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[2022] ZALMPPHC 60
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Meyr and Others v Sable Hills Eco Park Home Owners Association (NPC) and Others (78/2020) [2022] ZALMPPHC 60 (15 November 2022)
IN
THE HIGH COURT OF SOUTH AFRICA,
LIMPOPO
DIVISION, POLOKWANE.
CASE
NO: 78/2020
REPORTABLE:
YES/NO
OF
INTEREST TO OTHER JUDGES: YES/NO
REVISED.
DATE:
15-11-2022
In
the matter between:
JOHANN
ALBERT
MEYR
1
ST
APPLICANT
LEONORE
ALENDRA LAAS
2
ND
APPLICANT
PETRUS
HENDRIK DU BRUYN N.O
3
RD
APPLICANT
BARBARA
DU BRUYN N.O
4
TH
APPLICANT
DANIEL
CHRISTOFFEL STRYDOM
5
TH
APPLICANT
JOHN
GAR
ANNADALE
6
TH
APPLICANT
GERT
JACOB WILHEMUS
7
TH
APPLICANT
VAN
DER MERWE
LEON
FERDINAND STEYN
N.O
8
TH
APPLICANT
GERRIT
VOORSTER
N.O
9
TH
APPLICANT
And
SABLE
HILLS ECO PARK HOME
OWNERS
ASSOCIATION
(NPC)
1ST RESPONDENT
BUNKER
HILLS
INVESTMENT 638
(PTY)
LIMITED
2
ND
RESPONDENT
GERHADUS
RUDOLPH VILJOEN
3
RD
RESPONDENT
WILLIAM
STEPHEN WILLIAMS
4
TH
RESPONDENT
NADIA
SMIT
5
TH
RESPONDENT
THE
COMPANIES AND INTELECTUAL
PROPERTY
COMMISION
6
TH
RESPONDENT
JUDGMENT
This
judgment was handed down electronically by circulation to the
parties' legal representatives by email. The date and time for
handing down shall be deemed to be the 15-11-2022
2022.
LITHOLE
AJ:
INTRODUCTION
1.
The applicants seek an order compelling the Sable Hills Eco
Park
Homeowners' Association's board of directors to adopt a resolution to
amend its existing memorandum of incorporation (MOI).
They contend
that the amendment sought is to ensure that the developer, as the
profit company with the sole director, no longer
appoints the
majority of the directors to the board of the Homeowner Association
(HOA) as the (non-profit company) thereby preventing
the developer
exerting its wishes on the remainder of the homeowners who are
members of the HoA.
2.
The applicant asserts that the relief sought is in two fold
first,
the HoA memorandum of incorporation does not comply with the
provision of the 2008 Companies Act. Secondly, because the
developer
controls the majority of the Board of directors and there is
currently a deadlock between the directors concerning important
financial decision of the HoA.
3.
The second respondent (the respondent) is on opposing this
application on the basis that the applicant has misconceived the
legal basis of the relief they are seeking. They contend that section
66(4) of the Company Act 71 of 2008 is not applicable to the HoA as
it is non-profit company and raised point in
limine
to that
effect. He further contend that the first respondent article of
association is an agreement as contemplated in section 15(7)
of the
Company Act 71 of 2008 and consequently item 3A of schedule 5 to the
Act applies to the article of association, in that
regard the MOI is
not inconsistent with the Act.
FACTUAL
MATRIX
4.
The applicant approached this court seeking the court to excise
it
powers in terms of section 163 of the Company Act 71 of 2008. In
essence the applicant are seeking the following relief:
"That the first
respondent's board of directors are directed to forthwith adopt a
resolution as contemplated
in
section 16(4)(a)
of the
Companies
Act, 71 of 2008
, to amend the first
respondent's
existing Memorandum
of
Incorporation
(formerly known
as
its
Articles
of Association)
in the following
ways:
(a)
By deleting
the existing
paragraph
6.1 and 6.3 of the Memorandum
of Incorporation
and replacing
them
with the
following new paragraphs:
"6.1
Subject the provisions of the
Companies Act, 71 of
2008
,
the company's board of directors shall during the currency of the
development period comprise of no less than four and no more than
six
directors. After expiry of the development period, the board shall
consist of no Jess than three and no more than five directors.
