About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2017
>>
[2017] ZAGPPHC 1264
|
|
De Beer v Von Landsberg and Others (36842/16) [2017] ZAGPPHC 1264 (26 January 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NUMBER: 36842/16
DATE:
26 January 2018
HENDRIK
CHRISTOFEL
DE BEER
Applicant
HEINRICH
VON
LANDSBERG
First Respondent
UNIVERSAL
PULSE TRADING 367 (PTY) LTD
Second Respondent
ALEXIPROX
(PTY) LTD
Third Respondent
JUDGMENT
MABUSEJ:
[1]
This matter conflates two major applications. One is an application
in terms of Rule 30(2) of the Uniform Rules of Court.
Strictly
speaking it was erroneously referred to by the parties as an
application in Rule 30(2) instead of an application in terms
of Rule
30(1). This Rule 30(1) states that:
"A
party to a cause in which an irregular stop has been taken by any
other party may apply to Court to set it aside."
On
the other hand Rule 30(2) deals with the steps that must be followed
before an application in terms of Rule 30(1) can be launched.
It
provides as follows:
"An
application in terms of sub-rule (1) shall be on notice to all the
parties specifying the particulars of the irregularity
or impropriety
alleged, and may be made only if-
(a)
the Applicant has not himself token a further step in the cause
with the knowledge of the irregularity;
(b)
the Applicant has, within ten days of becoming aware of the step,
by written notice afforded his opponent and opportunity of removing
the cause of complaint within ten days;
(c)
the application is delivered within fifteen days after the expiry
of the second period mentioned in paragraph (b) of sub-rule (2
)."
[2]
On the basis of the provisions of the said Rule 30(1), the Applicant
sought, by the Notice of Motion issued by the Registrar
of this Court
on 16 August 2017, against the First and Second Respondents, the
following order:
"1.
An order declaring the combined summons instituted by the Respondents
against the Applicant and Alexiprox (Pty) Ltd, (the
Third
Respondent), dated 12 July 2017 under case number 36842/2016 under an
already existing action with case number 36842/2016
between the
Applicant and the First and Second Respondents) issued on 9 May 2016
an irregular step;
2.
The combined summons issued by the First and Second Respondents
under case number 36842/2016 dated 12 July 2017 is set aside;
3.
The First and Second Respondents are ordered to pay the costs of
this application on the scale as between attorney and client;
4.
Further and/or alternative relief “
[3]
In this application [in terms of Rule 30(1)], the parties are as
follows. The Applicant is Hendrik Christofel de Beer. He is
the
plaintiff in an action he himself has instituted against the First
and Second Respondents. The First and Second Respondents
are in that
particular action the Applicant has instituted, the First and Second
Defendants respectively. The case is number 36842/2016.
[4]
The First Respondent in this application, Heinrich Von Landsberg, is
an adult businessman and the director of companies with
his address
located at 282 Maggs Street, Waltloo, Pretoria. The Second
Respondent, Universal Pulse Trading (Pty) Ltd, is a company
with
limited liability with its place of business located at 282 Maggs
Street, Waltloo, Pretoria. The Third Respondent, Alexiprox
(Pty) Ltd,
is a company with limited liability. Its registered office is located
at 25 Fish Eagle Street, Silver Lakes Estate,
Pretoria. The Applicant
' s son and wife are the directors of the Third Respondent. The Third
Respondent has neither filed any
papers nor is it represented in this
application.
[5]
The Applicant, in his capacity as the Plaintiff, instituted an action
against the First and Second Respondents as the First
and Second
Defendants respectively under case number 36842/2016 on 9 May 2016.
In the course of the said action, the Applicant,
as the Plaintiff,
applied for summary judgment. Based on the opposing affidavit of the
First Respondent as the First Defendant,
the First Respondent and the
Second Respondent opposed the said application for summary
judgment. On 26 July 2016 the Court
granted summary judgment in
favour of the Applicant against the First and Second Respondents, the
one paying and the other to be
absolved, in the amount of
R2,989,208.00 plus interest and costs.
[6]
The First Respondent had made the following allegations in the said
opposing affidavit :
"41.
In the weeks that followed I approached Absa Bank and Nedbank and
negotiated substantially reduced settlements with both
banks. By way
of example, Absa Bank alleged to have a claim in the amount of R8,5
million over the Willow Acres property. I purchased
this claim for a
cash amount of R2,5 million. The saving generated through this
transaction exceeded R6 million.
42.
Absa Bank claimed payment in an amount of approximately R15 million
related to the Plaintiff's property in Silver Lakes Golf
Estate. I
have settled this claim with Absa's Attorney in a cash amount of R4.5
million. The saving generated through this transaction
exceeded R10.5
million.
46.
The complaints concerning commissions paid third parties by the
Second Defendant is also misplaced. Firstly, I had exclusive
control
over the affairs of the Second Defendant and did not require the
Plaintiff's approval to make payment of legitimately owed
commissions. Secondly, all commissions were paid on the strength of
valid invoices received by the Second De fendant."
[7]
On 28 July 2016, the Applicant delivered a Notice in terms of Rule
35(12) on the First and Second Respondents. By this Notice
the
Applicant requested the First and Second Respondents to produce for
inspection, within five (5) days of service of the said
Notice,
certain documents referred to in the said Opposing Affidavit. The
said documents were:
7.1
copies of all settlement and purchase agreements referred to in
paragraphs 41 and 42 of the said Opposing Affidavit; and,
7.2
copies of all invoices payable to third parties received by the
Second Respondent and documents pertaining to the payment thereof
referred to in paragraph 46 of the said Opposing Affidavit.
