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[2018] ZAKZDHC 13
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Kaniah v WPC Logistics (Joburg) CC and Others (5794/2016) [2018] ZAKZDHC 13 (9 May 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU–NATAL
LOCAL DIVISION, DURBAN
CASE NO:
5794/2016
In the
matter between:
JAMES
KANIAH
Applicant
And
WPC
LOGISTICS (JOBURG) CC (IN
LIQUIDATION)
First
Respondent
CHAVONNES
BADENHORST ST CLAIR COOPER NO
Second
Respondent
LUKE
BERNARD SAFFY
NO
Third
Respondent
CHENG-MING
CHAO
Fourth
Respondent
DILNAWAAZ
FIRFIREY
Fifth
Respondent
THE
MASTER OF THE HIGH COURT,
DURBAN
Sixth
Respondent
JUDGMENT IN THE APPLICATION FOR LEAVE TO APPEAL
Henriques J:
[1]
This is an application by the fourth and fifth respondents for leave
to appeal to the full bench of this division against the
whole of the
judgment delivered on 13 December 2017. The grounds upon which
the fourth and fifth respondents rely on are
set out in paragraphs 1
to 4 of the application for leave to appeal. In essence the
fourth and fifth respondents submit that
I erred in granting the
applicant the relief he sought, specifically in allowing him to
pursue the action instituted by the second
and third respondents in
their capacity as liquidators against the fourth respondent,
notwithstanding the fact that I found the
second and third
respondents acted bona fide and did not act in a way in which no
reasonable liquidator would have acted.
Legal
position
[2]
Applications for leave to appeal are governed by
ss 16
and
17
of the
Superior Courts Act 10 of 2013
.
Section 17
reads as follows:
‘
(1) Leave to appeal may
only be given where the judge or judges concerned are of the opinion
that—
(
a
) (i) the appeal would
have a reasonable prospect of success; or
(ii) there is some other
compelling reason why the appeal should be heard, including
conflicting judgments on the matter under consideration;
(
b
) the decision
sought on appeal does not fall within the ambit of
section 16(2)
(a)
;
and
(
c
)
where the decision sought to be appealed does not dispose of
all the issues in the case, the appeal would lead to a just
and
prompt resolution of the real issues between the parties.’
[3]
Both the fourth and fifth respondents submit that there are
reasonable prospects of success within the meaning of
section
17(1)(
a
)(i) of the
Superior Courts Act. What
is meant by
reasonable prospects of success has always been defined to mean there
is a reasonable possibility another court might
come to a different
decision.
[1]
[4]
However, with the enactment of
s17
of the
Superior Courts Act, the
test has obtained statutory force. The test to be applied is to
use the word ‘would’ in deciding whether to grant
leave
to appeal – in other words ‘would another court come to a
different decision?’ In the unreported
decision of
The
Mont Chevaux Trust (IT 2012/28) v Tina Goosen & 18 others
LCC
14R/2014 dated 3 November 2014, the Land Claims Court held, albeit
obiter, that the wording of the subsection raised the bar
of the test
that now has to be applied to an application for leave to appeal.
In
Notshokovu v S
(157/15) [2016] zasca 112 (7 September 2016)
at para 2 it was held that an appellant faces a higher and stringent
threshold in
terms of the Act.
[5] In
Acting National Director of Public Prosecution & others v
Democratic Alliance In Re: Democratic Alliance v Acting National
Director
of Public Prosecutions & others
(19577/09) [2016]
ZAGPPHC 489 (24 June 2016), Ledwaba DJP writing for the full
court considered the test as envisaged in
s 17
of the
Superior Courts
Act. At
para 25 of the judgment he dealt with the test set out
in
The
Mont Chevaux Trust
above where Bertelsmann J
held the following:
‘
It is clear that the
threshold for granting leave to appeal against the judgment of a High
Court has been raised in the new Act.
The former test whether
leave to appeal should be granted was a reasonable prospect that
another court might come to a different
conclusion, see
Van
Heerden v Cronwright & others
1985 (2) SA 342
(T) at 343H. The use of the word “would”
in the new statute indicates a measure of certainty that another
court
will differ from the court whose judgment is sought to be
appealed against.’
[6] At
the hearing of the matter Mr Combrinck who appeared for the fourth
and fifth respondents, submitted that there existed a
possibility
that another court ‘might’ come to a different decision.
However, given the test in deciding whether
to grant leave to appeal,
I must be satisfied that another court would come to a different
decision.
