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[2021] ZAGPJHC 410
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Whiskey Creek Trading 4 (Pty) Limited v Lucid Ventures (Pty) Limited (2020/21979) [2021] ZAGPJHC 410 (19 August 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, JOHANNESBURG
REPORTABLE:
No
OF
INTEREST TO OTHER JUDGES: No
19/8/2021
Case
No.: 2020/21979
In
the matter between:
WHISKEY CREEK TRADING 4
(PTY) LIMITED
Applicant
and
LUCID
VENTURES (PTY)
LIMITED
Respondent
JUDGMENT
This
judgment was handed down electronically by circulation to the
parties’ legal representatives by email and is deemed to
be
handed down upon such circulation.
Gilbert
AJ:
1.
The applicant seeks payment from the
respondent of two amounts that the applicant alleges the respondent
was obliged to advance
to the applicant in terms of a written
shareholders agreement.
2.
Whether the applicant is entitled to the
relief is dependent upon the interpretation of the shareholders
agreement.
3.
The respondent raises two points
in
limine
. The first point
in
limine
is that the applicant’s
claims for payment in terms of the shareholders agreement are subject
to an arbitration dispute resolution
mechanism in the agreement. The
second point
in limine
is that the matter cannot be decided on the papers as there is a
relevant material dispute of fact.
4.
This material dispute of fact relates to
whether these application proceedings were settled, particularly
whether agreement was
reached that the applicant withdraw this
application. The applicant submits that the respondent’s
version in support of the
matter having been settled is sufficiently
far-fetched and fanciful that it can be rejected on the papers.
5.
The
applicant seeks final relief in the form of a money judgment. This
brings to the fore the election to be made by an applicant
when
seeking final relief by way of motion proceedings where there are
relevant material factual disputes whether to persist with
seeking
final relief by way of motion or whether to seek a referral of the
matter either to trial or to oral evidence. This election
is to be
made upfront in the hearing and not once it becomes clear that the
applicant is failing to persuade the court on the papers,
unless
there are exceptional circumstances.
[1]
6.
Whatever may be said as to the merits of
the factual dispute, and in respect of which I naturally express no
view, the dispute whether
the matter has become settled is a relevant
and material issue. Should the respondent succeed on the basis that
these proceedings
have become settled, that would be the end of these
proceedings. It therefore follows that this anterior issue would need
to be
decided.
7.
At the commencement of the hearing of the
matter, I enquired of Mr Hoffman, for the applicant, the applicant’s
position in
relation to the election. Both Mr Hoffman, for the
applicant, and Mr Mÿburgh, for the respondent, were alive to the
election,
and the timing thereof.
8.
At the request of Mr Hoffman, I stood
down the matter to enable him to take instructions. Having taken
instructions, Mr Hoffman
informed the court that the applicant
would seek a referral to oral evidence of the settlement issue. Mr
M
ÿburgh
for the respondent did not oppose the referral. But the parties were
not agreed as to the appropriate costs order to be made consequent
upon the referral. Mr Hoffman submitted that the appropriate order
would be that the costs arising from the referral be reserved.
Mr M
ÿburgh
submitted that the applicant should be liable for the wasted costs.
It is therefore necessary for me to make a determination in
relation
to the costs.
9.
In
light of the parties’ stance on a referral to oral evidence, I
am prepared to grant such an order referring the settlement
issue to
oral evidence. It will then be for that court after hearing oral
evidence to decide the matter in its totality having
heard oral
evidence on the referred issue and based upon the affidavits already
filed in the matter.
[2]
To this
end, the parties prepared for my consideration a draft referral order
along the usual
Metallurgical
lines,
[3]
adapted to their purposes. I propose making an order in terms of the
draft order, with some minor changes on procedural aspects.
10.
In the circumstances, the parties were
agreed that it was neither necessary nor appropriate for me to make
any findings in relation
to the other disputes between the parties.
This included in relation to the respondent’s reliance upon the
arbitration clause.
11.
On the issue of costs, Mr Hoffman
submitted that there were no wasted costs, in effect, and that the
court which decides the
settlement issue in due course would be best
placed to make an appropriate costs order. Mr Hoffman submitted that
should it transpire
after the hearing of oral evidence that the
respondent’s reliance upon the matter having become settled was
a contrived ruse,
the respondent should not have had the benefit of
any costs arising from a referral to oral evidence on that ruse.
12.
