About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
>>
2019
>>
[2019] ZAKZPHC 48
|
|
ABSA Bank Ltd v Transcon Plant and Civil CC and Another (3954/17P) [2019] ZAKZPHC 48 (19 July 2019)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN THE
HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE NO.
3954/17P
In the matter between:
ABSA BANK LTD
APPLICANT
and
TRANSCON PLANT AND CIVIL CC
FIRST
RESPONDENT
(Reg No. 2011/007376/23)
WESLEY NAIDOO
SECOND RESPONDENT
(I.D. No. [….]
O R D E R
In the
result, the following orders will issue:
(a) The respondents are granted
condonation for the late filing of their heads of argument.
There
will be no order as to costs in the condonation application. The
respondents’ attorney of record is not entitled to
levy and
recover any fees occasioned by the condonation application from the
respondents.
(b) The respondents are found to
be in contempt of court for failing to comply with the court
order
granted on 21 April 2016 under case number: 11081/2015 (the order).
(c) The second respondent
is committed to prison for a period of thirty (30) days, such
imprisonment is to be served periodically from 17h00 on every Friday
until 07h00 on Monday.
(d) The Sheriff in whose area of
jurisdiction the second respondent may be found is hereby
directed to
take the second respondent into custody and commit him to prison for
a period of thirty (30) days. Such imprisonment
is to be served
periodically from 17h00 on every Friday until 07h00 on Monday.
(e) The operation of the orders
in paragraphs (c) and (d) are wholly suspended on condition
that the
respondents, within thirty (30) days of the granting of this order,
return to the applicant the assets referred to in
paragraphs 2.4, 2.6
and 2.9 of the order.
(f) The respondents are
directed to pay the costs occasioned by the contempt application
jointly and severally, the one paying the other to be absolved, on an
attorney and own client scale.
J U D G M E N T
Henriques
J
Introduction
[1]
In these current economic times, financial institutions are more and
more reluctant
to provide finance to small business owners.
Given the state of our economy, instituting proceedings to cancel
such finance
agreements are often the last resort. As will
become evident during the course of reading this judgment, this was
one such
matter and consequently, one would have expected the utmost
co-operation from the respondents.
[2]
This is a contempt application in which the applicant seeks to hold
the respondents
in contempt of a court order issued in this court on
21 April 2016 under case number 11081/2015 (the order). The
order confirmed
the cancellation of the 18 instalment sale agreements
concluded between the applicant and the first respondent and directed
the
first respondent to return the assets referred to in the
instalment sale agreements to the applicant.
[3]
These assets were described in paragraphs 2.1 to 2.18 of the order
and it is common
cause that the assets mentioned in paragraphs 2.1,
2.4, 2.6 and 2.9 of the order have not been delivered to the
applicant nor have
their whereabouts been disclosed to the
applicant’s representative.
[4]
It is further common cause on the affidavits filed, that the
existence of the order,
service and notice of the order on the
respondents is not in issue. The respondents have, in opposition to
the contempt application,
raised the following defences and
explanation for non-compliance with paragraphs 2.1, 2.4, 2.6 and 2.9
of the order:
(a) that the second respondent
was not a party to the proceedings in which the order was granted,
and as such, the applicant cannot obtain an order for contempt in
these proceedings;
(b) compliance with paragraphs
2.1 and 2.9 of the orders is impossible and in respect of the
items
in paragraphs 2.4 and 2.6, the second respondent avers that the first
respondent has substantially complied with the order;
and
(c) the respondents are not
in wilful default of the order and have not acted in a mala
fide
manner.
Civil
contempt of court
[5]
Despite the fact that wilful disobedience of a court order
in civil
proceedings constitutes a criminal offence, a practice exists in the
high court in which proceedings are instituted by
way of an
application on notice of motion for committal of a respondent for
contempt of court. In D E Van Loggerenberg
Erasmus Superior Court
Practice
2 ed vol 1 at A2-170-171, the authors summarise the
position as follows:
‘
(a)
The civil contempt procedure is a valuable and important mechanism
for securing compliance
with court orders, and survives
constitutional scrutiny in the form of a motion court application
adapted to constitutional requirements.
(b)
The respondent in such proceedings is not an “accused person”,
but is
entitled to analogous protections as are appropriate to motion
proceedings.
.
. . .
Contempt
of court, in the present context, has been defined as “the
deliberate, intentional (i e wilful), disobedience of
an order
granted by a court of competent jurisdiction”’.