[7] In
essence the applicant instituted the application in terms of s 387(4)
of the Companies Act 61 of 1973 (the Act) read with
s 66
of the
Close
Corporations Act 69 of 1984
. The section provides that a person
aggrieved by any act or decision of a liquidator may apply to the
court after notice
and thereupon the court may make such order as it
thinks just. The parties are ad idem that the applicant had
locus standi
to institute the application. The section empowers
the court to make whatever order it thinks just. Such
discretion
is not restricted.
[8]
Although this court found that the second and third respondents did
not act mala fide or in circumstances in which no reasonable
liquidator could have acted, in the exercise of the discretion
afforded by
s 387(4)
, I found it appropriate to allow the applicant
to continue with the action. The reasons for doing so were
dealt with in the
judgment at para 28.
[9] At
para 28 of the judgment I recorded that given the composition of the
membership of the first respondent, the fourth and fifth
respondents
together with the creditors would always have been in a position to
vote against proceeding with the action instituted
against the fourth
respondent and his wife. In addition the only remedy available
to the applicant would be to approach this
court to direct it to make
an order it thinks just. Although I found that the second and
third respondents did not act unreasonably
and acted bona fide, the
only suitable remedy for the applicant would have been to allow him
to proceed with the action provided
a suitable indemnity for costs
was provided.
[10]
Mr Combrinck submitted that once the court had made the finding that
the second and third respondents had not acted mala fide
and not in a
manner no reasonable liquidator would have acted, that was the end of
the enquiry. I disagree. What must also
be borne in mind is
that the second and third respondents indicated that they acted in
accordance with the decision taken at the
meeting and could not act
contrary to same. They, however, indicated to the applicant to
invoke
s 387(4)
and institute an application. The second and third
respondents had no difficulty with this relief.
[11]
By denying the applicant his right to pursue the action and limit him
to the grounds set out in the decisions referred to in
Fargro Ltd
v Godfrey & others
[1986] 3 All ER 279
and
Re: Edennote
Ltd Tottenham Hotspur PLC and others v Ryman and another
[1995] 2
BCLC 248
namely, in circumstances where the liquidators acted mala
fide or unreasonably, or in circumstances in which no reasonable
liquidator
would have acted would in essence have denied the
applicant or a person in his position any form of relief and access
to justice.
[12]
One cannot have regard to the test enunciated in
Fargro
and
Edennote
and limit the enquiry to those two grounds.
Section 387
specifically recognises the interests of members.
As the wording of subsec 4 appears to be wide, and the exercise of
such
discretion is not restricted, I am of the view that there are no
reasonable prospects that another court would come to a different
decision.
[13] I
say this purely based on the particular facts of this matter.
As to the exercise of a discretion and the reluctance
of an appeal
court to interfere with same, I can only refer to the judgment of
Cloete JA in
Naylor & another v Jansen
2007 (1) SA
16
(SCA) para 14 wherein he stated the following:
‘
Where the law has given a
Judge an unfettered discretion, it is not for this Court to lay down
rules which, while purporting to
guide the Judge, will have the
effect only of fettering the discretion. If, therefore, there
are factors which the trial
Court, in the exercise of its discretion,
can and legitimately does decide to take into account so as to reach
a different result,
a Court on appeal is not entitled to interfere –
even although it may or even probably would have given a different
order.
The reason is that the discretion exercised by the
Court’s giving the order is not a “broad”
discretion (or a
“discretion in the wide sense” or a
“discretion loosely so called”) which obliges the Court
of first instance
to have regard to a number of features in coming to
its conclusion, and where a Court of appeal is at liberty to decide
the matter
according to its own view of the merits and to substitute
its decision for the decision of the Court below, simply because it
considers
its conclusion more appropriate. The discretion is a
discretion in the strict or narrow sense (also called a “strong”
or a “true” discretion). In such a case, the power
to interfere on appeal is limited to cases in which it is
found that
the Court vested with the discretion did not exercise the discretion
judicially, which can be done by showing that the
Court of first
instance exercised the power conferred on it capriciously or upon a
wrong principle, or did not bring its unbiased
judgment to bear on
the question or did not act for substantial reasons. Put
differently, an appeal Court will interfere
with the exercise of such
a discretion only where it is shown that
“…
the lower court
had not exercised its discretion judicially, or that it had been
influenced by wrong principles or a misdirection
on the facts, or
that it had reached a decision which in the result could not
reasonably have been made by a court properly directing
itself to all
the relevant facts and principles”.’ (Footnotes
omitted.)
