilities, BXI’s
wilful disobedience has been established.
Accordingly, a
declaration of contempt is made in respect of paragraph 1 of the
order
.
47.
The DEA’s claim that BXI did not comply with paragraph 3 of the
order in that it failed
to provide a full copy of the relevant bank
statements reflecting interest earned on the R3 400 000 and
R380 000
from 21 August 2019, is not disputed. The only answer
is that the Smith J orders were a nullity because the Judge acted
beyond
his acting appointment. The FNB money on call account
statements from August 2019 to June 2020 are attached to the founding
affidavit
[66]
. In addition, it
is also not disputed that in respect of its trust account, BXI had
failed to provide a full copy of it statements
in respect of interest
earned on the R380 000.
48.
The same argument that the Smith J order sought to vary the August
2019 order which was
already been discharged by Rogers J on 30
January 2020, and therefore it
was a nullity, was
raised in respect all the orders granted by
Smith J. My comments
above regarding
compliance with orders until they are
set aside, refer. In the circumstances the explanation or
justification for
not complying with the
Smith J order is rejected. The undisputed facts establish
that BXI is in breach of paragraph 3 of the order of which it had
been given notice, and I am satisfied
that the first three elements for contempt have been
proved beyond
reasonable doubt. However, it is highly probable that
BX I acted wilfully and in bad faith when it failed to comply with
the order,
though a finding cannot be
made beyond reasonable doubt.
In the result, I consider that BXI’s
contempt is established on a balance of probabilities and thus I
shall
issue a
declaration of contempt (declarator) in this regard
.
Paragraph
4.1.6 of the Smith J order of 12 October 2020
[67]
49.
The order of 12 October was an anti-dissipation order granted
ex
parte.
At paragraph 4, Smith J granted various interim orders pending the
final determination of
rule
nisi
proceedings determining Mr Xulu’s liability jointly and
severally with BXI for the R20 242 472, 90. At paragraph 4.1.6,
an interim order was granted directing the sheriff of Cape Town to
take immediate possession of Mr Xulu’s Porsche 911 Carrera
GTS
registration number CA 3302
(the
Porsche)
for safekeeping
[68]
. Email
correspondence on 20 October 2020 between Mr Manuel and Mr Xulu
[69]
,
read with Mr Manuel’s letter to Millar and Reardon on 21
October 2020 indicate that the order was certainly brought to Mr
Xulu’s notice. I must point out that while the order
required service on BXI and Mr Xulu at the firm’s offices
and
on its attorney, the evidence indicates that Mr Manuel was having
difficulty with service at BXI’s offices. In the circumstances,
email communication of the order suffices as giving notice of the
order for purposes of fulfilment of the contempt requirement.
50.
Pursuant to the order, the Chief Registrar issued a writ of
attachment in respect of Mr
Xulu’s Porsche
[70]
.
On four occasions the sheriff of Cape Town attempted to serve the
writ but without success: an attempt on 13 October 2020 at Mr
Xulu’s
Camps Bay address found nobody home, while earlier on the same day an
attempt at his office found Mr Xulu absent and
not answering his
cellphone. But most importantly, on 14 October 2020 the deputy
sheriff Mr Ntsibantu reported on his return of
non-service that
[71]
:
"after
several attempts, I have been unable to locate neither the 5th
respondent or the vehicle in question at both provided
addresses. The
5
th
Respondent has been absent from the office and the Camps Bay address
is always locked, the vehicle could not be located at any
of the
parking bays there. Efforts to contact the 5th Respondent
telephonically proved fruitless as he neither answers his phone
nor
returns missed calls, he only responded by sms saying he cannot
talk”.
[72]
51.
