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[2016] ZAFSHC 9
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Noordman N.O. and Another v Bruin (3635/2013) [2016] ZAFSHC 9 (29 January 2016)
IN THE HIGH COURT OF
SOUTH AFRICA
FREE
STATE DIVISION: BLOEMFONTEIN
Case
No.: 3635/2013
In
the matter between:-
O
A NOORDMAN N.O.
1
st
Plaintiff
S
M RAMPOPORO N.O.
2
nd
Plaintiff
and
J
F B DE BRUIN
Defendant
CORAM:
DAFFUE,
J
JUDGMENT
BY:
DAFFUE,
J
HEARD
ON:
2,
3 and 5 JUNE 2015
DELIVERED
ON:
29
JANUARY 2016
I
INTRODUCTION
[1]
The liquidators of an insolvent company and the sole shareholder and
former director of that company are at loggerheads.
The manner
in which the insolvent company carried on its business is the centre
of attraction in so far as the liquidators believe
that its former
director should be held liable in his personal capacity for the
insolvent company’s debts.
II
THE PARTIES
[2]
Messrs O A Noordman and S M Rampoporo, the two liquidators of Elysium
Graanbemarking (Pty) Ltd (2000/006848/07) (in liquidation),
(herein
later referred to as “the insolvent company”), are the
plaintiffs. Adv P Zietsman SC appeared for
them before
me.
[3]
Mr Jopie Fourie Beyers De Bruin, the sole shareholder and former
director of the insolvent company, is the defendant.
He was
represented by Adv J D Maritz SC.
III
THE RELIEF
SOUGHT
[4]
Plaintiffs seek an order in terms whereof defendant is declared
personally liable for payment of the total debts of the insolvent
company in the amount of R2 952 836.37 plus interest
a
tempore morae
and
costs. The claim is based on s 424 of the Companies Act, 61 of
1973 (“the Old Companies Act”), which deals
with the
liability of directors and others for reckless and/or fraudulent
conduct in respect of a company’s business.
In terms of
this section a court may, on application of
inter
alia
the liquidator
of a company, declare that any person who was knowingly a party to
the carrying on of the business of the company,
recklessly, or with
intent to defraud creditors of the company or creditors of any other
person, or for any fraudulent purpose,
shall be personally
responsible, without any limitation of liability, for all or any of
the debts or other liabilities of the company
as the court may
direct.
[5]
In their particulars of claim plaintiffs rely on sixteen grounds in
support of the averment that defendant shall be personally
held
liable. I do not intend to quote those grounds now, but shall
deal with the more pertinent grounds which were raised
in the evidence.
IV
UNDISPUTED
MATERIAL FACTS
[6]
The following are undisputed:
6.1
Feedex Exchange (Pty) Ltd (“Feedex”) trades as a grain
merchant, conducting its business
inter
alia
in the Free
State Province.
6.2
Feedex has been doing business with an entity known as Elysium
Graanbemarking (“Elysium”)
since about 2002.
Defendant was Elysium’s contact person and for all intents and
purposes effectively in control of
Elysium.
6.3
Elysium, or the insolvent company as contended by defendant, also
acted as grain merchant and
particularly in the Koppies district,
Free State Province. Defendant was at relevant times a farmer
and grain producer who
conducted his business in the Koppies
district.
6.4
Ex facie
documentary
evidence placed before me, and following the trend of previous years,
several contracts were entered into between
Feedex and Elysium
during 2005 in respect of the 2005/2006 sunflower harvest season.
In terms hereof Feedex purchased grain
from Elysium in respect of
sunflower crops still to be planted by various farmers
(“producers”).
6.5
When entering into the various contracts Feedex knew at all relevant
times that Elysium had entered
into back to back agreements with
producers in the Koppies district in order to be able to sell and
deliver grain to Feedex.
In each case the parties recorded that
the grain sold by Elysium to Feedex had been purchased from a
particular producer.
Defendant as representative of Elysium
signed the contracts as producer (“produsent”), which is
clearly not correct
as Elysium acted as grain merchant.
6.6
The identities of all producers in respect
of all contracts entered into between Feedex and Elysium
were
therefore known to Feedex and duly recorded in writing.
6.7
The business of a grain merchant (and
farming in general) is risky as many risk factors such
as droughts,
hail, excessive rainfall and several other factors have an impact on
production of grain.
6.8
Already in January 2006 defendant informed
Mr Botha of Feedex that two of the farmers with whom Elysium
had
contracted, did not plant any sunflower and that it would not be
possible for Elysium to honour its contractual obligations
in respect
of these two contracts as and when they become due. The one
producer, Loggenberg, failed to plant any sunflower
due to financial
difficulties. He sold 400 tons of sunflower to Elysium who in
turn sold this quantity of grain to Feedex.
The second
producer, a Mr van der Westhuizen, died and also failed to plant any
sunflower before his death. He sold 250 tons
of sunflower to
Elysium who in turn sold the same quantity to Feedex.
6.9
At the beginning of June 2006 Feedex owed Elysium R278 906.00 in
respect of grain delivered
which it failed to pay. Feedex was
strictly speaking entitled to withhold payment, bearing in mind the
contractual terms
agreed upon, but it is evident that Feedex, in
order to stay competitive in the market, orally agreed to pay its
sellers for deliveries
on a weekly basis and not as stipulated in its
written contracts.
6.10
Over and above the 650 tons referred to above, Elysium
was contractually bound to deliver a further 910 tons of
sunflower to
Feedex which it failed to do notwithstanding an undertaking to
deliver at least a further five freights during the
week of 7 June
2006.
6.11
Elysium also entered into back to back contracts with
defendant personally and his son in his personal capacity
as
producers and although they had grain available for purposes of
delivery, they failed to deliver their grain to Feedex through
Elysium or at all.
6.12
It is clear from the minutes held by the Koppies magistrate in
respect of the two meetings chaired by him that
no creditors, not
even Feedex, proved claims against the estate of the insolvent
company. This was in essence conceded by
Mr Senekal who claimed
that claims could still be proven.
V
DISPUTED
FACTS:
[7]
Defendant disputed that he had conducted the affairs of the insolvent
company in any fraudulent or reckless manner as set out
in s 424(1).
By far the majority of the facts averred in paragraph 6 of the
particulars of claim were disputed in defendant’s
plea and
remained in dispute. I will deal with only those issues raised
during the trial when the evidence is evaluated.
VI
THE EVIDENCE:
[8]
The plaintiffs called two witnesses, to wit Mr Ben Botha, a director
of Feedex and Mr Kobus Senekal, attorney and director of
Matsepes
Inc, whereafter they closed their case. Defendant closed his
case without leading any evidence.
