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[2022] ZANCHC 27
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Morake v Karstens and Another (1173/2020) [2022] ZANCHC 27 (9 May 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
NORTHERN
CAPE DIVISION, KIMBERLEY
CASE
NO: 1173/2020
Reportable:
YES/NO
Circulate
to Judges: YES/NO
Circulate
to Magistrates: YES/NO
Circulate
to Regional Magistrates: YES/NO
In
the matter between:
MOLEFE
P MORAKE
Applicant
and
MARCEL
KARSTENS
First
Respondent
MULTITECH
AFRICA (PTY) LTD
Second Respondent
JUDGMENT
EILLERT
AJ
:
Introduction
[1]
The Applicant, Molefi P Morake (“
Morake
”)
and the First Respondent, Marcell Karstens (“
Karstens
”)
are the directors of the Second Respondent, Multitech Africa (Pty)
Ltd (“
Multitech
”).
On 19 June 2020 Olivier J made an order under case number 208/2020 of
this court directing and ordering Karstens to provide
Morake with
information and/or documentation relating to the affairs of
Multitech, specified as: contracts from 1 February 2016
to 31
December 2019 entered into between Multitech and third parties, the
financial statements of Multitech for the same period,
an inventory
of all the movable and immovable assets registered in the name of
Multitech, names of financial institutions holding
accounts opened in
the name of Multitech, bank statements including account numbers,
current balances and transactions of the accounts
opened in the name
of Multitech from the 1
st
of February 2016 until the 31
st
of December 2019 and the current liabilities of Multitech. Karstens
was ordered to provide this information and/or documentation
within
ten days of the date of the order.
[2]
Karstens did not provide the information
and/or documentation to Morake within the prescribed time. Morake
therefore launched the
current application, requesting that Karstens
be held in contempt of the court order 19 June 2020 and for
appropriate sanctions
to be imposed against him.
[3]
The
approach to be followed in contempt of court proceedings within the
new constitutional context was definitively set out by Cameron
JA (as
he then was) in
Fakie
NO v CCII Systems (Pty) Ltd
[2006] ZASCA 52
;
2006 (4) SA 326
(SCA)
.
It bears repeating for purposes of this judgment. The applicant is
required to prove the requisites of contempt of court, being
the
existence of the order, service thereof on, or notice thereof to, the
respondent, non-compliance with the order, and wilfulness
and
mala
fides
(bad faith) on the part of the respondent. The standard of proof is
beyond a reasonable doubt. But, once the applicant has proved
the
order, service or notice thereof and non-compliance, the respondent
bears an evidential burden in relation to wilfulness and
mala
fides
:
Should the respondent fail to advance evidence that establishes a
reasonable doubt as to whether non-compliance was wilful and
mala
fide, contempt will have been established beyond reasonable doubt.
[1]
[4]
In this matter the existence of the order,
notice thereof to Karstens and non-compliance therewith within the
prescribed ten days,
are not in dispute. What must be decided is
whether it has been established that Karstens acted wilfully and
mala
fide
.
The
affidavits of the parties
[5]
Morake has not sought any relief against
Multitech and Multitech did not take part in these proceedings. An
answering affidavit
was delivered on behalf of Karstens.
[6]
Multitech and Karstens initially delivered
a notice of intention to oppose the proceedings under case number
208/2020. Their opposition
was however withdrawn by way of a notice
of withdrawal of opposition that was delivered one or two days before
the order of 19
June 2020 was granted. On or about 23 June 2020
Magoma Attorneys (“
Magoma
”)
on behalf of Morake, wrote a letter to Karstens’ attorneys, Van
de wall Incorporated (“
Van de
Wall
”), informing them of the
order granted on 19 June 2020 and attaching a copy thereof to the
letter. Van de Wall was requested
to provide Magoma with the
necessary information on or before the 3
rd
of July 2020. Van de Wall was already informed in this letter that
should they fail to provide the necessary information, Magoma
was
instructed to apply to court for an order holding Karstens in
contempt of court.
