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[2019] ZAGPPHC 43
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Bayard NO and Others v Strategy House (Pty) Ltd and Others (26469/17) [2019] ZAGPPHC 43 (17 January 2019)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHERS JUDGES: NO
(3)
REVISED
17
January 2019
Case
no: 26469/17
I
n
the matter between:
JERENIQUE
BAYARD N.O
First
Applicant
SARITA
ERICA RICKS N.O
Second
Applicant
ROY
ABRAHAMS N.O
Third
Applicant
and
STRATEGY
HOUSE (PTY) LTD
First
Respondent
LYDON
BARENDS
Second
Respondent
CJ
BENJAMIN
Third
Respondent
JUDGMENT
Molahlehi
J
Introduction
[1]
On 10 January 2019, I made judgment in this matter. I noticed the
following day that the judgment handed down was erroneously
made in
that it was an incorrect version. The parties were then contacted and
informed about this error and that the court intended
rescinding the
judgment.
[2]
The judgment handed down on 10 January 2019 is rescinded and replaced
by the judgment below.
[3]
This is an application in terms of which the applicant seeks an order
directing the first and third respondent to pay
JSL Family Trust the
amount of R1 350 000.00. The applicant, JSLJ Family Trust, is a
family trust registered as such under trust
number IT000661/2015 (T).
The other applicants including the deponent to the founding affidavit
are trustees of the Trust and cited
in these proceedings in their
representative capacity.
[4]
The first and second respondents (the respondents) filed notice to
oppose the applicant’s application.
They
however did not file the answering affidavit within the prescribed
timeframe. It was for this reason that they filed an application
for
condonation for the late filing of what they referred to as
“Preliminary, Answering Affidavit."
The first
respondent is, Strategic House (Pty) Ltd, a company registered in
terms of the Companies Act of 1973.
[5]
The delay in filing the answering affidavit was
according to them due to the incorrect advice by the applicant's
legal representative
concerning the different practices in the Cape
High Court and the North Gauteng High Court.
[6]
The respondents further filed an application to
be allowed to file the supplementary answering affidavit. The reason
for this seems
to be due to the fact that the applicants did not
respond to the points of law raised in the "Preliminary
answering affidavit."
The other reason is that the applicant has
failed to file a notice of bar against them and that gave them the
impression that they
(the applicants) had abandoned the litigation.
[7]
The requirements for an application for
codonation are well known in our law and thus there is no need to
repeat the same in this
judgment. The test to apply is also trite,
being whether it is in the interest of justice to grant or refuse
condonation.
[8]
In my view, the respondents have failed to
satisfy the requirements of condonation for the late filing of the
answering affidavit.
The explanation is so poor that it amounts to no
explanation. It accordingly follows that the application for
condonation stands
to fail. It also follows that there can be no
basis to talk about a supplementary affidavit as there is nothing to
supplement.
In any case, there is no satisfactory explanation as to
why the rule relating to the number of permissible affidavit in
motion
proceedings should not apply in this matter.
[9]
The other point raised by the respondents in their purported
supplementary affidavit is the application to rectify the
agreement
to provide for the period of the payment once the venture was
profitable. This point is also unsustainable in that it
does not make
business sense when the agreement is interpreted in its context. In
my view this application was unnecessary.
[10]
To summarize, it is my view that the respondent
has failed to make out a case for: (a) condonation for the late
filing of the answering
affidavit and (b) the filing of the
supplementary affidavit, and (c) for the rectification of the
agreement.
[11]
In relation to the third respondent a default judgment was granted
against her on 19 July 2017 by Manamela AJ. The order
made reads as
follows:
“
1. ORDER
IN RESPECT OF 3
rd
RESPONDENT:
1.1 The
3
rd
Respondent is ordered to pay to the Applicant an
amount of R1 350 000.00 . . . ., within 30 days of the
granting of this
order.
1.2 The
3
rd
Respondent is ordered to pay interest on the amount
set out in prayer 1.1 supra
a tempore morae
at a rate of 25%
within 30 days of granting of this order.
1.3 The
3
rd
Respondent is ordered to pay costs of this
application.
