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[2020] ZAECPEHC 48
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Hantle Infra Planning (Pty) Ltd v Retro Reflective (Pty) Ltd (in liquidition) & others (1354/2020) [2020] ZAECPEHC 48 (10 December 2020)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE LOCAL
DIVISION, PORT ELIZABETH)
CASE
NO: 1354/2020
In the
ex parte
in
camera application of:
HANTLE
INFRA PLANNING (PTY) LTD
Applicant
In re:
HANTLE
INFRA PLANNING (PTY) LTD
Applicant
and
RETRO
REFLECTIVE (PTY) LTD (IN LIQUIDATION &
First
Respondent
ANDRE
SWANEPOEL (SENIOR) NO
Second
Respondent
HENDRIK JACOBUS
JOHANNES LAMBRECHT NO
I’ANDRE
SWANEPOEL (JUNIOR) NO
In their capacities as
the Trustees for the time being
of the I’ANDRE
SWANEPOEL FAMILY TRUST
LAMPRECHT
& MEYER ACCOUNTANTS
Third
Respondent
CAREL
FREDERICK BENJAMIN DU PREEZ (JUNIOR)
Fourth
Respondent
I’ANDRE
SWANEPOEL (JUNIOR)
Fifth
Respondent
PLAN
B WIRELESS (PTY) LTD
Sixth
Respondent
TOOL
X WHOLESALERS CC
Seventh
Respondent
DIVINO
RESTAURANT AND CATERING (PTY) LTD
Eighth
Respondent
RADIO
OOS-KAAP (PTY) LTD
Ninth
Respondent
BURMEISTER
DE LANGE SONI ATTORNEYS INC
Tenth
Respondent
CAREL
FREDERICK BENJAMIN DU PREEZ (SENIOR)
Eleventh Respondent
BRADLEY
& VAN DER MERWE t/a BVDM CHARTERED
Twelfth
Respondent
AND PROFESSIONAL
ACCOUNTANTS
ANDRE
SWANEPOEL (SENIOR) NO
Thirteenth
Respondent
HENDRIK JACOBUS
JOHANNES LAMBRECHT NO
INGRID GERTRUIDA
CHRISTINA SWANEPOEL NO
In their capacities as
the Trustees for the time being
of the I’ANDRE
TRUST
ANDRE
CHARL VAN HEERDEN
Fourteenth
Respondent
SUNE
SMIT
Fifteenth
Respondent
ANDRE
SWANEPOEL (SENIOR)
Sixteenth
Respondent
HENDRIK
JACOBUS JOHANNES LAMBRECHT
Seventeenth Respondent
INGRID
GERTRUIDA CHRISTINA SWANEPOEL
Eighteenth
Respondent
PHUMLA
CYNTHIA MKHONTWANA
Nineteenth
Respondent
SWANS
HARDWARE CC
Twentieth
Respondent
JUDGMENT
D VAN ZYL DJP:
Introduction
[1] The applicant sought
and obtained what is commonly known as an Anton Piller order (the
order). As is ordinarily the case, the
application for the order was
without notice and was heard in camera. The order authorised the
deputy sheriff for a number of districts
to search the premises,
vehicles, computers and other electronic devices of the respondents
for certain documents and items as
reflected in the schedule to the
notice of motion.
[2] The second, fourth,
fifth, sixth, seventh, eighth, ninth, tenth, eleventh, thirteenth,
sixteenth, eighteenth, nineteenth and
twentieth respondents (the
respondents) filed opposing affidavits, and upon notice to the
applicant enrolled the matter for hearing
in terms of Uniform Court
Rule 6(12)(c). It provides that a person against whom an order was
granted in his absence, may by notice
set the matter down for a
reconsideration of the order. The respondents ask that the order be
set aside, the documentation seized
pursuant to the order be returned
to them, and that a punitive costs order be made against the
applicant.
[3] The Applicant founded
its application for the order on the allegation that it intends to
institute several actions based on
various causes of action arising
from the alleged unlawful conduct of the fourth, fifth and nineteenth
respondents in their capacities
as directors of the first respondent;
that the respondents have in their possession specified documents
which provides vital evidence
to its claims; that there exists a real
and well founded apprehension that the evidence may be hidden or
destroyed in some or other
manner; and that the applicant has no
other effective remedy available to it.
[4] In a civil case, the
authority of the court to deal with evidentiary material ordinarily
only arises after proceedings have
been instituted. It is limited to
the regulation of a process of discovery governed by the Rules of
Court. In the case of documentary
evidence, Uniform Court Rule 36
inter alia
provides for what is essentially a cooperative
process of disclosing documents relevant to the proceedings by the
filing of a discovery
affidavit. It is complimented by a procedure to
compel the discovery of specified documents in the possession of the
opposing party.
[5] A civil court does
not have the jurisdiction, inherent or otherwise, to facilitate an
investigation aimed at formulating a civil
action by authorising the
search of a premises and anything found thereon. That is a
public power exercised in terms of empowering
legislation which is
reserved for the prosecution of criminal proceedings based on, at the
lower end, the existence of a reasonable
suspicion that evidence of
an incriminating nature may be found in or on a property occupied by
someone.
[6]
The jurisdiction of a civil court to deal with documentary evidence
before proceedings is confined to a situation where there
is a
significant concern that if the opposing party has knowledge of the
impending claim, crucial documents may be altered, concealed
or
destroyed. In such circumstances, the court may preserve the evidence
by granting an order that allows the plaintiff, through
court
appointed officers, to enter a premises to search for and remove
documents or other items related to the plaintiffs’
claim. The
order is known as an Anton Piller order. Its name is derived from the
1976 decision of the English court of appeal in
Anton
Piller KG v Manufacturing Ltd,
[1]
a case that dealt with copyright infringement and the breach of
secret information. The foundation of the order is the inherent
jurisdiction of the court to regulate its own process in the
interests of justice, and to prevent a defendant from frustrating
the
administration of justice by destroying or disposing of evidence
relating to the subject matter of the litigation.
[2]
“
The
proposed order is at the extremity of this court’s powers. Such
orders therefore, will rarely be made and only when there
is no
alternative way of ensuring that justice is done to the
applicant…”
[3]
and
“
The
overriding consideration in the exercise of this salutary
jurisdiction is that it is to be resorted to only in circumstances
where the normal processes of the law would be rendered nugatory if
some immediate and effective measure is not available”.
[4]
[7]
The procedure has since become part of our law and is now well
established.
[5]
There are two
types of preservation orders. “
The
one has to do with an attachment where the applicant seeks the
preservation of documentary evidence in which it has no proprietary
interest (Universal City Studios (supra at 755 A-D)). The other
has to do with an attachment where the applicant seeks to
assert a
real or personal right in what is being attached (Cerebos Food
Corporation Ltd v Diverse Foods SA (Pty) Ltd and Another
1984 (4) SA
149
(T) at 150 G-H.