[6]
The locus classicus in respect of civil contempt is the
decision of
Fakie NO v CCII Systems (Pty) Ltd.
[1]
In
Fakie
the court, per Cameron JA indicated as follows:
(a) The essence of contempt of
court ‘lies in violating the dignity, repute or authority
of
the court.’
[2]
The offence has been approved by the constitutional court as the rule
of law requires the dignity and authority of the courts
to be
maintained.
[3]
(b) ‘The test for when
disobedience of a civil order constitutes contempt has come to
be
stated as whether the breach was committed “deliberately and
mala fide
”. A deliberate disregard is not enough,
since the non-complier may genuinely, albeit mistakenly, believe him
or herself
entitled to act in the way claimed to constitute the
contempt. In such a case, good faith avoids the infraction.
Even
a refusal to comply that is objectively unreasonable may be
bona
fide
(though unreasonableness could evidence lack of good
faith).’
[4]
(c) ‘These
requirements – that the refusal to obey should be both wilful
and
mala fide
, and that unreasonable non-compliance, provided
it is
bona fide
, does not constitute contempt – accord
with the broader definition of the crime, of which non-compliance
with civil orders
is a manifestation. They show that the
offence is committed not by mere disregard of a court order, but by
the deliberate
and intentional violation of the court’s
dignity, repute or authority that this evinces. Honest belief
that non-compliance
is justified or proper is incompatible with that
intent.’
[5]
(d) The onus is that of the
criminal standard of proof being proof beyond reasonable doubt.
[6]
(e) Once an applicant shows an
order in existence and that it came to the notice or attention
of a
respondent and that the respondent had disobeyed or neglected to
comply with the order, wilfulness and mala fides will be
inferred and
the applicant will then be entitled to a committal order. An
evidentiary burden then rests upon a respondent
in relation to the
aspect of wilfulness and mala fides
.
A respondent must
advance evidence that establishes a reasonable doubt as to whether
non-compliance with such order was wilful
and mala fides. A
respondent does not bear a legal burden to disprove wilfulness and
mala fides. If the respondent
fails in discharging such
evidentiary burden, contempt of the court order will be established
beyond reasonable doubt
.’
[7]
[8]
And at para 42 sub-para (d) the court held the following:
‘
(
d)
But, once the applicant has
proved the order, service or notice, and non-compliance, the
respondent bears an evidential burden in
relation to wilfulness and
mala fides
:
Should the respondent fail to advance evidence that establishes
a reasonable doubt as to whether non-compliance was wilful
and
mala
fide
,
contempt will have been established beyond reasonable doubt.’
[9]
In this regard,
see also
Pheko
& others v Ekurhuleni City,
[8]
which held the following:
‘
[32]
The pre-constitutional dispensation dictated that in all cases, when
determining contempt in relation
to a court order requiring a person
or legal entity before it to do or not do something (
ad
factum praestandum
),
the following elements need to be established on a balance of
probabilities:
(a)
the order must exist;
(b)
the order must have been duly served on,
or brought to the notice of, the alleged contemnor;
(c)
there must have been non-compliance with
the order; and
(d)
the non-compliance must have been wilful
or mala fide.’ (Footnote omitted)
[10]
A respondent can escape liability if he/she can show that he/she was
bona fide in his/her disobedience of such
court order, and that
he/she genuinely, though mistakenly, believed he/she was entitled to
commit the act or omission alleged to
be in contempt of such court
order. In determining this, an element of reasonableness enters
the arena specifically in relation
to determining the absence of bona
fides. There are degrees of reasonableness and the mere fact
that such conduct was unreasonable
is not tantamount to an absence of
bona fides.
Issue
[11]
The issue for determination is whether or not the respondents’
are in wilful and mala fide
default of the order. There is an
evidential burden on the respondents to show beyond reasonable doubt
that they are not
in wilful and mala fide contempt of the order.
Factual
Matrix
[12]
To determine the issue in this application, a consideration of the
facts which formed the basis
for the institution of the initial
proceedings which resulted in the order and which precipitated the
current contempt application
is warranted.
[13]
The first respondent, a close corporation, obtained finance from the
applicant to purchase the
assets subject to the various instalment
sale agreements. The first respondent fell into arrears in
terms of the instalment
sale agreements resulting in the applicant
cancelling the agreements and obtaining the order for the return of
the assets.
