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[2021] ZAGPPHC 20
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Malao Inc v Investec Bank Limited and Others (60617/2020) [2021] ZAGPPHC 20 (6 January 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, PRETORIA)
Case number: 60617/2020
In the matter between:
K
MALAO INC
Applicant
(Applicant in the application for
leave to appeal)
and
INVESTEC
BANK LIMITED
First
Respondent
(Respondent in the application for leave to appeal
THE
ROAD ACCIDENT FUND
Second
Respondent
(Respondent in the application for
leave to appeal)
THE
SHERIFF FOR SANDTON SOUTH
Third
Respondent
CITY
OF JOHANNESBURG
Fourth
Respondent (Respondent in the application for leave to appeal)
APPLICATION FOR LEAVE TO APPEAL
BASSON J
Introduction
[1]
This
is an application for leave to appeal against the order and judgment
of this court made on 26 November 2020:
“
1. In respect of
the 1
st
and 2
nd
respondents:
The matter is held to be not urgent
and is therefore struck from the roll with costs (in respect of each
of the two respondents)
de bonis propriis on the scale as between
attorney and client against Mr Kabelo Malao of Messrs K Malao Inc.
Such costs to
include the costs consequent upon the employment of two
counsel.
2.
In
respect of the 4
th
respondent the following order is made:
2.1
The
application is dismissed with costs
de
bonis propriis
on the scale as between attorney and client against Mr Kabelo Malao
of Messrs K Malao Inc.
2.2
The
attachment of the fourth respondent’s bank account, held at
Investec Bank is irregular and is hereby set aside.
2.3
The
Sheriff of the High Court, Sandton South, is ordered to immediately
and without any delay repay all amounts attached and paid
into its
Trust Account held at Standard Bank, with account number 012[…]
with branch code number 012345, under case number
359[…], to
the 4
th
respondent’s Investec bank account.”
[2]
Although
the applicant does not take issue with the order in respect of
urgency, it does take issue with the remainder of the order
and
judgment. All in all, the applicants listed more than 30 grounds of
appeal.
[3]
It
is, in my view, not necessary to deal with each and every ground of
appeal in detail as I am of the view that the entire application
for
leave to appeal is ill-founded and not supported in either fact or
law and moreover, not supported by the papers.
[4]
It
is suffice to deal with the following four issues in broad terms.
Firstly, the order (“order 1”) relating to urgency
and
the striking off of the matter with costs
de
bonis propriis
on a scale as between attorney and client against Mr Malao which
costs include the costs consequent to the employment of two counsel
in respect of Investec and the Road Accident Fund (“the RAF”)
respectively. Secondly, the contention that this Court
erred in
admitting the answering papers filed on behalf of the respondents.
Thirdly, the order granted in favour of the fourth
respondent (“the
City of Johannesburg” – “order 2”). Fourth,
the costs order.
Order 1
[5]
Order
1 provides in respect of Investec and the RAF that the matter is not
urgent. The matter was struck with costs
de
bonis propriis
on a scale as between attorney and client against Mr Malao which
costs include the costs consequent to the employment of two counsel
in respect of Investec and the Road Accident Fund (“the RAF”)
respectively.
[6]
The
applicant is not appealing the order in respect of urgency but is
appealing the costs order.
[7]
Order
1 is not appealable: Firstly, this order is not appealable as it is
interlocutory in nature and effect. The merits of the
claim against
Investec and the RAF remain alive and will be dealt with in the
normal course.
[1]
Secondly, the order as to punitive costs was made in the discretion
of the Court.
The
answering affidavits filed on behalf of Investec, the RAF and the
City of Johannesburg
[8]
The
applicant takes issue with the fact that the Court admitted the
answering papers filed by these three respondents.
[9]
This
application was launched on 17 November 2020. In the notice of
motion, the respondents were granted an opportunity to give
notice of
their intention to oppose no later than 18 November 2020 at 14H00 and
to file their answering affidavits by no later
than 10H00 on 19
November 2020. The urgent application was set down for 24 November
2020 but was only heard by direction of the
Court on 26 November
2020.
