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[2016] ZAGPPHC 727
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Masuku v Sydow N.N (A937/2014) [2016] ZAGPPHC 727 (19 August 2016)
THE
REPUBLIC OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
no
: A937
/2014
DATE:
19 AUGUST 2016
In
the matter between:
LUKAS
PUTUKU MASUKU
AND
ANDRIAN
SYDOW N.N
JUDGMENT
MOLAHLEHIAJ
Introduction
[1]
This appeal, which concerns the narrow
issue of costs, comes before this court with leave to appeal from
Lazarus J. The appeal arises
from the finding of the learned Judge
that the applicant’s application was ill conceived, unnecessary
and accordingly there
was no reason not to allow the cost to follow
the results. In other words the court found that the respondent
successfully opposed
the rescission application which had been
launched by the applicant. The court awarded cost on the party and
party scale.
[2]
The appellant has also filed an
application for the late filing of the record which is unopposed.
Having regard to the explanation
proffered by the applicant, I am of
the view that the interests of justice supports the granting of the
condonation of the late
filing of record of appeal.
[3]
The applicant in his papers provides
lengthy details about the sequestration order which the respondent
obtained against him on
3 May 2011. For the purpose of this judgment
the relevant issues are those related to the costs order granted
consequent to the
dismissal of the rescission application which was
opposed by the respondent.
[4]
The present application is opposed.
Background
facts
[5]
It is common cause that during December
2013, the appellant launched the application to rescind and set aside
the provisional sequestration
order which had been granted against
him on 28 February 2011, including the sequestration order granted
against him on 3 May 2010.
The appellant also sought an order as to
costs on the of attorney and client scale.
[6]
This rescission application was opposed
by the respondent who also sought an order on attorney and client
scale. However, before
filing the answering affidavit the respondent,
informed the appellant's attorneys that the first order which was
made on 3 May
2011, had been recalled following the application which
was made by his erstwhile attorneys.
[7]
The appellant says he discovered that he
was sequestrated when he approached his bank during June 2013, for a
credit facility. He
was informed that there was a rehabilitation
order against him and thus his credit application was forthat reason
unsuccessful.
Itwas in that regard thatthe respondent contended and
advised the appellant that his application for rescission was without
foundation
and that he should withdraw it. The appellant disregarded
the advice and proceeded with the application for the rescission and
setting aside the sequestration order.
Grounds
for appeal.
[8]
The appellant contends that the court a
quo in awarding costs against him overlooked certain common cause
facts and legal principles.
The common cause facts, it would appear,
related to the recalling of the sequestration order and the manner in
which the respondent
conducted itself in the institution of and
prosecuted the appellant's sequestration. He contends further that,
based on the principle
of finality he had no option but to apply to
have the provisional and the final sequestration orders set aside. It
is further contended
in this regard that the sequestration orders
remained valid until they were set aside. The sequestration order
could not, according
to him, be set aside by agreement between the
parties.
[9]
The court is said to have ignored the
principle of finality when it ignored the fact that the order of
final sequestration orders
was recalled after it was issued by the
Registrar. In argument counsel for the appellant conceded that these
proceedings concern
the normal principles governing an appeal against
a cost order. He however, argued that it was necessary to institute
the rescission
proceedings because there were three conflicting
orders from the court relating to the issue of the sequestration of
the appellant.
The orders, are public documents and therefore third
parties may hold them against the appellant.
The
decision of the court
[10]
In determining the appellant's
rescission application the court a quo held that:
"9.
Consequently the applicant cannot obtain the rescission of the
provisional or final sequestration orders as sought in the
notice of
motion as these orders are not presently in operation nor were they
in operation at the time this application was launched.”
[11]
The court then in noting the problem
faced by the appellant, concerning the listing on the credit bureau,
adopted a practical solution
to the problem by declaring that:
“
11.
Notwithstanding the legal position, however, the applicant continues
to suffer prejudice as a result of having been listed with
credit
bureau. As a result practical solution to the applicant’s
plight, I granted the declaratory relief set out above."
[12]
It is apparent from the reading of the
judgment that the court a
quo
in ordering the appellant to pay the costs reasoned as follows:
“
10.
This being the case, the application was ill conceived and
unnecessary. In the circumstances I see no reason for deviation from
the general principle that the costs must follow the result.”