[14]
Although the second respondent was not cited as a party to the
proceedings in which the order
was obtained, it is common cause that
the second respondent is the sole member and manager of the first
respondent and that the
order was obtained as a consequence of the
second respondent signing a consent to judgment on behalf of the
first respondent in
favour of the applicant. This was in his
capacity as sole member and manager of the first respondent. I may
add that although
the order was issued on 21 April 2016, it was dated
19 May 2016 and it is not apparent from the affidavits filed what was
the reason
for this.
[15]
On 7 June 2016, a representative of the applicant, Eben Van Wyngaardt
(Wyngaardt), met with the
second respondent to ascertain the location
of the assets. At such meeting, the second respondent was
presented with the
court order and appeared co-operative and advised
Wyngaardt of the location of the assets and undertook to provide
proof of insurance.
At the same meeting, it is common cause
that the second respondent submitted the first payment proposal for
consideration by the
applicant.
[16]
On 10 June 2016, the second respondent was informed that the first
payment proposal had been
rejected by the applicant and that the
assets had to be returned or it would be uplifted. At that
point in time, the second
respondent had failed to provide any proof
of insurance of the assets.
[17]
Whilst the applicant was engaging with various sheriffs, as the
second respondent had advised
that the assets were located in various
locations, on 15 June 2016 the applicant’s representative met
with the second respondent
again, at his request, at the premises of
the first respondent. At such further meeting, he proposed a
further grace period
until 20 June 2016 to settle the full balance
outstanding under each instalment sale agreement (the second payment
proposal).
He undertook that by 20 June 2016, in the event of
him not complying with this further proposal, all the assets would be
returned
to the applicant.
[18]
This subsequent proposal was likewise rejected by the applicant. On
17 June 2016, within two
days of the meeting of 15 June 2016, the
second respondent, in his capacity as sole member of the close
corporation, resolved
to place the first respondent in business
rescue.
[19]
In the affidavit in support of the business rescue application, the
second respondent indicated
the following:
(a) the main business of the
first respondent was reflected as the rendering of services in
the
civil engineering and construction industry and the “hire of
plant, machinery and equipment in the building construction
industry”;
(b) the first respondent’s
indebtedness to its creditors was pegged in the amount of
approximately R6 million and its assets approximately worth R12
million. The assets were described as consisting of 25 plant
machinery equipment and motor vehicles of which seven were freehold
and valued at approximately R450 000;
(c) in respect of the
remaining 18 assets financed by the applicant, the second respondent
recorded the total amount owing as being in an approximate sum of
R5,7 million of which R850 000 are the arrears for a period
of
three months;
(d) at the time of deposing to
the affidavit, the first respondent had a contract with Masemanzi
Mining to hire plant machinery and equipment for five years, such
contract commenced in June 2016 and an amount of approximately
R750 000 was anticipated;
(e) the first respondent had no
working capital as a consequence of the applicant terminating
the
first respondent’s overdraft facilities; and
(f) the applicant caused
the second respondent to sign a consent to judgment and obtained
judgment and had threatened to attach all the assets of the first
respondent.
[20]
In the answering affidavit in the contempt application, at paragraph
10, the second respondent
concedes that he had entered into a
proposed payment plan with the applicant when the first respondent
was unable to meet its repayment
obligations to the applicant in
terms of the instalment sale agreements. Such payment proposal
was accepted on condition
that the first respondent signs a consent
to judgment which he did on its behalf. It is common cause that
the first respondent
was unable to keep to the payment plan as Group
Five who owed monies to the first respondent and whose undertaking to
pay such
monies to the first respondent informed the proposed payment
plan to the applicant, did not maintain its payment arrangement with
the first respondent.
[21]
The second respondent concedes that as a consequence of the failure
by the first respondent to
adhere to the proposed payment plan, the
applicant filed the consent to judgment. The second respondent
indicates that he abandoned
the business rescue application by the
first respondent as he had received incorrect legal advice that this
would stay the execution
by the applicant of a warrant of execution
which it had obtained pursuant to the order. He had also been
advised by the business
rescue practitioner that the applicant was
entitled to execute upon the warrant of execution and obtain return
of the assets as
the first respondent was not in lawful possession of
the assets as defined in
s 133
of the
Companies Act 71 of 2008
. He
subsequently considered the liquidation of the first respondent but
similarly abandoned this course of conduct.
