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[2010] ZAGPJHC 6
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Maharaj v Choudree and Others [2010] ZAGPJHC 6; 09/52967 (1 March 2010)
IN THE SOUTH GAUTENG HIGH COURT
(JOHANNESBURG)
CASE NO 09/52967
REPORTABLE: NO
OF INTEREST TO OTHER JUDGES: NO
REVISED
In the matter between
ANISH
ANIL MAHARAJ
APPLICANT
and
DINESH
CHOUDREE
FIRST
RESPONDENT
STANDARD
BANK OF SOUTH AFRICA LIMITED
SECOND
RESPONDENT
NEDBANK
LIMITED
THIRD
RESPONDENT
J U D G M E N T
VAN OOSTEN J:
[1] This is an application for
the confirmation of a rule
nisi
, issued by this court
(Blieden J) in terms of which the attachment of the first
respondent’s funds held in three of
his bank accounts held with
the second and third respondents was authorised
ad fundandam vel
confirmandam jurisdictionem
. Only the first respondent
(henceforth referred to as “the respondent”) opposes the
confirmation of the rule.
[2] The respondent’s
opposition is based on four grounds. On the view I take of this
matter it is only necessary to
determine one of those grounds, which
is that the applicant has failed to show a
prima facie
cause
of action against the respondent, in the action he, at the time of
launching this application, proposed to institute against
the
respondent. The action I should mention was instituted the day after
the rule
nisi
was granted.
[3] It has become well
entrenched that an applicant seeking an order for attachment to found
jurisdiction must show a
prima facie
cause of action against
the defendant. The requirement is satisfied if an applicant
shows that there is evidence which, if
accepted, will establish a
cause of action. In
Dabelstein and Others v Lane and Fey NNO
[2000] ZASCA 156
;
2001 (1) SA 1222
(SCA), Hefer ADCJ held as follows (para
[7]):
‘
However, accepting the
statements at face value, it is plain that an applicant must at the
very least make all the allegations in
his founding affidavit that
will sustain a cause of action
.’
(See also
Tsung v Industrial
Development Corporation of SA Ltd
[2006] ZASCA 28
;
2006 (4) SA 177
(SCA) at para
[7]
). In
Hülse-Reutter and Others v Gödde
2001 (4)
SA 1336
(SCA), Scott JA, having referred to the above general
requirement, added thereto (para [12]):
‘
..it is only where it is
quite clear that the applicant has no action, or cannot succeed, that
an attachment should be refused.’
The remedy moreover should be applied
with care and caution as it is (in the words of Scott JA) “of
an exceptional nature
and may have far-reaching consequences for the
owner of the property attached”. As rightly pointed out by
counsel for the
respondent, this is even more apposite in our post
constitutional dispensation where the protection of property is
constitutionally
(s 15(1) of the Constitution) enshrined.
[4] In deciding whether the
applicant has made out a
prima facie
case, I propose to adopt
a two-legged approach, firstly, to consider the allegations
concerning the applicant’s cause of
action as set out in the
founding papers and secondly, (in line with the approach proposed in
Dabelstein and Others v Lane and Fey NNO
, supra) to also
have regard to what has been said in the respondent’s answering
affidavit, or to put it differently, to look
at all the evidence
before me in order to decide whether a
prima facie
cause of
action has been established. For present purposes regard need only be
had to the fact that the applicant’s cause
of action is based
on an agreement concluded between him and the respondent which was
“partly oral and partly in writing”
(the agreement).
[5] Applying the principles to
which I have referred above, the minimum threshold the applicant in
my view must pass to discharge
the onus of establishing a
prima
facie
cause of action is that the allegations made by him in the
founding affidavit (the founding affidavit has been deposed to by an
attorney duly authorised to do so on behalf of the applicant), on the
acceptance thereof, will show that an agreement was concluded,
on the
terms alleged, which would entitle the applicant to payment of the
sums claimed.
[6] This brings me to the terms
of the agreement which are set out as follows in the founding
affidavit:
13. ‘ The Applicant has a
claim against the First Respondent for the sum of US$1 507 033.00
as well as the
further sum of US$1 695 033.00 together with
such interest as may be claimed in law.
14. The claim arises out of, and
is based on, an agreement concluded between them in 2005.
15. The Applicant and First
Respondent were involved in a business in the online gaming industry
and were both shareholders
of a local company called Brandbox Media
(Pty) Limited (“Brandbox”).
16. On 13 July 2005, in
Johannesburg, the Applicant and First Respondent concluded an
agreement which was partly oral and
partly in writing, in terms of
which the Applicant sold to the First Respondent his interest in the
business, as well as his shareholding
in Brandbox.
17. I attach copies of the
documents which constitute the written part of the agreement as
“VJM1” to “VJM8”.
