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[2014] ZASCA 50
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Grancy Property Limited and Another v Seena Marena Investment (Pty) Ltd and Others (244/13) [2014] ZASCA 50; [2014] 3 All SA 123 (SCA) (1 April 2014)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
REPORTABLE
Case No: 244/13
In the matter
between:
GRANCY PROPERTY
LIMITED AND
ANOTHER
.......................................................
Appellants
and
SEENA MARENA
INVESTMENT
(PTY)
LTD AND
OTHERS
.............................................................................................
Respondents
Neutral
citation
:
Grancy
Property
v
Seena
Marena
(244/13)
[2014] ZASCA 50
(01
April 2014)
Coram:
Lewis, Mhlantla, Petse and Saldulker
JJA and Legodi AJA
Heard:
3 March 2014
Delivered:
1 April 2014
Corrected:
9 May 2014
Summary:
Civil Procedure – where an order
made in the High Court is final in effect and definitive of the
rights of the parties, the
order is appealable – party is
entitled to claim an order that there be an inquiry into the adequacy
of an account before
it is debated.
ORDER
On
appeal from:
Western Cape High Court,
Cape Town (McDougall AJ sitting as court of first instance):
1
The
appeal is upheld with costs, including the costs of two counsel.
2
The order of the high court is set aside
and replaced with:
‘
(a)
(i) The application under case no 15757/07 instituted by the second,
third and fifth respondents in terms of Rule 6 (11)(the
Spearhead
application) is dismissed.
(ii) The
counter-application instituted by the applicants in terms of Rule
6(11) is granted in terms of the order annexed to this
judgment
marked ‘A’.
(b) (i) The
application under case no 10547/08 instituted by the applicants in
terms of Rule 6(11) (the Scharrig application) is
granted in terms of
the order annexed to this judgment marked ‘B’.
(ii) The
counter-application instituted by the first to sixth respondents in
terms of Rule 6(11) is dismissed.’
((2
The order of the high court is set aside and replaced wit
JUDGMENT
Mhlantla
JA
(Lewis, Petse, Saldulker JJA and
Legodi AJA concurring):
[1]
This appeal is against a decision of the Western Cape High Court,
Cape Town (McDougall AJ). It is in respect of four applications
brought in terms of rule 6(11) of the Uniform Rules of Court and
which are interlocutory to two main applications under case numbers
15757/07 and 10547/08. The appeal is with leave of the court below.
The underlying dispute between the parties relates to an entitlement
of Grancy Property Limited and Montague Goldsmith AG in Liquidation
(the appellants) to a proper statement of account by Seena
Marena
Investments (Pty) Ltd (Seena Marena Investments), Mr Dines Gihwala,
Mr Lancelot Manala and the Gihwala Family Trust (the
respondents).
[2]
At issue in this appeal is the question whether the order of the high
court is appealable and if so, whether the appellants
have made out a
case for a two
–
stage judicially
controlled procedure dealing, first with the adequacy and second with
the accuracy of the accounts in question.
[3]
Some factual background is necessary before the determination of the
issues. The appellants, who are based overseas, decided
to invest
moneys in South Africa. They communicated with Mr Gihwala regarding
their interest in two investments, that I shall refer
to as Spearhead
and Scharrig. They transferred funds to him to invest accordingly and
in certain instances advised him to collect
funds from a firm of
attorneys which held their moneys in its trust account. At a certain
stage the relationship between the parties
turned sour. It transpired
that some of the funds were never invested, whilst the others were
repaid to them. The appellants were
not satisfied with the refunds
and by way of letters demanded an account from the respondents. When
this was not forthcoming they
brought the two main applications in
the Western Cape High Court.
[4]
The Spearhead proceedings commenced in November 2007. In terms of a
settlement agreement, which was made an order of court on
9 March
2009, the respondents were ordered to submit to the appellants an
account setting out how the appellants’ funds had
been
utilised. The respondents rendered the account. The appellants
complained, however, that it was inadequate. They launched
proceedings under rule 6(11) of the Uniform Rules and sought an order
declaring that the account rendered by the respondents was
inadequate
and directing them to provide an account in accordance with the March
2009 order. No relief was sought with regard to
the debatement of the
account.