[8]
8.1
Notwithstanding the effluxion of a period of five days from 28 July
2016, the First and Second Respondents failed to com ply
with the
Applicant's Notice in terms of Rule 35(12). On 10 August 2016 the
Applicant served the First and Second Respondents with
a Notice in
terms of Rule 30A. In this Notice, the Applicant required the First
and Second Respondents to comply with his Notice
in terms of Rule
35(12} within 10 days from the date of service of the said Notice in
terms of Rule 30A.
8.2
In addition, the said Rule 30A Notice warned the First and Second
Respondents that should they fail to comply with the Applicant's
Notice in terms of Rule 35(12), within the period referred to in the
Rule 30A Notice, the Applicant would on Notice apply to compel
the
First and Second Respondents to comply with Rule 35(4) Notice or for
the dismissal of the First and Second Respondents' defence
to the
Applicant's claim.
8.3
Still the First and Second Respondents failed to heed the Applicant's
Notice in terms of Rule 30A. Consequently, the Applicant
approached
the Court to enforce compliance by the First and Second Respondents
with the Applicant's Rule 35(12) Notice. The Court,
per Adams AJ,
granted the Applicant the following order on 30 September 2016:
"1.
The Respondents are ordered to comply with the Applicant's Notice in
terms of Rule
35(12) dated 28 July
2016 and the Applicant's subsequent Notice in terms of Rule 30A dated
10 August 2016 within
7
days
from the date of this order."
[9]
On 23 February 2017 the First and Second Respondent s approached the
Court with an application for leave to appeal the granting
of the
summary judgment in favour of the Applicant. Judge Kollapen refused
the application for leave to appeal. After the Court
had dismissed
the application for leave to appeal, the First and Second Respondents
then approached the Supreme Court of Appeal
with a petition for leave
to appeal against the said summary judgment. On 15 May 2017 the
Supreme Court of Appeal dismissed the
said petition.
[10]
The First and Second Respondents failed to comply with the order of
Adams AJ. This prompted the Applicant to approach the Court
with
another application to compel the First and Second Respondents to
comply. On 19 May 2016 Mali J granted the Applicant the
following
order, among others:
"1.
The Respondents are hereby ordered to comply with the order of this
Court granted on 30 September 2016 under case number
26842/16 within
7
days from the date of this
order by making the documents referred to the Plaintiff's Rule 35(2)
Notice dated 28 July 2016 available
for inspection and allow the
Plaintiff to make copies thereof
2
….
3.
…
4.
The Respondents are ordered to pay the Applicant's wasted costs for
19 May 2017 on opposed attorney and client scale.”
[11]
Against the aforegoing background, on 12 July 2017, the First and
Second Respondents instituted an action by way of a combined
summons
against the Applicant and the Third Respondent. The said action was
instituted under case number 36842/ 2016. In the said
action, the
First Plaintiff is Heinrich van Landsberg, the current First
Respondent, Universal Pulse Trading 367 (Pty) Ltd, the
current Second
Respondent, is the Second Plaintiff. The Applicant, in the instant
application, is the First Defendant in that action
and the Third
Respondent in this application is the Second Defendant in that
action. It is this combined summons that is the target
of this
application .
[12]
For the following three reasons, the Applicant was unhappy with the
steps taken by the First and Second Respondents. He thereupon
took
the necessary steps set forth in Rule 30(2).
[12.1]
The Applicant complains that the First and Second Respondents have
instituted an action by way of a combined summons
under case number
36842/2016 against the Applicant and Third Respondent. He complains,
furthermore, that the summons was issued
under an exist ing case
number for the purpose of rescinding and setting aside the summary
judgment and the Court orders granted
against he First and Second
Respondents dated 26 July 2016, 30 September 2016 and 19 May 2017.
[12.2]
The second complaint that the Applicant raised against the combined
summons issued by the First and Second Respondents
is that a copy of
the combined summons with case number 36842/2016 dated 12 January
2017 was not served by the sheriff on the Applicant
or the Third
Respondent as required by Rule 17(1) of the Uniform Rules of Court .
Instead a copy of the said summons was merely
emailed by the First
and Second Respondent s' attorneys to the Applicant's attorneys.
[12.3]
Thirdly and lastly, the institution of the second action under the
already existing action and the citation in the
same case of the
Third Respondent as a Second Defendant constitutes, according to the
Applicant, a highly irregular step which
is not in compliance with
the Rules of Court. That step; so complained the Applicant further,
amounts to an abuse of the Court
process and is aimed solely at
emasculating the Applicant's judgment.
[13]
In their answering affidavits, the First and Second Respondents,
having taken note of the Court orders, submitted that compliance
with
such Court orders was subject to the outcome of this action that has
been instituted and that because of the allegations contained
in its
summons the effect of such order has been suspended. Accordingly, the
First and Second Respondents argue that this Court
should take the al
legations they have raised in their quest to set aside the summary
judgment granted by Kollapen J and confirmed
by the Supreme Court of
Appeal and decide on such allegations. On the basis of such
allegations they apply that this Court should
dismiss the Applicant's
application with costs.
