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[2017] ZAFSHC 220
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Kramer v Westraad and Others; In re: Kramer v Ursispace (Pty) Ltd (5602/2016) [2017] ZAFSHC 220 (19 October 2017)
FREE
STATE COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case
No.: 5602/2016
In
the interlocutory application between:
MARITZ
JOHAN (FELIX)
KRAMER Applicant
and
JACOBUS
JOHANNES
(BUKS)
WESTRAAD
First Respondent
ETIIENNE
VISS
E
R
Second Respondent
URSISPACE
(PTY)
LTD
Third Respondent
In
re:
Case
No.: 5602/2016
MARITZ
JOHAN
(FELIX)
KRAMER
Applicant
And
URSISPACE
(PTY)
LTD
Respondent
CORAM:
HEFER, AJ
JUDGMENT:
HEFER, AJ
HEARD
ON:
24 AUGUST 2017
DELIVERED
ON:
19 OCTOBER 2017
[1]
This is a rather extra-ordinary application in which the Applicant
seeks the joinder of two additional parties as Respondents,
merely to
enable Applicant to obtain an order to the effect that such
additional parties would pay the cost of the liquidation
proceedings
instituted by the Applicant against an existing Respondent party. The
Applicant further seeks an order in terms of
which Applicant be
allowed to withdraw its application for liquidation in such
proceedings. In order to make sense of the rather
peculiar
circumstances of the matter, the facts need to be set out as
concisely as possible.
THE
FACTS:
[2]
The Applicant and the First Respondent has apparently been familiar
with each other since 2007. It appears that the Applicant
has
performed various construction works at the instance of the First
Respondent at the well-known Emoya Estate, Bloemfontein,
of which the
First Respondent is the registered owner, as well as various other
developments in Bloemfontein, namely Lillyvale,
Riversdale as well as
Fellissier.
[3]
At some stage the Third Respondent was incorporated and registered.
The First Respondent as well as a certain Mr. Jeremy Berlyn
became
equal shareholders of Third Respondent. The Third Respondent, amongst
others, financed the Lillyvale development. Since
the Third
Respondent's involvement in the Lillyvale development, the Applicant
conducted the construction work in his own name
instead of a close
corporation of which he apparently is a member.
[4]
The Applicant alleges that the Third Respondent failed to pay him the
amount of R150 000,00 which was due and payable in regards
to the
Lillyvale development. Although the First Respondent refers to
certain additional allegations pertaining to the unworkmanlike
manner
of performance by the Applicant, the First Respondent does not deny
that the Third Respondent, of which, as stated he is
one of two
shareholders, is indeed indebted to the Applicant in this amount.
[5]
During 2016 the First Respondent informed the Applicant that he wou:d
assist him to get the money from the Third Respondent.
It is common
cause that at that stage, the relationship between the First
Respondent and Mr. Berlyn deteriorated. According to
the First
Respondent it was agreed that he would take responsibility for the
amount of R75 000,00 for the work performed in the
Lillyvale
development on behalf of Ursispace, although, according to him, he
did not agree with the Applicant's claim against the
Third
Respondent. The First Respondent further alleges that the Applicant
was to claim the balance of the amount due from Mr. Jeremy
Berlyn.
According to the First Respondent, when the Applicant requested him
to assist him in this regard, he indicated that he
was not willing to
communicate with Mr. Berlyn but instead referred the Applicant to the
Second Respondent, a practising attorney,
to assist him to collect
the amount from Mr. Berlyn.
[6]
It is common cause that proceedings were indeed instituted by the
Applicant for the liquidation of the Third Respondent. According
to
the Applicant such proceedings were instigated by the First
Respondent in corroboration with the Second Respondent. In broad
terms, the Applicant alleges that he received a telephone call from
the Second Respondent at some stage during September 2016 during
which the Second Respondent introduced himself and informed him that
the First Respondent initiated an application for the liquidation
of
the Third Respondent. This allegation is of course disputed by both
First as well as Second Respondents.
[7]
During this telephone conversation, Applicant alleges that he also
heard the First Respondent in
the
background. The Second Respondent then informed
Applicant that he would let him know when the documents
were ready to
be signed. At some stage the Second Respondent indeed contacted the
Applicant and requested him to go to his offices.
