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[2012] ZASCA 48
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Bonugli and Another v Standard Bank of South Africa Ltd (266/11) [2012] ZASCA 48; 2012 (5) SA 202 (SCA) (30 March 2012)
REPORTABLE
(as to paragraphs 1 – 23 and 32 to end)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 266/11
In
the matter between:
BEULAH EVELYN BONUGLI
…................................................
First
Appellant
CHRISTOPHER STEPHEN BONUGLI N.O.
…....................
Second
Appellant
and
THE STANDARD BANK OF SOUTH
AFRICA LIMITED
…..........................................................................
Respondent
Neutral citation
:
Bonugli v Standard Bank of
South Africa Limited
(266/2011)
[2012] ZASCA 48
(30 March 2012)
Coram:
FARLAM, CACHALIA, MALAN, WALLIS JJA and
PETSE AJA
Heard:
15 February 2012
Delivered:
30 March 2012
Summary:
Jurisdiction – submission to –
peregrine defendant opposing summary judgment on the merits without
contesting competence
of court – effect thereof – mistake
– rectification of contract – party seeking rectification
failing to
establish requirements therefor – calculation of
quantum – whether certain charges recoverable.
__________________________________________________________________
ORDER
__________________________________________________________________
On appeal from:
Western
Cape High Court, Cape Town (Veldhuizen J sitting as court of first
instance):
1. The appeal is upheld with costs including the costs
occasioned by the employment of two counsel, save that the costs in
respect
of the preparation, perusal and copying of the record shall
not exceed ten per cent of the costs incurred in relation to those
tasks.
2. The order of the trial court is set aside and the
following order is substituted in its stead:
‘
Judgment is granted in favour
of the plaintiff against the first defendant in her personal capacity
and against the first and second
defendants in their representative
capacities jointly and severally, the one paying the other to be
absolved, for:
(a) payment of the sum of R14 578 143;
interest on the sum of R14 578 143 at 15,5 per cent per
annum from the date of service of summons to date of payment;
costs of suit which shall include the costs occasioned
by the employment of two counsel.’
__________________________________________________________________
JUDGMENT
__________________________________________________________________
WALLIS JA and PETSE AJA (FARLAM, CACHALIA and MALAN JJA
concurring):
Introduction
[1] The respondent, the Standard Bank of South Africa
Limited (as plaintiff) successfully sued the appellants (as
defendants) in
the Western Cape High Court for payment of the sum of
R16 958 969 together with interest and costs of suit, inclusive of
the costs
occasioned by the employment of two counsel.
[2] The first appellant, Beulah Evelyn Bonugli, was sued
both in her personal capacity and in her representative capacity as a
trustee
of Rivonia Close Trust (RCT). The second appellant,
Christopher Stephen Bonugli, was sued in his representative capacity
as a trustee
of RCT. In effect therefore the action was against Mrs
Bonugli and RCT. The appeal to this court is with the leave of the
court
below.
[3] The bank’s action was founded on a deed of
suretyship purporting to bind both Mrs Bonugli and RCT as sureties
for the
debts of Union Charter Trust (UCT) under four leases in
respect of Pilatus PC12 aircraft. The leases and the suretyship were
concluded
on different dates in Johannesburg. Mrs Bonugli represented
RCT in executing the deed of suretyship. She also represented UCT in
concluding the leases. In each instance she claimed to be authorised
to do so by her fellow trustees. UCT’s indebtedness,
although
not the amount thereof, was admitted. This is hardly surprising as
UCT had been sequestrated by the bank in respect of
that
indebtedness.
[4] Pursuant to its right in terms of the contracts the
respondent recovered possession of the four aircraft in May 2006 and
on
various dates sold them. The amount of UCT’s indebtedness in
respect of each aircraft, save one, was agreed in the course
of the
trial. We will need to revert to that one when dealing with the
question of quantum.