[14]
The First and Second Respondents' contention is as follows . On 9 May
2016 the Applicant instituted action under case number
36842/2016
against the First Respondent and the Second Respondent for certain
relief pertaining to an alleged joint venture agreement
that was
allegedly entered into between them, on one hand, and the Applicant,
on the other. The relief in claim 1 of the said action
was for
payment of R85,431,721.00 together with interest thereon and in
respect of claim 2 an order was prayed for a full account
of the
joint venture concluded between the parties, supported by vouchers
and source documents for the period 1 November 2012 to
date of this
order as well as the debatement of the account and payment of
whatever amount may be due and owing. The Applicant
brought an
application for summary judgment for part payment of the amount
claimed.
[15]
Mr de Beer, the Applicant herein, in the affidavit in support of the
application for summary judgment, acted in his own name
and there was
no reference to any cession of any right, title and interest for him
in respect of the joint venture agreement or
the proceeds of the
joint venture agreement at all in the said affidavit: The relevant
affidavit was signed on 8 June 2016. Eventually
summary judgment was
granted on 28 July 2016. Certain interlocutory orders were also
granted against the First and Second Respondents
on 30 September 2016
and 19 May 2017.
[16]
In an application brought by the Applicant against Absa Bank Ltd
under case number 44498/ 2017 the deponent, namely the same
De Beer,
had stated the following in paragraph 45 of the founding affidavit in
that application:
"I
now deal with the cession of my right , title and interest in and to
my decision against Von Landsberg and Universal Pulse
Trading
Alexiprox
... “
"...
I concluded, on or about the middle of January 2014 an oral
agreement with the respondent, Alexiprox (Pty) Ltd, of which entity
my wife Lorraine is the sole shareholder and the director and which
company is the registered owner of available and unencumbered
immovable property situated at Fancourt Golf Estate, the gist of
which agreement was of Alexiprox agreed to fund the litigation
against Von Landsberg and Universal Pulse arising from the JV
agreement and that in return I ceded and made over in favour of
Alexiprox the proceeds of my claims against Von Landsberg and
Universal Pulse arising from the JV agreement and that any litigation
against Von Landsberg and Universal Pulse and as anticipated would be
conducted in my name."
It
appeared to the First and Second Respondents that the same cession of
agreement of the right, title and interest in the claims
of the
Applicant, the agreement, was concluded on 3 March 2017 by way of
deed of cession dated 3 March 2017 which is in writing
and which was
annexed as Annexure 'HE16' to the founding affidavit of the Absa
application. According to the First and Second Respondents
this
material fact was never disclosed to the Court
a quo
and the
Supreme Court of Appeal in the summary judgment proceedings nor when
the interlocutory orders were applied for. This discovery
was made by
the First and Second Respondents long after the application for leave
to appeal was refused and the petition for leave
to appeal against
the summary judgment was refused by the Supreme Court of Appeal.
[17]
According to the allegations the oral cession that took place in 2014
referred to as well as the written cession agreement
Annexure 'AB16'
to the founding affidavit of the Absa application, the Plaintiff's
right, title and interest in and to his claims
as cedent against the
First and Second Respondents herein arising from the joint venture
agreement and in respect of the proceedings
between the Applicant and
the First and Second Respondents in the Pretoria High Court case
number 30742/2016 and 36842/2016 have
been ceded, assigned, t
ransferred and made over to the cessionary namely Alexiprox (Pty)
Ltd. This took place in January 2014.
[18]
On the strength of the aforegoing it is submitted by the First and
Second Respondents that there was a clear final cession,
a complete
cession and not a cession in
securitatum debiti .
According to
them the Applicant 's right, title and interest in the action and the
proceeds of the joint venture agreement were
therefore. fully and
completely ceded in 2014 to the Third Respondent. They rely on the
preamble of a written deed of cession of
2014. According to them the
effect thereof, notwithstanding any agreement to the contrary between
the cedent and the cessionary,
was that Alexiprox (Pty) Ltd should
have become a party to the litigation proceedings. It should have
been substituted as the Plaintiff
in the place of the current
Plaintiff as the Plaintiff in the action and only Alexiprox (Pty) Ltd
would have been entitled to proceed
with the litigation proceedings.
Only Alexiprox (Pty) Ltd would have been entitled to apply for
summary judgment or for any other
Court orders. Accordingly, the
Applicant, so they contend, has no
locus standi
in the matter.
The Applicant was never entitled as the Plaintiff to proceed with the
main action and litigation and most importantly
he was never entitled
to apply for summary judgment and to obtain judgment as referred to
above against the First and Second Respondents.
The fact and
existence of the 2014 cession was never disclosed to the first and
Second Defendants, their attorneys and counsel,
nor to the High Court
and the Supreme Court of Appeal during the proceedings pertaining to
the Applicant's applications for summary
judgment and interlocutory
orders. This, according to the First and Second Respondents,
constituted a fraud upon the Court which
gives rise to a right that
the First and Second Respondents now have, in terms of the common
law, to seek rescission and setting
aside of the summary judgment
that was obtained by the Applicant as well as the interlocutory
orders.
[19]
The First and Second Respondents contend that it was clear from the
fact that the intention of the Applicant and the Third
Respondent was
to cede the right, title and interest in the claim and such a finding
can be made on the probabilities of the facts
and the evidence. That
means that the Applicant never had
locus standi
when the main
action herein was instituted. Cession of a right that will be
enforced only in the future is of full force and effect
immediately
and that includes the right to proceed with the action. The
cessionary is therefore the party thereto to enforce such
a right
such as the bank with a cession of debt. The cessionary is Alexiprox
(Pty) Ltd . The re fore, it follows according to the
First and Second
Respondents, that if the right, title and interest were ceded, the
Third Respondent had the right to institute
action; that De Beer
could not in law act as agent for the cessionary and did not obtain
locus standi
in the main action. On the basis of the
aforegoing the First and Second Respondents have applied for the
dismissal, with costs,
of the application on attorney and client
scale.
