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[2018] ZAGPPHC 12
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Singh and Others v Companies and Intellectual Property Commission and Others (33482/2016) [2018] ZAGPPHC 12 (19 March 2018)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE
NO:
33482/2016
In
the matter between:
RAMESH
SINGH
1
st
APPLICANT
LAHLENI
LAKES (PTY)
LIMITED
2
nd
APPLICANT
FINISHING
TOUCH TRADING 304 (PTY)
LTD
3
rd
APPLICANT
ONE
VISION INVESTMENTS 344 (PTY)
LTD
4
th
APPLICANT
and
THE
COMPANIES AND INTELLECTUAL
PROPERTY
COMMISSION
1
st
RESPONDENT
MR
R VOLLER
N.0
2
nd
RESPONDENT
RALSTON
EMMANUEL
SMITH
3
rd
RESPONDENT
JUDGMENT
AC
BASSON, J
[1]
On 18
February 2016 the third respondent (Mr. Ralston Emmanuel Smith –
“Smith”) filed two complaints with the
first respondent
(the Companies and Intellectual Property Commission – “CIPC”)
in terms of section 169 of the
Companies Act
[1]
(“the Act”).
[2]
In terms of this complaint, Smith alleged that
his resignation as a director of the second applicant (“Lahleni
Lakes (Pty)
Ltd – “Lahleni”) and the third
applicant (Finishing Touch Trading 304 (Pty) Ltd – “Finishing
Touch”)
had been fraudulently effected. Smith submitted that
the conduct which is the subject of the complaints is continuing.
Smith provided
CIPC with a forensic report that concluded that the
signatures used to effect his resignation as a director of Finishing
Touch
were “
without doubt not authentic
writing but a forgery
”. Smith further
provided CIPC with an affidavit stating that the signatures used to
effect his resignation as a director
of Lehleni were likewise
forgeries. A criminal case of fraud had also been opened at
Middleburg SAPS.
[3]
In his complaint, Smith requested CIPC to
intervene. CIPC recommended on 23 February 2016 that the complaints
regarding Finishing
Touch and Lahleni be investigated. Subsequently,
Singh was requested in his capacity as a director to appear before
CIPC and also
to furnish certain information to CIPC in respect of
the two entities.
[4]
When Singh failed to appear and to comply with
the request, summons was served on him by way of e-mail on 5 April
2015. Subsequently,
the attorneys acting on behalf of Singh objected
to,
inter alia
, the
service of the summons by means of e-mail. In this letter the
attorneys also pointed out, with reference to of section 219(1)
of
the Act, that a complaint in terms of the Act may not be initiated
by, or made to CIPC, more than three years after the act
that is the
cause of the complaint. Therefore, according to the attorneys, the
complaint was made
after
the expiry of the period contemplated in section 219(1) of the Act.
The attorneys consequently requested that Singh be excused
from
appearing before the senior investigator as directed by the summons.
On 7 April 2016 CIPC contacted the state attorney to
effect service
of the summons via the office of the sheriff. According to Smith, in
doing so, CIPC cured any defect as to the manner
in which the summons
was served.
[5]
CIPC responded to the letter on 18 April 2016
stating that the investigation has not been terminated and that Singh
was not excused
from appearing as directed by the summons.
[6]
The applicants thereafter and on 21 April 2018
launched this review application.
Relief
sought by the applicant
[7]
Singh approaches this court for relief on three
alternative bases: In
Part A
Singh seeks an order to review and set aside the decisions (i) to
accept the complaints; (ii) to investigate the complaints; and
(iii)
to authorise summonses in terms of which Singh was requested to
appear and provide information to CIPC in his capacity as
director of
Lahleni and Finishing Touch. In the alternative, for a declaration
that the directions, summonses and investigations
are
ultra
vires
in terms of the Act (prayers 1 –
6). In
Part B
(in the
alternative to Part A), Singh seeks an order to set aside (i) the
directions to investigate the complaints; and (ii) setting
aside the
summonses. In the alternative, a declaration that the directions,
summonses and investigations are
ultra vires
and therefore invalid and unenforceable (prayers 7 – 11). In
Part C
(in the
alternative to Parts A and B) Singh seeks an order to suspend (i) the
investigations of the complaints and (ii) the operation
of the
summonses pending the determination of the action under case number
76711/14 (prayers 1 – 3).
