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[2013] ZAGPPHC 513
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Reunert Limited v Holdsworth and Others (16558/2013) [2013] ZAGPPHC 513 (1 October 2013)
HIGH
COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case No: 16558/2013
Heard: 30 September
and 01 October 2013
Date of judgment: 01
October 2013
Not Reportable
Not of Interest To
Other Judges
In
the matter between:
REUNERT
LIMITED
.....................................................................................................
Applicant
and
HOLDSWORTH,
JOHN
CHARLES
...................................................................
1
st
Respondent
ALTIVEX
295 (PTY)
LIMITED
.........................................................................
2
nd
Respondent
CLINE,
RAEL
IAN
..............................................................................................
3rd
Respondent
RANGILA,
MOHAMMED
..................................................................................
4
th
Respondent
ONI,
OPEYEMI
OLUWASEUN
.........................................................................
5
th
Respondent
JOHNSON,
BRIAN
RICHARD
..........................................................................
6
th
Respondent
FRANCESCO,
DARRYN
....................................................................................
7
th
Respondent
CHENGALROYEN,
JARRYD
JERMAINE
....................................................
8
th
Respondent
MOODLEY,
THIRESH
.....................................................................................
9
th
Respondent
FRANCESCO,
DONOVAN
GILYAN
............................................................
10
th
Respondent
NEIMAN,
VICTOR
...........................................................................................
11
th
Respondent
JOVANOVIC,
DAMJAN
.................................................................................
12
th
Respondent
GROBLER,
LOUIS
..........................................................................................
13
th
Respondent
OPEN
NETWORK HOLDINGS (PTY)
LIMITED
......................................
14
th
Respondent
JUDGMENT
PHATUDI
J:
[1]
The applicant seeks an order declaring the Respondents to be in
contempt of Court Orders granted by this Court on 17 April 2012
and
24 August 2012 respectively.
1
There are numerous interlocutory applications filed by the
respondents. Among the said applications, some of the Respondents
(the
respondents), (being the first, third up to the thirteenth)
apply for condonation of the late filing of their answering affidavit
to the main application.
[2] At the
commencement of the hearing of this application, Mr Vivian, counsel
for the respondents, places on record that he only
represents the
1
st
, 3
rd
- 13
th
respondents. He
raises, as a point in limine, non-substitution of the 2
nd
and 14
th
respondents by the trustees appointed for the2
nd
and 14
th
respondents occasioned by the said respondents’
liquidation. He submits that the main application cannot be dealt
with in
the absence of the trustees for 2
nd
and 14
th
respondents. He refers me to section 359 of the Companies Act 61 of
1973. (Old Companies Act)
[3] Mr Bhana,
counsel for the applicant, submits in rebuttal thereto, that the
liquidators of 2
nd
and 14
th
were informed by
notice of their intent to proceed with the matter as against the
second and fourteenth respondents. He hands up
the notices he refers
to, to which I marked exhibit A and exhibit B in respect of the
second and fourteenth respondents respectively.
He reads on record
paragraph 5 of exhibit A. The paragraph reads:
‘
5.
As required by section 359 of the Companies Act 61 of 1973 as read
with Schedule 5 of the
Companies Act 71 of 2008
, you are hereby
notified of our client’s intention to proceed with the above
application against Altivex on the aforesaid
dates’
He further reads
paragraph 4 which stipulates
‘
4.
The parties to the application (with the exception of Altivex and the
fourteenth respondent, Open Networks (Pty) Ltd (in liquidation))
have
filed various affidavits, heads of argument have been delivered on
both our client and the matter is set down for hearing
in the North
Gauteng High Court on 30 September and 1 October 2013’
[4] Emphasising the
notification of the liquidators, he places on record that a meeting
was held with the liquidators on the 09
September 2013. They on 11
September 2013 responded that they only need the Founding papers. He
submits that substitution is not
required on a forma! basis.
[5] In reply, Mr
Vivian submits that the liquidators do not know what the application
is all about. He submits that the whole papers
in connection with
this matter should have been delivered and or served on the trustees
of the 2
nd
and 14
th
respondents. He lastly
submits that no substitution or the application thereto has been made
by the applicants. He, at the least,
submits that a criminal sanction
cannot be made in the absence of a party the applicant seeks to
impute.
[6] I enquired from
the applicant’s counsel if the applicant still pursues the main
application against the 2
nd
and 14
th
respondents. Mr Bhana submits that they still pursue the orders they
seek in the main application against all respondents including
the
second and the fourteenth. He submits that substitution is not
necessary.