[9]
Numerous documents contained in four bundles were placed before me.
The parties agreed that I should not consider any
document not
specifically referred to and identified during evidence or during the
interrogations which took place before the Magistrate
of Koppies in
terms of ss 414 & 415 of the Old Companies Act. They also
agreed beforehand that the documents were what
they purported to be,
save that the correctness thereof was not admitted, unless
specifically so confirmed or not put in issue
during the trial.
I need to emphasise at this stage that the transcript of the
interrogations was not accepted by defendant
to be correct in all
respects. Nothing really turns on this as it is evident from a
reading of the record that questions
and answers were not properly
recorded in several instances, probably due to either mechanical
problems, or somebody not speaking
in the microphone or people
speaking simultaneously.
[10]
Mr Botha was plaintiffs’ first witness. His company,
Feedex, obtained judgment by default against the insolvent
company in
case number 2531/2006. In that matter the insolvent company was
the plaintiff and Feedex the defendant.
The insolvent company’s
claim in the amount of R278 906.00 was dismissed and judgment by
default was granted in respect
of Feedex’ counterclaim in the
amount of R1 538 429.54 plus interest. Cost orders
were also made in favour
of Feedex. The insolvent company’s
attorneys withdrew just before the trial and consequently there was
no appearance
on its behalf. It should be mentioned that Feedex
admitted the amount claimed by the insolvent company, but pleaded
that
payment was not due until the insolvent company delivered all
grain it agreed to deliver in terms of the various written
contracts.
As mentioned this is not in line with the evidence
tendered by Mr Botha eventually during this trial.
[11]
The illiquid counterclaim was based on damages suffered as a result
of the insolvent company’s breach of contract.
Nowhere in
these pleadings was it alleged that Feedex had not contracted with a
company, contrary to the evidence of Mr Botha.
As mentioned
judgment was eventually granted for payment in the amount of
R1 538 429.54 plus interest. When action
was
instituted herein the total of the claim, interest included, amounted
to R2 952 836.37 and this is the amount claimed
by plaintiffs
from defendant. Plaintiffs calculated their claim by merely
adding interest to the Feedex claim for which default
judgment was
granted earlier.
[12]
During his testimony Mr Botha denied that defendant acted on behalf
of a company known as Elysium Graanbemarking (Pty) Ltd
when the
relevant contracts were entered into. As far as he was
concerned defendant merely traded under the name and style
of Elysium
Graanbemarking. He placed much reliance on a contract entered
into on 6 March 2002 which reflects defendant’s
identity number
and no reference to a company or company number. It is also
evident that all contracts entered into during
2005 reflect the name
Elysium Graanbemarking without reference to it being a company and no
company number was provided.
Unlike the earlier contract
referred to, defendant’s identity number is not contained in
these latter contracts. We
were told that the contracts
provided to defendant for completion were in respect of individuals
as the Feedex contracts with legal
entities contained suretyship
clauses. I’ll deal with Mr Botha’s knowledge of the
corporate entity later.
He could not explain why the pleadings
were drawn on the basis that the insolvent company was indeed the
party that contracted
with Feedex and thus responsible for the
damages suffered.
[13]
There can be no doubt that defendant was at all relevant times the
person acting on behalf of Elysium. Feedex and Elysium
were
grain merchants as mentioned above and were conducting the same type
of business. As was the case with Elysium, Feedex
also entered
directly into contracts with producers in terms whereof grain still
to be planted was purchased for delivery after
harvesting has taken
place.
[14]
It appeared from Mr Botha’s evidence that Feedex, and he in
particular, was fully aware of the manner in which Elysium
went about
its business. The witness used to provide a standard Feedex
contract to defendant who then made copies thereof.
The
contract price for a particular season was predetermined by Mr
Botha. Elysium would then source grain from producers,
particularly in the Koppies area and defendant would then fill out
the Feedex contract in his own handwriting,
inter
alia
indicating the
tons to be sold and delivered, the purchase price, the date of
delivery and the farm (of the particular producer)
where delivery
would take place. Although it did not happen in every instance,
the name of the particular producer with whom
Elysium had contracted
on a back to back basis, was written at the top right hand corner of
the first page of the contract.
Feedex needed this for
their own administrative purposes. It also recorded full
details of each and every producer with whom
Elysium had back to back
contracts for the delivery of grain as well as his contractual
obligations.
[15]
Printouts of the details of all transactions, indicating in each case
the original producer’s name, the tons to be delivered,
the
price to be paid and the date of delivery were affixed to all
contracts entered into between Feedex and Elysium.
[16]
Feedex negotiated contracts with its purchasers for on-selling of
grain based on
inter
alia
the contracts
entered into with Elysium. Bearing in mind droughts, excessive
rainfall, hail, other natural disasters or unfortunate
events, it
would always be possible for Feedex as agent or middleman to negotate
with its purchasers to alleviate its contractual
obligations.
The agent can, according to Mr Botha, buy grain from a different
producer if one of its producers is not capable
of complying with his
contractual obligations, even if the agent has to pay more than it
initially agreed to pay the initial producer.
The agent can
also ask its purchaser for posponement of delivery, and if need be,
even until the next harvesting season.
Such agent can also
entrench himself against the risk eventuating in order to minimise
his damages. The witness was not allowed
to expand on this
topic as Mr Maritz objected on the basis that he would be required to
give an opinion, whilst no notice of expert
evidence and/or an
expert’s summary had been filed. The objection was
sustained.
[17]
In January 2006 defendant and a producer, Mr Loggenberg, made an
appointment with Mr Botha who was then informed that Loggenberg,
with
whom Elysium had contracted to the knowledge of Feedex, never planted
any sunflower as he could not get financial assistance.
By then
the planting season was not over yet. It was put to the witness
in cross-examination that he listened to the two
gentlemen, but did
not offer any assistance and reiterated that Feedex would be seeking
from Elysium compliance with its contractual
obligations. Mr
Botha testified that it was expected of defendant to buy grain from
other producers to make up any deficit
as had been done in the past.
It was also put to the witness that he had been informed that a
further producer, a Mr van
der Westhuizen with whom Elysium had a
contract as well, passed away earlier and that that contract would
also not be honoured;
also that a Mr Oosthuizen, another producer,
had problems as well. Mr Botha confirmed the news about Mr Van
der Westhuizen,
but stated that Mr Oosthuisen’s problems were
not raised at that stage. Loggerenberg’s grain had to be
delivered
not later than 15 June 2006.
[18]
In February 2006 defendant delivered 180 tons less than agreed upon.
