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[2016] ZAGPPHC 147
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Austin v Sentoo and Another (42443/2008) [2016] ZAGPPHC 147 (23 February 2016)
REPUBLIC
OF SOUTH AFRICA
HIGH
COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO: 42443/2008
DATE:
23/2/2016
In
the matter between:
JAMES
GEORGE
AUSTIN
Applicant
And
UMANAND
RAMPURSAD
SENTOO
1
st
Respondent
DEREK
ARROW
2
nd
Respondent
J
U D G M E N T
MSIMEKI
J:
[1]
Applicant, in this application, seeks an order extending the period
for and condoning the late filing of a declaration. Applicant
further
seeks an order for costs against any respondent who opposes this
application.
BRIEF
FACTS
[2]
Applicant, in the main application, sought to obtain payment of R3
million Rand by way of motion proceedings from respondents.
Applicant
contends that the two respondents' liability arises from suretyships
concluded by directors and shareholders of TAS Investments
(Pty) Ltd.
The two respondents and applicant on 14 May 2010, before Makgoka J,
agreed that the main application be referred to
trial. The notice of
motion would stand as a simple summons while the answering affidavit
would stand as a notice of intention
to defend. A declaration was to
be filed within 20 days from the date of the order of 14 May 2010
whereafter the rules dealing
with pleadings and· the conduct
of trials would apply. Applicant failed to file the declaration in
the matter as ordered
by the court. Such failure resulted in the
bringing of this application which is opposed by second respondent.
[3]
Second respondent, in his opposing affidavit, has raised a point in
limine contending that, if upheld, the point in limine would
render
the current application premature. The point in limine raised is that
first respondent was finally sequestrated on 21 July
2014 and that
the sequestration order has the effect of staying all civil
proceedings instituted by or against the insolvent pending
the
appointment of a trustee (See
Section 20
(1) (b) of the
Insolvency
Act No 24 of 1936
and Vrystaat Vloere (Pty) Ltd V Van Rooyen
1969 (2)
SA 437
(0))
[4]
Advocate S J Van Rensburg (Mr Van Rensburg). for second respondent.
submitted that applicant's failure to properly cite the
trustees
appointed on behalf of first respondent rendered the application
fatally defective. Advocate K Fitzroy (Ms Fitzroy) for
applicant.
submitted that even if first respondent was indeed sequestrated that
would not affect second respondent who was not
sequestrated. Mr van
Rensburg. in his heads of argument, t stated that a copy of the
sequestration order was attached to their
heads. This is in fact not
so. First respondent. despite service of the notice of motion with
founding affidavit and annexures
on Miss K Reddy, secretary, is not
opposing the application. It was submitted on behalf of applicant
that second respondent had
failed to prove that first respondent had
in fact been sequestrated.
[5]
Mr Van Rensburg submitted that should first respondent indeed have
been sequestrated, proceeding in his absence or that of his
trustee
would effectively deprive his estate of an opportunity to oppose the
relief sought and thereby deprive his creditors of
an opportunity to
oppose the application. This is correct if first respondent has been
sequestrated. However, it does not. in my
view. affect second
respondent who is opposing the application. The point in limine. in
my view. has nothing to do with second
respondent. Mr Van Rensburg.
in any case. represents second respondent and not fist respondent.
The point in limine. in so far
as it relates to second respondent.
should fail. Nothing has been produced to prove that first respondent
has indeed been sequestrated.
[6]
LEGAL
POSITION APPLICABLE TO AN APPLICATION FOR
CONDONATION
The
application is brought in terms of
rule 27
of the uniform Rules of
Court. The rule provides:
"27
extension of time and removal of bar and condonation
(1)
In the absence of agreement between
the parties,
the
court
may
upon application
on
notice and on
good cause
shown.
make an order
extending
or
abridging
any
time prescribed by these
rules or by an order of
court or fixed by an order extending or abridging any time for
doing any act or
taking any step
in
connection with any proceedings of any nature whatsoever upon
such terms as to it seems m
eet.
(2)
........................ ..
