About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, Makhanda
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, Makhanda
>>
2022
>>
[2022] ZAECMKHC 103
|
|
Ropax Investments 10 (Pty) Ltd and Others v Express Petroleum (Pty) Ltd (CA206/2021) [2022] ZAECMKHC 103 (22 November 2022)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE
DIVISION, MAKHANDA)
Case No: CA206/2021
Matter heard on: 21
October 2022
Judgment delivered on:
22 November 2022
In the matter between:
ROPAX INVESTMENTS 10
(PTY) LTD
First Appellant
RIO RIDGE 1387 (PTY)
LTD
Second Appellant
GRANT
COTTERELL
Third Appellant
ADRIAN
PRICE
Fourth Appellant
and
EXPRESS PETROLEUM
(PTY)
LTD
Respondent
REPORTABLE: YES
OF INTEREST TO OTHER
JUDGES: YES
REVISED.
JUDGMENT
Smith
J:
Introduction
[1]
This appeal is against the judgment of Kruger AJ, delivered on 20 May
2021,
inter alia
, finding the appellants in contempt of the
order granted by Nhlangulela DJP on 4 December 2020. In terms of
Nhlangulela DJP’s
judgment, the appellants were ordered,
pending final determination of the trial, exclusively to source fuel
from the respondent
(Express). The order does not mention the price
at which the fuel had to be procured. Kruger AJ nevertheless found
that the order,
properly construed, re instated the
status
quo ante
and thus enjoined the appellants not only to procure
their fuel exclusively from Express, but also to pay the same price
they have
paid before. She also found that the appellants were in
contempt of that order because they paid short on the invoices
delivered
to them by Express, ‘by only paying market-related
prices for fuel delivered’. She consequently ordered the
appellants
to purge their contempt by paying in accordance with the
invoices delivered by Express.
[2]
The appellants contend that Kruger AJ erred in having regard to the
reasons provided
by Nhlangulela DJP in his judgment when construing
the order. They contend that the order is unambiguous and it was
therefore not
permissible for Kruger AJ to go outside the scope of
the wording of the order. She also erred by going beyond merely
interpreting
the order and extending it outside the perimeters
intended by Nhlangulela DJP, namely by determining the price
they had to
pay for the fuel. According to them, the order, properly
construed, does not enjoin them to pay the above market-related
prices
unilaterally determined by Express. The appeal is with the
leave of the court
a quo
.
Condonation
application
[3]
Before I consider the merits of the appeal, I must first deal with
the appellants’
application for condonation of their failure to
comply with the Uniform Rules of Court in the prosecution of the
appeal. In order
to do so, I briefly narrate the history of the
various applications filed or abandoned, so as to provide proper
context.
[4]
After Kruger AJ granted the appellants leave to appeal, Express
successfully applied
for an order in terms of
section 18(4)
of the
Superior Courts Act 10 of 2013
for her order to become effective
immediately. The order was granted by Pakati J on 10 November
2021. The appellants thereafter
unsuccessfully attempted to appeal
Pakati J’s order. Lowe J, writing for the Full Court, dismissed
the appeal and found that
it had effectively lapsed.
[5]
The appellants have subsequently filed no less than three condonation
applications
in an attempt to rectify numerous procedural
difficulties. On 19 October 2021 they purported to file the
record, but
omitted to file security as required by Uniform
rule
49(13).
They also failed to file powers of attorney, as required in
terms of Uniform
rule 49(6)
(a)
, read with
rule 7(2).
[6]
On 16 November 2021, Express’s attorneys wrote to the
appellants’ attorneys
alerting them to those procedural
shortcomings. The appellants’ attempt to rectify the
irregularities were also not good
enough. The security they purported
to provide was wholly inadequate and the powers of attorney did not
comply with the requirements
of
section 74
of the
Companies Act 71 of
2008
. Once again it was Express’s attorneys who pointed out
those difficulties to the appellants’ attorneys. They also
explained
what the law required and the extent of the appellants’
non-compliance.