[10]
Despite
the fact that the papers filed on behalf of the applicant comprise
approximately 595 pages (with the annexures alone comprising
almost
570 pages), the respondents were placed under severe time pressure to
file their answering affidavits. Investec took issue
with the severe
truncated time periods and also took issue with the fact that the
state of the annexures to the founding affidavit
left much to be
desired. Some annexures referred to in the founding affidavit are
either missing or have not properly been marked
in accordance to what
has been set out in the founding affidavit. Some pages are also
missing in the annexures. Regarding the severely
truncated timeframes
within which it had to file its answering papers, Investec submitted
that it was severely prejudiced thereby
because it did not have
sufficient time to answer to the application. Although Investec duly
gave notice of its intention to oppose
on 18 November 2020, it only
managed to serve and file its answering affidavit on 20 November
2020. The Road Accident Fund (“the
RAF”) and the City of
Johannesburg only managed to file their answering affidavits a few
days later.
[11]
The
respondents have clearly been afforded very little time to file their
answering affidavits. Although it is accepted that severe
truncated
time limits may be necessary where the facts of a particular matter
so require, no cogent reasons are advanced in the
papers in this
matter for the necessity of such extreme truncated time periods.
[12]
This
matter is not urgent (subject to what has been found in respect of
the City of Johannesburg). In light of the fact that the
matter is
not urgent and in light of what Investec states in its answering
affidavit about the state of the applicant’s papers,
Investec
cannot, in my view, be blamed for not having been able to adhere to
the strict time periods set by the applicant for the
filing of
answering affidavits.
[13]
The
setting of time periods in urgent applications for the filing of
papers is dictated by the facts. The Court in
[zRPz]
Luna
Meubel Vervaardigers (Edms) Bpk v Makin And Another (t/a Makin's
Furniture Manufacturers)
[2]
made
it clear that practitioners should take cognisance of the facts of a
particular matter and of the considerations of urgency
in setting
down a matter in the urgent court. The notice of motion should thus
be tailored with due
consideration
to the degree of urgency required in bringing the application.
[14]
This
was clearly not done in this matter. T
here
existed no reason for the extreme urgency within which this
application was brought and for affording the respondents such
a
short time within which to file their answering affidavits. The Rules
are “
not
an end in themselves
”
as was pointed out by the court in
Federated
Trust Ltd v Botha
.
[3]
Parties cannot tweak the Rules to suit their own agenda. The court in
Federated
Trust
[4]
pointed out that where a party “
has
failed to comply with requirements of the Rules or an order made in
terms thereof and prejudice has thereby been caused to his
opponent,
it should be the court's endeavour to remedy such prejudice in a
manner appropriate to the circumstances, always bearing
in mind the
objects for which the Rules were designe
d”.
Therefore, just as it is for a Court to decide whether a matter is
really urgent
[5]
and whether the circumstances warrant a departure from the Rules, it
is also, in my view, for a Court to decide whether or not
to allow a
party to file an answering affidavit which does not comply with the
truncated time periods stipulated by an applicant
in its notice of
motion. In exercising a discretion, a court must always be mindful of
the fact that litigants are entitled to
the right to a fair hearing.
Where a litigant will suffer prejudice as a result of truncated time
periods set by a litigant in
urgent proceedings and which may result
in a party being deprived of the right to a fair hearing, a court
will be entitled to come
to the assistance of such party.
[15]
It
is a well-established principle that the High Court has the inherent
jurisdiction to prevent the abuse of its processes. As far
back as
1927 the Court in
Hudson
v Hudson
[6]
pointed out that –
“
Every
court has the inherent power to prevent an abuse of the machinery
provided for the purpose of expediting the business of the
Court.”
The
inherent jurisdiction of the Superior Courts to protect their own
processes is now recognised in section 173 of the Constitution:
[7]
“
The
Constitutional Court, the Supreme Court of Appeal and the High Court
of South Africa each has the inherent power to protect
and regulate
their own process.”
[16]
For
these reasons, this Court exercised its discretion and allowed
Investec to place its answering affidavit before the Court.
[17]
In
terms of the answering affidavits filed by the RAF and the City of
Johannesburg, the same considerations as set out in respect
of
Investec’s answering affidavit, apply. As far as the RAF is
concerned, there is the additional claim made by the RAF that
it had
to obtain a copy of the application from Investec’s attorneys.