(3)
The court may,
on good
cause
shown
condone
any non-complience
with
these
rules." (my emphasis)
[7]
To succeed with the application,
Rule 27
(1) requires applicant to
show good cause. The court has a wide discretion which it has to
exercise having regard to the merits
as a whole. (See Du Plooy V
Anwes Motors (Edms) Bpk
1983 (4) SA 212
(0) at 217B and Erasmus:
Superior Court Practice D-322 where the aspect of "on good cause
shown" is discussed)
[8]
Second respondent contends that:
1.
The sequestration of first respondent has the effect of staying all
actions against first respondent
until a final trustee is appointed
in terms of
Section 20
(1) (b) of Act 34 of 1936. I discussed this
above.
2.
Applicant failed to give a proper explanation for not complying with
the order. This, according
to second respondent, amounts to contempt
of court.
3.
There was an extensive delay of more than four years before the
application was brought.
4.
Applicant failed to set out the merits of the matter.
5:
Applicant failed to explain what the costs for filing the declaration
would have been.
[9]
I have already shown that the point in limine, in so far as second
respondent would like it to apply to him, should be dismissed.
[10]
The 20 day period within which applicant was supposed to have filed
his declaration lapsed on 11 June 2010. The notice of motion
in this
application is dated 25 June 2014 which is almost four years after
the lapsing of the 20 day period. .Applicant, as a result,
has to
show good cause why the 20 day period ordered by the court was not
complied with. There has to be a good reason for condonation
to be
granted for the late filing of the declaration. The court, in the
exercise of its discretion, may extend the time within
which to file
the declaration should such "good cause" be shown (See
Smith N. O v Brummer N.o
1954 (3) SA 352(0)
at 358A and Du Plooy v
Anwes Motors (Edms) Bpk (Supra) at 216H-217A )
[11]
The court has to establish if:
1.
Applicant has given a reasonable explanation for the delay
2.
The application is bone fide
3.
Applicant has not demonstrated a reckless or intentional disregard of
the court Rules
4.
Applicant's action is not ill-founded.
[12]
In Van Wyk v Unitas Hospital and Another (Open Democratic advice
Center as Amicus Curiae)
2008 (2) SA 427
(CC) at [22] the court said:
"[22]
An applicant for condonation must give full explanation for the
delay. In addition, the explanation must cover the entire
period of
delay. And, what is more, the explanation given must be reasonable."
(See
also Laerskool General Hendrik Schoeman v Bastian Financial Services
(Ply) Ltd
2012 (2) SA 637
(CC) at [15]
In
Grootboom v National Prosecuting Authority and Another
2014 (2) SA 68
(CC) at [23] the court said:
"[23]
It is now trite that condonation cannot be had for the mere
taking. A party seeking condonation must make
out a case entitling it
to the court's indulgence. It must show sufficient cause. This
requires a party to give a full explanation
for the non-compliance
with the rules or court's directions. Of great significance, the
explanation must be reasonable enough to
excuse the default."
[13]
Coming back to the current application it is noteworthy that
applicant in paragraph 6.4 of his founding affidavit states:
"6.4
I was unable to provide my attorney with the sufficient funds in
order to proceed with this application that has been
referred for
trial. After the aforesaid actions have been finalized I am now able
to fund this action and have the available time
and resources to
properly proceed with my claim in the amount of R3 million."
The
actions referred to in this paragraph relate to case number
2008/22987 where applicant states that he had been sued by Nedbank
Limited which claimed an amount of R46 million from him and case
number 2010/12641 where Absa Bank Limited claimed R1.7 million
from
him.
[14]
According to applicant, the Nedbank case was finalized in May 2013
while the Absa bank case was finalized during November 2013.
[15]
It is common cause that applicant concluded an agreement with
TAS Investments (Ply) Ltd (TAS Investments)
in terms of which
TAS investments bought applicant's shares in various companies for
R8.000.000.00. Applicant, up to the time of
the main application,
received R5.250.000.00 from TAS Investments. TAS Investments was
liquidated before the balance in the amount
of R3 million was paid to
applicant.
Applicant,
on the basis of the suretyships alleged by him, brought the main
application, against the two respondents for the payment
of the
balance.