[22]
As a consequence of the warrant of execution, the applicant attached
and removed 14 of the items
reflected in the order which it was able
to locate with the assistance of various sheriffs. As
indicated, not all the assets
had been attached.
[23]
Subsequent to receipt of the answering affidavit in the contempt
application, the applicant served
a
rule 35(12)
notice on the
respondents’ attorneys of record requesting copies of the
documents referred to therein, these being a copy
of the contract
with Masemanzi Mining and copies of all documentation evidencing a
criminal complaint had been opened under Cas
number 35/01/2016 with
the KwaMvuma SAPS. The second respondent had indicated in the
answering affidavit that items 2.1 and 2.9
referred to in the order
had been stolen from various work sites. These thefts were
reported to the SAPS, Witbank under Cas
number 35/01/2016 and in
Howick under Cas number 206/4/2016.
[24]
The second respondent further describes his role in the first
respondent, that being, to secure
tenders, liaise with the customers
of the first respondent and oversee its administration. He played no
role in the operation of
the various sites on which the equipment had
been hired out and such responsibility for all of the operations of
each of the sites
at the time of the closure of the business was the
responsibility of the managers and supervisors located at each site.
[25]
He was advised that at the time of closure of the first respondent,
the plant equipment and machinery
was situated in Durban,
Pietermaritzburg and Witbank. Although the second
respondent does not indicate when he became
aware that four of the
assets mentioned in the orders were not recovered by the sheriff, he
indicates that he initiated an enquiry
(although he does not say
when) and subsequently discovered that the assets mentioned in
paragraphs 2.1 and 2.9 of the orders were
stolen from the sites.
[26]
In respect of the assets in paragraphs 2.4 and 2.6 of the order, he
caused enquiries to be made
with Masemanzi Mining and requested a
detailed report from their security company .It appears that as at
the date of deposing to
the answering affidavit being 7 June 2017 and
by the time of the hearing of the opposed motion, Masemanzi Mining
had not furnished
such information to the second respondent.
[27]
In response to the request in terms of
rule 35(12)
, a covering letter
was sent by the respondents attorneys advising that there was no
written contract but an oral contract with
Masemanzi Mining for the
supply of plant and machinery equipment. In respect of the
details relating to the various thefts,
the second respondent
provided a receipt from the offices of SAPS, Ogies, a secondary page
from the SAPS diary setting out the
asset allegedly stolen and a
statement from a manager of the first respondent, Strinivasan
Addieah, dated 7 January 2016.
[28]
All the documents provided in response to the
rule 35(12)
request all
relate to the assets referred to in paragraph 2.1 of the order.
In addition, from the time of deposing to the
affidavit in June 2017
until the date of the opposed motion being 14 February 2018, neither
of the respondents sought leave to
file any supplementary affidavits
placing additional information before the court in relation to the
remainder of the assets and/or
any information from Masemanzi Mining
in respect of the enquiries the second respondent had allegedly made.
The
submissions of the parties
The
applicant’s submissions
[29]
The applicant disputes that the items referred to in paragraphs 2.1
and 2.9 of the order have
been stolen. This is as the
respondents have provided no explanation as to why items 2.4 and 2.6
of the order have not been
returned. All that the respondents
have contented themselves with is that these have been left in the
possession of Masemanzi
Mining. No further explanation has been
tendered in relation to these items and consequently the court must
arrive at the
conclusion that the respondents have merely refused to
return these items to the applicant.
[30]
In relation to the items mentioned in paragraphs 2.1 and 2.9, the
applicant submits that only
item 2.1 has been reported as stolen.
Consequently, the applicant submits that the court must arrive at the
conclusion that
the allegations relating to the theft of item 2.9 as
well as item 2.1 have been fabricated by the respondents to avoid the
consequence
of being held in contempt of the court order.
[31]
In the practice note, the applicant indicates that there are disputes
of fact in relation to
the items referred to in paragraphs 2.1 and
2.9 of the order. In consequence thereof, the applicant indicates
that the respondents
have not presented sufficient evidence to create
reasonable doubt that their conduct is wilful and mala fide.
The
respondents’ submissions
[32]
Ms
Qono-Reddy
is quite correct when she surmises that the
applicant relies on inferences to be drawn from the following
circumstances to discharge
the onus of showing that the conduct of
the respondents was wilful and mala fide, namely:
(a) the conduct of the second
respondent as sole member and manager of the first respondent
in
placing it under business rescue and considering the liquidation of
the first respondent;
(b) the first respondent’s
business operations with Masemanzi Mining in relation to items
2.4
and 2.6; and
(c)
the thefts of items 2.1 and 2.9 from the work sites.