Upon his arrival at
the offices of the Second Respondent, according to the Applicant, he
had a less favourable impression of the
Second Respondent as well as
his offices. Of importance is that the Applicant alleges that he did
not have the opportunity to read
the founding affidavit in support of
the liquidation application. The Applicant alleges that because the
First Respondent wanted
to help him, he actually did proceed to sign
such founding affidavit without reading it. He only perused the
founding affidavit
for the first time after the application had been
issued and according to the Applicant, this was the first opportunity
he had
to read such affidavit. Upon perusal of such founding
affidavit, he noted that reference was made to the commissioner of
oaths
who according to the affidavit, administered the oath whilst
the Applicant alleges that when he signed the founding affidavit, it
was only done so in the presence of the First Respondent.
[8]
Upon perusal of the founding affidavit, Applicant further discovered
that the amount which was due and payable by the Third
Respondent
towards the Applicant, was R249 000,00 which, according to the
Applicant, is untrue whereas it was only R150 000,00.
The Applicant
further alleges that the invoice which was appended to the founding
affidavit was not compiled by him and he did
not deliver such invoice
to the First Respondent whereas the amount of R249 000,00 was not due
by the Third Respondent.
[9]
The Applicant then proceeds with various aspects of the founding
affidavit which according to him, are not correct and in fact
untrue.
The detail of such facts need not be set out herein. At this stage it
needs to be mentioned already that the Applicant
does not provide
details of when in particular he perused the founding affidavit and
discovered the errors as alleged by him. Of
importance is that it
also need to be mentioned at this stage that save for the incorrect
amount, namely R249 000,00, the Applicant
did not confront either the
First nor the Second Respondent with any of the incorrect facts which
were contained in the founding
affidavit and which, as stated, are
incorrect. According to the Applicant, he only contacted the Second
Respondent after Mr. Jeremy
Berlyn confronted him with the incorrect
amount referred to in the founding affidavit
to the
liquidation application.
[10]
According to the Applicant at the stage when he confronted the Second
Respondent with the incorrect amount, he already instructed
him at
that stage to withdraw the application. The Second Respondent,
according to the Applicant, however assured the Applicant
that
everything will be in order. The Applicant further alleges that
had he been made aware of any cost implications in regards
to the
liquidation application, he would not have proceeded with such
application because of the financial difficulties he experienced
at
that stage. According to the Applicant he insisted on numerous
occasions that Second Respondent withdraws the liquidation
application
against the Third Respondent, but to no avail. At some
stage it also appeared to the Applicant that the First Respondent did
not
intend to pay the Applicant any money as was suggested by Mr.
Jeremy Berlyn. It was at that stage that the Applicant also realised
that he was merely used by the First Respondent together with the
Second Respondent to have the Third Respondent liquidated because
of
the First Respondent's differences with Mr. Berlyn.
[11]
According to the Applicant the allegations pertaining to Third
Respondent's indebtedness towards the Frist Respondent can be
attributed to the fraudulent conduct of the First Respondent. The
Applicant alleges in particular that the First Respondent used
him in
the sense that he was to gain financially by adding the R99 000,00 to
the amount due to the Applicant by the Third Respondent.
Furthermore
according to the Applicant through this application the
First Respondent sought to settle his differences
with Mr. Berlyn. In
that sense the First Respondent acted
mala
fide.
[12]
The Second Respondent in broad terms disputes the allegations by the
Applicant pertaining to coercion between himself and the
First
Respondent as alleged by the Applicant. The Second Respondent in
particular disputes that the Applicant was not aware of
the cost
implications in regards to the liquidation application. In support
hereof the Second Respondent attached detailed transcriptions
of two
telephonic conversations which took place between the Applicant and
the Second Respondent during February as well as March
2017. The
contents of these transcriptions will only be dealt with as far as
they may be relevant for purposes of the adjudication
of the
application.
[13]
The relevant portions for purposes of this judgment in the said
transcription read as follows:
Mnr.