Mr Malao, according to the RAF, also refused to provide
the RAF’s
attorney access to CaseLines until the Saturday afternoon before
hearing of the application.
[18]
Taking
into account all of these factors, there is, therefore no reason why
this Court ought not to have exercised its discretion
to also allow
the RAF and the City of Johannesburg to place their affidavits before
this Court.
[19]
The
applicant also advances as one of its grounds of appeal that this
Court should have granted the applicant an opportunity to
file a
reply. This is not correct. The applicant made no request for a
postponement and made no request to file a replying affidavit.
The
applicant chose the time frames within which this matter should be
brought before the court. Moreover, the applicant chose
to persist
with its application on the date of the hearing.
The
City of Johannesburg: Order 2
[20]
The
applicant takes issue with the order granted in favour of the City of
Johannesburg, particularly the fact that the Court granted
the order
in the absence of a formal counter-application on behalf of the City
of Johannesburg.
[21]
There
is no merit in any of these grounds for leave to appeal. The facts
placed before the Court by the City of Johannesburg regarding
the
three Investec accounts, stand uncontested. The applicant’s
contention that this Court erred in ordering the release
of the funds
belonging to the City of Johannesburg without satisfying itself as to
whether the amounts belonged to the RAF or the
City of Johannesburg
is therefore incorrect. Also, the contention that the Court erred in
accepting the explanation that the Investec
accounts were opened to
compensate motorists whose vehicles were damaged on the city’s
roads similarly is incorrect. To restate,
the applicant did not file
a replying affidavit. The City of Johannesburg’s contentions
regarding the three Investec accounts
therefore stand uncontested.
[22]
Further,
I am in agreement with the contention advanced on behalf of the City
of Johannesburg that the applicant, in any event,
did not disclose a
cause of action in its founding affidavit against the City of
Johannesburg. The cause of action as set out in
the applicant’s
founding affidavit is premised on an agreement purportedly concluded
between the applicant and Investec.
The City of Johannesburg was not
party to this agreement. Therefore, the applicant’s papers do
not disclose a cause of action
between the applicant and the City of
Johannesburg. Also, the RAF is the debtor to the applicant’s
alleged clients, not the
City of Johannesburg. The City of
Johannesburg is not a debtor to the applicant nor to the applicant’s
clients. This, as
argued by the City of Johannesburg, means that the
attachment of the City of Johannesburg’s bank accounts in these
circumstances
is impermissible in law as no debtor/creditor
relationship exists between the applicant and the City of
Johannesburg.
[23]
Regarding
the submission that the Court erred in granting the order in the
absence of a counter application, I am also of the view
that this
ground has no merit.
[24]
Having
regard to the facts, the applicant had no right in law to attach the
bank account of the City of Johannesburg. The City of
Johannesburg
explains in its papers that the funds held in these accounts were
derived through various revenue generating mechanisms
of the City of
Johannesburg, and that these funds are public funds which exist for
the proposes of ensuring that the City of Johannesburg
meets its
legislative and constitutional mandates of service delivery. The
uncontested facts are that these funds were erroneously
paid out from
the City of Johannesburg’s accounts to the Sheriff (the third
respondent).
[25]
The
fact that the City of Johannesburg did not launch a formal
counter-application seeking an order that the funds be returned to
it, does not, in my view, prevent this Court from granting an order
that the funds be returned to the City of Johannesburg. The
issue of
the impermissible attachment of the three Investec accounts held by
the City of Johannesburg is pertinently raised on
the papers.
Moreover, the City of Johannesburg expressly states in its papers
that the funds urgently needed to be returned to
it.
[26]
I
am therefore not persuaded that it was impermissible for the Court to
have granted the order in light of what is contained in
the answering
affidavit of the City of Johannesburg and the express request that
the funds urgently be returned to it. What the
applicant did in this
matter (to borrow words from the Supreme Court of Appeal in the
recent judgment of
Gobela
Consulting CC v Makhado Municipality
[8]
)
amounted to “
impermissible
self-help
”.
There exists, in my view, no reason, not to have ordered that the
applicant return public funds it was not entitled to
in the first
place.
