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[2010] ZAWCHC 426
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Motague Goldsmith and Another v Gihwala and Others (10547/2008) [2010] ZAWCHC 426 (18 June 2010)
IN
THE HIGH COURT OF SOUTH AFRICA (WESTERN CAPE HIGH COURT)
REPORTABLE
CASE
NO. 10547/2008
In
the matter between:
MONTAGUE
GOLDSMITH
…........................................................................
FIRST
APPLICANT
GRANCY
PROPERTY LTD
….....................................................................
SECOND
APPLICANT
AND
DINES
GIHWALA
…...............................................................................................................
FIRST
RESPONDENT
DINES
GIHWALA
…..........................................................................................................
SECOND
RESPONDENT
SHANTI
GIHWALA N.O.
…..................................................................................................
THIRD
RESPONDENT
KANTIELAL
JERAM PATEL N.O.
….............................................................................
FOURTH
RESPONDENT
NARENDRA
GIHWALA N.O.
…...........................................................................................
FIFTH
RESPONDENT
KIRAN
GIHWALA N.O.
…....................................................................................................
SIXTH
RESPONDENT
HOFMEYER
HERBSTEIN & GIHWALA INC
….......................................................
SEVENTH
RESPONDENT
Coram:
DLODLO,J
Judgment
by: DLODLO,J
For
the Applicant: ADV. P. HODES (SC)
ADV.
JPV McNALLY (JHB COUNSEL)
Instructed
by: WEBBER WENTZEL
10
Fricker Road
Illovo
Boulevard
JOHANNESBURG
(REF.
G. Van der Linde/V. Moshovich)
TEL.
NO. O11 530 5000
C/o
Webber Wentzel
15th
Floor, convention Towers
Heerengracht
Foreshore
CAPE
TOWN
(REF.
A. Magerman
For the
Respondents: ADV. L.A. ROSE-INNES (SC)
Instructed:
MAURICE
PHILLIPS WISENBERG
20
th
Floor
2 Long Street
CAPE
TOWN
(REF.
M. Phillips)
TEL.
NO. 021 419 7115
Date
(s)
of
Hearing: 11 MAY 2010
Judgment
delivered on: 18 JUNE 2010
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
REPORTABLE
CASE
NO. 10547/2008
In
the matter between:
MONTAGUE
GOLDSMITH
…........................................................................
FIRST
APPLICANT
GRANCY
PROPERTY LTD
….....................................................................
SECOND
APPLICANT
AND
DINES
GIHWALA
…...............................................................................................................
FIRST
RESPONDENT
DINES
GIHWALA
…..........................................................................................................
SECOND
RESPONDENT
SHANTI
GIHWALA N.O.
…..................................................................................................
THIRD
RESPONDENT
KANTIELAL
JERAM PATEL N.O.
….............................................................................
FOURTH
RESPONDENT
NARENDRA
GIHWALA N.O.
…...........................................................................................
FIFTH
RESPONDENT
KIRAN
GIHWALA N.O.
…....................................................................................................
SIXTH
RESPONDENT
HOFMEYER
HERBSTEIN & GIHWALA INC
….......................................................
SEVENTH
RESPONDENT
JUDGMENT
DELIVERED ON 18 JUNE 2010
DLODLO,
J
[1]
The Applicants are Montague Goldsmith AG in liquidation ("MG"
in liquidation) and Grancy Property Ltd ("Grancy").
The
Applicants will be referred to as "the Applicants or MG"
without distinguishing between the two. I am told to note
upfront
that MG, after instituting this application, went into voluntary
liquidation and that a Mr. Josef Steiger ("Mr.
Steiger")
was appointed as liquidator. The Applicants seek an order to the
effect that the First Respondent (Mr. Gihwala),
the Second
Respondent (Mr. Gihwala) in his capacity as trustee of the Dines
Gihwala Family Trust ("DGFT") and the Seventh
Respondent
("Hofmeyers") (now incorporated in DLA Cliffe Dekker
Hofmeyer Inc) be required to render a full and proper
account to the
Applicants in respect of an investment in Scharrig Mining Ltd
("Scharrig Investment"). The Scharrig
investment is
described in some detail in the papers. It suffices for present
purposes to mention that the Scharrig investment
refers to an
opportunity introduced to MG by Mr. Gihwala in terms of which MG
would invest in Scharrig, a JSE listed company
which provides mining
services to the coal mining industry. The opportunity arose out of a
black economic empowerment initiative
in terms of which a BEE
consortium was formed to acquire shares in Scharrig at a very
favourable price. I set out infra the background
to the investment
opportunity. The application is being resisted by Mr. Gihwala and
Hofmeyers. Mr. Hodes SC (assisted by Mr.
McNally) and Mr. Rose-Innes
SC appeared on behalf of the Applicants and the Respondents
respectively.
BACKGROUND
[2]
During March and April 2005, MG (in liquidation) and Gihwala were
involved in negotiations relating to a possible investment
in
Scharrig Mining Limited, a South African company listed on the JSE
Limited ("the JSE"). MG (in liquidation) was
initially
interested in entering into an investment partnership with
Interactive Capital (Pty) Ltd ("Interactive Capital")
jointly to invest in Scharrig. At the relevant time, Gihwala was a
director and the Chairperson of Interactive Capital. To this
end, a
meeting was held in Zurich, Switzerland on 11 March 2005 between Mr.
Narotam, who was an employee of MG (in liquidation)
at the time, and
Avram Levy ("Mr. Levy"), who represented Interactive
Capital. A copy of the "Memorandum"
drafted by Mr. Narotam
subsequent to the meeting is annexed in the Founding Affidavit and
marked "FA3". Subsequent
to the meeting with Mr. Levy, Mr.
Mawji had certain reservations about the offer that was finally made
by Interactive Capital
to MG (in liquidation). His primary concern
in relation to the Interactive Capital offer was that the proposed
transaction would
require MG (in liquidation) to make a significant
capital contribution and in addition, that Interactive Capital's
final proposal
materially departed from their original proposal as
understood by Mr. Mawji. Furthermore, Interactive Capital's proposal
entailed
that MG (in liquidation) would invest significant funds in
a transaction over which MG would not, ultimately, have any control.