[8]
Singh
brings this review application in terms of section 6(2)(a), (b), (c),
(d), (e), (f), (h) and or (i) of the promotion of Administrative
Justice Act
[2]
(“PAJA”)
in respect of prayers 1 – 3 and in terms of legality in respect
of prayers 4 and 7 -9.
Pending
action proceedings
[9]
At the time of the hearing of this application,
an action was pending in this court between the fourth applicant (One
Vision Investments
344 (Pty) Ltd) and various defendants,
inter
alia
Smith who is the first defendant in the
pending action (case number: 76711/14. Lahleni is not a defendant in
the pending action.
Finishing Touch is the eight defendant. CIPS is
also not a party to the pending action. Singh is the twelfth
defendant in the pending
action although no relief is claimed against
him - he is merely cited as a party by virtue of his direct and
substantial interest
in the action. From paragraph 16 of the
declaration it appears that the following relief is sought against
the various defendants:
“
In the premises, the plaintiff
is entitled to an order:
16.1 for the rectification of the MOU;
16.2 for specific performance of the
MOI and the Sale of Equity;
16.3 in the alternative to the order
for specific performance, declaring the MOI, the Sale of Equity and
the Cession valid and binding
upon the parties thereto;
16.4 to the extent necessary, joining
Mr. Sing as the twelfth defendant in the action.”
[10]
On 30 June 2017 a practice note was filed on
behalf of the applicants to which a draft order is attached. In terms
of the draft
order the applicants in this matter sought an order that
the notice of motion, excluding Parts A and B, stand as a simple
summons.
That Parts A and B of the notice of motion be postponed
sine
die
and that a declaration be filed within 20
days of the proposed draft order. Furthermore, an order is sought
that the Uniform Rules
of Court dealing with pleadings and the
conduct of trails would apply; that the action be consolidated with
the action under case
number 76711/14; that the applicants’
application to strike out allegations in the respondents’
answering affidavit
be postponed
sine die
and that costs be reserved.
[11]
The basis for this application is set out in the
practice note: It is submitted,
inter alia,
that the issues in this application are on all fours with the
material issues in the action that has already been enrolled and
may
become academic once the trail court pronounce on these issue.
According to the applicants, the issue about whether Smith has
resigned as a director of Lahleni and Finishing Touch is a material
issue in the pending action. Also material, according to the
applicants, is whether Singh became the sole director of both Lahleni
and Finishing Touch.
[12]
I interpose
here to point out that the issue about whether Smith had resigned is
not a new issue. In his founding affidavit deposed
to as far back as
21 April 2016, Singh has expressly stated that one of the issues to
be decided in the pending action proceedings
is the question whether
Smith has resigned as a director of both Lahleni and Finishing Touch
as contemplated in the MOI and Sale
of Equity. This begs the
question: why did Singh then launch this review application when he
was acutely aware of the fact that
one of the “
material
issues”
between
the parties is whether Smith has resigned as a director of both
Lahleni and Finishing Touch. It is in my view, disingenuous
to now
argue that this application cannot proceed in light of this dispute
of fact. Our courts also take a dim view of the practice
of
instituting an application knowing of the existence of a dispute of
fact only to later raise the very point of a dispute of
fact. See in
this regard
Room
Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
:
[3]
“
But where no real dispute of
fact exists, there is no reason for the incurrence of the delay and
expense involved in a trial action
and motion proceedings are
generally recognised as permissible.
It is obvious that a claimant who
elects to proceed by motion runs the risk that a dispute of fact may
be shown to exist. In that
event (as is indicated infra) the Court
has a discretion as to the future course of the proceedings. If it
does not consider the
case such that the dispute of fact can properly
be determined by calling viva voce evidence under Rule 9, the parties
may be sent
to trial in the ordinary way, either on the affidavits as
constituting the pleadings, or with a direction that pleadings are to
be filed. Or the application may even be dismissed with costs,
particularly when the applicant should have realised when launching
his application that a serious dispute of fact was bound to develop.
It is certainly not proper
that an applicant should commence proceedings by motion with
knowledge of the probability of a protracted
enquiry into disputed
facts not capable of easy ascertainment, but in the hope of inducing
the Court to apply Rule 9 to what is
essentially the subject of an
ordinary trial action
.”
