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[2018] ZAGPJHC 562
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New Shelf 944 (Pty) Limited and Another v Mashaba (2017/48910) [2018] ZAGPJHC 562 (28 September 2018)
REPUBLIC
OF SOUTH AFRICA
THE
HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 2017/ 48910
In
the matter between:
NEW
SHELF 944 (PTY)
LIMITED FIRST
APPLICANT
NTSHANGASE,
MBULELO SIMON SECOND
APPLICANT
and
MASHABA,
JABULANI HLAMARISA
PRIDE RESPONDENT
JUDGMENT
NKOSI
- THOMAS AJ
A.
INTRODUCTION
[1]
Before me is an application for the enforcement of the consent order
of this Court dated 11 September 2017, under case number
- 43065/
2016
(“the main application”).
While the
applicants persist with obtaining the relief sought in the main
application, the respondent seeks an order postponing
the main
application
sine die
. The applicants seek the following forms
of relief in the main application:
[1.1] Directing the
respondent to deliver his share certificate in respect of his 50%
shareholding in the first applicant within
four (4) calendar months
from the grant of the order;
[1.2] Directing the
respondent to deliver a share transfer form duly completed and signed
in order for his 50% shareholding in the
first applicant to be
transferred to the second applicant within four (4) calendar months;
[1.3] Ordering that the
respondent is in contempt of the court order of 11 September 2017
inasmuch as he had hitherto failed to
comply therewith; and
[1.4] Ordering the
respondent to pay the costs of suit.
[2]
It is common ground, as between the parties, that should this Court
be disinclined to postpone the main application, the applicant
would
be entitled to the relief sought in the main application.
[3]
The grounds upon which the respondent seeks a postponement of the
main application are,
inter alia
, the following:
[3.1]
That the respondent launched a counter-application on 25 July 2018
(“the counter-application”)
in terms
whereof he seeks an order staying the execution of the consent order
of 11 September 2017 granted under case number. 43065/
2016
(“the
consent order”)
pending the finalisation of an action
instituted by him against the applicants under case number 4297/ 2018
(“the action”)
;
[3.2]
That the main application and the counter-application be heard
simultaneously inasmuch as the two are inextricably linked
to each
other;
[3.3] That when the main
application was launched, the applicants, and more particularly the
second applicant, had knowledge of
the disputes relating to the
existence or otherwise of fraud that had induced the respondent to
conclude the settlement agreement
leading to the consent order;
[3.4] That the second
applicant was aware that the true and only reason for the
respondent’s non-compliance with the consent
order was his
purported cancellation of the settlement agreement based on certain
alleged misrepresentation and non-disclosure
on the part of the
second applicant;
[3.5] That the respondent
was advised that it would have been both futile and prejudicial for
him to comply with the consent order
by transferring his shares and
resigning as a director and to, in due course, seek a cancellation of
the settlement agreement and
the setting aside of the consent order;
and
[3.6] That a grave
injustice would result were the respondent to be held in contempt of
court, thus compelling the respondent to
transfer his shares and
resign as a director, all while he may still be successful at the
trial in due course.
[4]
The applicants, even though not having filed an answering affidavit
in opposition to the substantive application for a postponement,
opposed the postponement application and persisted in regard to their
entitlement to relief under the main application. Their main
basis
for opposition is that the postponement application is a procedural
device to keep the applicant’s out of relief. In
other words,
as I understood the argument, the postponement application is nothing
but a tactical manoeuvre to frustrate applicants’
entitlement
to relief.
B.
MATERIAL COMMON CAUSE FACTS
[5]
The consent order was granted on 11 May 2017.
[6]
The consent order in issue in these proceedings was a culmination of
a settlement agreement reached in respect of eight cases,
in total,
between the parties before me. All of these cases were settled under
the consolidated case number 43065/2011 on 11 September
2017
[1]
.
