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[2016] ZAGPPHC 896
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Nedbank Limited v Luvhomba Legal Edge CC and Others (28220/2015; 28221/15) [2016] ZAGPPHC 896 (15 September 2016)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
15/9/2016
Reportable:
No
Of
interest to other judges: No
Revised.
Case
no: 28220/2015; 28221/15
In
the matter between:
NEDBANK
LIMITED
Plaintiff
and
LUVHOMBA
LEGAL EDGE CC
(Reg. No.:
2001/018852/23) 1
st
Defendant
MATTHEWS
TUWANI MULAUDZI
(ID No.:
…) 2
nd
Defendant
MULAUDZI
& ASSOCIATES CC
(Reg. No.:
1997/062781/23) 3
rd
Defendant
GERENDRA
CC
(Reg. No.:
1995/038092/23) 4
th
Defendant
LUVHOMBA
LEGAL CARE CC
(Reg. No.:
2001/024948/23) 5
th
Defendant
LUVHOMBA
COMMUNICATIONS &
INFORMATION
6
th
Defendant
TECHNOLOGY
CC
(Reg. No.: 2008/235739/23)
MZANTSI
RESTUARANTS CC
(Reg. No.:
2009/113294/23) 7
th
Defendant
LEGAE
LE MONATE RESTAURANT
CC
8
th
Defendant
(Reg.
No.: 2008/235719/23)
LUVHOMBA
PROJECTS & CONSTRUCTION
CC
9
th
Defendant
(Reg.
No.: 2008/242842/23)
LUVHOMBA
SECURITY SERVICES & PATROL
CC
10
th
Defendant
(Reg.
No.: 2008/235729/23)
LUVHOMBA
LEGAL AXE CC
(Reg. No.:
2001/030613/23) 11
th
Defendant
LUVHOMBA
FINANCIAL SERVICES
CC
12
th
Defendant
(Reg.
No.: 2003/048903/23)
Case
no: 28221/2015
In
the matter between:
NEDBANK
LIMITED
Plaintiff
and
MULAUDZI
& ASSOCIATES CC
(Reg. No.:
1997/062781/23) 1
st
Defendant
MATTHEWS
TUWANI MULAUDZI
(ID No.:
…) 2
nd
Defendant
LUVHOMBA
LEGAL EDGE CC
(Reg. No.:
2001/018852/23) 3
rd
Defendant
LUVHOMBA
LEGAL CARE CC
(Reg. No.:
2001/024948/23) 4
th
Defendant
GERENDRA
CC
(Reg. No.:
1995/038092/23) 5
th
Defendant
LUVHOMBA
COMMUNICATIONS &
INFORMATION
6
th
Defendant
TECHNOLOGY
CC
(Reg. No.: 2008/235739/23)
MZANTSI
RESTUARANTS CC
(Reg. No.:
2009/113294/23) 7
th
Defendant
LEGAE
LE MONATE RESTAURANT
CC
8
th
Defendant
(Reg.
No.: 2008/235719/23)
LUVHOMBA
PROJECTS & CONSTRUCTION
CC
9
th
Defendant
(Reg.
No.: 2008/242842/23)
LUVHOMBA
SECURITY SERVICES & PATROL
CC
10
th
Defendant
(Reg.
No.: 2008/235729/23)
LUVHOMBA
LEGAL AXE CC
(Reg. No.:
2001/030613/23) 11
th
Defendant
LUVHOMBA
FINANCIAL SERVICES CC
(Reg.
No.:
2003/048903/23) 12
th
Defendant
JUDGMENT
(Application
for leave to appeal)
AC
BASSON, J
[1]
On 28 July 2016 this court granted in favour of the applicant
(Nedbank Limited) the following two default judgments against
the
entities cited in the respective matters:
"Case number: 28220/2015
After reading the documents and
hearing counsel, default judgment is granted in favour of the
Plaintiff against the First, Third,
Fourth, Fifth, Sixth, Seventh,
Eighth, Ninth, Tenth, Eleventh and Twelfth Defendants, jointly and
severally, the one paying the
other to be absolved, together with any
judgment which may be granted against the Second Defendant, for:
CLAIM A
1. Payment of an amount of R1 138
970.16 (One Million One Hundred and Thirty Eight Thousand Nine
Hundred and Seventy Rand and Sixteen
Cents);
2. Interest on the aforesaid amount at
the Plaintiff s prime lending rate (then 9.25%), as from time to
time, less 0.8%, thus 8.45%
per annum, calculated from 14 April 2015,
to date of final payment, both days inclusive;
3. Costs of suit on the scale as
between attorney and client.