[5] The deed of suretyship, described as a general
guarantee, was executed on or about 22 April 1998. In terms of the
guarantee
RCT and the first appellant undertook liability, jointly
and severally, as sureties and co-principal debtors in-solidum with
UCT
for the due and faithful payment by UCT to the respondent of all
sums of money then owing or which might thereafter become owing
in
relation to any cause of indebtedness whatsoever and acknowledged
that any admission or acknowledgement of indebtedness by UCT
would be
binding upon them and that a certificate signed by a manager of the
respondent, whose appointment need not be proved,
as to the amount
owing by UCT to the respondent, would constitute prima facie proof of
such indebtedness.
[6] Subsequent to the sequestration of UCTand shortly
prior to the commencement of this action a number of certificates of
indebtedness
were issued by a manager employed by the bank, in terms
of which various amounts were certified as due and owing to the
respondent
by UCT. Although some time was spent in the trial over the
validity of these certificates the issues in that regard were largely
overtaken by the agreement on quantum and nothing in this appeal
turns on them.
[7] The defences raised by Mrs Bonugli and RCT were:
Rectification, in that they claimed that the suretyship
did not correctly reflect the common intention of the respondent and
the
appellants, because it was only intended to guarantee UCT’s
obligations in terms of an earlier instalment sale agreement,
which
UCT concluded with the respondent on 22 April 1998, in respect of an
aircraft with registration number BEB – 180
(the BEB
aircraft). In other words, notwithstanding the general terms of the
guarantee, it was, so they contended, limited to
a single
transaction and inapplicable to the four lease agreements giving
rise to UCT’s indebtedness to the bank.
A defence of lack of authority based on the contention
that Mrs Bonugli was not authorized to represent and bind RCT to a
general
guarantee at the time she executed the deed of suretyship,
but only a guarantee limited to the earlier lease concluded in
relation
to the BEB aircraft.
A special plea (which was filed on 28 May 2007)
averring that the Western Cape High Court had no jurisdiction to
entertain the
respondent’s action against RCT because
the leases were concluded in Johannesburg and the deed
of suretyship was also executed in that city, whilst the second
appellant
was permanently resident in Sydney, Australia when the
respondent’s action was instituted.
[8] The court below found that the bank had established
its case against Mrs Bonugli and RCT. In other words it held that it
had
jurisdiction in relation to the claim against RCT; that the
defences of rectification and lack of authority were unsound and that
the issues raised by the defendants in regard to the quantum were
unfounded.
[9] The appellants relied on four discrete grounds of
appeal in their application for leave to appeal, but in their heads
of argument
relied on three grounds only for purposes of this appeal,
namely that:
(a) The court below erred in finding that it had
jurisdiction to entertain the bank’s claim;
(ii) The court below erred in not granting the prayer
for rectification of the guarantee; and
(iii) The court below erred in finding that the
respondent had established the quantum of its claim in the amount of
R16 958 969.
Jurisdiction
[10] The appellants asserted in this court, as they did
in the court below, that the latter court lacked the requisite
jurisdiction
to entertain the respondent’s claim against RCT.
In this regard it was contended that as the various contracts
founding the
respondent’s claim against the appellants were
concluded in Johannesburg none of the elements of the cause of action
relate
to any cause arising within the area of jurisdiction of the
Western Cape high court.
1
They said that the court below could not have exercised
jurisdiction over the Bonuglis in their representative capacity –
they both being necessary parties in order to bring RCT before the
court– because the second appellant resides in Sydney and
was
permanently resident there when the respondent’s action was
instituted the court below lacked jurisdiction to entertain
the claim
against the appellants in their representative capacity.
2
In technical legal language he is a peregrinus of South
Africa and is not subject to the jurisdiction of our courts save in
limited
circumstances.
[11] The respondent countered the appellants’
contentions that the court below lacked jurisdiction to entertain the
claim
on a number of bases. It pointed out that in terms of the
guarantee, RCT agreed ‘that any division of the [High Court] of
South Africa … shall have jurisdiction with regard to any
legal proceedings arising’ under the guarantee. RCT also
agreed
that the guarantee would be governed by the laws of the Republic of
South Africa. Furthermore reliance was placed on s 5
of the Trust
Property Control Act 57 of 1988 (the Act) which provides:
‘
Notification of address
A person whose appointment as trustee comes into effect
after the commencement of this Act, shall furnish the Master with an
address
for the service upon him of notices and process and shall, in
case of change of address, within 14 days notify the Master by
registered
post of the new address.’