6.3
During
the
development
period,
the
developer
shall
have
the
right to appoint
50%
of the company's board of directors on
the expiry of the development period the directors so appointed shall
immediately be deemed
to have resigned from office. The remaining
members of the board shall be elected to office by the members in
general meeting,
it being understood that the developer shall not be
entitled to
cast
any vote on the election of such directors."
(b)
By
amending
the
existing
paragraph
7.
3
of
the
Memorandum
of Incorporation
by
adding
the following at the end of the paragraph:
"It being
understood that in the event that the vacancy involves
a
director
nominated by the developer, the remaining director(s) nominated
by
the
developer
shall
nominate
the
replacement
director,
and
in
the
event
that
the
vacancy
involves
a
director
elected
by
members,
the
replacement
director
shall
be
elected
by
the
remaining directors chosen by the
members.''.
(c)
By deleting the existing paragraphs 8.1 and 8.2 of the
existing Memorandum
of Incorporation
and
replacing
them with the following new paragraphs:
"8.1
The
directors elected and appointed at
a
general meeting shall
convene a first board meeting within 7-days after the general meeting
and shall at such first meeting, as
a first order of business, elect
a chairman and
a
vice-chairman
from their ranks.
8.2
The chairman and/or
vice-chairman shall have no
casting votes
or special privileges.
8.3
The chairman shall preside over all board meeting and, when
he/she is unavailable, this function will be fulfilled by the vice
chairman.
8.4
The office of chairman and vice-chairman shall during the
currency of the development period rotate on an annual basis between
the
directors nominated by the developer, and between the directors
elected by the company's members.”
(d)
By deleting the existing paragraph 11.2 of the memorandum of
incorporation
and replacing
it with the
following new paragraph:
"11.2 Subject to
the provisions of the
Companies Act, 71 of 2008
, the quorum for the
holding of ant meeting of the directors shall be one-half of the
total number of directors then in the office,
plus one director. “
(e)
By inserting the following new paragraphs 11.6 to 11.11 into
the memorandum
of incorporation:
"11.6
Unless the
Companies Act, 71 of 2008
, prescribed a higher
percentage,
a
decision by the board of directors shall be
adopted by
an
ordinary
majority
vote,
whether
taken at a board
meeting or through a round-robin process.
11.7
In the event that
the board is deadlocked on any decision, the disputed
decision
will
be
referred
to
an
independent
third
party.
In the event that the decision is of
a
financial nature, the
independent
party
shall
be
an
accountant
of
no
less
than
10-years standing. Any
other decision, or if the deadlocked directors cannot agree on the
nature of the dispute on which the board
is
deadlocked, will
be referred to a practicing attorney with experience in commercial
law, of no less than 10-years standing.
11.8
The referral in 11.
7
shall take place within 48-hours
after the deadlock
arises.
In the event that the parties are
unable to agree on the identity
of the decision maker
within 48-hours, such person shall be appointed
on
an urgent basis by the South African
Institute
of Professional
Accountants
(SA/PA),
in the case of an accountant, and by the President of the
Legal Practice Council, in the
case
of an attorney.
11.9
The deadlocked directors shall be entitled to make written
representations to the appointed decision maker, which
representations
must reach the decision maker in electronic format
within 48-hours after his/her appointment.
11.10The decision
maker shall publish his/her decision in electronic format within
4-days after his/her appointment
and the decision
so published shall be final and binding on the company and its
board of directors and shall be forthwith implemented by the
board of directors.
11.11When making
his/her decision, the decision maker shall act impartially, in good
faith, and with the best interest of the
company
as
his/her principal obligation."
5.
That the cost of this application be paid by the second respondent,
and by any other respondents who opposes this application, jointly
and severally with the second respondent.
6.
The first and second applicants are members and directors of
the
first respondent being HoA incorporated as non-profit company. The
third to the ninth applicants are the owners of the residential
erven
in the Sable Hills Eco Estate and are members of the first
respondent.
7.
The first respondent is Sable Hills Eco Park Homeowners' Association,
being non-profit company in terms of section 8 of the Companies Act
71 of 2008 (the Act).
8.
The first respondent was incorporated on 28 May 2011, approximately
two years before
Companies Act 71 of 2008
had come into operation. It
is association that was incorporated under
section 21
of the old
Companies Act 61 of 1973.The statute which governs the association is
the Article of Association. Before the commencement
of the Act the
first respondent' board of directors did not amend its article of
association and memorandum of association when
the new Act came into
operation on ground that the article of association or MO! is not
contrary to the Act.