18. In terms of the aforesaid
agreement, the purchase price payable by the First Respondent to the
Applicant in consideration
for the Applicants interest and
shareholding was the sum of US$4 839 099.00. The purchase
price was payable as follows:
18.1 the sum of US$1 637 033.00
by 15 January 2006;
18.2 the sum of US$1 507 033.00
by 15 January 2007;
18.3 the sum of US$1 695 033.00
by 15 January 2008.
19. The first respondent paid to the
Applicant, or caused to be paid, the sum of US$1 637 033.00
during January 2006,
but failed to pay the remaining two instalments.
20. The First Respondent is
accordingly indebted to the Applicant in the sum of US$1 507 033.00
and the further sum of
US$1 695 033.00 together with such
interest as may be claimable in law on each of the aforesaid
amounts.’
(the agreement)
[7] I turn now to the written
part of the agreement. It consists of eight pages. The first
page (Annexure “VJM1”)
bears the heading “Memorandum
of Understanding – 5 July 2005”. Below the heading there
appears altogether nineteen
paragraphs, numbered 1.1 – 1.9 and
2 – 2.9, each consisting of not more than two lines. In
addition thereto, four further
paragraphs have been inserted in
manuscript, numbered 3.0 – 3.3. Below the numbered paragraphs
the signature of the respondent
(who is throughout referred to as
“DC”) with the date 13/07/05 appears and below this, the
signature of the applicant
(referred to as “AM”) also
with the date 13/07/05 next to it. Before dealing any further with
the remaining pages of
the annexure, it is convenient at this stage
to consider the nature and impact of the Memorandum of Understanding.
[8] The Memorandum of Understanding is
anything but a model of clarity.It is certainly no easy task to
decipher the true meaning
of its “terms”. On my reading
thereof it in essence regulates the separation of the applicant and
the respondent in
regard to “BBM”, which I assume (and
accept for present purposes) is a reference to Brandbox Media (Pty)
Ltd, in which
it is alleged the applicant and the respondent were
shareholders. But what is glaringly absent from this document is any
reference
to any of the terms of the agreement.
[9] The next part of the written
part of the agreement consists of four pages (Annexure “VJM
2-5”), and bears
the heading “Transfer Notice”.
All pages, in the bottom corner thereof, it is common cause between
the parties,
bear the signatures of the applicant and the
respondent.
Ex facie
the Transfer Notice:
It is recorded that an Economic
Benefits Agreement exists between “Praxis
Investment Trust, a discretionary trust
established in terms of the
banks and trust companies of the British Virgin Islands and bearing
registration number (11111) (hereinafter
referred to as “Praxis”)
and Maricass International Holdings Incorporated, a company
incorporated in [insert details]
and bearing registration number
[11111] (hereinafter referred to “Maricass”)”.
It is issued by Praxis (as transferor)
to Maricass “in terms of clause 9.1 of the [Economic Benefits]
agreement”, which
constitutes an offer by Praxis to sell its
entire “economic benefit” in Maricass, to Maricass.
Certain “conditions” are
attached to the offer, one thereof being the purchase price payable
in the sum of US$ 4 839 099.00
(which corresponds with the
purchase price referred to in the applicant’s founding
affidavit) and that the amount is payable
by way of three
instalments, which all accord with the dates and amounts stated in
paragraph 18 of the founding affidavit.
It has not been signed in the spaces
provided for signatures by either Praxis or Maricass (on the last
page with the heading “Acceptance
Notice”).
[10] It is immediately apparent that
neither relevance nor nexus between the Transfer Notice and the
agreement exists nor has such
been alleged or shown. No mention of
any one of the entities (accepting them to be entities), Praxis and
Maricass, are to be found
in the terms of the agreement set out in
the founding affidavit. The Transfer Notice cannot in any way be
reconciled with the terms
of the agreement. If anything it is
destructive of the terms of the agreement. To summarise: nothing has
been set out to show respondent’s
(as opposed to Maricass)
personal liability to the applicant (as opposed to Praxis) for the
payments in respect of the sale of
the entire economic benefit of
Praxis in Maricass, to Maricass where, according to the applicant he,
in terms of the agreement
he now relies upon, personally had sold to
the respondent his interest “in the business” (without
disclosing the name
of such business) as well as his shareholding in
Brandbox, a company that simply does not feature at all in the
Transfer Notice.
[11] But it does not end there: the
Transfer Notice containing, as I have already referred to, an offer
by Praxis which was open
for acceptance by Maricass, was
ex facie
the documents not accepted. In the replying affidavit (deposed to by
the applicant personally) it is stated that the Transfer Notice
at
the time of concluding the agreement had not been signed (
ie
by either Praxis or Maricass), but that it was “later signed”.
[12] I proceed to deal with the final
pages of the written part of the agreement (Annexure “A6-8”)
bearing the heading
“Notes: Agreed Adjustments”. On the
last page thereof one finds a payment schedule where the instalments
(as stated
in paragraph 18 of the founding affidavit) again appear.
