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[2017] ZAECPEHC 18
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Edu-U-College (Port Elizabeth) v Transnet Limited and Another (135/2013, 212/2013, 62/2014, 1729/2011, 4397/2015) [2017] ZAECPEHC 18 (23 February 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE LOCAL DIVISION, PORT ELIZABETH)
Case
Nos: 135/2013
212/2013
62/2014
1729/2011
4397/2015
In
the matter between:
EDU-U-COLLEGE
(PORT
ELIZABETH)
Applicant
(Registration
No: 1995/011813/08)
and
TRANSNET
LIMITED
First
Respondent
[Registration
No: 1990/00090/06]
THE
SHERIFF OF THE HIGH COURT,
PORT
ELIZABETH
Second
Respondent
JUDGMENT
MBENENGE
J:
[1]
At all times relevant hereto, the applicant occupied two buildings
colloquially referred to as Payne’s Building
and the Harbour
Building located in Flemming Street, Central, Port Elizabeth, in
terms of lease agreements the applicant had concluded
with the first
respondent. The applicant conducted the business of a learning
institution to learners in the middle to lower
income groups from
these premises.
[2]
In the course of time, the first respondent fell into arrears in its
payment of rentals. Litigation relating primarily
to the
applicant’s indebtedness to the first respondent for arrear
rentals ensued.
[3]
The various proceedings launched by the first respondent against the
applicant resulted in the first respondent eventually
obtaining cost
orders against the applicant. The details of these orders are
embodied in the grid set out hereunder.
Case
Number
Amount
135
& 212/2013
R354
523.15
62/2014
R182
00.67
729/2011
R15
733.78
4397/2015
R9
606.13
Total
R561
863.73
[4]
The various cost orders were taxed by agreement during September
2015.
[5]
Initially, the applicant and the first respondent entered into a
settlement agreement providing,
inter alia,
for the payment of
arrear rentals and the eviction of the applicant from Payne’s
and the Harbour Buildings.
[6]
It also came to pass that the parties eventually concluded a
settlement agreement providing,
inter alia
, for the
determination of the applicant’s indebtedness to the first
respondent pursuant to the lease agreements.
[7]
In so far for as relevant hereto, the settlement agreement referred
to in paragraph [6] above provides:
“
3.
The parties respective auditors will endeavour to determine the
amount owed by the Respondent
to the Applicant, if anything, in
respect of the lease of Payne’s Building and the Harbour within
fifteen working days of
the Respondent’s auditors being
provided with all the necessary documentation requested by them.
4.
In the event of the party’s respective auditors being unable to
reach agreement
within ten working days as to the amount owing, if
anything, the parties agree that the Chairman of the Port Elizabeth
District
Region of the South African Institute of Chartered
Accountants shall within five days appoint an independent auditor to
determine
the said amount, whose decision will be final and binding
on the parties.
5.
In respect of the eviction application the Respondent hereby
undertakes to vacate
Payne’s Building and the Harbour Building
by no later than 31 July 2013.
7.
The Respondent will be liable to pay monthly rental in respective of
the Payne’s
Building and R33 000 00 in respect of the Harbour
Building until such time as it vacates both buildings.
9.
If any amount is found to be due by the Respondent to the Applicant
and/or Portnet
Ltd it will be settled in full by 31 December 2013.”
[8]
An arbitrator has been appointed, pursuant to the settlement
agreement, to determine the extent of the applicant’s
indebtedness to the first respondent. This court has pronounced
that the arbitrator must determine the indebtedness of the
applicant
in respect of outstanding rental payments for Payne’s Building
from 1 September 2011 until the date that building
was vacated, and
the indebtedness of the applicant towards the first respondent in
respect of the Harbour Building from the date
of commencement of the
relevant rental agreement until the date on which the first
respondent vacated the Harbour Building.
[1]
[9]
The applicant believes that the audit exercise to be undertaken by
the arbitrator might reveal that the applicant is not
indebted to the
first respondent, by reason thereof that the first respondent failed
to allocate certain payments made by the applicant
and incorrectly
charged value added tax on municipal rates in respect of the subject
buildings.