Kramer:
"Ek
het eintlik 'n
...
ek het eintlik ‘n
disturbing
ding gekry wat my eintlik heeltema/ disturb het. Um die ander outjie
wat ek jou gese het hy was bereid om
...
sy pa was bereid
om
te kom na jou toe en te onderhandel
...
en blykbaar het um
...
met hierdie uitstel van die likwidasie, het Buks vir hom
h
vir
hom (onhoorbaar) gestuur en
gese
hy het
die saak vir
drie weke uitstel
...
Buks laat hom weet hy betaal net die helfte aan my nie
...
My
geld, hulle sat die helfte betaal toe se Buks hy betaal niks nie. Dit
het ek op wit en swart gesien, sms. Hy se hy betaal niks
nie."
Mnr.
Kramer
:
"U
weet vandag
...
ek
...
nou nie vandag nie
...
toe
ek nou die goed sien, toe sien ek
...
toe
se
ek vir
Jeremy 'weet jy wat ek gaan my prokureur bel en vir hom
se
hy
moet maar die likwidasie my likwidasie terugtrek en vergeet die geld
...
los die geld vergeet ek stap weg. Ek het nie nus vir
hierdie mudslinging nie."
Mnr.
Visser
:
"Daar
is ‘n klomp kostes aan verbonde
..."
Mnr.
Kramer
:
"Ja
nee ek weet, ek weet daar is kostes aan verbonde."
Mnr
Visser
:
"Daar
is ‘n
klomp kostes aan verbonde. Wat gaan nou daarvan
word?"
Mnr
Kramer
:
"Nee
dis reg dis reg
.
Buks het my gebruik om 11 likwidasie
in te gebruik en dis hoekom ek hierdie d
i
ng
nou kanselleer want ek is gebruik
om ‘n
likwidasie
te bring. Sadat hy homself kan verryk. Hy
was
by jou en ek
weet daai dag toe hy
...
toe jy my gebel het."
Mnr.
Kramer
:
"Nou
staan al die kostes weer op my. Dis reg, dis reg Ettienne, dis reg
laat hom
...
ek kan dit vat
...
ek sal dit vat
...
ek sal dit vat. Dit wys jou net weet watse tipe ou hy is."
"Nee
dit is reg as daar kostes is om betaal te word dan gaan ek n plan
maak. Al moet ek gaan geld teen om dit te doen. Ek sal
dit doen. Ek
sal dit doen maar ek wil net vir jou weer n keer se dit is Buks
Westraad se modus
of
operandi."
[14]
The further importance of the contents of the transcription is that
the Applicant confirmed during his conversations with the
Second
Respondent that he was not able to transport his grandson due to the
fact that he did not have the necessary transport,
which fact is
disputed by the First Respondent. Furthermore Applicant confirmed
that only the amount of R150 000,00 was due by
the Third Respondent
to the Applicant.
[15]
The Second Respondent further alleges that the certificate of balance
which was used in support of the liquidation proceedings
and which
was appended to the main application, emanated from a summons issued
again the Respondent, which was brought to the Second
Respondent's
attention by the First Respondent. According to the Second Respondent
however, First Respondent did not play any role
whatsoever in the
liquidation application or exercised any form of influence and/or
decision making. The Second Respondent further
disputes Applicant's
allegations to the effect that he (Applicant) did not know the Second
Respondent prior to the liquidation
proceedings. According to the
Second Respondent he has consulted with the Applicant in regards to
two matters of which the First
Respondent provides the relevant file
reference numbers as well as the facts pertaining to such
consultations.
[16]
According to the First Respondent the Applicant has done some
additional construction work for Mr. Jeremy Berlyn and his father
Peter which caused the development in Lillyvale to be delayed. As a
result of this the Third Respondent lost approximately R480
000,00.
For this reason and also because of certain outstanding retention
work which was to be performed at the Pearl Ridge Development,
the
First Respondent was unwilling to pay the Applicant any of the moneys
which was due by the Third Respondent to the Applicant.
[17]
The First Respondent further alleges that the Applicant has earned a
considerable income through the First Respondent as well
as entities
of which First Respondent is part of, during the past nine years.
According to him, the Applicant is irresponsible
with his finances. A
great deal of money is spent by the Applicant on his grandson. First
Respondent further alleges that during
the second half of 2015 the
Applicant visited him at his offices. He was upset because Mr.