[5]
That application was heard by Binns–Ward J. On 15 April 2010
the learned judge found that the respondents had rendered
a ‘woefully
inadequate’ account. He directed the respondents to furnish the
appellants with an improved account within
15 days of the order. He
held that a debatement of the account still had to occur and the
actual definition of what was in issue
would take place after the
appellants had had an opportunity to consider the account and
privately debate with the respondents
any issues arising out of such
consideration. During May 2010 the respondents submitted a further
account which was supplemented
in June 2010 after the appellants had
requested them to account properly. Despite this, a dispute arose as
to the adequacy of the
account. This dispute culminated in the
respondents launching a further Spearhead application. The appellants
subsequently filed
their counter–application.
[6]
Regarding the Scharrig project, during April 2005, Mr Gihwala advised
the appellants of an opportunity to invest in Scharrig,
a JSE listed
company. The appellants decided to invest an amount of R1 million. Mr
Gihwala also held funds on behalf of the appellants
in the trust
account of Hofmeyer, Herbstein & Gihwala Inc, a firm of
attorneys, (Hofmeyer). He was authorised to utilise some
of those
funds for the Scharrig investment. During June 2005 a further
opportunity arose to invest in Scharrig shares. On 16 June
2005 the
appellants contributed a sum of R10 million which was transferred to
Hofmeyer’s trust account. This amount was subsequently
invested
in the name of Seena Marena Investments at Peoples Bank.
[7]
It later transpired that Mr Gihwala did not invest the R10 million on
behalf of the appellants and in August 2005, this amount
was repaid
to the appellants. Mr Gihwala paid the appellants an amount of
R50 000 as interest but failed to furnish
an account setting out
the interest earned from 16 June to 11 August 2005. The appellants
demanded an account dealing with receipts,
growth and the application
of the funds. Mr Gihwala refused, contending that the appellants had
received a full and proper account.
As a result, on 1 July 2008, the
appellants launched the Scharrig proceedings in the court below and
sought an order that the respondents
provide a proper account,
debatement thereof and payment of the amount due to them.
[8]
This application was heard by Dlodlo J. On 18 June 2010, the learned
judge concluded that the accounting rendered was inadequate.
He
ordered the respondents to provide the appellants a full and proper
account within 14 days of the order; that the account should
be
supported by vouchers dealing with at least how, when, by whom and
for what purposes the amounts of R1 million and R10 million
were
used.
[9]
Pursuant to the order, the respondents handed over further
documentation. The appellants were, however, not satisfied and
alleged
that the accounting was not adequate. A statement of
account with supporting vouchers and a separate affidavit with
annexures
were provided by respondents. The appellants persisted in
their position that the account was defective. The respondents sought
to address the defects by submitting further documents on 27 and 29
September 2010 respectively.
[10]
The appellants were still not satisfied with the adequacy of the
accounts and brought an application in terms of rule 6(11)
where they
sought a judicially controlled procedure to debate the adequacy and
accuracy of the accounts. The respondents filed
a counter-application
contending that the accounts were ready for debatement and proposed
an
extra curial
debatement. The four applications
in the high court were:
(a)
An application which was launched on 29
July 2010 by Mr Gihwala , Mr Manala and the Trust against the
appellants ( the Spearhead
application);
(b)
A counter-application launched on 30
September 2010 by the appellants against Mr Gihwala, Mr Manala and
the Trust;
(c)
An application launched on 12 November 2010
by the appellants against Mr Gihwala, the Trust and Hofmeyer, (the
Scharrig application);
and
(d)
A counter-application launched on 24
January 2011 by Mr Gihwala and the Trust against the appellants.
[11]
The four applications were consolidated and heard by McDougall AJ.
The court recognised that there was no prescribed procedure
for a
statement and debatement of an account. It rejected the
appellants’ proposed approach for a two-stage enquiry
where the
accounts would first be debated for adequacy and then accuracy. It
concluded that both the Spearheard and Scharrig accounts
were ready
to be debated. It thus upheld the respondents’ application in
the Spearhead application and their counter-application
in the
Scharrig application. The parties were directed to debate the
accounts furnished by the respondents pursuant to the orders
dated 9
March 2009, 15 April 2010 and 18 June 2010 respectively. The
appellants now seek a reversal of the orders of the court
below, and
in particular the finding that the accounts were ready to be debated.
