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[2018] ZASCA 163
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Louis Pasteur Holdings (Pty) Ltd and Others v Absa Bank Limited and Others (1119/2017; 1120/2017) [2018] ZASCA 163; 2019 (3) SA 97 (SCA) (29 November 2018)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
Nos: 1119/2017
&
1120/2017
In
re the appeal case no 1119/2017:
LOUIS
PASTEUR HOLDINGS (PTY)
LTD FIRST
APPELLANT
AHMED
ISMAIL GUTTA (PTY)
LTD SECOND
APPELLANT
HAROON
AHMED GUTTA
NO THIRD
APPELLANT
FERIEL
GUTTA
NO FOURTH
APPELLANT
ABDUL
RAZAK AHMED GUTTA
NO FIFTH
APPELLANT
SALEEM
OMAR GUTTA
NO SIXTH
APPELLANT
ZUNAID
OSMAN TAYOB
NO SEVENTH
APPELLANT
LEOPONT
PROPERTIES (PTY)
LTD EIGHTH
APPELLANT
ABDUL
RAZAK AHMED
GUTTA
NINTH
APPELLANT
and
ABSA
BANK
LIMITED FIRST
RESPONDENT
MEDICAL
EMPOWERMENT CONSORTIUM
INVESTMENTS
LIMITED SECOND
RESPONDENT
LIEBENBERG
DAVID RYK VAN DER MERWE NO THIRD
RESPONDENT
ETIENNE
JACQUES NAUDE
NO FOURTH
RESPONDENT
COMPANIES
AND INTELLECTUAL PROPERTY
COMMISSION FIFTH
RESPONDENT
And
in re the appeal case no. 1120/2017:
LOUIS
PASTEUR HOLDINGS (PTY)
LTD FIRST
APPELLANT
DR
HAROON AHMED
GUTTA SECOND
APPELLANT
DR
SALEEM OMAR GUTTA
NO
THIRD APPELLANT
HAROON
AHMED GUTTA
NO FOURTH
APPELLANT
FERIEL
GUTTA
NO FIFTH
APPELLANT
ABDUL
RAZAK AHMED GUTTA
NO SIXTH
APPELLANT
SALEEM
OMAR GUTTA
NO SEVENTH
APPELLANT
ZUNAID
SOMAN TAYOB
NO EIGHTH
APPELLANT
MARIAM
INVESTMENTS (PTY)
LTD NINTH
APPELLANT
HAROON
RASHIED GHOOR
NO TENTH
APPELLANT
ZUNAID
OSMAN TAYOB
NO ELEVENTH
APPELLANT
AKHTER
HOOSEN MOOSA
NO TWELFTH
APPELLANT
ZAINUB
TAYOB
NO THIRTEENTH
APPELLANT
SAFEEYAH
TAYOB
NO
FOURTEENTH
APPELLANT
and
ABSA
BANK
LIMITED FIRST
RESPONDENT
MEDICAL
REVIEW CORPORATION LIMITED SECOND
RESPONDENT
LIEBENBERG
DAVID RYK VAN DER MERWE NO THIRD
RESPONDENT
ETIENNE
JACQUES NAUDE
NO FOURTH
RESPONDENT
COMPANIES
AND INTELLECTUAL PROPERTY
COMMISSION FIFTH
RESPONDENT
Neutral
citation
:
Louis Pasteur Holdings (Pty) Ltd & others v Absa
Bank Limited & others
(1119/2017 & 1120/2017)
[2018]
ZASCA 163
(29 November 2018)
Coram
:
Navsa ADP, Swain, Mathopo and Mocumie JJA and Matojane AJA
Heard
:
12 November 2018
Delivered:
29 November 2018
Summary:
Companies Act 71 of 2008
–
ss 134(3)
and
136
–
business rescue – cession to creditor by debtor of rental
income as security – absence of consent by creditor
for use of
rental income by business rescue practitioner – rental income
insufficient to fully and promptly discharge indebtedness
– use
precluded – no prospect of successful business rescue –
final liquidation of companies.
