About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2014
>>
[2014] ZAGPJHC 113
|
|
EACB Studio (Pty) Limited v Super Group Trading Limited and Another (13/16424) [2014] ZAGPJHC 113 (6 May 2014)
REPUBLIC
OF
SOUTH AFRICA
IN THE
HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 13/16424
DATE:
06 MAY 2014
In the matter
between:
EACB
STUDIO (PTY)
LIMITED
.............................................................
Applicant
And
SUPER
GROUP TRADING LIMITED
.......................................
First
Respondent
RAZISPACE
(PTY) LIMITED
.................................................
Second
Respondent
J U D G
M E N T
N F
KGOMO, J
:
INTRODUCTION
[1] The applicant launched an
application against the two respondents for an order –
1.1
declaring
that the applicant is the owner of the goods referred to in Annexes
“FA3” and “FA4” of the applicant’s
founding affidavit and which are shaded or colour-coded in red
therein;
1.2
directing
the second respondent to return to the applicant the goods as
identified in Annexes “FA3” and “FA4”;
1.3
that
any of the respondents who opposes this application be directed to
pay the costs thereof; and
1.4
for
further and/or alternative relief.
[2] The application is only
opposed by the first respondent.
[3] The facts and circumstances
inherent in this application will be set out when the history
and
factual matrix hereof is dealt with hereunder.
THE
PARTIES
[4] The applicant, EACB STUDIO
(PTY) LTD, is a limited liability company duly registered and
incorporated in accordance with the company laws of South Africa
(“
RSA
”). It carries on business as a designer,
manufacturer and distributor of high fashion clothing, shoes and
related accessories.
Its registered office is situated at 18 Hope
Street, Gardens, Cape Town.
[5] The first respondent, SUPER
GROUP TRADING LIMITED, is a company registered and incorporated
in
Mauritius in accordance with the company laws of Mauritius,
represented in this matter by Attorneys Darryl Furman &
Associates
whose offices are situated at Rosebank law Chambers, No 4
Glenhove Road, Melrose Estate, Johannesburg.
[6] The second respondent,
RAZISPACE (PTY) LIMITED, is a limited liability company duly
registered
and incorporated in accordance with the company laws of
the RSA and whose registered office is situate at 21 The Broads,
Mulbarton,
Southern Johannesburg.
[7] The deponent of the
applicant’s founding affidavit, Mr Casper Badenhorst
(“
Badenhorst
”) is the sole director of the
applicant. He (Badenhorst) and Mr Eliyahu Saig (“
Saig
”)
are joint directors of the second respondent.
[8] The applicant conducts
business as a retailer of women’s clothing and footwear.
Initially it conducted four retail outlets at, respectively, Maponya
Mall in Soweto; Rosebank; Eastgate and Cresta. The Maponya
Mall
and Cresta outlets were closed due to them not being financially
viable. Only the Eastgate and Rosebank stores continue
to
conduct business.
RELEVANT
BACKGROUND HISTORY AND FACTUAL MATRIX
[9] According to the applicant,
the clothing in the second respondent’s outlets (hereinafter
referred to as “
Razispace
”) at Rosebank and
Eastgate are predominantly sourced from the applicant, and are of the
make or branding or label, “
Errol Arendz
” and
“
Errol Arendz Dusud
”. According to the applicant
further, this stock was purchased by Razispace from it pursuant to a
credit application submitted
by it to the applicant. The
applicant accepted the credit application and allowed Razispace to
purchase goods on credit from
it. The express and relevant
provisions of the credit application (and agreement) provided,
inter
alia
, as follows:
9.1
Razispace’s
credit terms were 30 days from date of statement; and
9.2
Until
such time as Razispace had paid the purchase price in full in respect
of any purchase of goods, the ownership in and to the
goods remain
vested in the applicant. The applicant would be entitled in its
sole discretion and without notice to Razispace,
take possession of
the goods which had not yet been paid for in full and in respect of
which payment is overdue. When such
goods are taken back due to
non-payment, a credit note would be passed in favour of Razispace in
respect of such goods.
[10]
According to the applicant further, “…
the stock that was sold to
Razispace was all manufactured at the applicant’s manufacturing
facility in China and on-sold to
Razispace
…”
[1]
[11] The above highlighted words have been
relied upon herein by the respondent in support of its case
as would
be demonstrated later. What is material at this stage is that the
applicant is adamant and categoric that it remains the
owner of all
the stock that was sold to Razispace as long as it is not yet fully
paid for.