It is common cause in this appeal that the address given
by both appellants, as trustees of RCT, to the Master in terms of s 5
of
the Act was that reflected in the respondent’s summons. That
address was within the area of jurisdiction of the trial court.
[12] On the basis of those facts it was submitted on
behalf of the respondent, relying on
Hay
Management Consultants (Pty) Ltd v P3 Management Consultants (Pty)
Ltd
3
paras 13-15 that the address furnished to the Master in
terms of s 5 of the Act is akin to a domicilium clause in a contract
and,
together with the other two factors, the furnishing of this
address amounted to a submission to the jurisdiction of the Western
Cape high court.
[13] In the alternative the bank contended that the
failure by RCT to contest the jurisdiction of the trial court, in the
affidavit
deposed to by Mrs Bonugli opposing summary judgment,
amounted to a submission to the jurisdiction. In response to that
contention
it was submitted in the appellants’ heads of
argument that rule 32(3)
(b)
of
the Uniform Rules only requires of a defendant resisting an
application for summary judgment to satisfy the court that there
is a
bona fide defence to the action and no more. Consequently, so the
argument continued, the defences that the appellants raised
in their
opposing affidavit having been sufficient to meet the threshold
required by rule 32(3)
(b
),
it was not necessary for them also to have raised lack
of jurisdiction as a defence.
[14] In holding that it had the necessary jurisdiction
the court below, whilst mindful of the considerable differences
between a
partnership and a trust, found support for its findings in
the general principles on jurisdiction relating to a partnership,
considerations
of convenience and common sense for its conclusion to
entertain the claim. It went on to conclude on that aspect by saying
that:
‘
The following facts and
circumstances are, in my opinion, pertinent:
In terms of s 19(1)
(a)
of the Act this court has
jurisdiction over the first defendant in her personal capacity as
well as in her representative capacity.
The second defendant is not resident in the Republic.
All the defendants entered an appearance to defend and
this court’s judgment will, therefore, bind them.
Any warrant for execution issued pursuant to this
court’s judgment will be valid throughout the Republic.
The first defendant was the driving force behind the
RCT.
None of the defendant’s will suffer any
inconvenience or prejudice if this court was to adjudicate the
issues.
Every consideration of convenience and common sense
requires that this court should adjudicate the issue between the
plaintiff
and all the defendants.’
[15] It is of course trite that a trust does not have
legal personality.
4
A trust is in truth an accumulation of assets and
liabilities, which constitute the trust estate vesting in the
trustee. The trust
can only act through its trustees. Trustees must
therefore act jointly unless the trust deed provides otherwise.
5
It follows that in legal proceedings the trustees must
all be cited in their representative capacity as such as the trust
itself
cannot be either a plaintiff or defendant as an entity in its
own right.
[16] In
Lupacchini NO &
another v Minister of Safety & Security
6
this court said the following:
‘
By the nature of the office of
trustee the control and administration of the trust property vests in
each trustee individually.
It follows that where there is more than
one trustee they must act jointly, unless the trust instrument
provides otherwise. And
because they have individual interests all
must necessarily join in litigation concerning the affairs of the
trust (through it
seems that one trustee might authorise another to
sue in his or her name).’
[17] Mindful of this proposition the bank cited both
trustees as defendants. But, as alluded to earlier in this judgment,
the second
appellant was not resident within the area of jurisdiction
of the court below when litigation was commenced. For that reason it
was said that the court lacked jurisdiction over him and hence over
RCT. We use ‘resident’ in the special sense that
it has
in the area of the law of jurisdiction over natural persons, where a
distinction is drawn between those who are resident
within the area
of jurisdiction of a court, commonly referred to by the Latin word
incolae
, and those who
are not, commonly referred to as
peregrini
.