The impugned consent order reads,
inter
alia,
that:
“
1. The parties
agree to settle all triable issues / matters under the following case
numbers, together with all claims between the
Plaintiff, the
Defendant and Mr. Simon Ntshangase … [ here 7 case numbers
were expressly mentioned]
2. This agreement is
to be made an order of court. This agreement settles all the triable
issues between the parties…
3. Ntshangase sells to
… Mashaba … his shareholding comprising 50% … of
the issued share capital in New Shelf
944 (Pty) Limited including all
loan accounts of whatsoever nature for a purchase price of R12
million …
4. The sale by
Ntshangase of his shares … [is] voetstoets… without any
representations being made in regard thereto
…
5. New
Shelf and/ or Ntshangase shall … furnish Mashaba with a copy
of New Shelf’s audited financial statements
for the financial
years ending 28 February 2015, 28 February 2016 and 28 February 2017.
6. Subject to the
compliance of [sic] the provisions of clause 5, the purchase price of
R12 million … shall be paid by Mashaba
to Ntshangase by no
later than 16.00 on 27 October 2017…
14. In the event that
Mashaba does not pay the purchase price of his share and loan
accounts to Ntshangase within the period as
provided in paragraph 6
above, then and in such event… there shall be a deemed sale by
Mashaba to Ntshangase of Mashaba’s
loan account and shares in
New Shelf… for the sum of R 3.2 million.”
[7]
The respondent breached the terms of the consent order.
[8]
In consequence, the reverse purchase provisions of the consent order
became operative resulting in the respondent selling his
50%
shareholding in the first applicant to the second applicant for a
purchase consideration of R 3,2million.
[9]
Correspondingly the respondent was, by operation of paragraphs 6 and
9 of the consent order, obliged to deliver to the second
applicant a
complete and signed share transfer form as well as the original share
certificate held by him within a period of 48
hours after 30 October
2017.
[10]
The respondent, however, failed to deliver the aforesaid share
certificate and the share transfer form in accordance with the
express terms of the consent order.
[11]
Consequently, the main application was launched. As stated, the
applicants seek, thereby to enforce,
inter alia
, the above
terms of the consent order.
[12]
The respondent, in answer to the main application, challenges the
validity of the settlement agreement that resulted in the
consent
order. In so doing, the respondent relies on certain alleged acts of
misrepresentation and non-disclosure. The respondent
relies,
thereupon, further for his non-compliance with the express terms of
the consent order.
[13]
It was quite properly conceded before me, in argument, that the
respondent’s unilateral cancellation of the settlement
agreement that led to the consent order does not avail the
respondent, absent an order staying and/ or suspending the operation
of the court order pending the finalisation of the action.
[2]
C.
THE POSTPONEMENT APPLICATION
[14]
It is trite that an applicant for relief must show “
good
cause”
for relief.
[15]
The
locus
classicus
in applications for postponement is
Myburgh
Transport v Botha t/a SA Truck Bodies
,
[3]
in which an application for postponement was based on the
unavailability of an essential witness of the defendant.
[16]
There, the court set out the principle that where a postponement is
sought, the Court has a discretion to exercise which discretion
is to
be exercised judicially. It should not be exercised capriciously or
upon a wrong principle, but for substantial reasons.
[4]
[17]
The court went on to emphasise that the fundamental consideration in
such an application is whether it is in the interests
of justice to
grant the postponement.
[5]
[18]
Following on the
Myburgh
Transport
decision,
the Labour Court went on to summarise the principles applicable to
applications for postponement in the case of
Insurance
and Banking Staff Association and Others v SA Mutual Life Assurance
Society
,
[6]
where it stated the following:
“
In an
application for postponement, the legal principles established in the
High Court over the years apply equally in practice
in the Labour
Courts. For the purpose of the present application, the following
principles apply:
(a)
The trial judge has a discretion as to whether an application
should be granted or refused (
R v Zackey
1945 AD
505
;
Myburgh Transport v Botha t/a SA Truck Bodies
1991 (3) SA 310
(NM)).