The deputy sheriff’s efforts were fruitless and on 15 October
2020, Smith J granted
a variation of his order of 12 October, by
authorising Tracker (Pty) Ltd to assist the sheriff to immediately
track the location
of the Porsche and allow the sheriff to access
Tracker’s records for purposes of obtaining the location of the
vehicle to
give effect to paragraph 4.1.6 of his order. On the same
day, the Sheriff visited Mr Xulu’s residence and in another
return
of non-service, reports as follows
[73]
:
“
I
was unable to locate neither the vehicle in question nor the 5
th
respondent at the given address, I however left a message with the
house helper there, who refused to disclose her identity, for
Mr Xulu
to contact me. I then received a call from Mrs Xulu, who informed me
that the 5
th
respondent has been away without notice for about 3 weeks now and she
is also looking for him for maintenance issues. She further
made an
appointment to meet me at our office on 16-10-20 when she came to
explain that Mr Xulu is currently in Johannesburg as
per information
which was provided to her by Mr Xulu’s sister and she has not
seen him driving the vehicle in question for
a while before his going
away, he actually is said to have borrowed her car to use for his
day-to-day runnings. She also showed
to me the could of messages that
she received at the time that she had tried to contact Xulu which
read
“sorry I cannot talk right now”.
A diligent search of the vehicle was conducted at the parking areas
at the given address
as well as at the old Christian Barnard hospital
where he is said to usually park but the vehicle was not found”
[74]
.
52.
Correspondence by Mr Manuel to Mr Xulu and his attorneys on 20 and 21
October 2020 respectively,
reminding him to comply with the order,
requesting that the vehicle be handed over and providing the contact
details of the deputy
sheriff to be contacted were met with
absolutely no compliance
[75]
.
Paragraph 4.1.6 of the 12 October 2020 order, as amended on 15
October 2020, was simply not complied with.
53.
This, however, was not the end of the Porsche saga. In correspondence
on 10 November 2020,
Mr Manuel yet again wrote to Millar and Reardon,
reminding them that Mr Xulu was required to comply with the 12
October order,
and attached a copy of the issued writ. Significantly,
Mr Manuel makes the averment that Mr Xulu was intentionally evading
the
sheriff and that while aware of the order and writ, his conduct
was “
not
in accordance with his role as an officer of the court especially
since he recently in an affidavit specifically articulated
that he
respects court orders
[76]
”.
The
tireless deputy sheriff once again attempted to serve the writ on Mr
Xulu at his Fresnaye residence and reported the following:
“
I
was unable to execute the process as the 5
th
Respondent ignored me and sped off the moment I introduce myself as
the Deputy Sheriff who was there to serve him. His wife who
was in
the car with Mr B. Xulu later phoned me to inform me that she took
the 5
th
respondent to the airport. I was unable to locate the Porsche at the
given address, the respondent drove off in a different vehicle
[77]
.
54.
Subsequent to the above effort by the deputy sheriff, Mr Xulu
provides no explanation why
the Porsche was not surrendered and why
it's location was not disclosed. Regardless of what Mr Xulu thought
of Judge Smith's authority
or the orders, he was required to comply
with the order. It is of great concern that the deputy sheriff made
several attempts at
service of the writ of attachment, left messages
at the Xulu residence, yet all to no avail. But even more alarming,
is the report
that the attorney fled from the deputy sheriff
attempting to execute the writ. Similarly, Mr Manuel’s written
requests for
compliance and reminders to Millar and Reardon that
their client complies with the order, were met with questions about
the Judge’s
authority, Mr Xulu’s deliberate evasion of
the sheriff and what I regard as a wilful refusal to disclose the
whereabouts
of and surrender the Porsche to the deputy sheriff.
55.
The deputy sheriff’s reports on the returns of service are not
disputed in any way. The argument
that any rescission application
stays the operation of the order was correctly withdrawn by Mr Masuku
when Ms Bawa pointed out
that a rescission application does not stay
the operation of a Court order. The further defence raised by Mr Xulu
that he was instructed
not to hand over the Porsche because of a
pending rescission, is with respect, nonsensical and far-fetched to
say the least. I
must ask why an experienced attorney, who regularly
litigates in the High Court, would be instructed to not hand over his
vehicle
which forms the subject matter of Court orders requiring it
to be attached by the sheriff for safekeeping, and even if he were so
instructed, why he would think that it is correct not to surrender
the vehicle when the sheriff was authorised to attach it. Mr
Xulu has
not disclosed the identity of the person who issued the instruction
to disobey the order/not co-operate with the sheriff,
which leads me
to conclude on the probabilities indicate that no such instruction
occurred.
56.