Feedex initially indicated that it would buy in
grain from other
producers and hold defendant liable for damages. However the
witness stated that the short delivery of grain
in February
2006 was made up by late deliveries as agreed with Feedex’
purchasers. There were no serious delivery
problems in March
and April 2006. In May 2006 serious problems arose.
Elysium was in breach of contract and failed
to deliver. This caused
Mr Botha to write a letter to defendant dated 17 May 2006 indicating
that the outstanding deliveries amounted
to 1560 tons. A
discussion between the two gentlemen followed and on 26 May 2006 Mr
Botha received a fax indicating defendant’s
problems. The
letterhead of the document bears the name Elysium Graanbemarking
(Pty) Ltd with its registration number.
According to Mr Botha
that was the first time that he became aware of the existance of such
a company. In this fax defendant
mentioned the 650 tons of the
producers Loggenberg and Van der Westhuizen due for delivery in May
and June referred to earlier
and confirmed that these would not be
delivered. He also indicated that it would not be possible to
harvest sunflower at
that stage as it was still wet. Mr Botha
referred in his evidence to several further letters written by him
between 30 May
2006 and 12 June 2006, the contents of which were read
into the record. As mentioned, it is evident that Mr Botha was
well
aware as early as January 2006 of the fact that Elysium would
not be able to deliver the 650 tons of Loggenberg and van der
Westhuizen.
[19]
Feedex undertook not to withhold payment due on 9 June 2006 in
respect of grain deliveries received on condition that Elysium
deliver at least five freights of grain during the week of 7 June
2006. However Elysium failed to honour the agreement reached
with Mr Botha. Eventually it was placed on record in a letter
of 8 June 2006 that the amount of R278 906.00 would be
paid into
the trust account of Feedex’ attorneys with instructions to pay
the amount against delivery of the last 612 tons
of sunflower
(excluding the aforesaid 650 tons). It was also suggested that
Elysium cede its claim to Feedex in respect of
the 650 tons referred
to
supra
.
No response was received.
[20]
Notwithstanding the negotiations and attempts by Mr Botha to ensure
that Elysium complies with at least some of its contractual
obligations, matters turned sour to such an extent that in a letter
dated 12 June 2006 Mr Botha accused defendant of theft and
threatened
to institute criminal charges against him. Co-incidently on
that very same day the simple summons of the insolvent
company,
Elysium Graanbemarking (Pty) Ltd was signed by its Bloemfontein
attorney whereafter the summons was issued for payment
of
R278 906.00.
[21]
Mr Senekal’s evidence did not take the matter any further. He
merely referred to the interrogations conducted by
himself of several
witnesses, including defendant and also confirmed the correctness of
the transcript of proceedings. Feedex’
claim was never
proved at anyone of the two meetings of creditors. I find this
strange and disturbing. If this is the
case, it would mean that
if the plaintiffs’ claim is dismissed with costs, defendant as
the applicant in the winding-up application
of the insolvent company
would eventually be held responsible for the costs incurred by the
plaintiffs. This does not appear
to be just. Mr Senekal
indicated that it would still be open for Feedex to prove its claim
with leave of the Master or the
court, but there would surely be no
reason for it to do so if the plaintiffs’ claim is dismissed.
[22]
Defendant closed his case without leading any evidence.
VII
CERTAIN LEGAL
PRINCIPLES:
[23]
As mentioned, the plaintiffs’ claim is based on s 424 of the
Old Companies Act which still applies as chapter 14 of that
Act has
not been repealed. Section 424(1) reads as follows:
“
When
it appears, whether it be in a winding-up, judicial management or
otherwise, that any business of the company was or is being
carried
on
recklessly
or
with intent to defraud creditors
of the company or creditors of any other person or
for
any fraudulent purpose
, the Court may,
on the application of the Master, the liquidator, the judicial
manager, any creditor or member or contributory
of the company,
declare that any person who was knowingly a party to the carrying on
of the business in the manner aforesaid, shall
be personally
responsible, without any limitation of liability, for all or any of
the debts or other liabilities of the company
as the Court may
direct.”
(emphasis
added)
[24]
It is important to emphasize the words
“
recklessly”,
“with intent to defraud creditors” and “for any
fraudulent purpose”.
Fraud,
or at the very least recklessness, must be proved. Normal
breach of contract or negligence would not suffice.
See:
Ebrahim
& Another v Airport Cold Storage (Pty) Ltd
[2008] ZASCA 113
;
2008 (6) SA 585
SCA para 15:
“…
(T)he
function of the statutory provision also shapes its application. …
The section retracts the fundamental attribute of
corporate
personality, namely separate legal existence, with its corollary of
autonomous and independent liability for debts,
when
the level of mismanagement of the corporation's affairs exceeds
the merely inept or incompetent and becomes heedlessly
gross or
dishonest
. …….those
running the corporation may not use its formal identity to incur
obligations recklessly, grossly
negligently or fraudulently. If
they do, they run the risk being made personally liable”.
(emphasis added)
[25]
In
Philotex (Pty)
Ltd v Snyman
;
Braitex (Pty) Ltd
v Snyman
[1997] ZASCA 92
;
1998
(2) SA 138
SCA at 142 (H – I) the Supreme Court of Appeal held
that it is not necessary to prove a causal link between the relevant
conduct and the debts or liabilities for which a declaration of
personal liability is sought in terms of s 424. However in
Saincic &
Others v Industro-Clean (Pty) Ltd & Another
2009 (1) SA 538
SCA at para [20] Farlam JA stated that the absence of
a causal link is a factor to be taken into account when the court
exercises
its discretion whether or not to grant the declaration.
In a separate judgment Harms JA confirmed this at para [30].
It
is clear from a reading of s 424 (1) that the court has a general
discretion to hold a person personally responsible for
all or
any of the debts or other liabilities of the company. The word
“
may”
is
used and not
“
shall”
which latter word is generally
associated with a peremptive provision.
[26]
Recklessness,
as the term is understood in legal parlance is a totally different
concept than negligence, although it might be seen
as “
growwe
nalatigheid
”
or
“
gross
negligence”.
See:
Fourie
v Newton
2010 JDR 1437 SCA at para [29]:
“…
acting ‘recklessly’
consists in an entire failure to give consideration to the
consequences of one’s actions,
in other words, an attitude of
reckless disregard of such consequences.”
Put
otherwise, as in
Philotex
loc cit at 144A,
“…
.,
‘recklessly’ does not connote mere negligence but at the
very least gross negligence and nothing in s 424 warrants
the word’s
being given any other than its ordinary meaning.”