[16]
Second respondent contends that the reason proffered by applicant for
his failure to comply with the court order of 14 May
2010 cannot be
true and correct. Second respondent bases his contention on the fact
that applicant had received R5.250.000.00 referred
to in paragraph 15
above. What is more, second respondent contends, applicant paid only
1.010.000.00 in respect of the Nedbank
and Absa bank cases. This,
according to second respondent, left applicant with an amount of
R3.990.000.00 which should have been
used to fund the current action.
[17]
Applicant, in paragraph 14.2 of his replying affidavit, admits
receiving R5.000.000.00 which was to be utilized as his "pension
for old age and was kept available to cover my legal costs, to
potentially pay the legal costs of Nedbank and Absa Bank and to
pay
Nedbank and Absa Bank's claims against me". A settlement was
reached at the trial and applicant ended up paying R1.010.000.00
as
shown above. Applicant, in paragraph 14.4 of his replying affidavit,
explains that his last instalment with Absa Bank was paid
in June
2014. Nothing more is said about this installment. No satisfactory
explanation is advanced regarding why applicant, at
the time, could
not use the R3990.000.00 to fund the current action.
[18]
Applicant fails to explain when the R3.990.00 was invested in the
pension fund. The court is not told as to how much was retained
to
pay Nedbank and Absa Bank. Ms Fitzroy, for applicant, however
conceded that the two cases were settled before the money was
invested in the pension fund.
[19]
The above demonstrates that it cannot be correct that applicant did
not have money to fund the current action as he contends.
No
reasonable explanation, also, has been furnished for the delay in
filing the declaration. As Mr Van Rensburg correctly submitted,
this
could have been done without any difficulty. Applicant again failed
to explain how much would have been needed for work done
in respect
of the declaration. This could not have exhausted the R3.990.000.00
that applicant remained with after paying R1.010.00
to Nedbank and
Absa Bank. The fact that one does not have money to proceed with a
matter was not seen as reasonable explanation
in Ferrera v Ntsingila
1990 (4) SA 271
(A). What is worse in applicants matter is that he
had more than enough money which could have enabled him to have the
declaration
prepared and filed and to proceed with the matter. The
inordinate delay in filing the declaration has not been adequately
explained
by applicant. The merits of the matter, in my view, have
also not been properly set out especially if regard is had to the
alleged
suretyships. In an application for condonation the
explanation of the delay must be full and frank and demonstrate that
the case
of the applicant bears some prospect of success. The
application, in my view, is deficient in both respects
[20]
Ms Fitzroy, for applicant, submitted that second respondent had a
remedy in Rule 26 where a notice of bar could have been delivered
and
followed, in the event of continued inaction by the applicant, by an
application of absolution. The case of Woolf v Zenex Oil
(Pty) Ltd
1999(1) SA 652 (W) at 654F-G which they rely on is, in my view,
distinguishable from the current case. There an application
was
brought by applicant seeking the dismissal of the action instituted
against applicant by respondent who had failed to deliver
a
declaration. A point in limine relating to Rule 26 was taken by
applicant and such was upheld by the court. Here the application
is
different. Second respondent was not obliged to invoke the
application of Rule 26. The duty rested on applicant to explain the
inordinate delay in filing the declaration as ordered by the court.
This, applicant failed to do. It can hardly be said that applicant
was bona fide. He failed to take the court into his comfidence.
Applicant may not have intentionally disregarded the court rules
but
he was nevertheless reckless. The delay is inordinate and this
renders it unnecessary to decide whether or not the action is
ill
founded. The application, in my view, should fail
COSTS
[21]
Second respondent seeks costs on a scale as between attorney and
client. I find nothing to justify the granting of such an
order.
Second respondent, however, having successfully opposed the
application is entitled to his costs.
[22]
I, in the result, make the following order:
Condonation
is therefore refused and the application is dismissed with costs.
_____________________________
M
W MSIMEKI
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
Date
of hearing: 27.7 2015
Judgment
delivered: 23.1.2016
Appearances:
For
the applicant: Adv K Fitzroy
Instructed
by: Jordaan and Smit Inc
For
the respondent:Adv S T Van Rensburg
Instructed
by: Scharbort Inc