Jeremy and Dr. Peter Berlyn refused
to pay him for construction work
done by him on their behalf. The First Respondent telephoned Mr.
Berlyn and tried to solve the
problems on Applicant's behalf, to no
avail. It appears that during the middle of 2016, the relationship
between the First Respondent
and Mr. Berlyn has deteriorated to such
an extent that First Respondent was not willing to assist Applicant
with the collection
of the funds which was due and payable by the
Third Respondent to the Applicant. The First Respondent then referred
the Applicant
to Mr. Ettienne Visser to enable him to assist with the
collection of the money. First Respondent disputes that he tried to
convince
Applicant to proceed with the
liquidation proceedings. In regards to
the Second Respondent, the First
Respondent alleges that the Second Respondent was at that stage
his attorney of record. According to
him the Second Respondent mentioned that a liquidation
application will be in the best interest of Applicant to enable him
to get his money from Third Respondent. The First Respondent
indicated to Third Respondent that he would not oppose such an
application because, according to him, he would not gain any
advantage
from such an application and furthermore that he was not
willing to do any business with either Mr. Jeremy nor his father, Dr.
Peter Berlyn. According to the First Respondent he offered his help
in providing the necessary documentation for such an application.
First Respondent, however, does not provide any detail of which
documentation he refers to. According to the First Respondent,
the
Applicant's wish to withdraw the application for liquidation is not
because of the irregularities as alleged, but merely because
the
Applicant and the Berlyns are now on a good footing and :t appears
that Jeremy Berlyn is indeed willing to pay his share of
the amount
due by the Third Respondent to the Applicant. The Applicant never
confronted the First Respondent with the irregularities
as alleged.
[18]
The reply by the Applicant to a large extent contains legal argument
pertaining to the matter and does not necessitate detailed
discussion. In broad terms the Applicant joins issue with the
allegations as contained in both the First and Second Respondents'
opposing affidavits.
[19]
In regards to the facts and allegations upon which the Applicant
relies, it is evident that there
is
a
dispute of
fact in regards to First and Second Respondents' role pertaining to
the instigation of the liquidation process. In this
regard,
Mr.
Snellenburg
SC, on behalf of the Applicant, in his Heads of
Argument referred me to the matter of
Wightman t/a JW
Construction v Headfour (Pty) Ltd and Another
[2000] ZASCA 106
;
2000 (3)
SA 371
SCA where Heher JA referred to the principle that an Applicant
who seeks final relief on motion proceedings, must in the event of
conflict, accept the version set up by his opponent unless the
latter's allegations are, in the opinion of the Court, not such
as to
raise a real, genuine or
bona tide
dispute of fact or are so
farfetched or clearly untenable that the Court is justified in
rejecting them merely on the papers. In
particular, at paragraph 13
of the judgment the following was said:
“
A
real,
genuine
and
bona
fide
dispute
of fact
can
exist
only
where
the Court is satisfied that the party who purports
to
raise the dispute has in his affidavit seriously and unambiguously
addressed the facts said to be disputed... When the facts averred
are
such that the disputing party must necessarily possess knowledge
of
them and be able to provide an answer (or countervailing evidence)
if they may be not true or accurate but, instead of doing
so,
rests his case on
a
bare or ambiguous denial the Court will
generally have difficulty in finding that the test is satisfied.”
[20]
In
Room Hire Co. Ltd v Jeppe Street Mansions (Pty) Ltd
1949
(3) SA 1155 (T) Murray, AJP at 1162 said the following:
“
In
as much as the ascertainment of the true facts is effected by the
trial judge, on considerations not only of probability but
also of
credibility
of
witnesses giving evidence viva-voce, it has
been emphasised repeatedly that (except in interlocutory matters) it
is undesirable
to attempt to settle disputes of fact solely
on
probabilities disclosed in contradictory affidavit, in disregard
of the additional advantages of viva-voce evidence
... “
[21]
The first task is accordingly to identify the facts of the alleged
involvement of the First Respondent in initiating and continuing
the
liquidation application of the Third Respondent, on the basis of
which a legal dispute are to be decided.
[22]
According to the Applicant, during the middle December 2016, Mr.