ORDER
On
appeal from:
Gauteng Division of the High Court, Pretoria
(Preller J sitting as court of first instance):
1. The appeals in case numbers
1119/2017 and 1120/2017 are dismissed.
2. The costs of the appeal are to be
borne by the appellants, jointly and severally, such costs to include
the costs of two counsel,
save for 50 per cent of the costs of the
preparation of the appeal record.
JUDGMENT
Swain
JA (Navsa ADP, Mathopo and Mocumie JJA and Matojane AJA concurring):
[1]
This appeal arises from a failure by the Gauteng Division of the High
Court, Pretoria (Preller J) to determine an agreed upon
separated
issue
in limine
in two related applications and
counter-applications. The court a quo, after a delay of two years in
adjudicating the separated
issue, went on not to decide that issue
but determined the merits of the principal dispute, without affording
an opportunity to
the parties to present argument thereon.
[2]
Before the court a quo were separate applications brought by Absa
Bank Ltd (ABSA), for the final liquidation of two related
companies,
Medical Empowerment Consortium Investments Ltd (MECI) and Medical
Review Corporation Ltd (MRC). MECI is the owner of
the Kine Centre
and MRC is the owner of the adjacent Small Street Mall situated in
central Johannesburg. The basis for the application
against MECI was
the breach of a loan agreement concluded with ABSA to re-finance the
Kine Centre. As at 25 October 2013, MECI
was indebted to ABSA in an
amount of R98 262 816.17. In the application against MRC, based on a
breach of a loan agreement to facilitate
the development of the Small
Street Mall by MRC, an amount of R61 million was said to be owed to
ABSA, as at 20 February 2014.
A further amount of R98 million was
owed by MRC to ABSA in respect of suretyship obligations.
[3]
As a precursor to the grant of final liquidation orders in respect of
MECI and MRC, ABSA sought orders setting aside the resolutions
adopted by the directors of MECI and MRC on 26 March 2012, which had
placed these companies under voluntary supervision and in
business
rescue in terms of s 129(1) of the Companies Act 71 of 2008 (the
Act). In response, Louis Pasteur Holdings (Pty) Ltd (Louis
Pasteur),
an alleged creditor of both companies, delivered counter-applications
in each of the MECI and MRC applications, seeking
further orders
placing both companies under supervision and in business rescue.
Additional parties belatedly alleging they were
also creditors of the
companies, sought leave to intervene in each application and joined
in seeking further orders placing both
companies under supervision
and in business rescue, which had the effect of postponing and
delaying the finalisation of both applications.
[4]
There was an urgency to the applications due to the deteriorating
condition of the buildings which served as security for the
loans,
the finalisation of which was frustrated by repeated postponements
and delays caused in no small measure initially by Louis
Pasteur and
later aided and abetted by the intervening parties. The spectre of a
delay in the finalisation of the present appeal
was raised shortly
before the hearing thereof, when the attorneys representing the
second to ninth appellants wrote to the Registrar
of this court
requesting that the appeals be removed from the role, as the
appellants were not in a financial position to place
their attorneys
of record in funds to argue the appeal. Shortly thereafter however,
new attorneys representing the appellants stated
that the matter
would proceed as arranged.
[5]
Of significance in relation to the delays in the finalisation of the
applications, is that Louis Pasteur itself was also placed
under
supervision and in business rescue and represented in the proceedings
by its business rescue practitioner. In addition, Dr
Mohamed Adam who
represented MECI in concluding the loan agreement with ABSA, is not
only a director of Louis Pasteur but also
a director of both MECI and
MRC and deposed to affidavits on behalf of Louis Pasteur, in both
applications.
