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[2016] ZAGPJHC 283
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Jacobus and Others v Van der Merwe and Others (27801/14) [2016] ZAGPJHC 283 (30 August 2016)
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OFFICE OF
THE CHIEF JUSTICE
REPUBLIC OF
SOUTHAFRICA
Case No: 27801/14
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
DATE:
30 AUGUST 2016
In the matter
between:
LUCAS JOHANNES STEPHANUS
JACOBUS
JANSEN VAN
VUUREN
1
st
Applicant
SUSANA JOHANNA
MARIA JANSEN VAN
VUUREN
2
nd
Applicant
STRYSBAR PROPERTY
INVESTMENT 6
CC
3
rd
Applicant
and
GERRIT VAN DER
MERWE
1
st
Respondent
J.H DU PLESSIS
TRUSTEES
CC
2
nd
Respondent
JOHANNES HENDRICUS
DU PLESSIS
N.O.
3
rd
Respondent
CHETAN KUMAIJ
VENILAL PANNA
N.O.
4
th
Respondent
FREDIRCK PETRUS
SENEKAL
5
th
Respondent
JUDGMENT
CORAM: RE MONAMA, J
Introduction.
[1] This
is a rescission application. The applicants seek an order setting
aside the liquidation order of Strybar Property Investment
6 CC which
was granted on 2 August 2013.
[2] The
first and second applicants are married to each other in community of
property. They reside in Barberton in Mpumalanga.
[3] The
third applicant is a close corporation. The first, second applicants
and the first respondent or Atticus Trust are the sole
members. The
first and second applicants are jointly holding 50% members’
interests and other 50% is held by Atticus Trust.
[4] The
first respondent is a businessman who resides in Lanseria, Gauteng.
The second respondent is a close corporation with its
business
address in Randpark. It has been appointed liquidator. The third and
fourth respondents are employees of the second respondent.
The fifth
respondent is the party who brought liquidation proceedings against
the third applicant.
The
background facts.
[5] The
first respondent and the first and second applicants met during 2009.
They created a business relationship through the third
applicant. The
members of the third applicant are the first and second applicants
and the Atticus Trust. They hold interests in
equal shares. The
interests of the Atticus Trust are protected by the first respondent.
[6] The
third applicant owns an immovable property – Erf 100 St Lucia,
in Kwa-Zulu Natal Province. The agreement between the
parties was to
convert the property into a sectional title scheme in terms of the St
Lucia Town Planning Scheme.
[7] The
parties’ envisaged conversion into sectional title was not
achieved because the first respondent demanded sub-division.
This
demand created a serious dispute which resulted in a deadlock.
[8] In
the answering affidavit they alleged that the relationship between
the parties has broken down irretrievably. Their differences
have
become irreconcilable. The deadlock resulted in an application for
liquidation under case no. 26572/2013.
[9] The
application for the liquidation was served at its registered offices
in Johannesburg. On 2 August 2013 the third applicant
was placed
under final winding up order.
[10] The
second, the third and fourth respondents were appointed as the joint
liquidators. They tried twice to sell the only asset
of the third
applicant. The sale was stopped on two occasions. On or during 30
July 2014 the applicants launched the rescission
application. They
were represented by Hamel Attorneys who withdrew on 14 October 2014
before the respondents could serve their
answering affidavits and
related documents. Thereafter, the first and second applicants just
disappeared.
[11]
Given the attorneys’ withdrawal the respondents were forced to
make several unsuccessful attempts to serve the applicants
with the
answering affidavit and annexures. On 12 October 2015 the
respondents obtained an order to serve same by publication
in a
newspapers and on the first applicant’s father at 74 Hornbill
Street, St Lucia. On 28 October 2015 the answering affidavit
and
annexures were served is St Lucia.
[12] On
28 July 2016 the applicants’ new attorneys filed an application
informing the respondents that they intend to seek
a postponement at
the hearing of the rescission application. The application supported
by the affidavit of the attorney. The applicants
do not provide any
confirmatory affidavit. The respondents opposed the application for
postponement.
The
hearing of the rescission application.
[13] The
postponement was argued and rejected. It was found that the
applicants were merely playing delaying tactics
to the prejudice of
the respondents. The absence of their replying affidavit counted
heavily against them. They have done nothing
since October 2015 to
bring these proceedings to finality. To date they have not filed any
replying affidavit. This is totally
unacceptable – Justice
delayed amounts to justice denied.
[14] The
applicants contend that they were not aware of the liquidation
proceedings, and that the said liquidation was not
sanctioned
by a special meeting. Accordingly, they contend that the winding up
of the third applicant was “erroneous”.
[15] The
respondents raise two issues in their papers. They submitted that
there was a deadlock between the applicants and Atticus
Trust. These
are parties who jointly owned the third applicant. They argued that
the deadlock is insurmountable. The amount of
contribution brought in
by various parties is irrelevant. The respondents allude that the
disappearance of the first and second
applicants compelled them to
institute interlocutory application for a different mode of service.
[16]
Secondly, it was contended that the third applicant was unable to pay
its debts. The debts are clearly itemised and identified.
[1]
They submitted that the application for liquidation was
properly served at the registered office of the third applicant.
[17] The
respondents persisted that in terms of section 81(1)(d) of Act 71 of
2008
[2]
and section 344(h) of Act 61 of 1973
[3]
they were entitled to the order of winding up and the application was
properly made.