[12]
With that background, I revert to the preliminary issue, that is,
whether the order of the high court is appealable. In deciding
this
question, this court is guided by the principles laid out in a line
of cases. It is useful to begin with
Zweni
v
Minister
of Law and Order
[1]
where Harms JA stated:
‘
A
“judgment or order” is a decision which, as a general
principle has three attributes, first, the decision must be
final in
effect and not susceptible of alteration by the Court of first
instance; second, it must be definitive of the rights of
the parties;
and, third, it must have the effect of disposing of at least a
substantial portion of the relief claimed in the main
proceedings.’
[13]
In
Moch
v
Nedtravel
(Pty) Ltd
,
[2]
Hefer JA pointed out that the principles are neither exhaustive nor
cast in stone. The tests did not deal with a situation where
the
decision, without actually defining the parties’ rights or
disposing of any of the relief claimed in respect thereof,
yet has a
very definite bearing on these matters.
[14]
Maya JA in
Jacobs
v
Baumann
NO
,
[3]
said:
‘
.
. . [A] court determining whether or not an order is final considers
not only its form but also, and predominantly, its effect.
An order
may not possess all three attributes, but will nonetheless be
appealable if it has final jurisdictional effect or is ‘such
as
to “dispose of any issue or any portion of the issue in the
main action or suit” or . . .“irreparably anticipates
or
precludes some of the relief which would or might be given at the
hearing”’.
[15]
In
NDPP
v
King
,
[4]
Harms DP held:
‘
.
. . [T]he focused issue is whether the “order” was in
substance and not in form final in effect. In other words, was
it
capable of being amended by the trial court? . . . If a party has
been prejudiced by the order his prejudice is irremediable.’
[16]
In
Absa
Bank
v
Mkhize
,
[5]
the high court had been seized with an application for default
judgment. It set out steps to be taken by the plaintiff to ensure
that the notice of a consumer’s default in meeting an
obligation to the plaintiff was provided to the consumer in terms of
sections 129
and
130
of the
National Credit Act 34 of 2005
. The court
thereafter postponed the application
sine
die
in order to give the plaintiff an opportunity to take the further
steps it considered were necessary before the matter could be
disposed of. The plaintiff appealed against that order. In this
court, Ponnan JA stated:
‘
[The]
order of the high court amounted to no more than a direction from the
high court. The order is a preparatory or procedural
order which does
not bear upon or in any way affect the decision in the main action .
. . The order does not amount to a refusal
of default judgment, nor
does it directly bear upon or dispose of any of the issues in the
main action, it thus cannot be said
that it is tantamount to a
dismissal of Absa’s action.’
[17]
With these principles in mind, I revert to the contentions of the
parties. Before us, counsel for the respondent submits that
the
judgment and orders are not appealable in that they relate to
interlocutory applications; do not dispose of a substantial portion
of the relief in the main application and are not final in effect.
[18]
It is so that what was before the high court were four interlocutory
applications. However once the relief sought was denied,
it was not
open to the
appellants to
seek it again: the effect of the denial was to deprive the appellants
of a remedy.
[19]
It is clear that the issue of
adequacy
of the account is at the heart of the dispute between the parties.
This issue is very important to them. This is borne out by the
history of the case outlined above. The court below said: ‘In
my view the Spearhead and Scharrig accounts are ready to be
debated.’
Implicit in that statement is that the accounts are adequate and that
there should be no debate about the adequacy
thereof. The court made
this finding without furnishing any reasons therefor. It accepted the
respondents’ proposed method
to deal with the debatement of the
accuracy of the accounts. The effect of the order is that the
appellant is now precluded from
and has been denied the right to
enquire and ensure that accounts to be debated are adequate. The
question that has to be answered
is: can one debate the accuracy of
an account that is inadequate? I think not.
[20]
The appellants would thus be prejudiced if the judgment and order of
the court below were allowed to stand. That was the case
too in
NDPP
v
King
referred
to above in which it was held that although the order on appeal was
made during the course of
proceedings, it was final in effect.