9.
The HoA received an advice from the association's attorney and
the
advice was accepted since it was consistent with item 4 of schedule 5
to the Act which provided that every pre-existing company
incorporated in terms of section 21 of the previous act is deemed to
have amended its memorandum of incorporation as of the general
effect
date to expressly state that it is non -profit company and to have
changed its name in so far as required to comply with
section 11(3).
10.
The second respondent is the developer of the Sable Hills Eco Estate.
The second
respondent is the only respondent opposing this
application though six respondent are cited.
11.
The relation between the applicants and the respondent is that of the
homeowners
and the developer relationship. The relationship is based
on an agreement. The agreement is as contemplated of section 15(7) of
the Act.
12.
The second respondent concluded the contract with third party
purchaser of an
erf in the estate including the applicants. The
agreement is that all parties to it accept all the rules and
regulations of the
first responded as entrenched in the contract.
Each buyer agreed to automatically becoming the member of the first
respondent and
to comply with all the rules of the HoA in clause 6 of
the agreement.
The
applicants
13.
The applicant seeks a relief in terms of section 163 of the companies
Act 71
of 2008 in that the HoA's board of directors be directed to
adopt a resolution to amend the HoA's existing Memorandum of
incorporation
with the view to inter alia introduce a more equitable
or democratic governance structure in the management of the Sable
Hills
Eco Park residential Estate.
14.
The applicant seeks to amend the memorandum to ensure that the
developer no
longer appoints most of the directors to the board of
the HoA with the intent to prevent the developer from exercising de
facto
control in respect of the remainder of the home owners for an
undetermined future period to the prejudice of the homeowners. They
contend that the present situation operates oppressive vis a-vis
the remainder of the residents in the HoA.
15.
The applicant contend that they are not seeking to renegotiate the
terms of
the sale agreements concluded with the developer when they
purchased stands but rather seeking to enforce the provision of the
2008
Companies Act.
16.
The
applicant conceded in the replying affidavit that the "the
developer has a vested interest in the success of his development,
that he may for this reason require a certain degree of control over
the development." But they content that "however
the
legislature resolved to limit the control that a single party (like
the developer)
can excise
over a company
that is why
section
66(4)
was
enacted."
[1]
The
respondent
17.
As alluded supra the second respondent is the only respondent
resisting the
relief sought by the applicant. The basis for its
opposition is that the
section 66(4)
does not find application in
this matter since the first respondent is the non-profit Company. It
is accepted by the applicant
that the first respondent is not profit
company. The respondent raised point
in
limine
that the "relief is mis conceived "in that the
applicant ill-conceived the application of section 66(4)(b) of the
Act
that empowers the members of the 1
st
respondent
to appoint at least 50 % of its board of directors .This section
seems to be based upon the provision of section
10 (2) (b) of the Act
which had not excluded the operation of the subsection 66(4)(b) as
read with the provision of section 10(4)
which provided that any
reference to "a shareholder" as it is the case in section
66)4) (b) must be construed as reference
to "the voting members
of the non-profit company".
18.
The respondent further contended that the applicants when buying the
property,
they signed the contract with the 1
st
respondent
voluntarily ,and have contractual agreement which is binding between
the parties . They agreed to be members of HoA
and to comply with the
rules and guidelines of the HoA.
19.
Thirdly, the respondent contend that the conduct of the respondent in
exercising
its right to appoint three directors to the first
respondent's board is not oppressive or prejudicial to the applicants
or not
unfairly disregarding the interest of the applicants.
20.
The respondent further contend that there is dispute of fact on the
papers as
to whether the board that had been selected at the AGM of
12 October 2019 had in fact become deadlocked as alleged by the
applicants
in their founding affidavit.
21.
The respondent filed an application for condonation for late filing
of the heads
of arguments which is not opposed by the applicant. The
application is granted since there is no prejudice to any party to
the
proceedings.
22.
As indicated the respondent raised a point
in
limine
which clearly is intertwined to the merits .It will be dealt with
below when dealing with that relevant point.
23.
The issues to be determined:
23.1 whether
the MOI does comply with the provision of the
Companies Act 71 of
2008
;
23.2 whether
section 66(4)
(b) apply to non-profit company; and
23.3 whether
the court should excise its inherent power as envisaged in
section
163
of the
Companies Act 71 of 2008
to address the alleged power
imbalance which constitute oppressive conduct if it find that
section
66(4)
does not find application.