)
[6]
The present matter falls in the first category”.
[8]
The Anton Piller order (preservation order) is considered to be an
extraordinary order. It is extraordinary because (a) it is
an
ex
parte
order made in camera that sanctions the search of a premises and the
seizure of evidentiary material relevant to civil proceedings
before
those proceedings have commenced; and (b) by its very nature the
order provides for a court sanctioned inroad into the right
of
privacy of another, a right that is guaranteed by the Bill of
Rights.
[7]
“
The
making of an order which affects the intended defendant’s
rights, in secret, in haste, and without the intended defendant
having had any opportunity of being heard is grossly undesirable and
contrary to fundamental principles of justice. It can lead
to serious
abuses and oppressive orders which may prejudice an intended
defendant in various ways, including ways that may not
be
foreseeable.”
[8]
The negative effect which
the order has on the reputation of a respondent in an application for
a preservation order must not be
underestimated. The reason is that a
finding that there exists a reasonable apprehension that the
respondent may destroy evidence,
carries with it an inference of
dishonesty.
[9] As
a result of its extraordinary nature, the order has a number of
features which are essentially aimed at restricting the breadth
of
its application and ensuring proportionality in relation to the
interest being protected.
[9]
Some of those features, relevant in the context of this matter are as
follows: (a) As the order is granted without prior
notice to
the respondent, it places an obligation on the applicant for the
order to make a full and frank disclosure of all the
relevant and
material facts.
[10]
It
requires the utmost good faith and the failure to make a full and
fair disclosure may be penalised by the setting aside of the
order on
that ground alone, with an adverse costs order to follow.
[11]
‘
The
utmost good faith must be observed by litigants making ex parte
applications in placing material facts before the court; so
much so
that if an order has been made upon an ex parte application and it
appears that material facts have been kept back, whether
wilfully and
mala fide or negligently, which might have influenced the decision of
the court whether to make an order or not, the
court has a discretion
to set the order aside with costs on the ground of non-disclosure. It
should, however, be noticed that the
court has a discretion and is
not compelled, even if the non-disclosure was material, to dismiss
the application or to set aside
the proceedings”.
[12]
Whether the undisclosed
facts are of sufficient materiality as to justify a discharge of the
order without considering the merits
of the application, depends on
the importance of the facts to the issues which are to be decided.
[10]
The applicant is therefore required to disclose every fact which is
material to the granting of the order, favourable or unfavourable.
What is material to the application is ultimately for the court to
decide and is not determined by the assessment and categorisation
of
the facts as such by the applicant or his legal advisers. The duty of
disclosure may consequently require the applicant to err
on the side
of caution by saying more rather than less in the papers filed in
support of the application. Information that might
influence the
decision of the court to grant the order must not be hidden away in
annexures. It must be disclosed in a manner that
the attention of the
court is directed thereat. The judge who hears an
ex
parte
application, particularly if urgent and voluminous, is rarely able to
study the papers at length, and cannot be expected to trawl
through
annexures in order to find material favouring the absent party. The
seriousness of the responsibilities of legal practitioners
in
obtaining a preservation order must not be taken lightly,
[13]
and it will require the exercise of diligence in the preparation of
the application for a preservation order.
[11]
(b) Another feature of the order that similarly arises from the
manner in which it is granted, is that, irrespective of its
mandatory
nature and the finality of the form it may take, it is, not unlike
any other order that is granted
ex
parte
,
considered to be an interlocutory order. It is consequently subject
to reconsideration and variation once the respondent has had
an
opportunity to respond to the application.
[14]
(c) Further, the
ex
parte
attachment
of, and the removal of the documents and the like must be the only
practicable means of protecting the applicant’s
rights. If the
applicant can preserve and obtain the evidence in some other less
intrusive way, the order must not be granted.
[15]
[12]
(d) Of paramount importance is that the order must be formulated with
sufficient particularity so as to avoid it from being
overly wide in
its reach, and it must incorporate safeguards against abuse in the
execution of the order.
[16]
(e) The invasive nature of the order and the circumstances in which
it is made further requires strict compliance with the requirements
for the granting of the order. A preservation order which is granted
outside of, or which goes beyond what is permitted in law,
is
considered to have been granted without authority and is invalid and
must be set aside.
[17]
It is
the duty of the applicant to ensure that the order applied for does
not go beyond what is permitted.
[13]
There are three essential substantive requirements that must be
satisfied for the granting of a preservation order. They were
summarised as follows by Corbett JA in Universal City Studios Inc.
and Others v Network Video (Pty) Ltd:
[18]
‘
In
a case where the applicant can establish prima facie that he has a
cause of action against the respondent which he intends to
pursue,
that the respondent has in his possession specific documents or
things which constitute vital evidence in substantiation
of the
applicant’s cause of action (but in respect of which the
applicant can claim no real or personal right), that there
is a real
and well-founded apprehension that this evidence may be hidden or
destroyed or in some manner spirited away by the time
the case comes
to trial, or at any rate to the stage of discovery, and the applicant
asks the court to make an order designed to
preserve the evidence in
some way . . .’
[19]
[14] The respondents’
opposition to the application can be summarised as follows:
(a)
The order is invalid by reason of the applicant having failed to
comply with the fundamental requirements
applicable to the
applications for a preservation order.
(b)
The applicant failed to make a full disclosure of all the material
facts in particular that the
fourth and fifth respondents in earlier
proceedings raised valid defences to the
applicant’s action
founded on the same cause of action in which
it relies upon in the present proceedings.
(c)
The applicant failed to ensure that the order applied for did not
exceed what is permitted, by
knowingly appointing its own forensic
auditors, consultants and attorneys as members of search parties to
conduct searches at various
premises.
(d)
The order was executed in a manner that exceeded the bounds of what
is permitted in the execution
of a preservation order.
The matter can be decided
solely with reference to the issues raised in (a) and (b).The
respondents’ opposition is primarily
based on the submission
that the order should not have been granted in the first place. It is
as a result not necessary to resolve
any of the factual disputes
raised in the affidavits in relation to the manner in which the
ex
parte
order was executed.
The existence of a
prima facie
cause of action
[15]
The requirement for establishing a
prima
facie
cause of action is satisfied if the applicant can show that there is
evidence which, if accepted at the trial, will establish a
cause of
action.
[20]
It is
consistent with the usual test for the existence of a
prima
facie
case in civil proceedings. It is satisfied when a party adduces
evidence of a fact which, if unchallenged by his opponent, becomes
conclusive proof of that fact.
