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[2021] ZAGPJHC 157
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Process Design & Automation (Pty) Ltd and Others v Gamede (41905/2020) [2021] ZAGPJHC 157 (24 May 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
CASE
NO: 41905/2020
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
24
May 2021
In
the matter between:
PROCESS
DESIGN & AUTOMATION (PTY) LTD
First Applicant
BESISONKE
NDABA
Second Applicant
DAVE
BULLER
Third Applicant
JACOBUS
SUTHERLAND
Fourth Applicant
PAUL
BARNARD
Fifth Applicant
FRANCOIS
VAN HUYSSTEEN
Sixth Applicant
HENDRIK
VENTER
Seventh Applicant
and
BONGANI
CYPREAN GAMEDE
Respondent
in
re:
the
ex parte
application brought by:
BONGANI
CYPREAN GAMEDE
Heard:
26 January 2021
Judgment:
24 May 2021
JUDGMENT
MOVSHOVICH
AJ:
Introduction
1.
This is an application for the reconsideration and setting aside
of
an order granted by this Court (per McLean AJ) on 10 December 2020
("
the 10 December order
"), pursuant to an urgent
ex
parte
application instituted on 4 December 2020 ("
the
ex
parte
application
") by the respondent ("
Mr
Gamede
"). The 10 December order is in the following terms:
1.1
that Ms Besisonke Ndaba is interdicted from authorising the transfer,
in part
or in whole, to any party the 25% shareholding of Process
Design and Automation (Pty) Ltd ("
Process Design
")
until the finalisation of court proceedings to be instituted by Mr
Gamede by no later than 15 December 2020;
1.2
that Ms Ndaba is interdicted from signing any share transfer
documents relating
to the 25% shareholding of Process Design, in part
or in whole, until the finalisation of court proceedings to be
instituted by
Mr Gamede by no later than 15 December 2020;
1.3
that Ms Ndaba is interdicted from ceding to any other party, in part
or whole,
ant of the 25% shareholding in Process Design until the
finalisation of court proceedings to be instituted by Mr Gamede by no
later
than 15 December 2020;
1.4
that Ms Ndaba is interdicted from selling and/or offering to sell a
part or
in whole the 25% shareholding of Process Design until the
finalisation of court proceedings to be instituted by Mr Gamede by no
later than 15 December 2020;
1.5
that all directors and shareholders of Process Design (being Mr
Jacobus Johannes
Sutherland, Mr Dave Maclean Buller, Mr Paul
Stephanus Barnard, Mr Hendrik Gideon Francois van Huyssteen, Mr
Hendrik Petrus Venter)
are interdicted from ceding, selling, buying
and transferring, in part or whole, the 25% shareholding of Process
Design currently
registered under Ms Ndaba's name until the
finalisation of court proceedings to be instituted by Mr Gamede by no
later than 15
December 2020.
2.
As will be apparent, the 10 December order is a broad-ranging
interim
interdict against the disposal (in whatever form) of the second
applicant's ("
Ms Ndaba's
") shareholding in the first
applicant ("
Process Design
"), pending the
finalisation of court proceedings (presumably for final relief) ("
the
main proceedings
") to be instituted by Mr Gamede by 15
December 2020.
3.
Uniform Rule 6(12)(c) specifically contemplates that a person
whose
rights have been adversely affected by an order granted in its
absence may set down the matter for reconsideration. Mr Gamede
opposes the reconsideration application.
4.
The second to seventh applicants are the current and former
directors
of Process Design.
The applicants'
principal contentions
5.
The applicants raise several grounds to support the reconsideration
application, including the following:
5.1
Mr Gamede did not make a full and frank disclosure to this Court in
obtaining
the 10 December order, in that he did not disclose:
5.1.1
the existence and content of an earlier urgent application which he
brought in the Gauteng Division
of the High Court, Pretoria (GP case
no 59836/2020) on or about 12 November 2020 ("
the Pretoria
application
") seeking declaratory relief on a final basis in
relation to the same issues he raised in the e
x parte
application on an interim basis;
5.1.2
that on 24 November 2020 Basson J granted an order dismissing the
Pretoria application with a punitive
costs order ("
the Basson
order
").
5.2
The Basson order renders the issues in the
ex parte
application
res judicata
.
5.3
There was no basis for instituting the
ex parte
application
without notice to the applicants, as the Pretoria application was
dealt with, a few weeks earlier, in compliance with
all notice
requirements.
5.4
The 10 December order, in any event, lapsed in its terms given that
Mr Gamede
failed to institute the main proceedings by 15 December
2020.
6.
It is unnecessary for the purposes of this judgment to rehearse
each
of the above grounds in detail.