[6]
Because of the repeated delays and postponements, a directive was
sought and obtained by ABSA from the Deputy Judge President
of the
Pretoria High Court, that the applications be heard as a special
motion during the period 13 to 16 April 2015. The applications
were
argued together before the court a quo on those dates and at the
hearing, an order was granted by consent in terms of rule
33(4) of
the Uniform Rules of Court. The following separated question was to
be determined as a preliminary issue:
'Having
regard to the provisions of Section 136 read with
Section 134
of the
Companies Act, 71 of 2008
, would a business rescue practitioner be
entitled to utilise the rental income without ABSA’s consent or
unless the proceeds
of the disposal would be sufficient to fully
discharge the indebtedness of the Second Respondent as protected by
the First Respondent's
security?'
[7]
Preller J, rather than dealing
with the separated issue, considered the principal question before
him to be whether a liquidation
order should ensue. This question was
inextricably linked to the question of the viability of business
rescue proceedings. In his
view, the past financial record of MECI
and MRC was crucial. He had regard to the repeated failed attempts by
MECI to procure the
City of Johannesburg as a tenant in the Kine
Centre, with the envisaged rental agreement providing the means to
repay their indebtedness
to ABSA.
[1]
[8]
Preller J considered the deterioration in the relationship between
the incumbent business rescue practitioners of MECI and MRC
and Dr
Adam, whose role I have referred to above, as another negative factor
in relation to placing them in business rescue. In
this regard, he
thought that the withholding of crucial financial information by Dr
Adam and related parties was a compelling factor
against the
viability of business rescue proceedings. In addition, the court
below rejected the superficial information presented
to it on behalf
of Louis Pasteur, MECI, MRC and the parties belatedly seeking leave
to intervene in support of business rescue
proceedings, as relevant
in deciding this issue.
[9]
The court below took a dim view of the dilatory stratagem employed by
Louis Pasteur and the other intervening parties and reached
the
following conclusion:
'It
is clear from the papers that both companies are hopelessly
insolvent, not only in that they are not able to pay their debts
as
they become due, but also in that their liabilities vastly exceed the
value of their assets. Sufficient notice of the proceedings
up to
this stage and of the intention of the applicant to apply for the
liquidation of both companies has been given to all possible
interested parties. I can see no need for a provisional liquidation
order of which the only effect will be to invite further litigation.
Both companies are accordingly finally liquidated.'
[10]
Orders were also granted setting aside the resolution adopted by MECI
placing it in voluntary business rescue and the application
and the
counter- application for intervention, were dismissed with costs. The
costs of ABSA on the scale as between attorney and
client were to be
costs in the administration, and the intervening creditors were
liable for the costs of ABSA, jointly and severally
with the company
in liquidation, on the scale as between party and party.
[11]
Aggrieved by the procedural irregularities committed by the court a
quo, Louis Pasteur together with the intervening parties
in the MECI
and MRC applications, sought and were granted leave to appeal to this
court against those orders, not by Preller J
who had retired, but by
Tuchten J. Both appeals were enrolled and argued together. Louis
Pasteur is the first appellant in both
appeals and the remaining
appellants in each appeal are the respective intervening parties.
ABSA is the first respondent in both
appeals and the second
respondents in each appeal are respectively MECI and MRC. The third
respondent in both appeals is Mr Liebenberg
van der Merwe NO, the
duly appointed business rescue practitioner in respect of MECI and
MRC. The fourth respondent in both appeals
is Mr Etienne Naude NO,
the duly appointed business rescue practitioner in respect of Louis
Pasteur.
[12]
The appellants submitted that the central issue on appeal was the
correction of the material irregularity in the proceedings
in the
court a quo. In addition, notwithstanding their apparent assent
thereto, they submitted that the formulation of the separated
question was imprecise and unclear, with the result that no order in
terms of
rule 33(4)
should have been made. It was submitted that the
proper remedy was to correct the material irregularity in the
proceedings by setting
aside the order for liquidation and related
orders and to thereafter remit the matter to the court a quo for
decision on the merits
of liquidation and the counter applications
for business rescue.
[13]
This court is called upon to decide whether the decision to grant a
final liquidation order, instead of deciding the separated
issue
discretely, should be set aside. Put differently, in anticipation of
what is set out later, the question is whether this
court can decide
the separated issue which, essentially, is a law point, which in
consequence has the result arrived at by the
court below by way of
the final liquidation order.