[21]
The evidence must therefore at the very least be capable of becoming
conclusive proof of a fact if accepted to be true, “
…
the
court must pay regard to inter alia the cogency of the prima facie
case established…”
[22]
Further, as the first requirement requires the applicant to plead a
substantive cause of action, the evidence must be sufficient
to
establish each of the different elements that comprises the cause of
action on which the applicant relies. This is consistent
with the
fact that the applicant must have an accrued cause of action. A cause
of action means the combination of facts that are
material for a
plaintiff in order to succeed with his action. Those facts must
enable a court to arrive at certain legal conclusions
regarding the
constituent elements of the action which the plaintiff has elected to
pursue.
[23]
A cause of action
has accrued when the entire set of facts which the plaintiff must
prove in order to succeed with his action are
in place
[24]
.
[16] The evidential
criterion in respect of the cause of action remains that of
prima
facie
proof when the court is asked to reconsider the granting of
the order.
“
The
requirement of a prima facie cause of action, in the sense of an
applicant showing “no more than that there is evidence,
which,
if accepted, will establish a cause action” (per Botha JA in
Cargo Laden and Lately Laden on Board the MV Thalassini
Avgi v MV
Dimitris
1989 (3) SA 820
(A) at 831 H-I) needs no adaptation at the
reconsideration stage. This requirement relates to an issue
which would have to
be adjudicated upon in the forum hearing the main
action to which these proceedings are merely a precursor (compare the
Thalassini
case, above, at 832C, and similar reasoning in the Bocimar
NV case, above, at 581 A-B). There is no need to prejudice that
finding further at this stage.’
[25]
This
was confirmed by the Supreme Court of Appeal in Non-Detonating
Solutions v Durie
[26]
where it was said that:
“
All
the issues in dispute by the parties will properly be adjudicated in
the action that is still pending. Although I am constrained
not
to enter into the merits of the case at this stage and to attempt to
adjudicate on credibility, probabilities or the prospects
of success
,
I can nonetheless state unequivocally that, on the facts and the
evidence as adduced on the papers, I am satisfied that the court
a
quo was correct in finding that the appellant had established a prima
facie cause of action against the respondents.”
[27]
(emphasis
added)
[17]
These statements are correct. The reason lies in the nature of the
order itself. It is granted
pendente
lite
.
It is procedural relief with the purpose of preserving evidence for
use at a subsequent trial, and ultimately securing substantive
relief. It remains an interlocutory order throughout regardless of
whether it is being considered at the
ex
parte
stage, or at the reconsideration stage.
[28]
The test for the order must consequently remain the same. Further, in
the present matter the respondents seek a reconsideration
of the
order as envisaged in Rule 6(12)(c). When subrule (12)(c) is
utilised, the original order is reconsidered on what was placed
before the court at the
ex
parte
stage, but with the added benefit of the respondents’ competing
submissions and allegations on the affidavits. The purpose
of the
subrule is to afford an aggrieved respondent a mechanism designed to
redress the imbalances in, and the injustices and oppression
flowing
from, an order granted as a matter of urgency in his or her absence,
and without an opportunity to make submissions with
regard to the
granting thereof.
[29]
In the
present context, the court will determine whether, after considering
the respondents’ competing allegations and submissions,
the
applicant has established a
prima
facie
cause
of action. The applicant may not in reply seek to supplement its
founding affidavit with additional matter in an attempt to
justify
the grant of the
ex
parte
order.
[30]
What this means for
the applicant is that he is in no better position than what he was
when the order was first sought.
[31]
[18]
There is authority based on the decision in
Anton
Piller KG Manufacturing Processes and Others (supra)
that
the applicant for a preservation order must make out a “strong”
prima facie case.
[32]
Another
view is that the evidentiary burden is set no higher than
establishing a “clear case”.
[33]
As stated earlier, the test for the existence of a
prima
facie
cause
of action is satisfied if there is evidence, which if accepted, will
establish a cause of action that is good in law. In order
to achieve
this, it will require the applicant to produce evidence in
substantiation of the facts on which he relies for seeking
the
substantive relief claimed. The factual allegations and the evidence
must cover each of the elements or components of the identified
cause
of action. Whether or not those averments, and the evidence in
support thereof are sufficient to establish a
prima
facie
cause
of action, requires an assessment not only of the nature of the
cause of action relied upon and of the evidence adduced,
but also of
whether the evidence is such as would require a response from the
respondent.
[34]
[19] The applicant’s
cause of action must be finite, that is, he must come to court with
an accrued, identifiable and defined
cause of action, and be able to
demonstrate that the documents which he seeks could or would serve as
vital evidence to that cause
of action. The applicant cannot come to
court and say that, once he has the attached documents in question
and studied it, he will
be able to institute proceedings. The scope
of the order is very limited. It is to preserve evidence
pendent
lite.
The evidence sought to be preserved is fixed by the scope
of the intended action. The applicant must therefore state his cause
of
action. He cannot use the preservation order as a means to find
one and see what case he can make out. A preservation order is in
other words not a means of fishing for evidence. As stated earlier, a
civil court does not have the jurisdiction to authorise an
investigation aimed at formulating a civil action. A feature on an
adversarial system at the pre-trial stage is that it is the
primary
responsibility of the parties to define the issues in dispute, and to
investigate and gather the necessary evidence.
[20] In this matter, the
applicant has identified a number of causes of action in its founding
papers filed in support of the application.
It has further,
subsequent to the granting of the preservation order, issued
summonses against the fourth, fifth and nineteenth
respondents which
have been annexed to its replying affidavits. The identified causes
of action all have as their source a contract
of sale that was
entered into between the applicant and the first respondent in 2016.
In terms of that agreement, the applicant
and a company known as
Penny-Farthing Engineering (SA)(PTY) Ltd (Penny Farthing) sold to the
first respondent, represented by the
fourth respondent, a business
known as Philock Sign Industries for the purchase price of
R4 796 497.00, payable in 60
equal monthly instalments. The
agreement was subject to three suspensive conditions. The fourth and
fifth respondents bound themselves
as sureties and co- principle
debtors with the first respondent for the due and punctual payment by
the first respondent of all
its obligations under the agreement.
[21]
According to the applicant, all the suspensive conditions were
fulfilled timeously and it complied
with its obligations arising from
the agreement. The first respondent however failed to comply with its
obligations under the agreement
and only made three payments. In
January 2019, the applicant issued summons against the two sureties,
claiming the outstanding
balance of the purchase price. When the
fourth and fifth respondents failed to enter an appearance to defend,
the applicant obtained
a judgment by default. In response to the
issuing of warrants of execution, the fourth and fifth respondents
applied for rescission
of the judgment and for leave to defend the
action. The applicant subsequently agreed to the relief claimed and
the judgment was
rescinded. In March 2020 the applicant proceeded to
withdraw the action against the two respondents. It also
withdrew an
application for the sequestration of the estate of the
fourth respondent. It thereafter issued letters of demand to the two
sureties
demanding payment of the outstanding balance of the purchase
price, and gave notice of its intention to again institute legal
proceedings
against them based on the deed of suretyship, should they
fail to comply.