Analysis
[33]
I now turn to the first point raised by the respondents, specifically
the second respondent.
[34]
Although the second respondent indicates that he was not a party to
the proceedings in which
the order was obtained, it must be
remembered that not only is he the sole member of the first
respondent, he is also its manager.
He acknowledges that he
attended to the administration of the first respondent which would
mean he applied for finance on behalf
of the first respondent with
the applicant. He concedes that he consented to the judgment which
the applicant obtained against
the first respondent in order to
cancel the instalment sale agreements and to obtain the return of the
assets mentioned in the
order. He has, for want of a better
word, been the alter ego of the first respondent.
[35]
On his own version as submitted in the affidavit, he liaised with the
applicant’s representative
after judgment was granted and after
the warrant of execution was issued. He has also indicated the
steps he has taken to
resolve the matter, specifically the two
proposed payment plans and the fact that he advised the applicant’s
representatives
of the location of the assets.
[36]
In
Twentieth Century Fox Film Corporation & others v Playboy
Films (Pty) Ltd & another,
[9]
King AJ held the following:
‘
A
director of a company who, with knowledge of an order of Court
against the company, causes the company to disobey the order is
himself guilty of a contempt of Court. By his act or omission such a
director aids and abets the company to be in breach of the
order of
Court against the company. If it were not so a court would have
difficulty in ensuring that an order
ad
factum praestandum
against a company is enforced by a punitive order.’
[37]
King AJ’s judgment was referred to in the decision of
Ntombela
v Herridge Hire & Haul CC & another.
[10]
And at para 26 of the judgment Landman J expressed the view that as
with a Director of a company the same considerations applied
to a
close corporation. Consequently, the order sought would affect him
and he would be responsible for any non-compliance with
the order
being the sole member of the close corporation.
[38]
In deciding whether or not the respondents have discharged the
evidential burden, to establish
reasonable doubt that their conduct
is wilful and mala fide
,
this court takes the following into
consideration. At all material times the second respondent was
the sole member and manager
of the first respondent. He liaised
with and conducted all negotiations with representatives of the
applicant. Although it
was submitted by the applicant that prior to
the warrant of execution being executed the second respondent
‘actively avoided
delivering the assets’, in my view,
this is not correct. He attempted to further negotiate with the
applicant and such conduct
is reasonable in the circumstances as it
is not disputed that the applicant considered both proposals.
[39]
It was only in respect of item 2.1 that it appears that a theft was
reported. According
to the documents produced in response to
the
rule 35(12)
notice, such asset went missing in December 2015 and
the respondents became aware of the theft on 5 January 2016.
The statement
submitted by the first respondent’s employee, the
manager being Strinivasan Addieah was deposed to on 7 January 2016.
The theft appears to have occurred between 10 and 11 December 2015
but was only reported on 5 January 2016 to Addieah.
[40]
At the time the order was taken by consent being 21 April 2016, both
the first and second respondents
would have been aware of the theft.
Prior to the consent to judgment being filed and signed, neither the
first nor the second
respondent advised the applicant of the missing
assets, nor was this asset disclosed as being stolen in the statement
filed by
the second respondent in support of the business rescue
proceedings contemplated by the first respondent.
[41]
In fact, after January 2016, when the respondents acquired knowledge
of the theft, they misrepresented
to all parties at the time of the
consent to judgment that the assets were still in their possession.
Furthermore, it was
never mentioned to the representative of the
applicant at any stage when the second respondent was approached to
point out the
location of these assets in May and June 2016, nor was
it disclosed by the second respondent in his negotiations with the
applicant
after the order was granted.
[42]
In addition, the reporting of the theft relates only to item 2.1 of
the order. In respect
of item 2.9 of the order, the respondents
have contented themselves with an allegation in their answering
affidavit that they have
made enquiries with Masemanzi Mining as at 7
June 2017. To date, no follow up has taken place in relation to
the location
of item 2.9, nor has a report been filed from Masemanzi
Mining indicating the location of the asset or what transpired with
such
asset whilst it was in their possession.
[43]
The respondents have also failed to provide any explanation in
relation to the remainder of the
outstanding assets referred to in
the order. Most importantly, the second respondent acknowledges
that the insurance in respect
of these assets lapsed but blames the
applicant for this as the overdraft facility was cancelled.
