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[2021] ZASCA 126
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Bassani Mining (Pty) Ltd v Sebosat (Pty) Ltd and Others (835/2020) [2021] ZASCA 126 (29 September 2021)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 835/2020
In
the matter between:
BASSANI
MINING (PTY)
LTD APPELLANT
And
SEBOSAT
(PTY)
LTD FIRST
RESPONDENT
MASHALA
RESOURCES (PTY) LTD SECOND
RESPONDENT
KURT
HERMAN THIRD
RESPONDENT
ANDREA
AVRIL ANDERSON FOURTH
RESPONDENT
Neutral
Citation:
Bassani
Mining (Pty) Ltd v Sebosat (Pty) Ltd & others
(835/2020)
[2021] ZASCA 126
(29 September 2021)
Coram:
NAVSA
ADP, MATHOPO, MOLEMELA, PLASKET and MOTHLE JJA
Heard:
16
August 2021
Delivered:
This
judgment was handed down electronically by circulation to the
parties’ legal representatives by email, publication on
the
website of the Supreme Court of Appeal and release to SAFLII. The
date and time for hand-down is deemed to be 10h00 on 29 September
2021.
Summary:
Civil
procedure – common law remedy
–
anti-dissipation
interdict – whether it was a requirement for an
anti-dissipation interdict for an applicant to prove that
the
dispositions were made with the intention of thwarting an applicant’s
pending damages claim or whether there were exceptional
circumstances
where a lesser threshold applied – whether appellant satisfied
the requirements of an interim anti-dissipation
interdict –
foundational requirements of interim interdict not met. Appeal
dismissed with costs including costs of two counsel.
ORDER
On
appeal from
: Gauteng Division of the
High Court, Johannesburg (Bhoola AJ sitting as court of first
instance):
1
The appeal is dismissed.
2
The appellant is ordered to pay the respondents’ costs,
including the costs of two counsel.
JUDGMENT
Mothle
JA (Navsa ADP, Mathopo, Molemela and Plasket JJA concurring):
[1] In
1996, this Court in
Knox
D’Arcy Ltd and Others v Jamieson and Others (Knox D’Arcy)
[1]
reaffirmed the existence in our law, of a distinctive interdict,
which provides a remedy where an applicant has shown on the
established
basis for an interim interdict: (a) a claim against a
respondent; and (b) that the respondent is concealing or dissipating
assets
with the intent of frustrating the claim.
[2]
This court, in
Knox
D’Arcy
,
reluctantly accepted the description of this remedy as an
‘anti-dissipation interdict’
[3]
.
That description has stuck and it is now in common usage.
[2] Before
turning to consider a very specific dictum in
Knox D’Arcy
,
on which the appellant in the present appeal relies, it is necessary
to have regard to the factual background, which appears hereafter.
[3] On
19 February 2020, the first respondent, Sebosat (Pty) Ltd (Sebosat
),
represented by the third respondent, Mr Kurt Herman
(Herman
)
,
its sole director and shareholder, entered into a written
sub-contract agreement with the appellant, Bassani (Pty) Ltd
(
Bassani). The essential terms of the agreement, for present
purposes, were that Bassani, as the subcontractor, would mine coal at
Wesselton Mine on behalf of Sebosat, as the contractor. Clause 16.5
stipulated that for the first three months, Bassani would only
be
entitled to payment of its invoices within 48 hours after the coal
mined had been sold and Sebosat had received payment from
its client,
the second respondent, Mashala Resources (Pty) Ltd
(Mashala).
Clause 2.1.11 defines the ‘Main Agreement’ as an
‘[a]greement entered into between the Client and Contractor’,
meaning Mashala and Sebosat respectively. The agreement recorded that
Mashala was the holder of the mining rights over the mineral
area at
the Wesselton Mine. In clause 18 of the subcontract agreement,
Sebosat agreed that the coal mined would be used to provide
security
to Bassani for its obligations, for any amounts due by Sebosat to
Bassani for mining operation.
[4] Bassani
mined the coal from March 2020 until 31 May 2020. At the end of May
2020, a dispute arose between Bassani
and Sebosat. Bassani claimed
that Sebosat owed it monies, evidenced by unpaid invoices, while
Herman, on behalf of Sebosat, alleged
that Bassani had failed to mine
the coal as agreed, in that the coal that it mined fell short of
agreed tonnage targets. Sebosat,
instead of dealing with a
contractual breach notice issued by Bassani, terminated the agreement
on 1 June 2020. Bassani was adamant
that Sebosat’s termination
of the agreement was without foundation. It asserted that at the time
of the termination Sebosat
owed it an amount of R14 530 824-90.