According to Mr. Mawji he informed Mr. Narotam of his concern in
this regard. Mr. Narotam concurred, and MG (in liquidation)
decided
not to pursue the Interactive Capital investment opportunity. An
e-mail to Mr. Levy was written on 23 March 2005 to inform
him of
this. A copy of this e-mail is annexed to the Founding papers and
marked "FA4".
[3]
Mr. Gihwala subsequently approached MG with his own independent
offer. To this end, Mr. Gihwala sent an e-mail to Mr. Narotam
on 6
April 2005 to which he attached electronic copies of the document
entitled "Scharrig Mining Limited Investment Memorandum
- April
2005" ("the Scharrig Investment Memorandum") and
other related information. A copy of this e-mail and
the attached
Scharrig Investment Memorandum is annexed to the Founding papers and
marked "FA5". This is set out in
the Scharrig Investment
Memorandum as follows:
"1.3
The discount is attributable to the introduction of a black economic
empowered consortium and as a result of a trading
statement released
by the Company indicating an increase in earnings and headline
earnings of between 160% and 170%.
1.4
The composition of the investment consortium, by economic value, is
approximately as follows:
1.4.1
1.4.2
1.4.3
Interactive
Capital consortium, (Gihwala, Levy, Brett) and David
Bronze:
1/3
rd
…
..............................................................................................................................................................................................................................................................
3.1.1
An SPV will be formed, the ordinary shares will be owned by the Sam
Jonah Family consortium and Mr. DCM Gihwala consortium.
3.1.2
3.1.3
3.1.4
The
funders or funding entity shall also be granted the right to borrow
the SML script held by the SPV on an indefinite basis,
subject to an
annual charge of 1% of the value of the borrowed script to be levied
by the SPV. "
At
the time, Mr. Gihwala's offer was more attractive to MG (in
liquidation) than the Interactive Capital offer because the former
required a much smaller capital outlay. Moreover, what Mr. Gihwala
was proposing was a much simpler and ostensibly more transparent
partnership structure. Mr. Gihwala also indicated to MG (in
liquidation), at the time, that there would be a subsequent
opportunity
to acquire further shares in Scharrig at an attractive
purchase consideration of R2.25 per share plus a notional interest
charge.
[4]
The option to acquire Scharrig shares at a "locked-in"
price as alluded to by Mr. Gihwala, was considered by MG
(in
liquidation) to be a lucrative prospect because it was anticipated
at the time that the Scharrig share price would increase
in the
future. The terms of the option referred to above, were embodied in
an announcement on the JSE's Stock Exchange News Service
("SENS")
dated 22 April 2008 which is entitled
"Schamin
— Announcement Relating To A Black Economic Empowerment ("BEE)
"
("the
Scharrig press release"), a copy of which has been annexed to
the Founding papers and marked "FA6".
The relevant portion
of the announcement reads as follows:
"In
addition, the BEE consortium has been granted an option to acquire a
further 34.38 million shares in the company from
companies and
trusts associated with Mr. Theunis Scharrighuisen ("the
option"). The option can be exercised in whole
or in part by
the BEE consortium on or before 22 July 2005 at a price per share of
225 cents plus 0.043 cents per day from 22
April 2005 until the date
the option is exercised ("option price "). Should the
option be exercised and result in the
BEE consortium acquiring 35%
or more of the shares in Schamin, an offer to minorities will be
made at the option price in terms
of the SRP Code on Mergers and
Takeovers."
Telephonic
discussions relating to Mr. Gihwala's offer ensued between MG (in
liquidation), represented by Mr. Narotam, and Mr.
Gihwala and, with
Mr. Mawji's approval, it was agreed that MG (in liquidation) would
accept Mr. Gihwala's offer to participate
in the Scharrig
investment. Mr. Gihwala had indicated that he would invest Rl
million in the Scharrig investment, and MG decided
to contribute the
same amount. This was confirmed in an e-mail, dated 13 April 2005, a
copy of which is annexed to the Founding
papers and marked "FA7".
In this e-mail Mr. Narotam informed Mr. Gihwala that MG (in
liquidation) wanted to join him
in the investment and would also
contribute Rl million. The relevant e-mail reads as follows:
"I
refer to our telephonic discussion relating to joining you in your
investment in the Scharrig Mining Limited deal and
wish to confirm
that we will invest an amount ofRl million. We hereby authorize you
to utilize Rl million from the available
funds you hold on our
behalf for this investment... "
It
is important to note that, by this time, Mr.Gihwala had already held
funds in the trust account of Hofmeyer (the Seventh Respondent),
on
behalf of MG, which were intended for other investments. For
practical reasons, Mr. Narotam, on behalf of MG (in liquidation),
therefore authorized Mr. Gihwala to utilize some of those funds for
the Scharrig investment.
[5]
It is important to understand the circumstances surrounding the
transaction discussed above. At the time, once discussions
with
Interactive were ended, Mr. Gihwala was MG's (in liquidation) sole
point of contact in South Africa in relation to the Scharrig
investment. In essence, the relative informality of the business
relationship was attributable to the close personal and professional
relationship which existed and was built up among Mr.G Gihwala, Mr.
Narotam and Mr. Mawji. MG (in liquidation) relied totally
on Mr.
Gihwala to effect the Scharrig investment and to keep MG (in
liquidation) informed of relevant events relating to the
Scharrig
investment. In the circumstances, a relationship of confidence and
trust between Mr. Gihwala and MG (in liquidation)
was essential and
it was on this basis that Mr. Ghiwala was authorized to utilize Rl
million from the available funds held on
MG's (in liquidation)
behalf in the Seventh Respondent's trust account for purposes of
executing the Scharrig investment. A copy
of a cheque dated 14 April
2005 drawn in favour of the DGFT in the amount of Rl million is
annexed and marked "FA8".
The cheque evidences the
transfer of funds held in trust by the Seventh Respondent on behalf
of MG (in liquidation) to the DGFT.
[6]
At the time, it was not clear whether Mr. Gihwala was acting in his
personal capacity, as representative of the Seventh Respondent
or as
an authorized trustee of the DGFT in making the subsequent
investment in Scharrig on MG's (in liquidation) behalf. An e-mail
dated 18 November 2005 by Mr. Gihwala to Mr. Narotam, a copy of
which is annexed to the Founding papers and marked "FA9"
sheds some light on the arrangement and provides as follows:
"The
shares are in SPV controlled by me. Whoever buys the shares will
receive a declaration of trust from me to the effect
that it/he/she
is the beneficial owner of the shares. "
The
uncertainties regarding Mr. Gihwala's role notwithstanding, in
whatsoever capacity he was acting, it was clear that Mr. Gihwala
executed the Scharrig investment with MG as a partner
en
commandite.