[44]
If one considers the answering affidavit filed in opposition to the
contempt application as well
as the affidavit filed in support of the
application for business rescue, it is evident that there is merit in
the submission that
the application for business rescue was a last
ditch attempt by the respondents to avoid the execution and
satisfaction of the
order.
[45]
The second respondent goes so far as admitting that the initial legal
advice which he obtained
was that business rescue proceedings would
prevent execution and satisfaction of the order by the applicant,
hence why he embarked
on this course of action for the first
respondent. He concedes this advice was incorrect as
subsequently, business rescue
proceedings were abandoned as he was
advised this would not stay off execution and satisfy the order.
[46]
It was then that the second respondent contemplated placing the first
respondent in liquidation.
Similarly this application was not
proceeded with. All of this, in my view, points to the mala
fides and wilfulness in the
conduct of the respondents, more so the
second respondent on behalf of the first respondent. As already
mentioned in the
judgment, both the respondents have to rebut the
presumption that their conduct constitutes wilful and mala fide
disobedience of
the court order.
[47]
In respect of the asset mentioned in 2.1, the applicant, although it
places the explanation provided
by the respondents in issue, and
mentions that there is a dispute of fact, the applicant has not asked
for the matter to be referred
for the hearing of oral evidence.
[48]
Fakie NO v CCII Systems (Pty) Ltd
[11]
similarly deals with disputes of fact in contempt proceedings as
follows:-
‘
[55]
That conflicting affidavits are not a suitable means for determining
disputes of fact has been doctrine in this court for more
than 80
years. Yet motion proceedings are quicker and cheaper than
trial proceedings and, in the interests of justice, courts
have been
at pains not to permit unvirtuous respondents to shelter behind
patently implausible affidavit versions or bald denials.
More
than 60 years ago, this Court determined that a Judge should not
allow a respondent to raise “fictitious” disputes
of fact
to delay the hearing of the matter or to deny the applicant its
order. There had to be “a
bona
fide
’ dispute
of fact on a material matter”. This means that an
uncreditworthy denial, or a palpably implausible version,
can be
rejected out of hand, without recourse to oral evidence. In
Plascon-Evans Paints
Ltd v Van Riebeeck Paints (Pty) Ltd
,
this Court extended the ambit of uncreditworthy denials. They
now encompassed not merely those that fail to raise a real,
genuine
or
bona fide
dispute of fact but also allegations or denials that are so
far-fetched or clearly untenable that the Court is justified in
rejecting
them merely on the papers.
[56]
Practice in this regard has become considerably more robust, and
rightly so. If it were otherwise, most of
the busy motion
courts in the country might cease functioning. But the limits
remain, and however robust a court may be inclined
to be, a
respondent’s version can be rejected in motion proceedings only
if it is “fictitious” or so far-fetched
and clearly
untenable that it can confidently be said, on the papers alone, that
it is demonstrably and clearly unworthy of credence.’
[49]
If one considers the documents put up in response to the
rule 35(12)
notice it would appear that the theft in respect of the item
mentioned in paragraph 2.1 of the order was reported. The
second
respondent’s failure to disclose this when he consented
to the judgment and in his negotiations with the applicant’s
representative after a judgment was obtained is not an issue which
this court has to decide and the applicant can explore whatever
civil
or criminal remedies it wishes to take in that regard.
[50]
Given the test enunciated in
Fakie,
this court can only reject
the version if it is ‘fictitious or so far-fetched and clearly
untenable that it can confidently
be said, on the papers alone, that
it is demonstrably and clearly unworthy of credence.’
[12]
I cannot make that finding on the papers and I must accept that the
respondents are not in contempt of paragraph 2.1 of the order.
[51]
In my view, the respondents have not discharged the evidential burden
resting on them as required
in the decisions referred to hereinbefore
to establish reasonable doubt that they are not in wilful and mala
fide default in respect
of their non-compliance with paragraphs 2.4,
2.6 and 2.9 of the order. Consequently, the respondents are in
contempt of the order
of 21 April 2016 specifically paragraphs 2.4,
2.6 and 2.9 thereof.