Analvsis
24.
First, Whether the MOI comply with the provision of the 2008
Companies Act. It
is common cause that the 1
st
respondent
MOI was prepared in terms of the old
Companies Act and
that during
the development period of the estate the respondent shall have the 20
votes in addition to the votes in respect of
each unsold erf that
vest in it .The article of association is an agreement as
contemplated in section 15(7) of the Act consequently.
25.
Clause 6.1 of the first respondent's MOI conflicts with the Act
insofar as it
provides for the appointment of a minimum of two
directors (as opposed to the minimum of three directors dictated by
section 66(2)(b)),
the aforesaid provision only will be void to the
extent that it contravenes or is inconsistent with the Act as
envisaged in section
15(1)(c) of the Act. It is not the entire MOI
that becomes void as the applicants seem to contend. In terms of item
4(1)(a) of
Schedule 5 of the Act, every pre-existing company
incorporated in terms of section 21 of the previous Act was deemed to
have amended
its memorandum of incorporation as the general effective
date of the Act.
26.
Secondly, whether section 66(4) (b) apply to non-profit company.
27.
The applicant counsel argued that the section 66 (4)(b) find
application in
this matter and that It empowers the members of the
1
st
respondent to appoint at least 50 % of its board of
directors .This section is based upon the provision of section 10 (2)
(b) of
the Act which he argues that it had not excluded the operation
of the subsection 66(4)(b) as read with the provision of section
10(4) which provided that any reference to "a shareholder as is
in the case in section 66(4) (b) must be construed as reference
to
"the voting members of the non profit company".
28.
The respondent contends that because section 66(4) expressly refers
to profit
companies, it does not apply to non-profit Companies. The
respondent's submission is that the provisions of section 66(4)(b)
expressly
exclude non-profit companies, is supported by the exclusion
of the provisions of section 66(8) from application to non-profit
companies.
The latter section expressly refers to profit companies
(as is the case with section 66(4)(b)) and provides that directors
"must
be elected by the persons entitled to exercise voting
rights in such an election".
29.
There is two destructive interpretation of the same section before
the court,
which then will require the court to look into case law in
interpreting statute.
30.
The interpretation of legislation involves more than analysing the
particular
provision in question. To interpret a text in its context
includes the intra-textual context, that is the enactment as a whole,
including its unique structure and legislative codes, as well as the
extra-textual context (the rest of the existing law and other
contextual considerations that may be applicable).
31.
The
interpreter
has
to
study
the
legislation
as
a
whole.
In
Nasionale
Vervoerkommissie van Suid-Afrika v Salz Gossow Transport (Edms)
Bpk
[2]
,
the court pointed out that:
"when
interpreting certain provisions, statute must be studied in its
entirety."
32.
The interpretation of the Act requires a careful consideration of the
scheme
of the Act and its object and should be measured against the
rights embodied in the Constitution.
33.
In
Cool Ideas
1186 Cc V Hubbard
and
Another
the court held that:
"A fundamental
tenet of statutory interpretation is that the word in a
statute must be given their ordinary grammatical meaning, unless to
do
so
would result in an absurdity. there are three important
interrelated riders this general principle, namely:
1.
that statutory
provisions
should
always be interpreted
purposively.
2.
the relevant
statutory
provisions
must be properly
contextualized; and
3.
all
statutes
must be construed consistently with the constitution, that is, where
reasonably possible, legislative provision ought to
be interpreted to
preserve
their
constitutional
validity.
This
proviso
to
the
general
principle
is closely related to the purposive
approach
referred
to in (a)".
[3]
36.
In
Natal Joint Municipal Pension Fund
,
the
Supreme Court of Appeal postulated a modern approach to
interpretation. Wallis JA formulated it as follows:
''The general rule is
that the words used in a statute are to be given their ordinary
grammatical meaning unless they lead to absurdity.
He referred to
authorities that stress the importance of context in the process of
interpretation and concluded that:
''A court must
interpret the words in issue according to their ordinary meaning in
the context of the Regulations as a whole, as
well as background
material, which reveals
the
purpose
of
the Regulation,
in
order
to
arrive
at
the
true
intention
of
the draftsman of the Rules'.'"
[4]
37.
