About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2010
>>
[2010] ZAWCHC 218
|
|
Edward street Property Investments CC v Lambrechts and Others (3657/07) [2010] ZAWCHC 218 (1 December 2010)
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN
CAPE HIGH COURT)
REPORTABLE
Case No: 3657/07
In
the matter between:
EDWARD
STREET PROPERTY INVESTMENTS CC
….....................................................................................
Plaintiff
and
JEAN
LAMBRECHTS
…....................................................................................................................
First
Defendant
Wit
I FM JOHANNES LAMBRECHTS
…........................................................................................
Second
Defendant
MARIUS
ARTHUR EDWARD CONRADIE
…....................................................................................
Third
Defendant
Coram
:
R.C.A.
Henney, AJ
Judgment
by :
R.C.A.
Henney, AJ
For
the Applicant :
Mr
Louis Lourens
Instructed
by VISSER & PARTNERS
6
Karoo Street
BELLVILLE
P
O Box 670, BELLVILLE, 7535
Tel:
(021) 948 8280
Fax:
(021) 948 9265 (Ref: 05251)
C/o
MICHALOWSKY GELDENHUYS & HUMPHRIES
Suite
1156, 11
th
Floor,
Plcbel Parkade
58
Strand Street, Cape Town
Docex
7, Bellville
Tel:
(021) 948-8280
Ref:
LL/05251
For
the Respondent
:
Adv
Nicole Van Huyssteen
Instructed
by
:
NME
NIL5SEN & PARTNERS
32
Mimosa
Crescent
Plattekloof
PAROW
Tel:
(021) 696-1247
Fax:
(021) 696-1247
(Ref:
NMEN
/LS)
c/o
ASHERSONS
34
Plein Street
CAPE
TOWN
Date(s)
of Hearing
28
OCTOBER 2010
Judgment
delivered on
01
DECEMBER 2010
[Reportable]
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
CASE
No: 3657/07
In
the matter between:
EDWARD
STREET PROPERTY INVESTMENTS CC
…......................................
Plaintiff
And
JEAN
LAMBRECHTS
….......................................................................
First
Defendant
WILLEM
JOHANNES LAMBRECHTS
…..........................................
Second
Defendant
MARIUS
ARTHUR EDWARD CONRADIE
…........................................
Third
Defendant
JUDGMENT
DELIVERED ON 1
DECEMBER
2010
HENNEY,
AJ:
BACKGROUND
[1]
The Plaintiff issued Summons in 2005 against the three defendants
and Lalaco Beleggings ("CC"), a duly registered
close
corporation, in the Paarl Magistrate's Court in respect of arrear
rental.
The
action was withdrawn against the three Defendants who at that stage
were also members of the "CC". The "CC"
did not
oppose the action. Judgment was granted in default against it for
payment in the amount of R411 802.72 plus interest
at 15,5% p.a. a
tempore
morae.
This
judgment debt was never paid by the "CC.
[2]
On 22 December 2006, the "CC was deregistered in terms of
Sections 26(1)
and
26
(2) of the
Close Corporations Act. 69 of 1984
.
In
March 2007 the Plaintiff issued summons against the three defendants
for payment of the said amount plus interest out of this
court. The
plaintiff avers that the three defendants are liable in terms of
Section 26(5)
which provides:
"If
a corporation is deregistered while having outstanding liabilities,
the persons who are members at the time of deregistration
shall be
jointly and severally liable for such liabilities'.
[3]
The defendants entered an appearance to defend the action, whereupon
the plaintiff launched an application for summary judgment.
This
application was opposed by the defendants. They claimed they had a
bona
fide
defence
to the action. In essence their defence was that they were not
responsible for the liabilities of the Close Corporation
in terms of
Section 26(5)
of the Act. as the Close Corporation was improperly
deregistered.
[4]
In May 2007 the matter was postponed by agreement between the
parties in order for the defendants to launch an application
in the
North Gauteng High Court to have the deregistration by the Registrar
of Close Corporations declared null and void.
On
27 July 2008 the North Gauteng High Court dismissed the defendants'
application. The plaintiff thereafter re-enrolled the application
for summary judgment.
[5]
The
Application
As
a result of the issues raised by the parties in the Summary Judgment
application before me, it would be appropriate to re-visit
the
relevant portions of the Uniform Rules governing summary judgments.
Rule 32 states the following:
"Summary
Judgment:
(1)
Where
the defendant has delivered notice of intention to defend, the
plaintiff may apply to court for summary judgment on each
of such
claims in the summons as is only-
on
a liquid document;
for
a liquidated amount in money;
(c)
(d)
-
together
with any claim for interest and costs.
(2)
…...........
(3)
Upon
the heahng of an application for summary judgment the defendant
may-
(a) …..........
(b)
satisfy the court by affidavit (which shall be delivered before noon
on the court day but one preceding the day on which the
application
is to be heard) or with the leave of the court by oral evidence of
himself or of any other person who can swear positively
to the fact
that he has a bona fide defence to the action; such affidavit or
evidence shall disclose fully the nature and grounds
of the defence
and the material facts relied upon therefor".
