Marcus M Farming CC v Eagles Valley Poultry (Pty) Ltd (28604/21) [2022] ZAGPPHC 115 (17 February 2022)

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[2022] ZAGPPHC 115
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Marcus M Farming CC v Eagles Valley Poultry (Pty) Ltd (28604/21) [2022] ZAGPPHC 115 (17 February 2022)

IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHER JUDGES: NO
17
February 2022
Case No: 28604/21
In
the matter between:
MARCUS
M FARMING
CC
Applicant
and
EAGLES
VALLEY POULTRY (PTY)
LTD
Respondent
JUDGMENT
LAZARUS
AJ
1.
This
is an application for the winding up of the respondent on the basis
that it is unable to pay a debt allegedly owed to the applicant
in
respect of the occupation and use of the applicant’s property.
2.
The
respondent opposes the application on two grounds:
2.1.
First, it disputes being indebted to the
applicant in the amount claimed or at all.
2.2.
Second, it denies that it is either
factually or commercially insolvent.
3.
The basis for the respondent’s denial of
its indebtedness to the applicant was set out in an email from the
respondent’s attorney
to the applicant’s attorney evidently sent
before receipt of the applicant’s application. This letter also
provided financial
information demonstrating the respondent’s
factual and commercial solvency.
4.
The respondent’s answering affidavit
further substantiated the basis for the denial of its indebtedness to
the applicant and provided
further evidence demonstrating its factual
and commercial insolvency.
5.
Notwithstanding this, the applicant’s
persisted with the application and filed a replying affidavit still
seeking the winding up
of the respondent.
6.
Two days prior to the hearing of this
matter, the applicants uploaded onto Caselines two draft orders. The
first persisted with the
relief originally sought (i.e., the winding
up of the respondent). The second was framed as an alternative order
and sought the postponement
of the application
sine
die
and payment of the debt into the
trust account of the applicant’s attorney pending the final outcome
of the application.
7.
During argument, the applicant’s attorney
(who appeared on behalf of the applicant) stated that after receipt
of the answering affidavit,
he had advised his client not to proceed
with the winding up application but rather to request payment of the
debt into his account
pending finalisation of application.
8.
Albeit rather late in the day, the advice
not to proceed with the liquidation application was sound. It is well
established that a
liquidation application is not appropriate when a
debt is disputed on reasonable and
bona
fide grounds
. Notwithstanding the
applicant’s attorney’s submissions to the contrary at the
hearing, no evidence was presented to demonstrate
that the
respondents defence was unreasonable or
mala
fide
. On this basis alone, the
application for the winding up of the respondent must fail.
9.
So too must the applicant’s claim in its
alternative proposed order for a directive that the amount of the
debt should be paid into
the applicant’s attorney’s trust account
pending finalisation of this application. Since the debt is disputed
on reasonable and
bona fide
grounds it cannot be just or equitable for such an order to be made.
10.
The applicant’s application must also
fail in the absence of any evidence that the respondent is insolvent.
On the contrary, the
evidence clearly demonstrates that the
respondent is both factually and commercially solvent. This was in
fact conceded by the applicant’s
attorney at the hearing.
11.
This brings me to the question of costs.
12.
The respondent submits that the applicant
should be liable for the costs on a scale as between attorney and
client.
13.
There is merit in this submission. As
alluded to above, the applicant was made aware that the respondent
disputed the debt alleged
to be owing by it and explained the basis
for the dispute before the application was launched. There also could
never have been any
reasonable basis for the belief that the
respondent was either factually or commercially insolvent. Even if
there remained some doubt
at the time the application was launched,
there was no reasonable basis for the doubt to have persisted after
the respondent filed
its answering affidavit. Despite this, the
applicant persisted with the application and only presented the draft
order for alternative
relief two days prior to the hearing, the basis
for which relief is not substantiated in the papers before me. This
conduct justifies
a punitive costs order against the applicant.
14.
The respondent further submits that the
conduct of the applicant’s attorney, in advising the applicant to
launch and persist with
the application despite being aware (or, with
the exercise of reasonable professional care, ought to have been
aware) that the application
was doomed to failure from the outset,
ought to be sanctioned with a cost order
de
bonis propriis
.
15.
Costs orders
de
bonis propriis
are not easily awarded.
To justify such an order, the conduct complained of must be
mala
fides
, negligent or unreasonable.
[1]
It has also been
stated that such costs are awarded for conduct which substantially
and materially deviates from the standard expected
of the legal
practitioner, such that his clients, the actual parties to the
litigation, cannot be expected to bear the costs, or
because the
court feels compelled to mark its profound displeasure at the conduct
of an attorney in any particular context.
[2]
Examples are dishonesty, obstruction of the interests of
justice, irresponsible and grossly negligent conduct, litigating
in
a reckless manner, misleading the court, gross incompetence and a
lack of care.
[3]
16.
In the present matter, while it may be
argued that the applicant’s attorney was unreasonable or even
negligent in persisting with
this application for the winding up of
the respondent when he was aware or ought reasonably to have been
aware that the application
had no prospects of success, I am not
satisfied that there is sufficient evidence that his conduct was so
severe as to deserve the
censure of this court in the form of a costs
order
de bonis propriis
.
17.
In the result, I make the following order:
17.1.
The application is dismissed with costs on
a scale as between attorney and client.
LAZARUS
AJ
ACTING
JUDGE OF THE HIGH COURT, GAUTENG DIVISION PRETORIA
For the
Applicant: S M Ndobe
Instructed
by Ndobe Incorporated Attorneys
For the
Respondent: Adv F Terblanche SC
Heads of
argument prepared by Adv J Vorster
Instructed
by Strydom & Bredenkamp Incorporated
[1]
Vermaak’s Executor v Vermaak’s Heirs
1909 TS
679
at 691.
[2]
Lushaba v MEC for Health, Gauteng
2015 (3) SA 616
(GJ) quoting from
[3]
Multi-Links Telecommunications Ltd v Africa
Prepaid Services Nigeria Ltd
2014 (3) SA 265
(GP)