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[2013] ZAECPEHC 44
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Platt v Platt (116/2011) [2013] ZAECPEHC 44 (17 September 2013)
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE, PORT ELIZABETH)
CASE NO: 116/2011
Heard
on: 20 August 2013
Delivered
on: 17 September 2013
In the matter between:
DERECK CECIL PLATT
.........................................................................
APPLICANT
vs
BEVERLY-LYN PLATT
......................................................................
RESPONDENT
JUDGMENT
MAKAULA J
:
A.
Introduction
:
[1] This is an application in terms of
Rule 45A of the Uniform Rules of Court
wherein the applicant
seeks the following orders:
“
1.1.
Directing that this matter be heard as one of urgency and that the
time limits, forms and service provided for in the Rules
of Court are
dispensed with in terms of the provisions of Rule 6 (12);
1.2. That the applicant’s
compliance with the order of court dated 29 April 2013 to the extent
of R656 951.10 be and
is hereby suspended pending the resolution
of the dispute between the parties arising out of the settlement
agreement dated 29
April 2013;
1.3. That the respondent
institutes such action as he may be advised to do within 30 days of
the granting of this order;
1.4. Costs only in the
event of opposition.”
[2] In essence the applicant seeks to
purge his contempt of the order granted by this court dated 29 April
2013 pursuant to divorce
proceedings between the parties. The parties
consented to a Deed of Settlement which was made an order of court in
terms of which
the applicant was obliged to pay the respondent
R3
000 000.00
in full and final settlement of any patrimonial
claim which the respondent might have against the applicant upon
fulfilment of
the following conditions
(which are now relevant to
this application);
“
2.2
The Plaintiff shall:
2.2.1.
Resign immediately from Umgamanzi (Pty) Ltd and shall forthwith
transfer to the First Defendant her entire right, title and
interest
to any shareholding and loan account in one indivisible transaction;
2.3 .
. .
2.4.
The Plaintiff warrants that she has made a full disclosure of all the
liabilities in Umgamanzi (Pty) Ltd, including those listed
in “A”
hereto, the costs of the liquidation application, and the costs of
provisioning and fuelling the vessel for
its current voyage.”
Applicant’s case
:
[3] The applicant alleges that the
respondent has breached the undertaking and warranty contained in
paragraphs 2.4 of the settlement
agreement in that she had failed to
disclose the following liabilities of
Umgamanzi
which were due
as at 29 April 2013:
“
15.1
Squid Council Levies R1 890.00
15.2 I & D Radio
Communications R 863.79
15.3 Workmen’s
Compensation approximately R650 000.00
15.4 South African
Revenue Services R3 157.31
15.5 Pastel Payroll
R1 050.00
TOTAL R656 961.10”
[4] With regard to the
Workmen’s
Compensation
, the applicant avers that based on the advice of his
accountant
Mr Rodney Smith
(Smith)
of
Liandor
Financial Accountants (Pty) Ltd
, who has also deposed to an
affidavit,
Umgamanzi
was supposed to have registered its staff
with the
Workmen’s Compensation Commissioner
(WCC)
and the failure to do so has resulted in a due payment before
interest and penalties of between
R380 000.00
and
R650 000.00
. The applicant contends therefore that the
value of
Umgamanzi
was overstated by the respondent by
approximately
R659 961.10.
The applicant admits therefore
that for the reasons stated, he short paid the respondent in the
aforesaid amount and thus is in
contempt of the order of this court.
The applicant seeks an indulgence for leave to suspend his obligation
to pay the respondent
an amount of
R656 961.10
pending
the outcome of the resolution of the dispute between them with regard
to the undisclosed liabilities.
[5] The applicant makes the point that
the entire settlement agreement is predicated on
Umgamanzi
existing as a fishing company with rights. The applicant avers that
the fishing rights attaching to the vessel utilized by
Umgamanzi
are soon to terminate and
Umgamanzi
would have to apply for
renewal of the seven year rights and that necessitates
Umgamanzi
to comply with certain statutory precepts. It is thus imperative that
Umgamanzi’s
statutory records be in order amongst which
are the Workmen’s Compensation Returns, so submits the
applicant. The applicant
argues that failure to have the statutory
records in order would disqualify
Umgamanzi
and render the
applicant’s take-over of
Umgamanzi
worthless in which
case the applicant would have paid the respondent
R3 000 000.00
for no reason.
