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2021
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[2021] ZAGPJHC 758
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Somika v Saarthy Proprietary Limited (2020/24081) [2021] ZAGPJHC 758 (11 August 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
CASE NO: 2020/24081
REPORTABLE: No
OF INTEREST TO OTHER
JUDGES: No
REVISED.
11 August 2021
In the matter between:
SOMIKA SARL
Applicant
and
SAARTHY PROPRIETARY
LIMITED
Respondent
Delivery:
This judgment was handed down
electronically by circulation to the parties' legal representatives
by email, and uploaded on caselines
electronic platform. The date for
hand-down is deemed to be 11 August 2021.
Summary:
Leave to appeal against the order
granting specific performance by the urgent court. The respondent’s
conduct resulting in
the enforcement of the order becoming moot. The
applicant seeking costs on a punitive scale of attorney and client
scale.
JUDGEMENT
Molahlehi J
Introduction
[1] This matter served
before this court initially as an application for leave to appeal
against the judgment made on 11 September
2020. The judgment was
granted in favour of the respondent, Somika (Pty) Ltd (Somika),
directing the respondent Saarthy (Pty) Ltd
(Saarthy) to issue the
relevant amendment bill of landing at the port in Tanzania. Saarthy
did not comply with the order but instead
filed an application for
leave to appeal against it.
[2] Saarthy did not
proceed with the prosecution of the leave to appeal as it became
moot. The mootness arose because there would
be no practical outcome
that would flow from that application as the urgent court order is no
longer capable of being implemented.
The urgent court order cannot be
given effect because Saarthy is incapable of procuring the bill's
amendment to reflect Somika
as the consignee.
[3] The issue that now
remains for determination is which party is responsible for the costs
occasioned by the application for leave
to appeal, including those
occasioned by the application to declare the judgment referred to
above, declared to have been abandoned
by Somika.
Background facts.
[4] The initial dispute
between the parties in this matter concerned the consignment of
yellow Sulphur pellets (the consignment),
which was placed in forty
consignment containers on board the vessel, which was docked in the
port in Dar es Salaam on 14 September
2020. The dispute concerned the
failure of Saathy to sign the amendment of the bill of landing and
the packing list invoice.
[5] In the urgent
application, this court granted an order favouring Somika and
compelling Saarthy to sign the bill of landing.
The relevant part of
the order directing specific performance of the contract reads as
follows:
"1 (Saarthy) is
ordered, directed and compelled to forthwith procure the amendment of
bill of lading number MEDUI 823919, annexed
to the founding affidavit
marked "FA3" to reflect the consignee as Somika ... and the
notified party as ...; and
2 (Saarthy) is ordered,
directed and compelled to forthwith deliver the Bill of Lading ... by
close of business on 12 September
2020..."
[6] The other application
launched by Saarthy was for an order declaring Somika to have
abandoned the judgment made in its favour.
[7] Saarthy did not
comply with the order, and on 16 September 2020, Somika launched an
urgent application to declare the directors
of Saarthy be in contempt
of court. The following day on 17 September 2020, Saarthy applied for
leave to appeal against the order
compelling it to sign the bill of
landing.
[8] It is common cause
that the urgent court order has become unenforceable and has thus
become moot. In terms of section 16 (2)
(a) (i) of the Superior Court
Act, "the appeal may be dismissed on this ground alone."
Submissions by the
parties.
[9] Saarthy contends that
Somika should be held liable for the costs occasioned by the leave to
appeal because it (Somika) abandoned
the judgment resulting in the
leave to appeal becoming academic. It further contended that Somika
was responsible for the cost
incurred in the application to declare
the judgment abandoned. It was submitted in this regard that the
judgment was abandoned
because Somika cancelled the agreement
regarding the delivery of the consignment and instituted a claim for
damages in the amount
of USD82080 00.
[10] In the heads of
argument, Saathy argues that Somika could not have it both ways. It
claimed specific performance in the urgent
application compelling
compliance with the agreement. On the other hand, the action
proceedings now claim restitution damages based
on the alleged breach
of the same contract.
Abandonment of
judgment or order
[11] As indicated
earlier, the issue concerns costs arising from the mootness of the
leave to appeal. The case of Saarthy is that
the leave to appeal
became moot because Somika abandoned the judgment.
[12]
In general, a party abandoning a judgment shall be held liable for
the costs up to the time of the abandonment of the judgment.
[1]
[13] The procedure to
follow in abandoning a judgment is set out in rule 41(2) of the Rules
of the High Court (the Rules), which
reads as follows:
"(2)
Any party in whose favour any decision or judgment has been given,
may abandon such decision
or judgment either in whole or in part by
delivering notice thereof and such judgment or decision abandoned in
part shall have
effect subject to such abandonment. The provisions of
subrule (1) relating to costs shall mutatis mutandis apply in the
case of
a notice delivered in terms of this subrule."
[14] In the present
matter, Saarthy does not rely on the above rule in contending that
the urgent order granted by this court was
abandoned. It alleges that
Somika abandoned the rights acquired in instituting action
proceedings in which it claimed damages for
the alleged repudiation
of the contract.
[15]
The issue of abandonment of a judgment was equated to waiver in Body
Corporate 22 West Road v Erggold Property Number 8 CC,
[2]
where the court held that:
"The waiver is a
mechanism whereby a party can limit costs or distance himself from a
particular judgment, but it certainly,
as I have already indicated
above, cannot be equated to a rescission or setting aside of the
judgment on appeal..."