[21]
Counsel for the respondent submitted that a piecemeal adjudication of
the issues should be avoided. It is so that a piecemeal
determination
of issues is undesirable.
[6]
However, we were advised by both parties that the trial commenced in
February 2014 and does not relate to the issues raised in
this
appeal. Furthermore the Scharrig issue does not feature in the
consolidated actions. It follows that this court is properly
seized
with this matter.
[22]
The order of the high court has effectively precluded the appellants
from contesting the adequacy of the accounts, an issue
that has been
a bone of
contention between
the parties since 2009. It is thus final in effect. It has major
implications for the appellants as it affects
their rights to an
adequate account. The effect of the order is that, for as long as it
remains, the appellants will be precluded
from contesting or
revisiting the issue relating to the adequacy of the account. They
will have no remedy to obtain an adequate
account unless the judgment
of McDougall AJ is set aside. It follows that the appellants will be
prejudiced if this order stands. In the result, I conclude
that the decision of the high court is appealable.
[23]
Regarding the merits, the issue is whether the court below properly
held that the respondents’ proposed process for the
debatement
of the accounts was
appropriate
and thus correctly rejected the appellants’ application for a
two–stage judicially controlled process. It
was submitted on
behalf of the respondents that the method proposed by the appellants
is not supported by judicial authority; that
it is inappropriate,
unfair and unworkable and that the appellants’ proposed second
stage was not a debate but a conventional
action process aimed at
recovering the amounts due. The respondents urged us to accept the
method proposed by them as it is consistent
with the guidelines laid
down by this court.
[24]
In
Doyle
& another
v
Fleet
Motors PE (Pty) Ltd
,
[7]
Holmes JA accepted that in South Africa there is no prescribed
procedure for a statement and debatement of an account. He made
general observations about the procedure to be adopted when a party
sought a statement of account, debatement and payment of moneys
due.
The learned judge noted:
‘
The
degree or amplitude of the account to be rendered would depend on the
circumstances of each case. In some cases it might be
appropriate
that vouchers or explanations be included. . . . [Where] the
plaintiff has [already] received an account which he avers
is
insufficient, the court may enquire into and determine the issue of
sufficiency in order to decide whether to order the rendering
of a
proper account . . . In general the court should not be bound to a
rigid procedure, but should enjoy some measure of flexibility
as
practical justice may require.’
[25]
In
Video
Parktown
v
Paramount,
Shelburne & Century
[8]
Slomowitz AJ referred to the general observations made by Holmes JA
in
Doyle
v
Fleet
Motors
and said:
‘
It
seems apparent from his remarks that the issue whether an account
should be ordered may, in a suitable case, be tried separately
from
and before any question relating to the adequacy of the account.
Viewing the matter as one of principle, it seems to me that
the right
to receive an account is one which is distinct from the right to have
it debated and then to obtain payment of any monies
found to be
owing. Whether an account must in law be delivered is one question.
Whether it is correct is another. If an account
which is bound in law
to be furnished is found to be incorrect, the remedy of debatement
arises, not so much from the duty to deliver
it in the first
instance, but from the failure to ensure its accuracy.’
[26]
In
Doyle
v
Board
of Directors
,
[9]
Slomowitz AJ said:
‘
The
right to an account is at once two distinct concepts. It is both
substantive and procedural. It is a right as well as a remedy.
The
duties of good faith, which are owed by an agent to his principal,
are no different in kind to those which fall on a trustee
….
Inextricably bound
up with this by no means exhaustive compendium of obligations is the
agent’s duty to
give an accounting
to his principal of
all that he knows and has done in the execution of his mandate and
with his principal’s property.’
[27]
In this case, the appellants contended for a two-stage judicially
controlled procedure which would deal first with the adequacy
and
then with the accuracy of the Spearhead and Scharrig accounts
rendered by the respondents. The procedure would involve the
examination of the relevant respondents before the court in relation
to the adequacy of the details of the accounts. If the accounts
were
inadequate, the judge would specify in which respect and state what
has to be provided by the respondents and set the time
frames. The
court would
thereafter order
the provision of such information, explanations and documentation as
it considered necessary to enable the appellants
properly to debate
the accuracy of the accounts.