[20]
It is of paramount importance to point out that with regard to the
Applicant's allegations as contained in the application
in terms of
Rule 30(1 ), apart from raising issues that relate entirely to the
summary judgment, all that the First and Second
Respondents could say
was to submit that compliance with the Court orders that they failed
to comply with, all such Court orders
were subject to the outcome of
this action that has been instituted by them and that the effect of
such Court orders have been
suspended.
[21]
The question now is was the institution by the First and Second
Respondents of an action against the Applicant and the Third
Respondent dated 12 July 2017 under case number 36842/2016 under an
existing action between the Applicant and the First and Second
Respondents an irregular step? This question may be answered by
breaking the whole question into segments.
[22]
INSTITUTION OF COMBINED SUMMONS
Any
person who requires, before the Court out of which a civil summons is
issued, the appearance of any person against whom relief
ls sought or
who is interested in resisting the grant of such relief has an
unalienable right to issue such a civil summons. There
are two
classes of persons who are involved here and who may be affected.
The first of those two classes of persons is the
person against whom
relief is sought. This can be either the actual Defendant or
Respondent to an application. The second class
of such persons are
persons who are interested in resisting the grant of the relief, in
other words, who must show cause why the
relief desired should not be
granted.
[23]
The choice as to the cause of action, the relief sought and,
furthermore, who the Defendant or Respondent should be lies entirely
with the person who seeks the relief. Therefore, the First and Second
Respondents have the unalienable right to issue their civil
actions
commencing with a combined summons on and/or a Notice of Motion both
of which have the object of demanding the appearance
in Court of the
Applicant. The Applicant can therefore not quarrel with the First and
Second Respondents for issuing the summons
as they did.
[24]
It is accordingly open to the Applicant and the Third Respondent to
raise any defence they deem appropriate against the First
and Second
Respondents' claim. It is of crucial import ance to point out that in
their combined summons, the First and Second Respondents
seek the
following relief:
"
1.
That the summary judgment order that was granted by the above
Honourable Court in favour of the First Defendant against the First
and Second Plaintiffs dated 29 October 2016 and under case number
36842/2016 annexed hereto as Annexure 'NS' be rescinded and set
aside
.
2.
the interlocutory order that was granted by the above Honourable
Court on 30 September 2016 as well as the subsequent interlocutory
order granted on 19 May 2017 under case number 36842/2016 be
rescinded and set aside."
[25]
According to the particulars of claim, the First and Second
Respondents seek the rescission of the said summary judgment on
common law grounds. That being the case, the Applicant contend that
the First and Second Respondents should not have, in their
desire to
rescind the summary judgment, issued the summons under the same case
number as the case number under which the summary
judgment was
granted. The Applicant refers to steps taken by the First and Second
Respondents to have the summary judgment rescinded
and set aside as
being irregular.
[26]
A perusal of the following two authorities: Santos Erec v Cheque
Discounting Co (Pty) Ltd 1986 (4) 752 (W) and Motor Marine
(Edms) Bpk
v Thermotron 1985 (2) 127 (SECLD) shows that the principle of the law
set out in those authorities and in many others
is against the
Applicant. Both cases support the First and Second Respondents in
that they both hold the view that a litigant who
seeks, under common
law, to have a judgment rescinded on the basis of fraudulent
misrepresentation, should do so by way of an action
. In Santos the
Court , having turned to the point that relief should have been
sought by way of action, stated at page 6753H -
I the following:
"As
a starting point to the discussion that follows, it can, I think, be
stated that it is well established, that subject to
special
exceptions which are not presently relevant, a person may in general
claim relief in this Court either by way of action
or motion. There
is no reason in principle why in the case such as the present, a
litigant is bound to proceed by way of action.
There are however
authorities which indicate a different approach in cases such as the
present. I shall discuss them in turn."
In
Santos the court recognised two propitious procedures that may be
followed to rescind a judgment on the grounds of common law.
The one
such procedure is by way of an action, as currently followed by the
First and second Respondents, and the other procedure
is by way of
motion proceedings.
[27]
Then the Court referred to the case of Munshi v Naicker
1978 (1) SA
1093
D, in which the court had to deal with the setting aside of a
provisional judgment, and quoted with approval the following
paragraph
from page 1097 B thereof:
"The
remaining basis upon which the Applicant can bring such a case is
under the common law but there are authorities which
suggest that
such a case the procedure should be by way of action and not by way
of application. (see,eg Athanassiou v Schultz
1956 (4) 357 (W) at
360£-F: Dreary v Dreary 1971(1) SA 227(C) at 2308; Bristow's
case supra at
507,
and Hardroad's case supra at 579H"
[27.1]
In The Civil Practice of The Superior Courts In South Africa, by Van
Winsen et al, Second Edition, page 427, the learned
authors state
that:
"Where
a judgment is sought to be set aside on ground of fraud or
misrepresentation the proper procedure is by way of an action
and not
by way of motion. Where rescissio:7 is sought on one of the grounds
set out in rule 42 then the party desiring relief shall
make
application therefor upon notice to all the parties whose interests
may be affected by any variation sought."