[7]
Section 359 of the Companies Act 61 of 1973(old Act) stipulates:
‘
(1)
When the Court has made an order for the winding-up of a company or a
special resolution for the voluntary winding-up of a company
has been
registered in terms of section 200 -
(a) All civil
proceedings by or against the company concerned shall be suspended
until the appointment of a liquidator; and
(b) Any attachment
or execution put in force against the state or assets of the company
after the commencement of the winding-up
shall be void.
(2) (a) Every person
who, having instituted legal proceedings against a company which were
suspended by a winding-up, intends to
continue the same, and every
person who intends to institute legal proceedings for the purpose of
enforcing any claim against the
company which arose before the
commencement of the winding-up, shall within four weeks after the
appointment of the liquidator
give the liquidator not less than three
weeks’ notice in writing before continuing or commencing the
proceedings.
(b)lf notice is not
so given the proceedings shall be considered to be abandoned unless
the Court otherwise directs.’
[8] It is common
cause that the 2
nd
and 14
th
respondents are
placed under a voluntary winding-up. The liquidators have been
appointed. The liquidators are, by virtue of their
appointment,
represents the second and fourteenth respondents. The liquidators
have the power to bring and or defend any legal
proceedings in terms
of section 386 (4) (a) read with section 386 (3) of the Old Act.
[9] It is further
common cause that the liquidators were appointed on the 14 August
2013.
[10]
As section 359 (2) (a) provides that .every person who intends to
institute legal proceedings for the purpose of enforcing
any claim
against the company which arose before the commencement of the
winding-up, shall within four weeks after the appointment
of the
liquidato
r
give
the
liquidator not less than three weeks’
notice
in writing
before
continuing or commencing the proceedings.”(my underline)
[11] The Act does
not define the term notice. Mr Bhana submits that Exhibit A and
Exhibit B, being notifications of the liquidators
of the status of
proceedings against the 2
nd
and 14
th
respondent
is concerned, suffices to be a “notice” as required in
terms of section 359.
[12]
Section 220 of the Companies Act 71 of 2008 (New
Companies Act)
provides
in relation to the notice, that
‘
unless
otherwise provided in this Act, a notice, order or other document
that, in terms of this Act, must be served on a person,
will have
been properly served when it has been either
(a) Delivered to
that person; or
(b) Sent by
registered mail to that person's last known address
[13] In my
evaluation of the facts and the law surrounding notification of the
liquidators, I am of the view that “notice”
for the
purposes of the Companies Act 61 of 1973 need not be a formal notice
in the format required in terms of the Uniform Rules
of this Court. I
agree with the applicant’s counsel that Exhibit A and B
constitute a “notice” as envisaged by
the Old Act. It is
not in dispute that Exhibit A and B were sent to the liquidators of
2
nd
and 14
th
respondents. Mr Vivian
acknowledges that the liquidators received the said notification.
[14] Based on the
aforesaid, I find the applicant to have complied with the provisions
of section 359 (2) (a) of the Companies Act.
(Old Act)
[15] The issue to be
determined is whether the 2
nd
and 14
th
respondents ought to be substituted by the liquidators.
[16] It is trite
that the liquidators steps in the position of the company in
liquidation or liquidated. The liquidators have since
14 August 2013
been appointed by the Master of the High Court. The status of the
second and the fourteenth respondents has since
the 14 August 2013
changed. The liquidators have since been in control of the second and
fourteenth respondents. I already have
indicated in paragraph [8]
above that the liquidators have the power to institute, defend or not
to defend any legal proceedings.
The liquidators of the second and
the fourteenth respondents are not exceptional. Their choice or
intent must be placed formally
on record. They may choose to abide by
the decision of the court.
[17]
Considering the order the applicant seeks in the main application,
the second and fourteenth respondents must be substituted
by the
liquidators. They must be cited in their
“
nomino
officio"
status.
The consequences that flow with the orders the applicant seek are
stringent. The liquidators may be held responsible. They
may as may
be mulcted for the offences committed by the Company. Notwithstanding
the point being raised by counsel for the respondents,
non-substitution is a point I intended, mero motu, to raise with the
applicant’s counsel.
[18] It will be a
futile exercise for the Court to make orders that will not be of any
effect. For an order the applicant seeks
to be of force and or effect
against the 2
nd
and 14
th
respondents, the
liquidators must be cited as parties in order to hold them liable to
the effect of the Court Order.