In the circumstances, the background to the legislation, the context
and the surrounding
circumstances are important. The purpose of the
legislation and the intention of the legislature. This exercise is
not undertaken
in a piece meal fashion, nor is it a step by step
exercise. A wholistic approach should be adopted.
38.
In looking in the section 66(8) it is clear that it was never the
intention of the
legislature to make the reading of the "profit
company" to be synonymous to the phrase "non-profit
company'.'.
39.
If the legislature's lntention was indeed that the phrase "profit
company"
should be synonymous to the phrase "non-profit
company" and that the members holding voting powers in a
non-profit company
would be entitled to elect 50% of the directors of
the board (read "persons entitled to exercise voting rights in
such an
election"), then it is completely illogical that the
legislature would have excluded the operation of section 66(8) from
non-profit
companies. The exclusion of section 66(8) insofar as
non-profit companies is concerned, leaves one with the conclusion
that the
election of the directors of such a company will be governed
by the said non-profit company's MOI, which document ay include the
powers set out in sub-sections 66(4)(a)(i) - (iii).
40.
The second respondent's rights to appoint three directors during the
development period
as per clause 6.3 of the MOI, is neither
objectionable, nor contrary to the Act.
41.
Thirdly, whether the court should excise its inherent power as
envisaged in section
163 of the companies act to address the alleged
power imbalance which constitute oppressive conduct if it finds that
section 66(4)
does not find application in this matter.
42.
The applicants seeks to obtain an order in terms of section 163{2)(d)
of the 2008
Companies Act directing
the HoA to amend its MOI in
accordance with
section 66(4)
, in order to bring the MOI in line with
the 2008
Companies Act and
ensure it is no longer in conflict with
Act.
43.
The applicant in seeking the relief they do, they contend that they
seek to give effect
to section 7(h) and U) of the 2008
Companies Act
which
states the Act's purpose is to "provide for the formation,
operation and accountability of non-profit companies in a manner
designed to promote, support and enhance the capacity of such
companies to periorm their functions and "encourage the
efficient
and responsible management of companies".
44.
The respondents contend that
section 163(2)(d)
can only be granted to
prevent oppressive or prejudicial conduct, none of which the second
respondent, using, in the second respondent's
own words: his
'superior voting power in the first respondent' has caused to the
members/shareholders of the first respondent.
45.
The next enquiry to be considered is whether the exercise by the
second respondent
of its rights to appoint three directors to the
first respondent's board, has been oppressive or prejudicial to the
applicants
or whether it unfairly disregarded the interests of the
applicants.
46.
The applicants relies on Geffen and others v Dominquez-Martin and
Others (4501/2014)[2017]
ZAWCHC 118;[2018]1 All SA 21 (WCC) (17
October 2017) where Davis, J made reference to the analysis contained
in Henochsberg on
the
Companies Act which
states:
'Provided that the
courts will adopt the same approach as under s
252
,
Aspek Pipe
Co
(Pty) Ltd v Mauerberger
1968 (1) SA 51
l(c) and authorities
there referred to indicate
a
willingness on the part of
the court to intervene where the circumstances show e.g. "that
the majority shareholders are using
their greater voting
power
unfairly
in
order
to
prejudice"
a
minority
shareholder
or
"are
acting on
a
manner
which
does
not
enable
;
such
a
shareholder
"to
enjoy
a
fair participation"
47.
The applicants further relied Graney Property Ltd v Manala and others
(665/12)
[2013] ZASCA 57
;[2013}3 All SA 111 (SCA);
2015 (3) SA 313
(SCA) (10 May 2013) the application of
section 163
was considered and
applied where Petse JA considered the jurisprudence developed over
the years insofar as section 252 of the Companies
Act, 61 of 1973
(which is in all material respects, the previous equivalent of
section 163 of the 2008 Companies Act). In considering
such he cited
the following extract at paragraph [22] of this judgment:
"Oppressive
conduct has been defined as unjust or harsh or tyrannical
... or
burdensome,
hard and
wrongful
...
or which
involves
at least an
element
of lack of probity or fair dealing ...
or a visible departure from the standards of fair dealing and a
violation of the conditions
of fair play on which every shareholder
who entrusts his money to a company is entitled to rely. It will be
readily appreciated
that these various definitions represent widely
the divergent concepts of oppressive conduct."
48.