7.
For completeness, Mr Gamede's notice of motion in the Pretoria
application sought the following relief:
7.1
that the matter be heard as one of urgency, and that the prescribed
forms and
periods be dispensed with;
7.2
that Mr Gamede be declared as the rightful owner of 25% of shares of
Process
Design;
7.3
that Mr Gamede be recorded as a 25% shareholder in Process Design's
share register;
7.4
that Mr Gamede be recorded as a 25% shareholder of Process Design in
the records
at the Companies & Intellectual Property Commission;
7.5
That Mr Gamede be recorded as a 25% shareholder in Process Design's
Memorandum
of Incorporation;
7.6
that Mr Gamede be issued with the share certificate confirming his
25% share
ownership of Process Design; and
7.7
that the applicants, jointly and severally, pay Mr Gamede's costs of
suit in
the Pretoria application.
Mr Gamede's
responses
8.
Mr Gamede avers that while his founding papers in the
ex parte
application did not disclose the Pretoria application or its outcome,
he did orally inform McLean AJ of the existence of the Pretoria
application and that he served a notice to remove that application
from the roll.
9.
Mr Gamede denies that the Basson order renders the issues
res
judicata
, as Basson J merely struck the matter from the roll
or dismissed it for lack of urgency, and that to the extent that the
Basson
order is unclear in this regard, he has instituted an
application to vary such order. He asks that this be taken into
account and
that this reconsideration application be held in abeyance
pending the variation application. He states that, in any event, the
ex parte
application was based on "new different facts"
and the Basson order should thus not stand in the way of the
ex
parte
application being instituted or decided.
10.
Mr Gamede also states that there was every reason to institute the
ex
parte
application without notice to the applicants as he came
across information shortly before launching such application to the
effect
that Ms Ndaba was negotiating a disposal of her shares in
Process Design: hence the urgency and the need to prevent Ms Ndaba
taking
steps to defeat the purposes of any order which this Court
would make in the
ex parte
application.
11.
Mr Gamede avers that he instituted the main proceedings by 15
December 2020,
but it took time for the papers to be served as Ms
Ndaba was uncooperative in various respects.
Reasons for the
Basson order
12.
Following the hearing of the reconsideration application, Basson J
handed down
her reasons for the Basson order. Those reasons are dated
9 January 2021, but this seems to be a typographical error as the
reasons
only became available on or about 9 February 2021. The date
is of no material consequence for present purposes.
13.
The reasons make clear that Basson J dismissed Mr Gamede's
application on numerous
procedural and substantive grounds,
including:
13.1
lack of urgency and non-compliance with practice directives;
13.2
lack of
locus standi
;
13.3
absence of a cause of action for the relief sought;
13.4
fatal defects in the Pretoria application;
13.5
genuine disputes of fact which cannot be resolved on paper; and
13.6
non-joinder of the Companies and Intellectual Property Commission.
14.
Basson J mulcted Mr Gamede in punitive costs as a result of abuse of
court process.
Legal principles
related to
ex parte
orders
15.
The Supreme
Court of Appeal recently summarised the applicable principles and I
can do no better than to quote the relevant paragraphs
in full given
their direct relevance to the present case (all emphases are added;
footnotes omitted):
[1]
"
[45] The
principle of disclosure in ex parte proceedings is clear. In
NDPP
v Basson
this court said:
‘
Where an order
is sought
ex parte
it is well established that the
utmost
good faith must be observed. All material facts must be disclosed
which might influence a court in coming to its decision,
and the
withholding or suppression of material facts, by itself, entitles a
court to set aside an order, even if the non-disclosure
or
suppression was not wilful or mala fide
(
Schlesinger v
Schlesinger
1979 (4) SA 342
(W) at 348E–349B).’
[46] The duty of the
utmost good faith, and in particular the duty of full and fair
disclosure, is imposed because orders granted
without notice to
affected parties are a departure from a fundamental principle of the
administration of justice, namely,
audi alteram partem
. The
law sometimes allows a departure from this principle in the interests
of justice but in those exceptional circumstances the
ex parte
applicant assumes a heavy responsibility to neutralise the
prejudice the affected party suffers by his or her absence.
[47]
The
applicant must thus be scrupulously fair in presenting her own case.
She must also speak for the absent party by disclosing
all relevant
facts she knows or reasonably expects the absent party would want
placed before the court. The applicant must disclose
and deal fairly
with any defences of which she is aware or which she may reasonably
anticipate. She must disclose all relevant
adverse material that the
absent respondent might have put up in opposition to the order
.
She must also exercise due care and make such enquiries and conduct
such investigations as are reasonable in the circumstances
before
seeking
ex parte
relief.
