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[2019] ZALMPPHC 65
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Malan v Crimson King Properties 281 (Pty) Ltd and Others (2035 /2017) [2019] ZALMPPHC 65 (5 December 2019)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
LIMPOPO DIVISION,
POLOKWANE
(1)
REPORTABLE:
YES
/NO
(2)
OF
INTEREST TO OTHER JUDGES:
YES
/NO
(3)
REVISED
CASE
NUMBER:2035 /2017
In
the matter between:
PIERRE
MALAN
APPLICANT
AND
CRIMSON
KING PROPERTIES 281 (PTY) LTD
FIRST RESPONDENT
(IN
LIQUIDATION)
MARIE
PERLSER N.O
SECOND
RESPONDENT
WILLIAM
KEET HOFFMANN N.O
THIRD
RESPONDENT
ILSE
HOFFMANN N.O
FOURTH
RESPONDENT
JOHAN
FRANCOIS ENGELBRECHT N
.O
FIFTH
RESPONDENT
ZENZELE
BONGANT AUBREY NGCOB N.O
SIXTH
RESPONDENT
JUDGEMENT
KGANYAGO
J
[1]
The applicant was employed by the first respondent. Later he became a
director of
the first respondent. According to the applicant he was a
40% shareholder of the first respondent even though a shareholder’s
certificate was not issued to him. As the working relationship was
good, he did not worry about the shareholder’s certificate
that
was not issued to him.
[2]
Later his relationship with the respondents soured to the extent that
he brought an
ex parte
application for the liquidation of the
first respondent. The application was heard on the 7
th
March 2017 wherein he obtained a provisional order for the
liquidation of the first respondent. The third respondent anticipated
the application for the liquidation of the first respondent wherein
the provisional order was set aside and the application was
dismissed
on the basis that the applicant did not have
locus stand in
judicio
to bring the application.
[3]
On the 30
th
March 2017 the applicant issued the present
application. On the 11
th
April 2017 the first respondent
was placed under voluntary liquidation by agreement. The applicant
was a party to the proceedings
and agreement in which the first
respondent was placed under voluntary liquidation. The applicant’s
present application was
served on the respondents on the 13
th
April 2017 and 21
st
April 2017.
[4]
In the present application he is seeking an order that he be
confirmed to be 40% shareholder
in the first respondent; that
financial statements for the year 2012 up to 2017, management account
from February 2013 to March
2017, SARS returns for the period 2013 to
March 2017, copies of all resolutions passed from February 2013 to
March 2017, copies
of minutes from February 2013 to March 2017,
copies of the assets register for the year 2013, 2014, 2015, 2016 and
2017, and any
other documentation required by the independent
auditors be delivered to him in order to enable an independent
auditor to calculate
the fair market value of his shareholding in the
first respondent; and that once the value of the shareholding is
determined by
an independent auditor, that the respondents be ordered
to buy back the shares from the applicant at a fair market value
determined
by the independent auditors.
[5]
As part of the annexures to his founding affidavit, the applicant has
attached the first
and third respondents answering affidavit in
ex
parte
application which the provisional order to liquidate the
first respondent has been set aside.
[6]
The first to fourth respondents are opposing the applicant’s
application. The respondents
in their answering affidavit have raised
a point
in limine
stating that the applicant has launched the
present application fully aware that his shareholding of the first
respondent is disputed.
It is the respondents’ contention that
the answering affidavit in the previous litigation which the
applicant has annexed
to his founding affidavit clearly and
unequivocally stated why the applicant is not a shareholder, nor
would he ever become a shareholder
of the first respondent. The
respondent submits that there is a dispute of fact which is
bona
fide
and which will not be resolved by means of motion
proceedings.
[7]
The respondents submit that the applicant launched the present
application knowing fully
well that there were disputes of material
fact which are irresolvable by means of a motion proceeding, and has
therefore abused
the process of the court. The respondents are asking
for costs on a punitive scale.
[8]
The liquidators of the first respondent were later joined to the
proceedings as fifth and
sixth respondents respectively. The
liquidators have filed a letter stating that they will abide by any
decision that the court
makes.
[9]
The respondents have raised a point
in
limine
alleging that there is a material dispute of fact which could not be
resolved on papers. In
Wightman
t/a JW Construction v Headfour (Pty) Ltd and Another
[1]
Hefer JA said:
“
A real, genuine
and
bona
fide
dispute
of fact can exist only where the court is satisfied that the party
who purports to raise the dispute has in his affidavit
seriously and
unambiguously addressed the fact said to be disputed. There will of
course be instances where a bare denial meets
the requirement because
there is no other way open to the disputing party and nothing more
can therefore be expected of him. But
even that may not be sufficient
if the facts averred lies purely within the knowledge of the averring
party and no basis is laid
for disputing the veracity or accuracy of
the averments. When facts averred are such that the disputing party
must necessarily
possess knowledge of them and be able to provide an
answer (or countervailing evidence), if they be not true or accurate
but, instead
of doing so, rests his case on a bare denial the court
will generally have difficulty in finding that the test is satisfied”
[10]
It is the respondents’ contention that the applicant has
launched the present application fully aware
that it is disputed that
he is the shareholder of the first respondent, and that their grounds
of disputing his shareholding appears
on the annexure which the
applicant has attached to his founding affidavit being the third
respondent’s answering affidavit
in the previous litigation.
The respondents still stand by those grounds.
