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[2016] ZAFSHC 78
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Eldaro Trading (Pty) Ltd v Meraka Lesotho (Pty) Ltd (1092/2016) [2016] ZAFSHC 78 (19 May 2016)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Application
no.1092/2016
In
the matter between:
ELDARO
TRADING (PTY)
LTD)
APPLICANT
and
MERAKA
LESOTHO (PTY) LTD
RESPONDENT
JUDGMENT
BY
:
MBHELE,
J
DELIVERED
ON:
19 MAY 2016
Introduction
[1]
The Respondent seeks an order for reconsideration and setting aside
of the order granted by Chesiwe. A.J dated
8
th
March 2016
authorising the attachment of the respondent’s property to
confirm jurisdiction of this Court and grant leave to the Applicant
to serve the summons issued under case number
1093/2016
on the Respondent, in Lesotho at its principal offices.
[2]
The application was brought on an urgent basis in terms of Rule
6
(
12
)
c
of the uniform Rules of Court.
Background:
[3]
The Applicant is a company duly registered and incorporated as such
in terms of the company laws of South Africa with its registered
head
offices at Bloemfontein.
[4]
Respondent is a company registered in terms of the Laws of the
Kingdom of Lesotho with its principal place of business in Maseru,
Lesotho.
[5]
On the
16
th
February 2015
in
Maseru, the parties signed a written agreement in terms whereof the
Applicant was appointed the sole agent, representative and
supplier
of livestock to the respondent for an indefinite period. The nature
of the relationship between the parties was that the
applicant would
identify and purchase cattle and sheep on behalf of the respondent in
South Africa.
[6]
Respondent would at all times be liable for the payment of the costs
per kilogram of all livestock ordered which costs would
be due and
payable upon an invoice issued by the applicant.
[7]
The Respondent ceased to order livestock from the Applicant and
entered into a relationship with a new supplier known as
Sorour
Mine Industrial
.
The new supplier would fulfill the role performed by the applicant.
[8]
On
8
March 2016
the applicant approached this Court with an urgent ex parte
application to found or confirm jurisdiction of this Court to
entertain
an action the applicant instituted against the respondent
as
peregrini
under case no 1093/2016. The applicant also sought relief to serve
such papers on the respondent at its principal place of business
in
Maseru through Sheriff.
[9]
The order was duly granted by Chesiwe. A.J. with, no return date, as
follows:
(i)
This
application is heard as an urgent application and non-compliance
pertaining to form, service and time limits are condoned as
envisaged
by Rule
6
(
12
).
(ii)
In order to
find jurisdiction, confirm jurisdiction leave is granted to the
applicant to attach any movable property belonging to
the respondent
in the Republic of South Africa (wherever it is found) and more in
particular leave is granted to attach a trailer
with registration
number:
M4323
as well as any livestock therein belonging to the respondent wherever
same might be found in the Republic of South Africa. Such
attachment
to be effected by the appropriate sheriff, such sheriff to keep same
pending the outcome of action number:
1093/2016
wherein applicant seeks judgment against the respondent for the
amount of
R651
282.64
(
Six
Million Five Hundred and Thirty One Thousand Two Hundred and Eighty
two Rand and sixty four cents
)
together with ancillary orders.
3.
Leave is granted to the Applicant to serve the said summons number
1093/2016
,
as well as this application together with the order on the
respondent in Lesotho at its principal offices at 30 Lights Building,
Moshoeshoe Road, Maseru, such service to be effected by the duly
appointed Sheriff in Maseru.
4.
Respondents to pay the costs only if opposed (in future or at all).
[10] The applicant now
requests the court to amend the order to the effect that the assets
attached be substituted with the R650
000.00 held in the Trust
account of the Respondent’s Attorneys.
Rule
6
(
12
)
(
c
)
provides:
“
a person against whom an order
was granted in his absence in an urgent application may by notice,
set down the matter for consideration
of the order “
.
Issues
not in dispute:
[11]
Parties are in agreement that at the time when the order was granted,
the assets that were subsequently attached, were not
owned by the
respondent.
[12]
It is common cause that the property that was attached was
substituted with cash to the tune of
R650
000.00
which amount is kept in the trust account of the respondent’s
Attorneys in Bloemfontein.
Contentions
of the parties:
[13]
The respondent contends that the granting of the order by Chesiwe.
A.J. on
8
March 2016
was wrong in law for the following reasons:
(i)
The
deponent was not authorized by the Applicant to launch the
application.
(ii)
The
applicant failed to show that the property sought to be attached was
within the jurisdiction of the Court or within the Republic
of South
Africa at the time the application was brought.
(iii)
The
applicant brought this application after summons was issued.
(iv)
The
applicant failed to display the utmost good faith to the Court when
bringing the application
ex
parte
and failed to disclose material facts which might have influenced the
Court not to grant the relief claimed.
(v)
The
applicant failed to make out prima facie case against the respondent.
[14]
Mr. Louw, on behalf of the respondent, in oral argument submits that
the mere allegation by the deponent that he has authority
to depose
to an affidavit is not sufficient in the absence of a resolution
giving him the necessary authority to litigate on behalf
of the
applicant. Mr. Zietsman, on behalf of the applicant, contends that
the only other director in the company confirmed the
Deponent’s
affidavit and the argument that the requisite authority was not
obtained, is without basis. It is clear from the
papers that the
director who would have authorized the application had knowledge of
the application and has aligned himself thereof.