[25.2]
In Dreary v Dreary 1971(1) SA 227 (C) Baker AJ said the following at
230D:
"Had
the Applicant continued to rely upon a fraudulent representation
which induced the Court to grant summary judgment against
him in the
first instance, he would have had to proceed by way of action, to
have the judgment set aside."
And
the said Judge continued as follows:
"Where
a judgment is sought to be set aside on a ground of fraud or
misrepresentation, the proper procedure is by way of action
and not
by way of notice of motion. In cases where the judgment of the Court
has been sought to be set aside on the ground of discovery
of new
documents, or justus error, the general practice appears to be that
the matter should be brought before the Court by way
of action. This
is by no means the invariable practice, and depending on the
circumstances of the case
-
and also possibly the
question of whether the matter is capable of decision on affidavit
-
the Court has
entertained application s for relief on motion.”
[27.3]
In Bristow v Hill 1975 {2) SA SO(N) Kriek J had to deal with an
application for rescission of a judgment. At 547C he
had the
following to say:
"There
are two obstacles in the Applicant's way. In the first place,
assuming as was done in Seme v Incorporated Low Society
supra and
Vista Estates (Pty) Ltd v Animal Breeders Co-op Ltd (supra), that the
judgment of 3 July 1974 was a default judgment
in the sense
contemplated in Shilderley's case, the procedure for obtaining
restitutio is by way of action, not by way of motion
proceedings. “
[27.4]
Finally in Santos Eloff J had the following to say at page 755 C-G:
"Quite
recently the decision in the case of Motor Marine (Edms) Bpk v
Thermotron
1985 (2) SA 127
{SECLD) was given. The very point now
under discussion had to be dealt with . Mullins J discussed on
unreported decision of the
full bench of that Division, this
McPherson v Trust Bank of Africa Ltd (Case number
27/77,
a
decision by Solomon AJ, with Kannemayer J and Howie AJ concurring.
The view taken by the full bench was that only procedure by
way of
action is competent in a case such as the present. Mullins J doubted
the correctness of that decision but he was bound by
it. “
[28]
The authorities cited above demonstrate the principle that where a
party wishes to challenge any judgment on the grounds of
common law
or in particular of fraudulent misrepresentation the competent
procedure to follow is by way of action. Therefore the
conclusion I
have arrived at is that, based on the authorities referred to in
paragraph [25] above, the procedure followed by the
First and Second
Respondents in issuing the combined summons, which the Applicant
wishes to have set aside on the ground that it
is an irregular step,
in order to set aside, on the grounds of common law or fraudulent
misrepresentation, the summary judgment
granted in favour of the
Applicant on 29 October 2016 is a competent one. Contrary to the view
held by the Applicant such a combined
summons is not an irregular
step.
[29]
Concerning the joining of the Third Respondent as a party in the
combined summons issued by the First and Second Respondents,
it is
only fair and proper if the Third Respondent itself takes steps to
defend its position. An argument propounded by the
Applicant on
this joinder was that it was improper for the First and Second
Respondents to join the Third Respondent in the application
to set
aside the summary judgment in circumstances in which the Third
Respondent was not one of the parties to the proceedings
that led to
such a summary judgment. I did not find in the papers before me any
indication that the Applicant had been mandated
in this action or in
this application to act on behalf of the Third Respondent. I pointed
out somewhere above that the Third Respondent
has not filed any
papers.
Accordingly,
it goes without saying that the application for the relief set out in
prayers 1 and 2 of the Notice of Motion cannot
succeed.
[30]
THE SECOND APPLICATION
The
second application that the Court dealt with on 10 January 2018 was a
contempt application in which, initially, the Applicant
had sought a
declaration that the First and Second Respondent s are in contempt of
three Court orders under case number 36842/2016
and following the
granting of such a declarator that the First Respondent be sent to
prison for contempt and, finally, to strike
out the First and Second
Respondents' defence and grant judgment in favour of the Applicant.
[31]
The application referred to in paragraph [28]
supra
arose from
the failure of the First and Second Respondents to comply with the
Applicant' s Rule 35(12) and Rule 30A Notices within
seven days of
the granting of such orders respectively . It was launched on 8
February 2017. On 23 February 2017 the First and
Second Respondents
filed their Notice of Appearance to oppose the contempt of court
Application but, however, failed to file, within
the allocated time
period, their answering affidavit. As a consequence of the said
failure, the said application was placed on
the unopposed roll for
hearing on 19 March 2017.
[32]
On 19 May 2017 a Consent Order was granted. The Court ordered the
First and Second Respondents to comply with the Applicant's
Rule
35(12) and Rule 30(A) Notices and to deliver their answering
affidavit within seven days of 19 May 2017. A contempt of court
application was, for the aforegoing reason, postponed
sine die.
[33]
On 21 September 2017, after hearing the parties' legal
representatives and at the case management hearing, I issued the
following
directive by agreement between the parties:
"1.
With reference to the Interlocutory Application in terms Rule 30(2)
the following directives are made:
1.1
the Defendants are to file their answering affidavit on or before
the close of business on Tuesday, 26 September 2017;
1.2
the Plaintiff to file its replying affidavit, if any, on or before
the close of business on Friday, 29 September 2017;
1.3
the Plaintiff is to file its Heads Of Argument on or before the
close of business on Friday, 13 October 2017.
1.4
the Defendants are to file their Heads of Argument by the close of
business on or before Friday, 27 October 2017;
1.5
thereafter, the parties shall be entitled to approach Judge
Mabuse for the allocation of a date for the hearing of the
Interlocutory
Application.