[22]
The fourth and fifth respondents were directors of the first
respondent at the time that the sale agreement
was concluded. In 2018
they both resigned from their positions, and the nineteenth
respondent, an employee of a firm of attorneys,
was appointed as a
director. Following this, the first respondent’s board of
directors resolved by way of a special resolution,
to place the first
respondent into voluntary liquidation. According to the applicant, it
has uncovered conduct by the fourth and
fifth respondents to divert
monies, due to the first respondent, to other legal entities in which
they have an interest. One such
entity is the sixth respondent, a
close corporation in which the fourth and fifth respondents held an
interest until the fifth
respondent became its sole member in 2018.
[23] The conduct
complained of consists of the issuing of credit notes in respect of
monies owed to the first respondent by its
debtors, and the issuing
thereafter of invoices in the name of the sixth respondent for the
payment of monies actually due to the
first respondent. Other
irregularities in respect of credit notes and invoices
inter alia
included the issuing of more than one credit note in respect of
the same amount; the same credit note numbers were used resulting
in
the reissuing of the same invoice in the name of the sixth
respondent; credit notes were not issued in sequence; one credit
note
number was used to effect a credit for different amounts, and the
bank account details on the invoices were those of an entity
other
than the first respondent.
[24] The unlawful conduct
of the fourth and fifth respondents is further alleged to
inter
alia
consist of the fourth respondent holding himself out to be a
director of the first respondent, post resignation, and by asking
debtors of the first respondent to pay monies due to it into a bank
account of the sixth respondent. The fourth respondent is further
alleged to have changed the bank account of the first respondent
shortly before it was placed in liquidation. Further, the fourth
respondent, holding himself out to be a director of the first
respondent, is alleged to have separated the businesses operated
by
the first respondent before it was placed in liquidation. The fourth
and fifth respondents are accused of having diverted assets
of the
first respondent to entities associated with them, or that they had
relinquished their interest in those entities, such
as in the second
and seventh respondents. They are further alleged to have continued
to run the business of the first respondent
after they had resigned
as directors, and that their resignation as directors was motivated
by the anticipated liquidation process
of the first respondent in
order to escape liability. It is further alleged that the appointment
of the nineteenth respondent was
simply a ruse to disguise the
unlawful conduct of the fourth and fifth respondents.
[25] The conclusion which
the applicant seeks to draw from the alleged conduct of the fourth
and fifth respondents, is that they
dissipated the assets and
resources of the first respondent; they diverted those assets to
other entities in which they personally
have an interest in, either
directly or indirectly; and that they intend to escape liability by
hiding the true value of their
respective estates in order to
frustrate the applicant in the recovery of its judgment debt in the
prospective proceedings based
on the suretyship agreement.
[26 ] Based on this
conduct, and in addition to its claim against the fourth and fifth
respondents for the balance of the purchase
price of the sale of the
business based on their liability arising from the suretyship
agreement, the applicant in its founding
papers expressed the
intention to institute proceedings against the fourth, fifth and
nineteenth respondents to “…
recover assets illegally
and/or unlawfully disposed of and to be returned to the estate of
Retro Reflective, as well as in terms
of the suretyship they have
signed; also, action will be instituted against any person or entity
where it is established that such
person or entity illegally and/or
unlawfully received such assets. Papers have been prepared in terms
of
s 381
of the
Companies Act, 2008
5
th
Schedule Item 9 in
terms of which an enquiry is sought into the conduct of the
Liquidators (fourteenth and fifteenth respondents)
and their failures
as more fully set out herein. A complaint of so called ‘Fronting
Activities’ in respect of Phumla,
[the nineteenth respondent]
is also being formulated. The applicant furthermore intends
instituting proceedings aimed at having
Phumla, Carel Junior [the
fourth respondent] and Swanepoel Junior [the fifth respondent]
declared delinquent directors and having
them declared personally
liable for the debts of Retro Reflective. In the event of the
applicant being successful in its actions
under the suretyship
obligations of Carel Junior and Swanepoel Junior and in the actions
to have them declared personally liable
for the debt to the
applicant, and said parties and associated entity not having the
means to satisfy such obligation, the applicant
intends instituting
liquidation and sequestration applications as the case may be to
recover what it can (Cause of action 6)”.
[27]
In summary the applicant’s claims are the following:
(a)
an action based on the terms of the suretyship agreement;
(b)
proceedings to compel the liquidator to institute legal actions for
the recovery and return of
assets belonging to the first respondent
that have been wrongfully disposed of;
(c)
to instigate an enquiry into the conduct of the liquidators appointed
to the insolvent estate
of the first respondent;
(d)
to institute action(s) against any person or entity that has/have
wrongfully received such assets;
(e)
proceedings to hold the respondents personally liable “
under
s 77
(3)(b) read with
section 22
of the
Companies Act”
(f
)
to institute proceedings to declare the fourth, fifth and nineteenth
respondents delinquent
directors;
(g)
to institute liquidation and sequestration proceedings; and
(h)
to formulate a complaint of fronting against the fourth, fifth and
nineteenth respondents.
[28] Save for its claim
based on the suretyship agreement, I am of the view that the
applicant has failed to formulate any of its
other claims with the
particularity required for establishing a
prima facie
cause of
action. I intend to briefly deal with each of the identified claims.
The respondents are correct in their submission that
on the papers
filed, an application to compel the liquidators to institute
proceedings for the recovery of assets belonging to
the first
respondent, is without any factual foundation and will be premature.
There is no evidence that the applicant has had
any meaningful
engagement with the liquidators in the liquidation process. The
applicant simply relies on the allegation that the
liquidators have
not uncovered the extent of the unlawful conduct of the relevant
respondents, and that they have not engaged with
the applicant as one
of the creditors in the insolvent estate.
[29]
There is no evidence that the liquidators have been made aware of the
unlawful conduct of the fourth, fifth and nineteenth
respondents
relied upon, and that they have failed to investigate it. On the
contrary, the liquidators have invited the creditors
in their report
to furnish them with any information, and to assist in the
investigation of the affairs of the first respondent.
There is no
evidence that the applicant responded to the invitation and that the
liquidators have failed or refused to act. There
is similarly no
factual statement, supported by evidence, to invoke section 381 of
the Companies Act
[35]
(the
1973 Act). This section provides for the Master to enquire into the
conduct of the liquidator. An enquiry as envisaged in
that section is
premised on the existence of “
a
reason to
believe
that a liquidator is not faithfully performing his duties and duly
observing all the requirements imposed on him by any
law or otherwise
with respect to his duties
”.
On a reading of the section, the required belief must, on an
objective approach, be based on reasonable grounds. No such
grounds
have been advanced.
