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[2016] ZAGPPHC 1231
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Neuchtern v Connoway and Another (63867/2015) [2016] ZAGPPHC 1231 (15 November 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO:
63867/2015
Date:
15/11/2016
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
NUECHTERN,
MICHAEL
HELMUT
Applicant
AND
CONNOWAY,
HERMANUS
PHILLIPUS
First
Respondent
FLYCATCHER
CASTLE CC (In liquidation)
Second
Respondent
JUDGMENT
THOBANE
AJ,
1.
The applicant seeks an order compelling specific performance
arising out of a written agreement concluded between the applicant,
first respondent and liquidators of the second respondent, on 17
February 2014. The orders sought can be summarized as follows;
1.1
That the first respondent be ordered to give his full
participation to enable the second respondent's liquidators to
arrange an
auction in respect of the second respondent, immovable
property known as erf 1468, Graskop Township, Registration division
K.T.,
Mpumalanga;
1.2
That the first respondent be ordered to sign the necessary
documents to transfer his undivided half share in the said property;
1.3
That should the first respondent fail to sign the transfer
documents within 10 days the sheriff of the district of Graskop and
Sabie
be authorized and be ordered to sign those documents on behalf
of the first respondent;
1.4
Costs on an attorney and client scale.
2.
The applicant contends that being a co-owner of immovable
property together with the first respondent and whereas the parties
at
the Lydenburg Magistrate Court, concluded a settlement agreement
in terms of which the second respondent as well as the parties
immovable property was to be sold, the court is being approached to
give effect to the said settlement agreement in view of the
first
respondent's unwillingness to do so. The first respondent in opposing
the application has raised two points
in limine.
Firstly, that
there is pending litigation, before this honourable court under case
number 33454/2013, in terms of which an order
is sought to terminate
the parties' joint ownership of the immovable property. That a second
dispute that is pending before court
is for the termination and
sequestration of the universal partnership between the parties. In
those proceedings it seem parties
have pleaded and have filed
counterclaims against each other. Secondly, the first respondent
contends there exists material disputes
of fact that cannot be
resolved on affidavit only. The first respondent characterizes these
disputes as involving the parties'
immovable property, their joint
estate and in particular how the proceeds thereof should be
distributed. First respondent further
states that it is the selfsame
disputes of fact that prevented the implementation of a settlement
agreement.
3.
Some material facts that give rise to the dispute are common
cause.
3.1
The applicant and the respondent are co-owners of immovable
property known as erf 1468 Graskop Township, Registration Division
K.T.
Mpumalanga. The property is also known as 4 Hugenote Street,
Graskop.
3.2
The second respondent was established by both the applicant
and the first respondent with the intention to transfer the immovable
property to it and thereafter use the immovable property to run a
guest house. The property in 3.1., above, was registered in the
name
of both the applicant and the first respondent.
3.3
On 17 February 2014 at the Magistrate's Court, Lydenburg, the
first respondent, the provisional liquidators of the second
respondent
and the applicant entered into a written settlement
agreement. The material terms of the agreement,
inter a/ia,
are
said to be the following;
3.3.1
That the second respondent be sold, together with the property
situated at 4 Hugenote Street, Graskop, Mpumalanga, as a going
concern;
3.3.2
That the second respondent has a claim in respect of the
property at 4 Hugenote Street, Graskop.
3.3.3
That the first respondent and the applicant will be afforded
an opportunity to market the property as going concern through the
use of estate agents for a period of 4 (FOUR) months, after which, if
unsuccessful;
3.3.4
That the going concern, the guest house, will be sold on
auction by the liquidators at a price subject to confirmation and the
proceeds
will be paid into the attorneys of the claimants' trust
account, which will be invested, until such time as claims are proven
and
the liquidators instruct the attorneys to pay the money to the
claimants.
3.4 The immovable
property could not be sold. The reasons for the collapse of the
intended sale are however in dispute.
