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[2021] ZAGPJHC 98
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Industrial Development Corporation of South Africa Limited v Ingwenyama Conference and Sports Resort (Pty) Limited and Others (39230/19) [2021] ZAGPJHC 98 (20 January 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG
)
Case
No
: 39230/19
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In
the matter between:
THE
INDUSTRIAL DEVELOPMENT CORPORATION
Applicant
OF
SOUTH AFRICA LIMITED
and
INGWENYAMA
CONFERENCE AND SPORT
First Respondent
RESORT
(PTY) LIMITED
P
C JUNIOR BELEGGINGS (PTY) LIMITED
Second Respondent
PIERRE
CHRISTIAAN DE JAGER N O
Third Respondent
CATHERINA
GERTRUIDA DE JAGER N O
Fourth Respondent
GERT
HENDRIK MULLER N O
Fifth Respondent
PIETER
CHRISTIAAN DE JAGER
Sixth Respondent
COUNTRY
BOUTIQUE HOTEL (PTY) LIMITED
Seventh Respondent
NEDBANK
LIMITED
Eighth Respondent
JUDGMENT
MUNDELL A J
1.
The Industrial Development Corporation
(“
IDC
”)
has applied for a money judgment of R28 644 354.06 against
the first to seventh respondents, jointly and severally,
the one
paying the others to be absolved, together with an order declaring
certain immovable property specially executable in satisfaction
of
its judgment.
2.
The
foundation of the application is a common cause agreement of loan
concluded between the IDC, the first respondent and the Piet and Ria
de Jager Trust (“
the
trust
”).
[1]
The agreement of loan consists of two parts. The first is
headed “
CONSTRUCTION
LOAN AGREEMENT
”
and the second contains a range of “
MASTER
TERMS AND CONDITIONS
”.
3.
The loan document was signed on behalf of
the first respondent and the trust at White River on 23 March
2015. A representative
of the IDC signed the document at Sandown on
30 March 2015.
4.
Clause 22 of the Master Terms and
Conditions is in the following terms:
“
JURISDICTION
The
parties hereby irrevocably and unconditionally consent to the
non exclusive jurisdiction of the Gauteng Local Division
of the
High Court of South Africa, Johannesburg (or any successor to that
division) in regard to all matters arising from this
agreement
”
.
5.
The
parties exchanged answering and replying affidavits and the IDC
delivered a supplementary replying affidavit. Of greater
relevance to this hearing, however, is the fact that the first to
seventh respondents elected to also deliver a notice in terms
of Rule
6(5)(d)(iii) which is dated 17 January 2020 (“
the
Rule 6(5) notice
”).
[2]
That document consists of some seven pages of complaints, but the
tenor thereof is the respondents’ assertion that
the IDC’s
founding affidavit lacks averments or evidence necessary to afford
this Court jurisdiction to entertain the application.
[3]
6.
The rule 6(5) notice concludes with the
following prayers:
“
The
application be dismissed with costs on the scale as between attorney
and client; alternatively,
that
the above Honourable Court exercises its discretion in transferring
the application to the appropriate Court having jurisdiction
for
the commencement of the proceedings afresh, and that the applicant
pays the costs of the applications (
sic
)
on the scale as between attorney and client up to and including the
costs associated with the transfer thereof
”
.
7.
At the commencement of the hearing counsel
confirmed that the only issue I am now called on to decide is the
question of this Court’s
jurisdiction which is the “
question
of law
” raised in the
respondents’ rule 6(5) notice.
8.
It is not in dispute that the only direct
allegation in the founding affidavit in support of this Court’s
jurisdiction is
that contained in paragraph 22 thereof which reads:
“
The
Honourable Court has jurisdiction to hear and adjudicate upon this
matter as each of the first to seventh respondents has irrevocably
and unconditionally consented, in terms of the written financing
agreements to which they are party alongside the applicant, to
the
non exclusive jurisdiction of the Court in respect of all
matters arising from the agreements
”.