She may not refrain from
disclosing matter asserted by the absent party because she believes
it to be untrue. And even where the
ex parte
applicant
has endeavoured in good faith to discharge her duty, she will be held
to have fallen short if the court finds that matter
she regarded as
irrelevant was sufficiently material to require disclosure. The test
is objective.
[48] As Waller J said
in
Arab Business Consortium
, points in favour of the absent
party should not only be drawn to the Judge’s attention, but
must be done clearly:
‘
There should be
no thought in the mind of those preparing affidavits that provided
that somewhere in the exhibits or in the affidavit
a point of
materiality can be discerned, that is good enough.’
[49]
The ex
parte litigant should not be guided by any notion of doing the bare
minimum. She should not make disclosure in a way calculated
to
deflect the Judge’s attention from the force and substance of
the absent respondent’s known or likely stance on
the matters
in issue. Generally this will require disclosure in the body of the
affidavit
. The Judge, who hears an
ex parte
application, particularly if urgent and voluminous, is rarely able
to study the papers at length and cannot be expected to trawl
through
annexures in order to find material favouring the absent party.
[50] In regard to the
court’s discretion as to whether to set aside an
ex parte
order because of non-disclosure, Le Roux J said in
Schlesinger
v Schlesinger
‘
. . . [U]nless
there are very cogent practical reasons why an order should not be
rescinded,
the Court will always frown on an order obtained
ex parte
on incomplete information and will set
it aside even if relief could be obtained on a subsequent application
by the same applicant
.’
[51] This is
consistent with the approach in English law, that if material
non-disclosure is established a court will be ‘astute
to ensure
that a plaintiff who obtains [an
ex parte
order] without full
disclosure, is deprived of any advantage he may have derived by that
breach of duty’.
[52] As to the factors
that are relevant in the court’s exercise of its discretion
whether or not to set aside an
ex parte
order on grounds of
non-disclosure, in
NDPP v Phillips
this court said that regard
must be had to
the extent of the non- disclosure, the
question whether the Judge hearing the
ex parte
application might have been influenced by proper
disclosure, the reasons for non-disclosure and the consequences of
setting the
provisional order aside
.
"
Assessment
16.
In my view, Mr Gamede's founding papers in the
ex parte
application fall far short of the standards required of applicants
who choose to approach the Court without notice to their opponents.
His papers did not even mention the Pretoria application, and did not
attempt to set forth what defences the applicants may have
to the
ex
parte
application. Yet, the applicants, on or about 18 November
2020, filed a 32 page answering affidavit, dealing with various
procedural
issues and substantive matters, many of which went to the
heart of the rights on which Mr Gamede relied for the interdictory
relief
sought in the
ex parte
application.
17.
It is not acceptable for an applicant in Mr Gamede's position,
seeking far-reaching
interdictory relief, simply to refer to the
Pretoria application from the Bar in oral argument in the
ex parte
application. These matters must be traversed in full on oath in his
application: there is no reason why he could not do so. In
any event,
there is no suggestion in his papers in the reconsideration
application that he informed McLean AJ that answering papers
were
filed in the Pretoria application, what defences had been raised in
that application or the detailed substance of any of the
pleadings.
18.
The high-water mark of Mr Gamede's case is that he informed the Court
orally
of the existence of the Pretoria application, that such
application sought a declaratory order that he was the rightful owner
of
25% of the shares in Process Design and that he had served a
notice to remove that application from the urgent roll. This is
patently
inadequate. The full remit of the Pretoria application and
the detailed content of any defences were clearly relevant to, or at
the very least could have materially influenced, the determination of
the
ex parte
application.
19.
Moreover, Mr Gamede does not suggest that he informed McLean AJ of
the hearing
before Basson J or the existence of the Basson order.
Irrespective of whether that order struck the matter from the roll or
dismissed
the application altogether, McLean AJ should have been
informed of the hearing of the Pretoria application and its outcome.
20.
Mr Gamede does not proffer any substantive reasons for failing to
inform McLean
AJ of the full facts as set forth above. He merely
states that he was under the impression that the matter was struck
from the
urgent roll and was unsure what precise order had been given
as his electronic connection on 24 November 2020 was faulty. If Mr
Gamede was unsure about what actually transpired on 24
November
2020, then it was incumbent on him to make the relevant enquiries
before launching the
ex parte
application. He had a full ten
day period to do so before 4 December 2020. In any event, none of the
above explains why Mr Gamede
did not disclose in his founding papers
in the
ex parte
application the substance of the applicants'
defences and answering affidavit in the Pretoria application,
jurat
18 November 2020.
21.
