Blacher and Others v Britz and Another (2178/09) [2009] ZAECPEHC 46 (4 September 2009)

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[2009] ZAECPEHC 46
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Blacher and Others v Britz and Another (2178/09) [2009] ZAECPEHC 46 (4 September 2009)

FORM A
FILING SHEET FOR SOUTH EASTERN
CAPE LOCAL DIVISION JUDGMENT
PARTIES
:
Case
Number:
2178/2009
High
Court:
Port
Elizabeth
DATE
HEARD:
27
August 2009
DATE
DELIVERED:
4
September
2009
JUDGE(S):
Chetty
J
LEGAL
REPRESENTATIVES –
Appearances:
for
the Applicant(s):
Adv
Wickens
for
the Respondent(s):
Adv
Mullins
Instructing
attorneys:
Applicant(s):
Respondent(s):
CASE
INFORMATION -
Nature
of proceedings
:
Application
Topic:
Key Words:
Practice
– Rule 6 (12) (c) Uniform Rules of Court – Rule
nisi
granted
ex
parte
on urgent basis – Material facts not disclosed – Reconsideration
of orders granted - Factors governing – Requirements for
interdict
not met – Grounds of urgency wholly deficient – Order set aside
with costs
REPORTABLE
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE, PORT ELIZABETH)
Case No: 2178/09
In the matter between:
COLIN STUART BLACHER First
Applicant
THE BLACHER FAMILY TRUST
Second Applicant
GLYDEN PROP 20
(PTY) LTD Third
Applicant
a
nd
FRIEDA BRITZ First
Respondent
WALFRIE TRUST (IT 471/2000)
Second Respondent
Represented here and by its
trustees for the first time
Being FRIEDA BRITZ and QUITA
JURGENS
In re:
FRIEDA BRITZ First
Applicant
WALFRIE TRUST (IT 471/2000)
Second Applicant
Represented
herein by its trustees for the time being
FRIEDA BRITZ and QUINTA JURGENS
and
COLIN STUART BLACHER
First Respondent
THE BLACHER FAMILY TRUST
Second Respondent
GLYNDEN PROPR 20 (PTY) LTD
Third Respondent
INVESTEC BANK LTD Fourth
Respondent
ABSA BANK LTD Fifth
Respondent
THE REGISTRAR OF DEEDS, CAPE TOWN
Sixth Respondent
Coram:
Chetty,
J
Date Heard:
27
August 2009
Date Delivered:
4
September 2009
Summary:
Practice
– Rule 6 (12) (c) Uniform Rules of Court – Rule
nisi
granted
ex
parte
on urgent basis – Material facts not disclosed – Reconsideration
of orders granted - Factors governing – Requirements for
interdict
not met – Grounds of urgency wholly deficient – Order set aside
with costs
______________________________________________________________
JUDGMENT
______________________________________________________________
CHETTY, J
[1]
This
is an application for the reconsideration of an order granted as a
matter of urgency by Dhlodhlo ADJP on 6 August 2009 in the
absence of
the applicants. For the sake of clarity and to avoid confusion I
shall refer to the applicants as the respondents in
conformity with
the citation of the parties in the proceedings before the learned
judge (the main application). The first respondent
is the sole
trustee of the second respondent which owns sixty seven percent (67%)
of the shareholding in the third respondent,
the remaining shares
(33%) initially being owned by the second applicant, its trustees
being the first applicant and her now deceased
husband. Since his
demise he has been substituted by one
Quinta
Jurgens
.
[
2] In
order to place this application in proper perspective it is apposite
to chart the events which preceded it. On 6 August 2009,
the
applicants sought relief framed in the notice of motion as follows –
“
1. That
the matter be heard as one of urgency and that this Honourable Court
condone the non-compliance with the Rules relating
to time limit
s
and service of process.
2. That
a Rule nisi do hereby issue calling upon the Respondents to show
cause at 09h30 on the 17
th
day of September 2009 why the following Order should not issue: -
That the Third
Respondent’s bank account with the Fourth Respondent, Investec
Bank Ltd, account number 228602002, be and is
hereby frozen;
That the Third
Respondent’s bank account with the Fifth Respondent, Absa Bank
Ltd, account number 40-5664-2622 be and is hereby
frozen;
That the Fourth and
Fifth Respondents permit no withdrawals from the said bank
accounts, save as is specifically provided for
herein;
That paragraphs 2.1,
2.2 and 2.3 shall not apply to:-
2.4.1 The transfer of
sufficient funds from the Fifth Respondent to the Fourth Respondent
in order to cover the monthly bond payment;
The payment from the
Fifth Respondent’s account of the monthly rates and taxes;
Any reasonable and
necessary expenses, provide it is approved by the First Applicant
in writing;
2.5 That the First
Respondent be and is hereby interdicted from alienating or
encumbering the Third Respondent in any manner;
2.6 That the Sixth
Respondent enter a caveat against the records in the Deeds Registry
against the property in question in accordance
with prayer 2.5 above;
That the Second
Respondent be and is hereby interdicted from alienating its shares
in the Third Respondent;
That the First
Respondent pay the costs of this application.
3. That prayers 2.1 to
2.7 act as an interim interdict pending the return day.
4. That the Applicants
institute an action against the First and/or Second Respondents and
such entities as have received monies
from the Third Respondent
within thirty (30) days of the finalisation of this application.”
[3] An order
was
issued in conformity with the relief sought. It is common cause that
