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
>>
2013
>>
[2013] ZAGPPHC 260
|
|
Biz Afrika 104s (Pty) Ltd ( In Liquidation) v Fuchs Roux Inc (1006/2013) [2013] ZAGPPHC 260 (30 August 2013)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA NORTH GAUTENG HIGH COURT, PRETORIA
CASE
NO: 1006/2013
DATE:30/08/2013
In
the matter between:
BIZ
AFRIKA 104S (PTY)
LTD
................................................................
PLAINTIFF
(IN
LIQUIDATION)
and
FUCHS
ROUX
INC
..............................................................................
DEFENDANT
JUDGMENT
VAN
OOSTEN J:
[1]
This is an opposed application for summary judgment. The plaintiff
claims a total amount of R1 566 197,08, together with mora
interest
thereon from the defendant, an incorporated firm of attorneys. The
defendant has filed an opposing affidavit dealing at
length with its
alleged bona fide defence to the plaintiffs claim. The plaintiff
persists in its application for summary judgment
for a reduced amount
of R1 025 000,00, in terms of Rule 32(6)(b)(ii).
[2]
The common cause facts of the matter are these. Biz Afrika 1049 (Pty)
Ltd (Biz), the registered owner of the immovable property
known as
Erf 87 Newmark Estate, (“the property”) on 9 September
2011, and in terms of a written agreement, sold the
property
including a building contact to one Luan Neethling (the purchaser)
for a purchase consideration of R1 750 000,00. The
firm of
conveyancers nominated in the agreement was Burger Attorneys who in
turn instructed Ms Hartley who was employed by the
defendant, and who
is also the deponent to the defendant’s affidavit resisting
summary judgment, to proceed with the transfer.
Ms Hartley, however,
acted on instructions directly given to her by Mr Diedericks, who at
all times acted on behalf of Biz.
[3]
The transaction was lodged with Registrar of Deeds, Pretoria, on 8
May 2012, was rejected and upon re-lodgement registration
of transfer
of the property occurred on 30 May 2012. On 11 May 2012 the defendant
received a letter of demand from the plaintiffs
attorneys, who at
that time were acting for a creditor of Biz, Bridgelink (Pty) Ltd. In
the letter the defendant was informed that
an urgent application for
the liquidation of Biz would be issued that same morning, that the
date of the letter in terms of s 348
of the Companies Act 1973 (the
Act), would therefore be the date of liquidation and that any
payments, on behalf of Biz concerning
the transaction, henceforth
made by the defendant would be at their sole risk. Ms Hartley sought
and obtained instructions from
Diedericks to proceed with the
transfer of the property. On 14 May 2012 the plaintiffs attorneys
repeated their earlier warning
to Ms Hartley not to pay out the
proceeds of the sale of the property. In this letter Ms Hartley is
informed that the urgent application
was issued on 11 May 2012 and
set down for hearing on 22 May 2012. A copy of the liquidation
application that had been issued was
annexed to this letter. Ms
Hartley once again discussed the letter with Diedericks who
instructed her to proceed with the transfer
of the property and
insisted that she was obliged to act in accordance with his
instructions on behalf of Biz, unless a court order
to the contrary
was issued. On 4 June 2012 Ms Hartley received a letter from the
provisional liquidators informing her that an
order for the
provisional liquidation of Biz had been granted on 25 May 2012 and
that they had duly been appointed provisional
liquidators by the
Master, in confirmation of which a copy of the order was attached to
the letter. The letter further confirms
that transfer of the property
had been effected and demands that the proceeds of the sale were to
be paid to the liquidators and
not to Biz or any third party.
[4]
In the affidavit resisting summary judgment Ms Hartley accounts as
follows in respect of payments made from the receipt by the
defendant
in its trust account of the amount of R1 298 802,92 on 30 May 2012,
representing a portion of the purchase price in respect
of the
property. On 31 May 2012 the amount of R742 600,00 to the builders of
the house on the property and the amount of R100 000,00
to the estate
agents in respect of their commission, on 5 June 2012 an amount of R2
400,00 to the purchaser, on 7 June 2012 the
amount of R183 802,92
into the bank account of the plaintiff as nominated by the
liquidators, on 14 June 2012 by agreement between
the purchaser and
the builders, R160 000,00 from retention monies to the builders and
R20 000,00 to the purchaser.
[5]
In summary, as is apparent from what I have set out above, the total
amount of R1 025 000,00 was paid to beneficiaries other
than the
liquidators of Biz (which constitutes the reduced amount the
plaintiff now claims), of which R842 600,00 was paid by Ms
Hartley
before she was formally advised of the liquidation order and R182
400,00 after being so informed. The liquidators on the
other hand,
only received the amount of R183 802,92.
[6]
This brings me to the cause of action relied on by the plaintiff in
the particulars of claim. Premised on the date of the granting
of the
provisional liquidation order, being 25 May 2012, the plaintiff
pleads that on 30 May 2012 (which is the date of receipt
of a portion
of the purchase price by the defendant in trust), firstly, the
mandate which Biz had given to the defendant was terminated
by the
operation of the law, secondly, any disposition of the proceeds of
the sale of the property under the mandate was void pursuant
to the
provisions of s 341(2) of the Act, and thirdly and lastly, the
fiduciary relationship which had existed between plaintiff
and the
defendant regarding the proceeds of the sale of the property
continued to exist and that the defendant had a duty of care
towards
the liquidators of Biz to deal with such proceeds only on their duly
authorised instructions, which could only be given
after their
appointment as provisional liquidators by the Master. The defendant’s
liability to pay the balance of the purchase
consideration to the
liquidators, finally, the concluding paragraph of the particulars of
claim, is based on the defendant’s
breach of its fiduciary duty
to the plaintiff.