[4]
[13]
I should also point out that Smith pertinently
denies in his answering affidavit that it is a material issue in the
pending action
namely whether he had resigned as a director of
Finishing Touch in light of the fact that his resignation as a
director of Finishing
Touch was not a condition precedent in either
the MOU or the sale agreement nor is any relief sought in the action
in respect of
such resignation. Furthermore, Smith denies that the
dispute in respect of his alleged resignation as a director of
Finishing Touch
is relevant for purposes of the relief sought by One
Vision in the pending action and accordingly denies that the trial
court will
be obliged to determine such dispute. According to Smith,
the sole purpose of his complaint to CIPC is for CIPC’s records
to be remedied to reflect the fact that he did not resign as a
director of Lahleni and Finishing Touch and that he still is a
director of both companies. Furthermore, the purpose of CIPC’s
investigation is to establish whether the evidence that have
been
submitted to CIPC and that which is still to be submitted upon the
continuation of the investigation, proves Smith’s
contention
which will then result in the amendment of CIPC’s records to
reflect the correct position.
[14]
Are there
disputes of fact that warrant this matter to be referred to trail? It
is well established law that the mere existence
of factual disputes
on the papers does not necessarily prevent a court from deciding a
matter in motion proceedings. (See in this
regard:
Room
Hire Co (Pty) Ltd v Jeppe Street Motions (Pty) Ltd
)
.
[5]
The dispute has always been about whether Smith had resigned as a
director of Lahleni and Finishing Touch. The question is whether
this
dispute is relevant to what is before this court in this application?
The relief sought in this application relates to the
question whether
CIPC was precluded from investigating a complaint under section
219(1) of the Act; whether complete information
served before CIPC
when the investigation was initiated and whether the method of
service of the summons was permissible. This
court is not called upon
to decide whether or not Smith had resigned and/or whether his
signatures were forged on the documents
that effected his alleged
resignation. Therefore, the dispute in so far as it exists, is not
pertinently relevant in these proceedings.
What is relevant is
whether or not this court should review any decisions made by CIPC in
respect of the complaint lodged by Smith.
[15]
The declaration in the pending action was filed
on 1 December 2015. This application was filed on 21 April 2016.
Despite having
always been aware of the fact that there exists a
dispute between them as to whether Smith had resigned or not, Singh
nonetheless
proceeded by way of motion.
[16]
I am therefore in light of these facts not
persuaded that the matter be referred to trail. The
application is therefore
dismissed with costs.
Complaint
filed
[17]
In terms of section 186(1)(b) of the Act, CIPIC
has a statutory obligation to maintain “
accurate,
up-to-date and relevant information concerning companies”
.
Acting in terms of this obligation, CIPS initiated an investigation
into the complaint lodged by Smith. Singh was summoned in
his
capacity as a director of Lahleni and Finishing Touch to appear
before CIPS and to provide information.
[18]
As already pointed out, Singh was not prepared to
appear before the commission and instead opted to launch, together
with the fourth
respondent (One Vision Investments 344 (Pty)) the
present review application to set aside various decisions by CIPC and
its Commissioner.
[19]
Singh’s issue with the investigation is
therefore: (i) the investigation provided for in section 219(1) of
the Act is time
barred; (ii) CIPC failed to taken into account all
relevant facts when deciding to investigate; and (iii) the summonses
were incorrectly
served and therefore the summonses stand to be set
aside.
[20]
On behalf of Smith it was submitted that the
relief sought by the applicant is unsustainable for the following
reasons:
(i)
Firstly, CIPS is not time-barred from
investigating the complaints in terms of section 219(1) of the Act in
that the fraudulent
removal of Smith as a director of Lahleni and
Finishing Touch constitutes a “
continuing
wrong
”. CIPC bears a public duty to
maintain “
accurate, up-to-date and
relevant information concerning companies
”
and as such CIPC must remedy a wrong where it continues to exist.
(ii)
Secondly, there is no merit in the complaint that
the information that was placed before CIPC is allegedly incomplete
as Singh has
not made out a case in support of this allegation.
(iii)
Thirdly, in respect of the allegation that CIPC
has incorrectly served the summons, it is submitted that even where
this was the
case, the defect was cured by subsequently serving the
summonses correctly.