9.
In
argument Ms Magano (counsel representing the IDC) conceded that the
consent to jurisdiction in clause 22 of the Master Terms
and
Conditions is insufficient to found jurisdiction in this Court
without the addition of an accepted, common law jurisdictional
fact. Ms Magano’s concession was appropriate in the face
of the reference by Advocates van den Bergh SC and Nel (representing
the respondents) to the oft cited confirmation of that principle
in
Veneta Mineraria
Spa v Carolina Collieries (Pty) Ltd (in liquidation)
.
[4]
10.
The additional jurisdictional facts relied
on by Ms Magano in argument were that:
10.1
the loan agreement had been signed on
behalf of the IDC in Sandown; and
10.2
payment by the first respondent in terms of
the loan agreement was to be into the IDC’s bank account in
Sandton – a
reference to paragraph 8.2 of the Master Terms and
Conditions.
11.
The
respondents correctly emphasise that in motion proceedings the
applicant is required to make out its case in the founding affidavit
and that affidavits in motion proceedings serve not only to define
the issues between the parties but also to place the essential
and
necessary evidence before the Court.
[5]
12.
In
the context of the procedure to be adopted in relation to
notices in terms of Rule 6(5)(d)(iii) Harms JA said in
Valentino
Globe BV v Phillips and Another
[6]
1998 (3) SA 775 (SCA)
[7]
:
“
Initially
the appellant wished to argue the first point with reference to the
allegations contained in the founding affidavit only
as was done in
the Court below. There are a number of cases which recognise
the right of a respondent, in spite of having
filed an answering
affidavit, to argue at the outset that the founding affidavit does
not make out a prima facie case for the relief
claimed. They
for two reasons suggest that the procedure is akin to an exception
based on the ground that a summons or similar
initiating process does
not disclose a cause of action. The founding affidavit alone
calls to be considered, and the averments
contained therein must be
accepted as true. An important difference with an exception is,
however, that the application contains
evidence and not only
allegations of fact, and what might be sufficient in a summons may be
insufficient in a founding affidavit.
See, for example, Hart v
Pinetown Drive-In Cinema (Pty) Ltd
1972 (1) SA 464
(D), Pearson v
Magrep Investments (Pty) Ltd and Others
1975 (1) SA 186
(D), and
latterly, Hubby’s Investments (Pty) Ltd v Lifetime Properties
(Pty) Ltd
1998 (12) SA 295
(W) at 297 A-E. The usual object of
the procedure is to enable a respondent to meet an application for
referral to evidence
or the like and relieve the court of considering
the conflicting allegations of fact. Compare Bader and Another
v Weston
and Another
1967 (1) SA 134
(C) at 136F-G.
It
seems to me to be wrong to permit the use of this procedure in a
court of first instance where there is no real conflict of fact
on
the papers, as is the case here. But having used the procedure
unsuccessfully at that level does not mean that an appellant
is
entitled to use it again on appeal. In any event it seems to me that
analogy with the exception procedure may be inappropriate
and that
the comparison should rather be with an application for absolution
from the instance in a trial action. Having lost
an application
for absolution, a defendant cannot thereafter lead evidence and on
appeal argue that absolution should have been
granted at the end of
the plaintiff’s case
”
.
[8]
13.
The
principles applicable to assessment of an application for absolution
from the instance were re stated by Harms J A in
Gordon Lloyd
Page & Associates v Rivera and Another
[9]
in the following terms:
“
[2]
The test for absolution to be applied by a trial court at the end of
a plaintiff’s
case was formulated in Claude Neon Lights (SA)
Ltd v Daniel
1976 (4) SA 403
(A) at 409G-H in these terms:
‘…
(W)hen
absolution from the instance is sought at the close of the
plaintiff’s case, the test to be applied is not whether
the
evidence led by the plaintiff establishes what would finally be
required to be established, but whether there is evidence upon
which
a Court, applying its mind reasonably to such evidence, could or
might (not should, nor ought to) find for the plaintiff.’