The
principles governing the rescission and variation of orders.
[18]
There are three ways to rescind or vary orders which are obtained by
default. They are governed by the provisions of Rule 31(2)(b)
and
Rule 42 of the Uniform Rules of Court (“the Rules”) and
the common law. In terms of Rule 31(2)(b), the conditions
necessary
for a default judgment are clearly stipulated. It is either the
failure to note appearance to defend or to file plea.
The applicants
must also show “good cause” why their application for
rescission must succeed. This requires,
inter
alia
, the presence
of a
bona fide
defence.
[19] The
applicants do not and cannot rely on the provision of Rule 31(2)(b).
The applicants’ case, is therefore, based
on the
provisions of Rule 42. The applicants must prove that the order was
“erroneously” sought and granted. The term
“erroneous”
has received interpretation in various decisions. Nothing is alleged
which can be accepted as erroneous
within the context of these
provisions.
[20] The
purpose of the rescission is to afford the aggrieved party an
opportunity to litigate the real dispute. The applicant must
therefore prove a
bona
fide
defence.
[4]
The
evaluation of the application.
[21] The
parties have submitted affidavits in respect of their issue. The
affidavits constitute their evidence. The applicants contend
that the
order of liquidation and the appointment of joint liquidators granted
was:
“
-erroneously
sought or erroneously granted, alternatively that I
[applicant
s]
have shown good cause for the rescission of the judgment.”
[5]
On a proper
interpretation of their affidavits, they rely on Rule 42. This Rule
caters for variation and rescission of orders. It
provides that:-
-“The court may, in addition to any other powers
it may have
mero motu
or upon the application of any party
affected, rescind or vary;
(a)
court order or judgment erroneously sought or erroneously granted in
the absence of any party affected
thereby.”
This
Rule does not stipulate the time limits within which to bring the
rescission application. However, the application must be
brought
within a reasonable time.
[22]
According to the applicants’ affidavit they acquired knowledge
of the liquidation order on or about 10 October 2013.
They only
launched the rescission application on 30 July 2014. I do not accept
the reasons for delay as reasonable. Even after
they launched the
rescission application, they disappeared. The respondents had to
obtain an order for substituted service. To
date the applicants are
in default of their replying affidavit. The court is persuaded that
the applicants have been acting maliciously.
They have interdicted
the sale and left it there. They were expected to act expeditiously
and yet they failed to do so. They disappeared
from the scene without
trace. It is the principle of our law that justice must not only be
done but must seen to be done. This
principle is encapsulated in
Section 35(3)(d) of Act 108 of 1996 which provides that every person
has a right of a fair trial which
include the right to have
litigation begin and concluded without unreasonable delay.
[23] As
stated in paragraph 20 the primary purpose of the rescission is to
afford another party an opportunity to litigate. This
means there
must be a real dispute. The respondent have alleged deadlock. The
deadlock is common cause. The parties have been involved
in
acrimonious litigation. It is difficult to see how they still can
work together. The applicants do not disclose a
bona
fide
defence to the
claim. They do not deny that there is a deadlock.
[6]
They admit that:-
“
-The
second applicant and I were opposed to subdivision and a dispute
arose between us and the first respondent as to the issues
of
Sectional title sub-division.”
The
parties did not agree on how to proceed with their joint venture.
This disagreement goes to the heart of trust. The respondents
contend
that their disagreement cannot be reconciled. The court finds that
such statement is well founded.
[24] The
applicants also do not dispute that the close corporation was unable
to pay its debts. Their evidence is that:-
“
-Any
debts occurred by fraud for the third applicant was done without our
knowledge and consent.”
[7]
The
accusation of fraud is serious. It erodes any trust. The inability to
pay debts in one of the recognised grounds for the liquidation
provided that it is equitable and just. The nature of the debts
demonstrates that they were intended for their business. The
failure to pay these debts is a good grounds to wind up the third
respondent.
Costs.
[25]
attitude of the applicants in the conduct of this matter is less than
satisfactory. In my view they are
embarking on this
process merely to delay. They are delaying the work of the joint
liquidators. Those factors notwithstanding,
I am not satisfied that
the applicants should be punished with costs.
Conclusion.
[26]
In the circumstance I make the following order:
1.
The rescission
application is dismissed.
2.
The costs of this
application are costs in the liquidation.
_____________
RE MONAMA
JUDGE OF
THE HIGH COURT
GAUTENG
LOCAL DIVISION
Appearances
For the
Applicant:
Adv. M Smit
Instructed
by:
Bove Attorneys, Johannesburg
For the
Respondent;
Adv. JA Swanepoel
Instructed
by:
Mosterts Inc, Johannesburg
Date of
hearing;
4 August 2016
Date of
judgment;
30 August 2016
[1]
See paras 25 - 26 of the replying affidavit on pages 118 – 119
of the record.
[2]
The new Companies Act.
[3]
The old Companies Act.
[4]
Saphula v Nedcor Bank Limited
1999
(2) SA 76
(W) at 79.
[5]
See paragraph 9.1 of the founding affidavit on
page 24 of the record.
[6]
See paragraph 4.12 of the founding affidavit.
[7]
See paragraph 9.6 of the founding affidavit on
page 24.