no notice of the application was given to the respondents.
The
reasons advanced which she contended justified the hearing of the
matter clandestinely were that the third respondent would
suffer
irreparable harm if the first respondent was given advance notice of
the application. In amplification of her contentions
she annexed
copies of the third respondent’s bond and current account
ostensibly to show that there were monies available which
could be
misappropriated. No other reasons were advanced to justify the matter
being heard
ex
parte
.
[4] The grounds of
urgency relied upon by the first applicant which she averred
warranted an abridgement of the normal time limits
were – the
discovery that a substantial sum of money had been withdrawn from the
third respondent’s banking account over a
period of time without
any resolution to that effect by its board of directors; the absence
of any financial statements and books
of account and the notification
that the third respondent’s lease with its lessee, the Nelson
Mandela Metropolitan University,
would expire at the end of the
current year.
[5] The reasons
advanced for both the failur
e
to give notice and proceeding on an urgent basis are in my view
entirely unconvincing but appears to have persuaded the learned
judge
to indulge the applicants and grant the relief sought.
[6]
The
reconsideration of an order granted as one of urgency and in the
absence of a party is governed by the provisions of Rule 6
(12) (c)
of the
Uniform
Rules of Court
which reads -
“
(c)
A
person against whom an order was granted in his absence in an urgent
application may by notice set down the matter for reconsideration
of
the order.”
The rationale for
and dominant purpose of the rule was articulated by Farber AJ in
ISDN
Solutions (Pty) Ltd v CSDN Solutions CC and Others
1
as follows
2
–
“
The Rule has been
widely formulated. It permits an aggrieved person against whom an
order was granted in an urgent application to
have that order
reconsidered, provided only that it was granted in his absence. The
underlying pivot to which the exercise of the
power is coupled is the
absence of the aggrieved party at the time of the grant of the order.
Given this, the
dominant purpose of the Rule seems relatively plain. It affords to an
aggrieved party a mechanism designed to redress
imbalances in, and
injustices and oppression flowing from, an order granted as a matter
of urgency in his absence. In circumstances
of urgency where an
affected party is not present, factors which might conceivably impact
on the content and form of an order may
not be known to either the
applicant for urgent relief or the Judge required to determine it.
The order in question may be either
interim or final in its
operation. Reconsideration may involve a deletion of the order,
either in whole or in part, or the engraftment
of additions thereto.
The framers of the
Rule have not sought to delineate the factors which might
legitimately be taken into reckoning in determining
whether any
particular order falls to be reconsidered. What is plain is that a
wide discretion is intended. Factors relating to
the reasons for the
absence, the nature of the order granted and the period during which
it has remained operative will invariably
fall to be considered in
determining whether a discretion should be exercised in favour of the
aggrieved party. So, too, will questions
relating to whether an
imbalance, oppression or injustice has resulted and, if so, the
nature and extent thereof, and whether redress
is open to attainment
by virtue
C
of
the existence of other or alternative remedies. The convenience of
the protagonists must inevitably enter the equation. These
factors
are by no means exhaustive. Each case will turn on its facts and the
peculiarities inherent therein.
Something need be
said about procedure. Although no hard and fast rule need be laid
down, it seems desirable that a party seeking
to invoke the Rule
ought in an affidavit to detail the form of reconsideration required
and the circumstances upon which it is
based.”
[7
] This
exposition of the Rule has been judicially considered and approved in
various matters. In
Lourenco
and Others v Ferela (Pty) Ltd
and
Others (No 1)
3
Southwood J, in emphasizing that the term reconsideration must bear
the widest possible meaning, said
4
-
“
In terms of Rule
6(12)
(c)
a
person against whom an order was granted in his absence in an urgent
application may by notice set down the matter for reconsideration
of
the order. This Rule is very widely framed and I have no doubt that
the word `reconsideration' must bear its widest meaning.
The
Shorter Oxford English Dictionary
gives
the following three meanings for the word `reconsider':
`1.
To consider (a matter or thing) again;
(b)
to
consider (a decision, etc) a second time with a view
to changing or amending it; to rescind, alter.
2. To reflect on one's conduct with a view to . . . amendment.'”
[8
] The
effect of the order is manifest and its ramifications may properly be
characterised as oppressive – the third respondent’s
banking
accounts are frozen and payments therefrom delineated and made
subject to the first applicant’s sole approval; the second