[12] According to the applicant further,
Razispace is currently indebted to it in respect of goods sold
and
delivered to it by the applicant at the latter’s usual price,
which indebtedness is capitalised at the sum of R1 976
263,75 as at
the time this application was launched. The applicant attached
a statement from it given to Razispace in respect
of its indebtedness
as Annexure “FA2” to its founding affidavit. This
statement or series of statements span
a space of ten pages at folios
18 to 27 of the paginated record herein. This statement(s) lists all
the invoices in respect of
which stock was sold and delivered to
Razispace Eastgate and Rosebank stores. It is so that most of
the stock according to
the applicant, which it sold to Razispace has
been on-sold by it (Razispace) to customers notwithstanding the fact
that it (Razispace)
has not yet paid for it in full or at all.
That in any event would have been in the course and/or scope of the
normal conduct
of business.
[13] The procedure of sourcing and
on-selling stock to Razispace is as follows: When the applicant
delivers
goods to Razispace, the latter scans the goods in-store onto
its computer stock control system. The system allows for a report to
be generated at any time relating to the goods that have not been
sold and which are still in the relevant store.
[14] The applicant has attached Annexures
“FA3” and “FA4” being Razispace store
control
computer system lists in respect of the stock at the two respective
stores. The schedules form part of the paginated papers
herein:
Annexure “FA3” is in respect of stock at the Rosebank
store and it is at folios 28 to 55 of the paginated
record.
“FA4” is in respect of stock at the Eastgate Mall store
and is at folios 56 to 65 of the paginated record.
The lists or
annexures are colour-coded green and red. The stock or goods
shaded in red in the annexures represent the goods
that were sold by
the applicant to Razispace and in respect of which it has reserved
ownership. Those shaded in green were
not sourced by Razispace
from the applicant and may thus be dealt with by the respondent or
any creditor(s) at their discretion.
[15] The lists in Annexures “FA3”
and “FA4” were obtained from or emanate from
Badenhorst
who is director to both the applicant and Razispace.
[16] The applicant states that it is
contemplating bringing liquidation proceedings against Razispace.
[17] According to the deponent of the
applicant’s founding affidavit, Razispace has effectively
been
hijacked by Saig (co-director with Badenhorst) who Badenhorst accuses
of having changed the credit card facilities at the
Rosebank store,
enabling him (Saig) to channel the proceeds of sales from the store
to an entity controlled by him.
[18] On 14 May 2013 and under the aforesaid
case number the first respondent (hereinafter cited herein
as “
Super
Group Trading
”) obtained an order against Razispace
pursuant to which it was authorised and mandated or empowered to
attach the movable
assets of Razispace. Razispace is indebted
to Super Group Trading and an attachment was granted and/or made to
Super Group
Trading pursuant to a general notarial bond granted by
Razispace to Super Group Trading.
[19] On 22 May 2013 the applicant’s
attorneys had a meeting with Saig’s attorneys in the person
of
Jonathan Stockwell from Werkman’s Attorneys. The
applicant’s attorneys were represented by attorney Atonino
Lazzara. Badenhorst was also present. This meeting was to
discuss the attachment of the applicant’s goods at
Razispace.
The problem identified by the applicant was that despite the judicial
attachment of the goods at Razispace, including
the applicant’s
goods, Razispace continued to sell all the stock at the stores,
including the attached goods. Saig and Stockwell
explained to the
applicant’s attorneys and Badenhorst that they had reached an
agreement with Super Group Trading in terms
of which Super Group
Trading agreed to allow and was allowing Razispace to continue
trading in order to pay over part of the proceeds
towards the
reduction of the debt due to Super Group Trading.
[20] The problem with this was that some of
the stock being sold in that manner was that which still belonged
to
the applicant as they had not yet been paid for or paid for in full.
More-so that Razispace was not paying anything to
the applicant to
reduce its indebtedness to it or had attempted to engage the
applicant with a view to clearing out the aspect
of how it
(Razispace) proposed to deal with its indebtedness to the applicant.
[21] The parties have differing stories as
to whether or not Super Group Trading has furnished the applicant,
at
its request, with a copy of the sheriff’s return. The applicant
submitted that Super Group Trading has been dilly-dallying
over this
aspect whereas Super Group Trading submitted that it faxed a copy
thereof to the applicant’s attorneys on 13 June
2013.
[22] The applicant has called upon the Super
Group Trading people to provide it with an undertaking that
it will
not allow Razispace to sell any of the stock that belongs to it which
was identifiable from the red-shaded portions in
Annexures “FA3”
and “FA4” on pains of legal proceedings, more-so that the
stock at Razispace was being
sold by Saig with the consent of Super
Group Tading.