[5] Following
on the termination there were attempts by the parties to settle the
dispute amicably. It appeared,
at first, that these attempts might
bear fruit, with Bassani of the belief that the parties were on the
brink of settling amounts
owing and the terms of a handover,
including the retrieval of its equipment. Communications then broke
down.
[6] During
July 2020, according to Bassani, it discovered for the first time,
through its attorneys, certain crucial
facts, which Herman allegedly
failed to disclose at the time the parties concluded the subcontract
agreement. These were that:
(a) Mashala had been under business
rescue since 20 November 2014; (b) the ‘Main Agreement’,
supposedly concluded between
Sebosat and Mashala, purporting to be
the authority for Sebosat to act as contractor, did not exist; (c)
Sebosat was a shelf company
with no business address and assets, and
was allegedly interposed by Herman for the purposes of the
subcontract agreement, to shield
Mashala from any liability; (d)
Bassani had thus mined the coal for the benefit, not of Sebosat, but
of Mashala; and (e) as a consequence,
Bassani at all material times
never had security for payment of its amounts due in terms of clause
18 of the subcontract agreement.
[7] Consequently,
Bassani alleged that Herman had fraudulently misrepresented facts
relating to his relationship
with Mashala, and also Mashala’s
relationship with Sebosat. Further, that as a result of the alleged
fraudulent misrepresentation,
Bassani was induced to conclude the
sub-contracting agreement with Sebosat. Bassani further alleged that
Herman fraudulently interposed
Sebosat as a contractor, in what it
described as an unconscionable abuse of juristic personality, with
the intent to prevent or
shield Mashala from any liability that would
arise from the mining operations.
[8] Herman’s
alleged fraudulent misrepresentation moved Bassani to institute an
urgent application for an
interdict in the high court, seeking relief
pendente lite
, against Sebosat, Mashala, Herman and his
co-director, Andrea Avril Anderson
(
Anderson), cited as the
fourth respondent. Bassani sought an order restraining the
respondents from alienating, encumbering or removing
directly or
indirectly coal, to the value of R25 million from Wesselton Mine,
pending an action for damages. There was a further
claim for the
return of equipment, which is not significant to this appeal as that
aspect was settled before the hearing in the
high court.
[9] In
opposing the relief sought, Sebosat and Herman contended as follows.
First, that the contract was terminated
because Bassani had failed to
meet certain production targets; second, that the coal mined by
Bassani had been sold; third, that
Bassani had refused to submit the
dispute to arbitration, provided for in terms of the agreement; and
fourth, that Bassani could
not prove that the coal had been sold with
the intent to thwart execution on the pending damages claim.
[10] The
high court considered that Bassani first, had to meet certain
‘threshold’ requirements in
relation to an interim
interdict, which it identified as: (a) a prima facie right, albeit
open to some doubt, (b) a well-grounded
fear of irreparable harm were
an interim interdict to be refused, and (c) the absence of a
satisfactory alternative remedy.
[11] The
high court took into account that the coal that was mined for Sebosat
had already been disposed of by
Mashala in the ordinary course of its
business and that there is no further coal on the premises that had
been mined by Bassani.
Essentially, the high court found that Bassani
had failed to prove that there was ‘
a real risk’,
that
in the intervening period before the damages claim was heard, that
the respondent would ‘
dissipate and/or diminish their assets
in order to avoid the efficacy of a court order and to leave it with
a hollow judgment, should
it succeed.
’ The high court
stated the following: ‘…this means that [Bassani] has
not met the second threshold requirement
for obtaining an
anti-dissipation interdict’. Thus, it dismissed Bassani’s
application. It is with leave of the high
court that this matter is
before us.
[12] Sensing
the problems it faced in establishing the foundational requirements
for the grant of the relief sought,
Bassani relied on the following
passage in
Knox D’Arcy
:
‘
The question which
arises…is whether an applicant need show a particular state of
mind on the part of the respondent, ie
that he is getting rid of the
funds, or is likely to do so, with the intention of defeating the
claims of creditors. Having regard
to the purpose of this kind of
interdict, the answer must be, I consider, yes, except possibly in
exceptional
cases. As I have said the effect of the interdict is to prevent the
respondent from freely dealing with its own property to which
the
applicant lays claim. Justice may require this restriction in cases
where the respondent is shown to be acting
mala
fide
with the intent of preventing execution in respect of the applicant’s
claim.’
[4]
(Emphasis
added).
[13] The
submission on behalf of Bassani was that this was an ‘exceptional’
case, as envisaged in
Knox
D’Arcy
,
and that in such instances a lower bar applied and that an interdict
might be granted even when there was a bona fide disposition
of
property. This submission was with reference to what is said, in
those terms in
Knox
D’ Arcy
at 377 A-E. It was also submitted on behalf of Bassani that this
lower bar was recognised in
Carsten
and Another v Kullmann and Others
.