[28]
If the accounts were adequate or if the respondents had complied with
the order of the court to cure the inadequacy,
a second hearing
would be convened at which the adequate accounts would be debated in
relation to their accuracy and to determine
whether any amounts were
due to them. Once that is done, the parties would follow the
procedure as envisaged in action proceedings.
[29]
In my view, the court below erred when it rejected the two-stage
process proposed solely because it has not been sanctioned
previously. The method proposed by the appellants is appropriate and
justified under the circumstances. It is unfortunate that
the court
criticised it as being unconventional. It appears that in coming to
this conclusion, the court below overlooked the fact
that there are
no rules that are prescribed for the disputes of the kind in issue in
this case. Accordingly the court is, in general,
not bound to a rigid
procedure but enjoys a measure of flexibility as practical justice
may require.
[30]
It was submitted on behalf of the respondents that the procedure
involving their examination was invasive. I do not agree.
The entire
process envisaged
would be
presided over and controlled by a judge. The interrogation phase
relates to the adequacy stage only. The respondents were
the agents
as the money was entrusted to them and they are the only parties who
know how the funds were utilised. Therefore
they have a duty to
account and respond to the questions posed. There is no corresponding
obligation imposed on the appellants.
In my view the procedure
proposed by the respondents is flawed as it does not cater for the
provision of adequate accounts.
In so far as the accuracy of
the accounts is concerned, the parties will be able to debate the
issues and will be afforded an opportunity
to file pleadings and the
matter will be set down for hearing.
[31]
In the result, the appellants are thus entitled to the relief sought.
The appeal therefore succeeds.
[32]
For these reasons the following order is made:
1 The appeal is
upheld with costs, including the costs of two counsel.
2 The order of the
high court is set aside and replaced with:
‘
(a)(i)
The application
under
case no 15757/07
instituted by the
second, third and fifth respondents in terms of
Rule 6
(11), (the
Spearhead application), is dismissed.
(ii) The
counter-application instituted by the applicants in terms of
Rule
6(11)
is granted in terms of the order annexed to this judgment
marked A.
(b)(i) The
application
under case 10547/08
instituted by the applicants in terms of
Rule 6(11)
, (the Scharring
application), is granted in terms of the order annexed to this
judgment marked B.
(ii) The
counter-application instituted by the first to sixth respondents in
terms of
Rule 6(11)
is dismissed.
__________________
NZ
MHLANTLA
JUDGE
OF APPEAL
A
Order
in respect of Case No: 15757/07
1
The applicants and the second, third and fifth respondents (the
respondents) are directed to debate the adequacy of the account
delivered by the respondents on 7 May 2010 and supplemented on 3 June
2010 (‘the May/June 2010 account’) pursuant to
the order
of Binns-Ward J delivered on 15 April 2010 (‘the April 2010
Judgment’).
2
The applicants and the relevant respondents are directed to debate
the accuracy of the May/June 2010 account.
3
The debatement of the account, contemplated in 1 and 2 above, shall
be conducted before the Western Cape High Court (the high
court) at a
date and time that is convenient to all the parties involved, as well
as their counsel.
4
The debatement of the May/June 2010 account is separated into two
stages:
4.1 the first stage
dealing with the adequacy of the May/June 2010 account; and
4.2 the second stage
dealing with the accuracy of the final account as defined in
paragraph 14 below.
5
The two stages of the debatement should be regulated in the following
manner:
The
first stage: adequacy
6
At the hearing, the applicants’ legal representatives will be
entitled to pose questions to the respondents in relation
to the
adequacy of the May/June 2010 account. The respondents’ legal
representatives will, thereafter, be entitled to question
the
respondents on issues raised by the applicants’ legal
representatives during their questioning of the respondents, after
which the applicants’ legal representatives will be entitled to
re-examine the respondents.
7
In questioning the respondents on the adequacy of the May/June 2010
account, the applicants’ legal representatives will
be entitled
to question the respondents on every aspect and every detail of the
May/June 2010 account, and the content of their
legal duty to account
under the court order delivered by the high court, under the above
case number, on 9 March 2009 (‘the
March 2009 court order’)
and the April 2010 Judgment.