Mr Mÿburgh countered that upon receipt
of the answering affidavit, the applicant was placed on guard that
there were material
disputes of fact, particularly in relation to the
settlement issue. The answering affidavit details, according to
Mr M
ÿburgh
,
sufficient facts supporting the settlement issue that the applicant
should have responsibly at that stage made the election not
to
persist in seeking final relief on motion but instead to have agreed
to a referral to oral evidence at that stage and so have
avoided the
need for the parties to come to court on an opposed basis only to
find that the applicant then elected to seek a referral
to oral
evidence.
13.
It may transpire, with the benefit of
hindsight following oral evidence, that the respondent’s
reliance upon settlement was
opportunistic and had no merit. It may
also transpire after the benefit of oral evidence that the defence
was well-founded. Or
it may transpire after the benefit of oral
evidence that although the defence fails, it was nonetheless of
sufficient veracity
that it warranted a referral to oral evidence.
Accordingly, the outcome of oral evidence would inform the incidence
of costs.
14.
I also take into account that Mr Hoffman
did, albeit only at the commencement of argument, make the election,
and did not persist
in first seeking to argue the matter on its
merits. The applicant, in the present circumstances, should not be
faulted for adopting
a more cautious approach.
15.
In the exercise of my discretion, the costs
arising from the hearing on 17 August 2021 should be reserved.
The court subsequently
and having heard oral evidence whether these
proceedings had become settled would be better placed to make a
determination as to
the incidence of any costs that arose upon the
referral of oral evidence.
16.
The following order is made:
16.1.
The matter is referred for the hearing of
oral evidence, at a date and at a time to be arranged with the
Registrar, on the issue
whether the parties settled these application
proceedings on the terms set out by the respondent in its answering
affidavit.
16.2.
The evidence shall be that of any witnesses
whom the parties or either of them may elect to call, subject to
sub-paragraph
3 below.
16.3.
Save in the case of Mr. Justin Nichlas
Divaris and Mr. Gidon Saul Novick (whom the parties are obliged to
make available for cross-examination
to the extent that such party
persists in seeking to place any reliance on these persons’
evidence in the affidavits), neither
party shall be entitled to call
any witness unless:
16.3.1.it
has served on the other party at least 30 calendar days before the
date appointed for the hearing (in the case of a witness
to be called
by the respondent) and at least 20 calendar days before such date (in
the case of a witness to be called by the applicant),
a statement
wherein the evidence to be given in chief by the witness is set out;
or
16.3.2.the
Court, at the hearing, or if the parties so agree, permits such
person to be called notwithstanding that no witness statement
has
been so served in respect of his or her evidence.
16.4.
The witness statements referred to in
sub-paragraph 3 above shall:-
16.4.1.attach
all documents to which the witness will refer in evidence; and
16.4.2.stand
as the witness’ evidence in chief (save for the right of either
party to lead evidence on clarification).
16.5.
There shall be no general discovery in
respect of the issue referred to oral evidence.
16.6.
Either party may deliver a notice, at least
15 calendar days before the hearing of the matter, requiring the
other party to make
targeted disclosure of any document not already
referred to in the affidavits and/or witness statements. Such notice
shall be complied
with by the receiving party within 10 calendar days
of receipt thereof.
16.7.
Either party may subpoena any person to
give evidence at the hearing, whether such person has consented to
furnish a statement or
not.
16.8.
The fact that a party has served a witness
statement in terms of sub-paragraph 3, or has subpoenaed a witness,
shall not oblige
such party to call the witness concerned.
16.9.
The remainder of the issues in the
application stand over for determination on the affidavits filed by
the parties to date.
16.10.
The costs arising from the hearing of the
application on 17 August 2021 are reserved.
Gilbert
AJ
Date
of hearing:
17
August 2021
Date
of judgment:
19
August 2021
Counsel
for the Applicant:
Mr J Hoffman
Instructed
by:
Alan
Allschwang & Associates Inc
Johannesburg
Counsel
for the Respondent: Mr J L
M
ÿburgh
Instructed
by:
Cliffe Dekker
Hofmeyr Inc
Johannesburg
[1]
See the decision of the Full Court of this division in
ABSA
Bank Limited v Molotsi
[2016]
ZAGPJHC36 (8 March 2016), paras 25-27, applying
Law
Society, Northern Province v Mogani
2010
(1) SA 186 (SCA), para 23 and
De Reszke
v Maras and others
2006
(1) SA 401
(C) para 33.
[2]
Lekup
Prop Co No. 4 (Pty) Limited v Wright
2012
(5) SA 246
(SCA) at 258I.
[3]
Metallurgical
and Commercial Consultants (Pty) Limited v Metal Sales Co (Pty)
Limited
1971
(2) SA 388
(W).