[19] Based on what I
penned above, I am of the view that substitution of the 2
nd
and 14
th
respondents by the liquidators is peremptory. The
2
nd
and 14
th
respondents must be substituted by
the appointed trustees/liquidators.
[20] This does not
stop one from dealing with the application for condonation filed by
1
st
, 3
rd
to 13
th
respondents.
Factual
background surrounding condonation
[21] It is apparent
from the papers before me that the main contempt application was
issued by this Court on 18 March 2013. The
application was then
served on respondents between 18 and 20 March 2013 respectively.
Notice of intention to oppose was served
and filed on 25 March 2013.
The answering affidavit ought to have been served and filed by 5
April 2013.
[22]
On 2 April 2013, the respondents served their notice in terms of Rule
35 (12) of the Uniform Rules of this Court. A substantive
application
in terms of Rule 35 (12) was issued on an urgent basis. Prinsloo J,
as agreed between the parties, ordered the postponement
of the matter
to the urgent roll of 24 April 2013.
2
[23] Mothle J handed
down judgment on the 21 May 2013. The applicants were ordered to
provide the respondents with the required
documents. The respondents
were, however, mulcted with costs of the application due to their
failure to comply with the practice
directive of this Court. Mothle J
ordered the applicants to produce for inspection and to allow copies
of the proven claim by the
applicants against the Estate of Black
Sheep Development (Pty) Ltd in liquidation within 7(seven) days from
date of the order.
The Respondents were provided with documentation
as ordered on 23 May 2013.
[24]
It must be borne in mind that Prinsloo J ordered, among others, that
‘
[t]he
[respondents] are to deliver their answering affidavit in the
contempt of court application within 10 days of either the Rule
35
(12) application being dismissed or the [applicant] producing such
document or documents as it is ordered to produce in the
Rule 35 (12)
application’
3
[25] This obligated
the respondents to serve and file their answering affidavit within 10
days from 23 May 2013. The tenth day fell
on the 06 June 2013.
[26] On the 05 June
2013, the respondent’s attorney wrote a letter to the
applicant’s attorney requesting for an “extension
of
time” for delivery of the respondent’s answering
affidavit. The attorney scribes:
‘
3.1
The Respondents will be unable to finalise their answering affidavit
to the
Contempt Application
on its due date which is tomorrow, 06 June 2013 ...
3.2...
3.3
...
3.4
...
3.5
As a result ... our clients will also bring an application for
condonation of the late filing of its answering affidavit and
hope
to
file their answering affidavit by no later than the week commencing
on 10 June 2013.’
4
(emphasis
added)
[27] The parties had
scheduled a meeting with Ledwaba DJP for 7 June 2013. I infer that
the meeting was scheduled with the sole
purpose of “managing
the case”. The meeting did not proceed. The meeting was
postponed to 20 June 2013. It Is placed
on record that the
respondents’ counsel, Stephen Vivian, was unable to attend the
meeting due to counsel’s daughter
involvement in the motor
vehicle accident that occurred In the afternoon of 6 June 2013.
[28]
Prior to the scheduled meeting of the 20 June 2013, the parties
corresponded with each other which correspondence includes
the
applicant’s letter placing the respondents
“
in
mora”
of
delivery of their answering affidavit.
[29]
At the 20 June 2013 meeting with Ledwaba DJP, the respondents legal
representative, both the attorney and counsel,
agreed
to
deliver and file the long awaited answering affidavit by no later
than 28 June 2013. At the very meeting, Ledwaba DJP issued
a “case
management directive” directing the parties as to when to
deliver and file what they have to. Ledwaba DJP directed
that the
matter will be heard on the 30 September and 01 October 20123
respectively.
5
[30]
On 28 June 2013, the respondent’s attorney wrote a letter to
Ledwaba DJP informing the office that the respondents will
not be in
a position to adhere to the office directive and authority by
delivering the answering affidavit as
agreed
.
[31]
On 28 June 2013, the respondents attorney wrote a letter to Ledwaba
DJP setting out that all respondents in the exclusion of
the second
and fourteenth, attended the insolvency inquiry in the Insolvent
Estate of Black Sheep development (Pty) Ltd (in liquidation).
She
further penned that ‘all of the above has resulted in the
Answering Affidavit not being ready today, 28 June 2013.’
She
further thereto stated that we were also not aware on the 20 June
2013 that Adv. Vivian would not be in Johannesburg and South
Africa
and available to settle the Answering Affidavit finally, from
Wednesday
26
June
until Tuesday 04 July 2013.