8
It is the respondents, rather than their accountants or legal
representatives, who shall be obliged to answer the questions put
to
them by the applicants’ legal representatives and/or the
respondents’ legal representatives relating to the May/June
2010 account.
9
The applicants will not be obliged to submit to questioning by the
respondents during this stage of the procedure.
10
The questioning of the respondents will be done under oath.
11
After the applicants’ and the respondents’ legal
representatives have finished examining the respondents, the high
court shall make an order on the following issues:
11.1 whether the
May/June 2010 account is adequate in the sense contemplated in the
April 2010 Judgment;
11.2 If the May/June
2010 account is found to be inadequate in the sense contemplated in
the April 2010 Judgment, in what specific
respects it is inadequate;
11.3 what further
explanations must be provided by the respondents, and by what date
these explanations must be provided to the
applicants;
11.4 what further
documentation and/or information the respondents must provide to the
applicants in order to comply with the April
2010 Judgment, and by
what date this documentation and/or information, and further
explanations in relation to this documentation
and/or information,
must be provided to the applicants.
The
second stage: accuracy
12
Should the high court find that the May/June 2010 account is:
12.1 adequate in the
sense contemplated in the April 2010 Judgment;
12.2 alternatively,
inadequate in the sense contemplated in the April 2010 Judgment, and
thereafter make the orders contemplated
in paragraphs 11.2 to 11.4
above, and the respondents thereafter comply with these orders, the
applicants will be entitled to proceed
to debate the accuracy of the
account with the first to third and fifth to ninth respondents (the
relevant respondents) before
the high court.
13
Alternatively, if the respondents fail to comply with the order of
the high court as contemplated in paragraph 12.2 above, the
applicants will be entitled to proceed to debate the accuracy of the
May/June 2010 account with the relevant respondents before
the high
court, subject to the court drawing any appropriate adverse
inferences from the respondents’ failure to comply with
their
legal duty to furnish a full and proper account.
14
In debating the accuracy of the May/June 2010 account, supplemented
in accordance with paragraphs 11.2 to 11.4 above (the final
account),
the following procedures will be followed:
14.1 The
applicants will, within 20 days of the court’s finding
that the May/June 2010 account is adequate;
alternatively within 20
days of the respondents’ compliance with the court’s
order as contemplated in paragraph 12.2;
further alternatively within
20 days of the respondents’ failure to comply with this court’s
order as contemplated
in paragraph 12.2, deliver a written notice to
any one or more of the relevant respondents in the form of
particulars of plaintiffs’
claim in which they claim any
amounts due to them, which arise from the debatement contemplated in
paragraph 4 of the March 2009
court order and/or the second, third
and/or fifth respondent’s failure to provide an adequate and/or
accurate account.
14.2 Any
one or more of the relevant respondents will be entitled, within 15
days of the delivery of the particulars
of claim, to respond in
writing to the allegations in the particulars of claim in the form of
a plea. The relevant respondents
will not be entitled to lodge any
counterclaim against the applicants.
14.3 The
applicants will be entitled, within 10 days of the delivery of
plea(s) by one or more of the relevant respondents,
to respond in
writing to such plea(s) in the form of a replication.
15 The above
procedure does not preclude the applicants from initiating contempt
of court proceedings against one or more of the
respondents should
such respondent(s) fail to comply with the high court’s order
as contemplated in paragraph 12.2.
16
Once the procedure contemplated in paragraphs 14.1 to 14.3 has been
finalised, the applicants shall set the matter down to be
heard by
the high court at a date and time convenient to all the parties
involved, as well as their counsel.
17
To the extent that the above procedure does not provide otherwise,
the process of the debatement of the accuracy of the final
account
and adjudication of the claims in the particulars of claim will take
place in accordance with the Uniform Rules of the
Court which govern
action proceedings.
18
The debatement of the accuracy of the final account and adjudication
of the claims in the particulars of claim will, as far as
possible,
be argued before the same judge who heard argument on the adequacy of
the May/June 2010 account.
19
The respondents (and the first and sixth to ninth respondents under
WCC case no 15757/07, in the event of their opposing the
relief
herein)
are ordered
to pay, jointly and severally, the
one paying the other to be absolved, the applicants’ costs of
suit on the scale as between
attorney and client, including the costs
of two counsel.
