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2023
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[2023] ZAGPJHC 1124
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Dischem Sunward Park (Pty) Ltd and Another v HG Manolas t/a Sunward Park Pharmacy (2021/55809) [2023] ZAGPJHC 1124 (9 October 2023)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG DIVISION,
JOHANNESBURG)
Case
No.
2021/55809
NOT REPORTABLE
NOT OF INTEREST TO OTHER
JUDGES
REVISED
09.10.23
In the matter between:
DISCHEM
SUNWARD PARK (PTY) LTD
First
Applicant
DISCHEM
PHARMACIES LIMITED
Second
Applicant
And
HG
MANOLAS CC trading as
SUNWARD
PARK PHARMACY
Respondent
JUDGMENT
WILSON
J:
1
The respondent is a close corporation, whose sole member is
Mr. Manolas. The close corporation sued the applicants, Dischem, for
breach of contract. The close corporation sold a pharmacy to Dischem,
but alleges that Dischem has breached the sale agreement
in a number
of respects. It claims specific performance of the obligations it
says Dischem failed to fulfil. It also brings an
alternative claim
for just under R12 million in damages.
2
On receipt of the claim, Dischem demanded security for costs
under Rule 47. Security was tendered, and the Registrar set the value
of security in the amount of R225 226, to be provided by way of
a bank-guaranteed cheque. Although he accepts that he originally
instructed his erstwhile attorneys to tender security, Mr. Manolas
now disputes the close corporation’s obligation to provide
it.
3
Dischem seeks an order compelling the close corporation to
provide security in the manner and in the amount set by the
registrar,
failing which Dischem asks that the main action be stayed
until security is provided.
4
In opposing Dischem’s application, the close corporation
sought to introduce a supplementary answering affidavit, to which
Mr.
Manolas deposed. Dischem opposes that application. Mr. Manolas has
also sought my leave to permit him to represent the close
corporation
in the main action, as he has dismissed the close corporation’s
attorneys and he does not wish to instruct another
firm.
5
There are, accordingly, three interlocutory applications
before me: Dischem’s application to compel the provision of
security,
the close corporation’s application for leave to file
a supplementary affidavit and Mr. Manolas’ application for
leave
to act for his close corporation in the main action. I address
each in turn.
The application to
compel the provision of security
6
There is no real dispute that, with the benefit of its
attorney’s advice, the close corporation, acting through Mr.
Manolas,
tendered security for costs. Nor is the registrar’s
decision as to manner and amount of security to be provided seriously
assailed. What Mr. Manolas seeks in defending the application to
compel, is the re-opening of the issue of whether the close
corporation
should have had to provide security for costs in the
first place. I am not at liberty to re-open that issue, and, even if
I were,
I can find no good reason to do so in this case. Mr. Manolas’
case appears to be that (a) the close corporation only tendered
security to speed the litigation up; that (b) this did not have the
desired effect and (c) that, because the tendering of security
did
not have the desired effect, the close corporation should no longer
be required to provide it.
7
As sympathetic as I am to what appears to be a layperson’s
obvious frustration with the delays inherent in litigation, Mr.
Manolas has laid no basis on which the close corporation can avoid
the obligation to provide the security he instructed his attorney
to
tender on the close corporation’s behalf. The application to
compel security must succeed.
The application for
leave to file a supplementary answering affidavit
8
The application for leave to file a supplementary answering
affidavit must be refused, because the affidavit sought to be filed
is devoid of any material relevant to the issues in the main
application. What Mr. Manolas does in the affidavit, for the most
part, is complain about the delays that have dogged the main action,
and seek to litigate the issues in that action. The affidavit
does
not canvas any material that could conceivably be relevant to the
question of whether the close corporation should provide
the security
the close corporation’s attorney tendered on Mr. Manolas’
instructions.
The application for
leave to represent the close corporation
9
The common law rule is that a company or close corporation may
not be represented in legal proceedings by a layperson, even if that
layperson is a director or shareholder of the company, or a member of
the close corporation. A court, however, has a residual discretion
to
permit a layperson to appear before it and make submissions on the
company or close corporation’s behalf if the administration
of
justice requires it (see
Manong and Associates v Minister of
Public Works
2010 (2) SA 167
(SCA), paragraphs 10 and 13). I
permitted Mr. Manolas to do so in these applications, because he is
the sole member of the close
corporation he wishes to represent and
because the alternative would have been to have Mr. Manolas sit in
the public gallery while
I heard only from counsel for Dischem. That
seemed undesirable for all sorts of reasons, not the least of which
is that it would
have been demeaning of Mr. Manolas.
10
However, the question now is whether I should make a general
order permitting Mr. Manolas to appear in the main action on behalf
of the close corporation. Laypeople look with sometimes
understandable suspicion and incredulity at the way lawyers behave
and
at the way legal processes work. Mr. Manolas has, for reasons
that are not clear but with which it is hard not to have sympathy
at
a very general level, decided to do away with his lawyers and run his
case himself. However, as with most decisions born purely
of
frustration, Mr. Manolas’ choice was unwise. By dismissing his
attorneys and counsel, Mr. Manolas has multiplied the delays
of which
he complains, and has argued himself into a corner. The main action
will now be stayed until he provides the security
he tendered.
11
During the course of argument, I emphasised to Mr. Manolas
that he ought to obtain legal representation for his close
corporation.
There is no suggestion that the close corporation cannot
afford to obtain representation or to provide the security tendered.
Mr.
Manolas’ decision to go it alone seems to be little more
than hubris.
12
In these circumstances, I can see no good reason to issue a
general order permitting Mr. Manolas to represent the close
corporation
in the main action. Such an order would bind the Judges
before whom the main action or any future interlocutory applications
are
heard. There is nothing in this case that would justify that
outcome. The application will be dismissed, but I emphasise that my
order is not an absolute bar to Mr. Manolas being able to represent
the close corporation in future. I will leave the decision
of whether
to hear from Mr. Manolas again to the Judges who are in future seized
with the action or applications interlocutory
to it. That decision
will obviously have to be made taking into account the particular
circumstances with which future courts are
then presented.
Costs
13
Dischem seeks costs on a punitive scale, on the basis that Mr.
Manolas’ approach to these applications has been wholly
misconceived.
It is true that Mr. Manolas’ approach is
misconceived, but that is no reason to punish the respondent with a
punitive costs
order. As a layperson, Mr. Manolas is not to be held
to the same standards as a legal professional, and I do not wish to
open the
door to punitive costs orders against mistakes made without
malice by lay litigants.
Order
14
For all these reasons –
14.1 The respondent is
ordered to furnish security in the form of an irrevocable banker’s
guarantee in the amount of R225 226.
14.2 The action
instituted by the respondent under case number
55809 / 2021 is
stayed until the required security is provided.
14.3 The respondent is
directed to pay the costs of the application to compel security.
14.4 The application for
leave to file a supplementary answering affidavit is dismissed with
costs.
14.5 The application to
permit Mr. HG Manolas to appear for the respondent in the main action
is dismissed with costs.
S D J WILSON
Judge of the High Court
This judgment is handed
down electronically by circulation to the parties or their legal
representatives by email, by uploading
to Caselines, and by
publication of the judgment to the South African Legal Information
Institute. The date for hand-down is deemed
to be 9 October 2023.
HEARD ON: 7
September 2023
DECIDED ON: 9
October 2023
For the Applicants:
HC van Zyl
Instructed by
Saltzman Attorneys
For the Respondent:
HG Manolas
Instructed by
the Respondent