2. ORDER
IN RESPECT OF 1
st
and 2
nd
RESPONDENTS
2.1
The application against the 1
st
and 2
nd
Respondents is removed from the unopposed roll for adjudication at
the opposed roll.
2.2
The 1
st
and 2
nd
Respondents are ordered to pay
Applicants’ taxed costs of application; and Counsel’s
costs of the 19
th
of July 2017 on the opposed basis.
2.3
The 1
st
and 2
nd
Respondents are ordered to
serve and file a formal application to compel discovery in terms of
Rule 35 (7) of the Uniform Rules
of Court within (fifteen) 15 days of
this order (if any).
2.4
The 1
st
and 2
nd
Respondents are ordered to file
their answering affidavit within 15 (fifteen) days of the granting of
this order, where after the
Applicant shall file its affidavit as per
the Uniform Rules of Court (if any).
Background
facts
[12]
It is common cause that the agreement was concluded between the
parties during November 2015 and it is that which is
attached to the
applicant’s application. The essential terms of the agreement
were that:
a. The
first and second respondents owned the exclusive rights of the
Liverpool Football Academy soccer school
programme in South
Africa;
b. The
respondents wished to raise funds and further expertise in the form
of the share issue and thus agreed
to issue shares to the applicant
and the third respondent.
c. The
applicant would within seven days of the production of the shares
subscribe for the shares which the first
respondent would issue as
share capital and which amount to 35% of shareholding in the first
respondent.
d. In
return for the shares, the applicant was to contribute the amount of
R1 600 000,00 to the first respondent
of which R250 000,00 was for
the purchase of the shares and R1 350 000,00 was to be a loan amount
for the first respondent.
e. The
amount of R1 350 000,00 to be repaid monthly over a period of 18
months from the effective date”.
[13]
The applicant contends that the obligation to pay for the loan rested
with the three respondents. The agreement also
made provision for an
arbitration process in the event of a dispute arising between the
parties.
[14]
It also seems common cause that the respondents failed to pay the
loan amount within the 18 months as stipulated in the
agreement. The
attempt by the applicant to have the dispute concerning the failure
to comply with the contract resolved through
arbitration was
unsuccessful. Thus the issue of exhausting the dispute through the
contractual dispute resolution mechanism did
not arise.
[15]
It would also appear that the other aspects of the agreement were
that the first respondent was appointed as a consulting
company and
the third respondent as the chief executive officer of the Liverpool
project.
The
case of the respondents
[16]
The respondents have in the supplementary affidavit raised the
following preliminary legal points;
res judicata
,
locus
standi
, non-compliance with the General Law Amendment Act in
relation to surety and dispute of facts.
[17]
The respondents argued that the matter was
res judicata
because of the default judgment made by Manamela AJ. As indicated
earlier the third respondent was ordered to pay the applicants
the
amount of R1 350 000.00 with interest. In relation to the first and
the second respondent, the order removed the matter from
the
unopposed roll and placed it on the opposed roll. Also, the
respondents were granted leave to file their answering affidavit
within fifteen days of the granting of that order.
[18]
In support
of their proposition that the defence of
res
judicata
applied in this matter the respondents relied on the decision of the
Supreme Court of Appeal in Prinsloo NO v Goldex 15 (Pty) Ltd
and
Another,
[1]
where the court set
out the principles governing the defence of
res
judicata
.
The common principle set out in that judgment is that for the defence
to sustain, it must be shown that the parties are the same,
the
issues are the same and the matter has already been finally
adjudicated upon in proceedings between the parties. This means,
once
these requirements are satisfied the issue/s raised in the matter
cannot be raised again.
[19]
The SCA further made the following important point in assessing the
sustainability of the defence:
“
The recognition of
the defence will in such cases require careful scrutiny. Each case
will depend on its own facts and any extension
of the defence will be
on a case by case basis. Relevant considerations will include
questions of equity and fairness, not only
to the parties themselves
but also to others…”
[20]
In my view the defence of
res judicata
does not find the
application on the facts and the circumstances of this case. In the
first instance, the court did not make a
final determination of the
issues between the parties. If that were the case, then the court
would not have removed the matter
from the unopposed motion roll and
placed it on the opposed roll. Fairness and equity would require that
the issue of joint liability
be inferred from the order, for if the
court was of the view that joint liability did not apply it would not
have directed that
the matter be placed on the opposed roll and
granted the respondents leave to file their answering affidavit.