Knowing what is in store pursuant to a writ of attachment and the
consequences of non-compliance
with the Court order, Mr Xulu flees
the scene to escape the deputy sheriff, does not respond to any of
the messages to contact
the latter nor the requests by Mr Manuel to
comply. In my view, there was no need for Mr Manuel to have sent
reminders about compliance
with the Court order even if Mr Xulu
thought that Smith J acted beyond the scope of his authority, which
in any event, was an argument
dismissed by Slingers J in October
2020.
57.
Thus, the DEA has established the first three requirements for
contempt beyond reasonable
doubt. The evidence of the sheriff’s
reports taken with the email and written correspondence of Mr Manuel,
establishes Mr
Xulu’s deliberate, wilful and utterly
mala
fide
conduct in not only failing, but also refusing to comply so
that paragraph 4.1.6 of the Smith J order may be given effect to.
For
all the above reasons, I find that the DEA has proved Mr Xulu’s
contempt of paragraph 4.1.6 of the Smith J order beyond
reasonable
doubt
.
Paragraphs
6 and 7 of the Binns-Ward J order of 25 November 2020
58.
Judge Binns-Ward presided in Third Division on 25 November 2020, the
return date of the
Smith J
rule
nisi
as
referred to above. In terms of paragraph 6, the learned Judge ordered
that the sheriff of Cape Town or his deputy was directed
to obtain
and retain possession of the Porsche for safekeeping
[78]
.
At paragraph 7, he ordered that given the lack of success by the
sheriff, Cape Town, to take possession of the vehicle and that
Mr
Xulu had failed to surrender it in compliance with Judge Smith's
order of 12 October 2020,
in
the event that the Porsche was not surrendered to the sheriff by
17h00 on 26 November 2020, Mr Xulu was directed to appear in
person
at 10h00 on 27 November 2020 before the duty Judge and submit an
affidavit fully explaining his failure to comply with the
Court order
of 12 October 2020
[79]
.
59.
Firstly, the events which transpired at Court on 25 November 2020 are
not disputed in the
answering affidavit. A junior advocate appeared
for Mr Xulu and requested a postponement and after certain queries
were raised
by the Judge, the matter then stood down whereafter an
order was granted in favour of the DEA confirming the
rule
nisi.
[80]
60.
In terms of paragraph 9, paragraphs 1 to 6 of the order would remain
in force until finalisation
of the proceedings related to Mr Xulu’s
personal liability (the matter before Zilwa J). I shall accept that
Mr Xulu had received
notice of the order as his attorney, Mr Ndumiso,
confirmed in writing that he received the order from Mr Manuel (in
writing)
[81]
. Mr Manuel
reminded Mr Ndumiso that Mr Xulu was required to hand over the
Porsche on 26 November 2020 and that he should contact
the sheriff to
make the necessary arrangements. Mr Ndumiso’s instructions were
that Mr Xulu was in Johannesburg and struggling
to return to Cape
Town due to financial constraints but was willing to appear by
virtual means.
61.
Despite having knowledge of the order, Mr Xulu failed to hand over
the Porsche by 17h00
on 26 November 2020. In addition, he failed to
appear on 27 November 2020 at 10h00 before the duty Judge (again
Binns-Ward J) and
failed to provide an affidavit explaining his
non-compliance of the 12 October 2020 order. Mr Manuel offered to
arrange a virtual
hearing so that Mr Xulu could be accommodated on 27
November 2020, but Mr Ndumiso advised that his instructions from Mr
Xulu were
that the latter was no longer available for a virtual
hearing. No explanation is provided for Mr Xulu’s
unavailability to
attend a virtual hearing.
62.
The submission that because Judge Smith, according to Mr Xulu,
apparently lacked the authority
to make orders in October 2020 as he
had, it follows that orders granted by Judge Binns-Ward subsequently
confirming the Smith
J orders are a nullity, is not a
competent argument to stave off a finding of contempt. The evidence
establishes notice
and non-compliance with the order of 25 November
2020. The non-compliance displayed in respect of the Smith J order
related to
the Porsche, continued, leading to Binns-Ward J granting
the order on 25 November 2020. Mr Xulu’s disobedience continued
on 26 November 2020 when he failed to hand over the Porsche and on 27
November when he not only failed to provide an affidavit but
failed
to appear in the urgent Court on 27 November 2020.