Review
under the Promotion of Administrative Justice Act (“PAJA”)
– Prayers 1 - 3
[21]
For a decision to be reviewed under PAJA it must
amount to “administrative action”. Section 1 of PAJA
reads as follows:
“
'administrative action' means
any decision taken, or any failure to take a decision, by-
(a)
an organ of state, when-
(i)
exercising a power in terms of the Constitution or a provincial
constitution; or
(ii)
exercising a public power or performing a public function in terms of
any legislation; or ….
which adversely affects the rights of
any person and which has a direct, external legal effect…”
[22]
Does the action of the CIPC by accepting and
investigating a complaint constitutes administrative action as
defined? On behalf of
Smith it was submitted that it does not, simply
because the decision is not one “
which
adversely affects the rights of any person and which has a direct,
external legal effect…”
[23]
In this
regard the court was referred to the decision in
Viking
Pony Africa Pumps (Pty) ltd t/a Tricom Africa v Hidro-Tech Systems
(Pty) Ltd
[6]
where the Constitutional Court remarked that the administrative
justice requirement of procedural fairness does not arise from
the
mere institution of an investigation:
“
The applicability of PAJA
[37] PAJA defines administrative
action as a decision or failure to take a decision that adversely
affects the rights of any person,
which has a direct, external legal
effect. This includes 'action that has the capacity to affect
legal rights'. Whether
or not administrative action, which
would make PAJA applicable, has been taken cannot be determined in
the abstract. Regard must
always be had to the facts of each case.
[38] Detecting a reasonable
possibility of a fraudulent misrepresentation of facts, as in
this case, could hardly be said to
constitute an administrative
action. It is what the organ of State decides to do and actually does
with the information it has
become aware of which could potentially
trigger the applicability of PAJA.
It
is unlikely that a decision to investigate and the process of
investigation, which excludes a determination of culpability, could
itself adversely affect the rights of any person, in a manner that
has a direct and external legal effect.
[7]
[39] If the City were about to
pronounce on the culpability or otherwise of Viking, Hidro-Tech and
Viking would have to be afforded
the opportunity, in terms of PAJA,
to make whatever representations they may wish to make.
Similarly, if Viking were found
guilty, then the relevant provisions
of PAJA would have to be invoked before an appropriate sanction is
considered and imposed
by the City. This case has not, however,
reached that stage yet. The need to give some guidance is accentuated
by the apparent
lack of clarity and direction displayed by the City
and the DTI. The next question relates to the adequacy of the steps
taken by
the City.”
Similarly,
in
The
Companies and intellectual Property Commission v Moola &
others
[8]
the court held that the decision of the commissioner of CIPC to
accept a report from two inspectors is not reviewable as they do
not
constitute administrative action:
“
[29] But if in fullness of time
the decision proves in fact not to have the qualities that make the
grade under “
administrative action”
, and the
respondents were then to approach a court for a review under s.6, the
application will be unsuccessful; PAJA would not
be applicable. The
point is, the mere fact that an applicant is entitled to fair process
under PAJA along the way to a decision
being taken, does not mean
that the decision ultimately and actually taken is reviewable under
PAJA; it would not avail the respondents
to argue that although in
fact the decision might not qualify as “
administrative
action”
, at some earlier stage it potentially did.”
See
also
Langa
v Hlope
[9]
where the court held that even where a judge is accused of serious
misconduct, he does not have a right to be heard before the
complaint
was referred to the Judicial Service Commission for investigation:
“
[40] It
nonetheless became clear early in argument that, whatever the source
of the alleged right might be, the respondent does
not assert a right
on the part of a judge to be heard by complainants generally before
they lay complaints before the JSC, and
that is undoubtedly
correct (
Kaunda
and Others v President of the Republic of South Africa and Others
2005
(4) SA 235
(CC)
(2004 (10) BCLR 1009)
in paras 83 - 84;
National
Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA)
([2009] ZASCA 1) at paras 35 - 36;
Wiseman
and Another v Borneman and Others
[1971] AC 297
(HL) ([1969]
3 All ER 275)
at 308E - F (AC) and 277I -
278A (All ER);
Brooks
v Director of Public Prosecutions of Jamaica
and
Another
[1994]
2 All ER 231
(PC) at 239
g
-
j
).
While a judge is obviously entitled to be heard in the course of the
investigation of a complaint (as appears from the various
cases and
protocols referred to by the High Court and referred to in the heads
of argument) that is not what we are concerned with
in this appeal.
We are concerned instead with the act that initiates such an
enquiry (the 'trigger'), which is the decision
to lay a complaint. In
that respect there is no authority to which we were referred or of
which we are aware - whether in decided
cases or in judicial
protocols anywhere in the world - that obliges a complainant to
invite a judge to be heard before laying the
complaint. Indeed,
the authorities all say the opposite (
Meyer
v Law Society, Transvaal
1978
(2) SA 209
(T) at 214F - H;
Meyer
v Prokureursorde van Transvaal
1979
(1) SA 849
(T) at 855G - 856E;
Moran
v Lloyd's (a statutory body)
[1981] 1 Lloyd's Rep 423 (CA) at 427) and a rule to that effect would
be absurd, because it would altogether undermine the process
of
investigating complaints.”