The
evaluation
I
analysis
[13]
The key issue for determination in this
matter relates to the exercise of the discretion of the court a
quo
in awarding costs in favour of the respondent. The main contention of
the appellant is that there are “exceptional circumstances”
that supports his appeal. This is governed by the provisions of
s 16
of the
Superior Courts Act of 2013
, which provides:
(2)
(a)
(i) When at the hearing of an appeal the issues are of such a nature
that the decision sought will have no practical effect or
result, the
appeal may be dismissed on this ground alone.
(ii)
Save under exceptional circumstances,
the question whether the decision would have no practical effect or
result is to be determined
without reference to any consideration of
costs.”
[14]
As indicated above this matter has to do
with the appeal against the decision of the court a
quo
awarding costs in favour of the respondent. Having read the papers in
this matter I do not find the provisions of s 16 of the Superior
Court Act of 2013, to apply to the facts of this matter. This much
counsel for the appellant conceded.
[15]
I now proceed to deal with what I see as
the key issue for determination in this matter. It is trite that the
general rule of our
law is that costs follow the results, which means
the costs are awarded to the successful party. It is also trite that
in considering
whether to grant or refuse costs, the court has a
judicial discretion to exercise. It is for this reason that whiie the
appeal
court has the power to overturn decisions of a lower court on
the issue of costs, it will, as a matter of principle, only do so
if
it is shown that the discretion was not properly exercised or that
the court materially misdirected itself in determining the
issue.
[16]
In the present matter the proper reading
of the judgment of the court
a
quo
is that the respondent was
the successful party, in that the rescission application was refused.
This finding is supported by the
record. There was no sequestration
order that could be rescinded, the respondent having withdrawn its
application..
[17]
The fact that the court adopted a
practical solution to what appeared to be an untenable situation for
the appellant in having been
listed in the credit bureau, does not
detract from the finding that the appellant was unsuccessful in his
rescission application.
I do not agree with the appellant’s
counsel that this made the appellant partially successful.
[18]
It seems to me from the reading of the
appellant's papers that he conflates the merits of the sequestration
proceedings and those
of the rescission application. In this respect
in the heads of argument the appellant complains that the court a
quo
ignored the chronology of events dating back to 2008 including that
the respondent sought his sequestration in order to enforce
a
disputed debt. The disputed amount was according to him settled on 23
September 2010, but the respondent proceeded to obtain
the
sequestration order on 3 May 2013. The appellant further contended
that the respondent sought a final sequestration order in
terms of
the Insolvency Act without showing that he had committed an act of
insolvency.
[19]
The key finding by Lazarus J is that the
rule
nisi
relating to the
sequestration of the appellant was discharged in November 2011, after
the respondent's application was withdrawn
and the matter did not
proceed on the return day. it is important to note that it has not
been disputed that the the respondent
tendered costs for the
withdrawal of the sequestration application which was accepted by the
appellant. It is also important to
note that subsequent to the
withdrawal of the application by the respondent appellant taxed the
bill of costs tendered by the respondent.
[20]
Having regard to the above I find no
basis for faulting the court a
quo
in the approach it adopted in dealing with the issue of costs. In
this respect the court
exercised
its discretion properly after considering and taking into account the
facts and the circumstances of the case.
[21]
The argument about the issue of the
principle of finality bears no merits. In fact the issue is
irrelevant in as far as the costs
order arising from the reserving
application is concerned. In any case counsel for the appellant
conceded that even the authority
he relied on did not support his
proposition in this regard. The respondent has asked for cost on
attorney and client scale. The
appellant's counsel argued that for
but for the launching of the sequestration process this matter would
not have reached this
point. To the contrary, in my view, but for the
conduct of the appellant this matter would not have reached this
stage. The appellant
was warned very early on that there was no
basis, in the first instance for instituting the rescission
application and thereafter
pursuing these proceedings. This
application was also unnecessary and the conduct of the appellant in
instituting these proceedings
was unreasonable.
Order
[22]
In the premises the following order is
made:
1.
The findings of the Court a quo cannot
be disturbed.
2.
The appellant’s application for
appeal against the judgment of the Court a quo is dismissed with
costs on attorney and client
scale.
Molahlehi
E
Acting
Judge of the Gauteng
Division.
I
agree
Fabricius
HJ
Judge
of the Gauteng
Division
I
agree
Moosa
T
Acting
Judge of The Gauteng Division