[7]
At a stage Van de Wall asked an indulgence
form Magoma to deliver the information and/or documents by the 15
th
of July 2020.
[8]
The current application was launched by
Magoma on 17 July 2020.
[9]
The facts recounted above are the facts set
out by Morake in his founding affidavit that were not disputed by
Karstens.
[10]
The facts alleged by Karstens in his
answering affidavit were the following.
[11]
According
to Karstens he agreed to provide the information whilst having the
assurances from his accountant that all the information
would be
available by the 15
th
of June 2020. The information was however not available on the 15
th
of June and Karstens made a request from Morake on the 9
th
of July 2020 to provide the information no later than the 15
th
of July 2020. In support hereof, Karstens attached a letter dated the
9
th
of July 2020, addressed by Van de Wall to Magoma, to his answering
affidavit, that stated that due to an oversight in Mr Addinall’s
[2]
department the court order of 19 June 2020 was only sent to their
client on the 8
th
of June 2020
[3]
and that
apologised for such oversight. The letter went on to state that
Karstens did request the documentation from his bookkeeper
and that
the documentation would be available on Wednesday the 15
th
of July 2020. Morake granted Karstens’ request for the
indulgence.
[12]
On
the 16
th
of July Karstens was notified by his accountant that the outstanding
financial statement had not been completed because of the
relocation
of the accountant’s offices in Kimberley, the accountant then
relocating from Kimberley to Upington and delays
related to the Covid
pandemic. Karstens stated that a confirmatory affidavit by the
accountant was attached to his answering affidavit
as annexure “C”.
I interpose to state that annexure “C” however can only
be construed as a statement, as
the document does not comply with the
regulations governing the administering of an oath or affirmation.
[4]
[13]
Karstens further stated that he agreed to
provide the information knowing that:
13.1
No contracts or service level agreements
were concluded between Multitech and any other entity. All quotations
and invoices were
captured on an accounting system and freely
available to Morake;
13.2
Morake went with Karstens to Multitech’s
accountants during November 2018 and was introduced to Multitech’s
specific
accountant at the firm. As majority shareholder, Morake was
entitled and able to request and obtain the financial statements of
Multitech;
13.3
The inventory of moveable and immovable
assets is dealt with in the financial statements;
13.4
Multitech only holds banking accounts with
First National Bank;
13.5
Multitech holds an account with First
National Bank in Kimberley. The bank statements for this account up
to December 2019 is in
possession of the bookkeeper (accountant, I
suppose) and would be available when the financial statements up to
December 2019,
forming part of the 2020 financial statements, were
completed. The delay in completion of the 2020 financial statements
was caused
by the circumstances set out in paragraph 12 above. There
is a second account held by Multitech in Lime Acres, but which is
virtually
dormant, and was only opened to tender for contracts in the
area, but which did not materialise. Karstens requested statements
from the bank on the 4
th
of August 2020. An- email request was attached to his answering
affidavit as annexure “D”;
13.6
The current liabilities are dealt with in
the financial statements.
[14]
Karstens received the management accounts
up to December 2019 and would be able to provide, and tendered, all
information requested,
except for the bank statements of the FNB
account in Lime Acres, which was requested on the 4
th
of August 2020. Karstens undertook to provide the bank statements as
soon as he had received it from the bank.
[15]
In light of Karstens’ averments set
out above, he denies that he refused and/or neglected to provide the
information to Morake.
Wilfulness
and mala fides
[16]
The requirements of wilfulness and
mala
fides
were dealt with in Fakie supra
inter alia
as follows:
“
[9]
The test for when disobedience of a civil order constitutes contempt
has come to be stated as whether the breach was committed
‘deliberately and mala fide’. A deliberate disregard is
not enough, since the non-complier may genuinely, albeit mistakenly,
believe him or herself entitled to act in the way claimed to
constitute the contempt. In such a case, good faith avoids the
infraction.
Even a refusal to comply that is objectively unreasonable
may be bona fide (though unreasonableness could evidence lack of good
faith).