[14]
At this stage it is necessary
to consider the ambit and purpose of the separated issue, which
Preller J was called upon to address.
First, it is necessary to
consider whether it is sufficiently precise and clear and calculated
to serve the purpose of
rule 33(4).
In this regard, because it refers
to the provisions of
s 134(3)
and s 136 of the Act, it has to be
assessed, contextually, against those sub-sections and common cause
facts.
[2]
[15]
It was common cause that any rental income to be received by MECI, in
respect of a lease agreement allegedly concluded with
the City of
Johannesburg in respect of office space within the Kine Centre, had
been ceded to ABSA in
securitatem debiti
. The rental income
was the only income available to MECI. It was alleged that MRC would
receive from this income, a monthly payment
of R125 000 from MECI,
which would enable it to repay its obligations to ABSA. The
possibility of a successful business rescue
of MECI and MRC, was
therefore entirely dependent upon the business rescue practitioner
being entitled to receive and utilise for
general business rescue
purposes the rental income. In the absence of a successful business
rescue of MECI and MRC, their final
liquidation would inevitably
follow.
[16]
Section 134(3) provides as follows:
'(3) If, during a company's business
rescue proceedings, the company wishes to dispose of any property
over which another person
has any security or title interest, the
company must–
(a)
obtain the prior consent of that other person,
unless the proceeds
of the disposal would be sufficient to fully discharge the
indebtedness protected by that person's security
or title interest
;
and
(b)
promptly
–
(i)
pay to that other person the
sale proceeds attributable to that property up to the amount of the
company's indebtedness to that
other person
; or
(ii) provide security for the amount
of those proceeds, to the reasonable satisfaction of that other
person.' (Emphasis added.)
[17]
Section 136(2) provides as follows:
'(2) Subject to subsection (2A), and
despite any provision of an agreement to the contrary, during
business rescue proceedings,
the practitioner may –
(a)
entirely, partially or conditionally suspend, for the duration of the
business rescue proceedings, any obligation of the company
that –
(i) arises under an agreement to which
the company was a party at the commencement of the business rescue
proceedings; and
(ii) would otherwise become due during
those proceedings; or
(b) . . .
(2A) When acting in terms of
subsection (2) –
(a)
. . .
(b)
. . .
(c) if a business practitioner
suspends a provision of an agreement relating to security granted by
the company, that provision
nevertheless continues to apply for the
purpose of section 134, with respect to any proposed disposal of
property by the company.'
(Emphasis added.)
[18]
The appellants submitted that the formulation of the separated
question was imprecise and unclear, principally on the basis
that the
word 'disposal' as contained in s 134(3)
(a)
of the Act was not
employed as the verb and in its place the word 'utilise' was chosen.
The word 'disposal' was instead employed
as a common noun in the
formulation of the separated question. The word 'utilise' did not
appear in ss 134 and 136 of the Act and
the employment of the verb
'utilise' in conjunction with the common noun 'disposition' was not
capable, contextually, of meaningful
interpretation. Consequently, a
consideration of the separated question with reference to these
sections of the Act, was rendered
nugatory.
[19]
In addition, it was submitted that the separated question did not
refer to the exercise by the business rescue practitioner
and the
court, of powers provided for in s 136(2)
(b)
of the Act. In
other words, should a business rescue practitioner successfully
approach the court to obtain an order for the cancellation
of the
cession agreement, the answer to the separated question would be
different if such powers were not exercised. Consequently,
without
the inclusion of assumptions or future facts in respect of the
possible exercise of these powers of a business rescue practitioner
and the court, the separated question did not permit of an
unconditional answer.
[20]
It is unhelpful to subject the separated question to this type of
analysis. The possibility of a business rescue practitioner
applying
to court for the cancellation of the cession, was quite obviously
extraneous to the issues the parties sought to resolve
in its
formulation. Although not a model of clarity, its meaning examined in
the context of the common cause facts together with
the relevant
sections of the Act, is sufficiently clear. The separated question is
whether the business rescue practitioner would
be entitled to utilise
the rental income, without the consent of ABSA? If not, would the
business rescue practitioner be entitled
to utilise the rental
income, if such income was sufficient to fully discharge the
indebtedness of MECI to ABSA?