[11]
Paragraphs 7.15.3, 7.15.4 and 18.4 of William Keet Hoffman (third
respondent’s answering
affidavit in previous litigation) read
as follows:
“
7.15.3. Clause 6
and 7 have already been referred to but it is necessary to reiterate
that the required
quid
pro quo
by the applicant further shareholding at a ridiculously low price of
R 10.00 per share was that he accepted a
pro
rata
responsibility for the liabilities of the first respondent. To date
hereof, and since 2009 when it became a requirement, he has
studiously refused and/or failed to provide the
quid
pro quo
for his shareholding. His attempt to justify the failure to commit
himself to be liable
pro
rata
to
his shareholding for the debts of the first respondent on the basis
of events which only occurred this year (i.e. 2017), is
simply
dishonest. The abortive attempt fails to cater for the period between
2009 and 2017.
7.15.4. Most importantly,
the applicant’s failure to commit himself as a surety in
respect of the debts of the first respondent
is the reason why, until
date hereof, he has still not been issued any share certificates and
is not recorded as a member in the
share register of the first
respondent.
18.4. It is denied that
the applicant had a 40% shareholding for the reasons advanced above.
He simply never complied with the
quid pro quo
requirements. “
[12]
Based on the third respondent’s answering affidavit in the
previous litigation, the provisional
order that the applicant had
obtained
ex parte
was set aside and his application for
liquidation of the first respondent was dismissed. The issue of the
applicant’s shareholding
in the first respondent is not new. It
has already been thoroughly entertained by the third respondent in
the previous litigation.
The applicant launched the present
application well aware that his shareholding in the first respondent
is been disputed and on
what basis.
[13]
In
National
Director of Public Prosecutions v Zuma
[2]
Harms DP said:
“
Motion proceedings
unless concerned with interim relief, are all about the resolution of
legal issues based on common cause facts.
Unless the circumstances
are special they cannot be used to resolve factual issues because
they are not designed to determine probabilities.
It is well
established under the Plascon-Evans rule that where in motion
proceedings disputes of fact arise on the affidavits,
a final order
can only be granted only if the facts averred in the applicant’s
affidavits, which have been admitted by the
respondent, together with
the facts alleged by the latter, justify such order. It may be
difficult if the respondent’s version
consists of bald or
uncreditworthy denials, raises fictitious disputes of fact, is
palpably implausible, far-fetched or so clearly
untenable that the
court is justified in rejecting them merely on papers. “
[14]
The applicant has launched the present application with the full
knowledge of the third respondent’s
answering affidavit in the
previous litigation as he had also attached it to his founding
affidavit as an annexure. In that answering
affidavit in the previous
litigation, the third respondent did not make bald denials. He had
substantiated the basis of his denials.
That explains why the
provisional order was set aside and the liquidation application was
dismissed. Since the dismissal of the
liquidation application in the
previous litigation, nothing has changed regarding the dispute of the
applicant’s shareholding
in the first respondent. The
respondents are still standing by the facts as stated by the third
respondent in his answering affidavit
in the previous litigation.
[15]
It is trite that an applicant who elects to proceed by way of motion
proceedings despite being
aware that a serious dispute of fact was
bound to develop, runs the risk that the application may be dismissed
with costs. It is
not proper that an applicant should commence
proceedings by way of motion procedure with full knowledge that the
dispute of fact
might arise.
(See
Room Hire Co (Pty) Ltd v Jeppe Street Mansion (Pty) Ltd
[3]
)
.
I agree with counsel for the respondent that there exist a real,
genuine and
bona
fide
dispute of fact which cannot be resolved on the papers as they stand.
[16]
Turning to costs, the respondents are asking for a punitive costs
order. The respondents have submitted
that the application was
unnecessary and that it amount to abuse of the court processes.
[17]
In
Limpopo
Legal Solution and Another v Eskom SOC Ltd
[4]
the court said:
“
In
Nel the then- Appellate Division held:
‘
The true
explanation of awards of attorney and client costs not expressly
authorised by statute seems to be that, by reason of special
considerations arising either from the circumstances which gives rise
to the action or from the conduct of the losing party, the
court in a
particular case considers it just, by means of such an order, to
ensure more effectually that it can do by means of
a judgment for
party and party costs that the successful party will not be out of
pocket in respect of the expense caused to him
by the litigant”
[18]
The applicant when he launched his application was aware that the
respondents dispute his shareholding
in the first respondent, and
therefore a material dispute of fact was bound to arise which could
not be resolved by means of motion
proceedings. The applicant was
party to the settlement agreement that was made an order of court
voluntarily placing the first
respondent under liquidation. Even
though by the time the first respondent was placed under liquidation,
the applicant has already
issued his application, it was not yet
served on the respondents. However, despite being aware that the
first respondent has been
liquidated and that its affairs will be
placed in the hands of liquidators, he proceeded to serve the
application. In my view,
proceeding with the application whilst the
applicant was part and parcel of the parties who placed the first
respondent under voluntary
liquidation was unwarranted and constitute
abuse of court processes. For that it justifies costs on a punitive
scale on attorney
and client scale.
[19]
In the results I make the following order:
19.1.
The applicant’s application is dismissed with costs on attorney
and client scale which costs will include the costs
of employment of
a senior counsel.
MF. KGANYAGO J
JUDGE OF HIGH
COURT OF SOUTH AFRICA, LIMPOPO DIVISION, POLOKWANE
APPEARANCE:
COUNSEL FOR
APPLICANT
: ADV VAN DEN EENDE
INSTRUCTED BY
:
LEWIES & ASSOCIATES
COUNSEL FOR 1
ST
TO 4
TH
RESPONDENTS: ADV T.A.L.L POTGIETER S.C
INSTRUCTED BY
: EY STUART INC
DATE OF HEARING
: 06
TH
NOVEMBER 2019
DATE OF JUDGEMENT
: 5
TH
DECEMBER
2019
[1]
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA) at 375 G-I
[2]
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA) at 290 D-F
[3]
1949 (3) SA 1155 (T)
[4]
[2017] ZACC 34
at Para 35