[6] The applicant suspects that there
still could be liability to the
South African Receiver of Revenue
(SARS)
flowing from the fact that the skipper of the
vessel has apparently not paid any statutory contribution to
SARS
for tax and therefore there exists a possibility that
Umgamanzi
could be owing
SARS
an amount equal to
33%
of its
gross earnings together with interest and penalties by virtue of the
respondent’s failure to cause
Umgamanzi
to comply with
the provisions of the
Fourth Schedule and Section 231 of Act 58 of
1962
. The applicant contends therefore that the issues regarding
statutory compliance have not been resolved and the accountants of
both parties are working towards the resolution thereof.
Respondent’s case
:
[7] The respondent on the other hand
contends that the liabilities as stated in ‘annexure A’
to the settlement agreement
were prepared by
Umgamanzi
bookkeeper,
one
Heather Poole
(Ms Poole)
. Neither the respondent
nor
Ms Poole
were aware of any other liabilities not
disclosed. The respondent maintains that she stands by the warranty
she made and that should
the applicant be able to establish a breach
thereof, the applicant is at liberty to claim for damages in
contract. The respondent
contends that the only liability she was
aware of, amounted to
R740 025.44,
chief of which was that of
VAT
which amounted to
R580 438.00
.
[8] The respondent states that at the
time of signing the settlement agreement, she was not aware that
there was an amount owing
to the
WCC
.
However, the
respondent’s accountant advised her that on information
supplied to him by the respondent, there is a potential
liability to
the
WCC
. The respondent further contends that not only as an
initial Director of
Umgamanzi
, the applicant was aware that
the fishermen on the boat were not regarded as ‘
workmen’
for the purposes of determining whether
Workmen’s
Commission
levies were payable. The approach was that the
fishermen would sell their catch to
Umgamanzi
and be
remunerated through their catch and not wages and therefore would not
qualify as levies, in terms of the definition of ‘
Workmen’.
[9] The respondent denies that the
applicant has established a
prima facie
right to the order
sought because there is no basis alleged by the applicant for the
causa
for the payment of
R3 000 000.00
as settlement of
the patrimonial claim to be set aside. The respondent further denies
that the applicant has a well grounded apprehension
of irreparable
harm because the respondent had received an amount in excess of
R2
000 000.00
and owns an immovable property in
Port Elizabeth
and therefore, the applicant could still sue in contract and
recover what is due to him. The respondent further argues that the
balance of convenience favours her in that she needs the money in
order to pay for the house for her and their daughter.
[10]
Mr Royden Whitfield
(Whitfield),
an accountant for the respondent in his
supplementary affidavit states that based on information supplied to
him by the respondent
there is a potential liability to the
Workmen’s
Commissioner
. In
Whitfield’s
opinion the monies paid
to the Skipper of the fishing vessel according to
VAT
invoices
are not subject to
Workmen’s Compensation levies
and
thus would reduce
Umgamanzi’s
liability to the Workmen’s
Commissioner by a significant amount.
[11]
Mr Smith,
an accountant
for the applicant, opines that the fishermen are employees for the
purposes of both
Act 58 of 1962
and the
Workmen’s
Compensation Act, Act 30 of 1941
which has since been repealed by
Compensation for Occupational Injuries and Diseases Act
130
of 1993.
However,
Smith
concedes that the skipper through
applicant’s registered
Close Co-Operation
(CC)
which was a
VAT
vendor, billing
Umgamanzi
could reduce
the
Workmen’s Compensation
levies
. The enquiries
made by the applicant as to whether the skipper’s registered
CC
is an employment entity in terms of the
Fourth Schedule and
Section 23 C of Act 58 of 1962
bore no fruit. The applicant
submits that what can be deduced therefore is that liability in
respect of
VAT
and
Workmen’s Compensation Commission
is still going to be computed.
Analysis
:
[12]
Rule 45A of the Uniform Rules
of Court
provides as follows:
“
The
court may suspend the execution of any order for such period as it
may deem fit.