2.
The Defendants undertake to comply with the Plaintiff's Rule 35(
12 ) Notice dated 28 July 2016 on or before the close of business
on
Friday, 27 October 2017.
3.
.
The Defendants undertake to comply with the Court orders dated 30
September 2016 and 19 May 2017 on or before the close of business
on
Friday, 2
7
October 2017.
4.
The Defendants undertake to comply with the Plaintiff's request
for further particulars for trail dated 20 September 2017 on or
before the close of business on Friday, 2
7
October 2017.
5.
The Defendants undertake to comply with the Plaintiff's Notice in
terms of Rule 35(3) dated 21 September 2017 on or before the close
of
business on Friday, 27 October 2017.
6.
The adjudication of the Defendant's Special Plea will in the
interim stand over for trial by Court."
[34]
On 31 October 2017 the Applicant delivered an application to file a
supplementary affidavit to his founding affidavit in respect
of the
contempt of Court application. He also delivered a Notice Of
Intention To Amend his Notice of Motion in respect of the application
for contempt of court and the application to Strike Out the First and
Second Respondents' defence. The application to deliver a
supplementary affidavit was granted unopposed on 10 January 2018. As
the First and Second Respondent s had not objected to the
Applicant's
contemplated amendment of the Notice of Motion, on 15 November 2017
the Applicant delivered the amended pages of the
Notice of Motion. In
the amended Notice of Motion the Applicant had sought the following
relief:
"1.
An order declaring the Respondents to be in contempt of court order
issued out of this Court on 30 September 2016 by the
Honourable
Acting Judge Adams under case number 36842/2016;
2.
that the First Respondent be committed to prison for a period of
12 (twelve) months, or such period as the Court deems meet;
3.
striking out the Defendant's/Respondent's defence to Claim 1 and 2
of the Applicant's claim set out in the Respondent's plea dated
16
January 2017 (as amended on 28 August 2017);
4.
following the granting of prayer 3 supra had judgment be granted
in favour of the Applicant in the proceedings with case number
36842/2016 and that the Respondent be ordered to pay, jointly and
severally, the one paying, the other to be absolved, the amount
of
R97 ,842,513.00 (ninety seven million, eight hundred and forty two
thousand, five hundred and thirteen Rand) plus interest thereon
at
the rate of 9.9% per annum calculated from 25 June 2014 to date of
payment plus costs of the action on attorney and client scale;
5.
that the Respondents , jointly and severally, the one paying the
other to be absolved, pay the costs of this application on an
attorney
and client scale.”
[35]
Contrary to clause 1.1 of the said directive, the First and Second
Respondents only delivered their answering affidavit on
8 January
2018, three months and a few days late. Although the Applicant
delivered its replying affidavit on 8 January 2018, the
same day on
which the answering affidavit was delivered by his attorneys, it was
late, all because of the First and Second Respondents
failure to
deliver their papers in accordance with the timeline set out in my
directives. According to the directives, the said
replying affidavit
was supposed to have been delivered on or before 29 September 2017.
Because primarily of the undue delay caused
by the First and Second
Respondents' conduct, the parties' Heads of Argument were also filed
late in contravention of clause 1.3
and clause 1.5 of the directives.
[36]
APPLICATION FOR CONDONATION FOR THE LATE FILING OF THE ANSWERING
AFFIDAVIT
The
First and Second Respondents' answering affidavit contained an
application for condonation, without any notice of motion, for
the
late filing of the answering affidavit. The first Respondent made the
following allegations in the answering affidavit :
''7.
From the onset I deny that the non-compliance with the order
of the Court was wilful and ma/a fide for reasons set out in this
Affidavit.
8.
I further strongly deny any intent to defeat the course of justice ."
The
First and Second Respondents were aware that, for having failed to
deliver their answering affidavit in accordance with the
Court orders
and my directives, they were obliged to make an application for
condonation of the late filing of their answering
affidavit.
[37]
In the said application for condonation the First Respondent
explained that he was faced with logistical constraints in terms
of
financing legal costs. He continued and stated that it was the
logical constraints of financial legal costs that contributed
to the
late delivery of the answering affidavit. This statement speaks for
itself and needs no further interpretation. Then in
paragraph (17) of
the answering affidavit he explains how such financial constraints
became a problem and what the attorneys did.
He stated that:
“
The
legal fee problem became such a problem due to the high amount the
Defendants were in arrears in that our attorney of record
notified me
on or about 25 September 2017 that whilst his firm is out of pocket
for legal fees and counsel cost no further work
can be done on the
file."
[38]
He states furthermore that because of the history and complexity of
the matter, he found it practically impossible to replace
his
withdrawn legal team with a new one. He only managed on 14 September
2017 to settle his legal team's fees. While he concedes
the late
delivery of the Affidavit he contends that such late delivery will
not delay the proceedings. I disagree. Progress in
the matter has
already been delayed. Furthermore, he submits that the granting of
the Condonation Application will not prejudice
the Applicant in any
manner that cannot be compensated by an order of costs. He tenders to
pay the costs of this application for
condonation and other costs
caused by his delay.
[39]
The Applicant raised the following four complaints against the
answering affidavit, that:
[39.1]
although in terms of the Court order and the directives issued by
consent between the parties on 21 September 2017 the First
and Second
Respondents had been ordered to deliver their answering affidavit on
or before 27 October 2017, the said Respondents
failed to do so and
only did so on 22 December 2017 and, even then, only after the
Applicant's contempt application had been re-enrolled
for hearing.
