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2022
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[2022] ZAECMKHC 66
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Charlene Goodman (Pty) Limited and Another v The Acting Sheriff for the District of East London and Others (3009/2021) [2022] ZAECMKHC 66 (27 September 2022)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE DIVISION
– MAKHANDA)
CASE NO.: 3009/2021
Matter heard on: 20
September2022
Judgement delivered
on: 27 September 2022
In the matter between: -
CHARLENE GOODMAN (PTY)
LIMITED
1
st
Applicant
Y MKAZA
CC
2
nd
Applicant
and
THE ACTING SHERIFF FOR
THE DISTRICT OF
1
st
Respondent
EAST LONDON
VENFOLO LINGANI
INCOPORATED
2
nd
Respondent
THE STANDARD BANK OF
SOUTH AFRICA LIMITED
3
rd
Respondent
MANAGER OF THE VINCENT
PARK
REPORTABLE: NO
OF INTEREST TO OTHER
JUDGES: NO
REVISED.
JUDGMENT
SMITH
J:
[1]
The applicants seek an order setting aside a notice of attachment and
a writ of execution issued in pursuance of
a judgment granted by Lowe
J on 20 August 2021, under case number 383/2021. Lowe J had ordered
the second respondent and its sole
member, Mr. Yongama Mkaza, to pay
to the first applicant (Charlene Goodman PTY Ltd) the sum of
R1 355 194.62, together
with ancillary relief.
[2]
In order to avoid confusion, it is necessary for me to explain the
bases for the parties’ involvement in this
matter. The first
applicant is a company with limited liability duly registered in
terms of the laws of the country. It is represented
in this
application by its sole director, Ms Mfundiso Nana Ndwe. The second
applicant is Y Mkaza CC, a duly registered Close Corporation,
who is
the judgment debtor in respect of the abovementioned order granted by
Lowe J. The first respondent is the acting Sheriff
for the district
of East London, who is cited in his official capacity. No substantive
relief or costs order is sought against
him. The second respondent is
Venfolo Lingani Incorporated, a firm of attorneys practicing in Cape
Town. The third respondent is
the Standard Bank of South Africa
Limited. The applicants also do not seek substantive relief or a
costs order against it.
[3]
Although the applicants initially sought a rule nisi and interim
relief, the matter has since become opposed and
they now seek a final
order setting aside the above-mentioned processes.
[4]
Ms Ndwe has deposed to the founding affidavit on behalf of the first
applicant. She avers that she is the sole director
of the first
applicant and has attached official documentation in support of this
assertion. She furthermore says that the first
applicant did not
instruct the second respondent to act on its behalf in these
proceedings or to pursue execution proceedings against
the second
applicant for the recovery of the judgment debt. She has not signed
any resolution or power of attorney in her capacity
as director in
this regard. She contends that the proceedings resulting in the
notice of attachment and writ of execution were
accordingly unlawful
and of no force or effect.
[5]
The first applicant also points out that the execution is in respect
of the full amount of the judgment granted
by Lowe J when the second
applicant had in fact already paid a sum in excess of R730 000. The
first applicant had negotiated terms
for the repayment of the balance
with the second applicant and it is not in the interest of the first
applicant to attach monies
required by the second applicant for its
operations.
[6]
The second respondent disputed the averment that it has no authority
to act on behalf of the first applicant and
stated that had been
authorised by Mr Elvis Sello Matsoso in his capacity as director of
the first applicant, and not by Ms Ndwe.
In support of this assertion
the second respondent has attached a resolution purporting to
authorise it to act on behalf of the
first applicant.
[7]
Ms Ndwe has, however, correctly pointed out that the purported
resolution is dated 1 August 2022, almost a
month before the
application to set aside the processes was commenced on 4 September
2022. Thus, there could not have been any
mandate for the second
respondent to proceed on 18 July 2022 by way of writ of execution
since the purported resolution was not
in existence at the time. In
addition, she pointed out that although the resolution postdates the
institution of the application
proceedings, it nevertheless purports
to authorise the second respondent to oppose the application. This,
Ms Ndwe contends, is
a clear indication that the purported resolution
was an
ex post facto
attempt by the second respondent, in
cahoots with Mr Matsoso, to regularise their unlawful conduct. The
resolution is thus a fraudulent
document and could not provide any
basis for the second respondent to act on behalf of the first
applicant.
[8]
Mr.
Cole
, who appeared for the applicants, argued that this
point was devastatingly destructive of the second respondent’s
opposition
and that the applicants were entitled to final relief on
this basis only.
[9]
However, faced with this seemingly insurmountable hurdle, the second
respondent appears
to have changed tack and at the hearing of the
matter on 20 September 2022, Mr Matsoso and Mr Ian Mvula brought an
application
for leave to intervene in the proceedings (the joinder
application).
[10]
Mr. Matsoso wants to intervene in order to challenge his contended
unlawful removal as director of the company.
He says that he intends
to bring a counter-application for the setting aside of his removal
as a director and for his reinstatement
in that capacity. Mr. Mvula
wants to intervene as a majority shareholder, claiming that he
intends to oppose the application in
the best interests of the
company.
[11]
Mr Matsoso says that he became aware of his unlawful removal as
director of the first applicant during September
2021. He does,
however, not explain why it took him almost a year before even
contemplating the institution of proceedings to challenge
his
removal.
[12]
Mr
Cole
has correctly submitted that the intervening
applicants are effectively seeking to delay the proceedings so that
they could be
provided with an opportunity to regularise the internal
affairs of the company. It is not disputed that at the time of
instituting
these proceedings Ms Ndwe was the sole director of the
first applicant and thus properly authorised to act on its behalf. As
things
stood on the day that the application was argued, this was
still the factual and legal position.
[13]
There is nothing that stops Mr Matsoso from bringing proceedings to
challenge the validity of
his removal as director of the first
applicant or Mr Mvula from taking steps to appointment another
director. Those are, however,
proceedings that are unrelated to the
current application.
[14]
In my view the intervening applicants have not made out a case for
joinder in these proceedings and the application
for intervention
must fail with costs.
[15]
I accordingly find that Ms Ndwe, in her capacity as sole director of
the first applicant, has the requisite authority
to act on its behalf
and that the resolution on which the second respondent relies for its
authority to oppose the application
on behalf of the first applicant,
is invalid and of no force and effect. The applicants are accordingly
entitled to an order setting
aside the notice of attachment and writ
of execution.
[17]
Mr
Cole
has submitted that the conduct of the second
respondent, in purporting to act on behalf of the first applicant on
the basis of
a fraudulent resolution, warrants a punitive costs
order. I agree, the second respondent must have aware that the
resolution was
irregular. Costs must accordingly be on the attorney
and client scale.
[16]
In the result the following order issues:
(a)
The intervention
application is dismissed with costs.
(b)
The writ of execution
dated 18 July 2022 and the notice of attachment dated 17 August 2022
are set aside.
(c)
The second respondent
is ordered to pay the applicants’ costs on the attorney and
client scale.
JE
SMITH
JUDGE
OF THE HIGH COURT
Appearances:
Counsel
for the Applicants
: Adv.Cole
S.C.
:
Kawondera-Alex Attorneys
City Chamber, 115 High
Street
MAKHANDA
Attorney
for 2
nd
Respondent :
Mr Njokweni
:
Njokweni Attorneys
6
th
Floor, 36
Long Street
CAPE TOWN