(b)
That discretion must at all times be exercised judicially. It
should not be exercised capriciously or upon any wrong principle, but
for substantial reasons.
(c)
The trial judge must reach a decision after properly directing
his/her attention to all relevant facts and principles.
(d)
An application for postponement must be made timeously, as
soon as the circumstances which might justify an application become
known
to the applicant. However, in cases where fundamental fairness
and justice justify a postponement, the court may in an appropriate
case allow such an application for postponement, even though the
application was not timeously made.
(e)
The application for postponement must always be bona fide and
not used simply as a tactical manoeuvre for the purpose of obtaining
an advantage to which the applicant is not legitimately entitled.
(f)
Considerations of prejudice will ordinarily constitute the
dominant component of the total structure in terms of which the
discretion
of a court will be exercised. What the court has primarily
to consider is whether any prejudice caused by a postponement to the
adversary of the applicant for a postponement can fairy be
compensated by an appropriate order of costs or any other ancillary
mechanisms.
(g)
The court should waive the prejudice which will be caused to
the respondent in such an application if the postponement is granted
against the prejudice which will be caused to the applicant.
(h) Where the
applicant for a postponement has not made the application timeously,
or is otherwise to blame with respect to the
procedure which the
applicant has followed, but justice nevertheless justifies a
postponement in the particular circumstances of
a case, the court in
its discretion might allow the postponement but direct the applicant
in a suitable case to pay the wasted
costs of the respondent
occasioned to such a respondent on a scale of attorney and client.
Such an applicant might even be directed
to pay the costs of the
adversary before the applicant is allowed to proceed with the action
or defence in the action, as the case
may be. ”
[7]
[19]
It may also be apposite to refer to the judgment of the Labour Appeal
Court in the matter of
Carephone
(Pty) Ltd v Marcus NO and Others
[8]
where the court stated the following with regard to issues to be
considered in relation to applications for postponement:
“
In a court of
law the granting of an application for postponement is not a matter
of right. It is an indulgence granted by the court
to a litigant in
the exercise of a judicial discretion. What is normally required is a
reasonable explanation for the need to postpone
and the capability of
an appropriate costs order to nullify the opposing party’s
prejudice or potential prejudice. Interference
on appeal in a matter
involving the lower court’s exercise of a discretion will
follow only if it is concluded that the discretion
was not judicially
exercised (
Madnitsky v Rosenberg
1949 (2) SA 392
(A) at 398-9).”
[20]
This postponement application is akin to an application for a stay of
execution.
[9]
It is akin thereto
because in the event of this Court being disinclined to granting the
postponement sought, the consent order
falls to be given effect to.
[21]
In terms thereof, in order for the respondent to succeed, he must
demonstrate the possibility of the underlying “
causa”
to the consent order being ultimately removed. The real question
becomes whether “
real
and substantial justice requires such a stay, or put differently,
[whether] injustice would otherwise result’
[10]
were
the postponement application not be granted.
[22]
I am by no means persuaded that the possibility does exist for the
underlying
causa
for the consent order being ultimately
removed. I say so for the following reasons:
[22.1] The consent order
was based on a settlement agreement entered into by the parties in
terms of which no less than seven (7)
disputes hitherto extant as
between the parties were settled fully and finally.
[22.2] The settlement
agreement provided expressly for the settlement of all the triable
issues / matters in several litigious matters
therein referred
to.
[11]
[22.3] One such matter
being an Anton Pillar launched by the respondent
[12]
where allegations of fraud were made against the applicants in
respect of the KPMG valuation of the parties’ respective
shareholding in the first applicant as at 28 February 2013.
[13]
[22.4] As stated, the
settlement agreement settled all the triable issues between the
parties including the alleged fraud tainting
the parties’
respective shares and loan accounts in the first applicant.
[22.5] Significantly, one
of the many cases settled between the parties was concerned with the
respondent’s obligation to
transfer his shares to the second
applicant in terms of the original settlement agreement for the
purchase consideration as determined
by KPMG, where a significant
issue and, indeed, in the Anton Pillar application had been the
alleged fraudulent non-disclosure
of material facts to the KPMG
valuation.