[7]
The essential point of departure, in the view I take of the matter,
is to consider the payments made by Ms Hartley after she
had properly
been informed of the liquidation of Biz. The amount we are here
concerned with, as I have already dealt with, is R182
400,00. Counsel
for the plaintiff, in the alternative, in the event of leave to
defend being granted on the amounts paid prior
to this date, asked
for summary judgment for this amount together with the costs of the
application (the alternative claim).
[8]
All the facts concerning the alternative claim have been disclosed in
the papers before me. In addition to what I have already
set out
above, Ms Hartley in no uncertain terms, concedes that ‘At that
point in time I laboured under the bona fide but
mistaken belief that
the honouring of contracts entered into before the date of
liquidation was allowed. I am now informed that
the respondent was
not suppose (sic) to pay this amount to the purchaser, Mr Neetlingh’,
and ‘I am advised that the
respondent was also not suppose
(sic) to pay the amounts of R160 000,00 and R20 000,00 with knowledge
of the liquidation order’.
[9]
The alleged bona fides of Ms Hartley, assuming that it did exist,
does not avail the defendant. She was pertinently informed
by way of
a copy of the court order that an order for liquidation of Biz had
been granted. The only ‘defence’ proffered
in the
affidavit is that the plaintiff has not suffered damages as it was
incumbent on the plaintiff to have recovered the amounts
from the
end-beneficiaries thereof, which it has failed to do. The contention
was echoed in counsel for the defendant’s argument.
It is
without merit and falls to be rejected. Counsel for the plaintiff
specifically for the purpose of this application, relied
on the ex
lege termination of the defendant’s mandate, as pleaded. In
support of the contention counsel relied on the judgment
of Zulman J
(as he then was) in Klein NO v South African Transport Services and
others
1992 (3) SA 509
(W) 513G-I and 514A-B, where the learned Judge
having referred to Walker v Syfert NO
1911 AD 141
at 166 concluded:
‘
The
hand of the law, as it were, was laid on the insolvent’s estate
when he was finally sequestrated, and that hand was the
hand of the
trustee who was henceforth the person who was in charge of the
direction of the insolvent’s affairs and business
in general,
and in particular in regard to the type of matter with which I am now
concerned.’
The
learned Judge further (at 514A) in effect confirmed the concept of
concursus creditorum and in particular, the legal principle
concerning termination of a mandate by insolvency in holding that the
sequestration of the debtor’s estate in that matter
terminated
whatever authority Trust Bank might have had from the insolvent to
make a certain payment. In Administrator Natal v
Magill & Nel
(Pty) Ltd (in liquidation)
1969 (1) SA 660
(A) the facts the then
Appellate Division dealt with were that the respondent company had
prior to its liquidation, contracted
with the appellant to build a
school. After its liquidation the appellant elected to make certain
payments to certain sub-contractors
and deducted these amounts from
the amount due to the respondent. In the majority judgment the
appellant’s right to pay sub-contractors
directly after
liquidation was held to have been defeated by the liquidation of the
respondent. Applied to the facts of the present
matter the defendant
in making the payments acted without any authority to do so and in
fact contrary to the specific instructions
of the liquidators.
Counsel for the defendant submitted that there was no evidence of
vicarious liability. The contention flies
in the face of the
defendant’s letters annexed by Ms Hartley and in any event was
not raised by her at all. The defendant
has failed to disclose a
defence to the alternative claim and I am satisfied that the
plaintiff has established an unanswerable
case (cf Edwards v Menezes
1973 (1) SA 299
(NC)). No grounds have been advanced in support of
exercising my residual discretion to refuse summary judgment. It
follows that
the plaintiff is entitled to summary judgment on the
alternative claim.
[10]
It remains to deal with the remainder of the plaintiffs claim. In
this regard the decisive consideration having persuaded me
to grant
leave to defend is the absence of knowledge by Ms Hartley of the
liquidation order having been granted when these payments
were made.
Although this aspect was hotly debated before me and Ms Hartley’s
professed ignorance justifiably criticised I
refrain from expressing
any final views thereon. Suffice to say that, for purposes of this
application, the facts are such as to
persuade me to exercise my
residual discretion in favour of granting the defendant leave to
defend the remainder of the action.
[11]
In the result I make the following order:
1.
Summary judgment is granted against the defendant in favour of the
plaintiff for:
1.1
Payment of the sum of R182 400,00.
1.2
Interest on the amount in 1.1 above at the rate of 15,5 % pa from 4
June 2012 to date of final payment.
1.3
Costs of the application for summary judgment.
2.
The defendant is granted leave to defend the remainder of the
plaintiff’s action.
FHD
VAN OOSTEN
JUDGE
OF THE HIGH COURT
COUNSEL
FOR PLAINTIFF: ADV F DU TOIT SC
ATTORNEYS
FOR PLAINTIFF:STRYDOM & BREDENKAMP INC
COUNSEL
FOR RESPONDENT: ADV JD MARITZ SC
A
TTORNEYS FOR RESPONDENT: GILDENHUYS MALA TJI INC
DATE
OF HEARING: 26 AUGUST 2013
DATE
OF JUDGMENT: 30 AUGUST 2013