respondent is unable to deal with its shares in the third respondent
notwithstanding offers having been made to it for their acquisition;

the first respondent is effectively divested of control over the
third respondent of which he is a director and majority shareholder,

and the order vests the minority shareholder with control over the
third respondent.
[9] The principal
submissions advanced on behalf of the respondents for the setting
aside of the order granted in the main application
was that the
applicants had failed to make full and proper disclosure and moreover
had not satisfied the requirements for the grant
of an interim
interdict.
Failure to disclose
[
10] The
nature and extent of the duty resting upon an applicant to make full
disclosure of all material facts which might affect
the granting of
an order
ex
parte
has repeatedly been emphasized in our jurisprudence. Extrapolated
from the authorities
5
the principles applicable to the
uberrima
fides rule are –
“
(1) In
ex
parte
applications
all material facts must be disclosed which
might
influence
a Court in coming to a decision;
(2) the non-disclosure
or suppression of facts need not be wilful or
mala
fide
to
incur the penalty of rescission and
(3) the Court,
apprised of the true facts, has a discretion to set aside the order
obtained on material facts not disclosed or
to preserve it.”
[11] In similar
vein, Howie, P, pointed out in
Phillips
and Others v National Director of Public Prosecutions
6
that -
“
[29] It
is trite that an
ex parte
applicant
must disclose all material facts which might influence the court in
deciding the application. If the applicant fails in
this regard and
the application is nevertheless granted in provisional form, the
court hearing the matter on the return day has
a discretion, when
given the full facts, to set aside the provisional order or confirm
it. In exercising that discretion the later
court will have regard to
the extent of the non-disclosure; the question whether the first
court might have been influenced by
proper disclosure; the reasons
for non-disclosure and the consequences of setting the provisional
order aside.”
[12
] Counsel
for the respondents submitted that the extent of the applicant’s
non-disclosure was clearly established by the failure
to advert to
the protracted dispute regarding her directorship of the third
respondent and the fact that the second applicant had
ceded its
shares in the third respondent to the first respondent and that such
omission warranted the setting aside of the order.
It is not in issue
that in her founding affidavit the applicant described herself as a
director of the third respondent and a trustee
of the second
applicant which she averred held a thirty three percent (33%)
shareholding in the third respondent. What she omitted
to disclose
was that as far back as September 2007 her directorship of the third
respondent was disputed and has remained disputed
ever since. Mr
Wickens
has correctly pointed out that the issue of directorship was material
and had a significant impact on the relief granted in paragraphs
1.1
to 1.4 of the order which froze the third respondent’s banking
accounts and made its contractual and legal obligations subject
to
the unilateral approval of a person who may not be a director of the
third applicant and who, furthermore, on her own admission,
had no
knowledge of the management and affairs of the third respondent. The
order elevated the first applicant to a position effectively
in
control of the third respondent.
[13
] As
regards the cession of the second applicant ‘s shares in the third
respondent to the first respondent, the first applicant’s
laconic
excuse that she somehow forgot to mention this fact to her
instructing attorneys is unconvincing to say the least. The