Mr Bonugli is a
peregrinus
of
South Africa, having become a permanent resident of Australia.
Ordinarily jurisdiction can only be exercised over a
peregrinus
if there has been an attachment to found or confirm
jurisdiction of property owned by the
peregrinus
,
(whether in conjunction with some other ground of jurisdiction or, in
some cases, not),
or a submission to the
jurisdiction. In the case of a person being sued in a representative
capacity, such as a trustee, the former
of these requirements poses
considerable difficulties and may require some development of our
law. However, in the light of the
conclusion we have reached on the
question of a submission to jurisdiction it is unnecessary to canvass
that issue.
[18] In our view, by permitting Mrs Bonugli to cause an
appearance to defend the action to be delivered on behalf of RCT and
to
depose to an affidavit opposing summary judgment on its behalf, in
which she dealt solely and in considerable detail with the merits
of
its defences to the claim, without challenging the court’s
jurisdiction, Mr Bonugli, in his representative capacity, submitted
to the jurisdiction of the Western Cape high court. We say so for the
following reasons.
[19] In
Mediterranean Shipping Co
v Speedwell Shipping Co Ltd & another
7
it was stated that:
‘
Submission to the jurisdiction
of a court is a wide concept and may be expressed in words or come
about by agreement between the
parties.
Voet
2.1.18. It may arise through
unilateral conduct following upon citation before a court which would
ordinarily not be competent to
give judgment against that particular
defendant. Voet 2.1.20. Thus where a person not otherwise subject to
the jurisdiction of
a court submits himself by positive act or
negatively by not objecting to the judgment of that court, he may, in
cases such as
actions sounding in money, confer jurisdiction on that
court. Herbstein and Van Winsen
The
Civil Practice of the Superior Courts in South Africa
3
ed at 30; Pollak
The
South African Law of Jurisdiction
at
84
et seq.’
[20] In
MV
Alina II (no 2) Transnet v Owner of MV Alina II
8
this Court said that the question of
submission ‘to the court’s jurisdiction’ is a
factual enquiry. It went on
to say the following:
‘
It may be constituted by the
terms of an agreement prior to litigation commencing. Thus,
nominating a South African
domiciluim
citandi et executandi
in
a contract, in conjunction with a choice of South African Law,
was held to constitute a
submission to the jurisdiction in respect of any claims in respect of
that contract. Submission may arise
from conduct in litigation
commenced against a person before a court that lacks jurisdiction in
respect of that person or that
claim.’ (Footnotes omitted).
It then cited a passage appearing at
334A in
Mediterranean
Shipping
in which
the following is stated:
‘
Anyone who invokes the
jurisdiction of this court for relief under the Act must be taken –
one can hardly be heard to contend
otherwise – to have
submitted to that jurisdiction …’
[21] In this case in opposing summary
judgment in the court below neither Mr Bonugli nor RCT raised lack of
jurisdiction –
in any form or guise – of the court below
to entertain the respondent’s claim. The defence of RCT was set
out in detail
in an affidavit sworn, with Mr Bonugli’s
authority on its behalf, by Mrs Bonugli. In addition an order for the
payment of
costs on the attorney and client scale was sought. RCT
contends that their failure to object to the jurisdiction cannot be
construed
as constituting submission by conduct to the jurisdiction
of the court below. The foundation for this contention is rule
32(3)
(b)
of the Uniform Rules which, so the
contention concluded, does not require of a defendant seeking to
defeat an application for summary
judgment to disclose all available
defences. Thus, it was argued that it was not incumbent upon the
second appellant to have raised
lack of jurisdiction as a discrete
defence to the respondent’s claim.
[22] In the view we take of the
matter the appellants’ reliance on rule 32(3)
(b)
is misplaced. The fallacy in the
argument advanced on behalf of the appellants lies in the fact that
rule 32 does not deal with
the jurisdiction of the court to entertain
a plaintiff’s claim. Unless expressly challenged, to our minds,
rule 32, by logical
implication, assumes that the court has such
jurisdiction. What it then does, according to well established
authority, is to require
a defendant seeking leave to defend to set
the facts forth fully that would enable a court to determine whether
or not there is
a bona fide defence to the plaintiff’s claim.