Mr.
Gihwala disputes the alleged partnership though. It was further
accepted that Mr. Gihwala would hold the Scharrig shares on
MG's
(the beneficial owner) behalf in a Special Purpose Vehicle ("SPV")
and that MG (in liquidation) was, for all intents
and purposes, Mr.
Gihwala's investment partner. Moreover, it was within both Mr.
Gihwala and MG's (in liquidation) awareness,
given the prevailing
circumstances discussed in greater detail above, that Mr. Gihwala
owed various fiduciary duties and was
accountable to MG in respect
of its investment in Scharrig.
[7]
The existence of the partnership relationship between MG and Mr.
Gihwala is reflected in the Excel spreadsheets e-mailed by
Mr.
Narotam to Mr. Gihwala on 4 August 2005 and 24 October 2005
respectively, copies of which are annexed to the Founding papers
marked "FA 10" and "FA 11". Both these
spreadsheets are headed by the description "Scharrig Mining
Limited - Share Partnership With Dines Gihwala". Moreover, in
an e-mail dated 3 August 2005, Mr. Narotam also stated that
MG (in
liquidation) and Mr. Gihwala
"collectively
own 2 263 240 shares in Sharmin [Scharrig Mining]".
This
characterization was not objected to by Mr. Gihwala at the time. The
partnership character and understanding is also evidenced
in the
notes by Mr. Narotam dated 27 July 2005 annexed and marked "FA
13". In the alternative it is suggested in the
papers that Mr.
Gihwala at least acted in a fiduciary capacity as agent of MG and
thus owed MG a duty to account to it for the
investments undertaken.
As stated above, Mr. Gihwala's original offer to MG (in liquidation)
to invest in Scharrig also alluded
to an opportunity which was a
part of the terms of the underlying Scharrig shares at a
predetermined subscription price
of R2.25. Indeed, the Scharrig
press release explicitly states that the BEE consortium had an
option to acquire a further 34
million shares at R2.25.
[8]
During June 2005 Mr. Gihwala informed that the further opportunity
to invest in Scharrig shares had now become available in
line with
the option mentioned above. MG (in liquidation) therefore decided to
contribute a further RIO million towards this
further investment. On
16 June 2005 the aforesaid amount of RIO million was transferred to
Hofmeyer's (the Seventh Respondent)
trust account. A debit advice
dated 20 June 2005 a copy of which is annexed to the Founding papers
and marked "FA 14",
evidences such transfer. The reason
for the payment is recorded in this debit advice as
"Investment
into Scharrig Mining Ltd".
The
subsequent further investment of R10 million by MG in Scharrig was a
direct consequence of the option to acquire additional
shares
coupled to the original offer. Accordingly, Mr. Gihwala's use of the
funds subsequently made available to him for purposes
of making an
additional investment on MG's behalf in Scharrig was intrinsically
governed by the same relationship between him
and MG as that
relating to the earlier Rl million investment. Moreover, the
subsequent further investment by MG of R10 million
in Scharrig was
thus complementary to the existing transaction.
[9]
The terms of MG's (in liquidation) participation in this continuing
investment opportunity was confirmed in an e-mail from
Mr. Narotam
to Mr. Gihwala, dated 28 June 2005, a copy of which is annexed to
the Founding papers and marked "FA15".
The aforesaid
e-mail reads as follows:
"We
have authorized the release of the RIOm transferred to Hofmeyer to
Dines Gihwala Family Trust for the purchase of Scharrig
Mining
shares at R2.25 each on our agreed profit share arrangement... ".
MG
(in liquidation) expected Mr. Gihwala as its partner in an ongoing
profit share arrangement, to utilize the RIO million in
respect of
the Scharrig investment with the good faith expected from a partner,
and to account for the use of all the funds entrusted
to him.
Moreover, it was understood by MG (in liquidation) that Mr. Gihwala
would use the RIO million that was transferred to
Hofmeyer's (the
Seventh Respondent) trust account for the exclusive purpose of
making a further investment in Scharrig. To this
end, the reason for
the aforesaid transfer of funds to the Seventh Respondent's trust
account was recorded as "Investment
into Scharrig Mining Ltd".
Following the transfer of these funds, MG (in liquidation) in good
faith assumed that Mr. Gihwala
had, as he was required to do,
invested the funds in Scharrig.
[10]
However, Mr. Gihwala without explanation and contrary to MG's (in
liquidation) wishes apparently never invested the RIO million
in
Scharrig and subsequently failed properly to account to MG in
respect of the RIO million that had been transferred to Hofmeyer's
trust account or any transaction in Scharrig which was concluded by
Mr. Gihwala or in which Mr. Gihwala was involved. On 28 August
2005,
Mr. Narotam informed the Second Applicant's administrators per an
e-mail that the RIO million
"is
being returned today as it was not required. "
According
to the Applicants Mr. Gihwala failed to account for the interest
that must have accrued on such a substantial amount
of money over
the period 16 June 2005 to 11 August 2005. It is evident in Mr.
Narotam's e-mail of 3 August 2005 that Mr. Gihwala
was requested to
let MG (in liquidation)
"have
an update on the return of the RIO million together with the
interest earned. "
In
a subsequent e-mail dated 15 August 2005 ("FA 17" to the
Founding papers) Mr. Narotam again requested Mr. Gihwala
to
"advise
the amount of interest earned on the RIO million reimbursed"
the
previous week.
[11]
With regard to the Rl million investment it is evident from Mr.
Narotam's e-mail dated 3 August 2005 that he informed Mr.
Gihwala
that MG wished to exit the Scharrig investment "at the earliest
available opportunity". In reply to this, and
contemporaneous
with his e-mail dated 4 August 2005, Mr. Gihwala sent a further
e-mail, also dated 4 August 2005 to Mr. Narotam
where he set out his
calculations regarding the profit from the investment. A copy of
this e-mail is annexed to the Founding
papers and is marked "FA18".