(authorities omitted)
This
implies that the plaintiff has to make out a prima facie case –
in the sense that there is evidence relating to all the
elements of
the claim – to survive absolution because without such evidence
no Court could find for the plaintiff …
Having said
this, absolution at the end of a plaintiff’s case, in the
ordinary course of events, will nevertheless be granted
sparingly but
when the occasion arises, a court should order it in the interests of
justice
”
.
14.
The IDC’s founding affidavit does not
comply with Uniform Rule 18(6) in the sense that, when pleading the
loan agreement,
it is not said when, where and by whom that agreement
was concluded. Mr van den Bergh SC fairly conceded that, had
the founding
affidavit taken that form, there would, at the very
least, exist a
prima facie
case for this Court’s jurisdiction.
15.
In
argument both Ms Magano and Mr van den Bergh SC accepted that, at
face value, the loan agreement had been concluded in Sandown.
That issue is, of itself, not free from difficulty as, in general
terms, a contract comes into existence when and where the offeree’s
acceptance is communicated to and received by the offeror.
Given the sequence of signatures evident from the loan agreement,
that would appear to be the place at which the IDC’s acceptance
of the offer by the first respondent and the trust was received
by
those entities.
[10]
16.
That issue was not debated before me,
however, and I will, for the purposes of applying the test for
absolution, determine the matter
on the assumption that the loan
agreement was concluded in Sandown.
17.
Mr
van den Bergh SC argued with some conviction that the IDC is not
permitted to attach extensive documents to its founding affidavit
(including the loan agreement made up of the two parts I have
described) and expect of the respondents to divine therefrom on which
contents of those documents the applicant relies.
[11]
Relying on, amongst others,
Lipschitz
and Schwartz NNO v Markowitz
[12]
he argued that the same principle must be applied to the disputed
question of this Court’s jurisdiction.
18.
The authorities on which Mr van den Bergh
SC relied are unassailable but, of course, must be reasonably applied
to the facts of
the particular matter under consideration.
19.
In my view the facts which guide a
determination of this matter are:
19.1
one
of the
rationes
jurisdictionis
recognised
by the common law is the
ratio
contractus
[13]
which, in the current instance, falls within this Court’s
jurisdiction;
19.2
although not pleaded in the terms required
by Rule 18(6), the contents of the founding affidavit make it clear
that the IDC relies
for this Court’s jurisdiction on the
contents of the loan agreement concluded between it, the first
respondent and the trust;
19.3
in paragraph 2.3 of their Rule 6(5) notice
the respondents say:
“
It
appears ex facie the written agreements concluded allegedly between
the applicant and the first to seventh respondents that the
said
agreements were signed for and on behalf of the first to seventh
respondents at White River, Mpumalanga
”;
19.4
the same analysis make it clear that the
loan agreement was signed on behalf of the IDC at Sandown;
19.5
the pleadings in the main application have
closed and the respondents have delivered an answering affidavit
which appears to comprehensively
deal with the facts alleged in the
IDC’s founding affidavit. There is no prejudice contended
for by the respondent
in that process;
19.6
although it may be more convenient for the
respondents to conduct their opposition to the application in the
Mpumalanga Division
of the High Court (as is asserted in paragraph
3.2 of the Rule 6(5) notice) that convenience, in my view, is
outweighed by the
totality of the remaining facts including the fact
that the IDC will, should the objection to jurisdiction be upheld,
institute
precisely the same proceedings in the Mpumalanga High Court
with a duplication of the existing affidavits and costs. That
is, after all, what the respondents propose as an alternative in
their Rule 6(5) notice;
19.7
there
is no suggestion by the respondents that either the first respondent
or the trust falls within the category of a vulnerable
or indigent
litigant who has been brought to the seat of a remote court which
renders meaningful opposition to the suit impractical
and
unnecessarily difficult.