[30]
The applicant’s reliance on the provisions of section 77(3)(b)
read with section 22 of the Companies Act
[36]
(the 2008 Act) is clearly incorrect. Section 22 prohibits reckless
trading of a company. This includes the carrying on of business
recklessly or with gross negligence, with the intent to defraud any
person, or for a fraudulent purpose.
[37]
Section 77(3)(b) in turn provides that a director of a company who
acquiesced in the carrying on of the company’s business
in that
way will be liable for any loss, damages or costs sustained by the
company as a result. These sections do not provide for
a director to
be held liable for the debts of the company or to restore any
property to it, which is what the applicant intends
to claim. The
relevant section that provides for that relief is section 424 of the
1973 Act. It is a provision in the old Act which
continues to apply
in relation to the winding up and liquidation of Companies.
[38]
[31] It is apparent that
the applicant has since realised that it incorrectly sought to invoke
the provisions of sections 77(3)(b)
and 22 of the 2008 Act in its
founding papers. As stated earlier, subsequent to the granting of the
preservation order, the applicant
proceeded to issue two summonses.
In the one action, which is against the fourth and fifth
respondent’s, its claim is founded
on the deed of suretyship.
In the other, against the fourth, fifth and nineteenth respondents,
the applicant seeks to rely on the
provisions of sections 423 and 424
of the 1973 Act. Section 423 provides that a court may on application
of
inter alia
a creditor of a company in liquidation, enquire
into the conduct of a past or present director of the company who has
been guilty
of any breach of faith or trust, and may order that
director to pay or restore the money or property of the company or
any part
thereof.
[32] Section 424 in turn
provides that when it appears in the winding up of a company that any
business of the company was carried
on recklessly or with the intent
to defraud creditors of the company, the court may, on application of
inter alia
a creditor, declare that any person who has
knowingly been a party to such conduct, personally responsible for
any of the debts
or other liabilities of the company as the court may
direct.
[33] It can safely be
accepted that the applicant has abandoned its reliance on sections 22
and 77(3)(b) of the 2008 Act for the
claim identified in its founding
papers. The difficulty facing the applicant is that it cannot
supplement its case in reply. The
nature of the present proceedings
simply does not allow that. In the absence of the applicant in
its founding papers having
pleaded the facts and the evidence
necessary to support a
prima facie
cause of action based on
sections 423 and 424 of the 1973 Act, it has failed to comply with
the first requirement for a preservation
order.
[34] The applicant has
similarly failed to establish a
prima facie
case for the
sequestration of the fourth and the fifth respondents. It is alleged
in the founding affidavit that the anticipated
proceedings are
conditional upon the applicant being successful in its action based
on the suretyship agreement; the said respondents
being declared
personally liable for the first respondent’s debts; and
ultimately not having the means to satisfy the debt.
This claim is
without any factual foundation. The applicant is doing nothing more
than speculating that the three respondents will
not be in a position
to pay the judgment debt once it comes into existence.
[35] The applicant’s
claim for a declaration of delinquency in respect of the fourth,
fifth and nineteenth respondents also
does not disclose a
prima
facie
cause of action. The reasons are twofold: First, as
creditor in the insolvent estate, the applicant lacks the necessary
locus standi.
Section 162(2) of the 2008 Act provides that a
“
company , a shareholder, director, company secretary or
prescribed officer of a company, a registered trade union that
represents
employees of the company or another representative of the
employees of a company may apply to court for an order declaring a
person
delinquent .”
Secondly, the applicant has failed to
identify and to state the grounds of delinquency in Section 162(5) on
which it intends to
base the application, as well as identifying the
evidence relied upon in support thereof.
[36] That leaves the
complaint of “fronting”. According to the applicant it is
in the process of formulating a complaint
of fronting. It is not
stated to whom the complaint will be directed to. More importantly
however, it is not being relied upon
as cause of action separate from
any of the other claims which the applicant has identified in its
founding affidavit. It does
not, and cannot in the manner that it is
formulated, serve in any way to enhance the applicant’s case
for a preservation
order.
[37] The applicant has
accordingly, on the papers, only established a
prima
facie
cause of action based on the deed of suretyship. That however, the
respondents argued, cannot assist the applicant in any
way towards
the granting of the relief claimed in the preservation order. The
reason is twofold: Firstly, the applicant does not
require any of the
documentation in the
ex parte order
to prove its claim arising
from the sale agreement and the deed of suretyship. Secondly, the
respondents contend that the applicant
failed to comply with its duty
to make a full and fair disclosure of all the material facts in
relation to this cause of action
when it launched the
ex parte
application. This complaint is directed at the failure of the
applicant to alert the court to the fact that, in the application to
rescind the earlier default judgment granted against them, the fourth
and fifth respondents raised a number of defences to the
applicant’s
claim founded on the deed of suretyship. The defences were raised in
the affidavits filed in support of the application
for rescission.
They are the following:
(a)
the applicant failed to show that the conditions precedent in the
sale agreement were all fulfilled
before the date agreed upon in the
sale agreement;
(b)
the parties to the sale agreement subsequently in an addendum agreed
to reduce the purchase price.
In a further agreement the applicant
agreed to set off certain amounts owing by the applicant to the first
respondent against the
outstanding balance of the purchase price. The
result was that the total amount of the purchase price was paid;
(c)
the applicant failed to give the first respondent the required
notice in terms of the agreement
to remedy it’s alleged
breach of the agreement before it proceeded to institute action on
the deed of suretyship; and
(d)
following his resignation as a director of the first respondent the
applicant and Penny Farthing
agreed to release the fifth respondent
from the suretyship. This agreement was confirmed by Penny Farthing’s
chief executive
officer in an affidavit filed in the rescission
application.
[38]
In reply, the applicant acknowledged that it failed to mention the
fact in its founding papers, that the fourth and fifth respondents
raised these defences in the rescission application. Its explanation
for this failure is that it did not want to over burden the
papers
filed in the application. The defences are
prima
facie
valid defences, and if upheld, will defeat the applicant’s
claim based on the deed of suretyship. The claim based on the
deed of
suretyship is pivotal to the rest of the applicant’s claims on
which the preservation order is founded.
[39]
It was clearly material to the proceedings and the decision of the
court at the
ex
parte
stage in relation to the requirement that the applicant has a
prima
facie
cause of action which it intends to pursue. The weight to be given to
the defences raised, by the sureties must be assessed against
the
fact that the applicant agreed to a rescission of the judgement. It
is, in the absence of any explanation,
prima
facie
indicative of an acknowledgement by the applicant, that the fourth
and fifth respondents have
bona
fide
defences
to its claim.
[39] The fact that the
two respondents raised the defences to the action, and its merits and
demerits, should have been disclosed
and dealt with by the applicant
in its founding papers. As stated earlier, it is not for the
applicant seeking a preservation order
to decide what it should or
should not disclose to the court at the
ex parte
stage. That
is a decision for the court. There was no reason for the applicant
not to incorporate a summary of the contents of the
affidavits in its
founding papers if its concern was that the affidavits itself would
add to the volume of the documents filed
in support of the
application. I accordingly conclude that the applicant has failed in
its duty to make a full and fair disclosure
to the court at the
ex
parte
stag
e
of the proceedings.