[21]
Having established the meaning of the separated question, I do not
agree with the submission by the appellants that this court
should
not proceed to answer the questions raised, as this would require it
to do so as a court of first instance. This case does
not fall within
the ambit of the reservations enunciated in
Women's Legal Centre
Trust v President of the Republic of South Africa & others
[2009]
ZACC 20
;
2009 (6) SA 94
(CC) para 27, as to why a court of appeal is
loath to be a court of first and last instance. In addition, as
pointed out in
Brian Kahn Inc v Samsudin
2012 (3) SA
310
(GSJ) para 11, relevant considerations are that the issue raised
by the separate question is important not only for the parties,
but
also for business rescue practitioners in general. In addition, there
is no possibility of a further party having an interest
in the
matter. More importantly, as pointed out below, the parties when
arguing the application for leave to appeal, agreed that
this court
would be asked to decide the separated question. In any event,
because of the delay, to refer the matter back to the
high court
would not result in the just and expeditious resolution of the
litigation.
[22]
Section 134(3) of the Act provides that in the absence of the prior
consent of a person holding any security or title interest
in
property, which the company in business rescue proceedings wishes to
dispose of, it may only do so if the proceeds of the disposal
of the
property will be sufficient to fully discharge the indebtedness
protected by that person’s security, or title interest.
The
company is then obliged to promptly pay the proceeds of the
disposition to such person, up to the amount of the company's
indebtedness.
[23]
What the subsection therefore requires, in the absence of consent by
the person holding security over the property, before
it may be
disposed of by the company, is that the proceeds of its disposition
must be sufficient to fully discharge the indebtedness
of the company
to the holder of the security. If this requirement is not satisfied,
the company may not dispose of the property.
If this requirement is
satisfied, the company must promptly pay the proceeds of the
disposition to the security holder. On receipt
by the security holder
of the proceeds of the disposition, which fully discharges the
indebtedness of the company, the property
is released from the
security. Simply put, there must be prompt payment by the company of
the proceeds of the disposition to the
holder of the security and the
payment must fully discharge the indebtedness of the company.
Obviously, the security held by a
person in relation to a debt owed
by a company in business rescue, is not nullified by the business
rescue procedure.
[24]
It is therefore clear that the utilisation by the business rescue
practitioner of the rental income, in order to make periodic
payments
to ABSA in reduction of the indebtedness of MECI, with the ultimate
goal of discharging such indebtedness, does not satisfy
the
requirement that the prompt payment of the proceeds of the
disposition must fully discharge the indebtedness. Consequently,
the
answer to the separated question is that the business rescue
practitioner may not utilise the rental income without the consent
of
ABSA, even if such rental income may eventually be sufficient to
discharge the indebtedness of MECI to ABSA.
[25]
This conclusion accords with the requirement that business rescue
proceedings must be resolved expeditiously. In
Koen & another
v Wedgewood Village Golf and Country Estate (Pty) Ltd & others
2012 (2) SA 378
(WCC) para 10, Binns-Ward J stated the following:
'It
is axiomatic that business rescue proceedings, by their very nature,
must be conducted with the maximum possible expedition.
In most cases
a failure to expeditiously implement rescue measures when a company
is in financial distress will lessen or entirely
negate the prospect
of effective rescue. Legislative recognition of this axiom is
reflected in the tight time lines given in terms
of the Act for the
implementation of business rescue procedures if an order placing a
company under supervision for that purpose
is granted. There is also
the consideration that the mere institution of business rescue
proceedings – however dubious might
be their prospects of
success in a given case – materially affects the rights of
third parties to enforce their rights against
the subject company.'