[14]
At the hearing of the matter the further issue which arose is that of
the costs order which I made in the matter. Mr
Bingham who
appeared for the applicant in the main application and Mr Van Rooyen
who appeared for the second and third respondents
(the liquidators)
indicated that should the court not grant leave to appeal in respect
of what they termed the merits, then the
only remaining issue would
be an appeal against costs. They indicated that they have
agreed that the order I granted which
was prepared and submitted by
Mr Van Rooyen on behalf of the second and third respondents, is
ambiguous and contained patent errors.
Mr Bingham indicated
that in terms of the provisions of
Rule 42(1)
of the Rules of Court,
I can, mero motu in the light thereof, amend the order. The
effect of the proposed amendment to the
costs order would not
prejudice the fourth and fifth respondents and would remove any cause
of complaint.
Rule
42(1)
[15]
The relevant portions of
Rule 42(1)
read as follows:
‘
The court may, in
addition to any other powers it may have,
mero
motu
or upon the
application of any party affected, rescind or vary:
…
(
b)
an order or judgment
in which there is an ambiguity, or a patent error or omission, but
only to the extent of such ambiguity, error
or omission;’
[16]
Mr Combrinck opposed the relief and indicated that this court was
functus officio and could not alter or correct the relevant
portions
of the cost order.
[17]
It is a general well-established rule that once a court has
pronounced a final judgment or order, it becomes functus officio.
However, both the Constitutional Court and the Appellate Division
have recognised a number of exceptions to the general rule which
are
specifically catered for in
Rule 42(1)(b)
being that of an ambiguity
or patent error. The subrule applies and can be invoked by the
court either mero motu or upon
the application of any party affected
by such order.
[18]
In light thereof and the exceptions to the general rule, Mr
Combrinck’s submission cannot stand. Both Mr Van Rooyen
and Mr Bingham have indicated that I ought to invoke the provisions
of
Rule 42(1)(b).
This court can do so at their instance
alternatively do so mero motu. I am satisfied that I can and in
consequence
thereof will correct the ambiguity and patent error in
the cost orders to the extent suggested by Mr Bingham and Mr Van
Rooyen
at the hearing.
[19]
In the result, the orders I issue are the following:
(a) The application for leave to appeal is dismissed with costs.
(b) Paragraph 4 of the orders issued in the judgment delivered on 13
December 2017 are varied and are amended to read as follows:
[4] In
relation to the orders in paragraphs 2 and 3 hereinbefore it is
ordered that:
[4.1] no orders as to costs in the pursuance of the action will
influence or prejudice the position of the creditors of the first
respondent in any way;
[4.2] in the event that a costs order is granted against the
liquidators and/or the first respondent in the course of the
pursuance
of the action by the applicant, the liquidators are hereby
directed to levy a contribution in respect of such costs upon the
applicant;
[4.3] upon the levying of any such contribution, the applicant is
directed to make immediate payment thereof and the liquidators
are
hereby authorised to set-off any such costs order against the
contribution to be levied upon the applicant.
_________________________
HENRIQUES
J
Application
heard on :
3
May 2018
Further
documentation to Judge :
7 May 2018:
Judgment
delivered on :
9
May 2018
Counsel
for the applicant :
M Bingham
Instructed
by :
Henwood Britter & Caney
5
th
Floor, 6 Durban Club Place
Durban
Ref 12W)32002/RB Donnache/KG/W027
Email :
rbd@henwoodbritter.co.za
Counsel
for the first respondent :
PJ Combrinck
Instructed
by :
WPC Logistics (Jhb) CC (In Liquidation)
1503 General Building
47/49 Field Street
Corner Field & Smith Streets
Durban
Counsel
for the second and
third
respondents :
RM Van Rooyen
Instructed
by :
Edward Nathan Sonnenberg
1 Richefond Circle
Ridgeside Office Park
Umhlanga, Durban
Email :
Alombard@ensafrica.com
Ref : A Lombard/A Crook/0405151
Counsel
for the fourth
and
fifth respondents :
Instructed
by :
Morris Fuller Williams Inc
1 Knightsbridge
16 Westville Road, Westville
Tel 031 267 7700
Fax 031 266 5990
Email
staylor@morrisfuller.co.za
Ref : Ms S Taylor
Counsel
for the sixth respondent :
Instructed
by :
The Master of the High Court, Durban
4
th
Floor Devonshire Place
DurbanS
[1]
Van Heerden v Cronwright &
others
1985 (2) SA 342
(T)
at 343H.