[6]
During argument counsel for the defendants submitted that the claim
was not founded on a liquid document. This issue was never
raised by
the defendants in their papers filed of record. In any event, the
defence raised by the defendants is that they are
not liable for
payment of the amount claimed. The amount claimed was therefore
never in dispute. The contention that the amount
claimed was not
founded on a liquid document is without substance as the Plaintiff's
claim is based on a liquidated amount sounding
in money (See
Neves
Builders & Decorators v De La Cour
1985 (1) SA 540
CPD at 544 F
- H,
and
Tredoux
v Kellerman 2010 (1) SA (C)160 at 166G).
[7]
The defendants, after the enrolment of the matter, also filed a
"Supplementary Affidavit*' in amplification of their
defence
Miss Van Huyssteen, counsel for defendants, argued that in a summary
judgment application the court is entitled to adopt
a lenient
approach, and that the court has a discretion to allow the defendant
to file a supplementary affidavit.
Miss
Van Huyssteen submitted further that in exercising its discretion to
allow a litigant to present his case fully, there should
be no
prohibition against a defendant supplementing his defence in
rectifying a defective opposing affidavit. As authority for
this
proposition, Miss Van Huyssteen referred to the matter of
Juntgen
t/a Paul Juntgen Real Estate v Nottbusch
1989 (4) SA 490
(W) at 493
C-D
where
it was held that:
'
It follows that because of the scrutiny of the bona fides of the
defendant in respect of the defence to which he lays claim,
a
defendant may find that his affidavit is inadequate. He may have
forgotten to tell his attorney of an important fact or may
have
missed the significance thereof. Attorneys, like other humans, make
errors
which
are called omissions. The attorney's view on what is adequate may
differ from what counsel or the Court thinks. A defence
may develop
subsequent to the signing of the affidavit. It has all the potential
to cause injustice if the Court's discretion
to allow improvement of
defective attempts is to be hampered by an application of the dictum
in the Joubert case in any literal
meaning thereof.'
[8]
The further reasons advanced by Miss Van Huyssteen for filing the
supplementary affidavit, were that the defendants truly
believed in
their prospects of succeeding in their application for the
deregistration to be set aside and consequently failed
to deal with
the defences the "CC" may have had against the claim.
[9]
ISSUES FOR DETERMINATION
The
following issues must therefore be determined;
whether
condonation should be granted for the filing of the Supplementary
Affidavit
and;
b)
whether the Supplementary Affidavit serves to rectify, amend or
supplement the Opposing Affidavit and;
c)
if so whether it discloses a
bona
fide
defence.
In
answering the first two questions, it is clear that the court has a
wide discretion, especially in the case of Summary Judgment,
to
permit the filing of further affidavits, provided that good cause is
shown for further affidavits to be permitted. The onus
in my view
rests on the party who seeks to have such affidavits permitted.
Erasmus,
"Superior
Court Practice" Volume 1
at
B1-47.
states
the following:
'There
should in each case be a proper and satisfactory explanation which
negatives mala fides or culpable remissness as to the
cause of the
facts or information not having been put before the Court at an
earlier stage, and the Court must be satisfied that
no prejudice is
caused by the filing of additional affidavits which cannot be
remedied by an appropriate order of costs.
1
Erasmus,
"Superior Court Practice"
says
further at
B1-228
- B1-228A:
'In
Superior Court Practice a Defendant has been allowed to supplement
his or her affidavit by a further affidavit where, for
instance, the
first affidavit was defective, even though the supplementary
affidavit was out of time. It is submitted there must
be some basis
for granting leave to file a supplementary affidavit for example, an
adequate explanation by the defendant for
the deficiencies, in his
or her opposing affidavit, and at least some indication that the
prepared supplementary affidavit is
likely to clear the
difficulties.'
[10]
I
n
this
matter it seems that the defendants do not seek to cure or clear any
deficiency in their original affidavit. They neither
seek to
supplement nor say anything in addition to what they had already
stated earlier. The purpose of filing the Supplementary
Affidavit is
clearly aimed to substitute their initial defence, due to the fact
that they could not succeed in having the decision
of the Registrar
of Close Corporations to deregister the Close Corporation nullified.
[11]
In the matter of
Joubert,
Owens, Van Niekerk Ing v Breytenbach 1986 (2) 357 TPD at 361
.
the court after referring to the matter of
Empire
Fresh Meat Supply (Pty) Ltd v llic
1980 (4) SA 23(W)
held:
Soos
wat in die gemelde passasie genoem is, blyk dit baie duidelik dat
die toestemming wat verleen word ondersekere omstandighede
virdie
liassehng van n aanvullende verklaring hoofsaaklik daarop gemik is
om 'n verweerder te help waar daarbloot formele gebreke
of dergelike
defekte in die beantwoordende verklanng mag wees. Dit kan nie. soos
dit vir my lyk. gebruik word om 'n verweerder
se onvolledige
verweeraan te vul en om op die manier vir horn 'n geleentheid gee om
'n tweede kans te kry om n summiere vonnis
aansoek afte weernie.'