[7]
The appellants instituted their first application for condonation on
29 November 2021,
but brought it in the wrong court. On 30
November 2021, Express’s attorneys delivered a notice in terms
of Uniform
rule 30A
, notifying the appellants of that procedural
irregularity and calling upon them to remove their application from
the urgent court
roll. The appellants duly removed the application
from the urgent roll on 9 December 2021 and thereafter re-enrolled
the same application
in the correct court.
[8]
On 10 May 2022, the appellants purported to re-enrol their
section
18(4)
appeal, despite the fact that the Full Court had pronounced
that the appeal had lapsed. Express’s attorneys again wrote to
the appellants’ attorneys reminding them of their failure to
remedy the procedural irregularities in respect of the security
and
powers of attorney, and pointed out to them that their
section 18(4)
application was incompetent because the main appeal had lapsed.
Express thereafter filed its answering affidavit in the appellants’
third application for condonation, again drawing attention to the
mentioned procedural irregularities.
[9]
The
section 18(4)
appeal was argued on 18 July 2022 and Express’s
counsel,
inter alia
, argued that the condonation application
should be dismissed because of the clear failure to remedy the
procedural irregularities.
On 2 August 2022 Lowe J delivered the
judgment on behalf of the Full Court, holding,
inter alia
,
that the appeal had lapsed on 19 October 2021 on account of the
appellants’ non-compliance with Uniform
rule 49(6)
(a)
,
read with
rule 7(2).
[10]
The appellants have, on the third attempt, finally rectified the
procedural irregularities. They
contend that they have timeously
complied with Uniform
rule 49(6)
(a)
when they filed
the appeal record on 19 October 2021 and requested a date for the
hearing of the appeal.
[11]
Mr
De La Harpe SC
, who together with Ms
Watt
appeared
on their behalf, relying on an unreported judgment of the Western
Cape High Court in
Daniel Welman Janse Van Rensburg v Theodorim
Nguema Obiang
(case no: A338/2018; delivered on 10 May 2019)
argued that the appeal could not have lapsed in circumstances where
the responsible
functionary has accepted the timeously lodged
application for it to be set down and had allocated a date for the
hearing.
[12]
In respect of the contended deficient power of attorney, he argued
that it was for the Registrar
and not Express to be satisfied as to
the authenticity of that document when deciding whether to accept or
reject an application
for the set down of the appeal. Since there has
not been an application to impugn the Registrar’s decision to
accept the
power of attorney, there can be no question of the appeal
having lapsed.
[13]
In any event, so Mr
De La Harpe
argued, there is no challenge
to the validity of the powers of attorney filed on behalf of the
third and fourth appellants, namely
Mr Price and Mr Cotterell.
He submitted that Express’s contention is that there was
non-compliance with the requirements
of
section 74
of the
Companies
Act, because
the resolution was not referred to all of the directors,
in particular Mr Wells, even though the majority of the directors,
namely
Mr Cotterell and Mr Price had signed it.
[14]
He argued furthermore that since Mr Wells deposed to the opposing
affidavit on behalf of Express,
and had been behind litigation
instituted by Express against the appellants, it was inconceivable
that he would have signed a resolution
supporting the appeal. In
addition, the conflict of interests which arose from Mr Wells’
stance resulted in him being removed
as a director of the first and
second appellants, namely Ropax and Rio Ridge. The position is
therefore that the current directors
of Ropax and Rio Ridge have
authorised the prosecution of the appeal, or so Mr
De La Harpe SC
argued.
[15]
Mr
De La Harpe
submitted that the appellants’ previous
attorney, Mr Sharp, has explained the circumstances in which certain
irregularities
arose. After he had withdrawn as attorney of record,
the new attorney, namely Mr Allanson of DTS Attorneys, advised
the applicants
to convene another directors’ meeting where a
unanimous resolution was passed to proceed with the appeal. In the
event, the
appellants have filed a supplementary application for
condonation and reinstatement of the appeal, which must be considered
if
the court should find that it had lapsed.
[16]
Regarding the issue of security, Mr
De La Harpe
argued that
the appellants had filed sufficient and proper security. If Express
were of the view that the security was insufficient,
it should have
approached the Registrar in terms of Uniform
rule 49(14)(
b
)
to set a higher sum. The appellants have in any event since addressed
that complaint by providing security in the sum of R100 000.