[10] These
requirements – that the refusal to obey should be both wilful
and mala fide, and that unreasonable non-compliance,
provided it is
bona fide, does not constitute contempt- accord with the broader
definition of the crime, of which non-compliance
with civil orders is
a manifestation. They show that the offence is committed not by mere
disregard of a court order, but by the
deliberate and intentional
violation of the court’s dignity, repute or authority that this
evinces. Honest belief that non-compliance
is justified or proper is
incompatible with that intent.”
[17]
Morake’s legal representatives did
not request this matter to be referred for oral evidence, or for
Karstens to be cross-examined.
When I enquired from Mr Hefer at the
hearing why this had not been considered, he responded that the
Applicant’s legal representatives
would not mind if this were
to happen. However, there being no request or application on behalf
of Morake to this effect, a court
will usually not do so
mero
moto
. The result is that this court
must adjudicate the question of wilfulness and mala fide by
application of the test laid down in
Plascon
- Evans Paints Ltd v Van Riebeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A)
in order to decide the factual dispute between the
parties.
Analysis
[18]
Karstens’ explanation of his conduct
in the face of the court order of 19 June 2020 unfortunately leaves
much to be desired.
It is common cause that whilst he initially
opposed the proceedings under case number 208/2020, he withdrew this
opposition shortly
before 19 June 2020. It is unlikely that he would
not have been aware that Morake would be moving for the order on 19
June 2020,
but the court was not afforded with any explanation in
this regard, or told whether Karstens himself made any enquiries to
ascertain
whether the court order was indeed granted against him on
19 June 2020. It would have been important for Karstens to do so, as
he had to have been aware that Multitech’s accountant had not
made good on her assurance that the information would already
have
been produced by the 15
th
of June 2020.
[19]
When Karstens was informed of the court
order by Van de Wall on 8 July 2020, the prescribed ten days for
provision of the information
and /or documentation had already
expired on 3 July 2020. This ought to have created a sense of urgency
in Karstens to ensure that
what was necessary is done as soon as
possible.
[20]
In accordance with the indulgence granted
by Magoma, the information and/or documentation had to be provided by
the extended deadline
of 15 July 2020. Karstens avers that he was
only notified on 16 July 2020 that the financial statements had not
been completed.
Once again Karstens is silent on whether he made any
enquiries from his accountant on or before 15 July 2020 regarding the
collation
of the information and/or documents and the completion at
the financial statements, or whether he took any steps from his side
to side to ensure that the extended deadline is met.
[21]
Annexure “D” to Karstens’
answering affidavit, which he tendered in support of his request on 4
August 2020 to
First National Bank for provision of the bank
statements of the Lime Acres account, tends to show that an earlier
request in this
regard had been made on 20 July 2020. However,
Karstens would have been aware of the existence of the Lime Acres
account right
from the start, and annexure “D” then shows
that he only requested the bank statements well after 19 June 2020,
or
even well after 15 July 2020, being the date of the extended
deadline.
[22]
Karstens’ explanation about the
non-existence of contracts or service level agreements between
Multitech and any other entity
ought not to absolve him from
responsibility. If the non-existence thereof was indeed the case,
Karstens could have disputed this
in the proceedings under case
number 208/2020, which appears he did not do in any way.
[23]
Neither does it avail Karstens to allege
that the accounting systems of Multitech is freely available to
Morake and that Morake
is entitled and able to request and obtain the
financial statements of Multitech as majority shareholder. Karstens
acquiesced in
the granting of the court order under case number
208/2020, and the court imposed an obligation on him to take positive
steps to
ensure that the required information and/or documentation be
provided to Morake.
[24]
A number of the items of information and/or
documentation that Karstens was obliged to provide to Morake ought to
have been easy
to compile with relatively limited assistance by the
accountant. A separate inventory of all the movable and immovable
assets of
Multitech as well as a list of current liabilities, could
have been prepared. The name of First National Bank as the banker of
Multitech could easily have been provided. Copies of the bank
statements in possession of the accountant could easily have been
made and provided to Morake. Had this been done, it would have gone a
long way to show Karstens’ willingness to comply with
the court
order. Instead, the court is left to wonder why these steps were not
simply taken.