3.5 On 24 February 2015
the first respondent's legal representatives wrote a letter to the
trustees and to the applicant notifying
them that they hold
instructions and have the intention to launch a high court
application for the liquidation of the partnership
that existed
between applicant and the first respondent. I pause to indicate that
applicant and the first respondent were in a
love relationship that
was for some reason terminated. It was further stated on behalf of
the first respondent that pending such
application, the following
would obtain;
(
2)
That the
agreement entered into on 17 February 2014 was but for other reasons
giving our client the right to resile from same: inter
alia not
adhered to especially in respect to clauses 1.2 to 1.6 thereof and as
such the agreement is hereby cancelled;
(3)
To
institute proceedings for the said liquidation within thirty days
hereof and to request the liquidators and Mr. Nuechtern to
undertake
not to proceed with any further action pending the institution of the
said legal proceedings and to keep all actions
in abeyance inclusive
of-
a.
The auction
of the assets of the liquidated close corporation; and
b.
The assets
of the said partnership i.e. Erf 1468 Graskop; and
c.
The
litigation between the parties under case number 33454/2013."
3.6 The letter further
stated that should the applicant not give such an undertaking, the
first respondent would launch an application
to stay all proceedings
pending finalization of the application.
3.7 The applicant did not
give the sought undertaking.
3.8 It is further common
cause, from the reading of papers, that the first applicant proceeded
to launch the threatened application.
The
first point
in limine
4.
Lis pendens
is a defence that there is pending
litigation between the same parties on the same cause of action. In
Nestle (South Africa) (Pty) Ltd v Mars Inc 2001(4) SA 542 (SCA)
at paragraph 16 the court stated that;
"The defence of
/is alibi pendens shares features in common with the defence of res
judicata because they have a common underlying
principle, which is
that there should be finality in litigation. Once a suit has been
commenced before a tribunal that is competent
to adjudicate upon it,
the suit must generally be brought to its conclusion before that
tribunal and should not be replicated (/is
alibi pendens). By the
same token the suit will not be permitted to be revived once it has
been brought to its proper conclusion
(res judicata). The same suit,
between the same parties, should be brought only once and finally".
5.
It is trite that the first respondent bears the onus of
alleging and proving the requirements of
/is pendens,
namely;
5.1
that there is pending litigation;
5.2
between the same parties or their privies;
5.3
based on the same cause of action, and
5.4
in respect of the same subject matter.
6.
Case number 33454/2013, in this court, is between the same
parties. As I understand it, the pending matter is for termination of
the parties' joint ownership in the immovable property, the
guesthouse, as well as an order that the proceeds from the sale of
the immovable property be divided equally between the first
respondent and the applicant.
7.
The first respondent further points to the fact that there is
another pending matter in which the order sought is the
"termination
and sequestration of the universal partnership that exists between
applicant and second respondent".
It is not in dispute that
in that matter the applicant has sought to join the second respondent
as a second defendant. The applicant
states in paragraph 8 of his
founding affidavit that;
"I have filed a
special plea, a plea on the merits and a counterclaim. In my special
plea I have pointed out to the first respondent
that the second
respondent should be joined as a defendant in the main action"
8.
The applicant states that there is no pending application, in
responding to the contention by the first respondent that there is
a
second pending matter in this court. Specifically applicant states
that there is no pending application for the "liquidation
of the
second respondent". It is indeed so that there appears to be no
pending application for the liquidation of the second
respondent or
for the liquidation of the parties' business. There can be none
because it is undisputed that the second respondent
is in liquidation
and liquidators have been appointed. Nowhere in the first
respondent's papers does the first respondent contend
that there is a
pending application to liquidate the second respondent. In seeking to
impute such an interpretation, the applicant
misconstrues the
contention. The second pending matter therefore is about the
dissolution of the universal partnership between
the applicant and
first respondent. That much is clear from the papers.
9.