[27]
The
conduct of the applicant
vis
à vis
the City of Johannesburg and the relief sought against it, is clearly
an abuse of process. Where a litigant (such as in this matter)
abuses
this Court’s processes, a Court is entitled to protect and
regulate its own process and make an appropriate order
to prevent or
minimise the injustice inflicted upon a party. I am however, mindful
that this is a discretion that should be exercised
with caution. This
instance, however, warrants interference by this Court. As pointed
out by the Court in
Stanford
v Haley
:
[9]
“
[8]
In terms of s 173 of the Constitution the High Court has the inherent
power to protect and regulate its own process and to develop
the
common law, taking into account the interest of justice. It has an
inherent jurisdiction to control its own proceedings and
as such has
power to dismiss a summons or an action on account of the delay or
want of prosecution. (Herbstein and Van Winsen
The
Civil Practice of the Supreme Court of South Africa
4th
ed at 547;
Hunt
v Engers
1921
CPD 754
;
Western
Assurance Co v Caldwell's
Trustee
(supra
at
272).) The Court will exercise such power sparingly and only in
exceptional circumstances because the dismissal of an action
seriously impacts on the constitutional and common-law right of a
plaintiff to have the dispute adjudicated in a court of law by
means
of a fair trial. The Court will exercise such power in circumstances
where there has been a clear abuse of the process of
Court. (
Kuiper
and Others v Benson
1984
(1) SA 474
(W)
at
477A;
Molala
v Minister of Law and Order and Another
1993
(1) SA 673 (W)
;
Western
Assurance Co v Caldwell's Trustee (supra
at
271).)
[28]
In
Riordan
v First National Bank Limited and others
[10]
the Court similarly set aside the attachment of a bank account that
was done invalidly. The Court in that matter set aside the
attachment
and similarly ordered that the amounts attached be repaid:
“
[1] This
application, brought on urgent basis, concerns the validity of the
attachment of the applicant's movable
incorporeal property in terms
of Rule 45(8)(c) of the Uniform Rules. The movable property is in the
form of funds in a Platinum
Cheque Account held by the applicant at
the First Respondent.
……
[6] Based on the
above common cause facts, the only pertinent issue for determination
in this application is the
question whether the attachment was served
on the applicant and/or whether it is valid and regular. For present
purposes, all the
other issues raised in the papers and in argument,
such as why the applicant did not first approach the court for the
variation
of the Settlement Agreement before ceasing to pay the
maintenance, and whether the applicant was in arrears when the writs
of execution
were issued etc, do not have to be determined in these
urgent proceedings.
[7] The
obvious starting-point is the provisions of Rule 45(8)(c) of the
Uniform Rules of Court. However, prior
to dealing with the latter
Rule in full, mention should be made of one general practice. This is
that if incorporeal property,
whether movable or immovable is to be
attached, it may be so attached without the necessity of a prior
application to Court
1
.
(See in this regard
Ormerod
v Deputy Sheriff, Durban
and
LAWSA
3
.
[9] The
provisions of Rule 45(8)(c) make it perfectly clear and peremptory
that the attachment of incorporeal property,
such as in the instant
matter, (funds in a bank account), shall only be complete when notice
of the attachment has been given in
writing by the Sheriff to all
interested parties. (See
Messenger
of the Magistrate's Court, Durban v Pillay
1952
(3) SA 678
(A) at 683C-D, where the peremptory nature of a Court Rule
was discussed.) There is no doubt that in the instant matter, the
applicant
is an "
interested
party
".
See for example,
SA
Soutwerke (Pty) Ltd v Saamwerk Soutwerke (Pty) Ltd,
in the context of the
Mineral and Petroleum Resources Development Act
28 of 2002
.
In
my view, conduct which is clearly mala fide and not in
compliance with this rule for whatever flimsy reasons and an
abuse of
court process, ought not to be countenanced by the Courts. The
applicant is clearly an interested party since it is his
account and
funds which have been attached
[11]
.
