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[2022] ZAMPMBHC 69
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Standard Bank of South Africa Limited v Pit Dog Trading CC and Another (2709/2019) [2022] ZAMPMBHC 69 (22 August 2022)
THE
HIGH COURT OF SOUTH AFRICA
MPUMALANGA
DIVISION, MBOMBELA MAIN SEAT
CASE
NO: 2709 / 2019
REPORTABLE: YES
OF INTEREST TO OTHER
JUDGES: NO
REVISED.
22 August 2022
In the matter between:
STANDARD
BANK OF
SOUTH
INTERVENING
CREDITOR
AFRICA
LIMITED
(Registration
no. 1962/00738/06)
And
PIT
DOG TRADING CC
FIRST RESPONDENT
(Registration
no. 2008/192907/23
LIKWETI
HOME
OWNERS SECOND
RESPONDENT
ASSOCIATION
IN
RE:
PIT
DOG TRADING
CC APPLICANT
(Registration
no. 2008/192907/23
LIKWETI
HOME
OWNERS RESPONDENT
ASSOCIATION
JUDGMENT
RATSHIBVUMO J:
Delivered:
This judgment was handed down
electronically by circulation to the parties' representatives by
email. The date and time for hand-down
is deemed to be 10H00 on 22
August 2022.
[1]
This matter incorporates two applications
that were heard simultaneously. The first application is for
rescission of judgment by
Pit Dog CC (the Applicant). This
application follows an order granted by this court on 02 December
2019 placing the Applicant under
final liquidation. The application
for liquidation was brought by Likweti Home Owners Association (the
Respondent), the Applicant’s
creditor at the time. The second
application is by Standard Bank of South Africa Limited (the
Intervening Party). The Intervening
Party wishes to be joined as a
party in the application brought by the Applicant as an interested
party because it is its Creditor
in the amount exceeding R4.4
million. In the founding affidavit, the Intervening Party also
opposes the application for rescission
by the Applicant.
[2]
The intervening application.
In
National
Union of Metalworkers of South Africa v Intervalve (Pty) Ltd and
Others
[1]
the
Constitutional Court held that the
test
for joinder at common law is governed by the following principles;
first, there must be a legal interest in the proceedings
and not
merely a financial interest
.
Secondly,
a
party has a right to ask that someone be joined as a party “if
such a person has a joint proprietary interest with one or
either of
the existing parties to the proceedings or has a direct and
substantial interest in the Court’s order and to avoid
a
multiplicity of actions and . . . a waste of costs”
[3]
In
Pheko
and Others v Ekurhuleni Metropolitan Municipality (No. 2)
[2]
it was held that t
he
test for joinder requires that a litigant has a direct and
substantial interest in the subject matter of the litigation, that
is, a legal interest in the subject matter of the litigation which
may be affected by the decision of the Court.
[4]
The
Intervening Party avers that it is the Applicant’s creditor in
a substantial amount, a fact that remains undisputed. The
Applicant
was placed under final liquidation, something that was not brought to
the attention of the Intervening Party, despite
the requirements for
all the creditors to be notified when a company is liquidated. The
Respondent, being the party who sought
and acquired the liquidation
order, has strangely chosen not to participate in this application,
notwithstanding that it was cited
as such. The rescission application
was launched in August 2020 and was not prosecuted until the
Intervening Party got involved.
This background establishes the
nature and extent of the interest the Intervening Party has in this
application. The Applicant
does not dispute that the Intervening
Party has a substantial interest in the application. It however
opposes the application on
the basis that there is no valid affidavit
filed in support of the intervening application.
[5]
Dispute over the validity of an
affidavit.
The Applicant submits
that this application should proceed as unopposed and that the
Intervening Party’s application should
be struck from the roll
as it is not supported by a valid affidavit. The reason for this
submission is that on the face value,
the Intervening Party’s
founding affidavit was commissioned in Johannesburg by a commissioner
of oath (an attorney) who also
affixed the stamp of practice that
reflects the office address in Menlo Park. This, the Applicant
argues, suggests that the affidavit
was not signed in the presence of
the commissioner of oath who operates from Menlo Park office.
[6]
It
is my respectful view that this suggestion is not evinced by the
affidavit in question. It seems as though the Applicant is equating
the office or position of an attorney to that of police officers who
operate from police stations. Generally, police officers are
appointed to serve at a particular police stations that have their
area of jurisdiction clearly demarcated,
[3]
whereas legal practitioners (attorneys and advocates) are admitted to
practice anywhere in the Republic of South Africa.
[4]
In order to have affidavits commissioned by police officers, one
would have to visit a police station, except in limited instances
such as when the investigating officers visit witnesses at their
locations to acquire statements. Thus if an affidavit has a police
stamp reflecting Pretoria Police Station, it can be presumed in the
absence of any other explanation that the deponent had to visit
that
police station in order to have the statement commissioned.
[7]
The approach would be different to legal
practitioners who visit the courts in various provinces, following
their cases and clients.
