About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2016
>>
[2016] ZAGPPHC 1160
|
|
Roselli v Derek's Boerewors and Pie Mecca CC and Others (84979/2014) [2016] ZAGPPHC 1160 (7 December 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO: 84979/2014
DATE:
7/12/2016
REPORTABLE:
YES
OF
INTEREST TO OTHER JUDGES: YES
In
the matter between:
ROSELLI,
VITTO
Applicant
and
DEREK'
S BOEREWORS & PIE MECCA CC
First
Respondent
NIEMANN,
ANNA
SUSANNA
Second Respondent
NIEMANN,
SUSAN
Third Respondent
JUDGMENT
NGALWANA
AJ
A.
The Pro
blem
[1]
The applicant comes to this Court, on special motion, seeking an
order that the first respondent
"be finally
wound
up
and placed
in
the
hands
of
the
Master".
The obligatory costs order is also sought - against all three
respondents. It is common cause that the second and third respondents
are members of the first respondent close corporation.
[2]
The basis for the order sought is that the first respondent close
corporation is commercially insolvent and, in any event, it
is just
and equitable to
"place
the
hand
of
the
law"
upon it as it
is being used by the second respondent for insalubrious purposes:
fraud to be precise.
[3]
He seeks to hinge his
locus
standi
on his
membership of the first respondent close corporation or, in the
alternative, his status as creditor of the first respondent
close
corporation in a sum in excess of Rl,2 million. The second respondent
places in dispute both the applicant's membership of
the close
corporation and his status as its creditor.
[4]
The respondents contend that there arise material and
bona
fide
disputes of fact that are not capable of resolution
on the papers and that were known to the applicant at the time of
launching
this application. For that reason they seek a dismissal of
this application with costs.
[5]
The respondents also balk at the joinder of the second and third
respondents in proceedings that are targeted at the first respondent
close corporation and in which no relief is sought against them. For
this they want a punitive costs order against the applicant
whether
or not his application succeeds. There is no misjoinder. The second
and third respondents, being members of the close corporation,
clearly have a direct and substantial interest in the winding up of
the close corporation. In any event, a punitive costs order
is not an
appropriate remedy for misjoinder.
[6]
They also want a punitive costs order because, they say, the
applicant included in his papers settlement proposals between the
parties which they contend constitute inadmissible evidence. Again, a
punitive costs order is not appropriate remedy for that.
A striking
out application is. The respondents have not sought the latter.
[7]
The applicant contends that these settlement proposals constitute
evidence of the close corporation's inability to pay its debts
and
are thus admissible in winding-up proceedings. The respondents'
retort is that this position is true only where the applicant
relies
on an act of insolvency. It is not necessary to decide this issue
here. The respondents have not sought the striking out
of the matter
about which they complain.
B.
The Solution
[8]
The purpose of the courts in motion proceedings is to resolve legal
disputes on common cause facts. This application does not
fit that
mould. In my view the application is disposable on one question,
namely, whether there arise disputes of fact of the sort
that is
material,
bona fide,
foreseeable and incapable of
resolution on the pleadings.
[9]
The application was launched on 27 November 2014. A month
earlier (on 28 October 2014) the respondents' attorneys cautioned
the
applicant's attorneys about the inappropriateness of motion
proceedings in light of
"a
clear dispute of
fact".
That dispute related to whether the applicant
was a member of the close corporation and held an interest in it.
Moreover, there
is a material dispute as regards whether the
applicant is a creditor of the first respondent close corporation or
of the second
respondent. These are not spurious disputes.
[10]
More than 65 years ago a warning was sounded by our courts about the
abuse of motion proceedings as follows:
"It
is
becoming
a
habit
to
bring
applications
to
Court
on
controversial
issues
and
then
to
endeavor
to
turn
them
into
trial
actions.
Applicants
thereby
obtain
a
great
advantage
over
litigants
who
have
proceeded
by
way
of
action
and
who
may
have
to
wait
for
many
months
to
get
their
cases
before
the
Court.