Jeremy Berlyn contacted him and enquired about the amount
of R250 000,00 which appeared in the liquidation application. The
Applicant further alleges that upon his arrival back in Bloemfontein
at that stage he telephoned the Second Respondent and requested a
meeting upon which Second Respondent told him to come and see
him the
next day. The Applicant then in particular states that he went to see
the Second Respondent during which visit he informed
the Second
Respondent that the amount which was due to him was indeed R249
000,00 and not R150 000,00. In answer to these allegations,
and in
particular the previous visit to the offices of the Second
Respondent, the Second Respondent merely refers to the transcripts
of
the telephonic conversations. The contents of the transcripts does
not shed any light on the previous visits to the Second Respondent
as
alleged by the Applicant.
[23]
In the transcript of the conversation of 22 February 2017, the Second
Respondent indicated that he has already received an
invoice from the
liquidator in the amount of approximately R40 000,00. In the context
of the conversation it appears that Second
Respondent had already
discussed the withdrawal of the liquidation application with
the provisional liquidator which he would
have only done subsequent
to the Applicant's visit and after Applicant had informed Second
Respondent of his misgivings.
[24]
In the same breath Heher JA in the
Wightman
-
matter
also referred to circumstances where the facts averred are such that
the disputing party must necessarily possess knowledge
of them and be
able to provide an answer or more importantly,
countervailing evidence. In this particular
regard the First and
Second Respondents and more in particular Second Respondent's failure
to provide any transcription in regards
to the first telephonic
conversation which the Applicant refers to which took place during
September 2016 needs also to be considered.
The Applicant alleges in
particular that it was Mr. Visser who contacted him and not
vice
versa.
Applicant then deals extensively about what was said
during this conversation during which he also amongst others heard
the First
Respondent laughing in the background. The allegations
pertaining to these are however, admitted.
[25]
First Respondent, in broad terms elected to attempt to attack the
Applicant's character in order to impugn the credibility
of his
version.
Mr. Steenkamp,
on behalf of the First Respondent,
argued that due to certain discrepancies between the contents of the
founding affidavit and the
contents of the transcriptions which were
disclosed by the First Respondent, the Applicant is not open and
frank in his founding
affidavit.
Mr. Steenkamp
further argued
that it is improbable that the Applicant would have signed the
founding affidavit of the liquidation application
without perusing it
first in view of the circumstances prevailing. According to him
further, the First Respondent did not collude
with the Second
Respondent as averred by the Applicant.
[26]
Mr. Roux
SC on behalf of the Second Respondent presented his
argument in, if I may say so, a quite different yet pleasant and
capable manner.
What he actually did is that in a somewhat narrative
manner he described what, according to the Second Respondent is the
true state
of affairs. In short
Mr. Roux
told the story that
the Applicant decided to institute liquidation proceedings against
the Third Respondent in an attempt to collect
his money from the
Third Respondent in an attempt to collect his money from the Third
Respondent which was due by the Third Respondent
to the Applicant. It
is common cause that the First Respondent and Jeremy Berlyn were
equal shareholders in the Third Respondent.
At some stage, which is
also not disputed by either one of the Respondents, Mr. Jeremy Berlyn
apparently approached the Applicant
and offered to pay him R75 000,00
in regards to his share of indebtedness to the Applicant by the Third
Respondent. It also appears
that Mr. Jeremy Berlyn also offered
Applicant the use of a certain motor vehicle in order to assist him
to convey his grandson
to school amongst others. At some stage it
also came to the knowledge of the Applicant that the First Respondent
as the other shareholder
did however, not intend to settle his share
of indebtedness towards the Applicant. The Applicant knew, according
to
Mr. Roux
on behalf of the Second Respondent that the First
and Second Respondent did not collude with each other. However, due
to the offer
by Mr. Berlyn and due to the refusal of the First
Respondent to make payment towards the indebtedness, the Applicant
decided to
withdraw the application for liquidation proceedings and
now wishes to hold First as well as Second Respondent liable for the
costs
of such liquidation application. It is this
"story"
as advanced on behalf of the Second Respondent which necessitates
careful consideration.