[26]
Also, in
DH Brothers Industries (Pty) Ltd v Gribnitz NO &
others
2014 (1) SA 103
(KZP) para 27, Gorven J stated:
'Business
rescue proceedings are geared at providing a window of opportunity to
restore an ailing company to financial health and
functionality . . .
The window of opportunity does not remain open indefinitely.'
It
is quite clear that it would take many years for MECI and MRC to
fully discharge their indebtedness to ABSA, in reliance upon
the
rental income. In addition, ABSA submits that the monthly payment of
R125 000 which MRC says it will receive from MECI, will
result in MRC
only extinguishing its direct indebtedness to ABSA after 37 years. On
this basis, any business rescue proceedings
would never be resolved
expeditiously.
[27]
The determination of the separated question cures any prejudice
suffered by the parties as a result of the procedural irregularities,
as is clear from the following concession made in the first
appellant’s heads of argument:
'The
need for the separate adjudication of a question of law to determine
the validity of the assumption in the proposed business
rescue plan
that future rentals could be disposed of by the business rescue
practitioner (the
substratum
of the application to place the
Second Respondent under supervision and in business rescue) is plain
to understand. If the assumption
is invalid, the basis of the
application for supervision and business rescue is non-existing.'
The
appellants therefore conceded that if the business rescue
practitioner was unable to dispose of future rentals, then the
applications
for supervision and business rescue of MECI and MCR had
to fail. The need for oral argument on the remaining issues is
therefore
no longer necessary, as the final liquidation of MECI and
MRC must inevitably follow.
[28]
In addition, ABSA submitted that the request by the appellants that
the matter be remitted to the court a quo comprised a
volte face
.
The following statement in the heads of argument of ABSA, which has
not been disputed by the appellants, is relevant:
'At
the hearing of the application for leave to appeal before the
Honourable Justice Tuchten (Preller J being unavailable), it was
specifically stated, in response to a question by Tuchten J to then
senior counsel for the first appellant, Mr Burman SC by Mr
Burman SC
that the Supreme Court of Appeal will be asked to determine the
separated issue as opposed to having the matter remitted
back. Mr
Subel SC, then appearing for the balance of the appellants, raised no
complaint in this regard and did not state that
his clients held a
contrary position. The application for leave to appeal, and the
granting of leave to appeal, proceeded,
inter alia
, on such
basis.'
The
resolution of the separated question by this court, therefore accords
with the basis upon which the appellants sought and were
granted
leave to appeal.
[3]
[29]
In essence the findings by Preller J in relation to the financial
position of the companies as set out above, cannot be faulted.
His
views in relation to the conduct of the intervening parties, both in
respect of Louis Pasteur and those parties who sought
intervention at
a later stage, appear wholly justified. For all the reasons set out
above the order made by Preller J, albeit misguidedly,
should remain
extant.
[30]
Regrettably, the conduct of Preller J in delaying the furnishing of
the judgment for two years after the separated question
was argued,
must be deprecated in the strongest possible terms. No explanation or
apology for the inordinate delay in only delivering
the judgment on
11 May 2017, is offered in the judgment. The Judge’s conduct
was highly prejudicial to the parties and more
particularly ABSA,
which seeks to recover a large outstanding debt from MECI and MCR, in
reliance upon what appears to be inadequate
and deteriorating
security in the form of the buildings in question.
[31]
This court disapproves of unreasonable delay by judicial officers in
delivering judgments. In
Pharmaceutical Society of South Africa &
others v Tshabalala- Msimang & another NNO; New Clicks South
Africa (Pty) Ltd v
Minister of Health & another
2005 (3) SA
238
(SCA) para 39, Harms JA stated the following:
'The
judicial cloak is not an impregnable shield providing immunity
against criticism or reproach. Delays are frustrating and
disillusioning
and create the impression that Judges are imperious.
Secondly, it is judicial delay rather than complaints about it that
is a threat
to judicial independence because delays destroy the
public confidence in the judiciary. There rests an ethical duty on
Judges to
give judgment or any ruling in a case promptly and without
undue delay and litigants are entitled to judgment as soon as
reasonably
possible. Otherwise the most quoted legal aphorism, namely
that "justice delayed is justice denied", will become a
mere
platitude.'