Howie
JA (as he then was) proceeded at 144B of the judgment as follows:
“
In
the application of the recklessness test to the evidence before it a
Court should have regard,
inter
alia,
to
the scope of operations of the company, the role, functions and
powers of the directors, the amount of the debts, the extent
of the
company’s financial difficulties and the prospects, if any, of
recovery:….”
[27]
In
Meskin,
Henochberg
on the Companies Act
,
vol 1 at 916 (2) the author makes the following submission:
“
It
is submitted that, based on the above dicta in the Philotex case and
the Fourie case,
supra
,
mere non-compliance with a duty, in the absence of grounds for
suspicion (Fisheries Development Corporation
supra
at 165) may properly be regarded as negligent rather than reckless
conduct (eg, books of the company not being written up and the
director failing to determine the true facts (Howard v Herrigel NO
1991 (2) (SA) 660 (A) at 678)), but, if there are clear suspicious
circumstances in respect of a company’s transactions, the
director has a duty to act and a failure to so, or mere reliance
on
information given by a third party, must be reckless conduct
according to the test postulated in the Van As case
supra
(but cf the Triptomania Twee case
supra
at 374, where failure by a highly qualified director to investigate
clear inconsistencies in the financial statements in respect
of tax
payments was determent to be negligent and not reckless.”
[28]
The aspects “
with
the intent to defraud
”
or
“
for
a fraudulent purpose
”
ordinarily
play a role where the company is carrying on its business and incurs
debts at a time when to the knowledge of the directors
there is no
reasonable prospect of the creditors ever receiving payment.
See Henochsberg
loc
cit
at
916 (2). One single reckless or fraudulent transaction is
sufficient to bring the conduct within the ambit of s 424(1).
VIII
EVALUATION OF
THE EVIDENCE
[29]
It is clear from the evidence that Feedex was at all relevant times
fully aware of the identity of the producers with whom
Elysium
concluded back to back contracts. There was no recklessness or
intention to defraud or fraudulent purpose in the
manner in which
defendant conducted its business. The attitude and actions of
defendant since January, but particularly during
May and June 2006
were criticized by Mr Zietsman and these should be considered more
closely. It must be pointed out that
plaintiffs failed to rely
in their particulars of claim on such conduct, in particular the
failure to deliver grain, as a ground
for liability in terms of s
424(1).
[30]
Defendant indicated at an early stage to Mr Botha that it would not
be able to comply with its contractual obligations pertaining
to the
Loggenberg en Van der Westhuizen contracts as these two producers
failed to plant any crop. It is clear from the evidence
that
the price of sunflower went up in the meantime and that if sunflower
had to be purchased from other producers, the purchaser
would have
paid more than the original price agreed upon. Feedex was in a
position to negotiate with its purchaser(s), as
Mr Botha testified,
for delivery to take place at a later stage and even at the end of
the next season. I am mindful of the
fact that successful
negotiations might have come at a price. It is however evident
from Mr Botha’s evidence and the
letters referred to by him in
evidence that he took a strong and even obstinate stance against
defendant, insisting on contractual
compliance and withholding of
monies that were due and payable. On 30 May 2006 Mr Botha
warned as follows:
“
Ons
het genoeg moeilikheid met kort-lewering, om nog moeilikheid te kry
met laat-lewering. Onthou dat laat-lewering se gevolge
vir alle
praktiese doeleindes, dieselfde is as nie-lewering. Dit kan
selfs erger wees, aangesien daar ‘n prys penalisasie
is.”
The
alternative offers were made at a stage when defendant had already
indicated that Elysium
“
bang
is Feedex hou geld terug van boere wat onskuldig is.”
This
was recorded by Mr Botha in his letter of 7 June 2006.
[31]
By the end of May Feedex failed to pay defendant for grain delivered
and it is apparent that defendant was dissatisfied with
the
situation. This was contrary to the practice that had been
developed notwithstanding the terms and conditions of the
written
contracts. The question to be considered is whether defendant’s
failure to make further deliveries in such circumstances,
especially
in so far as Feedex insisted that payment would only be made when
Elysium complied with all its contractual obligations
fully, could be
found to be reckless or fraudulent conduct. It must have been
clear to defendant at that stage that it was
objectively impossible
to comply with all its contractual obligations and therefore, even if
the R278 906.00 was to be paid
on receipt of the five extra
freights as offered by Mr Botha and confirmed in his letter of 7 June
2006, chances were that Feedex
might withhold payment in respect of
these further deliveries, causing defendant to be out of pocket and
unable to pay its producers.
Ex
facie
the
transcript of the insolvency interrogation defendant personally
borrowed money to settle claims of producers in order to prevent
them
from suffering losses due to Feedex’ attitude.
[32]
Although defendant may be blamed for not delivering the five extra
freights of sunflower as allegedly agreed upon in order
to receive
payment of the R278 906.00, the failure to deliver these
freights cannot be regarded as reckless or fraudulent
conduct by the
director of the insolvent company. There was no undertaking by
Feedex to also pay for the five freights of
sunflower upon delivery
and based on its attitude to hold money back, the reasonable supplier
might have been under the impression
that Feedex would not pay for
these five freights until there was full compliance by Elysium in
respect of all its contractual
obligations. Defendant’s
fear was real. The letter of 7 June 2006, the last paragraph in
particular, confirms
this. The parties knew, as was the case
several months earlier in that defendant played open cards with Mr
Botha, it would
not be possible to deliver fully in respect of all
contracts. At that stage defendant was already instructing
attorneys as
the simple summons was issued as soon as 12 June 2006.
Mr Zietsman’s submission that defendant misled Feedex when he
undertook to deliver five freights while at that stage instructing
attorneys to sue Feedex and that such conduct was fraudulent
in the
circumstances is without substance, bearing in mind my comments
supra.
In
any event, this was not relied upon as a ground for liability in
terms of s 424(1).
[33]
Mr Zietsman also submitted that defendant’s fraudulent action
is evident from the fact that he elected to issue summons
(on behalf
of his company) against the producers Oosthuizen and Loggenberg, but
that no action was taken against others who failed
to deliver,
including himself and his son. Defendant was thereafter the
driving force of the litigation between his company
and Feedex over a
period of years, only to surrender eventually and thereafter to apply
for his company’s winding-up.
[34]
As mentioned plaintiffs rely in their particulars of claim on sixteen
grounds for the relief claimed. Few of these have
been touched
upon in evidence and/or in argument by counsel. Apparently some
of the grounds have been formulated based on
defendant’s
evidence during the insolvency interrogations before the Koppies
magistrate. Mr Botha testified that he
was unaware of the
existence of the defendant’s company until May 2006.