[27]
It is common cause that the Third Respondent was established after it
appeared a close corporation, Loyal Harvest CC, which
was involved in
the Pearl Ridge Development needed additional finances. The Third
Respondent then replaced the Loyal Harvest CC
as developer.
[28]
It is further common cause that the First Respondent together with
Jeremy Berlyn are the only shareholders of the Third Respondent.
[29]
According to the Applicant, during 2016 the First Respondent
indicated that he would assist him to get his money from the Third
Respondent. It is common cause that at that stage the relationship
between the First Respondent and Jeremy Berlyn has deteriorated
to
such an extent that the First Respondent was not willing to
communicate with Jeremy Berlyn pertaining to the moneys due to the
Applicant. The First Respondent disputes Applicant's
allegations to the effect that it was he that suggested that the
Third
Respondent be liquidated to enable the First Respondent to get
his money from the Third Respondent. What is important is that,
according to the First Respondent, he indicated to the Second
Respondent that he was not going to oppose the application for
liquidation
because he was not to gain anything from opposing such
application. Furthermore, according to the First Respondent,
he
"mentioned"
to the Applicant that he will not
oppose the application for liquidation because he no longer wishes to
do business with me
and Peter Berlyn. It is obvious that the First
Respondent also wishes the Third Respondent to be liquidated because,
as stated
by the First Respondent himself, that will solve any
further future problems with the Berlyns.
[30]
It is also common cause that in regards to the liquidation
proceedings itself, there were discussions between the First and
Second Respondent. The Second Respondent states in particular that
certain facts were disclosed by Westraad and that certain inferences
were made by him in this regard. However we do not know what these
facts were, nor which inferences were made by the Second Respondent.
[31]
It is further common cause that a copy of action proceedings
instituted in the Free State High Court against the Third Respondent
was handed by the First Respondent to the Second Respondent from
which, according to the Second
Respondent,
"certain facts appeare
d”.
It appears that this copy of the
action proceedings referred to by the First Respondent
was indeed handed by the First Respondent to the Second Respondent
for purposes of the liquidation proceedings. It could only have
been
for that purpose. The Second Respondent states himself that it was
this judgment documentation together with other documentation
which
provided the background for purposes of the Section 345(1)(a) notice
and thereafter the liquidation application together
with the
inferences drawn from the aforesaid documents and statements therein
contained.
[32]
From these facts, which are common cause, it appears undoubtedly that
First Respondent played an active role in the institution
and
continuation of the liquidation proceedings. This, however, does not
necessarily mean that he colluded with the Second Respondent
and that
the Applicant is therefore entitled to the relief as sought.
[33]
The First Respondent fails to deal with Applicant's referral to the
contents of a sms message from the First Respondent addressed
to
Jeremy Berlyn in which the First Respondent apparently indicated that
he was not willing to pay his share of the debt by the
Third
Respondent to the Applicant. This is also dealt with in the
transcription provided by the Second Respondent. This fact is
therefore further support for the narrative story by the Second
Respondent as advanced by
Mr. Roux
on behalf
of the Second common cause and apparently followed after
Jeremy Berlyn indicated that he was willing
to settle the
debt by the Third Respondent to the Applicant as far as his
half share is concerned, on the basis that the
liquidation
proceedings against the Third Respondent was to be withdrawn.
However, it appears that due to
the bad blood
between the First Respondent and the Berlyns, the First
Respondent not only fails and/or refuses to pay
his share of the debt
to the Applicant but also in fact wishes that the liquidation
proceedings against the Third Respondent should
continue. That is
again the only inference that can be drawn from the facts common
cause. In this regard it is also quite significant
that up until
today the Second Respondent did not follow the Applicant's
instruction to withdraw the application for liquidation
but in fact
rather chose to withdraw as attorney of record on behalf of the
Applicant.
[34]
Mr. Snellenburg,
on behalf of the Applicant referred me to the
matter of
Goldfields Ltd and Others v Motley Rice LLC
2015 (4) SA 299
GJ dealing with the joinder of funders to
proceedings already instituted in Court. In this matter
Mojapelo DJP made
a distinction between pure funders of litigation
and other funders. In this regard the following was
stated:
"Pure
funders have
no
personal interest in
the litigation. They do not
stand to benefit
from it and they do not fund litigation as
a
matter of
business. They do not seek to control the course of the litigation
that they fund... The other type of litigation funder
is
distinguishable from the pure funder described above. I shall call
this second type of funder the 'controlling funder' or 'funder
for
own interest' to distinguish it from the pure funder of litigation.