The question that begs an answer is whether these two matters,
which must be evaluated in accordance with the requirements in para
5, above, clear the bar. Yes both of the matters are pending and
there seems to be no qualms about the fact that they are between
the
same parties. The determining factors therefore will be whether or
not the cause of action is the same and also whether these
matters
relate to the same subject matter. In case number 33454/2013 the
order sought is that the ownership of both the applicant
and the
first respondent in the immovable property be terminated. In
casu
the order sought is firstly that the first respondent be ordered
to give his full participation to facilitate the auction to be
conducted by liquidators of the second respondent. The second order
sought is that the first respondent be ordered to sign transfer
documents once the auction has taken place, in the alternative, that
the sheriff be authorized to sign such transfer documents.
The order
sought in
casu
is a manifestation of or flows from termination
of ownership of the immovable property. It is only when parties are
ad idem
that the property be sold that any of them would have
to attach his signature to the transfer documents. It is not disputed
that
the immovable property is to be sold. To concretize such
consensus, the parties concluded a tripartite written agreement at
the
magistrate court, in terms of which the method for disposal of
the immovable property was by way of estate agents involvement and
thereafter by way of an auction.
10.
The term "cause of action" was defined in
McKenzie
v Farmers'
Co-
operative Meat Industries Ltd
1922
AD 16
at 23 as
"..."every
fact which it would be necessary for the plaintiff to prove, if
traversed, in order to support his right to
the judgment of the
Court. It does not comprise every piece of evidence which is
necessary to prove each fact, but every fact which
is necessary to be
proved."
11.
In
Evins v Shield Insurance
Co
Ltd
1980 [2] SA 814 A
at 825G it was said that "cause of
action "... is ordinarily used to describe the factual basis,
the set of material facts,
that begets the plaintiffs legal right of
action."
12.
In summary, the following, gleaned from common cause facts and
facts contained in the affidavits must be accentuated; that the
parties
were in a universal partnership, their partnership came to an
end, during the subsistence of that partnership they purchased
immovable
property from which they ran a business of a guesthouse,
they also formed and registered an entity (second respondent)
primarily
to operate the guesthouse, in 2013 under case number
33454/2013, the first respondent issued an action in terms of which
he sought
an order for the sale of the immovable property as well as
the equal division of the proceeds therefrom, the applicant brought
an application for a mandamus, in the vent the property is sold, for
the cooperation of the first respondent.
13.
The applicant contends that an action wherein the first
respondent seeks an order that the property be sold and that the
proceeds
therefrom be divided equally between the parties, is
distinct and different to an application wherein the applicant seeks
an order
that the first respondent give his co-operation to actuate
the sale, whatever form the sale takes. There is in my view no doubt
that the action pending in this court relates to the same subject
matter, namely, the immovable property and the sale thereof.
It is
further my view that the cause of action is the same. Closely
scrutinized, the applicant seeks in this application, couched
in the
form of a mandamus, the co-operation of the first respondent. There
has been no reason advanced why such co operation
cannot be
secured in the pending application, in light of the fact that the
parties are
ad idem
that the immovable property must be sold
and the proceeds thereof be shared equally between them.
14.
The applicant seems to be concerned that the first respondent
is abusing court processes. Applicant is of the view that the first
respondent has no intention to seriously pursue the litigation that
he instituted in case number 33454/2013. A litigant is not
without
remedy in circumstances where a fellow litigant institutes
proceedings and fail to pursue them seriously. Such remedy certainly
does no lie in the aggrieved litigant instituting an application of
his own, as the applicant has done.
15.
The headnote in
Socratous v Grindstone Investments 134
(Pty) Ltd
2011 (6) SA 325
(SCA),
is apt;
"courts are
a
public resource under severe pressure
-
congested court
rolls prejudiced by repeated litigation involving the same parties,
based on the same cause of action and related
to the same subject
matter
-
court ought not to have decided the merits"
The
second point
in limine
16.
A party that relies on a defence that there are material or
genuine disputes of fact, is under obligation to clearly articulate
the reasons why he holds that view and must set out in detail what
those disputes of fact are. In
Wightman tla JW Construction v
Headfour (Pty) Ltd and Another
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA)
the
Supreme Court of Appeal eloquently set out what is a dispute of fact
and the approach to be adopted when confronted thereby.