The calculations referred to above are criticized by the Applicants
and are described
as
"not
clear and do not purport to reflect the actual financial position as
at the stage when MG exited the transaction ".
Of
course Mr. Gihwala contends otherwise. It is clear from Mr.
Narotam's e-mail of 23 March 2006, Mr. Narotam informed Adriana
Lecoultre, Petra Mayrhofer and Silvia Mathis, from the Second
Applicant's administrators, on 23 March 2006 in an e-mail annexed
to
the Founding papers and marked "FA 19", to expect "R2,7m
from D. Gihwala" in respect of the "return
of investment
in Scharrig plus profits". Mr. Narotam referred in this regard
to the initial investment of Rl million by
MG in Scharrig. On or
about 29 March 2006 MG received the amount of R2 764 118.24
ostensibly as return on the Rl million investment
in Scharrig. This
amount arose exclusively from the Rl million that was initially
invested and did not contain an element of
interest or return
relating to the subsequent RIO million investment.
[12]
According to the Founding papers in early 2007 MG's (in liquidation)
Attorneys were instructed to demand a full and proper
account from
Mr. Gihwala. Annexure "FA20" to the Founding papers
(written on 5 February 2007) is a letter to Mr. Gihwala
from Webber
Wentzel Attorneys demanding certain information and copies of
documentation pertaining to explanation with regard
to the RIO
million as well as transaction trail relative thereto. It is common
cause that Mr. Gihwala responded as can be seen
in Annexure "FA2".
This annexure
inter
alia
reads:
"
It is not clear on what legal basis your client demands the
information
and records You are requested to clarify the basis for the
demand
so that the demand may receive proper consideration Our
client
denies any form ofpartnership. "
It
is needless to mention that the writing generated further
correspondence between the parties.
ISSUE
FOR DETERMINATION
[13]
Although there is some dispute on the papers as to the nature of the
relationship between the parties to the Scharrig investment,
there
is no dispute that MG (in liquidation) has the right to receive an
account and that Mr. Gihwala accepts the duty to account
to MG (in
liquidation). The account would be required to deal adequately with
the receipt, application, growth, use and repayment
of two amounts
placed by MG (in liquidation) in Mr. Gihwala's hands for purposes of
the Scharrig investment. The first amount
was the sum of Rl million,
paid over by MG (in liquidation) on 9 February 2005 and the second
was the sum of RIO million paid
on 16 June 2005. Moreover, the
amounts of Rl million and RIO million paid by MG (in liquidation)
for investment in Scharrig were
channeled through Hofmeyers' trust
account. As such, Hofmeyers assumed a duty to account for the
receipt and the disbursement
of the aforesaid funds. Again, MG's
right to receive an account and Hofmeyers' duty to account for such
receipt and disbursement
is not disputed. In both cases, Mr. Gihwala
and Hofmeyers contend that they have properly discharged their duty
to account to
MG (in liquidation) and it is accordingly the issue of
whether they have fully and properly accounted to MG (in
liquidation)
that requires determination by this Court.
LEGAL
PRINCIPLES: DUTY TO ACCOUNT
[14]
An accounting requires the party drawing the account to explain what
was done with the monies entrusted to him and to do
so in a manner
that serves to justify his actions and conduct in respect of those
monies. It is not sufficient for such a party
merely to state
mechanically what payments were made out of the funds being
accounted for. He must ensure that the account includes
not only an
explanation of how the monies were applied, but also an explanation
of their ultimate fate, with reference to any
and all transactions
carried out with the said monies, or the proceeds from time to time
of any investments made therewith. A
proper accounting should also
include all documentation evidencing the various transactions
referred to in the account. See:
Hansa
v Dinbro Trust (Pty) Ltd
1949
(2) SA 513
(T) at 516;
Doyle
& Another v Fleet Motors PE (Pty) Ltd
1971
(3) SA 760
(A) at 762 H-767 H;
Counter
Trade
Establishment (Pty) Ltd v EBN Trading (Pty) Ltd
1995
(1) SA 762
(N) at 770 C-G.
Trade
Establishment (Pty) Ltd v EBN Trading (Pty) Ltd
1995
(1) SA 762
(N) at 770 C-G.
[15]
In
Video
Parktown North (Pty) Ltd v Paramount Pictures Corporation;
Shelbourne Associates and Others; Century Associates and Others
1986
(2) SA 623
(T) at 638 F-G Slomowitz AJ (with whom Eloff and Le Roux
JJ concurred) noted
'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 correct,
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.'
Indeed
Binns-Ward J in
Grancy
Property Limited and Another vs Seema Marena Investments (Pty) Ltd
and Others
(an
as yet unreported Western Cape High Court Case Number 15757/2007-
Judgment delivered on 15 April 2010) reinstated the legal
position
in this regard as follows:
"[12]
The nature and adequacy of the account to be rendered in a
particular case necessarily depends on the nature of the
mutual
relationship giving rise to the duty to account; cf. e.g. Krige v
Van Dyk's Executors
1918 AD 110.
Any questions as to the adequacy of
an account rendered, and as to whether and how it should be
amplified or supplemented; as
well as whether any dispute on the
adequacy of an account should be determined separately and before
the debatement stage, or
together with and as part of the debatement
stage, are all matters which fall to be determined having regard to
the purpose for
which the accounting and a debate thereof have been
sought. "
DISCUSSIONS
[16]
Mr. Rose-Innes SC prefixed his submissions by making a very
important concession, namely that the Respondents do not dispute
that the Applicants are entitled to an accounting in respect of
their participation in the Scharrig investment but he then proceeded
to contend that the Applicants have in fact some years ago, received
a full and proper accounting and payment of whatever amounts
were
due to them. He contended that an agreed sum of One million rand (Rl
000 000.00) made available by the Applicants for the
Scharrig
investment was utilized for that purpose and that at the Applicants'
request their interest in the Scharrig investment
was realized and
the sum of Two million seven hundred and sixty four thousand one
hundred and eighteen rand and twenty four cents
(R2 764 118.24) was
paid to them on 17 March 2006. Mr. Rose-Innes emphasized that this
sum of money, was arrived at by agreement
with the Applicants after
a full accounting. According to Mr. Rose-Innes' submissions a
further amount of Ten million rand (R10
000 000.00) which the
Applicants had made available for the possible acquisition of
further option shares in Scharrig was returned
to the Applicants on
8 August 2005 when the opportunity did not materialize and that
further the agreed sum of Fifty thousand
rand (R50 000.00) was paid
to the Applicants on 18 April 2006 in respect of interest which had
been earned on that capital amount
(R10 000 000.00). Therefore, in
Mr. Rose-Innes' submissions the Applicants have received a full and
proper accounting in respect
of the Scharrig investment and payment
of such amounts as were due to them. He reiterated and emphasized
that the accounting
of the amounts paid to the Applicants were done
by agreement with them. Before concluding on this aspect Mr.