Such
applications-cum-trials
interpose themselves,
occupying
the
time
of
Judges
and
still
farther
delaying
the
hearing
of
legitimate
trials.
Applications
for
the
hearing
of
viva
voce
evidence
in
motion
proceedings
should
be
granted
only
where
it
is essential in the interests
of
justice.
"
[1]
[11]
This is why a Court has a discretion to dismiss an application with
costs where an applicant knows or ought reasonably to have
known that
there is likely to arise material and
bona fide
disputes
of fact which cannot reasonably be resolved on the pleadings.
[12]
More than 40 years ago, this division re-iterated a well-established
rule of practice here as follows:
"It
is a
well-established
rule
o
f
practice
in
this Division,
that
dismissal of
the
application
with
costs
is
the
proper course
to
follow
if Omegalabs
knew
or should
have
known
before
the
proceedings
were
instituted,
that
there
was
likely
to
be
a
dispute
of fact which
the
Court
would
not be
able
to
resolve
on
affidavit
.”
[2]
[13]
Once
identified,
the
resolution
of factual
disputes
in motion
proceedings
must be done
pursuant to
the
long-established
principles
laid
down in
the
qualified
Stellenval
e
[3]
rule
in
motion
proceedings
[4]
.
Those
principles
are,
in summary,
the following:
13.1
The starting point is that motion proceedings, unless concerned with
interim relief, are
all about the resolution of legal issues based on
common cause facts.
13.2
Unless the circumstances are special, motion proceedings cannot be
used to resolve factual
issues because they are not designed to
determine probabilities.
13.3
Where in motion proceedings disputes of fact arise in the affidavits,
a final order
can be granted only if the facts averred
in the applicant's affidavits, which have been admitted by the
respondent,
together with the facts alleged by the latter, justify
such order.
13.4
It may be different if the respondent's version consists of bald or
implausible 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.
13.5
I should add that where facts are peculiarly within the knowledge of
the party who fails
to transmit that knowledge to the Court, the
Court is entitled to draw inferences that are least favourable to
that party from
the proven facts.
[14]
But the
qualified
Stellenvale
[5]
rule
in
motion
proceedings
[6]
does not
even arise
here
because
these
disputes
are
not
capable
of
resolution
on
the
papers. The
picture that emerges is
this:
14.1
The applicant knew a month before launching these proceedings that
his membership of the
first respondent close corporation is
strenuously disputed.
14.2
He knew from the correspondence with the second respondent's
attorneys that his dispute was with
the second respondent and not
with the first respondent close corporation. Indeed, his opprobrium
in the pleadings is reserved
for the second respondent (not the close
corporation) for the manner in which he says she has conducted
herself and the affairs
of the close corporation throughout.
14.3
In any event, it is clear from the pleadings that whatever
"agreement"
there may have been is between the
applicant and the second respondent. On his own version in founding
papers, the applicant talks
of an agreement with the second
respondent for the acquisition of an interest in the close
corporation following payment
of some Rl,2 million. The second
respondent denies that there was such an agreement and in any event
pleads in the alternative
that even if there were such an agreement,
the applicant had not fulfilled its terms as he had not paid the full
amount agreed
upon. In reply, the applicant does not aver that
the agreement was with the close corporation and that the close
corporation
is indebted to him. He says,
"I
note the admission
on behalf
of
the second
respondent
that I
'. . .
only paid
over an
amount of roughly R
1
,296,
704.25
'.
On
her
own
admission, there
is
an
indebtedness to
the
sum
of
in
excess
of Rl.2
million, and as
such, I am
clearly
a
creditor.
"
14.4
In this context, clearly the averment is that the applicant is the
creditor of the second respondent.
The close corporation is a
separate person and, although the applicant alleges fraud on the part
of the second respondent in her
running of its affairs, there is no
relief sought under
section 20(9)
of the
Companies Act, 71 of 2008
for the piercing of the corporate veil. Winding up proceedings
against a close corporation that on the facts is not indebted to
the
applicant are not the appropriate remedy for the recovery of a debt
that is owed by a member of that close corporation.