Therefore plaintiffs rely on s 50 of the Old
Companies Act which
provided for personal liability in certain instances. The
action was not based on the provisions of this
section, but reliance
was placed on non-compliance thereof as one of the grounds for
liability under s 424(1). Defendant
is also blamed for entering
into contracts on behalf of his company with
inter
alia
Feedex and
Tiger Brands without ensuring that the back-to-back contracts with
its producers would yield sufficient produce to comply
with its
contractual obligations. Fact is that for several years the
parties contracted on the same basis without any problems.
Also, clearly identified producers’ crops were sold to Feedex
with reference to their names and the particular farms where
crops
would be planted.
[35]
It is also averred that defendant should have arranged for
entrenchment (“verskansing”) to enable his company to
still comply with its contractual obligations in the event of a
failure by its producers to produce in terms of their obligations.
Bearing in mind Mr Botha’s own evidence that it was always
possible to renegotiate delivery dates and/or to buy in grain
from
other producers, and an awareness of the risks, this ground is on its
own inadequate to find in plaintiffs’ favour.
Mr Zietsman
did not argue the issue, as in the case of the inadequate
back-to-back contracts, at all.
[36]
I do not accept that the litigation instituted can be labelled as
fruitless and that defendant acted fraudulently. His
company
had a liquid claim while Feedex’ claim for damages was
illiquid. The mere fact that legal costs have been incurred
is
a necessary consequence of litigation. It appears from
defendant’s interrogation that his company carried on with
business during at least 2007. An amount of in excess of R1.5M
was received during this year from Tiger Brands in respect
of maize
contracts which were entered into on the same basis as in casu.
However various producers, including defendant personally,
had to be
paid and expenses settled if the cheques relied upon by plaintiffs
are considered. The investigation was not continued
and it is
uncertain what was due to the company. Mr Zietsman did not
labour this issue at all during argument. The
receipt of
payments by either defendant or his company’s attorney has been
dealt with in the plea and no evidence pointing
to action within the
ambit of s 424(1) has been led. It was alleged that payments
had been made from the insolvent company’s
cheque account
towards university expenses of defendant’s daughter, but it has
not been proven when these payments were made
and that defendant was
not entitled at the time to authorise these. This aspect was
also not argued on behalf of plaintiffs.
The further
allegations that defendant used his company as a conduit and that he
failed to differentiate between the legal
persona
of his company and himself have not been addressed in evidence or
arguments. It is apparent from the contracts entered into
that
Feedex should have been well aware that defendant and his son entered
into contracts under their own names, distinct from
the name Elysium
Graanbemarking. These allegations are without merit. The
same applies to those not specifically mentioned
herein.
[37]
In my view defendant did not act recklessly, fraudulently or with the
intention to defraud creditors, and Feedex in particular,
although
there can be no doubt that his company failed to comply with its
contractual obligations. The plaintiffs failed
to bring their
claim within the ambit of s 424 (1) of the Old Companies Act and
therefore the action should be dismissed.
[38]
Even in the event of a finding that defendant acted recklessly to an
extent, I still have a discretion whether or not to issue
a
declaratory order in accordance with the aforesaid subsection.
Bearing in mind the conduct of Feedex and Mr Botha in particular,
and
there obvious intention from the onset that Elysium would be held to
its contractual obligations, come what may, until the
very last
moment when it was prepared to advance a possible solution, the
manner in which defendant dealt with the matter is such
that he
should in my view not be held personally liable for the debts of the
insolvent company. Feedex, and Mr Zietsman in
his argument
before me, maintained that Feedex was within their rights to withhold
payment notwithstanding the evidence presented
by Mr Botha referred
to above. Contrary to the wording of its written contracts, it
paid producers on delivery in the past.
Defendant had reason to
believe that if he, his son and other producers were to deliver grain
in circumstances where it was impossible
for Elysium to comply fully
with its contractual obligations, Feedex might have refused to pay.
In the process blameless
“
onskuldige
”
producers might be prejudiced.
[39]
The plaintiffs having been unsuccessful, there is no reason why the
claim should not be dismissed with costs.
IX
THE REQUEST
FOR FURTHER PARTICULARS AND COSTS
[40]
In conclusion I also need to deal with the costs of the plaintiffs’
application in accordance with rule 21(4) of the
Uniform Rules of
Court and the wasted costs in respect of the postponement of the
trial in November 2014. Mr Maritz submitted
that the plaintiffs
should pay these costs
de
bonis propriis
. Mr
Zietsman argued that the wasted costs in respect of the postponement
of the trial should be costs in the cause and defendant
be ordered to
pay the costs of the application in accordance with my discretion as
set out in rule 21(5).
[41]
The plaintiffs insisted that defendant be directed to supply better
further particulars to their request for further particulars
for
purposes of trial dated 17 October 2014. The application, filed
on 21 April 2015, was opposed and was set down for hearing
on 28 May
2015, a mere three court dates before the first day of the hearing of
the main action. I quote
verbatim
from the notice of
motion which is in Afrikaans:
“
1.
Dat die Respondent verplig word om ‘n
verbeterde
antwoord
op die Applikant se Versoek om
Nadere Besonderhede gedateer 17 Oktober 2014 onder saaknommer
3635/2013 en meer spesifiek paragrawe
1, 3, 5, 6, 7, 8, 9, 10, 11,
12, 14, 15, 17, 18, 19, 20, 21, 22, 23, 24, en 25 en wel binne ‘n
tydperk soos bepaal deur die
Agbare Verhoorregter af te lewer;
2. Indien die
Respondent versuim om aan hierdie bevel te voldoen dat:
2.1 Verlof aan die Applikante
(Eiser) om die hof te nader om op dieselfde stukke of soos aangevul
vir die skrapping van die
Verweerder se verweer, en vonnis tesame met
koste teen die Verweerder soos uiteengesit in die Besonderhede van
Vordering.
3. Dat die
Respondent gelas word om die koste van hierdie aansoek te betaal;
4.
Sodanige verdere en/of alternatiewe regshulp aan die Applikante te
verleen as wat die Agbare Hof mag behaag;”
(emphasis
added.)
[42]
In order to appreciate that dispute it is necessary to provide a
history of the litigation in chronological order:
1
The plaintiffs issued summons on 10 September 2013.
2
Defendant’s plea was filed on 25 October 2013.
3
On 24 January 2014 plaintiffs filed their notice of set down, trial
dates having been allocated, to wit 25, 26 and 28 November 2014.