[52]
I do not reach this conclusion lightly and in doing so I am reminded
of the words of Nkabinde
J in
Pheko &
others v Ekurhuleni City
[13]
where she held the following:
‘
[1]
The
rule of law, a foundational value of the Constitution, requires that
the dignity and authority of the courts be upheld. This
is crucial,
as the capacity of the courts to carry out their functions depends
upon it. As the Constitution commands, orders and
decisions issued by
a court bind all persons to whom and organs of state to which they
apply, and no person or organ of state may
interfere, in any manner,
with the functioning of the courts. It follows from this that
disobedience towards court orders or decisions
risks rendering our
courts impotent and judicial authority a mere mockery. The
effectiveness of court orders or decisions is substantially
determined by the assurance that they will be enforced
.’
[53]
That then brings me to the form of the order sought.
Form of
the Order
[54]
In the notice of motion the rule nisi which the applicant sought was
the following:
‘
1.1
THAT
the First Respondent is convicted of contempt of Court in failing to
comply with the Order granted by the above Honourable Court
on 21
April 2016 under Case No. 11081/2015;
1.2
THAT
the Second Respondent be committed to prison for such
period as this Honourable Court may determine for the First
Respondent’s
contempt of Court of the Order granted by this
Honourable Court on 21 April 2016 under Case No. 11081/2015;
1.3
THAT
the Respondents are ordered to pay the costs of this application,
jointly and severally, the one paying the other being absolved
on an
attorney and own client scale
.’
[55]
At the hearing of the matter, I raised with Mr
Veerasamy
, who
appeared for the applicant the form of the order sought. He
indicated after considering the notice of motion and in
preparation
for argument for the opposed motion he drafted two orders which were
handed in as ‘A’ and ‘B’
respectively for the
court to consider. He indicated that the order sought in ‘B’
was preferable given the nature
of these proceedings as all the
applicant sought was the return of the items which form part of the
order.
[56]
Ms
Qono-Reddy
who had cited these orders, did not oppose any
of the draft orders in the event of the court being disposed to
granting them.
She concurred with Mr
Veerasamy
that the
most appropriate order, should the court find against the
respondents, was that proposed in ‘B’.
[57]
I have considered the orders submitted and I am of the view that “B”
may not be the
most appropriate in the circumstances of the matter.
Condonation
[58]
A preliminary matter which arose at the hearing of the opposed
application, related to the application
for condonation by the
respondents for the late filing of the heads of argument. This
application was opposed by the applicant
who filed supplementary
heads of argument setting out the basis for the opposition, namely,
that an applicant for condonation must
provide a full explanation for
the delay which must encompass the entire period of the delay and
must be reasonable.
[14]
[59]
The basis upon which the applicant opposed the grant of condonation
was that the heads of argument
attempted to raise a new defence which
was not raised in the answering affidavit. The applicant
submitted that this was ambush
litigation and that the second
respondent was raising the defence that he was not part of the court
order for the first time in
the heads of argument.
[60]
In support of the application for condonation, an affidavit had been
filed by the respondents’
attorneys of record, Mr Shabeer
Joosab. His affidavit does not deal with the ‘new’
defence raised by the second
respondent but focuses purely on the
delay in instructing counsel to prepare the heads of argument.
[61]
Insofar as the application for condonation is concerned, the
affidavit of the instructing attorney
provides a reasonable
explanation and provides a full explanation for the period of the
delay. What is concerning about the
affidavit is that he
indicates that he was not aware of the current practice directive in
this division in relation to the time
periods for the filing of heads
of argument and a practice note.
[62]
Given the order below, I have no doubt that after this matter this
‘
oversight
’
will not occur again. Consequently, I am in agreement that the
respondents ought not to be prejudiced with such an ‘
oversight
’
and they ought to be granted condonation as the fault lies at the
attorney’s doorstep.
[63]
The applicant’s complaint that the second respondent for the
first time raised a new defence
in the heads of argument is not
justified as the second respondent had already canvassed this in the
answering affidavit and in
the affidavit filed in support of the
business rescue application which formed part of the allegations in
the founding affidavit.
[64]
On receipt of the heads of argument and practice note on 7 February
2018, the applicant’s
attorney of record filed the requisite
letter in terms of the practice directive. It never took issue with
the late filing of the
heads in such letter. In addition, the
applicant had sufficient time before the hearing of the application
to consider the heads
of argument and the contents of the affidavit.
There is thus no prejudice, in my view, to the applicant and any
prejudice which
it may submit it suffered is ameliorated by the costs
order below.