[24]
In
Simelane
and Others NNO v Seven-Eleven Corporation SA (Pty) Ltd and
Another
[10]
the Supreme Court of Appeal held that the decision by the Competition
Commission to refer a complaint concerning prohibited practices
to
the Competition Tribunal is not subject of review save in cases of
“
ill-faith,
oppression, vexation or the like
”.
[25]
It follows in my view that, if the decision to
investigate does not constitute administrative action, then the
various constructive
steps required to carry out the investigation –
including the issuing of the summons also do not constitute
administrative
action and are consequently likewise not reviewable
and PAJA (I will return to this issue of the service of the summons
and the
time-bar argument).
[26]
In light of the foregoing I am in agreement with
the submission on behalf of Smith that the decision of CIPC with
regard to the
receipt, summons or referral of the complaint or sought
to be reviewed in prayers 1,2 and 3 of Part A falls to be dismissed
on
the basis that such decisions do not constitute administrative
action subject to a review under PAJA.
Time
barred investigations (legality)
[27]
It was also submitted on behalf of the applicants
that the directions, summonses and investigations issued by CIPS are
ultra vires
in terms
of the Act because CIPS was time-barred in terms of section 219(1) of
the Act. This was disputed and it was submitted on
behalf of Smith
that this section contemplates that “
in
the case of a course of conduct or continuing practice”
the time-bar only starts running “
from
the date that the conduct or practice ceased
”.
[28]
Although
section 219(1) employs the words “
continuing
practice”
and not “
continuing
wrong
”,
the Supreme Court of Appeal in
Barnett
v Minister of Land Affairs
[11]
had occasion to consider what is meant by the wording “continuous
wrong”:
“
[20] In considering the special
plea of prescription, the postulation is, of course, that the
allegations underpinning the government's
claim had in fact been
established. Broadly stated, it must therefore be accepted for
the prescription issue that the defendants'
occupation of their sites
constitutes a contravention of both the Decree and the common law.
Departing from this premise, the answer
to the prescription defence
is, in my view, to be found in the concept which has become
well-recognised in the context of prescription,
namely that of a
continuous wrong. In accordance with this concept, a distinction is
drawn between a single, completed wrongful
act - with or without
continuing injurious effects, such as a blow against the head - on
the one hand, and a continuous wrong in
the course of being
committed, on the other. While the former gives rise to a single
debt, the approach with regard to a
continuous wrong is
essentially that it results in a series of debts arising from moment
to moment, as long as the wrongful conduct
endures (see eg
Slomowitz
v Vereeniging Town Council
1966
(3) SA 317
(A)
;
Mbuyisa
v Minister of Police, Transkei
1995
(2) SA 362
(Tk)
(1995 (9) BCLR 1099)
;
Unilever
Bestfoods
E
Robertsons (Pty) Ltd and
Others v Soomar and Another
2007
(2) SA 347
(SCA)
in para
[15]).
[21] In
Slomowitz
(at 331F - G) this Court accepted the description of a continuous
wrong as one which 'is still in the course of being committed
and is
not wholly past'. In applying this description, the defendants'
wrongful conduct relied upon by the government must,
in my view,
be classified as a continuous wrong, in contrast with a single
wrongful act. For their contention to the contrary,
the defendants
sought to rely mainly on the decision in
Radebe
v Government of the Republic of South Africa and Others
1995
(3) SA 787
(N) at 803D - 804G. I believe, however, that
Radebe
is distinguishable on its facts. What
Radebe
claimed was the setting aside of an alleged wrongful expropriation
and the consequent transfer of his immovable property to
the
government, which was the defendant in that case. What the Court held
was that a deprivation of ownership based on a single
act of
expropriation did not constitute a continuous wrong and that, because
the single wrongful act that
Radebe
relied upon had occurred more than three years ago, his claim
had become prescribed. Where the present case differs from
Radebe
,
as I see it, is that the government's claim is not for the setting
aside of a single act of deprivation of possession which happened
wholly in the past, but effectively for an order terminating wrongful
conduct which is still in the course of depriving it
of the
possession of its property. Thus understood, the government's
position is, in my view, no different from that of the plaintiff
in
South African Railways &
Harbours v Fisher's Estate
1954
(1) SA 337
(A)
which was
succinctly described as follows by Centlivres CJ at 342B - C:
'The
plaintiff's case is not that the defendant wrongfully entered upon
the land but that the defendant was at the time of
service of
the summons (not at any time prior to that date) in wrongful
possession of land of which it is the registered owner.