[10]
On the one hand, the first respondent is bent on executing the cost
orders referred to in paragraph [3] above, whilst
the applicant, on
the other, entertains the belief that the applications that generated
the cost orders might end up being proven
(during the arbitration
process) to have been vexatious from inception.
[11]
The order being sought by the applicant is one staying the warrants
of execution issued in respect of the cost orders,
pending the
finalisation of the arbitration proceedings.
[12]
The application seems to have been triggered,
inter alia
, by
the view held by the applicant that the first respondent has elected
to execute the warrants of execution in question in an
attempt to
cripple the applicant financially so as to avoid the inevitable
outcome of the arbitration in terms of which the first
respondent
will be proven to be indebted to the applicant in an amount exceeding
R1 600 000.00.
[13]
As a further bow to its arrow, the applicant alleges that the first
respondent has delayed the execution of the orders
for more than 10
months, which serves to illustrate that the first respondent has not
deemed it necessary to protect itself from
possible prejudice which
might be posed by the delayed execution of the relevant warrants.
[14]
The first respondent contends that there exists no ground in respect
of which any possible future claim by the applicant
can be set off
against the taxed costs; there is no liquidated debt, fully due to
the applicant; the money value of the alleged
debt has not been
ascertained and is not capable of prompt ascertainment; the
proceedings that have been referred to arbitration
do not constitute
any counter-claim against any action by the first respondent.
[15]
The first respondent’s contentions, persisted in by
Mr
Rautenbach
at the hearing of this matter, deserve of being
considered closely.
[16]
The applicant is, in essence, raising set-off against the first
respondent. The fact that a claim for costs has been
extinguished by
set-off is a ground for staying execution in respect of those
costs.
[2]
The debt upon which
set-off is based must, however, be liquidated. About this Innes CJ
(as he then was) once said:
[3]
“
The
law requires that a debt which is desired to oppose by way of set-off
must be of a liquidated nature. It need not be liquid
in the
sense in which that word is now used in our practice. According
to Vinnius (
Select
Juris Quaest,
1 c. 50), if not admitted by the other side it must be capable of
easy and speedy proof. Pothier (
Obligations
,
3, c 4 sec 2), says a debt is liquidated when it is evident that it
is due, and to what amount –
cum
certum est an quantum debeatur
;
he adds that a disputed debt cannot be opposed in compensation unless
the person who opposes it has proof at hand, and is in a
position to
justify his claim promptly and summarily. (See also:
Code
4, 31, 14, par 1:
Burton’s
Ins Law
p 69,
Burge
vol 3, p 807;
Kruger
v Van Vuuren’s Executor
5 SC 162).
”
[17]
The claim of the applicant does not constitute a liquidated claim; it
is an unliquidated claim to be determined by the
arbitrator in
future.
[18]
It remains to consider whether it is possible for me to exercise my
discretion in favour of staying the execution of
the relevant
warrants on other bases.
[19]
Rule 45A of the Rules of Superior Court Practise (the Rules) gives
the court a discretion to suspend the execution of
any order for such
period as it may deem fit. The court has always exercised its
inherent power to suspend the execution of its
orders in appropriate
circumstances. It is a discretion that must be exercised judicially
but which is not otherwise limited. Apart
from instances that
are governed by statute,
[4]
the
numerous grounds upon which execution has been stayed include the
following:
(a)
pending payment of the amount of the judgment in instalments;
(b)
pending an action by the husband for divorce on the grounds of the
wife’s adultery;
(c)
pending legislation;
(d)
pending interpleader proceedings; and
(e)
where ejectment had been ordered.
[20]
Whilst the courts have previously been loath to grant a stay of
execution to merely avoid injustice and inequity,
[5]
the courts have now become benevolent, and the general rule is to
grant a stay of execution where real and substantial justice
requires
such a stay or, put differently, where injustice will otherwise be
done.
[6]
[21]
What the applicant is seeking is an order staying execution with a
view to enabling the applicant to await the result
of the arbitrator
in the hope that he will decide in the applicant’s favour and
find that the applicant does not owe the
first respondent any money.
The applicant says that if there is no stay it will suffer
irreparable prejudice and harm. Much as
there is no certainty that
the arbitrator will decide in the applicant’s favour and the
alleged prejudice and irreparable
harm may be said to be speculative,
the court is not at this stage concerned with the merits of the
underlying dispute-the sole
enquiry is simply whether the
causa
is in dispute.