4
On 26 March 2014 a pre-trial conference in terms of rule 37(8) was
held before Kruger J, who
inter alia
ordered defendant to make
discovery by not later than 30 May 2014. The parties were also
directed to file their requests
for further particulars for purposes
of trial by not later than 31 July 2014 and to furnish the further
particulars requested in
terms of the rules. The parties were
also directed to hold a pre-trial conference by 25 August 2014 and to
file the minutes
thereof by 5 September 2014. At that stage the
matter was not certified trial-ready.
5
The rule 37 minutes were filed on 3 July 2014.
6
On 17 October 2014, nearly a year after the close of pleadings, the
plaintiffs filed a rule 37 questionnaire and requested further
particulars for purposes of trial. The request for further
particulars was filed contrary to Kruger J’s directions.
7
Defendant responded to plaintiffs’ request and filed his
answers
on 5 November 2014.
8
Three separate applications to compel were filed by plaintiffs on 7
November 2014 in respect of the alleged failure to file a discovery
affidavit, the failure to supply better further particulars
and the
failure to respond to the rule 37 questionnaire. One
application would suffice. The applications were set down
for
hearing in the unopposed motion court and on 13 November 2014 Lekale
J granted certain orders. Defendant was compelled
to file
better further particulars for purposes of trial and to file its
discovery affidavit. The application to compel better
further
particulars was fatally defective in that the date of set down was
reflected as 6 November 2014 instead of 13 November,
while the other
application was totally unnecessary and ill-founded as defendant had
served his discover affidavit months before
the application to compel
was brought. The orders were abandoned eventually.
9
On 20 November 2014 plaintiffs brought a further application to
compel
better further particulars which was set down for hearing on
25 November 2014, but not proceeded with. On 25 November 2014
the main action and the application in terms of rule 21(4) were
removed from the roll by agreement. On that same day
plaintiffs’
attorney enrolled the matter again for hearing on
2, 3 and 5 June 2015, the dates having been agreed upon by the
parties and allocated
by the Registrar. This was done,
well-knowing that the better further particulars the plaintiffs
required were outstanding.
10
On 21 April 2015, five months after a similar application was removed
from the
roll, plaintiffs launched the present application in terms
of rule 21(4), still seeking the same better further particulars as
in the past, which application was opposed as mentioned
infra
.
This application was enrolled for hearing on 28 May 2015, a mere
three court days prior to the first trial date of the main
action.
Heads of argument were filed, but on the day of the hearing the
parties settled the matter, save for the issue of
costs.
[43]
After the close of pleadings any party may deliver a notice
requesting
only
such further particulars as
are
strictly necessary
to enable him/her to prepare for trial. Such a request shall be
complied with within ten days of receipt thereof. See
rule
21(2) of the High Court rules. Although rule 21(2) stipulates
that a party may request his/her further particulars by
a notice
delivered not less than twenty days before trial, our High Courts,
and this division in particular, have approached the
matter
differently in recent times following the need to have a proper case
flow management system in place. Therefore, as
a general rule,
the case flow management judge shall not certify a defended civil
action as trial-ready unless further particulars
have been requested
and supplied, to mention just one aspect relating to pre-trial
procedure. I accept that there was uncertainty
amongst
practitioners as to the exact ambit of the practice in this division
notwithstanding the introduction of a case flow management
procedure
by Erasmus AJP (as he then was) in the beginning of 2014.
Therefore it shall not be held against the parties and
plaintiffs in
particular that no certificate has been issued indicating that the
main action was trial-ready. Fact of the
matter is that on 28
May 2015 the case was not ready for trial as the parties were still
at loggerheads as to whether or not better
further particulars ought
to be supplied.
[44]
Rule 21(5) stipulates that the trial court shall at the conclusion of
the trial
mero motu
consider whether the further particulars requested by a party were
strictly necessary and shall at that stage disallow all costs
of and
flowing from any unnecessary request or reply, or both, and may order
either party to pay the costs thereby wasted on an
attorney and
client basis or otherwise. Rule 21(2) is clear: a party is only
entitled to particulars that are strictly necessary
to enable him/her
to prepare for trial. A party is particularly not entitled to
further particulars for trial relating to
a bare denial. See
Swart v De Beer
1989 (3) SA 622
(ECD) at 625D and further, and the numerous
authorities relied upon. In
Hardy
v Hardy
1961
(1) SA 643
(WLD) at 646D-F, a judgment by Munnik AJ (as he then was)
relied upon in
Swart
v De Beer
, the
following remarks were made:
“
From
a perusal of the numerous authorities quoted from the Bar by both
counsel for the plaintiff and counsel for the defendant,
it appears
that in each case where particulars were sought and granted, they
were particulars of allegations made in the pleadings
by the party
from whom such particulars were sought.
No
case was quoted to me in which a party, who had pleaded a bare denial
of the allegations made by his opponent, was ordered to
give
particulars of any matter placed in issue by such a denial. That this
is so, is not surprising, as this would be tantamount
to ordering a
party to furnish particulars of allegations made by his opponent, and
it cannot be the function of particulars to
enable a party to prove
allegations which he himself has made.
”
(emphasis added.)
[45]
Where the denial necessarily involves an implied and affirmative
allegation, the position is different for in such a case the
mere
fact that the allegation is not stated in so many words, the court
will not be precluded from ordering further particulars.
Hardy
v Hardy
loc
cit
at 646H –
647A.
[46]
It should therefore be abundantly clear that a litigant confronted by
his opponent’s denials is not entitled to admissions
or to a
better answer as that already provided in response to a request for
further particular for purposes of trial. A party
is also not
entitled to further particulars which are irrelevant and do not
relate to the pleaded issues. In similar vein
a party may not
in a request for further particulars raise further or new issues.
See
De Polo and
Another v Dreyer and Others
1991 (2) SA 164
(WLD) at 174I – J.
[47]
It is trite that the applicant in application proceedings must make
out his/her case in the founding affidavit. A litigant
should
not be allowed to try and make out a case in the replying affidavit.
The founding affidavit must contain sufficient
facts in itself upon
which a court may find in the applicant’s favour. An
applicant must stand or fall by his/her founding
affidavit. See
Director of
Hospital Services v Mistry
1979 (1) SA 626
(AD) at 635H – 636D.
[48]
Fresh allegations cannot be made in the replying affidavit.
Allegations in an applicant’s replying affidavit which
should
have appeared in the founding affidavit or which are irrelevant and
would gravely prejudice a respondent may be struck out
and/or
disregarded. It is not sufficient to prepare a skeleton of a
case in the founding affidavit and then to add flesh
in the replying
affidavit. See
Titty’s
Bar and Bottle Store (Pty) Ltd v ABC Garage and Others
1974 (4) SA 362
(TPD) at 369A and further.