This by no means entails that the defendant must, in order to
successfully
resist summary judgment, disclose all the defences to
the claim. It requires the defendant to disclose facts from which it
appears
that there is a bona fide defence to the whole or part of the
plaintiff’s claim. The facts disclosed necessarily invite the
court to determine whether or not the defendant has a bona fide
defence that is good in law.
9
This can be tested quite simply by
way of a problem put to counsel in argument to which no answer was
forthcoming. If the court
in this case had held that none of the
defences raised in the affidavit opposing summary judgment were good
it would have entered
summary judgment against the defendants in
their representative capacities – in effect against RCT. Could
there subsequently
have been an objection to the court’s
jurisdiction and an application to have the judgment rescinded on
that basis? The answer
is clearly in the negative.
[23] When a challenge to a court’s
jurisdiction is raised, such a challenge instead contests the
competence of the court to
grant the relief sought by the plaintiff.
In our view by electing only to advance facts which constitute a
defence to the respondent’s
claim in the opposing affidavit
filed on his and RCT’s behalf, the second appellant, in the
words of Van Heerden J in
Mediterranean
Shipping
,
10
invoked the jurisdiction of the trial
court for relief which was, as prayed for by him, to dismiss the
respondent’s application
for summary judgment with attorney and
client costs and to grant him leave to defend the respondent’s
action on its merits.
On the facts of this case we therefore conclude
that by not contesting the competence of the court below to grant
summary judgment
the second appellant and therefore RCT, by his
conduct, unequivocally submitted to its jurisdiction. That conclusion
renders it
unnecessary to consider the other bases upon which the
jurisdiction of the court below was supported by the respondent in
this
court.
Lack of authority
[24] The gist of the appellants’ argument on this
aspect was that Mrs Bonugli was only authorised by RCT to conclude a
limited
guarantee in respect of the BEB aircraft transaction and not
a general guarantee for present and future liabilities of UCT. It was
thus contended that RCT is not bound by the terms of the unlimited
guarantee because its terms went outside the scope of the authority
granted to Mrs Bonugli by RCT. The terms of the authority as spelt
out in a resolution taken on 22 April 1999, it was claimed,
were only
to ‘sign a suretyship (guarantee)’ in favour of UCT (in
respect of the) Pilatus PC 12 BEB-180 (aircraft).
It was accordingly
argued that the first appellant was only authorised to bind RCT as a
guarantor for the obligations of UCT arising
from the purchase by UCT
of a specific aircraft and nothing more.
[25] RCT contended that the respondent’s reliance
on clause 7.1 of RCT’s trust deed, which conferred on Mrs
Bonugli,
as the donor, the right to decide all matters in terms of
such deed of trust ‘according to her sole and absolute
discretion’
was misplaced. This was so, according to it,
because in this specific instance the first appellant’s sole
and absolute discretion
was confined to the terms of the RCT
resolution authorizing her to conclude only a limited guarantee.
[26] There are a number of flaws in these arguments. On
the evidence of Mrs Leukis, which was accepted by the trial court,
when
the issue of a guarantee arose a general guarantee was discussed
between her and Mrs Bonugli, and there was no request for, or a
discussion about, a limited guarantee. Mrs Leukis explained that the
reason for the unlimited guarantee was that there were plans
afoot at
the time for UCT to conclude further leases of aircraft with the bank
and the guarantee would cover these further transactions.
In regard
to the resolution of 22 April 1998 Mrs Bonugli accepted under
cross-examination that when the suretyship was prepared
and signed by
her the bank was not in possession of that resolution although it had
been relied upon by her in resisting summary
judgment. But the bank
was, to the knowledge of Mrs Bonugli, in possession of a different
resolution taken on 20 April 1998, which
did not in any way, restrict
her authority in regard to the execution of a guarantee and agreement
on its terms. Indeed she accepted,
when questioned by the court
below, that the later resolution was ‘not concluded [as yet] at
the [relevant] time’.