Heher JA
said;
''A real, genuine and
bona fide dispute of fact can exist only where the court is satisfied
that the party who purports to raise
the dispute has in his affidavit
seriously and unambiguously addressed the fact said to be disputed.
There will of course be instances
where a bare denial meets the
requirement because there is no other way open to the disputing party
and nothing more can therefore
be expected of him. But even that may
not be sufficient if the fact averred lies purely within the
knowledge of the averring party
and no basis is laid for disputing
the veracity or accuracy of the averment. When the facts averred are
such that the disputing
party must necessarily possess knowledge of
them and be able to provide an answer (or countervailing evidence) if
they be not true
or accurate but, instead of doing so, rests his case
on a bare or ambiguous denial the court will generally have
difficulty in
finding that the test is satisfied. I say 'generally'
because factual averments seldom stand apart from a broader matrix of
circumstances
all of which needs to be borne in mind when arriving at
a decision. A litigant may not necessarily recognise or understand
the
nuances of a bare or general denial as against a real attempt to
grapple with all relevant factual a/legations made by the other
party. But when he signs the answering affidavit, he commits himself
to its contents, inadequate as they may be, and will only
in
exceptional circumstances be permitted to disavow them. There is thus
a serious duty imposed upon a legal adviser who settles
an answering
affidavit to ascertain and engage with facts which his client
disputes and to reflect such disputes fully and accurately
in the
answering affidavit. If that does not happen it should come as no
surprise that the court takes a robust view of the matter.
"
17.
The first respondent points to two issues which he contends
are disputes of fact in this matter. Firstly, that there is a long
existing
"feud" between him and the applicant as a result
of which there is disagreement about the manner of distribution of
the
proceeds from the sale of the immovable property. Secondly, that
the first respondent disputes the validity of an agreement signed
by
the parties at magistrates court. The issue therefore is whether the
two points raised are genuine disputes of fact. The manner
of
distribution of the proceeds from the sale of the immovable property
is in my view not a dispute of fact for the simple that
the parties
are in agreement that the proceeds have to be distributed equally
between them. The contention that distribution of
the proceeds from
the sale of the immovable property is a dispute of fact is without
merit. There is however merit in the contention
that the validity of
the agreement is disputed. In a letter dated 24 February 2015, before
current proceedings were initiated,
first respondent's legal
representatives advised that the agreement, on which the applicant
bases this application, is being cancelled.
It was easily foreseeable
that seeking a mandamus based on an agreement that is being disputed
was always going to raise disputes
that cannot be resolved in motion
proceedings.
18.
The approach in these matters is trite having been so
articulately set out in and has come to be referred to as the
Plascon-Evans
rule. In
National Director of Public Prosecutions
v Zuma
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA)
at paragraph 26
the court, in restating the rule, said:
"[26] Motion
proceedings, unless concerned with interim relief, are all about the
resolution of legal issues based on common
cause facts. Unless the
circumstances are special they cannot be used to resolve factual
issues because they are not designed to
determine probabilities. It
is well established under the Plascon-Evans rule that where in motion
proceedings disputes of fact
arise on the affidavits, a final order
can be granted only if the facts averred in the applicant's (Mr
Zuma's) affidavits, which
have been admitted by the respondent (the
NDPP), together with the facts alleged by the latter, justify such
order. It may be different
if the respondent's version consists of
bald or uncreditworthy denials, raises fictitious disputes of fact,
is palpably implausible,
far-fetched or so clearly untenable that the
court is justified in rejecting them merely on the papers.”
19.
I am
accordingly of the view that whereas the first part of this point
in
limine,
namely,
that the "feud" between the parties is a dispute of fact is
not sustainable. The second one to the effect that
the agreement is
disputed, is not bald, fictitious, far-fetched, implausible or
untenable. It is in my view good in law.
20.
In the result, the points
in limine
are upheld.
21.
I therefore make the following order;
1. The application is
dismissed with costs.
__________________
SA
THOBANE
ACTING
JUDGE OF THE HIGH COURT