Petse, JA went on to agree with Prof Cassim et ai and state:
"in the affairs
of the company
-
(per
Tebbutt
AJ (as
he then was)
in the Aspek
Pipe case supra at 527)' or where the shareholders have entered into
an association upon the understanding that each
Of them will
participate in the management
of the company,
but the majority use their voting Dower to "exclude a
member from participation
in the management
without giving him the opportunity to remove his capital upon
reasonable terms".
49.
The applicant contend that they have suffered and will continue to
suffer, prejudice
due to the conduct of the second and third
respondents.
50.
The respondents submitted that apart from alleging that the third and
fourth respondents
had adopted a
"dictatorship-like
approach
over
the
HOA"
by assuming the positions of vice-chairman and chairman
respectively (an allegation which does not even feature in the
founding
papers), the Applicants' counsel had not drawn the Court's
attention to any single incident pointing to oppressive, prejudicial
or unfair conduct.
51.
Section 163 of the Act reads as follows:
"(1)
A
shareholder
or
a
director of
a
company
may apply to
a
court for relief if
(a)
any act or omission of the company, or
a
related
person, has had
a
result that is oppressive or unfairly
prejudicial to, or that unfairly disregards the interests of, the
applicant;
(b)
the business of the company, or
a
related
person, is being or has been carried on or conducted in
a
manner
that is oppressive or unfairly prejudicial to, or that unfairly
disregards the interests of, the applicant; or
(c)
the
powers
of
a
director
or
prescribed
officer
of
the
company, or
a
person
related
to the company, are
being
or have been exercised
in
a
manner that is oppressive or unfairly prejudicial to, or that
unfairly disregards the interests of, the applicant,
(2)
Upon considering an application in terms of subsection (1),
the court may make any interim or final order it considers
fit, including-
(a)
an order restraining
the conduct complained
of,·
(b)
an order appointing
a
liquidator, if the company
appears to be insolvent;
(c)
an order placing the company under supervision and commencing
business rescue proceedings in terms of Chapter 6, if the
court is satisfied that the circumstances
set out in
section 131(4)(a) apply;
(d)
an order to regulate the company's affairs by directing the
company to amend its Memorandum of Incorporation or to create or
amend
a
unanimous shareholder agreement;
(e)
...,
(f)
…
(i)
...;
or
(ii)
...,
(g)
... ,
(h)
... ,
(i)
...,
(j)
...,
(k)
...;
or
(l)
…
(3)
…
(a) ... and
(b)
…"
52.
From the facts submitted it is clear that the applicants are unhappy
with the second
's respondent using his voting power which are
contained in the MOI signed by HOA and its members. The applicants in
essence attempt
to subvert the rights that were created in favour of
the Second Respondent in terms of its contractual arrangements with
the members
of the first respondent through the purported amendment
of the latter's MOI.
53.
Where the applicants and all other members of HoA voluntarily
accepted the second
respondent's greater voting powers and its
ability to appoint directors on the board, there can hardly be any
room for describing
these provisions (or the exercise thereof) as
oppressive, prejudicial or unfairly dlsregarding their interests. The
applicants
had failed to make out a case for any relief in terms of
section 163 of the Act and that the application therefore falls to be
dismissed.
54.
The respondents had raised an issue about dispute of facts. The
respondent contends
that a clear dispute of fact on the papers exist.
It arise on the issue on whether the board that had elected at the
AGM of 12
October 2019 had in fact become deadlocked as alleged by
the applicants in their founding papers. The applicants had not
disputed
the second respondent's testimony that despite not being
delegated by a properly constituted meeting of directors, the first
and
second applicants had in fact side-lined or shunned the other
directors of the first respondent and purported to discharge all the
functions of the first respondent's board of directors on their own,
even going so far as to arrogate to themselves the titles
managing
directors despite the fact that the first respondent's MOI did not
recognise any such office.
55.
If the Court finds that there are disputes of fact, the Court retains
the power to
refer only those aspects that are in dispute and not
capable of resolution on paper to oral evidence.
56.
This
principle
that
applicable
if
there
is
dispute
of
facts
is
called
the
"Plascon
Evans
Rule"
which
was
developed
in
the
matter
of
Stellenbosch
Farmers
Winery
Ltd
v
Stellenbosch
Winery
(Pty)
Ltd
[5]
and
applied
in
the
Plascon
Evans
Paints
ltd
v
Van
Riebeeck
Paints
(Pty)Ltd
[6]
.