[39.2]
the Respondents' answering affidavit was irregular as it was
delivered seven months from the date of the order of Judge Mali
(not
Adams) dated 19 May 2017 and some 38 court days from the Court 's
directive of 21September 2017;
[39.3]
lack of funds does not constitute good cause and was devoid of any
truth;
[39.4]
that the application for condonation is irregular as it was not
brought by way of motion proceedings, i.e .it was not accompanied
by
a notice of motion setting out the relief the First and Second
Respondents sought.
[40]
The complaints raised in paragraphs [39.1] and [39.2] have, in my
view, been dealt with in the application for condonation.
I will deal
with them on that basis. It is the complaints raised in paragraphs
[39.3] and [39.4]
supra
that warrant further consideration.
[40.1]
The Respondents lacked funds
The
fact that the First Respondent lacked funds did not prevent him from
complying with the Court order without the assistance of
his legal
team. He did not state that he was unable to do so. Secondly, he did
not ask the other side for indulgence. This he could
have done
without the assistance of his legal team. I therefore conclude that
lack of funds did not constitute a good excuse for
failing to comply
with the Court order .
[40.2]
The application for condonation was not brought bit way of motion
proceedings
This
complaint by the Applicant that the First and Second Respondents'
application for condonation was not brought by way of motion
proceedings seems to lack merit. This is so because in practice
condonation is usually sought on notice. Furthermore, it can also
be
sought from the bar in circumstances where the objection is technical
and the other party will not suffer any prejudice. In
regard to the
First and Second Respondents' failure to launch their application by
way of mot ion proceedings, in other words,
a notice of motion
supported by an affidavit, I take the approach set out in McGill v
Vlakplaats Brickworks Pty Ltd 1981(1) SA
637 [WLD], 643 D, where the
Court, in dealing with what was perceived to be a summons that did
not comply with the Rules of Court
in certain respects, stated that:
"The
objection is of a highly technical nature and the Defendant has not
suffered any
prejudice as a result
of such imperfect procedure. In these circumstances, and relying on
the principles enunciated in the following
cases, in exercise of my
discretion, I am of the opinion that the irregularity in relation to
the summons should be condoned without
enquiring a substantive
application for such relief
Wiehahn Konstruksie Toerusting
Maatskappy Edm s Bpk v Potgieter 197 4 (3) SA 191 [T] at 203; Trans
Africa Insurance Co Ltd v Maluleka
1956 (2) SA 273 at 278 F."
[40.3]
According to the aforegoing authorities the Court must look at two
aspects, firstly, the nature of the default and, secondly,
whether
the other party stands to suffer any prejudice. If the failure to
comply with the Rules is of a highly technical nature
and, secondly,
the other side will not suffer any prejudice the failure to comply
with the Rules should be condoned.
[40.4]
In casu, the Applicant has raised a complaint, and I must emphasize
that it is valid, a complaint that the First and Second
Respondents
have failed to bring an application for condonation by way of motion
proceedings. The Applicant has unfortunately not
produced any
evidence to prove that such failure by the said First and Second
Respondents, which cannot be made good by an order
of costs, has
prejudiced him. Accordingly, I hereby condone the First and Second
Repondents' failure to bring the application .for
condonation by way
of motion proceedings.
[41]
Does the affidavit in support of condonation meet the
requirements?
For
this Court to exercise its discretion in favour of the First and
Second Respondents, they must, in their application for condonation,
satisfy the following two requirements:
[41.1]
firstly, they should file an affidavit, as they have done, in which
they satisfactorily explain their delay in complying
with the Court
orders and directives. It is in this affidavit that the First and
Second Respondents must at least furnish the Court
with an
explanation of why they failed to comply with the Court orders
sufficiently to enable the Court to understand how it really
came
about. Such an explanation will enable the Court to assess the
conduct and motives of the First and Second Respondents.
[41.2]
secondly, they must satisfy the Court that they have a
bona fide
defence. Both in respect of this requirement and the requirement
referred to in paragraph [40.1]
supra
I rely on the following
excerpt from Ford v Groenewald
1977 (4) SA 224
[TPA], 225 G-H:
"Tog
blyk dit uit die gewysdes (en ek maak weereens stoat op die
laasgenoemde uitspraak) dot door twee hoofvereistes bestaan
waaraan
voldoen moet word in hierdie soort van aansoek. Eerstens moet 'n
applikant wot die Hof vir sodanige
Toeskietlikheid
nader, 'n redelike verduideliking onder eed voorle vir sy
verontagsaming van die Hof reels. Tweedens, moet sy beedigde
verklaring aantoon dot hy 'n bonafide verweer teen die aksie het. Wat
die eerste vereiste betref moet 'n verduideliking verstrek
word wat
genoegsaam volledig is om die Hof te loot vestaan hoe die verstek
eintlik ontstaan het en
om
die applikant se optrede en motiewe
te oorweeg; (Silber v Ozen Wholesalesr Pty Ltd
1954 (2) SA 345
[AA]).
Wat die tweede vereiste betref wil ek dit volgende meld. In Swarts v
Minister of Justice 1942 [TPA] 210 , is dit beslis
dat dit voldoende
is as die applikant onder eed verklaar dot hy 'n
bona fide
verweer het en dat dit onnodig is
om
die aard van sulke
verweer te openbaar."
[41.3]
I am satisfied that the First and Second Respondents have satisfied
the second requirement set out in paragraph [41.2]. I
need therefore
not be detained by this requirement any longer that is necessary.