[7]
[22]
I find that an injustice would be done were I not to grant the relief
sought. All impediments to the final disposal of the
arbitration
proceedings relevant to this matter have been removed. It remains for
the arbitrator to reconvene the proceedings and
bring same to a
logical conclusion.
[23]
The applicant sought a costs order against the first respondent in
the event of the latter opposing the application. With the
applicant
having attained substantial victory, nothing militates against an
order being granted directing the first respondent
to pay the costs
occasioned by the opposition of this application. The engagement of
two counsel by the applicant was not warranted.
[24]
In all these circumstances, I grant the following order:
1.
The
execution of cost orders in case numbers 135/2013; 212/2013;
62/2014;729/2011 and 4397/2015 is stayed pending the finalisation
of
the arbitration proceedings involving the applicant and the first
respondent instituted pursuant to the order of this court
under case
number 135/2013 granted on 28 March 2013.
2.
The
first respondent shall pay the costs occasioned by the opposition to
this application
_____________________
S
M MBENENGE
JUDGE
OF THE HIGH COURT
Counsel
for the Applicant
:
B C
Dyke SC ( with him
,
A C Barnett)
Instructed
by
: Listen
Brewis & CO
35
Albany Road
Central
PORT
ELIZABETH
Counsel
for the First Respondent :
J G Rautenbach SC
Instructed
by
: Siya
Cokile Inc. Attorneys
16
Clyde Street
Central
PORT
ELIZABETH
Date
heard
: 9
February 2017
Judgement
delivered
:
23
February 2017
[1]
Transnet
Ltd vs Ed-u-College (Port Elizabeth) & Another
(unreported) decision of the ECLD, Port Elizabeth by Mbenenge J,
delivered on 21 February 2017, under case no 3618/2016
[2]
Whelan
v Oosthuizen
1937
TPD 304
[3]
Treasurer
General v Van Vuuren
1905
TS 582
at 589
[4]
Section
5(1)
of the
Insolvency Act 24 of 1936
;
section 30
of the
Administration of Estates Act 66 of 1965
and
Rule 49
(11) of the
Rules
[5]
See
for example
Fisheries
Development Corporation of South Africa LTD v Jorgensen and Another:
Fisheries Development Corporation of South Africa
LTD v AW3
Investments (PTY) LTD and Others
(1979 (3) SA 1331
(W), where Nicholas J held:
“
Mr
Morris
submitted in the alternative that it was not necessary for the
defendants, in order to obtain a stay of the plaintiff’s
action, to show that it was vexatious or an abuse of the process of
the Court, but that a stay could be granted by the Court
in the
exercise of its inherent discretion to avoid injustice and inequity.
The Courts do not however act on abstract ideas of
justice and
equity. They must act on principle. CF the
Western
Assurance
Co case supra at275. And see the remarks of Innes CJ in
Kent
v Transvaalsche Bank
1907 TS 765
at 773-774:
‘
(The
appellant) also asked us to stay the proceedings on equitable
grounds, urging that we had an equitable jurisdiction under
the
insolvency law. The Court has again and again had occasion to point
out that it does not administer a system of equity, as
distinct from
a system of law. Using the word ‘equity’ in its broad
sense, we are always desirous to administer equity;
but we can only
do so in accordance with the principles of the Roman-Dutch law. If
we cannot do so in accordance with those principles,
we cannot do so
at all.’ ”
[6]
Soja
(Pty) Ltd v Tucker and Development Corporation (Pty) Ltd
1981
(2) SA 407
(W) at 411E-F;
Strime
v Strime
1983 (4) SA 850
(C) at 852 B
;
Bestbier v Jackson
1986 (3) SA 482
(W);
Santam
Ltd v Norman
1996
(3) SA 502
(C) at 505 E-F 2001(1) SA 292 (C) at 300 B;
Standard
Bank of South Africa Ltd v Malefane
:
In
re
Malefane
v Standard Bank of South Africa Ltd
2007 (4) SA 461(Tk)
at466 A-D
[7]
Gois
t/a Shakespear’s Pub v Van Zyl
2011 (1) SA 148
(LC) at 155H-156B