He
argued that the effect of not filing security is not that the appeal
lapses, because the Uniform rules do not provide for
such an
eventuality.
[17]
I agree with Mr
Epstein SC
, who together with Mr
Hopkins
appeared for Express, that it was incumbent on the appellants to show
good cause for condonation and reinstatement of the lapsed
appeal,
since Lowe J’s pronouncement that the appeal had lapsed remains
unchallenged.
[18]
The application for condonation and reinstatement of the appeal must
be considered in the light
of the following factors: (a) the standard
for considering an application for condonation is the interests of
justice. This will
depend on the facts and circumstances of each
case; (b) the nature of the relief sought; (c) the extent and course
of the delay;
(d) the effect of the delay on the administration of
justice and other litigants; (e) the reasonableness of the
explanation for
the delay; (f) the importance of the issues to be
raised in the intended appeal; and (g) the prospects of success.
(
Van Wyk v Unitas Hospital and Another
[2007] ZACC 24
;
2008 (4) BCLR 442
(CC), para 20).
[19]
I now turn to consider those factors in the context of the
circumstances of this case.
(a)
Nature of the relief:
Express sought urgent
relief before Nhlangulela DJP and subsequently also before Kruger AJ.
The appellants’ notice of appeal
had caused it to bring another
application for relief in terms of
section 18(3).
The appeal in terms
of
section 18(4)
was also heard on an urgent basis by the Full Court,
resulting in a unanimous judgment. Mr
Epstein
, submitted that
despite those four urgent applications, Express still does not have
effective relief.
I am also constrained to
have regard to the fact that these are essentially contempt of court
proceedings and that a pronouncement
against any litigant is a
serious matter. In my view courts should be inclined to leniency and
to adopt an approach that would
ensure that a litigant has a fair
opportunity to challenge allegations of contumacious non-compliance
with court orders. There
are, however, limits to the leniency. Mr
Epstein
submitted this court should not come to their
assistance given the extent of the appellants’ remissness and
obstinate refusal
to heed the advices of Express’s attorneys.
(b)
The extent of the delay:
It had taken the
appellants nearly nine and a half months to file powers of attorney
that complied with section 74 of the Company’s
Act. This was
after their attorneys were alerted on numerous occasions about the
procedural deficiencies of the filed powers of
attorney.
(c)
The reasonableness of the explanation for the
delay:
Mr
Epstein
has
submitted that there has effectively been no explanation for the
four-month period that preceded Mr Allanson’s involvement
in
the matter. The appellants were required to provide an explanation
that covers the entire period and they have failed to do
so. He
argued that this long and serious delay militates against the
granting of condonation.
(d)
The reasonableness of the explanation for the
delay:
Mr
Epstein
has
correctly submitted that all the blame has been put on the previous
attorney, Mr Sharp, and no attempt was made to explain
the four month
period before the new attorney took over. Indeed, the conduct of the
appellants’ attorneys, in particular
Mr Sharp, leaves much to
be desired. Despite the numerous warnings by Express’s
attorneys regarding the procedural irregularities,
it appears that Mr
Sharp has arrogantly ignored them and allowed a period of more than
four months to lapse before they were rectified.
In the end, the
delay of nine and half months is extensive and the explanation
tendered by the appellants falls far short of reasonably
clarifying
the delay.
[20]
All of the abovementioned factors militate strongly against the
granting of condonation. However,
I am also constrained to consider
the prospects of success and must therefore consider the merits of
the appeal before pronouncing
on the application for condonation.
Contempt
of court
[21]
In the application before Kruger AJ, Express initially sought an
order declaring the appellants
to be in contempt of Nhlangulela DJP’s
order and for the imposition of such period of imprisonment or fine
as the court may
deem meet. It, however, subsequently amended its
notice of motion, in effect abandoning the prayer for the imposition
of a sentence
and instead asking for an order compelling the
appellants to purge their contempt by enjoining them to source the
fuel at the price
determined by Express.