B
Order
in respect of Case No: 10547/08
1
The applicants and the first, second and seventh respondents (the
respondents) are directed to debate the adequacy of the account
delivered by:
1.1 the first and
second respondents on 2 July 2010 (the Gihwala July 2010 account) and
supplemented on 27 September 2010 (the 27
September 2010 letter)
(collectively, ‘the first and second respondents’
account’); and
1.2 the seventh
respondent on 2 July 2010 (the HHG July 2010 account) and
supplemented on 30 September 2010 (the 30 September 2010
letter)
(collectively, ‘the seventh respondent’s account’),
pursuant to the order of Dlodlo J delivered
on 18 June 2010
(the June 2010 Judgment).
2
The applicants and the relevant respondents are directed to debate
the accuracy of the first and second respondents’ account
and
the seventh respondent’s account (collectively, ‘the
respondents’ accounts’).
3
The debatement of the account, contemplated in 1 and 2 above, shall
be conducted before the Western Cape High Court (the high
court) on a
date and time that is convenient to all the parties involved, as well
as their counsel.
4
The debatement of the respondents’ accounts shall be separated
into two stages:
4.1 the first stage
dealing with the adequacy of the respondents’ accounts; and
4.2 the second stage
dealing with the accuracy of the final accounts as defined in
paragraph 14 below.
5
Directing that the two stages of the debatement should be regulated
in the following manner:
The
first stage: adequacy
6
At the hearing, the applicants’ legal representatives will be
entitled to pose questions to the respondents in relation
to the
adequacy of the respondents’ accounts. The respondents’
legal representatives will, thereafter, be entitled
to question the
respondents on issues raised by the applicants’ legal
representatives during their questioning of the respondents,
after
which the applicants’ legal representatives will be entitled to
re-examine the respondents.
7
In questioning the respondents on the adequacy of the respondents’
accounts, the applicants’ legal representatives
will be
entitled to question the respondents on every aspect and every detail
of the respondents’ accounts, and the content
of their legal
duty to account under the June 2010 Judgment.
8
It is the respondents, rather than their accountants or legal
representatives, who shall be obliged to answer the questions put
to
them by the applicants’ legal representatives and/or the
respondents’ legal representatives relating to the respondents’
accounts.
9
The applicants will not be obliged to submit to questioning by the
respondents during this stage of the procedure.
10
The questioning of the respondents will be done under oath.
11
After the applicants’ and the respondents’ legal
representatives have finished examining the respondents, the high
court shall make an order on the following issues:
11.1
whether the first and second respondents’ account and/or the
seventh respondent’s account are adequate
in the sense
contemplated in the June 2010 Judgment;
11.2 If
the first and second respondents’ account and/or the seventh
respondent’s account are found to be
inadequate in the sense
contemplated in the June 2010 Judgment, in what specific respects
they are inadequate;
11.3
what further explanations must be provided by the first, second
and/or seventh respondents, and by what date these
explanations must
be provided to the applicants;
11.4
what further documentation and/or information the first, second
and/or seventh respondents must provide to the
applicants in order to
comply with the June 2010 Judgment, and by what date this
documentation and/or information, and further
explanations in
relation to this documentation and/or information, must be provided
to the applicants.
The
second stage: accuracy
12.
Should the high court find that the first and second respondents’
account and/or the seventh respondent’s account
is:
12.1 adequate in the
sense contemplated in the June 2010 Judgment;
12.2 alternatively,
inadequate in the sense contemplated in the June 2010 Judgment, and
thereafter make the orders contemplated
in paragraphs 11.2 to 11.4
above, and the first, second and/or seventh respondents thereafter
comply with these orders,the applicants
will be entitled to proceed
to debate the accuracy of the account with the relevant respondents
before the high court.
13
Alternatively, if the respondents fail to comply with the order of
the high court as contemplated in paragraph 12.2 above, the
applicants will be entitled to proceed to debate the accuracy of the
May/June 2010 account with the relevant respondents before
the high
court, subject to the court drawing any appropriate adverse
inferences from the respondents’ failure to comply with
their
legal duties to furnish a full and proper account.