As against the First Defendant
only:
4. An order declaring the following
immovable property specially executable:
Remaining Extent of Erf […]
Sunnyside (Pretoria) Township, Registration Division J.R., the
Province of Gauteng, measuring
388 square metres, held under Deed of
Transfer No. T082134/2008.
CLAIM B
5. Payment of an amount of R1 715
362.78 (One Million Seven Hundred and Fifteen Thousand Three Hundred
and Sixty Two Rand and Seventy
Eight Cents);
6. Interest on the aforesaid amount at
the Plaintiff s prime lending rate (then 9.25%), as from time to
time, less 0.8% per annum,
calculated from 14 April 2015, to date of
final payment, both days inclusive;
7. Costs of suit on the scale as
between attorney and client.
As against the First Defendant
only:
8. An order declaring the following
immovable property specially executable:
Remaining Extent of Erf […]
Hatfield Township, registration Division J.R., the province of
Gauteng, measuring 125 square
metres, held under Deed of Transfer No.
T006312/2010.
9. The action against the Second
Defendant is postponed
sine die,
costs reserved."
"Case
number: 28221/2015
After reading the documents and
hearing counsel, default judgment is granted in favour of the
Plaintiff against the First, Third,
Fourth, Fifth, Sixth, Seventh,
Eighth, Ninth, Tenth, Eleventh and Twelfth Defendants, jointly and
severally, the one paying the
other to be absolved, together with any
judgment which may be granted against the Second Defendant, for:
1. Payment of an amount of R3 873
783.29 (Three Million Eight Hundred Seventy Three Thousand Seven
Hundred and Eighty Three Rand
and Twenty Nine Cents);
2. Interest on the aforesaid amount at
the Plaintiff's prime lending rate (then 9.25%), as from time to
time, less 1.05%, thus 8.2%
per annum, calculated from 14 April 2015,
to date of final payment, both days inclusive;
3. Costs of suit on attorney and
client scale.
As against the First Defendant
only:
4. An order declaring the following
immovable property specially executable:
Portion 132 (a portion of portion 6)
of Erf […] Waterkloof Ridge Township, Registration Division
J.R., the province of Gauteng,
measuring 1225 square metres, held
under Deed of Transfer No. T084283/2006.
5. The action against the Second
Defendant is postponed
sine die,
costs reserved."
[2]
I will refer to the parties as they are cited in the two applications
for default judgment.
[3]
The second defendant in both matters is Mr Matthews Tunwani Mulaudzi
(hereinafter referred to as "Mulaudzi"). He was
finally
sequestrated on 27 May 2016.
[4]
The remainder of the defendants are cited as close corporations.
Mulaudzi took issue with the citations and submitted to the
court
that all of these close corporations have been converted to
companies. (I will revert to this issue herein below.)
[5]
Mulaudzi filed an application for leave to appeal against the two
orders. It was brought to the court's attention that Mulaudzi
has
since filed two rescission applications for an order rescinding the
two orders. The rescission applications are opposed. Despite
having
filed the rescission applications the applications for leave to
appeal were not withdrawn or abandoned.
The
second defendant
[6]
I have already referred to the fact that Mulaudze was finally
sequestrated on 27 May 2016. Mr Strydom of Strydom & Bredenkamp
Incorporated was duly appointed as the attorney of record for the
second defendant (the two trustees of the insolvent estate of
Mulaudze). Strydom deposed to an affidavit that was handed up setting
out some additional facts that were relevant to the hearing
of the
two applications for default judgment.
[7]
Strydom confirms in his affidavit that the two trustees (Mr Sithole
and Mr Musawenkosi of Ngwenduna Trustees - hereinafter referred
to as
"the trustees) were appointed by the Master of the North Gauteng
High Court, Pretoria as the provisional trustees in
the insolvent
estate of Mulaudzi. Once they have been appointed, they were
substituted by Nedbank as the second defendant on 13
June 2016 by a
notice in terms of Rule 15.