[22.6] The settlement of
11 September 2017 recorded specifically that the contemplated sale of
shares was to be
voetstoets
and free of any encumbrance and representations being made in regard
thereto.
[14]
[22.7] The settlement
agreement also made provision for reverse purchase by the respondent
of his shareholding to the second applicant
in the purchase
consideration of R 3.2 million upon the respondent ‘s failure
to pay R12 million or procuring the release
of the second applicant
from his overdraft obligations.
[15]
[22.8] The second
applicant caused the R3.2 million purchase consideration under the
reverse purchase to be paid into the respondent’s
attorneys of
record’s trust account.
[22.9] According to the
reverse purchase provisions which became operative on 27 October
2017, the respondent became entitled to
payment from his attorney’s
trust account of the purchase consideration of R 3.2 million on 30
October 2017, and correspondingly,
became obliged within 48 hours
thereafter to deliver the relevant share transfer documents to the
second applicant.
[22.10] The respondent
failed to comply with his obligations in terms of the consent order
contending, yet again, that the applicants
have acted fraudulently.
[22.11] The respondent
did not bring any counter-claim in its answering affidavit for the
setting aside of the consent order on
account of the alleged fraud.
[23]
The picture that emerges from the common cause facts set out above is
that there are no reasonable prospects for respondent
successfully
setting aside the
causa
underlying the consent order.
[24]
That being the case I must, of necessity, find that the respondent
has failed to show “good cause” for the postponement
of
these proceedings.
[25]
It must follow in my judgment that he postponement application must
be refused.
[26]
As stated above, the parties are
ad idem
that in the event of
the postponement application being refused, the applicants would be
entitled to the relief sought in the main
application.
[27]
In the result, I make the following order:
[27.1] The respondent is
ordered to deliver his share certificate in respect of his 50%
shareholding in the first applicant within
four (4) calendar months
from the grant of the order;
[27.2] The respondent is
ordered to deliver a share transfer form duly completed and signed in
order for his 50% shareholding in
the first applicant to be
transferred to the second applicant within four (4) calendar months;
[27.3] The respondent tis
ordered to pay the costs of suit.
_____________________
L.G
NKOSI-THOMAS AJ
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION
Heard:
30 July 2018
For
the Applicant: Advocate I Miltz SC and R Cohen
Instructed
by Glynnis Cohen Attorney
For
the Respondent: Advocate S Pincus SC
Instructed
by Bicarri, Bollo and Mariano Inc
[1]
Record, page 43, Annex “
SN1
”.
[2]
RU Tergeta Zerga and 20 Others v Powerment CC, Unreported Judgment
GLD JHB 43785/2011.; EKE v Parsons 2016(3) SA 37 (CC)
at [24].
[3]
1991 (3) SA 310
(NMSC). This case was approved by the
Constitutional Court in the
National
Coalition for Gay and Lesbian Equality v Minister of Home Affairs
2000 (2) SA 1
(CC0 and also applied in
Shilubana
and Others v Nwamitwa (National Movement of Rural Women and
Commission for Gender Equality as Amici Curiae
[2007] ZACC 14
;
2007 (5) SA 620
(CC) at para
[3]
and [10] - [12].
[4]
At p314 G-H.
[5]
At p315 H-J.
[6]
(2000) 21 ILJ 386 (LC).
[7]
Footnotes and references omitted.
[8]
(1998) 19 ILJ 1425 (LAC).
[9]
See Rule 45 (A) of the Uniform Rules of the Court.
[10]
Gois t/a Shakespeare’s Pub v Van Zyl and Others
2011 (1)
SA 148
(LC)
.
[11]
FA, P15, para 29.1, clause 1.
[12]
Case Number 32658/15.
[13]
Record, p 68-85, Annexure “
SN4
”.
[14]
Record p 44, Clause 4.
[15]
Record p 47, Clause 14.