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[2020] ZAGPJHC 401
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Eldo Telecommunications Proprietary Limited and Others v Ohlsen and Others (17615/2020) [2020] ZAGPJHC 401 (31 August 2020)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 17615/2020
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
Date:
31/8/2020
In
the matter between:
ELDO
TELECOMMUNICATIONS PROPRIETARY
LIMITED
FIRST APPLICANT
DAMON:
IRVAN CLINTON CLIVE
SECOND APPLICANT
BHAWAN:
MITESH
THIRD APPLICANT
AND
OHLSEN: TIM
UWE
FIRST RESPONDENT
WAINWRIGHT: MATTHEW
JAMES
SECOND RESPONDENT
ELDO GROUP HOLDINGS
PROPRIETAYRY
LIMITED
THIRD RESPONDENT
JUDGMENT
Delivered:
This judgment was
handed down electronically by circulation to the parties’ legal
representatives by e-mail. The date and
time for hand-down is deemed
to be 10h00 on the 31
st
of August 2020.
TWALA
J
[1]
This is an application brought on urgent basis by the applicants
seeking the enforcement
of the court order granted by this Court on
the 31
st
of July 2020 under the above case number
10249/2020, including an order that the first and second respondents
are held in contempt
of the said Court order.
[2]
The first and second respondents have filed its opposition to this
application. In
these proceedings my reference to the respondents
should be construed as referring to the first and second respondents.
[3]
The genesis of this case emanates from an order consented to by the
parties and granted
by this Court on the 31
st
of July
2020. To put matters in the proper context, it is necessary for to
now state the contentious paragraphs of the Court order
being
paragraphs 7 and 8 which provide as follows:
“
Para
7 the applicants and the respondents undertake that only legitimate
business expenses of the 1
st
applicant shall be effected by way of online banking payments on the
account, and which payments require the prior consent of both
the 1
st
respondent and the 3
rd
applicant, including but not limited to payment of salaries,
operational expenses, invoices of suppliers and contractors
legitimately
employed;
Para 8 the applicants
and the respondents undertake that all due and payable legitimate
business expenses of the 1
st
applicant, including but not
limited to salaries, operational expenses, invoices of suppliers and
contractors legitimately employed,
shall be effected as expeditiously
as may be reasonably practical;”
[4]
Advocate Pincus SC contended on behalf of the respondents that,
although matters of
contempt of Court are inherently urgent, this
matter was not urgent for it involves the payment of creditors and
salaries. It does
not deserve, so it was argued, to be brought in
such a haste that the respondents are not given sufficient time as
provided for
in clause 9.23 of the Practice Manual of this Court.
Furthermore, it was contended that even if the matter is found to be
urgent
that it should be enrolled in this Court, the applicants do
not have the necessary authority to prosecute this application for
there is no resolution of the directors authorising the deponent to
act on behalf of the first applicant.
[5]
It was contended by Advocate Benson for the applicants that the
majority of the directors
signed the resolution circulated to them in
terms of section 74 of the
Companies Act, 71 of 2008
– hence a
power of attorney has been filed appointing the legal representatives
to proceed and act on behalf of the first
applicant. Furthermore, so
it was contended, the contempt of Court proceedings are by their
nature urgent and the respondents do
not dispute that. It is
necessary for the Courts to enforce obedience of its orders otherwise
the public will lose confidence in
the legal system.
[6]
It is trite that the rules of the Court are there to facilitate the
smooth running
of the Court. Courts have been enjoined to encourage
the litigants and their legal representatives to comply with the
rules otherwise
the Court system will be thrown in disarray. However,
the Court has a discretion to allow non-compliance where there is no
substantial
prejudice to be suffered by any of the parties and where
it is in the interests of justice.
[7]
In
Khunou & Others v Fihrer & Son 1982 (3) SA (WLD)
the
Court stated the following:
“
The
proper function of a Court is to try disputes between litigants who
have real grievances and so see to it that justice is done.
The rules
of civil procedure exist in order to enable Courts to perform this
duty with which, in turn, the orderly functioning,
and indeed the
very existence, of society is inextricably interwoven. The Rules of
Court are in a sense merely a refinement of
the general rule of civil
procedure. They are designed not only to allow litigants to come to
grips as expeditiously and as inexpensively
as possible with the real
issues between them, but also to ensure that the Courts dispense
justice uniformly and fairly, and that
the true issues aforementioned
are clarified and tried in a just manner.”
[8]
In
Trans-African Insurance Co Ltd v Maluleka
1956 (2) SA 273
(A)
which was quoted with approval in
Life Healthcare Group (Pty) Ltd
v Mdladla & Another (42156/2013) [2014] ZAGPJHC 20 (10 FEBRUARY
2014)
the court stated the following:
“
No
doubt parties and their legal advisers should not be encouraged to
become slack in the observance of the Rules, which are an
important
element in the machinery for the administration of justice. But on
the other hand technical objections to less than perfect
procedural
steps should not be permitted, in the absence of prejudice, to
interfere with the expeditious and, if possible, inexpensive
decision
of cases on their real merits.”
[9]
I agree that the applicants did not give the respondents sufficient
time to file their
papers as provided for in the practice manual of
this Court. However the Court, being mindful that it was dealing with
a contempt
of Court case, it allowed the matter to stand over for two
days giving the parties ample time to attend to the filing of the
papers.