It follows that
Mr Xulu’s contempt in relation to orders 6 and 7 of the 25
November 2020 order is established beyond reasonable
doubt.
Paragraph 4 of
the Binns-Ward J order of 27 November 2020
63.
In the absence of Mr Xulu’s appearance, his affidavit and his
continued non-compliance
with orders, Binns-Ward J granted an order
on 27 November 2020 including an order regarding the Porsche.
Paragraph 4 of the order
granted Mr Xulu
a
further opportunity to comply by 17h00 on 30 November 2020, by
handing over or making arrangements with his attorney to provide
the
sheriff access to the Porsche for safekeeping
[82]
.
64.
The order was sent per email to Mr Ndumiso on the same day and he
acknowledged receipt,
and I am thus satisfied that notice of the
order was given
[83]
. The
evidence indicates that by 1 December 2020, the Porsche had still not
been surrendered and neither were any arrangements to
do so
forthcoming. Further follow up reminders in December 2020 regarding
non-compliance
[84]
and that a
contempt application would follow, had absolutely no effect.
Correspondence between Mr Manuel and Mr Ndumiso demonstrates
that Mr Xulu had provided his attorney with no further instructions
regarding compliance with the order
[85]
.
Rather than comply, Mr Xulu’s attorneys delivered a notice of
appeal. Despite Mr Manuel’s contention that the orders
were not
appealable as they are not final but interlocutory, Mathopo
Attorneys
[86]
advised Mr
Manuel that Mr Xulu is of the view that the notice of appeal in
respect of the order of 27 November 2020, suspends
the operation of
the order
[87]
.
65.
What becomes abundantly clear in this matter, is that on 12 October,
and 25, 26, 27 and
30 November 2020 respectively, Mr Xulu was ordered
to surrender the Porsche, contact the deputy sheriff, arrange with
his attorney
that the Porsche be surrendered and attend Court to
explain his non-compliance. Three orders in total were granted
regarding the
Porsche, yet Mr Xulu acted in flagrant disregard and
defiance of all of them. The application for leave to appeal did not
suspend
the order as it was not a final order.
Thus, I find that
the DEA has proved Mr Xulu’s wilful and
mala fide
non-compliance beyond reasonable doubt and thus he is found to be in
contempt of paragraph 4 of the Binns-Ward J order of 27 November
2020.
.
Concluding
remarks and Costs
66.
Mr Masuku has argued that the DEA has set out to embarrass BXI and Mr
Xulu and that
the contempt application is recklessly sought
against an attorney
whom it recognises as an officer of the Court whose integrity is
undermined by the harassment
he
has faced. I respectfully disagree with this submission.
The evidence, which is undisputed, paints
a picture of a law firm and
its director who
have flagrantly, deliberately and
defiantly disrespected and refused
to
comply with Court orders
granted by the various Judges of the Western
Cape High Court. Rather than comply,
as required, BXI
and Mr Xulu embarked on
urgent applications which were ultimately dismissed.
67.
The submission that Mr Xulu is entitled to question Court orders and
have them placed under
“
judicial scrutiny”
seems
to suggest that he and BXI should somehow, unlike other litigants
against whom orders are granted, be exempt or immune from
the effects
and implications of Court orders. This cannot be, and until such time
that the orders are set aside by a Court of competent
jurisdiction,
they must be obeyed.
68.
I must agree with Ms Bawa that it would be chaotic if litigants could
decide for themselves
whether they wished to obey Court orders or
not. BXI and particularly Mr Xulu’s continued and repeated
non-compliance with
the various Court orders makes a mockery of
judicial authority. The evidence points to the ineluctable conclusion
that Mr Xulu
and BXI have appropriated to themselves the right to
disobey Court orders which they believe they are entitled to disobey
as and
when they see fit. If ever a litigant should be aware that
orders remain in effect and must be complied with until set aside,
then
it should be Mr Xulu (and BXI)
[88]
because he is a practising attorney with years of experience.
69.
The respondents have flouted section 165 (5) of the Constitution
which makes Court orders
binding on all persons to whom it applies.
They have acted with impunity and the utmost contempt and it is of
great concern that
an attorney has conducted himself in continued
wilful defiance and bad faith in the manner set out in this judgment.