Rose-Innes pointed
out that the Applicants received a very handsome
return on their investment pursuant to the agreed accounting and
determination.
[17]
I shall later on fully deal with Mr. Rose-Innes' submissions in this
Judgment. It is also of importance to note that in Mr.
Rose-Innes'
submission material disputes of fact are apparent in the papers. The
truth is that where disputes of fact arise in
motion proceedings,
the final relief may be granted if the facts averred in the
Applicant's Affidavits which have been admitted
by the Respondent
together with the facts alleged by the Respondent, justify such an
order. In certain instances the denial by
a Respondent may not give
rise to a real, genuine or
bona
fide
dispute
of fact. There may also be exceptions to this rule, for example,
where the allegations or denials by the Respondent are
so
far-fetched or clearly untenable that the Court is justified in
rejecting them merely on the papers. See:
Plascon
Evans Paints Ltd v Van Riebeeckpaints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634 E-635 C. Relying on
Doyle
& Another v Fleet Motors PE (Pty) Ltd
and
certain other cases
supra
at
762 F - 763 F-G, Mr. Rose-Innes contended that a clear distinction
must be drawn between a failure to render an account at
all and a
claim that an account which has been rendered is insufficient
because these are distinct causes of action supported
by different
allegations. I have also been referred to
Video
Parktown North (Pty) Ltd v Paramount Pictures Corporation;
Shelbourne Associates and Others; Century Associates and Others
supra;
Brown
and Others v Gebba CC t/a Remax Tricolor
2009
(1) SA
519
(D) at para 30. It is necessary that I refer briefly to the various
paragraphs in these cases relied on by Mr.Rose-Innes.
Indeed in
Video
Parktown North (Pty) Ltd v Paramount Pictures Corporation;
Shelbourne Associates and Others; Century Associates and Others
supra
Slomowitz
AJ stated the following at page 638 F-G"
"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 correct,
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. That being
so, there is in my judgment no reason why a claim for an account
alone, as distinct from the debatement
of that account, may not be
the subject matter of a separate suit which is brought by way of a
motion proceedings. "
As
mentioned above Mr. Rose-Innes SC also relied on the following
exposition made by Levinsohn DJP in
Brown
and Another v Yebba CC t/a Remax Tricolor
supra
at
525 paragraph [30]:
"the
action for an account and the debatement thereof is well recognized
in our law, the leading case being Doyle and Another
v Fleet Street
Motors PE (Pty) Ltd
1971 (3) SA 760
(A). At 763 Holmes JA made the
following pertinent observations:
'6.
Where the issue of sufficiency and the element of debate appear to
be correlated, the Court might, in an appropriate case,
find it
convenient to undertake both enquiries at one hearing, and to order
payment of the amount due (if any).
7.
In
general the Court should not be bound to a rigid procedure, but
should enjoy such measure of flexibility as practical justice
may
require. "'
Before
dealing any further with submissions, it is appropriate that one has
regard to the relevant circumstances which governed
the relationship
between the parties.
RELATIONSHIP
BETWEEN MG AND MR. GIHWALA
[18]
At all times, MG (in liquidation) was totally reliant on Mr. Gihwala
to effect the Scharrig investment and to keep MG informed
of
relevant events relating thereto. When the investment was first
discussed and implemented, MG (in liquidation) was represented
by
Mr. Narotam, who was a long-standing personal friend of Mr. Gihwala.
Since then, the relationship between Mr. Narotam and
MG has broken
down and Mr. Narotam left MG's (in liquidation) employment in
September 2006. Mr. Narotam and Mr. Gihwala remained
friends, and
Mr. Narotam has filed an affidavit in support of Mr. Gihwala's
opposition to the present application. The relationship
between Mr.
Mawji (the then CEO of MG and the deponent to the Founding
affidavit) and Mr. Narotam has broken down. As a result,
MG (in
liquidation) was isolated from the investment transactions
undertaken by Mr. Gihwala and became wholly and completely
reliant
on Mr. Gihwala for a detailed and accurate account. Whether the
relationship between MG (in liquidation) and Mr. Gihwala
was one of
partnership (as alleged by the Applicants) or one of agency (as
alleged by Mr. Gihwala), it is an undisputed fact
that MG (in
liquidation) was entirely reliant upon Mr. Gihwala to keep it
informed of the initial application of the funds transferred
into
Hofmeyers' trust account, and of the ultimate fate of those funds
and the investment or investments to which they were applied.
[19]
The nature of the relationship between the parties was such that MG
was utterly reliant upon Mr. Gihwala for all and any
information
about the use and application of the funds. MG (in liquidation) was
entirely remote from the transaction and had
absolutely no insight
into the details thereof, beyond what was told to him by Mr.
Gihwala. As stated above, the accounting which
is sought by the
Applicants relates to two (2) amounts, one (1) of One million rand
(Rl 000 000.00) and the other of Ten million
rand (R10 000 000.00),
transferred by the Applicants to Mr. Gihwala for investment in
Scharrig. The first amount of One million
rand (Rl 000 000.00) was
taken from an amount of Three and a half million rand (3.5 000
000.00) transferred by MG to Hofmeyers'
trust account on or about 9
February 2005. The amount had originally been transferred for
purposes of the Spearhead investment,
but it was agreed between the
parties that One million rand (Rl 000 000.00) thereof would be
utilized for purposes of MG's investment
in Scharrig. Pursuant to MG
authorizing Mr. Gihwala to utilize the One million rand (Rl 000
000.00) aforesaid, Mr. Ghiwala arranged
for a cheque in that amount
to be drawn on Hofmeyers' trust account in favour of the DGFT on 14
April 2005. Thereafter, the Applicants
were given no insight
whatsoever as to the application or fate of the One million rand (Rl
000 000.00) investment. It is not
disputed that MG (in liquidation)
instructed Mr. Gihwala on 3 August 2005 that MG (in liquidation)
wished to exit the Scharrig
investment "at the earliest
available opportunity". Yet it is nowhere stated when (or
indeed whether) Mr. Gihwala in
fact realized MG's investment. An
amount, calculated on the basis set out in Annexure "DG7"
to the Answering Affidavit,
was paid to MG (in liquidation) on 17
March 2006. The nature and acceptability of Annexure "DG7"
as a full and proper
account by Mr. Gihwala to MG (in liquidation)
in respect of the investment of One million rand (Rl 000 000.00) is
dealt with
below.