That is all
it has to prove in order to succeed in its action. As far as its
claim is concerned, what occurred in the past is irrelevant.
. .'.”
Of
particular importance is the court’s reference to the matter in
Slomowitz
v Vereeniging Town Council
[12]
where the court pointed out that a “
continues
wrong is one that is still in the court of being committed and not
wholly past
”.
[29]
The Court
in
Makate
v Vodacom Ltd
[13]
the Court expanded on what is mean with a continuing wrong:
“
[192] In the case of a
continuing wrong there can be no question of prescription, even
though the wrong arises from a single act
long in the past. The
reason, which may appear somewhat artificial, but which is well
established, is said to be that while the
original wrongful act may
have occurred in a time past, the wrong itself continues for so long
as it is not abated.
But the running of prescription in
respect of any financial claim arising from the same wrong will not
be postponed. Accordingly,
if financial loss was occasioned by the
original wrongful act, the debt in relation to that loss would become
due and prescription
would commence to run when the original wrongful
act occurred and loss was suffered. The result is that the
impact of prescription
on claims having their source in the same
right may differ, depending on the nature of the claim.”
[30]
On behalf
of Smith it was submitted that the fact that the records continue to
reflect that he is not a director of Lahleni and
Finish Touch, it
constitutes a continuous practice. I am in agreement. In terms of
section 187(4) of the Act, CIPC has a statutory
obligation to
maintain in the prescribed manner and term the companies register and
to ensure that it reflects “
accurate,
up-to-date and relevant information concerning companies, foreign
companies and other juristic persons contemplated in
subsection (1)
(a) (ii) [of section 186 of the Act], and concerning intellectual
property rights, and the provision of that information
to the public
and to other organs of state
”
(section 186(b) of
the Act). (See also section 187 of the Act.
[14]
)
[31]
Where the
companies register reflects an error or a falsification, CIPC is
statutorily obliged to perform any function reasonably
necessary to
carry out its assigned registry function – including correcting
such an error or falsification. In this regard
the court in
Chegodi
v Commissioner for the Companies and Intellectual Property
Commission
[15]
held that where forged documents are used to effect changes to the
Company’s Register, such amendments should be regarded
as a
nullity.
[32]
In this regard I am in agreement with the
submission that it is in the public interest that the companies
register accurately reflects
the details of directors of a company.
[33]
I am further in agreement that, should Smith be
successful in his claim that he is still a director, this practice
has continuous
injurious effects in that it continues to reflect
information that is not correct.
Alleged
incomplete information (legality)
[34]
Singh
alleges that certain documents were not placed before CIPC at the
time when it decided to investigate the complaints and issue
summons.
On behalf of Smith it was submitted that this complaint cannot form
the basis of the present review. In this regard reference
was made to
sections 168(1)(b) and 169(1)(a) of the Act where it is merely
required that a complaint must be filed in writing using
the
prescribed form. It is further required that the complainant must
allege that “
a
person has acted in a manner inconsistent with [the] Act, or that the
complainant’s rights under this Act, or under a company’s
Memorandum of Incorporation or rules, have been infringed
”.
In respect of the nature of the complaint, it is merely required that
the complainant provides a concise statement of the
conduct that is
the subject of the complaint.
[16]
[35]
I have perused the complaint form submitted by
Smith and I cannot come to the conclusion that there has been
non-compliance with
these requirements. The allegation is also not
made by the applicants that there has been non-compliance with these
statutory requirements.
There is therefore no merit in this
allegation.
Service
of the summons (legality)
[36]
In terms of section 176(2) of the Act –
“
(1) At any time during an
investigation being conducted by it, the Commission, or the Panel, as
the case may be, may issue a summons
to any person who is believed to
be able to furnish any information on the subject of the
investigation, or to have possession
or control of any book, document
or other object that has a bearing on that subject to-
(a)
appear before the
Commission or Panel, or before an inspector or independent
investigator, to be questioned at a time and place
specified in the
summons; or
(b)
deliver or produce to the
Commission or Panel, or to an inspector or independent investigator,
any book, document or other object
referred to in paragraph
(a)
at a time and place specified in the summons.”