[23] The first respondent (Super Group
Trading) has refused to provide such undertaking. It is upon that
basis that the applicant submitted and argued that the prevailing
situation was extremely prejudicial to its rights: Razispace
went ahead and entered into the above agreement with Super Group
Trading without taking it (applicant) on board or sounding their
views hereon in spite of the fact that it (Razispace) was holding
those goods not yet fully paid for or paid for at all for the
benefit
of the first respondent (Super Group Trading) – a situation in
which Super Group Trading is acting to benefit itself
alone above
and/or to the exclusion of other creditors of Razispace, which
include the applicant.
[24] The first respondent (Super Group
Trading) while not convincingly denying the applicant’s
allegations that it owned some goods at Razispace, still insisted the
application should be dismissed with costs, claiming that
the case
the applicant gave in its replying affidavit is different from the
one it gave in its founding affidavit.
[25] The applicant vehemently denied this.
[26] In addition to Super Group Trading
setting out what procedures it followed to grant Razispace credit
facilities, the former alleged that the applicant was not the only
designers or business concerns sourcing Dusud clothing lines
for
clients. However, the first defendant (Super Group Trading) did
not deal with or have a counter-argument to the applicant’s
case that the goods in “FA3” and “FA4” had a
distinctive code germane to it (applicant) which distinguished
them
from those supplied to Razispace by it and/or other suppliers.
[27] Instead of dealing with this very
important aspect dispositive of the issue of the identity and
ownership of the goods attached at Razispace, the Super Group Trading
went on to point to an issue which in my view is neither here
nor
there when such identity and ownership is at stake: It queried
why the applicant said in the founding affidavit that
the goods it
supplied to Razispace were manufactured at its factory in China
whereas in the replying affidavit it stated that it
only sourced the
goods from a factory in China.
[28] I took up this issue with counsel for
Super Group Trading: Was it not so that what concerned
us in
this application was not what happened in China or elsewhere outside
South Africa but what actually did happen after the
goods were
already in South Africa.
[29] The response I received was in my view
very incoherent and inconclusive.
[30] I find that what happened to the goods
when they were actually delivered to Razispace is what is
material to
us. The applicant’s explanation of how the clothes were coded
upon receipt and how such goods can be tracked
through the computers
in my further view adequately identify the goods the applicant is
complaining about.
[31] The first respondent argued that the
applicant’s failure to include purchase and sale invoices
in
its papers should lead to this Court rejecting the applicant’s
version.
[32] That, in my view and finding, would be
going rather too far: The applicant has adequately identified
which goods it claims as it is from the goods attached at Razispace
as well as those still in that store(s). The first respondent
has not challenged this sufficiently. I find that the ramblings
by the Super Group Trading people through their counsel do
not help.
Super Group Trading submitted among others that the apparent bad
blood between the directors of Razispace, to wit Badenhorst
and Saig,
should be regarded as the motivation, which is improper in their
view, for Badenhorst to falsely start these proceedings
on behalf of
the applicant to spite his co-director at Razispace.
[33] There is evidence tendered by the
applicant, of some two shipments of goods from outside suppliers
ordered by Saig, which never reached the two operative Razispace
stores. Those goods are alleged to have been taken to another
entity controlled by Saig and the proceeds of their sale are being
received at or by another entity which is not Razispace.
[34] The first respondent (Super Group
Trading) did not refute these allegations or allude to them during
the exchange of papers or during argument. As such, these
allegations stood unadulterated at the end of argument.
[35] I consequently cannot disagree with the
applicant’s submission that these goods are the ones
that ought
to have been attached, not those at Razispace.
CONCLUSION
[36] It is not in dispute that Razispace is
indebted to both the applicant and the second respondent.
It is also
not in dispute on the facts herein that some of the goods placed
under attachment at Razispace at the instance of Super
Group Trading
(first respondent) belong to the applicant. It is also clear
that the applicant has paid for the goods shaded
in red in Annexures
“FA3” and “FA4” and that the coding on them
as they stand at Razispace point, as the
applicant submitted, that
they still belong to it as they are not yet fully paid for.
[37] The first respondent attached
commercial invoices to its answering affidavit at pages 211 to 212;
232 and 241 to 243 pertaining to Dusud Inc. The coding on those
invoices differ from those on the goods identified and claimed
by the
applicant.
[38] This Court is thus satisfied that the
stock forming part and subject matter of this application could
not
have been financed by Super Group Trading, i.e. the first respondent
on behalf of Razispace. This Court thus finds that such
stock (as in
Annexures “FA3” and “FA4”) was financed by
the applicant. It has not been disputed that
the stock as
identified by the applicant on Annexures “FA3” and “FA4”
were not yet paid for in full when
they were attached at the instance
of Super Group Trading. This Court thus accepts it as a “
fact
”
that they were not yet paid for in full, thus, in terms of the
agreement between the applicant and Razispace, still the
property of
the applicant until such time that they are fully paid for.