A legal practitioner is not limited to
practice from his/her registered office. A registered office is
necessary for administrative
purposes not directly linked to
performing the duties, serving the public as a lawyer. If legal
practitioners had to work only
from their offices, there would be no
one to represent the litigants in courts. As a result, an official
stamp by a commissioner
of oath who happens to be a legal
practitioner, does not evince where the statement was signed, but the
registered address of his/her
practice. As to the place where the
affidavit was signed, one would have to look elsewhere in the
statement as it is required to
reflect that too. After all, when this
query was raised, the Intervening Party filed a further statement to
the effect that the
founding affidavit was indeed signed and
commissioned in Johannesburg as it reflects.
[8]
I am therefore satisfied that there is a
valid affidavit on behalf of the Intervening Party, signed before a
commissioner of oath
in Johannesburg and that the registered address
of the commissioner of oath is in Menlo Park. I am also satisfied
that the Intervening
Party has a substantial and compelling interest
in the outcome of this application. The request to be joined in the
proceedings
is therefore allowed.
[9]
The rescission application.
The
basis for the rescission application is that the application was
erroneously granted in that the papers that served before the
court
were not in order and as such, could not justify the order granted.
The Applicant submitted that whereas section 346(3) of
the Companies
Act no. 61 of 1973 provides that an application for liquidation shall
be accompanied by a certificate by the Master
of the High Court,
issued not more than ten days before the date of the application, to
the effect that sufficient security has
been given for the payment of
all fees and charges necessary for the prosecution of all winding-up
proceedings and of all costs
of administering the company in
liquidation until a provisional liquidator has been appointed; no
such certificate was attached
to the application.
[10]
It is common cause though that on the date
of the hearing, the said certificate was in the file and that the
court did have sight
thereof. It is also common cause that in the
founding affidavit, the Respondent had made it clear that the
certificate was not
attached but would be made available on the date
of the hearing, which was ultimately done. The question is rather
whether the
lodging of the application should have been accompanied
by the certificate and if its later filing can be condoned. Perhaps
the
question should rather be whether the court was conscious of the
fact that the certificate was not attached and if it was, whether
it
was within its discretion to allow the liquidation without the filing
of the said certificate.
[11]
The
application is opposed by the Intervening Party on various fronts.
Amongst them, the Intervening Party claims that the Applicant
failed
to serve the notice of this application as required by Rule 42, and
on that reason alone, the application should not be
allowed. It was
further submitted that the application should be dismissed because
there is no good cause shown.
[5]
It was submitted in this regard that the application lacked prospects
of success as the Applicant did not put forward evidence
to suggest
that it was not insolvent. Lastly, the Intervening Party submitted
that there is nothing suggesting that the court was
not aware that
that the certificate was not attached. It was argued that the court
merely exercised its discretion and authorised
the liquidation based
on papers that were filed before it.
[12]
Rule 42 of the Uniform Rules provides,
“
(1)
The court may, in addition to any other powers it may have,
mero
motu
or upon the application of
any party affected, rescind or vary:
(a)
An
order or judgment erroneously sought or erroneously granted in the
absence of any party affected thereby;
(b)
an
order or judgment in which there is an ambiguity, or a patent error
or omission, but only to the extent of such ambiguity, error
or
omission;
(c)
an
order or judgment granted as the result of a mistake common to the
parties.
(2)
Any party desiring any relief under this rule shall make application
therefor upon notice to all parties whose interests may
be affected
by any variation sought.
(3)
The court shall not make any order rescinding or varying any order or
judgment unless satisfied that all parties whose interests
may be
affected have notice of the order proposed.”
[13]
The Applicant does not dispute that the
Intervening Party is an interested Party or that its interests may be
affected by the order
it seeks in this application. It however denies
that the Applicant had a duty to notify the Intervening Party of the
rescission
application. It further claims that the application was
brought against the Respondent and the liquidator who represents all
the
creditors. I need to pause to indicate that I do not understand
what the Applicant means when it alleges that the application was
brought against the liquidator. This is because in this application,
the liquidator has not been cited or joined as a party nor
was it
served with the notice of this application.
[14]
Had
there been notification on the liquidator, perhaps the question would
be whether it is necessary to also serve all the creditors.
For
reason that the said liquidator was not served, or if it was, no
proof was availed to the court, that question does not arise
in the
circumstances of this case. As highlighted above, the Intervening
Party has
a
direct and substantial interest in this application.
[6]
Notification of this application to the Intervening Party as an
interested party was as such peremptory. Failure to do so is fatal
to
the application.
[15]
Suppose
I am wrong in reaching the conclusion above; the application for
rescission would still fail for reason that the Applicant
failed to
show that the order made on 02 December 2019 was
erroneously
sought or erroneously granted or that there is an ambiguity, or a
patent error or omission or that it was granted as
the result of a
mistake common to the parties. A
judgment
is erroneously granted if there existed at the time of its issue a
fact of which the court was unaware, which would have
precluded the
granting of the judgment and which would have induced the court, if
aware of it, not to grant it.