A summons contemplated in
this section “
(b)
may be served in the same manner as a subpoena in a criminal case
issued by the magistrate's court.”
[17]
I have
already referred to the facts pertaining to the service of the
summons.
[37]
It is common cause that CIPC served the summons
by way of an e-mail on 5 April 2016. The summons was however
thereafter correctly
served on 7 April 2016 by way of the Sheriff. I
am in agreement with the submission that there was proper service of
the summons:
The mere fact that it was served incorrectly the first
time does not, in my view, warrant that the summonses be set aside or
suspended.
There is therefore no merit in this complaint.
Part
C of the Notice of Motion (Inherent jurisdiction of the Court)
[38]
In Part C
of the Notice of Motion, the applicants seek an order that the
investigations of the complaints and the operation of the
summonses
be suspended pending the determination of the action. Although this
Court has, in terms of section 173 of the Constitution
of the
Republic of South Africa
[18]
“
the
inherent power to protect and regulate their own process, and to
develop the common law, taking into account the interests of
justice
”
,
this court cannot merely - particularly in the absence of a statutory
power to do so - suspend an investigation of CIPS in exercising
a
statutory power conferred on it by the Act. I have already indicated
that CIPC has a statutory duty to maintain the companies
register in
the prescribed manner and form. The investigative powers conferred
upon CIPC are central to the statutory duty to maintain
the companies
register. I am further in agreement with the submission that it would
be absurd to suspend the investigative powers
of CIPC in exercising
its statutory duties merely because an affected party has instituted
proceedings into other matters relating
to the investigation
regardless of whether the statutory regulator (such as CIPC) is a
party to those proceedings. Moreover, there
is no reason, in my view,
why the investigation conducted by the CIPC (which is a statutory
obligation) cannot run concurrently
to action proceedings instituted
by a party to the investigation process. Lastly, if regard is had to
the relief sought in the
action proceedings, it is apparent that no
relief is claimed with regard to the correction of the companies
register maintained
by CIPC. The trail court is also not called upon
to decide whether Smith had resigned as a director of Finishing Touch
or not.
Applications
to strike out
[39]
Singh brought two applications to strike out
various allegations in the affidavit filed on behalf of CIPC and the
one on behalf
of Smith.
[40]
In terms of
Rule 6(15) of the Uniform Rules of Court, a court may on application
order that any matter which is scandalous, vexatious
or irrelevant be
struck out.
[19]
Affidavit
by Smith
[41]
In respect of the affidavit by Smith, it
was submitted with reference to paragraphs 17, 18 and 20 of Smith’s
answering affidavit,
that this court should strike out those
sentences in these paragraphs that are argumentative and hence
irrelevant in terms of Rule
23(2) of the Uniform Rules.
[42]
In these three paragraphs Smith either
denies or notes the responding paragraphs whilst adding either that
he is advised that Singh
and One Vision have failed to make out a
case for the relief sought; that Singh and One Vision do not rely on
the provisions of
PAJA; or that One Vision is not entitled to the
relief sought in the action. It is further alleged that the
applicants would be
prejudiced in that the decision of the court
could be influence by the argumentative material contained in these
three paragraphs.
Affidavit
by CIPC
[43]
In respect of the affidavit by CIPC, it is
alleged with reference to numerous paragraphs that the allegations in
some paragraphs
constitute argument, alternative inadmissible hearsay
evidence, and further alternatively that the allegations are
irrelevant.
Apart from merely listing various paragraphs, Singh makes
no effort to explain why he would suffer prejudice if these
paragraphs
remain and further makes no attempt to properly motivate
the various aspects of the application to strike out.
[44]
I
agree with the general principle that affidavits should refrain from
being argumentative particularly in respect to those issues
that fall
to be decided by the court hearing the application or the pending
action. See in general:
Vaatz
v Law Society of Namibia
:
[20]
“
[16] A
statement appeared in the introductory paragraphs of the answering
affidavit made by Cleverlad’s director that where
he made legal
submissions, he did so on the strength of legal advice having been
obtained by him on behalf of Cleverlad from its
legal representatives
in the application. A statement of such nature in motion
proceedings has become increasingly popular
in practice in the last
few years. Its apparent purpose is to disclaim responsibility
of the deponent for later argumentative
matter which serves to
inflate the papers and of which the deponent has no comprehension.