In
casu,
I have to
consider costs after having considered the evidence led at the trial
and further submissions made, but I cannot close
my eyes for the
history of the matter and allegations made in the application papers.
[49]
Mr Zietsman and Mr Senekal, a senior attorney of Matsepes Inc, have
been acting on behalf of plaintiffs from the onset and
they were also
responsible for drafting the particulars of claim. The
plaintiffs made detailed averments and
inter
alia
pleaded
material facts – and even evidence - in sixteen sub-paragraphs
under paragraph six of the particulars of claim in
order to arrive at
the conclusion that the business of the insolvent company was carried
on recklessly or with the intention to
defraud creditors thereof and
that defendant shall be personally held liable for the insolvent
company’s debts.
[50]
It is trite that legal representatives drafting pleadings on behalf
of litigants shall make averments only if a factual basis
has been
laid for the averments to be made. They may not suck facts out
of their proverbial thumbs.
[51]
Mr Senekal personally conducted interrogations in terms of s 415 of
the Old Companies Act on behalf of the plaintiffs and thoroughly
interrogated defendant on two occasions. Other persons were
also interrogated, including two people specifically mentioned
in the
particulars of claim. The plaintiffs were presented with
financial records of the insolvent company and contracts
entered into
between Elysium Graanbemarking and Feedex. They also obtained
pleadings in the litigation between the insolvent
company and Feedex
at a stage. I have reason to believe that the facts (and
evidence) relied upon to draft the particulars
of claim were obtained
from the interrogations and information and documentation received
before, during and/or following such
interrogations. Plaintiffs
should have been well placed to proceed with the trial.
[52]
Plaintiffs had to prove their case and could not call upon defendant
to provide particulars which would merely assist them
in preparing
for trial the case they had to prove, particularly where defendant
had put all issues in dispute.
[53]
The application was not proceeded with as the parties came to an
agreement that defendant would supply some of the particulars
sought. It is however necessary to deal with the application in
order to arrive at an appropriate costs order. Mr Senekal
deposed to both the founding and replying affidavit
in
casu
. He
particularly should have been in a position to inform the court as to
why the particulars sought were strictly necessary
to enable
plaintiffs to prepare for trial. He made the bold assertion in
paragraph [18] of the founding affidavit that detailed
legal
submissions would be made to the court at the hearing of the
application and equally boldly submitted in paragraph [19] that
the
responses received from defendant in reply to the request for further
particulars for purposes of trial caused plaintiffs serious
prejudice
as they were prevented from preparing for trial. These are
legal conclusions which the court had to adjudicate
eventually, but
unfortunately no facts were recorded in support of plaintiffs’
case as to why the further particulars were
sought, that these were
strictly necessary and on what basis plaintiffs would be prejudiced
if these were not provided.
[54]
I would not be prepared to consider the replying affidavit if the
application was to be adjudicated on the merits; alternatively,
if I
did and allowed the averments in the replying affidavit to stand, I
would have allowed defendant a further opportunity to
deal with those
aspects.
[55]
Plaintiffs must blame themselves for the predicament, if it can be
described as such, in which they found them. The pleadings
were
closed in November 2013 and Kruger J directed the parties to file
requests for further particulars for purposes of trial by
not later
than 31 July 2014. Notwithstanding these two events, plaintiffs
waited until 17 October 2014 to file their request.
Defendant
complied timeously, but not with plaintiffs’ satisfaction.
This caused the abortive applications referred
to above and
eventually the removal of the action and application in terms of rule
21(4) from the roll on 25 November 2014.
Plaintiffs immediately
set down the matter for hearing on 2, 3 and 5 June 2015 and instead
of launching a proper application to
compel compliance in terms of
rule 21 immediately, they waited a further five months. I
cannot see that any order that I
might have made in favour of
plaintiffs at that late stage of the proceedings could have
alleviated plaintiffs’ burden to
prepare for the hearing that
was enrolled to proceed the following week.
[56]
Mr Zietsman submitted in his heads of arguments in the application
proceedings that plaintiffs had to rely upon the evidence
of outside
sources and the evidence of defendant as the insolvent company’s
former sole director. I disagree with this
submission.
Surely, plaintiffs would have to rely on the evidence of third
parties and documentary evidence obtained
,
but it is not for defendant to prove plaintiffs’ claim and/or
to make the required admissions where he had already denied
the
applicable averments. Mr Zietsman also submitted that the
finding in
Swart
v De Beer
loc
cit
was
questionable and secondly, that the case is distinguishable. I
could not find any annotations to the judgment and was
not referred
to any authorities questioning the court’s findings. I
accept that this judgment, which followed a long
line of cases, has
not been criticised or overruled notwithstanding being delivered a
quarter of a century ago. I respectfully
agree with the court’s
reasoning and conclusion. The mere fact that the court did not
specifically refer to rule 18(5)
is immaterial. That rule
stipulates that if a party denies an allegation of fact in the
previous pleading of his/her opponent,
he/she shall not do so
evasively, but answer the point of substance. There is nothing
more to be stated if one denies an
averment to say so. Although
the cause of action in
Swart
v De Beer
was
different from that
in
casu,
the legal
principle reiterated in that judgment is clear and the case should
not be distinguished. The judgment in
Schmidt
Plant Hire (Pty) Ltd v Pedrelli
1990
(1) SA 398
(D & CLD) on which Mr Zietsman relied is clearly
distinguishable. The claim in reconvention was for damages
alleged to
have been suffered as a result of the collapse of a dam
wall which the plaintiff had built for the defendant. The
request
for further particulars for trial was reasonable and the
information was strictly necessary to enable plaintiff to prepare for
trial. The court’s
dicta
at pp 402I –
403A that it was entitled in an enquiry such as it was confronted
with to go beyond the pleadings was well-founded.
There,
particulars were sought relating directly to the counterclaim,
i.e.
whether the dam wall had been repaired and by whom, what were the
costs involved and had any efforts been made to repair the dam
wall,
and if so, by whom and at what costs. Here, plaintiffs are
seeking mainly admissions and/or defendant’s interpretation
of
documents, bearing in mind that the onus to prove defendant’s
liability is on plaintiffs and defendant does not have to
assist
them.
[57]
I agree with most of the allegations contained in defendant’s
answering affidavit and the submissions made by his counsel.
I
do not intend dealing in detail with the individual requests for
further particulars, save as stated later in this paragraph.
I
believe that my general observations suffice to a large extent.