Again, there is no nexus between this document and the Transfer
Notice
on the one hand, or for that matter, the agreement, on the
other.
[13] I turn now to the second leg of
the enquiry. In the answering affidavit the respondent in addition to
the uncertainties and
inconsistencies I have already referred to,
convincingly shows that the applicant has proffered different
versions concerning the
agreement in other proceedings between the
parties in this court concerning the self-same alleged cause of
action. Those proceedings
are a previous identical action instituted
by the applicant against the respondent, which is still pending; the
applicant’s
application for the sequestration of the
respondent’s estate also based on the alleged indebtedness
arising from the agreement,
which was dismissed with costs, and the
respondent’s application for the furnishing by the applicant of
security for costs,
which is still pending before this court. The
respondent, with painstaking accuracy, has referred to the
inconsistencies revealed
when a comparison is made between the
allegations concerning the agreement and the annexures relied upon as
the written part of
the agreement, in all of these cases. I do not
consider it necessary for purposes of this judgment to traverse all
those inconsistencies.
Merely two thereof will serve to illustrate
the point: firstly, in the sequestration application (brought
in June 2008) the
applicant stated that the Memorandum of
Understanding – 5 July 2005 constituted the written part of the
agreement and that
it had to be read “in conjunction with”
a further agreement (
ie
the Transfer Notice), which at the
time was “in the process of being concluded between Praxis and
Maricass”. He further
stated that the respondent, in terms of
the Memorandum of Understanding, personally guaranteed to make to the
applicant the payments
referred to in the Transfer Notice and that
the first payment of US$1 507 033, which the respondent had
guaranteed, had
in fact been made in January 2006 by Maricass on the
respondent’s behalf, to Praxis, on the applicant’s
behalf. These
allegations in the meanwhile seem to have fallen along
the wayside as they are not repeated in the present application, but,
in
my view more importantly, they can in any event in no way be
reconciled with the wording of the Memorandum of Understanding.
[14] Secondly, and in my view decisive
of the unsustainability of the applicant’s cause of action, is
the turn the applicant’s
cause of action has taken in the
Intendit which was issued the day after the order (in terms of which
the applicant was also granted
leave to sue the respondent in the
action by way of edictal citation) was granted. For the first time
the following is now alleged:
‘
6. The transfer notice
and acceptance notice (annex(sic)“B2” to “B5”)
reflect a simulated agreement
between Maricass International Holdings
Incorporated and the Praxis Investment Trust, which was designed by
the defendant to conceal
the fact that he was purchasing the
plaintiff’s said interest and shareholding. The purchase price
and method of payment
as agreed between the plaintiff and the
defendant are however correctly reflected in the transfer notice.
’
The applicant both under oath (in the
sequestration proceedings) and in the first action (which is still
pending) has never made
any mention of a simulated agreement. But it
goes further: the contents of the newly introduced paragraph 6 are at
odds with the
terms of the agreement. The allegation that the
“defendant concealed that he was purchasing the plaintiff’s
said interest
and shareholding” flies in the face of the fact
that the applicant was a co-signatory to those very documents and
further
that those documents are the very documents the applicant
relies upon as constituting the agreement.
[15] Finally, a further disturbing
feature deserves comment. The respondent in his answering affidavit
pertinently raised the impropriety
of the applicant relying on an
agreement between Maricass and Praxis as entities who are not parties
to these proceedings. The
applicant apart from relying for the first
time on a simulated agreement, does not deal with this apparent
anomaly at all. His
failure to do so is unjustifiable on any rational
basis. It merely needs to be stated that it is certainly not for this
court to
venture into speculation as to what the applicant’s
cause of action against the respondent is. He bore the onus of
showing
a
prima facie
cause of action which he, for the
reasons stated, has failed to discharge.
[16] To sum up then I conclude that
there are no prospects of the applicant succeeding on the cause of
action he has set out in
this application resulting in a failure to
discharge the onus of showing a
prima facie
cause of action.
The rule
nisi
accordingly falls to be discharged.
[17] In the result, I make the
following order:
1. The rule
nisi
dated 22
December 2009 is discharged.
2. The applicant is ordered to pay the
first respondent’s costs of the application, such costs to
include the costs consequent
upon the employment of two counsel where
two counsel were employed.
FHD VAN OOSTEN
JUDGE OF THE HIGH COURT
COUNSEL
FOR THE APPLICANT
ADV J A PLOOS VAN
AMSTEL SC
ADV
J J BITTER
APPLICANT’S
ATTORNEYS
GARLICKE
& BOUSFIELD INC
COUNSEL
FOR THE FIRST RESPONDENT
ADV V
SONI SC
ADV
SK DAYAL
FIRST
RESPONDENT'S ATTORNEYS
VOS
ATTORNEYS
DATE
OF HEARING
19
FEBRUARY 2010
DATE
OF JUDGMENT
1
MARCH 2010