……
CONCLUSION
[11] In applying
the above principles, and on a proper interpretation of the
provisions of
Rule 45(8)(c)
, and based on the largely common cause
facts of this matter, I conclude that the attachment was irregular
and invalid. There was
no notification of the attachment given to the
applicant in writing. The contentions of the second respondent to the
contrary are
without any merit. On her own version, on 26 and 27 June
2014, the Sheriff attended at the applicant's place of residence, and
was advised allegedly by the security guards at the gate that the
applicant was not there. At the applicant's place of employment,
the
Sheriff was allegedly informed that the applicant was abroad. There
is no evidence of this before me. To compound matters,
the Sheriff's
returns of service in executing the writ on the bank on 24 July 2014
and on 18 August 2014 both read that:
"The attachment is not yet
completed as satisfaction of the writ was not demanded from the
defendant (please favour me with
the defendant's/plaintiff's address
particulars)."
The reference
by the Sheriff to "
the
plaintiff's address particulars
",
in the return of service was clearly incorrect. It was only on 22
August 2014 that the Sheriff served the writ and notice
of attachment
on the applicant personally at his place of employment. The founding
affidavit was commissioned on 20 August 2014,
and the notice of
motion was issued by the Registrar of this Court the following day,
i.e. 21 August 2014. On these facts, the
application must succeed.”
Costs
[29]
The
applicant, as pointed out in the judgment, is a firm of attorneys. It
is clear from the papers that Mr. Malao is the driving
force
behind the launch of this urgent application. Notwithstanding the
fact that Mr. Malao was informed on 16 November 2020 by
Investec what
the status of the various accounts were, Mr. Malao nonetheless
decided to forge ahead with a voluminous application
that is not
urgent in the first place. Mr Malao’s threatening conduct
towards the deponent of Investec’s answering
affidavit, is
further unacceptable. He, as an officer of this Court, ought to have
known that bringing this application constituted
an abuse of process.
He further must have known that his conduct would cause substantial
costs to all the respondents.
[30]
Costs
falls within the
discretion
of a court,
provided
that such discretion must be exercised judicially.
[12]
In
Kruger
Bros & Wasserman v Ruskin
the Court held that –
“
the
rule of our law is that all costs – unless expressly otherwise
enacted – are in the discretion of the Judge. His
discretion
must be judicially exercised, but it cannot be challenged, taken
alone and apart from the main order, without his
permission.”
[13]
[31]
A
Court, exercising a discretion, can also grant a punitive costs order
in cases of unreasonable litigation. Where the driving force
behind
such unreasonable litigation is an officer of this court, this court
is furthermore entitled to show its displeasure by
grating a costs
order
de
bonis propriis
.
[32]
In
Hotz
and Others v University of Cape Town
[14]
the Constitutional Court, in considering the discretion of the High
Court on the issue of costs, stated that:
“
A cautious approach is,
therefore, required. A court of appeal may have a different view on
whether the costs award was just and
equitable. However, it should be
careful not to substitute its own view for that of the High Court
because it may, in certain circumstances
be inappropriate to
interfere with the High Court’s exercise of discretion.”
[33]
Having
regard to the above, I am not persuaded that another court will find
that this Court erred in ruling on costs as it did.
Conclusion
[34]
Having
considered all the grounds for application for leave to appeal, I am
of the view that the application has no merit. Section
17(1)(a)(i) of
the Superior Courts Act
[15]
has raised the threshold for granting leave to appeal. Bertelsmann J
in
The
Mont Chevaux Trust (IT2012/28) v Tina Goosen & 18 Others
[16]
explains
how the Superior Courts Act
has
raised the bar for granting leave to appeal:
"It
is clear that the threshold for granting leave to appeal
against a judgment of a High Court has been
raised in the new Act. The former test whether leave to appeal should
be granted was a reasonable prospect that another
court
might come to a different conclusion, see
Van
Heerden v Cronwright & Others
1985
(2) SA 342
(T)
at 343H. The use of the word "would" in the new
statute indicates a measure of certainty that
another
court will differ from the court whose judgment is sought to be
appealed against."
[35]
The
Supreme Court of Appeal in
Smith
v S
[17]
also
had
occasion to consider what constituted reasonable prospects of success
in section 17(1)(a)(i):
"What the test of reasonable
prospects of success postulates is a dispassionate decision, based on
the facts and the law that
a court of appeal could reasonably arrive
at a conclusion different to that of the trial court. In order to
succeed, therefore,
the appellant must convince this court on proper
grounds that he has prospects of success on appeal and that
those prospects
are not remote but have a realistic chance of
succeeding. More is required to be established than that there is a
mere possibility
of success, that the case is arguable on appeal or
that the case cannot be categorised as hopeless. There must, in
other words,
be a sound, rational basis for the conclusion that there
are prospects of success on appeal."