It is not necessary for defendant to make any admissions
in order to
assist plaintiffs to prepare for trial or to prove their case against
him. In so far as defendant elected to
deny the version pleaded
by plaintiffs, he could not be called upon to admit one, more, or all
of the allegations plaintiffs wanted
him to admit. I shall
limit my discussion to some issues, but it should not be understood
that I disregarded those not mentioned.
Defendant denied the
alleged unlawful conduct as set out in detail in the particulars of
claim, save for a few admissions.
The aim with questions 6, 11,
14, 19, 21 and 23 was to extract admissions in the face of
defendant’s earlier denials.
Plaintiffs were not entitled
to any better responses as those advanced. Questions 7, 20, 22
and 24 were premised on admissions
being made which were not made.
These are therefore irrelevant. There might have been a case
made out for defendant
to respond to questions 5, 9 and 10, but as
mentioned, applicant failed to do so. Questions 3, 8, and 12
relate
to interpretation and it is really irrelevant for purposes of
preparing for trial. Question 1 is irrelevant as plaintiffs
rely on a specific transgression of s 50 of the Old Companies Act,
which has been denied, and they are not entitled to unfair
interrogation. The other questions have been abandoned.
[58]
Plaintiffs were in a much better position than any normal civil
litigant in so far as they were armed with the transcript of
the
interrogations held under s 415 of the Old Companies Act and had been
provided with the financial records and other financial
information
of the insolvent company, not in terms of normal discovery at a late
stage of the proceedings, but long ago and when
the interrogations
took place. Furthermore they have all along been in possession
of all relevant contracts entered into
by the insolvent company,
referred to only as Elysium Graanbemarking, with Feedex. It is
also important to remember that
plaintiffs had every opportunity to
consult with all potential witnesses, probably even before summons
was issued herein.
There can’t be any prejudice to
plaintiffs. They could and should have summoned all potential
witnesses and in some
cases witnesses could have been summoned
duces
tecum
. They
should have been ready for trial, and if not, it was of their own
making and defendant should not be blamed.
If they were not
ready, the only deductions to be made are that they either did not do
their homework and prepare for trial properly,
or that they were on
an unsuccessful fishing expedition which is hard to believe in so far
as the particulars of claim were drawn
by experienced and respected
legal representatives who surely would not have acted on speculation,
but facts.
[59]
Mr Maritz wanted Mr Senekal to admit in cross-examination that
plaintiffs were aware of all the answers they requested in their
request for further particulars. I stopped Mr Maritz from
cross-examination in this regard as the aim had nothing to do with
the merits of the claim, but to extract evidence to show that
plaintiffs acted grossly unreasonable. Mr Senekal testified
that the request was drawn up in collaboration with senior counsel,
Mr Zietsman, and that they believed it to be reasonable.
He
inter alia
indicated that plaintiffs wanted to know whether defendant admitted
that the insolvent company entered into contracts with Feedex
and
that these were for delivery of grain. Plaintiffs were in
possession of several contracts between Elysium and Feedex
and it was
apparent that these were for grain delivery. Defendant
testified during the insolvency interrogation that he acted
on behalf
of his company when the contracts were entered into. We know
that the contracts do not refer to the abbreviation
“(Pty) Ltd”
or company number, but we also know that Mr Botha testified on behalf
of plaintiffs that no contracts were
concluded with Elysium
Graanbemarking (Pty) Ltd, the company, although his testimony is not
supported by Feedex’ allegations
contained in the pleadings
referred to
supra
which led to
judgment by default being granted against the company. The
present action was brought for the ultimate benefit
of Feedex, a
creditor whose claim against the insolvent company was never proved.
This is inexplicable.
[60]
Therefore I conclude in saying that there was no basis on which the
application could succeed and I would have dismissed it
with costs.
It is so that in terms of an agreement entered into defendant
provided some of the particulars required.
Even in so far as I
might have found that plaintiffs were strictly speaking entitled to
some better further particulars, I would
have exercised my discretion
against them. The pleadings have been closed eighteen months
earlier and the parties were at
the door steps of the trial court for
a second time. Again, as was the case in November 2014,
plaintiffs decided to wait
until the eleventh hour to launch exactly
the same interlocutory application as before. Such approach
cannot be countenanced.
There is much criticism to be levelled
at the manner in which plaintiffs elected to litigate. They
acted grossly unreasonable
in requiring irrelevant particulars and/or
particulars to which they were not entitled to prepare for trial, but
their blatant
disregard for the directions issued by Kruger J and the
approach to wait until the eleventh hour on two occasions to launch
their
interlocutory applications must be penalised. The
information the plaintiffs required in respect of contracts and the
parties
involved thereto could easily be obtained from Feedex who is
really the driving force behind the plaintiffs’ case.
Other information required was either irrelevant or so obvious that
the application could really be regarded as frivolous.
If the
usual costs order is made, defendant as petitioning creditor in the
winding-up application will have to bear such costs
as no claims have
been proved. Even if claims are proved at a later stage which
is highly unlikely, there is no reason why
such creditors shall be
saddled with payment of such costs. Plaintiffs should never
have instructed their attorneys to launch
the two applications in the
manner they did and in so doing acted unreasonably and improper.
They should be ordered to pay
the costs of the application issued on
21 April 2015
de
bonis propriis
notwithstanding
the general rule. See:
Cooper
N.O. v First National Bank of SA Ltd
2001 (3) SA 705
(SCA) at para
37; Ex parte Klopper N.O.: in re Sogervim SA (Pty) Ltd (in
liquidation), (Sogervim SA intervening)
1971
(3) SA 791
(TPD) at 797G and
Grobbelaar
v Grobbelaar
1959
(4) SA 719
(AD) at 725B. The same order should be made in
respect of the wasted costs pertaining to the postponement of the
hearing
set down for 25, 26 and 28 November 2014.
X
ORDER
[61]
I therefore make the following orders:
1.
Plaintiffs’
action is dismissed with costs.
2.
Plaintiffs are directed
to pay the costs of the rule 21 application dated 21 April 2015,
including the wasted costs occasioned by
the postponement of the
hearing set down for 25, 26 & 28 November 2014
de
bonis propriis
.
3.
The legal costs
incurred by plaintiffs in prayer 2
supra
shall not form part
of the administration costs in the liquidation of Elysium
Graanbemarking (Pty) Ltd.
_____________
J.P.
DAFFUE, J
On
Behalf of the Applicant:
Adv. P Zietsman SC
Instructed
by:
Matsepes
Inc.
BLOEMFONTEIN
9301
On
Behalf of the Respondent:
Adv. J D Maritz SC
Instructed by:
Symington
& De Kok
BLOEMFONTEIN