[8]
Strydom states in his affidavit that he (as the attorney of record)
as well as the joint provisional trustees have considered
the
pleadings and that they are of the view that they do not possess any
information or evidence confirming that the second defendant
or any
of the other defendants have a valid defence against the claim.
According to Strydom it would therefore not be to the benefit
of
anyone to proceed with litigation in this matter.
[9]
Strydom also points out in his affidavit that he and the two
provisional trustees did in fact attempt to obtain information
from
the insolvent that may have been relevant to the matters before court
but that they were met by the following:
"4.3 The joint provisional
trustee and I have attempted to obtain information from the
insolvent.
4.4 However we have been met with a
barrage of criticism, racist slander and unfound allegations, which
has resulted in our respective
offices not being in a position to
consider the merits of the matter. The insolvent has since we
attached and removed his assets
in terms of Section 19 of the
Insolvency Act launched two urgent applications against us. The first
was dismissed by this court
and the second removed from the roll
during last week.
4.5 I find such comments unwanted,
insulting and in extremely bad taste. Receiving comments as below
does not move the matter forward
or place my office and that of the
provisional trustees in a position to participate in this matter.
Remarks such as, I quote:
'Was it a case of pass-one pass-all at
Tuks? You disappoint me Prof, unlike your so-called client's, I do
not brief white attorneys.
I hate whites. I am not as confused as
your client, who have sold their souls by briefing incompetent whites
..."'
[10]
Mulaudzi (as one of the grounds for leave to appeal) takes issue with
the fact that the affidavit was placed before the court.
In light of
the fact that Nedbank had postponed the relief sought against the
trustees
sine die,
this ground for leave to appeal has become
moot.
[11]
Mulaudzi also took issue with the fact that the court had refused to
postpone the matter in order to allow for the second defendant
to
obtain legal representation. The point is not only moot for the
aforesaid reasons, it is ill founded in light of the fact
that
Mulaudzi has been substituted as the second defendant by the two
trustees.
[12]
I will now briefly deal with the remainder of the grounds for leave
to appeal.
Grounds
for leave to appeal
[13]
I have already dealt with some of the grounds for leave to appeal. In
respect of the other grounds for leave to appeal, Mulaudzi
takes
issue with the fact that this court found that he (Mulaudzi) has no
locus standi
to address the court in light of the fact that he
was substituted as the second defendant by the two duly appointed
provisional
trustees in his insolvent estate as well as in light of
the fact that he has no
locus standi
to represent the
remainder of the defendants. He also takes issue with the fact that
the court refused to grant him a postponement
to obtain legal
representation for the remainder of the defendants. Mulaudzi is
further of the view that the
Insolvency Act of 1936
is
unconstitutional. In respect of the last-mentioned ground for leave
to appeal, I should immediately point out that this point
was not
raised nor argued by any of the parties at the hearing of the
applications for default judgment. I therefore do not intend
dealing
with ground any further.
[14]
Mulaudzi also takes issue with the cost order and the fact that the
court accepted the version of Nedbank. There is no merit
in either of
these grounds. In respect of costs it is trite that a court has a
discretion to award costs and that a court on appeal
will only in
limited circumstances interfere with a costs order made by a lower
court. In respect of the ground that the court
erred in accepting the
version of Nedbank there is equally no merit in this ground in light
of the fact that the only version that
was presented to the court was
the version advanced by Nedbank. I have already referred to the fact
that the trustees have attempted
to obtain information from Mulaudzi
which could have assisted the court, but that he had refused to
co-operate.
[15]
Mulaudzi also avers that this court erred in granting an order to
have the various properties declared executable. There is
no merit in
this argument as Nedbank has complied with all formalities required
in this regard.
[16]
I will now briefly turn to what seems to be the main ground for leave
to appeal and that is this court's finding that Mulaudzi
had no
locus
standi
to appear on behalf of any of the defendants.
[17]
Mulaudzi appeared in court at the hearing of the two applications for
default judgement. He insisted on addressing the court
and made
lengthy submissions despite the fact that he had repeatedly been
informed that he had no
locus standi
to do so.