The controlling funder does not merely fund litigation
proceedings,
but substantially also controls the proceedings that it funds,
or
at any rate stands to benefit from them.
Justice
ordinarily requires that, proceedings, but substantially also
controls the proceedings that it funds,
or at any rate
stands to benefit from them.
Justice ordinarily requires
that, if the proceeding fail this second type of funder will pay the
successful party's costs."
[35]
Mojapelo DJP, however, in the
Goldfields
-matter came to the
conclusion that because the Respondent was not to benefit from the
action already instituted, the Respondent
was not to be joined as a
party.
[36]
As far as the First Respondent in the present matter is concerned, in
view of the undisputed facts referred to above, it can
be found
without any doubt that the First Respondent indeed stands to benefit
from the continuation of the liquidation proceedings
against the
Third Respondent whereas he himself states that according to him, it
means the end of the business relationship with
the Berlyns and in
particular Jeremy Berlyn. This is so in spite of the fact that it
cannot be found that the First Respondent
is indeed a funder to the
liquidation proceedings. On that basis the First Respondent should
indeed be joined as a party to the
present liquidation proceedings.
[37]
As far as the Second Respondent is concerned, it is not quite clear
from the affidavits filed on behalf of the Applicant on
which basis a
cost order against Second Respondent will be sought in the event of
Second Respondent also being joined to the liquidation
proceedings.
In his heads of argument,
Mr.
Snellenburg,
on behalf of
the Applicant referred to
Section 74
of the
Insolvency Act, 24 of
1936
. In terms of this legislation, if it appears to a Court that any
attorney, with intention to benefit himself improperly advised
the
institution, defence or conducting of legal proceedings by or and
against an insolvent estate order the whole or part of the
expense
thereby incurred to be borne by that attorney personally.
[38]
In short, based on the facts before me, it cannot be said that Second
Respondent had the intent to benefit himself at any stage
or has
incurred any unnecessary expense in regards to the liquidation
proceedings. There can therefore be no basis on which the
Second
Respondent can be held liable for the costs in regards to the
liquidation proceedings. In respect of the Second Respondent,
the
application for joinder should therefore fail.
[39]
The Applicant further seeks an order in terms of which the Applicant
is granted leave in terms of Rule 41(1)(a) of the Uniform
Rules of
Court to withdraw the liquidation application entered into by the
Applicant against the Third Respondent. However, by
implication the
said Rule only provides that a Court may grant leave for the
withdrawal of any proceedings already instituted
before
an
order of Court has been issued. As soon as an order has been issued,
as in the present matter where a provisional order of liquidation
has
already been issued, a Court cannot grant such leave whilst a
provisional order of liquidation still stands. The appropriate
manner
will be for the provisional order of liquidation to be discharged and
then, as far as necessary, to make an appropriate
order in regards to
costs. Whereas it is clear from the papers that the Applicant do not
wish to continue anymore with the application
for liquidation,
although the return date of the provisional liquidation order is
unknown to me, at this stage the rule
nisi
may be discharged.
[40]
What further needs to be considered is who should be held liable for
the costs of the application for liquidation. In this
regard
the allegations by the Applicant himself need to be considered. Upon
perusal of the transcripts of the telephonic
conversations between
the Applicant and the Second Respondent, it appears as mentioned
earlier, that there had been at least one
previous conversation
between the Second Respondent in regards to the continuance of the
liquidation application. It appears that
during the conversation on
22 February 2017, that the Applicant was upset about the fact that
the First Respondent did not want
to pay the amount due by the Third
Respondent to the Applicant. At that stage the Applicant also
confirmed that the amount pertaining
to the claim by the Applicant
against the Third Respondent was indeed R100 000,00 less as the one
as contained in the papers. What
is of further importance is that
during the conversation on 1 March 2017, the Applicant again
confirmed that he was used, according
to him, by the
First Respondent to institute the liquidation proceedings against the
Third Respondent.