[22]
The effect of that amendment was to bring into play the standard of
proof applicable to contempt
of court proceedings where a civil
remedy is sought, as opposed to criminal contempt of court where a
criminal conviction and consequential
committal of the contemnor is
sought. The Constitutional Court held in
Matjhabeng Local
Municipality v Eskom Holdings Limited and Others; Mkhonto and Others
v Compensation Solutions (Pty) Limited
2018 (1) SA 1
(CC), at
para 67, that in civil contempt proceedings, where the committal of
the contemnor is not sought, the standard of proof
is the balance of
probabilities. In order to succeed, Express was required to prove:
(a) a valid court order; (b) that the appellants
were notified of the
order; (c) that they have failed to comply with the order; and (d)
that their non-compliance was wilful and
mala fide
. It is
trite that once (a), (b) and (c) have been established, the
appellants bore an evidentiary burden to prove that the
non-compliance
was not
mala fide
. (
Fakie N.O v CCII
Systems (Pty)
Ltd
[2006] ZASCA 52
;
2006 (4) SA 326
(SCA)).
[23]
It was common cause that the requirements of a valid court order and
the appellants’ knowledge
of it had been established. The only
questions which Kruger AJ was therefore required to decide were
whether the appellants had
failed to comply with the order and, if
so, whether their non-compliance was wilful or
mala fide
.
[24]
The appellants contend that Nhlangulela DJP’s order only
compelled them to source their
fuel from the respondent without
telling them how much they must pay. They contend that they did
comply with the order because
they sourced their fuel exclusively
from Express, but had refused to pay the invoiced price as they were
entitled to do.
[25]
The appellants’ stance was premised on the judgment in
Firestones South Africa (Pty) Ltd v Genticuro AG
1977 (4) SA
298
(AD) at 304D-E (
Firestones
). In that case it was held that
the court’s intention is to be ascertained primarily from the
language of the judgment or
order as construed according to the usual
well-known rules. Thus, as in the case of a document, the judgment or
order and the court’s
reasoning for it must be read as a whole
in order to ascertain its intention. If, on such a reading, the
meaning of the judgment
or order is clear and unambiguous, no
extrinsic fact or evidence is admissible to contradict, vary, qualify
or supplement it. In
such a case not even the court that gave the
judgment or order can be asked to state what its objective intention
was in giving
it.
[26]
In
Rail Commuters Action Group & Others v Transnet Ltd t/a
Metrorail and Others
2007 (1) All SA 279
(C)
,
at 286F,
Thring J endorsed this approach and held that the order is the
executive part of the judgment. It defines what the court
requires to
be done or not done, and although it must undoubtedly be read as part
of the entire judgment, and not as a separate
document, ‘if its
meaning is clear and unambiguous, it is decisive, and cannot be
restricted or extended by anything else
stated in the judgment’.
[27]
However, insofar as
Firestones
must be read as holding that
the reasons in the judgment can only be resorted to when there is
ambiguity in the order, it has been
superseded by the judgment in
HLB
International (South Africa) v MWRK Accountants and Consultants
(113/2017) [2022] ZA(12 April 2022), at para 26. The Supreme
Court of Appeal held in that case that orders must be interpreted
together
with the reasons provided in the judgment and that both the
reasons and the order must be read as a whole in order to ascertain
the court’s intention. (See also
Eke v Parsons
2016 (3)
SA 37
, at para 29 (CC))
[28]
Nhlangulela DJP’s order must therefore be construed in the
context of the reasons provided
in his judgment. Express’s
attempt to introduce into this exercise averments made in their
founding or replying affidavits
must, however, be resisted. The
dangers of such an approach are obvious. A judgment is the judicial
officer’s recordal of
his or her factual findings, conclusions
of law and the consequential relief granted. In interpreting the
executive part of the
judgment, namely the order, regard can only be
had to the reasons as they appear from the judgment. Averments
contained in the
parties’ affidavits can only be relevant
insofar as they form part of the judicial officer’s factual
findings. Otherwise,
parties will effectively be allowed to re argue
the case in order to give meaning to the order.
[29]
What then did Nhlangulela DJP say about the relief sought by Express?