[25]
Mr Harmse, on behalf of Karstens, informed
the court from the bar that a file with the required information
and/or documentation
was delivered to Magoma on 28 August 2020. A
copy of this file was in Mr Harmse’s possession at the hearing.
This caused
some debate whether the file related to case number
208/2020, or another matter in which the parties are involved. In
light thereof
that Karstens deposed to his answering affidavit on 26
August 2020 and that the affidavit was delivered on 27 August 2020,
no cogent
explanation was forthcoming on behalf of Karstens as to why
Karstens did not seek to file a further affidavit to establish that
compliance with the court order had taken place on 28 August 2020, if
this was indeed the case. Karstens had ample opportunity
to do so
until the hearing of this matter.
[26]
The findings set out above necessarily
leads me to the conclusion that Karstens’ assertion that he did
not act wilfully or
in bad faith is untenable and must be rejected on
the papers. Karstens has therefore not advanced sufficient evidence
to establish
a reasonable doubt that his non-compliance was not
wilful and mala fide, and Morake has succeeded in proving contempt of
court
beyond reasonable doubt.
The
appropriate sanction
[27]
What is then left to decide is the
appropriate sanction to be imposed, and the issue of costs. Morake
from the outset requested
that Karstens be committed to imprisonment,
but that the sentence be suspended on condition that Karstens
complies with the order
under case number 208/2020. The period of
suspension of the sentence was requested to be a year. Mr Hefer
indicated that Morake
would not object if the time period allowed for
compliance with the order under case number 208/2020 be extended from
the 30 days
requested by Morake to a period of 45 days. Should I
order Karstens to comply with the court order under case number
208/2020 within
45 days, there would be no purpose
in
casu
to suspend the sentence for a
year.
[28]
In
Protea
Holdings Ltd v Wriwt and Another 1978(3) SA 385 (W)
Nestadt
J remarked that:
“
(I)t
is vital to the administration of justice that those affected by
court orders obey them. Our courts cannot tolerate the disregard
of
its orders. Accordingly, it seems to me that I would be failing in my
duty if I did not impose a punishment which takes into
account the
serious nature of this type of offence”.
[29]
The fundamental importance of ensuring that court orders are obeyed
was more recently stressed by the Constitutional Court
in
Secretary
of the Judicial Commission of Inquiry into Allegations of State
Capture, Corruption and Fraud in the Public Sector Including
Organs
of State v Zuma and others (Helen Suzman Foundation as amicus curiae)
2021 (9) BCLR 992
(CC)
.
[30] Given the sentiments
set out above, I find that it would be appropriate in the
circumstances of this matter to order the First
Respondent to pay the
Applicant’s costs on the attorney and client scale.
ORDER
[31] In the premises, the
following order is made:
1.
The First Respondent is held in contempt of
the court order granted by this Court under case number 208/2020 on
19 June 2020;
2.
The First Respondent is committed to
imprisonment of 30(thirty) days;
3.
The order set out in paragraph 2 above is
suspended for a period of 45 days from date of this judgment on
condition that the First
Respondent complies with the terms of the
order made under case number 208/2020 within this period of
suspension.
4.
The First Respondent is ordered to pay the
costs of the Applicant on the attorney and client scale.
_____________
A
EILLERT
ACTING
JUDGE OF THE HIGH COURT
NORTHERN
CAPE DIVISION, KIMBERLEY
DATE
HEARD:
29 January 2021
DATE
OF JUDGMENT:
5 May 2022
For
the Applicant:
JJF Hefer SC, instructed by Magoma Attorneys
For the First
Respondent: J
Harmse, instructed by Van de Wall Incorporated
[1]
At 344 I – 345 A
[2]
Mr Addinall is the attorney and director at Van de Wall who was
acting for Karstens at the time.
[3]
The Applicant accepted that this date should have been the 8
th
of July 2020.
[4]
GNR. 1258 of 21 July 1972, Promulgated in terms of section 10 of the
Justice of the Peace and Commissioners of Oaths Act 16 of
1963