Costs
[65]
It is trite that the issue of costs falls within the
discretion of the court. In
light of the fact that the
applicant has been successful in the application, I see no reason to
depart from the usual rule in relation
to costs and consequently the
applicant is entitled to the costs of this application. The
agreements which cover the order
obtained made provision for costs on
an attorney and own client scale and there appears to be no reason
once again to depart from
that provision.
[66]
In addition, in respect of the condonation application in light of
the fact that Mr Joosab has
acknowledged that this was an oversight
on his part, he ought not to be entitled to levy and recover any fees
from the respondents
in respect thereof.
[67] In the result, the following
orders will issue:
(a) The respondents are granted
condonation for the late filing of their heads of argument.
There
will be no order as to costs in the condonation application. The
respondents’ attorney of record is not entitled to
levy and
recover any fees occasioned by the condonation application from the
respondents.
(b) The respondents are found to
be in contempt of court for failing to comply with the court
order
granted on 21 April 2016 under case number: 11081/2015 (the order).
(c) The second respondent
is committed to prison for a period of thirty (30) days, such
imprisonment is to be served periodically from 17h00 on every Friday
until 07h00 on Monday.
(d) The Sheriff in whose area of
jurisdiction the second respondent may be found is hereby
directed to
take the second respondent into custody and commit him to prison for
a period of thirty (30) days. Such imprisonment
is to be served
periodically from 17h00 on every Friday until 07h00 on Monday.
(e) The operation of the orders
in paragraphs (c) and (d) are wholly suspended on condition
that the
respondents, within thirty (30) days of the granting of this order,
return to the applicant the assets referred to in
paragraphs 2.4, 2.6
and 2.9 of the order.
(f) The respondents are
directed to pay the costs occasioned by the contempt application
jointly and severally, the one paying the other to be absolved, on an
attorney and own client scale.
Henriques J
CASE
INFORMATION
APPEARANCES
Counsel for
the Applicant
: Advocate I
Veerasamy
Instructed
by
:
Johnston & Partners
2
nd
Floor, 81 Richefond Circle
Ridgeside Office Park
Umhlanga Ridge
Ref: JMK/ccb/42A244237
Tel: 031 536 9700
Fax: 031 536 9799
c/o Stowells Attorneys
295 Pietermaritz Street
Pietermaritzburg
Ref: Sarah Myhill
Counsel for
the First and Second
Respondents
: Adv Z
Qono-Reddy
Instructed by
: Shabeer
Joosab Attorneys
582 Peter Mokaba Ridge
Overport
Durban
Ref: Mr Joosab/ts/3T60
c/o Essa & Associates Attorneys
480 Church Street
Pietermaritzburg
Tel: 033 345 4455
Date of Hearing
: 14
February 2018
Date
of Judgment
: 19
July 2019
[1]
Fakie NO v CCII Systems (Pty) Ltd
[2006] ZASCA 52
;
2006 (4) SA 326
(SCA) para
42.
[2]
Fakie
para 6.
[3]
S v Mamabolo (E TV & others intervening
)
[2001] ZACC 17
;
2001 (3) SA 409
(CC) para 14;
Coetzee v Government of the Republic of South
Africa
;
Matiso v Commanding Officer, Port Elizabeth Prison
[1995] ZACC 7
;
1995 (4) SA 631
(CC) para 61.
[4]
Fakie
para 9.
[5]
Fakie
para 10.
[6]
Fakie
para 33; at 342B and 344D.
[7]
Fakie
at 344J-345A; para 41.
[8]
Pheko & others v Ekurhuleni City
2015 (5) SA 600 (CC).
[9]
Twentieth Century Fox Film Corporation & others v Playboy
Films (Pty) Ltd & another
1978 (3) SA 202
(W) at 203C-D.
[10]
Ntombela v Herridge Hire & Haul CC & another
[1998]
JOL 4306
(LC) para 26 where the following was stated: ‘These
considerations also apply to a close corporation. See
Höltz
v Douglas & Associates (OFS) CC & andere
1991 (2)
SA 79 (O)'.
[11]
Fakie NO v CCII Systems (Pty) Ltd
2006 (4) SA 326
(SCA).
[12]
Fakie
para 56.
[13]
Pheko & others v Ekurhuleni City
2015 (5) SA 600 (CC).
[14]
Van Wyk v Unitas Hospital & another
Open Democratic
Advice Centre as Amicus Curiae)
[2007] ZACC 24
;
2008 (2) SA 472
CC para 22.