[36]
There
must therefore exist more than just a mere possibility that another
court will find differently on both the facts and the
law.
[37]
In
conclusion, I am not persuaded that there are reasonable prospects
that another court will come to a different conclusion. The
application for leave to appeal is therefore dismissed with costs.
Order
[38]
The
application for leave to appeal therefore is dismissed with costs,
such costs to include the costs consequent to the employment
of two
counsel where so employed.
AC BASSON
JUDGE OF THE HIGH COURT
GAUTENG DIVISION OF THE HIGH COURT, PRETORIA
Electronically submitted
therefore unsigned
Delivered: This judgment was
prepared and authored by the Judge whose name is reflected and is
handed down electronically
by circulation to the Parties/their legal
representatives by email and by uploading it to the electronic file
of this matter on
CaseLines The date for hand-down is deemed to
be 6 January 2021.
Case number
: 60617/2020
Appearances
For the Applicant
: Adv CN Mosala
(In the application for leave to appeal)
Instructed
by
: K Malao Incorporated
For the 1
st
Respondent
: Adv GB
Rome (SC)
Adv SL Mohapi
Instructed
by
: Werksmans Attorneys
For the 2
nd
Respondent
: Adv R Schoeman
Instructed by
: Malatji & Co Attorneys
For the 4
th
Respondent
: Adv C Gibson
Instructed
by
: Moodie and Robertson Attorneys
Date
of Judgment
: 6 January 2021
[1]
See
Lubambo
v Presbyterian Church of Africa
1994 (3) SA 241
(SE) at 243A – 244A and
Zweni
v Minister of Law and Order of the Republic of South Africa
1993 (1) SA 523
(A) at 531I.
[2]
1977
(4) SA 135 (W).
[3]
1978
(3) SA 645 (A).
[4]
Ibid
at 654E-F.
[5]
Lubambo
v Presbyterian Church of Africa
1994 (3) SA 241
(SE) at 243G – 244A: “
In
any event, the decision as to whether a case should be heard as
a matter of urgency amounts to the exercise of a judicial
discretion. That is clear from the wording of Rule 6(12)
(a)
,
which reads as follows:
'In urgent applications a Court
or a Judge
may
dispense with the forms and service
provided for in these Rules and
may
dispose of such
matter at such time and place and in such manner and in accordance
with such procedure (which shall as far
as practical be in terms of
these Rules)
as to it seems meet
.'
(My italics.)
It is trite law that an appellate
tribunal will not readily interfere with the exercise of judicial
discretion unless it is shown
that it was exercised capriciously or
without grounds.
In
my judgment at the time I dealt with the question of urgency. On
this issue Harms in his work
Civil
Procedure in the Supreme Court
at
180 para G4 said the following:
'There are degrees of urgency.
Some matters may be so urgent as to necessitate the hearing at once,
albeit at night or during
the weekend and may even be so urgent that
no time is available to prepare any documents, in which case
viva
voce
evidence may be heard. Others again, whilst they may
be such that the time limits imposed by the Rules may be ignored,
may
not be so urgent as to require a hearing out of normal Court
hours.'
In the exercise of my discretion
I decided to hear the application as a matter of urgency. I took
into account the fact that the
papers were served on Lubambo and
that Lubambo had the opportunity to oppose the application and
to file opposing affidavits.
There was even enough time for the
church to file replying affidavits.”
[6]
1927
AD 259
at 267.
[7]
Act
109 of 1996.
[8]
[2020]
ZASCA 180
at para
[22]
.
[9]
2004
(3) SA 296
(C) at para [8].
[10]
[2014]
ZAGPJHC 195 (1 September 2014).
[11]
My
emphasis.
[12]
See
Ferreira
v Levin and Others; Vryenhoek & Others v Powell NO & Others
1996
(2) SA 621 (CC).
[13]
1918
AD 63
at [69].
[14]
2018
(1) SA 369
(CC) at para 28.
[15]
Act
10 of 2013.
[16]
2014
JDR 2325 (LCC) at para 6.
[17]
2012
(1) SACR 567
(SCA)
at para 7.