However impressive this might be
to a lay client in justifying a
legal representative’s fee for voluminous affidavits, I find
this practice disturbing in
at least four respects. First, by
their very nature these submissions have neither evidential content
nor probative value;
as argumentative matter they have no place in
affidavits. It is not for nothing that rule 6(1) of the uniform
rules of court
provides for an application to be supported by an
affidavit “as to the facts”. Secondly, the
argumentative submissions
that follow are expressly admitted hearsay
and, as such, inadmissible. Thirdly, the submissions amount to
legal opinions
on matters upon which the court is required to
decide. Even expert legal opinion on matters of domestic law is
neither necessary
nor admissible;
South
Atlantic Islands Development Corporation Ltd v Bu
chan
1971
(1) SA 234
(C) at 237 C – F and
Prophet
v National Director of Public Prosecutions
2007
(6) SA 169
(CC)
at 188 para 43…”
[45]
Having
regard to the affidavit of Smith, I am not persuaded that Smith
ventured into the territory cautioned against by the Court
in
Vaatz.
[21]
I am further not persuaded that that Singh would be prejudiced in
conducting his defence nor that a court would be influenced by
the
statements of a legal nature contained in this paragraph. In respect
of the affidavit of CIPC, I can likewise find no reason
to grant the
application to strike out for the reasons alluded to paragraph
[41].
[22]
[46]
In the event, the two applications to strike out
certain portions of the affidavit on behalf of CIPC and by Smith are
dismissed
with costs.
Costs
[47]
On behalf of Smith it was submitted that the
application should be dismissed on an attorney and client scale and
that Singh and
One Vision should pay the costs. No order as to costs
is sought against Lahleni or Finishing Touch. On behalf of the
applicants
it was submitted that there exists no basis for a costs
order against (some) of the applicants. I do not agree. I have
referred
to the fact that CIPC has certain statutory duties - one of
which is to investigate complaints that are referred to it. In this
matter, Singh has, throughout the process, displayed a dismissive and
non-cooperative attitude. Furthermore, what is supposed to
have been
a simple matter before this court, has developed into a court record
running into hundreds of pages. Lastly, Singh has
launched this
application as far back 21 April 2016, yet waited until the eleventh
hour to bring an application that this matter
be referred to trail.
Under the circumstances I am therefore satisfied that a punitive
costs order is warranted.
Order
1.
The application to refer the matter to trail is
dismissed with costs.
2.
The application to strike out portions of the
affidavit on behalf of the first respondent is dismissed with costs.
3.
The application to strike out portions of the
affidavit deposed to by the third respondent is dismissed with costs.
4.
The application for an order in terms of Part A,
alternatively Part B, alternatively Part C is dismissed on an
attorney and client
scale, such costs to include the costs of senior
counsel where so employed.
_________________________
JUDGE
AC BASSON
JUDGE
OF THE HIGH COURT
Appearances:
For
the Plaintiff:
Adv. DG van Loggerenberg SC
Adv.
J Malan
Instructed
by:
Hogan Lovells (South Africa) Inc.
For
the 1
st
and 2
nd
Respondent: Adv.
HF Oosthuizen
Adv.
D Smit
Instructed
by:
Rudman Attorneys
For
the 3
rd
Respondent:
Instructed
by:
Veneziano Attorneys
[1]
Act 71 of 2008.
[2]
Act 3 of 2000.
[3]
1949 (3) SA 1155 (T).
[4]
My emphasis.
[5]
Supra.
[6]
2011 (1) SA 327 (CC).
[7]
My emphasis.
[8]
[2017] ZAGPJHC 102 (30 March 2017).
[9]
2009 (4) SA 382 (SCA).
[10]
2003 (3) SA 64
(SCA) ad paragraph [17].
[11]
2007 (6) SA 313 (SCA).
[12]
1966
(3) SA 317
(A)
.
[13]
2016 (4) SA 121 (CC).
[14]
“(4) The Commission must-
(a)
establish and maintain in the prescribed manner and form-
(i)
a companies register; and…
(e)
perform any related functions assigned to it by legislation, or
reasonably necessary to carry out its assigned registry functions.”
[15]
Case nr: 42929/2016. 27 June 2016.
[16]
See Regulation 135 of the Act. A complainant must fill in Form C of
135.
[17]
Section 176(2) of the Act.
[18]
Act 108 of 1996.
[19]
See in general:
Vaatz v Law
Society of Namibia
1991
(3) SA 536
(Nm) at 566C – E.
[20]
[1991] 2
All SA 30 (NM).
[21]
Supra
.
[22]
Ibid
.