Regrettably,
the delay by the Judge in furnishing the judgment resulted in a
denial of justice to the parties.
[32]
A further issue that requires comment is that the separated question
was sought and granted in terms of rule 33(4) of the Uniform
Rules of
Court. Commenting upon this rule, D Harms
Civil Procedure in the
Superior Courts
Part B High Court at B33.9, states the following:
'The
provision does not apply to applications, but a court may deal with
separate issues in applications
in limine
and in its inherent
power apply a similar procedure to them.'
In
Theron & another NNO v Loubser NO & others
[2013]
ZASCA 195
; 2014 (3) 323 (SCA) paras 10-16, Ponnan JA, after an
extensive review of the relevant authorities, concluded that there
was a body
of authority, the correctness of which he left open, as to
the circumstances in which a high court may in the exercise of its
inherent
jurisdiction, separate issues in application proceedings.
Wallis JA, writing for the majority at para 23, expressed the view
that
it was undesirable to examine those cases in the high court,
where this procedure had been followed, as to do so may be taken as
implying an endorsement of some, or all of these cases. Wallis JA
added the following at para 26:
'In
general, however, the desirable course to be followed in application
proceedings, where the affidavits are both the evidence
and the
pleadings, is for all the affidavits to be delivered and the entire
application to be disposed of in a single hearing.'
[33]
Accordingly, a court in exercising its inherent power in application
proceedings to separate issues in limine, must do so with
circumspection. In this regard, the cautionary warning in
Democratic
Alliance & others v Acting National Director of Public
Prosecutions & others
2012 (3) SA 486
(SCA) para 49, is
apposite: 'Generally courts should be slow to allow parties to engage
in piecemeal litigation, with attendant
delays. Put differently,
courts should be intent on obviating prolonged litigation. This case
has shown precisely how undesirable
for the administration of justice
to-ing and fro-ing between the high court and this court over a long
period of time, without
the merits being finally adjudicated, can be.
Courts should be circumspect when suggestions are made about the
procedure to be
followed on the basis that it might shorten rather
than lengthen litigation.'
The
present appeal is a clear reminder of the consequences that flow from
insufficient circumspection being exercised by a court
of first
instance in separating an issue,
in limine,
in application
proceedings.
[34]
As regards the costs of the appeal, we were advised by counsel for
the appellants that it was at the insistence of ABSA that
all of the
papers in both applications were included in the appeal record.
Regard being had to the narrow ambit of the issues on
appeal, this
demand was unreasonable. As a consequence, ABSA will be ordered to
forego 50 per cent of the costs incurred by the
appellants in
preparing the appeal record.
[35]
In the result the following order is granted:
1. The appeals in case numbers
1119/2017 and 1120/2017 are dismissed.
2. The costs of the appeal are to be
borne by the appellants, jointly and severally, such costs to include
the costs of two counsel,
save for 50 per cent of the costs of the
preparation of the appeal record.
____________________
K
G B Swain Judge of Appeal
Appearances:
For
the Appellants: J Roux SC (with M Riley)
Instructed
by: Boshoff Smuts Inc, Centurion
Strauss
Daly, Bloemfontein
For
the First Respondent: K W Lüderitz SC (with G W Amm)
Instructed
by:
Lowndes
Dlamini Attorneys, Sandton
Phatsoane
Henney Attorneys, Bloemfontein
[1]
Preller J at pg 9 of the judgment deals in some detail with the
history of the litigation which I find unnecessary to restate.
[2]
As will be seen, the provisions of rule 33(4) do not apply to
applications, but a court may deal with separate issues in
applications
in limine and in its inherent power apply a similar
procedure to them. (D Harms Civil Procedure in the Superior Courts
Part B
High Court at B33.9)
[3]
It should be noted that Mr Subel SC and Mr Burman SC did not draft
the appellants’ heads of argument, nor did they argue
the
appeal.