There is only one reference
to this issue in the judgment where he
recognises that Express was seeking to maintain the
status
quo
ante
, namely to continue sourcing the fuel exclusively from
Express. It consequently sought to reinstate the business arrangement
that
was in place immediately before the launching of the
application. I agree with Mr
Epstein
that it is therefore only
logical to assume that in ordering the appellants to source their
fuel exclusively from Express, Nhlangulela
DJP, intending to
reinstate that
status ante quo
, must have had a price in mind.
Certainly he could not have intended for the appellants to get it for
free. And in the context
of the reasons provided in his judgment that
price could only have been the usual price paid by the appellants for
the fuel before
the institution of the application.
[30]
Nhlangulela DJP’s order was framed in exactly the language
prayed for by Express. So, in
a manner of speaking, Express was the
author of its own problems by not being more specific about the form
of the relief it sought.
The issue of the price which the appellants
had to pay for the exclusively sourced fuel was a fundamental part of
the relief sought
by Express. It should therefore have been spelled
out in clear and unambiguous terms and not left for complicated
exercises of
construction.
[31]
Nevertheless, in the context of this case, it matters not how one
arrives at the conclusion that
the order sought to reinstate the
status
ante quo
, both in respect of the exclusive
sourcing of the fuel and the price which the appellants were required
to pay. The result is the
same, namely that the appellants were
compelled to buy their fuel exclusively from Express at the usual
price.
[32]
As mentioned, the appellants contend that Express did not address the
issue of price in its main
application before Nhlangulela DJP. Hence
in his judgment the only reference to price was that it was an
above-market price and
that Express sought to restore the
status
ante quo
. The judgment nowhere spells out what that price was
or what the terms of the tacit agreement were, or so the appellants
contended.
[33]
Mr
De La Harpe
argued that there was a clear dispute on the
papers regarding the price of fuel and the cost of transporting it,
as well as the
manner in which those prices and costs were to be
calculated with reference to past practices and the conduct of the
parties. Those
disputes, if they were to be determined by Nhlangulela
DJP, should have been resolved on the appellants’ version, or
so the
argument went.
[34]
Even though the amendment of the notice of motion changed the nature
of the proceedings into
an application for civil contempt, Express
was still required to establish, amongst others, that the appellants
had wilfully disregarded
the order, albeit that the latter carried
the evidentiary burden of establishing the contrary.
[35]
It is manifest that the appellants adopted the position – at
least from 30 December
2020 – that Nhlangulela DJP’s
order only compelled them to source their fuel exclusively from
Express. According to
them the fact that the learned judge did not
mention the price at which they have to procure the fuel meant that
they were entitled
to pay what they regarded to be a market-related
price. This much was clear from the letter which their attorneys
addressed to
Express’s attorneys on 30 December 2020.
They accordingly did not pay the price which Nhlangulela DJP’s
order
intended them to pay. Their conduct consequently constitutes
non-compliance with the order. This, however, is not the end of the
enquiry. These being contempt of court proceedings, I must still
consider the appellants’ explanation for their non compliance
in order to determine whether it has been wilful.
[36]
The question as to whether their conduct was wilful must be answered
with due regard to their
explanation as to why they believed they
were entitled to adjust the prices stated on Express’s invoices
and to pay a price
that they regarded as market related.
[37]
In their answering affidavit, the appellants explained that Express
had priced its fuel according
to a formula based on prices that it
was able to obtain from various bulk suppliers, using ‘a
weighted average price’.
Express had, however, in the months
preceding the launch of the urgent application before Nhlangulela
DJP, adopted a new formula
which is equivalent to the most expensive
price that Shell charges. The appellants thus contended that in
determining the
status quo ante
price, the court must have
regard to the price which had historically been charged over a number
of years, using the formula previously
applied by Express and not
based on Shell’s most expensive price.
[38]
However, Express, in its replying affidavit, was able to demonstrate
conclusively, with the assistance
of chartered accountants, that it
has been using the same pricing formula in respect of Ropax for the
past 16 months and in respect
of Rio Ridge, for the past 24
months.