[41.4]
It is the first requirement that needs consideration.
41.4.1
On 30 September 2016 the Court ordered the Respondents to comply with
the Applicant's Notice in terms of Rule 35(12) dated
28 July 2016 and
the Applicant's subsequent Notice in terms of Rule 30A dated 10
August 2016 within seven days from the date of
the order. It is not
in dispute that the First and Second Respondents failed to comply
with the said Court order within a period
of seven days from 30
September 2016 nor is it in dispute that, even for a very long period
thereafter up to the day on which they
received a letter from their
attorneys in which such attorneys informed them that they would not
act for them any longer due to
non-payment of fees, the First and
Second Respondents still failed to comply with the said Court order.
In the circumstances it
behoved the First and the Second Respondents
to give this Court a satisfactory explanation for their default to
enable it to understand
how it really came about that they should
fail for so long to comply with the Court order. They have failed to
do so. The Court
is therefore unable to determine whether such
failure result ed from their recklessness or their intentional
disregard of the Court
Rules. Therefore the Court is unable to come
to their assistance.
[42]
Mr. Da Silva referred the Court to the following authority in support
of his submission that the First and Second Respondents
were in
contempt of the Court order. Fakie N.O. v CC11 Systems Pty Ltd
[2006] ZASCA 52
;
2006
(4) SA 326
[SCA] where at paragraph 42 the Court had the following to
say:
“
To
sum up:
(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 motion court application
adapted to Constitutional requirements;
(b)
Respondent in such proceedings is not an 'accused person', but is
entitled to analogous protections as are appropriate to motion
proceedings;
(c)
In particular, the Applicant must prove the requisites for
contempt (the order); service or notice; non-compliance; and
wilfulness
and mala fides beyond reasonable doubt;
(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 ma/a fides: should the Respondent fail to
advance evidence that establishes a reasonable doubt as to
whether
the non compliance was wilful and ma/a fide, contempt will have been
established beyond reasonable doubt;
(e)
A declaratory and other appropriate remedies remain available to a
civil applicant on proof on a balance of probabilities.”
[43]
I have come to the conclusion that the Respondents are in contempt of
the Court order dated 30 September 2016. The said Court
order was
served on the First and Second Respondents by the Sheriff on 7
February 2017. The First and Second Respondents were therefore
fully
aware of the said Court order. Still they failed to comply with it.
Furthermore still they failed to take this court into
their
confidence and explain why they defied the court order. Therefore the
Applicant has established, beyond reasonable doubt,
contempt by the
First and Second Respondents. This finding can be made even if the
default was corrected before the hearing of
the application for
contempt.
[43.1]
The Applicant seeks the relief as set out in paragraphs 3 and 4 of
the amended Notice of Motion, if the Court should
grant him the
relief set out in paragraph 1 of such notice of motion. I am
disinclined, for five reasons, to grant such a relief,
even if this
Court were entitled to do so;
[43.2]
the first reason is that both cases instituted in this matter are of
paramount importance to all the parties involved in
them. A court
should not close the door to either of the parties on technical
points and furthermore on failure by either party
to comply with the
Rules of Court in circumstances where such failure can be
sufficiently compensated by an appropriate order of
costs;
[43.3]
the second reason is, albeit late, the First and Second Respondents
have complied with the Court order dated 30 September
2016. If the
Applicant is unhappy with the extent of the First and Second
Respondents' compliance with the said Court order the
Rules provides
remedy therefor;
[43.4]
thirdly each party is confident of the strength of its case. They
should therefore be allowed an opportunity to properly
ventilate all
the issues without leaving one or two out;
[43.5]
fourthly this court has a prima facie view that the First and Second
Respondents do have, on the merits,
prima facie
a good defence
against the Applicant. In such circumstances a good defence can make
up for a bad explanation.
[43.5]
fifthly the First and Second Respondents wish to challenge the
Applicant's
locus standi.
In
the result the following order is made:
1.
The Applicant's application for an order declaring the combined
summons instituted by the First and Second Respondents against
the
Applicant and Alexiprox (Pty) Ltd (the Third Respondent) dated 12
July 2017 under case number 36842/16 under an already existing
action
with case number 36842/16 between the Applicant and the First and
Second Respondents is hereby dismissed, with costs including
the
costs consequent upon the employment of two counsel, where
applicable.
2.
The application for condonation is hereby granted and the First and
Second Respondents are both hereby ordered to pay the costs
t hereof,
the one paying and the other to be absolved.
3.
The First Respondent is held to be in contempt of the Court order
granted on 30 September 2016.
4.
The First Respondent is hereby committed to prison for a period of
twelve months suspended for as long as the main acti on proceeds,
on
condition that the First and Second Respondents, jointly or
severally, comply accordingly with the all the orders of the courts
granted against them in the process of the main action.
5.
The First and Second Respondents are hereby ordered, jointly and
severally the one paying and the other to be absolved, to pay
all the
Applicant's costs of the applications to compel and for contempt of
court.
__________________
PM
MABUSE
JUDGE
OF THE HIGH COURT
Appearances:
Counsel
for the Applicant : Adv. Da Silva (SC)
Instructed
by: Hennie Kotze Attorneys
Counsel
for the First and Second Respondents: Adv.
R du
Plessis (SC)
Adv.
FJ Labuschagne
Instructed
by: De Wet Attorneys
Date
heard: 10 January 2018
Date
of Judgment: 26 January 2017