[20]
At the time that MG (in liquidation) was first informed about the
opportunity to invest in Scharrig, Mr. Gihwala informed
MG that
there would be a subsequent opportunity to invest further in
Scharrig as a result of an option available to the BEE consortium
to
acquire further Scharrig shares in the future at a "locked-in"
price. MG (in liquidation) states that Mr. Gihwala
informed it in
June 2005 that
"the
further opportunity to invest in Scharrig shares had now become
available in line with the option mentioned above".
Pursuant
to that advice, MG (in liquidation) transferred an amount of Ten
million rand (R10 000 000.00) to the Hofmeyer trust
account on 16
June 2005. Mr. Gihwala states that
"he
does not recall"
having
advised MG (in liquidation) that the further opportunity had become
available. On his version, MG (in liquidation) transferred
the
amount in the mere hope that it might be able to increase its stake,
but it turned out that no such opportunity was available.
It,
however, remains undisputed that MG (in liquidation) transferred the
funds for
"investment
into Scharrig Mining Ltd",
the
funds were received into Hofmeyers' trust account on 16 June 2005,
and the first MG (in liquidation) heard about these funds
thereafter
was on 8 August 2005 when it was informed that the Ten million rand
(R10 000 000.00)
"is
being returned today as it was not required. "
Once
again, MG (in liquidation) was afforded no insight whatsoever into
the application and fate of its Ten million rand (RIO
000 000.00),
despite the fact that it was wholly reliant on Mr. Gihwala to deal
with its funds on its behalf and in its best
interests. The
"account" allegedly given to MG (in liquidation) by Mr.
Gihwala in respect of the Ten million rand (R10
000 000.00) is dealt
with below.
THE
ACCOUNTING
[21]
As submitted by Mr. Rose-Innes SC it is Mr. Gihwala's case that a
full and proper accounting has already been provided to
the
Applicants. In relation to the One million rand (Rl 000 000.00)
investment Mr. Gihwala relies on Annexure "DG7".
In
relation to the Ten million rand (R10 000 000.00) investment,
reliance is placed on Annexure "DG6" which is qualified
by
averments about an agreement concluded between Mr. Gihwala and Mr.
Narotam in about mid-April 2006 in terms of which Mr. Narotam
agreed
to accept an amount of Fifty thousand rand R50 000.00) in full and
final settlement of the interest payable on the Ten
million rand
(R10 000 000.00). I find it obligatory for purposes of this Judgment
to set out
infra
both
Annexures "DG7" and "DG6" in that order.
DG7"
- SCHARRIG MINING LIMITED SHARE PARTNERSHIP WITH DINES GIHWALA
Assumptions
Loan
from Standard Bank 1374352 shares @ 2.34)
R 3 215
983.68
Interest
rate
R 0.11
Amount
invested (888 888 shares @ 2.25)
Number
of shares acquired
R
2 000 000.00
R 2 263
240.00
Indicative
placement price
R 5.75
MG
EXITS AT R5.75: INTEREST PAYABLE FOR 12 MONTHS
Sale
proceeds
R13 013
630.00
Bank
loan
R 3 215
983.68
Interest
for 12 months + commitment fee)
R 40
1997.96
Estimated
taxation
R
2 761 333.07
Net
proceeds
R
6 634 315.29
MG
share
R
3 317 157.65
MG
investment
R
1 000 000.00
MG
profit before priority interest
R
2 317 157.65
Priority
interest @ 10.5% for 12 months
R
105 000.00
Net
profit on investment
R
2 212 157.65
DG
share on MG profit
R
553 039.41
Net
MG profit after tax
R
1 659 118.24
Estimated
tax calculation
Sale
proceeds
R
13 013 630.00
Cost
of investment
Initial
investment
R
5 215 983.68
Bank
interest
R
401 997.96
Priority
interest
R
105 000.00
R
5 722 981.64
Profit
R
7 290 648.36
Company
tax @ 29%
R
2 114 288.02
R
5 176 360.34
STC@12.5%
R
647 045.04
R
2 761 333.07
MG
proceeds
Initial
investment
R
1 000 000.00
Priority
interest
R
105 000.00
MG
Profit
R
1 659 118.24
Total
proceeds
R
2 764 118.24
Check
R2
764 118.24
diff
R
0.00
"DG6"
- SEENA MARENA INVESTMENTS: INV (R0015109)
INVITO SECT 78
(2A)
IN TERMS OF
ATTORNEYS ACT 53 OF 1979
PEOPLE'S BANK -
CLIENTS (SEC 78 (2)A) C0000909
DATE
DETAILS
REF.
EXTRA
DEBIT
CREDIT
BALANCE
Balance
B/F
R
0.00
08
AUG 2005
Investment
interest
adjustment
T910311
R
78 256.58
08
AUG 2005
Withdraw
investment:
50015109
T910311
R10
078 256.58
22
JUN 2005
Deposited
investment:
50015109
T1123
R5
000 000.00
22
JUN 2005
Deposited
investment:
50015109
T1121
R5
000 000.00
[22]
Mr. Hodes SC in his submissions was very critical of Annexure "DG7"
and he submitted that on its very face, it
is a speculative document
predicting a probable scenario based on various assumptions and
estimates. In his submission, Annexure
"DG7" is patently
not an account based on actual documented events. Mr. Hodes SC drew
it to the attention of the Court
that the facial appearance of
Annexure "DG7" is explained by the following facts,
namely, that on Mr. Gihwala's own
version it was a document prepared
in advance of any actual transactions, by Mr. Narotam (on behalf of
MG) and not by Mr. Gihwala,
which was "agreed" between Mr.