The extent of the non-disclosure was substantial and no adequate
explanation
has been advanced for the default. So lacking in
disclosure of relevant information was the
ex parte
application (information of which Mr Gamede was or ought to have been
aware), that it constituted an abuse of court process.
22.
In respect of the consequences of reconsidering and setting aside the
10 December
order, Mr Gamede states that the order should not be set
aside as the applicants will not suffer any prejudice if the
interdict
remains in place. To support this, Mr Gamede states that
Process Design "
does not trade in its shares as part of its
day to day operations and thus will suffer no harm or prejudice due
to the interdict
". While it may well be that Process
Design's operations will not be adversely affected, Ms Ndaba is
prevented from disposing
of the shares currently registered in her
name. At least one of the applicants is clearly prejudiced by the
interdictory relief
granted in the 10 December order. Similarly, the
other directors and shareholders have some restraints placed on them
under the
10 December order.
23.
On the other hand, if Mr Gamede is, in fact, the owner of the 25%
shareholding
currently registered in Ms Ndaba's name, then he may, in
due course, have a vindicatory claim against any possessor of his
shares
or a claim in damages for any harm he suffers as a result of
being divested of his shareholding or its fruits. The interdict
granted
under the 10 December order, in any event, does not entitle
Mr Gamede to exercise any rights flowing from such shareholding
during
the interim period.
24.
It is also not without significance that, as appears from the reasons
handed
down by Basson J, she dismissed the Pretoria application not
only on procedural, but also substantive grounds. Mr Gamede's attempt
to obtain final relief declaring himself to be the rightful owner of
the shares registered in Ms Ndaba's name was dismissed as,
inter
alia
, lacking a cause of action. For the purposes of this
reconsideration application, I need not reach a final determination
as to
whether that ruling gives rise to
res judicata
precluding all further claims being made by Mr Gamede, but it is
certainly a factor which may be weighed in balance in determining
whether the 10 December order should be reconsidered and set aside.
25.
Taking into account all the circumstances, I am of the view that the
10 December
order was granted on the basis of materially incomplete
information and there is every reason why it should be reconsidered
and
set aside. I point out, for completeness, I would have reached
this conclusion even without the considerations set forth in
paragraph
24 above.
26.
In light of the above findings, I do not need to deal substantively
with the
balance of the grounds and contentions advanced by the
applicants.
Costs
27.
This brings me to the issue of costs.
28.
There is no reason to deviate from the general principle that costs
follow the
result. The applicants have been substantially successful
and are entitled to their costs.
29.
The next question is on what scale costs should be ordered against Mr
Gamede.
The applicants pray for a punitive costs order. I agree that
a punitive order is warranted in this case.
30.
I have
found above that the
ex
parte
application was materially deficient and an abuse of process. The
authorities on punitive costs orders make clear, however, that
the
court need not even find that there was abuse or that there was
dishonesty to impose an adverse costs award on a punitive scale.
It
is sufficient if the party in question was vexatious in the sense
that it put his opponent to
"
unnecessary
trouble and expense, which it ought not to bear
".
[2]
31.
In my view, Mr Gamede's conduct in opposing the reconsideration
application
was, in all the circumstances, at least vexatious. The
very need to pursue the reconsideration application was occasioned by
Mr
Gamede's abuse of court processes in procuring the 10 December
order. The unnecessary trouble and expense were compounded by his
opposition when the reconsideration application was ultimately
brought.
Order
32.
I thus make the following order:
32.1
the 10 December order is reconsidered and set aside;
32.2
the
ex parte
application is dismissed;
32.3
Mr Gamede is ordered to pay the costs of this reconsideration
application on the scale as between
attorney and client.
Hand-down
and date of judgment
33.
This judgment is handed down electronically by circulation to the
parties' legal
representatives by email and by uploading the judgment
onto Caselines. The date and time for hand-down of the judgment is
deemed
to be 17:30 on 24 May 2021.
VM
MOVSHOVICH
ACTING
JUDGE OF THE HIGH COURT
Applicants'
Counsel:
J de Beer
Applicants'
Attorneys: GP van der
Merwe Attorneys
Respondent:
In person
Date
of Hearing:
26 January
2021
Date
of Judgment:
24 May 2021
[1]
Recycling
and Economic Development Initiative of South Africa v Minister of
Environmental Affairs; Kusaga Taka Consulting (Pty)
Ltd v Minister
of Environmental Affairs
2019
(3) SA 251
(SCA), paras [45] to [52].
[2]
Venmop
275 (Pty) Ltd and another v Cleverlad Projects (Pty) Ltd
2016
(1) SA 78
(GJ), para [33].