Whilst Mr
Masuku reminded me that Mr Xulu is an officer of the Court
and that his right to inherent integrity in terms of
section 10 of the Constitution is undermined, my view is that Mr Xulu
has conducted himself in a manner totally at variance with
the
integrity and utmost good faith principles inherent to a person who
is an officer of the Court. The conclusion is that BXI
and Mr Xulu
have violated the integrity and dignity of the Court through their
conduct. Mr Xulu’s refusal to surrender the
Porsche was
contumacious and his conduct is to be deprecated. Ultimately, the
conduct displayed by the respondents undermined respect
for and
obedience to the law.
70.
In respect of the proposed sanctions, I was requested to grant orders
which prevents Mr
Xulu and BXI from approaching the Court until they
have purged their contempt. Given the past conduct of the
respondents, my view
is that punitive sanctions are warranted in
respect of the non-compliance of orders where findings were made
beyond reasonable
doubt, and such sanctions are similar to those
imposed in
Victoria
Park Ratepayers’ Association v Greyvenouw CC and other
[89]
.
While Ms Bawa has submitted that
imprisonment
per
se
is not sought, it would be futile and ineffective to impose a
sanction that, if disobeyed, would be ineffective. The principles
involved in civil contempt proceedings should not have as its focus,
punishment, but rather to bring the contemnor to his/its senses,
protect the rule of law and restore and vindicate the dignity of the
Court
[90]
. On the issue of
urgency, contempt applications are regarded as inherently urgent as
the Court’s honour and dignity are to
be restored. Considering
the postponements granted in the respondents’ favour, the
lengthy history of the matter, consideration
of the orders granted
and defences raised, it was necessary to reserve judgment herein.
71.
The second applicant is successful and is entitled to costs on a
punitive scale as prayed for in terms
of prayer 6 of the Notice of
Motion. Ms Bawa has requested costs of two counsel rather than costs
of two senior counsel. Finally,
in view of my findings, and as the
orders are granted against a firm of attorneys and its director, a
practising attorney, a copy
of this judgment shall be forwarded to
the Legal Practice Council, Western Cape.
Orders
In
the result, I grant the following orders:
1.
It is declared that the first respondent, B Xulu and Partners
Incorporated (BXI)
is in contempt of the
following orders granted under case number 6189/19:
1.1
paragraphs 3.2.1 and 3.2.3 of the order granted by Rogers J on 21
August 2019;
1.2
paragraph 144 (e) of the order granted by Rogers J on 30 January
2020;
1.3
paragraphs 1 and 3 of the order granted by Smith J on 05 October
2020.
2.
It is declared that the fifth respondent, Mr Barnabas Xulu (Mr Xulu),
in his
capacity as director of the first respondent and personally is
in contempt of the
following
orders granted under case number 6189/19:
2.1
paragraph 4.1.6 of the order granted by Smith J on 12 October 2020
as amended on
15 October 2020;
2.2
paragraphs 6 and 7 of the order granted Binns-Ward J on 25 November
2020;
2.3
paragraph 4 of the order granted by Binns-Ward J on 27 November 2020.
3.
The first and fifth respondents are ordered to pay a fine of R30 000
jointly
and severally, the one paying the other to be absolved,
by
no later than 12h00 on Friday 7 May 2021
, such fine being payable
at the office of the Registrar of this Court. Failing such
compliance, the fifth respondent is sentenced
to 30 days’
imprisonment.
4.
The fifth respondent is ordered to surrender the Porsche 911 Carrera
with registration
number [….] (the Porsche)
by no later
than 12h00 on Friday 7 May 2021
to the sheriff or deputy sheriff
of Cape Town, or any other sheriff in whose area of jurisdiction the
Porsche is found/located,
for safekeeping by the sheriff, Cape Town,
pending finalisation of the remaining matters (including appeals)
under case number
6189/19. Failing compliance with this order, the
fifth respondent is sentenced to 30 days’ imprisonment.
5.
The fifth respondent is sentenced to 30 days’ imprisonment,
wholly suspended
for 3 (three) years on condition that he is not
again committed for contempt of Court in case number 6189/19,
committed during
the period of suspension.