[41]
In neither one of the transcriptions of the two telephonic
conversations referred to does the Applicant mention the fact that
he
did not read the founding affidavit before he signed it. The closes
he gets to that is by saying he
now
realises that an amount of R249 000,00
should in fact be R150 000,00. Applicant also does
not confront the
Second Respondent with the fact that he did not sign the founding
affidavit in the presence of a commissioner
of oaths. Most
importantly upon consideration of the contents of the transcriptions
referred to, during the conversations
with the Second
Respondent, the Applicant was not at all surprised by the fact that
he was to be held liable in the event
of the liquidation proceedings
against the Third Respondent being withdrawn.
[42]
I consider it highly unlikely, as argued by
Mr. Steenkamp,
where
Applicant attempted to recover the amount of approximately
R150 000,00 from the Third Respondent, which must have
been important
to the Applicant, that an adult person will sign a sworn affidavit in
the circumstances as described by the Applicant.
If the Applicant
failed to read the founding affidavit before signing such affidavit,
he only has himself to blame. Even if it
is accepted that the
Applicant did not read the affidavit before he has signed it, the
fact remains that the Applicant initiated
the liquidation proceedings
against the Third Respondent with the purpose of recovering the
amount claimed by the Applicant from
the Third Respondent. That
aspect cannot be denied by the Applicant. Even if the liquidation
process was indeed suggested by the
First Respondent, the Applicant
willingly and as stated, with the purpose of recovering the debt due
by the Third Respondent, initiated
the liquidation proceedings
against the Third Respondent. Therefore, although the First
Respondent may be held liable for the costs
of liquidation, there is
no reason why the Applicant should also not be held equally liable
for such costs.
[43]
As far, as the costs of the present application is concerned, in view
of my finding in regards to the liability of both the
Applicant and
the First Respondent of the costs of the application for liquidation,
I consider it just that as far as the Applicant
and the First
Respondent is concerned, each party should pay their its own costs.
As far as the costs of the Second
Respondent is
concerned, such costs was incurred solely through the
actions of the Applicant. There is therefore no
reason why the First
Respondent should be burdened by such costs.
[44]
Lastly, as far as the Second Respondent is concerned, it is common
cause that the Second Respondent did not withdraw the liquidation
proceedings as instructed by the Applicant at some stage, but in fact
withdrew as an attorney acting on behalf of the Applicant.
It also
appears that First Respondent served the proverbial two gods in
handling the liquidation proceedings against Third Respondent.
Although, as stated there is no basis that the Second Respondent may
be held liable for the costs of the liquidation, I consider
it
necessary that the Free State Law Society investigates the actions of
the Second Respondent and in particular whether he acted
in a
professional and ethical manner.
In
view of the above, the following order is made:
ORDER:
1.
First Respondent is joined as Second Respondent in the liquidation
application under civil
case number 5602/2016.
2.
The provisional liquidation order in case number 5602/2016 is
discharged.
3.
Applicant and First Respondent is ordered to pay the undermentioned
costs with
regards to the liquidation application
under civil case number 5602/2016 jointly and severally, the one to
pay the other
to be absolved:
(a)
All expenses, costs and fees of the provisional liquidators in the
liquidation application;
(b)
All expenses, costs and fees in respect of drafting, issuing and
prosecution of the
liquidation application.
4.
In regards to the interlocutory application to join the Second and
Third Respondents
in the liquidation application:
(a)
in regards to Applicant and First Respondent, each party is to pay
its own costs;
and
(b)
Applicant is to pay the costs of Second Respondent.
5.
A copy of the judgment is to be delivered to the Free State Law
Society by the Registrar.
__________________
J.J.F.
HEFER, AJ
On
behalf of Applicant:
Adv. N. Snellenburg SC
Instructed by H J
Stander, Stander & Partners Attorneys
BLOEMFONTEIN;
On
behalf of First Respondent:
Adv. M. DJ Steenkamp
Instructed by A.
de Wet, Webbers Attorneys, 96 Charles Street
BLOEMFONTEIN;
On
behalf of Second Respondent: Adv. J. Roux SC
Instructed by E Visser,
15 Barnes Street
BLOEMFONTEIN