[16] It is clear that
abandonment or waiving a judgment concerns the surrender of rights by
a litigant in whose favour judgment
was made. The onus was thus on
Saarthy to show that Somika had surrendered the rights it derived
from the urgent court order.
[17] The issue that then
arose is whether Saarthy has disclosed material facts that show that
there has been waiver or abandonment
of the judgment in its founding
affidavit.
[18] The case of Saarthy,
as appears from the earlier discussion, is that the judgment cannot
be given effect because of the cancellation
of the contract by Somika
in instituting the action proceedings. In paragraph 23 of the
founding affidavit, it is contended that:
"23.... Somika
cannot approbate and reprobate. By virtue of the election it made to
cancel the agreement, it abandoned the
judgment of 11 September 2020.
There is, therefore, no conceivable reason why the order of 11
September 2020 should be kept alive."
[19] I agree with Somika
that the cancellation of the contract is irrelevant to whether the
judgment was abandoned or the rights
acquired were waived. The facts
of this case do not support the proposition that the urgent order of
this court was abandoned.
[20] In the first
instance, it is important to note that the reaction of Somika when
called upon by Saarthy to file a notice of
abandonment in terms of
rule 41 (2) of the Rules. In this respect, Saarthy attorneys of
record addressed a letter dated 6 May 2021
to Somika's attorneys of
record and, amongst others, stated the following:
"4. You will recall
that the urgent application was founded on an agreement concluded
between your client, Somika and Saarthy.
Your client sought the
agreement (sic).
5. In the action, your
client has cancelled the agreement concluded with Saarthy, and
claims, inter alia, repayment of the amount
it paid in respect of the
first shipment.
6. Your client, by its
conduct aforesaid, abandoned the order obtained in the urgent
proceedings. This renders the application for
leave to appeal moot.
7. Kindly let us have a
formal notice of abandonment in confirmation of your client's
position, failing which we are instructed
to place this
correspondence before his Lordship Mr Justice Molahlehi at the
hearing of the application for leave to appeal and
to argue this
point…"
[21] Somika's attorney of
record responded as follows:
"We disagree that
the appeal is moot. If however your client wishes to abandon the
appeal then it should serve a notice of
withdrawal and tender our
clients’ costs. It should do so sooner rather than later to
avoid further inconveniencing the court."
[22] It is common cause
that Saarthy did not comply with the urgent court order. In my view,
the urgent court order became unenforceable
after December 2020 when
the Tanzanian Port Authority confirmed that the cargo relevant to the
bill of landing was discharged from
the relevant ship by the agent of
Saarthy to a third party. This means Saarthy cannot comply with the
order and this state of affairs
existed since December 2020, more
than four months before the cancellation of the contract alleged to
be evinced by the action
proceedings instituted by Somika.
[23] It follows from the
above that in terms of section 16 (2) of the Superior Court Act the
leave to appeal stands to be dismissed.
For this reason, the
declaratory order sought by Saarthy also stands to fail because the
proposition that the urgent court order
was abandoned is
unsustainable.
Costs
[24] Somika has prayed
for the cost to be awarded to it on a punitive scale of attorney and
client.
[25]
The guiding principles governing the awarding of costs on an attorney
and client scale are summarised in Public Protector vs
South African
Reserve Bank,
[3]
as follows:
"Costs
on an attorney and client scale are to be awarded where there is
fraudulent, dishonest, vexatious conduct and conduct
that amounts to
an abuse of court process. As correctly stated by the Labour Appeal
Court―
"[t]he scale of
attorney and client is an extraordinary one which should be reserved
for cases where it can be found that a
litigant conducted itself in a
clear and indubitably vexatious and reprehensible [manner]. Such an
award is exceptional and is
intended to be very punitive and
indicative of extreme opprobrium."
[26] In my view, the
institution of leave to appeal by Saarthy was unnecessary and
amounted to nothing but an abuse of the court
processes. It embarked
on a stratagem intended to undermine the order's implementation,
directing it to sign the bill of landing
to authorize Somika to
remove the cargo from the Tanzanian port. It was aware or ought to
reasonably have been aware that once
the cargo was removed from the
port, it would not be possible to give effect to the order and thus,
an application for leave to
appeal was ill conceived and unnecessary.
[27] For the above
reasons, I am satisfied that Somika has made out a case for the
awarding of costs on a punitive scale against
Saarthy.
Order
[28] In the
circumstances, the following order is made:
1. The application for
leave to appeal is dismissed in terms of section 16 (2) of the
Superior Courts Act with costs on the scale
as between attorney and
client scale.
2. The application to
declare the urgent court order issued on 11 September 2020 to have
been abandoned by Somika is dismissed with
costs on the scale as
between attorney and client scale.
3. Saarthy is to pay the
costs occasioned by the postponement arising from the belated
delivery of the supplementary grounds of
appeal.
E Molahlehi
Judge of the High Court,
Local Division,
Johannesburg
Representation:
For the Applicant: Adv. F
Bezuidenhout
Instructed by: AYOOB KAKA
Attorneys
For the Respondent: Adv.
Pullinger
Instructed by: Thomson
Wilks Inc.
Date of order: 11
September 2021
Date of reasons: 23
December 2020
Application for leave to
appeal: 18 June 2021
Delivered: 11 August 2021
[1]
Bonthys
v Visser 1950 n (1) SA Sentraboer Kooperetief v Mphaka 1981 (2) SA
814.
[2]
JDR
2258 at paragraph 9.
[3]
[2019]
ZACC 29.