[13] In
Erasmus
v Sentraalwes Ko
ő
perasie
Beperk
1
,
Wright
J
held
that in particular circumstances, the court could, in the
determination of the factors to be taken into account in the exercise
of its discretion under
Rule
45(A) of the Uniform Rules of Court,
borrow
from the requirements for the granting of an interim interdict. The
court went further and referred to the case of
L
F Boschoff Investments (Pty) Ltd v Cape Town Municipality; Cape Town
Municipality v L F Boshoff Investments (Pty) Ltd
2
which states that
the applicant must show:
“
(a)
that the right which is the subject-matter of the main action and
which he seeks to protect by means of interim relief is clear
or, if
not clear, is
prima
facie
established,
though open to some doubt;
(b) that, if the right is
only
prima facie
established, there is a well-grounded
apprehension of irreparable harm to the applicant if the interim
relief is not granted and
he ultimately succeeds in establishing his
right;
(c) that the balance of
convenience favours the granting of interim relief, and
(d) that the applicant
has no other satisfactory remedy.”
[14] It is common cause between the
parties that the
Deed of Settlement
which was made an order of
court constitutes a contract between the applicant and the
respondent. Therefore there are rights and
obligations flowing from
it. It is undoubtedly so that the applicant has a right of recourse
in contract against the respondent
in the event that he suffers
damages as a result of a breach of the contract by the respondent.
That much, is admitted by the applicant.
The applicant therefore, has
an alternative remedy available to him.
[15] Primarily, the applicant withheld
the money on the basis that there are potential claims for
VAT,
SARS and Workmen’s Compensation levies
. The evidence of the
applicant and both accountants reveal
Umgamanzi’s
liability
in respect of these items could not be determined on the information
received and that is why there has to be further
investigations. The
amount withheld is therefore arbitrary. The applicant withholds the
money in order to secure a claim which
cannot be determined at this
stage. The respondent on the other hand needs the money to purchase a
home in Johannesburg for her
and their minor daughter. It would
therefore be convenient to release the money to the respondent rather
than withhold it.
[16] The applicant argues that the
issues of convenience and prejudice favour him because the effect of
the non-disclosure by the
respondent does not only sound in money but
relate to a breach of statutory precepts and places the acquisition
of long term fishing
rights and the value of
Umgamanzi
in
serious jeopardy as alluded to. It seems to me that, that would
constitute a valid reason for the applicant to sue the respondent
for
breach of contract and damages, more especially that the withheld
amount cannot be said to represent the damages the applicant
would
have suffered for taking over a vessel which has no value.
[17] If the amount is released to the
respondent, the applicant shall not suffer any prejudice or
irreparable harm because the applicant
can still recover the money
from the respondent in an action in due course especially that the
respondent owns an immovable property
within the jurisdiction of this
court.
[18] The general
principles for the granting of a stay in execution where summarised
as follows in
Gois
t/a Shakespeare’s Pub v Van Zyl & Others
3
;
“
(a)
A court will grant a stay of execution where real and substantial
justice requires it or where injustice would otherwise result.
(b) The court will be
guided by considering the factors usually applicable to interim
interdicts, except where the applicant is
not asserting a right, but
attempting to avert injustice.
(c) The court must be
satisfied that:
The applicant has a
well-grounded apprehension that the execution is taking place at the
instance of the respondent(s); and
Irreparable harm will
result if execution is not stayed and the applicant ultimately
succeeds in establishing a clear right.
(d) Irreparable harm will
invariably result if there is a possibility that the underlying
causa
may ultimately be removed, ie where the underlying
causa
is
the subject-matter of an ongoing dispute between the parties.
(e) The court is not
concerned with the merits of the underlying dispute – the sole
enquiry is simply whether the
causa
is in dispute.”
[19] The applicant shall not suffer
any injustice if the amount is released to the respondent. As stated
above, the applicant can
still recover whatever loss he may suffer.
In the instant matter the applicant is not attacking the
causa
for
the order granted, like for example seeking the rescission of the
judgment or order. In other words, the
causa
is not disputed.
I am of the view that the applicant
has failed to make a case for the order sought.
Consequently, I make the following
order:
(a) The application is dismissed
with costs.
_______________________
M MAKAULA
JUDGE OF THE HIGH COURT
Applicant’s Counsel: Adv B C
Dyke
Applicant’s Attorneys: Jozel L
Obbes
Suite 203-207, A A House
4 Rink Street
PORT ELIZABETH
Respondent’s Counsel: Adv Nepgen
Respondent’s Attorneys: De
Villiers Attorneys
62 Erasmus Drive
Summerstrand
PORT ELIZABETH
1
1997
(4) ALL SA 303
(D) at 307; See also: Erasmus B1-330A
2
1969
(2) SA 256
(K) at 267
3
2011
(1) SA 148
(LC) at 155H-156B