[39] In terms of the abovementioned
agreement between the applicant and Razispace, the applicant can
demand that they be returned to it, as they are doing so in this
application.
[40]
In an application such as the current matter
where a party seeks a declaratory order, the following
principles
[2]
are applicable, among others:
40.1
The
applicant must be an interested person, not
in
vacuo
,
but interested in the right or obligation enquired into. The interest
must be a real interest and not merely an abstract or intellectual
interest;
40.2
There
must be a right or obligation which becomes the object of enquiry,
which may be existing, future or contingent. However,
much
more, it must be more tangible than the mere hope of a right or mere
anxiety of a possible obligation;
40.3
A
party is not entitled to approach the court for what would amount to
a legal opinion upon an abstract or academic matter;
40.4
A
court will not make a declaration of rights unless there are
interested persons upon whom the declaration would be binding. It
follows thus, that the interested persons against whom or in whose
favour the declaration will operate must be identifiable and
must
have had an opportunity of being heard before the ruling is made; and
40.5
When
a court has to determine whether it should exercise its discretion in
favour of a declaratory order, considerations of public
policy come
into play.
[41] It is the finding of this Court that
the applicant has satisfied the above requirements substantially.
The order to be made at the end hereof will be binding on both the
first and second respondents (i.e. Super Group Trading and Razispace
respectively).
[42]
Both parties abandoned their challenges on
the late filing of the necessary or relevant affidavits.
As
such it is not necessary that this Court rule on that aspect.
[43] The parties herein also half-heartedly
in my view, dealt with the aspect of whether or not a dispute
of
facts should be declared to exist. I agree with their inner
convictions, as evidenced by their scraping on the surface
on this
aspect, that that issue does not arise in this instance. Even
if it had arisen (which in fact did not), it would
not have been
accommodated.
[44]
As held among others in
Law
Society, Northern Provinces v Mogami and Others,
[3]
Harms DP put it as follows as paragraph [23]:
“…
The
appellant submitted that in these circumstances we should refer those
disputes for oral evidence. We cannot comply with the
request. An
application for the hearing of oral evidence must, as a rule,
be made in limine and not once it becomes clear
that the applicant is
failing to convince the court on the papers or on appeal. The
circumstances must be exceptional before a
court will permit an
applicant to apply in the alternative for the matter to be referred
to evidence should the main argument fail
(De Reszke v Maras and
Others
2006
(1) SA 401
(C)
([2005]
4 All SA 440)
at paras 32 - 33). In a case such as this a law
society might be able to apply in part A of its application for an
order ordering
the respondent to appear before its council for an
oral enquiry.
”
[45] Fortunately or
unfortunately, as already alluded to, there is no need to deal with
this aspect in
depth. It may be mentioned however that since
the applicant had not alluded to this aspect in its papers, had there
been
a need for it to arise, such an application would have failed.
[46] When all is
considered, it is the finding of this Court that the applicant has
made out a case for
the grant of the orders it seeks.
COSTS
[47] None of the
parties made any out-of-the-ordinary application for a specific costs
order. I have independently
assessed the issue of costs and have come
to a conclusion that an ordinary party and party cost order is
appropriate in this case.
The costs should follow the suit.
ORDER
[48] The following
order is made:
1.
It
is ordered that the applicant (EACB Studio (Pty) Ltd) is the owner of
the goods referred to in Annexures “FA3” and
“FA4”
of the applicant’s founding affidavit and which are shaded in
red therein;
2.
The
second respondent (Super Group Trading Limited) and/or the second
respondent (Razispace (Pty) Ltd) is/are ordered and directed
to
return to the applicant the goods identified in Annexures “FA3”
and “FA4”.;
3.
The
first respondent (Super Group Trading Limited) is ordered to pay the
costs of this application.
N F KGOMO
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
FOR
THE APPLICANT
ADV G WILKS
INSTRUCTED
BY
LAZZARA LEICHER INC
MELROSE
NORHT, JOHANNESBURG
TEL NO:
011 – 880 9575
FOR
THE FIRST RESPONDENT
ADV L HOLLANDER
INSTRUCTED
BY
DARRYL FURMAN & ASSOCIATES
MELROSE
ESTATE, JOHANNESBURG
TEL NO:
011 – 447 7747
DATE
OF HEARING
28 APRIL 2014
DATE
OF JUDGMENT
06
MAY 2014
[1]
Applicant’s
founding affidavit paragraph 12 at page 7 of paginated record of
this application.
[2]
Family
Benefit Friendly Society v Commissioner for Inland Revenue and
Another
1995 (4) SA 120
(TPD) at 124G to 126C.
[3]
2010
(1) SA 186
(SCA).