6.
The first and fifth respondents are precluded from launching any
further applications
against the applicants in relation to any
matters involving, relating to or arising from the disputes and
judgments under case
number 6189/19, unless and until they have
purged their contempt as set out in the preceding paragraphs. This
order (paragraph
6) does not apply to pending matters before Zilwa J.
7.
The first and fifth respondents are ordered to pay the second
applicant’s costs
on an attorney and
client scale and such costs shall include the costs of two
counsel where so
employed.
8.
A copy of this judgment shall be forwarded to the Legal Practice
Council, Western
Cape, for its information and attention.
M
PANGARKER
ACTING JUDGE OF
THE HIGH COURT
For
2
nd
applicant:
Ms N Bawa SC with Mr B Joseph SC and Ms J Williams
Instructed
by:
State Attorney, Cape Town
Mr L Manuel
For
1
st
and 5
th
respondents:
Adv. T Masuku SC
Instructed
by:
B Xulu &
Partners Inc./Ndumiso Attorneys
[1]
Para 5 of Binns-Ward J order of 27 November 2020, p 5136
[2]
This order was granted by Rogers J
[3]
It is noted that the Notice of Motion wrongly refers to the case
number as 6189/20 at para 4 and 5 thereof; it should read 6189/19
[4]
The record at that stage comprised 470 pages; the full record
including the replying affidavit is 520 pages
[5]
[2020] ZAWCHC 3
[6]
P 5494-7
[7]
My understanding from the proceedings is that he was referring
specifically to Johannesburg counsel
[8]
I have generally used the word “
attorney”
rather than “
legal
practitioner”
in this judgment
[9]
See para 3 of the Notice of Motion
[10]
Transcription 25 February 2021, line 24, p 41
[11]
Acting Appointment ito s 175(2) of the Constitution 1996 read with
s
6(5)
of the
Superior Courts Act 10 of 2013
, p 5313; Zilwa J letter
of appointment, p 5314
[12]
Smith J heard various applications between the parties under case
number 6189/19, and granted orders on 5, 12 and 15 October
2020
respectively
[13]
Annexure CEL52, P 5589-90
[14]
P 5479
[15]
P 5309
[16]
The other respondents included entities in which Mr Xulu holds an
interest (Setlacorp Pty Ltd and Incovision Pty Ltd)
[17]
The final postponement for hearing was granted to 19 March 2021 at
14h00
[18]
From the record, it is evident that on 10 September 2020, Rogers J
dismissed the respondents’ application for leave to
appeal the
judgment of 30 January 2020
[19]
The first applicant in the matter before Rogers J
[20]
The Rogers judgment
[21]
Para 5
[22]
See
Pheko
para 31
[23]
Section 165(2)
and (3)
[24]
2015 (5) SA 600
at para 1
[25]
[2006] ZASCA 52
;
2006 (4) SA 326
at para 6
[26]
1968 (3) SA 70
(A)
[27]
At para 67
[28]
[2005] ZAECHC 33
ECD
[29]
Paragraph 67 - my summation
[30]
See
Burchell v
Burchell
[2005]
ZAECHC 35
(ECD) – the relief sought was committal to prison
for failure to comply with a maintenance order
[31]
At para 9, with reference to the test for contempt, the SCA in
Fakie
referred to
Max Pollak
Vinderine Inc v Menell Jack Hyman Rosenberg & Co Inc
[1996] ZASCA 21
;
1996 (3) SA 355
(A);
Jayiya
v Member of the Executive Council for Welfare, Eastern Cape
2004 (2) SA 611 (SCA)
[32]
1968 (2) SA 517
(CPD) at 524 C-D, and 525 A-C
[33]
A contemnor is defined as a person who disobeys or disregards a law,
court ruling -
www.lexico.com
[34]
Matjhabeng
para 76;
Fakie
para 12 – at para 32,
Pheko
states the requirement as wilfulness
or
mala fides, while
Matjhabeng
and
Fakie
refer to wilfulness
and
mala fides
[35]
Fakie
,
para 42, p 344
[36]
Fakie
,
para 42 (d), p 345