[39]
Mr
Epstein
has described the appellant’s version as
‘stitched together with fabricated facts’, and he stopped
short of calling
it deliberately dishonest. While this depiction may
seem a trifle harsh, I am of the view that, at the very least, the
appellants
had been opportunistic in latching onto the fact that
Nhlangulela DJP’s order was silent on the price at which the
fuel have
to be procured.
[40]
The most compelling substantiation of this assertion is the fact that
from 4 December 2020
until 30 December 2020, the appellants had
fully complied with the court order. They had bought fuel exclusively
from Express at
the
status quo ante
price, namely the price
that they had consistently been paying – in the case of Ropax,
for the preceding 16 years and in
the case Rio Ridge, for the past 24
months. This much was evident from the letter their previous
attorney, Mr Sharp, had written
to Express’s attorneys on 11
December 2020, confirming that Ropax and Rio Ridge will pay the
invoices issued by Express for
the supply of fuel ‘provided
that the fuel is charged for at the same rate it has been charged for
most recently’.
This, in my view, is incontrovertible evidence
that the appellants had, at least at that point, understood at what
price Nhlangulela
DJP’s order has compelled them to procure the
fuel.
[41]
The letter of 30 December 2020 was thus an opportunistic about-turn
on the part of the appellants.
Their attorneys stated in that letter
that they, together with the appellants, had an opportunity to
reconsider the judgment and
the order and were of ‘the
considered view that the judgment obliges our clients to do no more
than source fuel from your
client. No terms are stipulated regulating
such sourcing, supply and pricing’.
[42]
It is thus clear that while their initial stance – as set out
in the letter of 11 December
2020 – was based on a
reasonable construction of Nhlangulela DJP’s order, they have
subsequently – and in my
view opportunistically – latched
onto the fact that the order did not specifically mention price, and
have contrived to construct
a version to justify their refusal to pay
the above market-related price.
[43]
I accordingly agree with Mr
Epstein
that in those
circumstances the appellants could not have held a genuine and bona
fide belief that they were entitled to pay short
on the invoices
issued by Express. Their conduct consequently constitutes
contumacious non-compliance with the order. The inexorable
consequence of this finding is that the appellants’ application
for condonation must also be refused. The appeal must accordingly
fail and, these being contempt of court proceedings, costs must be
awarded on a punitive tariff, namely on the attorney and client
scale.
The
order
[44]
In the result the following order issues:
1)
The appeal is dismissed with costs, including the
costs of two counsel, on the attorney and client scale.
2)
Paragraphs (a) and (c) of the order granted by
Kruger AJ on 20 May 2022 are confirmed.
3)
Paragraph (b) of the order made by Kruger AJ on
20 May 2022 is replaced with the following paragraph:
‘
(b).
The first and second respondents are hereby granted ten days from the
date of this judgment to purge their contempt
as set out in
paragraph (a) above. This must be done through payment in
accordance with the invoices delivered by the applicant
to the date
of the Full Court’s judgment and order, failing which the
applicant may set the matter down upon notice as a
matter of urgency,
with or without further amplification of the papers, calling upon the
first to fourth respondents to show cause
why:
(i)
A further order should not issue in terms of
which the first and second respondents would be prohibited from
proceeding in any other
litigation in any other matters that they may
be involved with in the High Court until they have purged the said
contempt;
(ii)
They should not pay the costs of any further
proceedings on an attorney and client scale;
(iii)
Further sanctions to ensure purging of the
contempt should not be imposed against them;
(iv)
Criminal sanctions should not be imposed on the
third and fourth respondents.’
JE
SMITH
JUDGE
OF THE HIGH COURT
I
agree
BESHE
JUDGE
OF THE HIGH COURT
I
agree
NTLAMA-MAKHANYA
ACTING
JUDGE OF THE HIGH COURT
Appearances:
Counsel
for the Appellants
: Adv. D H
De La Harpe SC
Adv K L Watt
:
Netteltons Attorneys
118A High Street
MAKHANDA
(Ref: Ms. Pienaar)
Counsel
for the Respondent :
Adv H Epstein SC
Adv K Hopkins
:
Neville Borman & Botha
22 Hill Street
MAKHANDA
(Ref: Mr Powers)