I am satisfied
that the necessary authority was obtained.
[15]
In
ex
parte
applications the applicant must disclose all material facts to the
Court. It is incumbent upon a litigant approaching Court
ex
parte
to bring to light all factors that may influence the Court to grant
or refuse the order sought. In
ex
parte
applications
Courts often do not have the benefit of hearing the other
party, it is therefore of utmost importance for
the applicant to
disclose all relevant factors in the matter.
[16]
The applicant failed to disclose that it applied for the liquidation
of the respondent in the Lesotho High Court, which application,
if
granted, would have resulted in the liquidators taking over the
respondent’s assets.
[17]
Mr Zietsman, on behalf of the applicant, argued that Liquidation
proceedings pending in the Lesotho High Court are irrelevant
to these
proceeding. He further contended that even if a liquidation order had
been granted in Lesotho, the liquidators of the
estate would have no
powers in South Africa until such time as the foreign liquidation
order has been recognized in South Africa.
[18]
The applicant requested the Lesotho High Court to appoint liquidators
to run the business activities of the respondent in the
interest of
creditors and had the order been granted the decision to continue
purchasing livestock from South Africa would have
vested with the
liquidators. This would have had a bearing in the enforcement of the
attachment order.
[19]
It was incumbent on the Applicant to disclose to Chesiwe. A.J that
liquidation proceedings were pending in the Lesotho High
Court. I am
doubtful whether the Court would have granted the order had this
information been brought to light.
[20]
It is argued on behalf of the respondent that the applicant failed to
show that it has a good of cause of action against the
respondent.
[21]
The respondent disputes that it is indebted to the applicant in the
amount of
R6
531 282.64
for livestock sales. The respondent admits indebtedness to the
applicant in the amount of
R2
315 061.01
.
Mr Louw
argued that the said amount was not due and payable as the applicant
had not sent a written demand to the respondent.
[22]
It is not in dispute that the Applicant rendered invoices. Respondent
in its own version admits indebtedness to the Applicant
in the amount
of
R2
315 061.01
.
The respondent conducted itself in a manner that indicates that it
has no intentions to consider material terms of the contract
binding.
Respondent cannot choose to selectively honor some parts of the
contract and disregard others. Respondent in its own version
made it
clear that the contract is not binding due to failure on the part of
the applicant to meet the demand for supply.
[23]
It is common cause that at the time the Applicant obtained this order
there was no proof that the assets sought to be attached
were a
property of the respondent and within the Republic of South Africa.
From the founding affidavit it is clear that the said
assets would
only be a property of the respondent in a future undetermined date.
[24]
It was argued on behalf of the applicant that although the respondent
was not the owner of the said property, the property
was always in
the Court’s jurisdiction, and the respondent later became the
owner.
[25]
In order to succeed with an application to found or confirm
jurisdiction, the Applicant must satisfy the following requirements:
(i)
A
prima facie
cause
of action against the Defendant.
(ii)
That the
Defendant is a
peregrinus
.
(iii)
That the
cause of action arose within the area of jurisdiction of the Court.
(iv)
That the
property in which the
peregrini
Defendant has a beneficial interest is within the jurisdiction of the
Court or Republic of South Africa. The Applicant must prove
that the
property sought to be attached is within the area of jurisdiction of
the Court.
[26]
In
Longman
Distillers v Drop Inn Group Of Liquor Supermarkets (Pty) Ltd
[1990] ZASCA 39
;
1990
(2) SA 906
it was held as follows:
“
in our law, once an incola
applicant establishes that, prima facie, he has a good cause of
action against the
peregrini
Respondent (Defendant), the
Court must, if other requirements are satisfied, grant an order for
the attachment ad
fundandam
of the property of the
peregrine
r
espondent (Defendant)”.
[27]
In casu the Respondent did not own the property within the area of
jurisdiction of the Court nor within the Republic.
[28]
It is clear that the order as granted was incapable of being
given effect to. Courts generally shy away from giving orders
that
are academic and futile in nature. The applicant requested and order
while hoping that in future the respondent would become
the owner of
the property within the Republic.
[29]
I am of the view that the requirements for an order for the
attachment of property to found or confirm jurisdiction were not
met
when the order was granted.
[30]
The argument that the Respondent later became the owner of an amount
of
R650
000.00
held in its Attorneys’ trust account is misplaced as that
amount came into the Attorneys’ trust account as a direct
consequence of the attachment order which, in my view, lacked
basis.
Costs
[31]
Having considered all of the aforegoing I am of the view that the
order granted by Chesiwe. A.J on
8
March 2016
,
must be reconsidered, and set aside. The order sought by the
Applicant is refused. The Applicant to pay the costs of the
Respondent.
The
following order is made:
1.
The order
of this Court dated
8
th
March 2016
under case number:
1092/2016
is set aside.
2.
The
Applicant to pay the costs of this application including the costs
of
one Counsel.
__________________
N.M.
MBHELE. J
On
behalf of the applicant: Adv. P. J. J. Zietsman
Instructed by:
Honey Attorneys
BLOEMFONTEIN
On
behalf of the respondent: Adv. Louw
Instructed by:
Bezuidenhouts Inc
BLOEMFONTEIN