Since the contempt of the Court order proceedings are by
their nature urgent and the parties having had sufficient time to
file
their papers, I condoned the non-compliance by the applicants
with the practice manual of this Court for I could not find any
prejudice
to be suffered by the respondents. I therefore ordered that
the matter be heard as it was urgent.
[10]
Rule 7 of the Uniform Rules of Court requires a power of attorney to
act to be filed, but that
the authority of anyone acting on behalf of
a party may be disputed, within 10 days after it has come to the
notice of a party
that such person is so acting, or with the leave of
the court on good cause shown at any time before judgment, whereafter
such
person may no longer act unless he satisfies the court that he
is authorised so to act.
[11]
It is on record that upon receipt of the answering affidavit wherein
the issue of authority was
raised by the respondents, the applicants
immediately circulated the notice in terms of
Section 74
of the
Companies Act to
the other directors to consent and or sign the
resolution authorising the deponent to act on behalf of the first
applicant and
the majority of directors duly signed the resolution –
hence a power of attorney was filed appointing the legal
representatives
to represent the applicants. I am therefore of the
respectful view that the applicants have the necessary authority to
act in this
case. Moreover, in my view these proceedings are a
continuation of the matter where the respondents consented to an
order which
order the applicants are now intent of enforcing. My
understanding of the above quoted authorities is that non-compliance
with
the rules by the litigants should not be encouraged but may be
condoned where the interest of justice so demand and would be best
served.
[12]
It is long established law that, for an applicant to prove that the
respondent is in contempt
of a Court order, it must prove: (a) the
existence of the court order; (b) service or notice thereof; (c)
non-compliance with the
terms of the order and (d) wilfulness and
mala fides beyond reasonable doubt on the part of the respondent.
(See Matjhabeng Local Municipality v Eskom Holdings Limited and
Others; Case No: CCT217/15 and CCT 99/2016 (26 September 2017)
[13]
It is common cause that the applicants have met requirements (a) to
(c) and that now the burden
rests with the respondents to prove that
they acted reasonably in the circumstances and that there was no mala
fides on their part.
[14]
I find myself in disagreement with Advocate Pincus SC that the Court
order at paragraph 7 requires
the parties to discuss and obtain
consent from the first respondent before payment is made. If that was
intended by the order,
then a mechanism would have been provided to
resolve any disagreements at that point and the order does not have
that. It is on
record that the payments the first respondent is
querying relate to a company which has been doing business with the
first applicant
for some time and has been paid with no issues until
the dispute arose between the directors. In my respectful view,
it is
disingenuous for the respondents to now come up with some other
interpretation of the Court order. Nevertheless, the respondents
do
not dispute that the first applicant has been doing business with
this company for some time but now question the involvement
of the
second applicant in the said company as a director thereof and that
he did not disclose to them which issue was not raised
in the main
application when they consented to the order. In my view this
argument is irrelevant to these proceedings.
[15]
Furthermore, it is on record that the applicants have attempted to
communicate with the respondents
when they realised that the first
respondent has failed to authorise the payments and they were
ignored. As time progressed, the
respondents requested the source
documents of the legitimate business expenses and these were
furnished to them and nothing happened
thereafter. The applicants
only became aware of the respondents concern in not paying these
business expenses when the respondents
filed their answering
affidavit in these proceedings. If the Court order intended that the
parties should negotiate or that the
consent of the first respondent
should be sought in the sense of analysing each and every transaction
and the respondents do not
want to engage with the applicants or
simply ignore them, then that would defeat the purpose of the order.
Even if it is accepted
for a moment that the consent of the
respondents was necessary to be sought before payment is made of the
business expenses as
contended for by the respondents, the
unavoidable conclusion in this case is that the consent of the
respondents was unreasonable
withheld and was to frustrate the
applicants from conducting the business of the first applicant.
[16]
I am in agreement with Advocate Benson that the respondents are
conflating issues when they now
raise the issue of non-payment of
certain taxes to the South African Revenue Service for refusing to
pay the legitimate business
expenses as ordered. The first respondent
is a director of the first applicant and has a fiduciary duty to
report the governance
issues of the company to the relevant
authorities. It cannot be said that that justifies disobedience of
the Court order. Although
I accept that there is animosity between
the directors of the first applicant, the respondents deliberately
and intentionally disobeyed
the Court order to force their hand in
the business of the first applicant. Nothing turns on the issue that
the respondents acted
on legal advice. I hold the view that, if the
respondents were advised by their legal representatives that they
should not communicate
with the applicants regarding their concern on
the legitimate business expense and simply ignore to comply with the
Court order,
then that legal advice was patently wrong and they have
to live with the consequences thereof.
[17]
I therefore conclude that the respondents conduct in the
circumstances of this case was unreasonable
and mala fide. The
applicants have therefore proven their case against the respondents
beyond reasonable doubt and are therefore
entitled to the relief they
seek although with some amendments.
[18]
In the premises, I make the following order:
1.
Paragraphs 1; 2; 3; 5;
6 and 7 of the notice of motion are granted
TWALA
M L
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION
Date
of hearing:
28
th
August 2020
Date
of Judgment:
31
st
August 2020
For
the Applicants:
Adv. GY Benson
Instructed
by:
Darryl Ackerman Attorneys
Tel:
011 268 2593
E-mail:
grant@ackermanlaw.co.za
For
the Respondents:
Adv. S Pincus SC
Instructed
by:
Howard Woolf Attorneys
Tel:
011 268 8400
E-
mail
hwoolf@mweb.co.za