[14]
20.
For these reasons I am of the view that,
applying the lenient test for absolution, the respondents’
objection to this Court’s
jurisdiction must fail.
21.
In argument, as an alternative to the IDC’s
support of this Court’s jurisdiction, Ms Magano proposed that I
should consider
removing these proceedings to the Mpumalanga High
Court. I am, of course, afforded that authority by section 27
of the Superior
Courts Act, but, given my view on the outcome of the
Rule 6(5) application, it is unnecessary for me to consider that
issue in
any detail.
22.
The short answer to Ms Magano’s
submissions, however, is that the IDC has made no case for that
relief in the terms contemplated
in section 27(1) of the Superior
Courts Act.
23.
In
the context of the appropriate costs order I am mindful of the
short comings in the IDC's founding affidavit, but in the
end am
guided by the admonition by Schutz JA in
De
Klerk v Absa Bank Ltd and Others
[15]
and the anecdote he relates in that context.
[16]
24.
In the circumstances I am not persuaded
that the usual rule should not apply. The costs will follow the
event.
25.
The following order is made:
25.1
the respondents’ objection to this
Court’s jurisdiction as formulated in their notice in terms of
Rule 6(5)(d)(iii)
dated 17 January 2020 is dismissed with costs;
25.2
the first to seventh respondents are to pay
the applicant’s costs jointly and severally, the one paying the
others to be absolved.
MUNDELL A J
Date of hearing
:
30 November 2020
Date of delivered
:
20 January 2021
APPEARANCES:
For the applicant
:
Advocate Magano
Instructed by
:
Ramathe MJ Inc
For the respondent
:
Advocates van den Bergh SC and Nel
Instructed by
:
Doman Weitsz Attorneys
[1]
The
third, fourth and fifth respondents are cited as the trustees for
the time being of the Trust. The sixth and seventh
respondents
stood surety for the loan liabilities of the first respondent to the
IDC.
[2]
The
respondents’ procedural approach in delivering their answering
affidavits together with their notice in terms of Rule
6(5)(d)(iii)
complied with mandated judicial practice :
Standard
Bank of South Africa Ltd v RTS Techniques and Planning (Pty) Ltd and
Others
1992 (1) SA 432
(T) at 440H-442A
[3]
The
Court’s jurisdiction to entertain the main application is
determined by
section 21
of the
Superior Courts Act, 10 of 2013
.
In terms of sub-section 21(1) of the Act this Court has jurisdiction
over “
all
causes arising … within its area of jurisdiction …
”
[4]
1987
(4) SA 883
(A) at 894
[5]
Hart
v Pinetown Drive-In Cinema (Pty) Ltd
1972
(1) SA (D) at 469C-E
[6]
1998
(3) SA 775 (SCA)
[7]
At
pages 779G-780A
[8]
See
also:
Contract
Employment Contractors (Pty) Ltd v Motor Industry Bargaining Council
and Others
2013 (3) SA 308
(CC) at paras [2] to [5]
[9]
2001
(1) SA 88
(SCA) at 92E-93A
[10]
Jamieson
v Sabingo
2002
(4) SA 49
(SCA) at para [5] on pp 53-54
[11]
Minister
of Land Affairs and Agriculture v D & F Wevell Trust
2008
(2) SA 184
(SCA) at
200D-E
[12]
1976
(3) SA 722
(W) at 775H-776A
[13]
Pollak
:
“
The
South African Law of Jurisdiction
”
(Juta) 3
rd
edition by van Loggerenberg at
para
7.5.5 at pp 238-239
[14]
University
of Stellenbosch Legal Aid Clinic and
Others v Minister of
Justice and
Correctional
Services and Others
2016 (6) DS 596
(CC) at paras [122] to [125]
[15]
2003
(4) SA 315
(SCA) at para [1]
[16]
At
para [44]