[18]
Apart from the fact that Mulaudzi had no
locus standi
to
appear on his own behalf as a result of him having been substituted
by the two provisional trustees as the second defendant,
Mulaudzi, in
any event had no
locus standi
to represent any of the other
defendants before court as they are all corporate entities.
[19]
If it is to be accepted that the defendants (except for the second
defendant who is represented by the two provisional trustees)
are
close corporations, Mulaudzi is disqualified, as an unrehabilitated
insolvent, from representing a close corporation by virtue
of section
47 of the Close Corporation Act, 69 of 1984.
[20]
In so far as these entities are companies as alleged by Mulaudsi, he
equally has no
locus standi
to represent any of them. In this
regard the rule is clear namely that a managing director of a company
has no right to address
the court (on behalf of a company) except in
exceptional circumstances. In this regard I quote from the headnote
of the decision
in
Manong
& Associates
(Pty) Ltd v
Minister of Public Works and Another
2010 (2) SA 167
(SCA):
"That a person in the position of
the managing director of the company had no right, such as counsel
and in certain circumstances
attorneys had, to address the Supreme
Court of Appeal on behalf of the appellant company was well settled.
But to observe that
he did not have a right of audience was not to
answer the question whether the court did not have, and whether the
court should
not on the facts of the case have exercised, a power to
permit him to address the court on behalf of the corporate litigant.
The
main reasons for relaxing the rule were obvious enough: a person
in the position of the controlling mind of a small corporate entity
could be expected to have as much knowledge of the company's business
and financial affairs as an individual would have of his
own. It thus
seemed somewhat unrealistic and illogical to allow a private person a
right of audience in a superior court as a party
to proceedings, but
to deny it to him when he was the governing mind of a small company
which was in reality no more than his business
alter ego. In those
circumstances the principle that a company was a separate entity
would suffer no erosion if he were to be granted
that right. There
might also be the cost of litigation which the director of a small
company, as well acquainted with the facts
as would be the case if a
party to the dispute personally, might wish to avoid. Such companies
were far removed from the images
of gigantic industrial corporations
which references to company law might conjure up.
It followed that cases would arise
where the administration of justice might require some relaxation of
the general rule. Their
occurrence was likely to be rare and their
circumstances exceptional or at least unusual. Our superior courts
had a residual discretion
in a matter such as this arising from their
inherent power to regulate their own proceedings. After all, it
seemed that the power
of a court to give leave to a corporation to
carry on a proceeding otherwise than by a legal representative was of
necessity an
integral part of the rule itself. It was important to
emphasise that the power vested in the court in this regard was a
purely
discretionary power. In general, and without attempting to lay
down any hard and fast rules, discretionary audience should be
regarded
as a reserve or occasional expedient. For, whilst we had to
be free to review the
Yates
rule in the light of currently
prevailing conditions and requirements, we perhaps needed to remind
ourselves that given the increasing
complexity of litigation, the
rule might well be required as strongly today as it ever was. In
those circumstances an unqualified
and inexperienced person might do
more harm than good to the corporate litigant that he purported to
assist.
It had to be emphasised that in each
instance leave had to be sought by way of a properly motivated,
timeously lodged formal application
showing good cause why, in the
particular case, the rule prohibiting non-professional representation
should be relaxed. Individual
cases could thus be met by the exercise
of the discretion in the circumstances of that case. It would thus be
impermissible for
a non-professional representative to take any step
in the proceedings, including the signing of pleadings, notices or
heads of
argument, without the requisite leave of the court concerned
first having been sought and obtained."
[21]
I am of the view that no such (exceptional) circumstances exist which
may warrant relaxing the rule prohibiting non-professional
representation.
[22]
I have considered whether an appeal would have reasonable prospects
of success. I am not persuaded that there exist reasonable
prospects
of success on appeal. I can also find no reason why costs should
follow the result.
[23]
In the event the following order is made:
The application for leave to appeal is
dismissed with costs.
____________________
AC
BASSON
JUDGE
OF THE HIGH COURT
Appearances:
For
the applicant
: Mr Mulaudzi
: In person
For
the Respondent
: J Killian
Instructed
by
: Baloyi Swart & Associates Inc