The earlier resolution did authorise her
to execute a guarantee and to agree the terms thereof with the bank.
According to Mrs
Leukis that is what happened and it suffices to
dispose of the claim of lack of authority
Rectification
[27] There is no need to spend much time on this
defence. The case in that regard was that the guarantee was only
intended to cover
the BEB transaction and not the later transactions
or, put differently, was intended to be a limited, not a general,
guarantee.
That case depended entirely upon the conflicting testimony
of Mrs Bonugli and Mrs Leukis. The learned judge accepted the
evidence
of Mrs Leukis, the bank’s witness in regard to the
execution of the deed of suretyship, and rejected that of Mrs Bonugli
in emphatic terms. He said that her evidence could be summed up in a
single word ‘bad’. He described her as ‘verbose,
evasive and argumentative’ and said that it was clear that she
was not averse to fabricating evidence. These credibility
findings
were not challenged in the heads of argument or in oral argument
before this court. They must be accepted and there is
no reason not
to do so. Whilst in the heads of argument it was suggested, on the
basis of a single passage in the cross-examination
of Mrs Leukis,
that the case for rectification had been made out, no argument was
addressed to us in support of that contention
and on a fair reading
of the whole of Mrs Leukis’ testimony it could never be
sustained. There is accordingly no basis for
disturbing the learned
judge’s finding that the defence of rectification was not
established.
[28] In the result there was no merit in any of the
defences raised, either on behalf of RCT, or by Mrs Bonugli in her
personal
capacity. The trial court was accordingly correct in
entering judgment in favour of the bank. The only question is whether
it correctly
assessed the amount for which judgment should be given.
It is to that question that we now turn.
The quantum of the bank’s claim
[29] During the course of the trial the parties
concluded an agreement on quantum by which the issue of quantum was
resolved save
for amounts claimed under two discrete heads. These
were an amount of R385 472.76 paid by the respondent for what it
termed ‘a
deposit for a loan engine’ and an amount of R2
088 107 claimed in respect of ‘aircraft repair charges’.
Both
payments were made in respect of an aircraft that was subject to
an agreement of sub-lease, shortly before the aircraft concerned
was
sold. Whilst not contesting that the respondent paid those amounts,
the appellants contended that there was no contractual
basis for the
bank to hold UCT – and by extension them – liable for
those charges.
[30] Both in this court and the court below the bank
persisted in its contention that UCT was liable for the disputed
amounts. In
pressing this argument it relied heavily on clause 19 of
the relevant lease agreement. Clause 19.1, to the extent relevant,
reads
as follows:
‘
Upon expiry of this agreement
at the end of the contract period, sub-lessee shall return the goods
to sub-lessor, at sub-lessee’s
expense, to enable sub-lessor to
sell the goods. Sub-lessor shall refund the proceeds of the sale to
sub-lessee as an abatement
of rentals after deduction of the costs of
the sale to the sub-lessee and the book value, if any. Where
appropriate, sub-lessee
shall disclose his abatement to the Receiver
of Revenue.’
[31] Relying squarely on the terms of clause 19.1 it was
argued on behalf of the bank that the two amounts in dispute were
plainly
incurred in procuring the disposal of the aircraft and are
thus for the appellants’ account. Moreover, so the argument
concluded,
clause 19.1 was on its terms, capable, by what counsel
termed ‘a stretched imaginative interpretation’, of
encompassing
the amounts in dispute. This argument cannot be
sustained. The terms of clause 19.1 are clear and leave no room for
any doubt.