The respondents’
possession of documents that constitute vital evidence.
[40]
As stated, the purpose of a preservation order is to search for and
to preserve evidence for its use at the trial of the actions
which an
applicant to the proceedings intends to institute in due course. The
documents must be able to provide evidence in the
prosecution of an
applicant’s cause of action.
[40]
The applicant will be able to use a document at the trial if he is
entitled to the discovery thereof. The materiality of the documents
sought to be preserved must accordingly be assessed against the
applicant’s entitlement to seek, and be granted access to
the
document during the discovery process. A document must be discovered
if it is relevant.
[41]
It will
be relevant if it will provide proof of a fact which the applicant
will be required to prove at the trial, or if the document
is able to
provide an answer to a defence raised in the action. At the lower end
of the scale and broadly speaking, the document
sought must
accordingly enable the applicant to either advance its own case, or
to damage the case of his adversary. However, “
the
incriminatory value of such evidence must not be mere makeweight when
considered together with the applicant’s other available
evidence”.
[42]
The evidence is required to be vital evidence. Evidence will meet
this requirement if it is essential to the issues raised in the
action. It will require the applicant to demonstrate that irreparable
harm will accrue, or there is a high probability that the
irreparable
harm may accrue, unless the preservation order is granted.
[41] It is evident from
this that an applicant must be in a position to identify the document
he seeks to preserve with the required
specificity and to establish
prima facie
that it is relevant, by making the necessary
evidential link between the identified cause of action and the
evidence provided by
the document. The documents sought are in other
words fixed by the scope of the applicant’s cause of action.
The latter aspect
will require the applicant to explain the relevance
of a specific document if it is not immediately obvious from the
nature of
the document itself.
[42] The obvious
difficulty facing the applicant in this matter is that it is unable
to show the relevance of the documents it seeks
to preserve. The
reason is simply that save for its cause of action founded on the
deed of suretyship, it has not met the requirement
of establishing a
prima facie
cause of action for the claims it says it intends
to pursue. The requirements for a preservation order are
interrelated, and its
failure to clear the first hurdle means that
the applicant is not in a position to make the link between a
specific document and
the facts it is required to prove at the trial
in order to be successful in its action. Put another way, the
applicant is unable
to point to facts which he is required to prove
at trial, which in turn, evidences that he is entitled to the
documents he seeks
to preserve. It is not the applicant’s
case that any of the documents it seeks has any relevance to its
claim against
the two sureties. Instead, the documents sought clearly
relate to what the applicant suspects may be other dishonest
transactions
perpetrated by the relevant respondents.
[43]
The aforementioned suspicion is premised on what the applicant in
essence alleges to be a pattern of dishonest conduct by the
fourth,
fifth and nineteenth respondents that raises the probability that
there are other dishonest transactions of which the applicant
is not
aware of. By way of example, the deponent to the applicant’s
founding affidavit says that “
without
the remedy of and Anton Piller ordered
(sic)
prayed
for, the applicant will not be in a position to uncover these
transactions”
and
“
locate
the evidence that will establish the extent to which monies owing to
Retro Reflective were diverted
”.
In this lies the applicant’s further difficulty. It is, as a
result, not able to identify any document with any specificity
that
will provide evidence of a particular dishonest act. The applicant is
consequently obliged to seek the preservation of a wide
range of
documents. The documents described in the annexures to the
applicant’s notice of motion, as a result, consists mainly
of
categories of documents such as, “
All
management accounts
”;
financial statements for a number of years; “
All
financial information
”
in respect of all transactions for a certain period; bank statements
for a number of years; and “
All
communications of whatever nature
”
between the first respondent and a number of individuals. While the
search and seizure for a class or classes of documents
is permitted,
it must be defined with sufficient particularity.
[43]
In this matter there is no attempt to define and limit the reach of
the documents required, and of the communications between the
relevant persons.
[44]
The unavoidable conclusion flowing from this is that the applicant is
not in a position to show that the respondents are in
possession of
any specific documents which are vital and must be preserved. An
order that authorises a blanket search for unspecified
documents
which may or may not exist, is not permitted.
[44]
The premise on which the preservation order is granted is to preserve
evidence, not to search for it.
“
The
object of an Anton Piller order is not to sanction a search for
evidence which may or may not exist and which may or may not
go to
found a cause of action, but to preserve specific evidence which is
known to exist, which prima facie constitutes vital substantiation
of
a known cause of action, and whose concealment, loss or destruction
is feared by the applicant for the order.”
[45]
[45] By reason of the
wide range of unspecified documents which the applicant must
inevitably seek to have access to in order to
establish the extent of
any other dishonest transactions that may or may not exist, the
ex
parte
order was framed unduly wide and expansive. It effectively
required the applicant, in the execution of the order, to make an
assessment
whether or not a particular document will provide
evidence. That is not permitted. It further meant that the applicant
had to use
a number of persons whose function it was to examine and
identify the documents which may be relevant to what it sought to
establish.
This in turn meant that the search and the seizure of
documents had to be particularly invasive, and had every potential of
degenerating
into a fishing for evidence, which is not permitted.
[46]
It is the duty of an applicant seeking the extraordinary relief of a
preservation order to limit the scope of the search and
attachment
down to specific documents, and “
It
is not for the court to wade through a classification such as the one
in the notice of motion… for the purpose of finding
whether
any position of it may justify the grant…”
of
the order.
[46]
The specificity
requirement must be strictly adhered to.
[47]
“
It
is trite that an applicant must establish that the respondent
possesses specific documents or things that constitute vital evidence
in substantiation of the applicant’s cause of action. Strict
compliance with this requirement is pivotal to the legality
of the
use of the procedure. The reason for this requirement is obvious. The
procedure has, potentially, draconian and extremely
invasive
consequences for respondents or defendants who are subject to it. The
implementation in particular of the search leg of
the order, can
amount to the most manifest intrusion of the respondents’ right
to privacy guaranteed in s 14 of the Constitution
as mentioned in
para 20 above. Thus as was stated in Shoba, and as part of
the balancing act to be performed by courts
based on the principle of
proportionality only vital evidence in the sense of evidence of
importance to the applicant’s case,
must be the subject of the
search. The specified documents must constitute vital evidence and a
blanket search for unspecified
documents or evidence which may exist
is not allowed”.
[48]
[47] I accordingly
conclude that the applicant has also failed to satisfy the second
requirement for a preservation order.