[7]
Equally, the order is erroneously granted if material facts were not
disclosed to the court, which if disclosed, the judgment would
not
have been granted.
[8]
This would
cover instances where there was a deliberate misrepresentation of
facts to the court.
[16]
The
Respondent had not misrepresented the facts surrounding the security
certificate as it disclosed that same was not yet issued
at the time
the application was lodged. It disclosed that it will be available on
the date of hearing. As these papers served before
the court, there
is no basis to presume that the court was not aware of the facts
contained therein. The Applicant submitted that
“had the
Honourable Court been made aware of the issues [above], it would not
have granted the winding up order.”
[9]
This statement ignores the fact that the papers served before the
court with full disclosure of the facts. To suggest that over
and
above the file serving before the court, a litigant had to point out
what is in the papers suggests that a judicial officer
may not be
conscious of the contents of the papers unless his/her attention is
drawn thereto.
[17]
Upon closer reading of Rule 42, it is clear
that if the error is due to non-disclosure of certain facts
(deliberate or
bona fide
)
or misrepresentations to the court, rescission will be available once
these facts are brought to the attention of the court. However,
when
the error is on failure to exercise the discretion judiciously as
when facts were disclosed, but the court still took a wrong
decision,
rescission would not be available, but appeal would be the proper
avenue to pursue.
[18]
To
demonstrate the above principle, the court noted that the founding
affidavit by Mr. Mokoena, a director of the Applicant, does
not
contain a full date on which it was signed before a commissioner of
oaths.
[10]
The Applicant has
always argued that an error like this, means there is no affidavit
before the court. Nobody raised this aspect
with the court in this
application. Whatever the outcome of this application, it would be
amiss for any party in the future to
argue that “had it been
brought to the court’s attention that the founding affidavit
was undated…” because
as long as the affidavit is before
the court, it should be presumed that the court had sight of it and
decided to deal with the
matter cognisant of defects therein if any.
To approach this differently, the application would no longer be a
rescission but a
judgment review.
[19]
This understanding should be able to
extinguish the belated argument raised only in the Applicant’s
heads of arguments to
the effect that the Respondent’s
affidavit filed in the liquidation application could have been
defective. As long as it
served before the court, it can be presumed
that the court had sight of the said affidavit and took a decision
taken, conscious
of the contents therein. I therefore conclude that
the circumstances that define the erroneous seeking and granting of a
judgment
as provided in Rule 42 exclude the alleged or possible
defects contained in papers that served before the court in an
application.
The mere fact that a litigant did not bring it to the
attention of the court that there could be non-compliance in the
application
itself or defects in the affidavit cannot, without more,
translate to erroneous granting of a judgment.
[20]
For the aforesaid reasons, I make the
following order:
[20.1] The application
for intervention by the Intervening Party (Standard Bank of South
Africa) in a rescission application is
granted with costs.
[20.2]
The application for rescission of judgment is dismissed with costs.
TV RATSHIBVUMO
JUDGE OF THE HIGH
COURT
MPUMALANGA DIVISION
MBOMBELA
FOR THE
APPLICANT
:
ADV TS NGWENYA
INSTRUCTED
BY
: MT
SILINDA & ASSOCIATES INC
MBOMBELA
FOR THE
RESPONDENT
:
ADV B GEDEDGER
INSTRUCTED
BY
: VEZI & DE BEER INC
C/O:
CHRISTO SMITH ATTORNEYS
:
NELSPRUIT
DATE
HEARD :
19 JULY 2022
JUDGMENT
DELIVERED :
22 AUGUST 2022
[1]
[2014]
ZACC 35
;
2015
(2) BCLR 182
(CC);
(2015) 36 ILJ 363 (CC) at para 186.
See also
Harding
v Basson and Another
1995
(4) SA 499
(C) at 501C.
[2]
(CCT19/11)
[2015] ZACC 10
;
2015 (5) SA 600
(CC);
2015 (6) BCLR 711
(CC) (7 May
2015) at para 56.
[3]
See
section 12 of the South African Police Services Act no. 65 of 1995.
[4]
See
section 25(1)
of the
Legal Practice Act no. 28 of 2014
.
[5]
As for what good cause entails, see
Torwood
Properties (Pty) Ltd v South African Reserve Bank
1996
(1) SA 215
(W)
at
227I - 228F.
[6]
See para 3 above.
[7]
Nyingwa
v Moolman NO
1993 (2) SA 508
(TK) at p.510F-G
[8]
See
Naidoo
v Matlala NO
2012
(1) SA 143
(GNP) at 153C–E.
[9]
See para 31 of the founding affidavit on p. 68 of the paginated
bundle.
[10]
See the Applicant’s founding affidavit on p. 61-69 of the
paginated bundle reflecting that it was commissioned on “05
August___”.