applicants’ attorneys were placed in possession of the share
transfer form signed by the first applicant’s late husband in
July
2006. Correspondence relating to the cession was exchanged between
the first applicant’s erstwhile attorneys and the respondents’

attorneys and the legality of the cession strenuously contested by
her. The cession of the shares was a material issue and, so
too, her
directorship in the third respondent. It is inconceivable that if
full disclosure of these material issues was made, the
applicants
would have obtained the order which eventuated.
[1
4] This
conclusion renders it unnecessary to embark upon an in depth
consideration of Mr
Wickens’
further submissions that although the applicants may, at the very
least, have established a
prima
facie
right, none of the remaining requirements for the granting of an
interdict had been established. Suffice it to say that the
requirement
of a well grounded apprehension of irreparable harm was
cursorily dealt with in the founding papers. The balance of
convenience
was moreover neither addressed nor was the existence of a
suitable alternative remedy. In short the requirements for the grant
of an interdict were never met.
[15
] Harms
JA’s trenchant statement in
Memory
Institute SA CC t/a SA Memory Institute v Hausen
7
that –
“
. . . interim orders
and rules
nisi
are
not to be had simply for the asking. Courts should satisfy themselves
that a proper case has been made out . . .”
illustrates the
point that where the requirements for the grant of an interdict have
not been met, the party responsible for pursuing
an application,
where its deficiencies are manifest, deserves to bear the
consequences of having the application dismissed.
[16
] The
following orders will issue –
The application for a
reconsideration of the order granted by Dhlodhlo ADJP on 6 August
2009 under case number 2178/09 is allowed
and the order is set aside
in its entirety.
The first and second applicants
are to pay the costs of this application jointly and severally, the
one paying the other to be
absolved.
___________________________
D. CHETTY
JUDGE OF THE HIGH COURT
Obo
the Applicants: Adv Wickens
Instructed
by Kim Warren, Rambau & Associates
97
Central Street
Houghton
Johannesburg
Ref:
Ms K Warren
Tel:
(011) 728 7728
C/O
Kaplan Blumberg
1
st
Floor, Block A
Southern
Life Gardens
70
Second Avenue
Newton
Park
Port
Elizabeth
Ref:
Mr D Nezar/K Morris
Obo
the Respondents: Adv Mullins
Instructed
by Theo Kitshoff Attorneys
69
Third Avenue
Newton
Park
Port
Elizabeth
Ref:
T Kitshoff
1
1996 (4) SA 484
(W)
2
At 486H-487D
3
1998 (3) SA 281
(T)
4
At 290D
5
Schlesinger v Schlesinger
1979 (4) SA 342
at
349A-B; See also Rizcum Trader (4), MV: MV Rizcum Trader v Manley
Appledore Shipping Ltd
200 (3) SA 776
(C) at 794A-D
6
2003 (6) SA 447
(SCA) at para [29]
7
2004 (2) SA 630
(SCA) at p 636G