A reasonable
apprehension that the respondents will destroy or hide evidence
[48] In the absence of
having met the other two pre-conditions for the grant of a
preservation order, it is not necessary to deal
with the third and
last requirement for a preservation order in any detail. I will
simply point to the fact that in respect of
a large number of the
categories of documents which the applicant seeks to preserve in the
order, the documents cannot
prima facie
easily be destroyed,
or can be obtained by other means from secondary sources. Such
documents include bank statements, share registers,
share
certificates, attorneys financial statements of account, Value Added
Tax returns, Pay as You Earn returns, Unemployment Insurance
Fund
returns, Skills Development Levy returns, Workmen’s
Compensation returns, Statutory submissions, Income Tax returns,
Emp501 submissions, IRP5 certificates, UI19 submissions, annual
financial statements, minutes of meetings, sale agreements and
bond
statements.
[49]
There must be a reasonable apprehension that these documents will be
destroyed. “
The
test of a reasonable apprehension is an objective one and is based on
the view of a reasonable person when confronted with the
facts”.
[49]
Most of the aforementioned documents are statutory documents which
were
prima
facie
produced
by, or submitted to third parties, and can ordinarily be obtained
through discovery, or by the issue of a subpoena
duces
tecum
.
The applicant has not produced any factual evidence to support a
finding that there exists a well-founded apprehension that the
documents may be destroyed before the trial, or that there exists no
other means available to ensure that the documents are available
at
the trial instead of an intrusive search and seizure. The nature of
the documents are such that a single reliance on the drawing
of an
inference from past dishonest conduct cannot support a finding of a
reasonable apprehension that the respondents will destroy
or hide the
documents.
Other considerations
relevant to the court’s decision.
[50]
As stated earlier, the relief granted in a preservation order is
interdictory in nature. There exists, in my view, no reason
in
principle or policy to approach the procedure for a preservation
order any differently from that of the granting of an interim
interdict. Both remedies are interlocutory and discretionary in
nature, and are considered to be extraordinary remedies.
[50]
Whether or not it is described as a general or overriding discretion,
the court is entitled, despite the applicant having established
the
requisites for a preservation order, to give consideration to what
the court in
Knox
D’Arcy Ltd and Others v Jamieson and Others
[51]
referred to as “a
number
of disparate and incommensurable features
”
in coming to a decision whether or not to grant the order sought.
Considerations such as the balance of convenience, that
is, prejudice
to the applicant if the remedy is withheld against the prejudice to
the respondent if it is granted; whether the
right of the applicant
can effectively be protected by another ordinary remedy; and the
cogency of the
prima
facie
case
established, are to be placed in the balance.
[52]
These considerations are not individually decisive and are
interrelated.
[53]
The
balancing of other considerations in arriving at a decision is
consistent, in the context of section 36(1) of the Constitution,
with
the aim of achieving proportionality between the interest which the
procedure for a preservation order seeks to protect, and
the
intrusive and invasive nature of the order on the entrenched right to
privacy of the respondents.
[51] Applied to the facts
of the present matter, I am of the considered view that the balance
of convenience does not favour the
granting of the preservation
order. The proposed claims of the applicant on which the preservation
order is premised, are subject
to a number of imponderables, while
the existence of the evidence it seeks to preserve presents its own
uncertainties. I explain.
The evidence sought solely relates to the
applicant’s subsidiary claims arising from its status as a
creditor in the insolvent
estate. As stated earlier, the applicant
does not require any documentary or other evidence to prove its main
claim based on the
suretyship agreement. The sale agreement and the
deed of suretyship are in writing and in the possession of the
applicant. The
applicant’s
locus standi
for claiming
relief aimed at the recovery of the assets belonging to the first
respondent, and holding any of the respondents liable
for any of the
company’s debts, is subject to its status as a creditor in the
insolvent estate of the first respondent. However,
in the event of it
being successful with its claim against the sureties on the deed of
suretyship, the principal obligation arising
from the sale agreement
will be extinguished. It will result in the applicant having no
further claim against the first respondent
arising from the sale
agreement, which in turn means that it will no longer be a creditor
in the insolvent estate, and that its
proposed claims against the
fourth, fifth and nineteenth respondents will fall away. The
existence of its claims against these
respondents are in effect
dependent on its failure to succeed against the sureties.
[52] Another aspect is
that the conduct of the fourth, fifth and nineteenth respondents on
which the applicant relies for the granting
of the preservation
order, is based on documentary evidence that is already in the
possession of the applicant. In other words,
what the applicant is in
effect asking for is the search for, and the preservation of other
documents which may or may not exist
to prove other dishonest
transactions, a proposition that is in turn premised on the
probability that the said respondents have
also made themselves
guilty of other similar incidents of unlawful conduct.
Conclusion
[53] In the
circumstances, I find that the applicant has failed to make out a
case for the grant of a preservation order, and that
the
ex parte
order granted by this court must be set aside. In so far as the
costs of the proceedings are concerned, I am in agreement that a
punitive costs order is appropriate in the circumstances. The
application is substantially flawed and the order which the applicant
asked for and which was granted exceeded the bounds of what is
permitted in law. The applicant has clearly failed to comply with
its
duties in a matter of this nature, and it did not make a full and
fair disclosure of all the material facts which may have
had an
influence on the court’s decision to grant the
ex parte
order. I have no reason to believe that the failure was wilful.
In the circumstances, an order for costs on an attorney and clients
scale will meet the exigencies of the case.
[54]
In the result it is ordered that:
(a)
The order is set aside;
(b)
Within 10 days of the date of this order, the sheriff, applicant or
any other person who is in
possession of the documentation or copies
of such documentation seized at any of the respondents’
premises pursuant to the
order, return that documentation to those
respondents from which the documentation was seized;
(c)
The Applicant pays the respondents costs on an attorney and client
scale, including the costs of two
counsel.
D VAN ZYL
DEPUTY JUDGE PRESIDENT
OF THE HIGH COURT
APPEARANCES
FOR APPLICANT:
ADV B VAN ZYL
Instructed by JGS
ATTORNEYS
FOR RESPONDENT:
ADV R BUCHANAN SC AND ADV MP MORGAN
Instructed
by GREGORY CLARK & ASSOCIATES
Date Heard:
10 September
2020
Date Delivered:
10 December
2020
[1]
[1976]
1 ALL ER 779 (CA).
[2]
Universal
City Studios Inc and Others v Network Video
[1986] ZASCA 3
;
1986 (2) SA 734
(A) at
754 G. Section 173 of the Constitution allows for the inherent power
of the court to be used by taking into account the
“interests
of justice”. See Pohlman and Others v Van Schalkwyk and Others
2001 (2) SA 690
(E) at 697 D- F.
[3]
Umrod
LJ in Anton Piller
supra
at 61.
[4]
Shaw
LJ in Anton Piller at 62.
[5]
Universal
City Studios Inc and Others v Network Video
supra
at 747 E-F; and Non- Detonating Solutions v Durie
2016 (3) SA 445
(SCA) at para [44].