[21]
In relation to
locus standi
the respondents contended that the
applicant does not possess the requisite
locus standi
because
of failure to attach the Master’s letter of authority and trust
deed to the founding affidavit.
[22]
In Breetzke
and Others v Alexander and Others,
[2]
the court held that the general rule is that only the co-trustees of
a trust acting together have the
locus
standi
to bring or defend legal proceedings on behalf of the trust
[23]
In Gross
and Others v Pentz,
[3]
the court
held that, as a general rule, the proper persons to act in legal
proceedings on behalf of a trust, testamentary or otherwise,
are its
trustees, and the beneficiary of the trust does not have
locus
standi
to do so. But a distinction must be drawn between actions brought on
behalf of a trust for example to recover damages from a third
party,
on the one hand, and on the other, actions brought by trust
beneficiaries in their own right against the trustee for
maladministration
of the trust estate.
[24]
Trusts do not have juristic personality, and therefore, unless a
statute confers juristic personality on a specific trust,
it cannot
sue or be sued. Therefore, to litigate for or against a trust, it is
the trustees in their capacity as such (and not
in their private
capacity) who must bring and defend actions about a trust. Trustees
who bring an action or application need to
aver their capacity and
also need to state that they were properly appointed by a given
instrument (for example a trust deed) or
order of the court. Unless
the others authorise one or more of the trustees, all trustees must
be joined in suing and all trustees
must be joined when action is
instituted against a trust.
[25]
The other point raised by the respondents is that the case of the
applicant is that of restitution because the applicants
have not
tendered to return the shares which were allocated, their claim
stands to fail. In my view, this point has no merit when
regard is
had to the facts and the circumstances of this matter.
[26]
The applicants are not claiming the return of the total amount that
had been put forward in support of the project. As
indicated earlier
in this judgment the amount of R1 350 000.00 claimed by the applicant
concerns the loan which the respondents
were to pay within eighteen
months but failed to do so. It is not an amount related to the
purchase of the shares.
[27]
It is trite that a party confronted with a breach of contract is
entitled to either sue for damages or specific performance.
In the
present matter, the ultimate purpose of this application was to have
the respondents pay for the loan in the sum of R1 350
000.00 to the
applicant. In this respect, the applicants state in paragraph 1.1 of
the founding affidavit that:
“
That the
Respondent be ordered to pay the Applicant an amount of R1 350 000…”
[28]
The above discussion in my view reveals quite clearly that the facts
in this matter are fairly common cause. The cause
of action is also
clearly set out in the notice of motion and in particular in
paragraph 1.1 quoted above. There is also no basis
for the contention
that there is a genuine dispute of fact that disqualifies the
applicant to the relief sought.
[29]
In light of the above I find that the applicant has made out a case
for specific performance.
Order
[30]
In the premises the following order is made:
1. The First
and Second Respondents, together with the Third Respondent are
ordered to pay to the Applicant an amount
of R1 350 000.00 within 30
days of the date of the granting of this order, the one paying the
other to be absolved.
2. The
Respondents are to pay the interest on the above amount at the
prescribed rate.
3. The
Respondents are to pay the costs of this application the one paying
the other to be absolved.
4. The
Respondents’ counter application is dismissed with costs on
attorney and client scale.
E
Molahlehi
Judge
of the High Court
Johannesburg.
Representation:
For
the Applicant:
Adv N
Breytenbach
Instructed
by:
Charle
Rossouw Attorneys
For
the First and Second Respondents:
Adv
M Matlapeng
Instructed
by:
Rurik
Mckcaiser Attorneys
Heard:
9
October 2018
Delivered:
17
January 2019
[1]
2014
(5) SA 297 (SCA).
[2]
(12922/14)
[2015] ZAKZPHC 44 (8 September 2015).
[3]
[1996] ZASCA 78
;
1996
(4) SA 617
(A).