Narotam and Mr. Gihwala. Mr. Hodes SC submitted that Annexure "DG7"
cannot
constitute an account which must at the very least record
actual transactions, as supported by the various vouchers generated
by such transactions. In this regard Mr. Hodes SC referred me to
Doyle
& Another v Fleet Motors PE (Pty) Ltd
supra.
This
indeed remains a powerful submission which, in my view, cannot be
faulted as it talks to the well established legal principle
in this
regard. One would have expected that a full and proper accounting in
relation to the One million rand (Rl 000 000.00)
investment would
inter alia include:
(a)
Details of the precise number, cost per equity instrument (excluding
costs) and time of purchase of equity instruments in
Scharrig or any
other investments which were acquired with the amount on behalf of
the Applicants;
(b)
Details as to whose direct and indirect economic interests the
Scharrig equity instruments were acquired for;
(c)
Details of the amount, source and costs of any financing received in
relation to each Scharrig equity instrument;
(d)
Full details of any encumbrances which apply in respect of the
acquired Scharrig equity instrument;
(e)
Full details of any costs, taxes and the like which fall to be
deducted from the return due to MG generated by the Scharrig
investment;
(f)
All vouchers supporting all of the above, including copies of all
relevant agreements and certificates evidencing or constituting
the
Scharrig equity instruments or any other instruments acquired with
the amount.
ACCOUNT:
TEN MILLION RAND (R10 MILLION)
[23]
In relation to the above sum of money paid by MG (in liquidation) to
Mr. Gihwala, Mr. Hodes SC submitted that there are two
(2) separate
and distinct features in respect of which a proper accounting must
be furnished. The first relates to the alleged
unavailability of any
further shares being available to MG (in liquidation) pursuant to
the option. The second feature relates
to the detail of the use to
which the Ten million rand (RIO 000 000.00) was put between the time
it was received by Mr. Gihwala
and the time it was returned to MG
(in liquidation). We now know from the papers that in regard to what
Mr. Hodes SC has termed
"first feature", that Mr. Gihwala
avers that he did not use the Ten million rand (R10 000 000.00) to
invest in Scharrig
despite the fact that he explicitly requested the
funds only a few days earlier specifically for that purpose.
Certainly it would
not be said to be too onerous an expectation on
the part of MG (in liquidation), to have expected an explanation
from him why
the opportunity could not be taken up and why, in the
circumstances, the funds were transferred out of the Hofmeyer trust
account
at all. With regard to what Mr. Hodes SC has termed "the
second feature", one would expect of Mr. Gihwala to provide
a
full and detailed account of how the monies were used while they
were under his curatorship, and account properly for the return
that
was (or must have been) generated by whatever use the monies were in
fact put to.
[24]
According to Mr. Gihwala the Ten million rand (R10 000 000.00) was
not used by him. That alone does impose an obligation
on him to
account for failure to utilize the funds. Mr. Hodes SC is correct in
contending that to the extent that the Ten million
rand (R10 000
000.00) was placed on account with the People's Bank, Mr. Gihwala
must necessarily explain why that was done and
particularly why the
monies were invested in the name of Seena Marena Investments (Pty)
Ltd. It is so that it is pointed out
in the Replying papers that
"DG6" to the Answering Affidavit reveals that the account
into which the monies were paid
was an interest bearing account
contemplated under section 78 (2A) of the Attorneys Act, 1979.
In
terms of that section Mr. Gihwala was obliged to deposit the funds
in the name of the Applicants and not in the name of SMI.
In Mr.
Hodes SC's submission Mr. Gihwala must account in full detail with
supporting vouchers for any interest that was earned
while the
monies were so invested and must also account for any costs or other
deductions by which the amount due to MG (in liquidation)
was
reduced prior to it being returned to MG (in liquidation). According
to Mr. Hodes SC Mr. Gihwala must make full disclosure
of any tax in
fact paid by any entity resulting from MG's deposit of Ten million
rand (RIO 000 000.00) into the Hofmeyer trust
account, together with
supporting vouchers. I cannot understand why Mr. Gihwala cannot
account in the manner that MG (in liquidation)
wants. I mean, if
they want supporting documents and/or vouchers that must certainly
be supplied to them.
ACCOUNT:
HOFMEYERS; TRUST ACCOUNT
[25]
For purposes of this subtopic it is necessary to set out
infra
the
contents of Annexure "DG5".
16
MAY 2005
Received
Direct
Deposit-Taurin
Management
106980
R
540 250.00
R
1 240 250.00
06
JUN 2005
Payment:
Ngatana Prop Inv (Pty) Ltd
R
1 240 250.00
R
0.00
20
JUN 2005
Direct
deposit: Taurin Management Prop Anstalt
112086
R
10 000 000.00
R10
000 000.00
22
JUN 2005
Investment:
HHG/SEENA MARENA/SEC 78(2 A)
R
5 000 000.00
R
5 000 000.00
22
JUN 2005
Investment:
HHG/SEENA MARENA/SEC 78(2 A)
R
5 000 000.00
R
0.00
08
AUG 2005
Received
People's Bank Seena Marena Inv-Close Investment
120544
R
10 078 256.58
R10
078 256.58
08
AUG 2005
Payment:
University Stellenbosch
R
21 073.92
R10
057 182.66
08
AUG 2005
Dines
Gihwala Family Trust
R
57 182.66
R10
000 000.00
10
AUG 2005
Paid:
Taurin Management Anstalt
120967
R
10 000 000.00
R
0.00
17
MAR 2006
Received
Dines Gihwala Family Trust - Seena Marena Investments
155136
R2
764 118.24
R
2 794 118.24
29
MAR 2006
Paid:
Foreign Exchange amount paid to Switzerland (DG) - FX IB63S01179
ZAR2764118.24
157037
R2
764 118.24
R
0.00
30
MAR 2006
FX
IB63S0111179 Taurin Management Bank Charges Foreign Exchange Trf
to Switzerland...
157038
R
600.00
R
600.00
30
MAR 2006
FX
IB63S0111179 Taurin Management Bank Charges Foreign Exchange Trf
to Switzerland...