They only require the sub-lessee to return the goods at
the expiry of the contract period. The ‘other charges’
and
the ‘aircraft repair charges’ were not expenses
incurred in returning the aircraft to the bank. Nor were they ‘costs
of sale’ incurred by the bank in the disposal of the aircraft
after their repossession. An examination of the documents in
the
record does not show why it was necessary to put down a deposit on a
loan engine. Nor do they disclose that the repairs were
necessary to
place the aircraft in a saleable condition, in which event they might
have been recoverable as costs of sale. The
onus of showing that
these amounts were due by UCT under the lease rested on the bank and
it failed to discharge that onus. Consequently
the court below erred
in finding that the bank had established its entitlement to the
disputed amounts for they evidently fall
outside the terms of the
contract upon which the bank relied for its claim. It therefore
follows that its claim falls to the reduced
by the total amount
making up these two claims, namely R2 473 579.76. The bank
accepted, rightly so, that the certificate
of balance which would
ordinarily serve as prima facie proof of the amount owed by the
appellants would not avail it if we were
to find – as we have –
that such a certificate was plainly at variance with the terms of the
contract relied upon.
Costs
[32] The conclusion we have reached on the aspect of
quantum has a bearing on the costs of the appeal. Counsel were agreed
that
were we to come to the conclusion that the amounts claimed in
respect of ‘other charges’ and ‘aircraft repair
costs’ should have been disallowed in the court below, which we
have, the appellants would have achieved substantial success
on
appeal. It therefore follows that they are entitled to a costs order
in their favour on appeal. However, for reasons that emerge
from what
follows, it was quite unnecessary to place most of this voluminous
record before us as the real issues emerged from the
evidence of a
single witness and a handful of documents. The record should have
been substantially abbreviated. The failure by
the appellants’
attorneys to do this must result in a disallowance of certain of the
costs that they would otherwise recover.
[33] Before concluding there is one other aspect that
requires mention. Rule 10A
(a)(
ix)
of the Rules of this court requires of counsel to indicate which
portions of the record are in their opinion necessary for the
determination of the appeal. The rationale for this rule is twofold.
First the number of appeals that may be enrolled for hearing
during
any given court term is determined by the length of the record and
the amount of reading that the members of the court will
have to do
in order to prepare for the upcoming term. Second, the object of the
rule is to direct the attention of the judges of
this court in their
preparation to what counsel deem necessary for the determination of
the appeal. It goes without saying that
the less material there is to
read the more appeals will be enrolled for hearing. The obvious
advantage to litigants in self-evident.
This rule serves the public
interest in that it promotes expeditious disposal of appeals in this
court, both in securing that a
date can be allocated for hearings and
in facilitating the judicial task of preparation. This laudable
objective is not served
and indeed is undermined if counsel only pay
lip service to the provisions of this rule.
[34] In this case both counsel indicated in their
practice notes, inter alia, that the entire record was necessary for
the determination
of the appeal supposedly in compliance with the
rule. But in court counsel for the appellant informed us that for
purpose of the
appeal it was only necessary to have regard to the
evidence of Mrs Leukis who testified on behalf of the respondent.
When the members
of the court enquired why, in that case, we were
told that it was necessary to read the entire record comprising 2190
pages, if
it was thought that only the evidence of the one witness
was necessary, all he could do was to tender an apology.
[35] This court has on various occasions explained the
object of this rule, which is, as we have said, twofold. First, it
enables
the President in settling the roll to estimate how much
reading matter is to be allocated to a particular judge, and second,
to
assist judges in preparing the appeal without wasting time and
energy in reading irrelevant matter.
11
This court has also on various occasions in the
past expressed its utmost displeasure at the frequency with which
this particular
rule is often flouted. In some cases it has warned
that failure to comply with the spirit of the rules and practice
notes, may
lead to an adverse costs order whereas in others it has
made punitive costs orders.
12
In this appeal counsel were agreed that approximately 90
per cent of the material incorporated in the appeal record was not
necessary
to determine this appeal.
[36] Given the frequency with which rule 10A
(a)
(ix) in particular is transgressed we direct the
attention of counsel to what this court said in
Van
Aardt v Galway
13
paras 34-38 in regard to the requirements of the
practice note.
[37] Counsel were afforded the opportunity of addressing
us on the question whether this court should not, as a mark of its
displeasure,
deprive them of a portion of their fees relating to
their preparation. Both counsel argued that in the circumstances of
this case
it would not be appropriate to censure them in this
fashion.