[37]
2001 (2) SA 224
(E) at 229 B-C
[38]
Referred with approval in
Dengetenge
Holdings Pty Ltd v Southern Sphere Mining and Development Company
Limited
[2013] ZASCA
5
[39]
[2015] ZASCA 35
at para 35, Ponnan JA refers to Dengetenge and
Bezuidenhout
judgments with approval
[40]
2017 (2) SA 622
(CC) at para 180
[41]
Para 5, p 5468
[42]
P 5560
[43]
The underlined paragraphs are the relevant orders
[44]
Setlacorp is an entity in which Mr Xulu has an interest
[45]
See Order granted on 21 August 2019, p 5125-32
[46]
Para 14, p 5471
[47]
A copy of the rescission application is attached to the answering
affidavit, BX14, p 5493-5532
[48]
P 5360 - 65
[49]
Millar and Reardon Attorneys of Durban have been BXI and Mr Xulu’s
legal representatives in this matter (case number 6189/19)
at
various stages
[50]
P5365
[51]
P 5366-71
[52]
28 of 2014
[53]
P 5106
[54]
Para 3 of Rogers J order of 21 August 2019 – my emphasis
[55]
See para 99 of the judgment - BXI provided extracts and summaries of
its business and trust accounts but was required to provide
further
information regarding the extracts supplied
[56]
See above table of BXI trust balances
[57]
Consolidated Fish
Distributors (Pty) Ltd v Zive and Others
1968 (2) CPD at 525 A-C
[58]
See Herbstein and Van Winsen, p 1110
[59]
See Rogers J order of 30 January 2020
[60]
CEL 11, Writ of execution issued by the Chief Registrar on 8 October
2020, p 5324-5
[61]
See
Coetzee v
Government of the Republic of South Africa, Matiso and Others v
Commanding Officer Port Elisabeth Prison and Others
[1995] ZACC 7
at para 61;
Matjhabeng
at para 56;
Mjeni v
Minister of Health and Welfare, Eastern Cape
2000 (4) SA 446
(TkH) at p 451
[62]
Fifth edition, Volume 2, p1106 - 1109
[63]
Non-payment of a maintenance order is treated as
ad
factum praestandum
because it is the failure to maintain that is punished, and not the
failure to pay a sum of money
[64]
Cape Times Ltd v Union
Trades Directorates (Pty) Ltd and Others
1956 (1) SA 105
(N);
Mjeni
v Minister of Health and Welfare, Eastern Cape
2000 (4) SA 446
(TkH)
[65]
Email dated 6 October 2020, p 5359
[66]
P5360-5365
[67]
The order was amended on 15 October 2020
[68]
P 5142
[69]
CEL 17, P 5333
[70]
CEL 22, p 5328-9
[71]
All the sheriff’s returns are typed as stated/reported
[72]
Sheriff’s return of non-service, p 5330
[73]
CEL 15.2, p 5331
[74]
CEL 15.2, p 5331 – it is unclear what the sheriff means by
“
could of
messages”
[75]
CEL 17, p 5333-5
[76]
P 5336
[77]
Sheriff’s return of non-service 11 November 2020, p 5338
[78]
A similar order to paragraph 4.1.6 of the Smith J order of 5 October
2020 – my emphasis
[79]
P 5151-2
[81]
P 5347-8 – correspondence indicates that Millar and Reardon
were not the instructing attorneys in the matter before Binns-Ward
J; see also CEL 22, p 5342
[82]
See para 6 of Binns-Ward J order of 25 November 2020
[83]
P 5444-5
[84]
CEL 44, p 5452; CEL 45, P 5453
[85]
See CEL p5451-5452
[86]
A new firm of attorneys representing MR Xulu
[87]
They are of the view that the Binns-Ward order of 27 November 2020
is final and thus a Notice of Appeal suspends the order. As
it
happens, Binns-Ward J dismissed the application for leave to appeal
on 31 March 2021 in
Department
of Environmental Affairs, Forestry and Fisheries v B Xulu &
Partners Incorporated
[2021] ZAWCHC 59
, holding
inter
alia
that the order
was not of a final nature
[88]
See
Tasima
[89]
[2003] ZAECHC 19
[90]
See
Meadow Glen Home
Owners Association v Tshwane City Metro Municipality
2015 (2) SA 413
(SCA)