57.
The court
held in the matter
of
Moosa
Bro
&
Sons
(Pty)Ltd
v
Rajah
[7]
"the
presence
of
a dispute
of fact in
an opposed
application,
and the
nature thereof, will often be the
determining
consideration
in deciding
whether
viva
voce
evidence should be ordered".
58.
In the
matter of
Room
Hire
Co
(Pty)Ltd
v Jeppe Street Mansions (Pty)Ltd
[8]
,
it
was held that the 'principle' ways in which a dispute of fact may
arise are set out as follows:
(i)
When the respondent denies all the material allegations made
by the various deponents on the applicant's behalf and produces or
will produce, positive evidence by deponents or witnesses to the
contrary. He may have witnesses who are not presently available
or
who, though adverse to making an affidavit, would give evidence viva
voce if subpoenaed.
(ii)
When
the
respondent
admits
the
applicant's
affidavit
evidence
but alleges
other facts which
the applicant disputes
.
(iii)
When the respondent concedes that he has no knowledge of the
main facts stated by the applicant, but denies them, putting the
applicant
to the proof and himself gives or proposes to give evidence
to show that the applicants and his deponents are bias untruthful or
otherwise unreliable, and that certain facts upon which the applicant
relies to prove the main facts are untrue. The absence of
any
positive evidence possessed by the respondent directly contradicting
the applicants' main allegations does not render the matter
free of a
real dispute of fact.
59.
There is dispute of facts in this matter, but
it
is not
a dispute not capable of resolution on paper .
Costs
60.
The purpose
of an award of costs is to indemnify a successful party who has
incurred expenses in instituting or defending an action.
[9]
To the
extent to which ethical considerations may enter the exercise of a
presiding officer's discretion,
this must
also be determined by the facts of each case.
[10]
61.
The basic
rule is that subject to express enactments
to the
contrary,
all costs
are in the discretion of the court. Even the general Rule, namely
that costs follow the event is subject to the overriding
principle.
The discretion must be exercised judicially
upon
consideration
of the
facts
of
each case.
In essence,
it is a
matter of fairness to both sides.
'Judicially
means not arbitrarily”'
[11]
62.
In giving
presiding officers a discretion, the law as contemplated
is that
they should
take
into
consideration
the
circumstances
of
each
case,
carefully
weighing the issues in the case, the conduct of the parties and any
other circumstance which has a bearing on the issue
of costs and then
make such an order as to costs
as it would
be fair
and just
between
the
parties.
[12]
63.
In the
exercise of the discretion as to costs, a presiding officer may also
attach weight to the moral obligations, as opposed to
the legal
obligations, of the parties.
[13]
Such conduct is deserving of censure, and it should attract the
necessary
cost order.
64.
The applicant asked for costs on any respondent who opposes this
application. The
respondent as well asked for the dismissal of the
application with costs.
I
make the following order:
1.1
The application is dismissed with costs.
TC
LITHOLE
ACTING
JUDGE
LIMPOPO
DIVISION OF THE HIGH COURT
POLOKWANE
APPEARANCES
On
behalf of the applicant: Adv D Van Der Bogert
Instructed
by:
Loock
Dupisane Incorporated Inc Attorneys
On
behalf of the respondent:
Mr Venter
Instructed
by:
BMV
Attorneys
DATE
OF HEARING : 18
AUGUST 2022
DATE
OF JUDGMENT: 15/11/2022
[1]
Replying affidavit page 518 par 5.6
[2]
1983 (4) SA 344 (A)
[3]
Cool Ideas v Hubbard
2014 4 SA 474
(CC) at paragraph 28
[4]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
(920/2010)
[
20121
ZASCA 13
(15 March 2012)
[5]
1957(4)SA234(C)
[6]
1984(3)SA623(A)at 634
[7]
1975(4) SA 87 (D) at 91D
[8]
1949(3) SA 115 (T) at 1163
[9]
Raboniwitz v Van Graan
2013 (5) SA 315
(GSJ).
[10]
McDonalds Trading v Huey Extreme Club 2008 (4) SA (C).
[11]
Gcanga v AA Mutual Insurance Association Ltd 1 979 3 SA 320 (E) 330.
[12]
Fripp v Gibbon & Co 1913 (AD) 354 at 363.
[13]
Berkowitz v Berkowitz
1956 (3) SA 522
(SR).