14
In debating the accuracy of the May/June 2010 account, supplemented
in accordance with paragraphs 11.2 to 11.4 above (the final
accounts), the following procedure will be followed:
14.1 The applicants
will, within 20 days of the court’s finding that the first and
second respondents’ account and/or
the seventh respondent’s
account is adequate; alternatively within 20 days of the respondents’
compliance with the
court’s order as contemplated in paragraph
12.2; further alternatively within 20 days of the respondents’
failure to
comply with the court’s order as contemplated in
paragraph 12.2, deliver a written notice to any one or more of the
relevant
respondents in the form of particulars of plaintiffs’
claim in which they claim any amounts due to them, which arise from
the debatement contemplated in paragraph 28(b) of the June 2010
Judgment and/or the first, second and/or seventh respondent’s
failure to provide an adequate and/or accurate account.
14.2 Any one or more
of the relevant respondents will be entitled, within 15 days of the
delivery of the particulars of claim, to
respond in writing to the
allegations in the particulars of claim in the form of a plea. The
relevant respondents will not be entitled
to lodge any counterclaim
against the applicants.
14.3 The applicants
will be entitled, within 10 days of the delivery of plea(s) by one or
more of the relevant respondents, to respond
in writing to such
plea(s) in the form of a replication.
15
The above procedure does not preclude the applicants from initiating
contempt of court proceedings against one or more of the
respondents
should such respondent(s) fail to comply with the court’s order
as contemplated in paragraph 12.2.
16
Once the procedure contemplated in paragraphs 14.1 to 14.3 has been
finalised, the applicants shall set the matter down to be
heard by
the high court at a date and time convenient to all the parties
involved, as well as their counsel.
17
To the extent that the above procedure does not provide otherwise,
the process of the debatement of the accuracy of the final
account
and adjudication of the claims in the particulars of claim will take
place in accordance with the Uniform Rules of Court
which govern
action proceedings.
18
The debatement of the accuracy of the final account and adjudication
of the claims in the particulars of claim will, as far as
possible,
be argued before the same judge who heard argument on the adequacy of
the respondents’ accounts.
19
The respondents (and the third to sixth respondents under WCC case no
10547/08, in the event of their opposing the relief herein)
are
ordered to pay, jointly and severally, the one paying the other to be
absolved, the applicants’ costs of suit on the
scale as between
attorney and client, including the costs of two counsel.
APPEARANCES
:
For Appellants: P B
Hodes SC (with him JPV McNally SC)
Instructed by:
Webber Wentzel
Attorneys
Symington & De
Kok, Bloemfontein
For Respondents: LA
Rose-Innes SC (with him G Quixley)
Instructed by:
Thomson Wilks Inc.
Honey Attorneys,
Bloemfontein
[1]
Zweni
v
Minister
of Law & O‘der
1993(1) SA 523 (A) at 532J to 533A.
Health
Professions Council of South Africa and another
v
Emergency
Medical Supplies and Training
CC t/a EMS
2010 (6) SA 469
(SCA) para 15.
[2]
Moch
v
Nedtravel
(Pty) Ltd t/a American Express Travel Service
1996 (3) SA 1
(A) at 10F.
[3]
Jacobs
and Others
v
Baumann
NO and others
2009 (5) SA 432
(SCA) para 9.
[4]
National
Director of Public Prosecution
v
King
2010 (2) SA SACR 146 paras 42 and 45.
[5]
Absa
Bank
v
Mkhize
[2014] 1 All SA 1
(SCA) paras 59, 61 and 63.
[6]
See
Health
Professions Council
v
Emergency
Medical Supplies
para 16.
[7]
Doyle
and Another
v
Fleet
Motors PE (Pty) Ltd
1971 (3) SA 760
at 762E-763D.
[8]
Video
Parktown
North
(Pty) Ltd
v
Paramount
Pictures Corporation, Video Parktown North (Pty) Ltd
v
Shelburne
Associates and others, Video Parktown North (Pty) Ltd
v
Century
Associates and others
1986 (2) SA 623
(TPD) at 638E-G.
[9]
Doyle
v
Board
of Directors
1999 (2) SA 805
(CPD) at 813D and 813G.