14.5
There are no special circumstances that warrant the resolution of
these factual disputes
in the affidavits.
14.6
These disputes are material,
bona
fide,
and were
foreseen by the applicant.
14.7
In any event, the applicant seeks a
final
winding up
order which is not available where there are disputes of fact. Only
in his supplementary heads of argument and from the
Bar did Counsel
for the applicant seek an interim winding up order. I can
think of no compelling reason in the interests
of justice to grant
orders not sought in the papers and for which no case is made out in
the papers.
14.8
It would hardly be in the interests of justice to refer these factual
disputes to the hearing
of
viva
voce
evidence. Not only did the applicant know, at least a month
before launching these motion proceedings, that his membership of the
close corporation was disputed, he also knew that both the quantum of
his claim and the party against whom it lies was disputed.
To refer
such disputes for the hearing of
viva
voce
evidence would in my view encourage precisely the sort of
"applications-cum-trials"
that were
deprecated by the courts more than 60 years ago.
[15]
For all these reasons, and on the authority of
Carrara and Lecuona
(Pty) Ltd v
Van
Den Heever
Investments
Ltd and Others
1973 (3) SA 716
(T) at 720, the application must be dismissed with costs. It is
hardly an answer in these circumstances to say because the
Companies
Act requires
that winding up proceedings must be brought on motion,
therefore action proceedings are not an option. The applicant had
other
remedies available to him for the recovery of a debt -assuming
for the moment that the debt is owed by the close corporation.
[16]
In argument the applicant's Counsel sought to mount a different
steed. He contended that following the respondents' admission
that
some Rl.2 million had been paid by the applicant to the second
respondent which did not result in the transfer of the 50%
interest
in the close corporation as had been the applicant's intention, then
the applicant's claim for the winding up of the close
corporation is
founded on
condictio
indebiti.
He says
this is because it is the close corporation that has been enriched
and not the second respondent.
[17]
This horse has short legs. First, this was never the
applicant's basis for the winding-up application in the pleadings.
Second, this was never the relief sought in the notice of motion.
Third, a
condictio
indebiti
is a delictual
remedy against a party who has not only been enriched but also
unjustly so at the expense of another inaction proceedings.
[18]
In the result, the application is dismissed with costs.
V
NGALWANA
ACTING
JUDGE OF THE HIGH COURT
Date
Heard:
21 November 2016
For
the Applicant:
J Hershensohn
Instructed
by:
Coetzer
and Partners
For
the Respondents: JGC Hamman
Instructed
by:
Romanos Attorneys
Date
of Judgment:
07
December 2016
[1]
Garment
Workers'
Union
v De Vries and
Others
1949
(I) SA
1110 (W)
at
1133.
See also
Seloadi
v
Sun International
(Bophuthatswana)
Ltd
1993
(2) SA
174
(BG) at
191;
Bonges
v
Bonges
en
'n
Ander
1965
(2) SA 82
(0) at 85;
De
Kloe
and
Slingerland
v
Geddes
1946
TPD 650
at 653.
[2]
Carrara
and Lecuona
(Pty)
Ltd
v
Van
Den
Heever
Investments
Ltd
and
Others
1973
(3) SA 716
(T)
at
720
[3]
Which derives from
Stellenbosch
Farmers'
Winery
Ltd v Stellenvale
Winery
(Pty) Ltd
1957
(4) SA 234
(C) at 235E-G
[4]
See
NDPP
v
Zuma
[2009] ZASCA 1
;
2009
(2)
SA
277
(SCA)
at para
[26]
,
290E-F;
Plascon-Evans
Paints
Ltd
v
Van
Riebeeck
Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634E-635C
[5]
Which derives from
Stellenbosch
Farmers' Winery
Ltd
v Stellenva/e Winery (Pty) Ltd
1957
(4) SA
234 (C) at
235E-G
[6]
See
NDPP
v
Zuma
[2009] ZASCA 1
;
2009
(2)
SA 277
(SCA)
at
para
[26],
290E-F;
Plascon-Evans
Paints
Ltd
v
Van
Riebeeck
Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634E-635C