[38] We have given careful consideration to those
submissions and have, on reflection, felt that we should spare
counsel our censure
for now purely on the basis that the judgment of
this court in
Van Aardt
was
delivered after they had already filed their heads of argument.
However, it must be said without equivocation that this court
views
non-compliance with its rules in an extremely serious light. Thus it
will not hesitate in appropriate cases, if transgressions
persist in
the future, to mark its displeasure by means of an appropriate costs
order.
Order
[39] In the result the following order is made:
1. The appeal is upheld with costs including the costs
occasioned by the employment of two counsel, save that the costs in
respect
of the preparation, perusal and copying of the record shall
not exceed ten per cent of the costs incurred in relation to those
tasks.
2. The order of the trial court is set aside and the
following order is substituted in its stead:
‘
Judgment is granted in favour
of the plaintiff against the first defendant in her personal capacity
and against the first and second
defendants in their representative
capacities jointly and severally, the one paying the other to be
absolved, for:
payment of the sum of R14 578 143;
interest on the sum of R14 578 143 at 15,5 per cent per
annum from the date of service of summons to date of payment;
costs of suit which shall include the costs occasioned
by the employment of two counsel.’
M J D WALLIS
JUDGE OF APPEAL
____________________
X M Petse
Acting Judge of Appeal
APPEARANCES
APPELLANTS: B J Manca SC, (with him A M Smalberger)
Instructed by
Herold Gie, Cape Town;
Naudes Inc, Bloemfontein
RESPONDENT: A O Cook SC, (with him J A Babamia)
Instructed by
Werksmans Attorneys, Johannesburg
McIntyre & Van Der Post, Bloemfontein
1
It
is unnecessary to consider whether,
if the cause of
action had arisen within the area of jurisdiction of the trial
court, this would have overcome the jurisdictional
problem
occasioned by Mr Bonugli’s residence in Australia.
2
E
Cameron, M de Waal, B Wunsh, P Solomon and E Kahn
Honore’s
South African Law of Trusts
5 ed (2002) at 256-257.
3
Hay
Management Consultants (Pty) Ltd v P3 Management Consultants (Pty)
Ltd
2005 (2) SA 522
(SCA).
4
Commissioner
for Inland Revenue v Friedman NO
[1992] ZASCA 190
;
1993
(1) SA 353
(A) at 370-371;
Land
and Agricultural Bank of South Africa v Parker & others
2005
(2) SA 77
(SCA) para 10.
5
Nieuwoudt
& another NNO v Vrystaat Mielies (Edms) Bpk
2004 (3) SA 486
(SCA) para 16;
Land and Agricultural Bank of South Africa v
Parker & others
para 15.
6
Lupacchini
NO & another v Minister of Safety & Security
2010 (6) SA
457
(SCA) para 2.
7
Mediterranean
Shipping Co v Speedwell Shipping Co Ltd & another
1986 (4)
SA 329
(D) at 333E-G.
8
MV
Alina II (no 2) Transnet v Owner of MV Alina
II
2011 (6)
SA 206
(SCA) para 14.
9
Maharaj
v Barclays National Bank Ltd
1976
(1) SA 418
(A) at 426A-D.
10
Fn
7
11
Caterham
Car Sales & Coachworks Ltd v Birkin Cars (Pty) Ltd
[1998] ZASCA 44
;
1998 (3)
SA 938
(SCA) at 954H.
12
Premier,
Free State v Firechem Free State (Pty) Ltd
2000 (4) SA 413
(SCA)
para 45;
Southern Cape Car Rentals CC t/a Budget Rent A Car v
Braun
1998 (4) SA 112
(SCA) at 1195F-1196C;
Minister of
Health & another v Maliszewski & others
2000 (3) SA 1062
(SCA) paras 33-39;
Plaaslike Oorgangsraad, Bronkhorstspruit v
Senekal
2001 (3) SA 9
(SCA) paras 28-29.
13
Van
Aardt v Galway
2012 (2) SA 312
(SCA).