[6]
Kebble
and Others v Wellesley – Wood and Others
(2004) 5 SA 274
(WLD)
at para 9.1. See also Friedshelf v Kallianji
2015 (4) SA 163
(GJ) at
para [77].
[7]
Section
14 of the Bill of Rights.
[8]
Knox
D’ Arcy Ltd and Others v Jamieson and Others
1974 (3) SA 700
(WLD) at 707 J – 708 A.
[9]
Non-Detonating
Solutions
supra
at para [20].
[10]
Cilliers
et al Herbstein and Van Winsen The Civil Practice of the Supreme
Court of South Africa 5
th
ed at page 442. See also Audio Vehicle Systems v Whitfield and
Another
2007 (1) SA 434
(C) at para [21].
[11]
Thint
(Pty)Ltd v National Director of Public Prosecutions and Others; Zuma
and Another v National Director of Public Prosecutions
and Others
2008 (12) BCLR 1197
(CC) at para [296]; Frangos v CorpCapital Ltd
and Others
2004 (2) SA 643
(T) at 649 C-F; and Audio Vehicle Systems
supra
at para [21].
[12]
National
Director of Prosecutions v Basson
2002 (1) SA 419
(SCA) at para
[21]; and Audio Vehicle Systems v Whitfield and Another
supra
at para [21].
[13]
Mathias
International v Bailache
2015 (2) SA 357
(WCC) at para [35].
[14]
Shoba
v Officer Commanding, Temporary Police Camp Wagendrift Dam and
Another; Maphanga
v
Officer Commanding, South African Police Murder and Robbery Unit,
Pietermaritzburg and Others
1995 (4) SA 1
(A) at 19H;
Ghomeshi-Bozorg v Yousefi
1998 (1) SA 692
(W) at 676 D-E; and
Pretoria Portland Cement Co Ltd v Competition Commission
2003 (2) SA
385
(SCA) at para [45].
[15]
Roamer
Watch Co SA and Another v African Textile Distributors t/a MK Patel
Wholesale Merchants and Direct Importers
1980 (2) SA 254
(W) at 272
G-H.
[16]
Mathias
International
supra
at
paras [20] and [25].
[17]
Mathias
International
supra
at paras [20] and [37]; Memory Institute SA CC t/a SA Memory
Institute v Hansen
2004 (2) SA 630
(SCA) at para [3]; and
Non-Detonating Solutions
supra
at para [30].
[18]
Supra
at 747 E-F. See also Non- Detonating Solutions
supra
at para [18] and Viziya Corporation v
Collaborit
Holdings (Pty) Ltd and Others
2019 (3) SA 173
(SCA) at para [22].
[19]
At
755 A-C.
[20]
Marine
and Trade Insurance Co Ltd v Van Der Schyff
1972 (1) SA 26(A)
at
37-38 and Friedshelf
supra
at para [51].
19
Kalil v Decotex Pty Ltd and Another
1988 (1) SA
943
(A) at 976 E-H; Cargo Laden and Latel Laden on Board the MV
Thalassini Avgi v MV Dimitris
1989 (3) SA 820
(A) at 831 H-J;
Friedshelf v Kalianji
supra
at para [51]; and Non-Detonating Solutions v Durie 2016(3) SA 445
(SCA) at para [21].
[22]
Shoba
supra
at 15F-16C and Non Detonating Solutions
supra
at para [20].
[23]
Truter
and Another v Deysel
[2006] ZASCA 16
;
2006 (4) SA 168
(SCA) at par
[17]
.
[24]
Truter
supra
at par [16]; Standard Bank v Miracle Mile Investments 67 2017(1) SA
185 (SCA) at para [24]; and Frieslaar No and Others v Ackerman
and
Another (1242/2016)
[2017] ZASCA 03
(2 February 2018). In civil law
fraudulent conduct does not in itself constitute a cause of action.
The unlawful conduct relied
upon may however be an element of
a recognised cause of action such as a delictual claim for damages
for fraudulent misrepresentation.
(International Shipping Co (Pty)
Ltd
v
Bentley
1990 (1) SA 680
(A) at 684 G-J.)
[25]
The
Reclamation Group (Pty) Ltd v Smit and Others
2004 (1) SA 215
(SE)
at 221 H – 222 A; and Friedshelf
supra
at para [55].
[26]
Supra.
[27]
At
para [26].
[28]
Friedshelf
supra
at para [17].
[29]
ISDN
Solutions (Pty) Ltd v CSDN Solutions CC and Others
1996 (4) SA 484
(W) at 486 H – 487 C.
[30]
Industrial
Development Corporation of SA v Sooliman
2013 (5) SA 603
(GSJ) at
paras [7] to [9].
[31]
Ghomeshi
– Bozorg
supra
at 696 D-E; Pretoria Portland Cement
supra
at para [45] and [47]; and Mathias International
supra
at para [19].
[32]
Friedshelf
supra
at para [48].
[33]
Roamer
Watch
supra
at
272D.
[34]
Shoba
supra
at 16 B-C; and Non-Detonating
supra
at para [20].
[35]
Act
61 of 1973.
[36]
Act
71 of 2008.
[37]
Rabinowitz
v Van Graan and Others
2013 (5) SA 315
(GSJ) at para [7].
[38]
See
Item 9(1) of Schedule 5 to the 2008 Act.
[39]
See
paragraph [51] of this judgment.
[40]
Shoba
supra
at 15 F-16C and Non-Detonating
supra
at para [19].
[41]
Herbstein
and Van Winsen op cit at page 796 and further.
[42]
Roamer
Watch
supra
at 272 H.
[43]
Non
– Detonating Solutions
supra
at para [36].
[44]
Universal
City Studios Inc
supra
at 755 H-J; Mathias International Ltd
supra
at para [20]; and Non-
Detonating
Solutions
supra
at para [30].
[45]
The
MV Urgup: Owners of the MV Urgup v Western Bulk Carriers
(Australia) (Pty) Ltd and
Others
1999
(3) SA 500
(C) at 508J - 509A.
[46]
African
Bank v Van der Merwe Booysen and Others
[2003] 4 All SA 247
(D) at
258 H.
[47]
Mathias
International
supra
at para [20]; Memory Institute
supra
at para [3]; and Non-Detonating
Solutions
supra
at
para [30].
[48]
Non
– Detonating Solutions
supra
at par [30; and Viziya
supra
at para [32].
[49]
Viziya
supra at para [45].
[50]
Erikson
Motors (Welkom) Ltd v Protea Motors, Warrenton and Another
1973 (3)
SA 685
(A) at 691
C;
and Shoba
supra
at 16B-C.
[51]
[1996] ZASCA 58
;
1996
(4) SA 348
(A) at 361 H-J
[52]
Shoba
supra
at 16B-C.
[53]
Erikson
Motors
supra
at
691 F-G.