157038
R
90.00
R
690.00
04
APR 2006
Received
Dines Gihwala Family Trust - Seena Marena Investments
158952
R
50 000.00
-R
49 310.00
18
APR
Foreign
Exchange: IB64100922 ZAR 50 OO.(sic) 1 0000-
Switzerland
Business
Balance Trust Balance Holding Trust Investment Balance Investment
Account
161087
R
50 000.00
R
690.00
R
0.00
R
0.00
R
0.00
R00
15109.00
In
regard to Hofmeyers' duty to account for the monies placed by MG in
its trust account, it is contended on behalf of the Applicants
that
it is not sufficient merely to provide the trust ledger which is
annexed to the Answering Affidavit as "DG5".
Various
entries in "DG5" relating to the amounts paid by MG (in
liquidation) require explanation according to the Applicants.
Once
more the Applicants insist that supporting vouchers must be
provided. The examples given in this regard are that Mr. Gihwala
must explain why the Seventy eight thousand two hundred and fifty
six rand and fifty eight cents (R78 256.58) allegedly earned
as
interest on the Ten million rand (R10 000 000.00) was paid to
"University of Stellenbosch" and to "DGFT"
and
why no part of the amount appears to have been used to offset any
tax liability alleged in the Answering Affidavit. Indeed
the fact of
the matter, all things being equal, any interest accruing on the
funds would accrue to its owner MG (in liquidation)
and would remain
governed by the tax regime applicable to MG (in liquidation).
Strangely, the Answering papers contain no evidence
of any tax which
the DGFT or SMI became liable for. The Applicants correctly require
an explanation for the very fact that funds
were unvested in an
account under SMI's name even though they in fact belonged to MG (in
liquidation).
OBSERVATION
[26]
It is common cause in the papers that Mr. Narotam is a friend of Mr.
Gihwala's and that their friendship existed even before
the
transactions between the Applicants and the Respondents were
concluded. The fact of the matter though is that Mr. Narotam
was an
employee of the Applicants at the time these monies were invested.
It remains concerning though that what purports to
be statements
accounting or purporting to be accounting to the Applicants was
drawn up by Mr. Narotam. The Applicants are correctly
concerned that
probably Mr. Narotam may have compromised the interests of his
employers by agreeing to be the draftsman of these
documents. These
are presented by Mr. Gihwala as agreed accounting records. Questions
would naturally come to the mind whether
or not Mr. Narotam had at
his disposal supporting documentation at a time he prepared these
accounts. However, there is no need
in the instant matter to make
any determination in this regard, save to mention that the concerns
raised by the Applicants have
some legitimacy.
[27]
The accounting Mr. Rose-Innes referred to (set out
supra
as
Annexures) although it represents the usual way of accounting,
remains more than bold and insufficient recital of
inter
alia
payments
made. As I mentioned above, the Applicants remain entitled to have
sight of the source and/or supporting documents. Annexures
"DG7"
and "DG6" may be likened to a "brokers note"
dealt with in
Hansa
v Dinbro Trust (Pty) Ltd
1949
(2) SA 513
(T) at 516. In the latter regard Millin J remarked that:
"The
furnishing of broker's notes is required by law as each transaction
is completed, but the broker's note itself does
not purport to be an
account but merely records that the broker has bought for the
principal or sold on his behalf, as the case
may be, a particular
number of shares in named companies at a particular price with the
brokerage and stamp duty. That is not
an account of the transaction.
A full and true account of the transaction certainly involves all
the particulars which are asked
for in this letter 'C' of the
petition. "
Full
accounting must necessarily mean an accounting that deals
exhaustively with the application of the Applicants' funds in regard
to the acquisition or non-acquisition of contemplated shares
including sufficient information as to supporting vouchers (where
they exist). The purpose must always be to sufficiently inform the
Applicants of what really happened to their funds and for
what
purposes they were applied at every level of the transaction
including any change in the nature of the investment. See:
Montague
Goldsmith AG in Liquidation & Another v Dines Chandra Manilal
Gihwala and Others
supra
(an
as yet unreported Western Cape High Court case). It is my considered
opinion that the Applicants have made out a compelling
case and that
the order sought is deserved. Binns-Ward J of this division in the
above
Montague
Goldsmith AG in Liquidation and Another v Dines Chandra Manilal
Gihwala and Others
case
correctly stated that having regard to the contention of the
applicants that a debatement of the account which they have
claimed
will demonstrate that they have unsettled monetary claims against
some of the Respondents, there is all the more reason
for the
account to be as fully stated and vouched as possible. In his view
this will assist in the private debatement
inter
partes
that
should take place in order to identify the list of unresolved issues
to be formulated for debatement. Seeing that the Applicants
in the
instant matter also pray for an order that debatement of the account
needs to take place, the views expressed by B inns-Ward
J are
compellingly applicable in this matter as well.
[28]
In the circumstances I make the following order:
(a)
It is ordered that the First, the Second and the Seventh Respondents
shall within fourteen (14) days from the date of this
order render a
full and proper account to the Applicants in respect of the First
Applicant (MG in liquidation), alternatively
the Second Applicants'
investment in Scharrig Mining Limited ("the Scharrig
investment") and shall provide a statement
of account, duly
supported by all relevant vouchers, dealing with at least but not
limited to how, when, by whom and for what
purposes the First
alternatively the Second Applicants' funds of:
(i)
One million rands (Rl 000 000.00), which were held in trust by the
Seventh Respondent on behalf of the First Applicant (MG
in
liquidation), alternatively the Second Applicant in the Seventh
Respondent's First National Bank trust account number 51331425227
from 9 February 2005 upto and until 14 April 2005 and subsequently
dispersed, and
(ii)
Ten million rands (R10 000 000.00) which were transferred to the
Seventh Respondent's aforesaid trust account on 16 June
2005 and
subsequently returned to the First Applicant (MG in liquidation),
alternatively Second Applicant on 11 August 2005,
were utilized by
any of the said Respondents, their assigns or agents, or any other
party;
(b)
It is ordered that there be a debate of the said accounts and
payment by the First, Second to Sixth and/or the Seventh Respondents
to the First Applicant (MG in liquidation), alternatively the Second
Applicant of whatsoever amounts appear to be due to either
of them
upon such debatement;
(c)
It is ordered that the First, the Second and the Seventh Respondents
shall pay jointly and severally, the one paying the other
to be
absolved, the Applicants' costs of suit herein on a scale as between
Attorney and own client.
DLODLO,
J