[12]
In this present matter there is no question of an incomplete
("onvolledige") defence. It is an attempt to substitute
the initial defence with a completely new defence. The reference
Miss Van Huyssteen made to the
Juntgen
decision
as referred to in para
7
would
in my view find application in a deserving and
bona
fide
case.
It may also find application in a matter where the defendant is
taken by surprise, or would not have had information at
their
disposal when his or her affidavit was initially deposed to. Whether
it is permissible to file a supplementary affidavit
for the purpose
of substituting a defence would depend on the circumstances of each
particular case.
It
is clear that none of the circumstances as mentioned in the
Juntgen
case
are
present in this case. The defendants do not aver that there were
some errors in, or certain important facts missing from,
or that
facts that were not in the initial opposing affidavit, which
therefore required to be rectified or supplemented. It was
also not
averred that a defence which the defendants were not aware of
subsequently developed.
In
this case, if one has to have regard to the supplementary affidavit,
the defendants at all relevant times were aware of all
the facts and
did not fully disclose the nature and grounds of their defence. They
consciously chose not to fully disclose all
the facts at their
disposal which in fact is a requirement in terms of Rule 32.
[13]
It is also clear in my view, as stated by
Erasmus,
"Superior Court Practice"
at
B1
-
47.
that
the supplementary affidavit
'had
been shaped to relieve the pinch of the shoe.'
The
defendants therefore in my view did not make out a case to justify
the filing of the supplementary affidavit because, it does
not seek
to rectify, amend or supplement their initial defence as set out in
the initial opposing affidavit. It seems rather
to substitute a
defence in circumstances where the defendants would not be permitted
to do so.
It
follows therefore, that the application for the filing of a
supplementary affidavit by the defendants cannot succeed.
[14]
Even if it would have been permissible to condone the filing of the
supplementary affidavit, I am not persuaded that the
defendants have
a
bona
fide
defence
in any event.
In
para 5 of the Supplementary Affidavit the first defendant on behalf
of the others and himself, states:
'
I
am
advised by my legal representative that the Defendants can avail
themselves of any and all defences which the Close Corporation
could
have relied on, and that the liability of the defendants does not
extend any further than the extent of the Close Corporation's
actual
liability to the Plaintiff, if any.'
[15]
If it is assumed that the defendants' supplementary affidavit should
be admitted, the following defence was raised:
1)
That during September 2000, the close corporation (Lalaco
Beleggings) entered into a lease agreement with the plaintiff for
the purposes of conducting a restaurant business.
2)
During May 2001, the close corporation sold the restaurant and
sublet the leased premises to one Pendens. The plaintiff was
aware
of this and insisted that the rentals payable be paid directly to
the plaintiff. Pendens, the sub-lessee, breached the
rental
agreement and during 2003 a summons was issued by the plaintiff
against the close corporation for outstanding rental in
respect of
the period 1 March 2003 - April 2005.
3)
The plaintiff did not advise the close corporation that Pendens
failed to fulfil his obligation.
4)
The plaintiff instituted an action against the close corporation (as
principal debtor) and the three defendants (as sureties)
for the
amount.
5)
In the Paarl Magistrate's Court during or about 2006, default
judgment was taken against the close corporation.
6)
It is not disputed that the three defendants were aware of the
proceedings in the Magistrate's Court. Miss Van Huyssteen argued
that the three defendants took a conscious decision not to defend
this action in the Magistrate's Court, because they foresaw
that the
close corporation would be liquidated. According to the defendants
neither the close corporation nor its members were
aware of the
breach of the rental agreement by the sub-lessee. The plaintiff was
aware of the breach by the lessee and should
have informed the close
corporation.
[16]
The argument by counsel for the defendants is without merit for the
following reasons:
Firstly,
it is a completely different defence than that averred in their
initial opposing affidavit. This itself is enough reason
to hold
that it lacks
bona
fides;
Secondly,
if they had this
bona
fide
defence,
they should have stated it in the initial opposing affidavit, which
they purposely omitted to do; and finally, during
the proceedings in
the Paarl Magistrate's Court, before judgment was given, no such
defence was raised. In fact, it was submitted
in argument by
defendants' counsel that a conscious decision was made by the three
defendants, as members of the "CC",
that judgment by
default be granted against the 'CC.
[17]
On a conspectus of the evidence, it is clear that the defendants
deliberately failed to fully disclose the nature and grounds
of
their defence. In the light of this failure, and given the nature of
the defence itself. I am of the view that the defendants
lack
bona
fides.
Conclusion
[18]
It has been established that the defendants were members of the "CC"
at the time of its deregistration. I am satisfied
that the plaintiff
is entitled to hold the defendants jointly and severally liable in
terms of Section 26(5) of the Close Corporations
Act for the amount
due to the plaintiff in terms of the judgment given in the
Magistrate's Court Paarl under Case No 2833/2005
for the amount of
R411 802,72 plus interest at 15,5% a
tempore
morae.
The
Order
[19]
In the result, I make the following order:
Summary
Judgment in favour of the plaintiff in the sum of R411 802.72. with
interest at 15,5% a
tempore
morae,
is
granted against the first, second and third defendants jointly and
severally, the one paying the other(s) to be absolved with
costs.
R.C.A. Henney, AJ