[5]
It was contended that this was a case in which the respondents
structured their affairs in such a way so as to leave Bassani with
a
hollow judgment in the event of it being successful in the
prosecution of its claim.
[14] There
are several problems with Bassani’s quest to overturn the order
of the high court. First, the
conclusion by the high court that there
are no longer any identifiable assets belonging to Sebosat against
which execution could
be levied, is irrefutable. On Bassani’s
own version of events it is a shell company and it was common cause
that the coal
Bassani had mined had been disposed of. Bassani has no
claim of any kind against any of the mine’s assets, especially
in
the light of the Business Rescue proceedings.
[15] Second,
Bassani had no contractual nexus with Mashala. It had made no
representations to Bassani and had no
contractual links with it.
According to the business rescue practitioners they had given no
permission for mining activities during
the period in question,
contrary to what was asserted by Herman. Mashala could thus, as a
corporate entity, have made no representations
of any kind while it
was under the control of the business rescue practitioners. This must
be so, on Bassani’s own version,
as set out in its replying
affidavit.
[16] Third,
at para 8 of its founding affidavit, Bassani stated emphatically that
the application for the interdict
was brought urgently to restrain
the respondents from concealing or dissipating assets ‘ie coal
that was mined by Bassani’.
As pointed out above that horse has
bolted.
[17] Fourth,
the fraud on which Bassani relied, was allegedly perpetrated by
Sebosat and Herman. Bassani did not
implicate Mashala as a corporate
entity, other than stating that Mashala is now reaping the rewards
and that in the envisaged damages
action it will feature as a
defendant. From that factual premise, it appears to involve an
enrichment claim. No evidence was placed
before the high court,
indicating what Mashala’s financial position was and which
assets, if any, it had or presently has,
at its disposal.
[18] Fifth,
it is unclear from the papers, following the business rescue process,
whether Mashaba continues to
conduct mining operations. There are no
details about which company now holds a controlling stake in it and
there is no clarity
concerning its financial state, including whether
it has assets and how it is dealing with them. Equally, there is no
clarity or
details concerning Herman’s assets and how he might
be dealing with them.
[19] Sixth,
the difficulty for Bassani in placing reliance on the aforesaid
passage in
Knox D’Arcy
is that there, this Court was
speculating about circumstances in which it might possibly be argued
that the base requirements for
an anti-dissipation interdict might be
relaxed. The possible ‘exceptional’ circumstances were
not identified. Moreover,
it was not for the purposes of that case
necessary for this Court to have engaged in that exercise. There, the
base requirements
for the interdict had not been met and it was
considered unnecessary to take the discussion on exceptional
circumstances any further.
The same applies to
Carsten and Another
v Kullmann and Others.
I hasten to add that I have great
difficulty, in circumstances where the base requirements have not
been met, imagining what such
‘exceptional’ circumstances
might be. It must be borne in mind that the application was premised
on the dissipation
of assets, which in light of the facts set out
above, has not been proved. Simply put, the jurisdictional facts for
the grant of
the remedy sought were conspicuously absent.
[20] Bassani,
as demonstrated above, was not out of the starting stalls in
establishing the right to an interim
interdict. It certainly did not,
for all the reasons aforesaid, establish that it was entitled to an
anti-dissipation interdict
against any of the respondents.
[21] In
the result, I make the following order:
1 The
appeal is dismissed.
2 The
appellant is ordered to pay the respondents’ costs, including
the costs of
two counsel.
SP
MOTHLE
JUDGE
OF APPEAL
APPEARANCES:
For
the appellant: A
J Eyles SC
Instructed
by: Hogan
Lovells,
Inc, Johannesburg
Webbers
Attorneys, Bloemfontein
For
the respondent: N Cassim SC
Instructed
by: Hulley
&
Associates Inc, Johannesburg
Peyper
Attorneys, Bloemfontein.
[1]
Knox
D’Arcy Ltd and Others v Jameson and Others
1996
(4) SA 348 (A); [1996] 3 All SA 669 (A).
[2]
At
372 D-F and at 373F-H. There is a brief reference at 370 J to a
comparable remedy in England, namely a ‘
Mareva
Injunction’,
from the English case of
Mareva
Compania Naviera SA v International Bulkcarriers
SA
[1980] 1 All ER 213
, coupled with a warning that using that
appellation might suggest that English principles are automatically
applicable.
[3]
372
A-C.
[4]
372F-H.
[5]
Carsten
and Another v Kullmann and Others
(49174/2017)
[2018] ZAGPJHC 2 (4 January 2018) at paras 25 and 33.