’
6
The respondents’ attorney undertook to deliver the answering
affidavit by the 9 July 2013.
[32]
The applicant indicated to Ledwaba DJP and the respondents their
refusal to grant the respondents further indulgence. The office
of
Ledwaba DJP informed the respondents that his office
‘
is
not granting an extension or an indulgence to file affidavits after
the date agreed upon’
7
Ledwaba DJP directed the respondent to file their answering affidavit
by no later than 09 July 2013. He further directed that an
application for condonation for the late filing must accompany their
answering affidavit.
8
[33] No answering
affidavit was delivered and filed by 9 July 2103. The answering
affidavit was only delivered on 12 July 2013 unaccompanied
by
condonation application as directed.
[34] On 17 July 2013
Ledwaba DJP caused issue of further directive with a rider that
‘
9.
Since the date of hearing is on 30 September 2013 and 01 October
2013,for the sake of progress and that the matter should reach
finality, I direct that the respondents should file their application
for condonation on or before the 26 July 2013 and the applicant
to
file the replying affidavit... by 9 August 2013.’
The answering
affidavit was served and filed by the 12 July 2013. They further
complied for the first time, with the due date of
the 26 July 2013.
Law
[35]
I believe it is trite law that whenever a party to the proceedings
realises that he/she has not complied with a Rule or the
practice
directive of the Court, he/she should apply for condonation without
delay.
9
Application for condonation of non-compliance with the Rules,
directives or practice manual is not a mere formality but a request
for indulgence from the Court to condone such non-compliance.
[36] In order for
the court to grant condonation, the applicant must set out:
•
The
degree of non-compliance/lateness
•
Briefly
and succinctly the reasonable explanation for noncompliance/lateness
•
The
applicants interest in bringing finality to the matter.
•
The
convenience of the court and the avoidance of the unnecessary delay
in the administration of justice.
10
•
Its
prospects of success in the main application. The prospects of
success must be made out in the application for condonation and
affidavits filed in support thereof.
[37]
These factors are encapsulated in
Dengetenge
Holding (Pty) Ltd v Southern Sphere Mining and Development Company
Limited and Others
where
the court, in reference to
Federated
Employers Fire and General Insurance CO Ltd and Another v McKenzie
1969 (3) SA 360
(A) at 362 F - G
and
Uitenhage
Transition Local Council v South African Revenue Services
2004 (1) SA
292
(SCA)
Stated:
‘
One
would have hoped that the many admonitions concerning what is
required of an applicant in a condonation application would be
trite
knowledge among practitioners who are entrusted with the preparations
of appeals to this Court.’
11
Evaluation
[38]
I, in my evaluation, first deal with the degree of non-compliance in
as far as lateness is concerned. The Uniform Rules of
this Court
dictate that the respondents must file their answering affidavit 15
days from date of entering appearance to defend
12
.
The notice of motion prescribed to the respondents the time frame
upon which to file their answering affidavit. The respondents
had to
deliver their answering affidavit by 5 April 2013. In computing the
timeframe, the respondents had to deliver their answering
affidavit
by 5 April 2013 being 10 days from 25 March 2013.
[39]
The respondent’s application in terms of Rule 35 (12) brought
about an order by Prinsloo J. The order, as indicated at
paragraph
[24] that the
‘
respondents
are to deliver their answering affidavit ... within 10 days of either
the Rule 35 (12) application being
dismissed
or
the [applicants] producing such documents...’
13
This, in my view, interrupted the running of the time frame upon
which the respondents had to deliver their answering affidavit
by 5
April 2013. The computation of 10 days
dies
had
to run
de
novo
from
the date upon which the application in terms of Rule 35 (12) is
either dismissed or granted.
[40] Mothle’s
J order in favour of the respondents on 21 May 2013 in so far as the
production of documents is concerned, is
the new starting time for
the running of the 10 days for the respondents to file their
answering affidavit. The applicant provided
the respondents with the
required documents on 23 May 2013. The respondents were obligated to
deliver their answering affidavit
on or before 6 June 2013.
[41] The respondents
failed to serve and file their answering affidavit from 6 June 2013.
The answering affidavit was only served
on the 12 July 2013. The
respondents answering affidavit is late by 24 court days.
[42] The
respondent’s explanation of counsel’s daughter
involvement in motor vehicle accident as their failure to serve
and
file by 6 June 2013 is, in my view, far from being reasonable within
the circumstances. The papers are silent as to the severity
of the
accident and or injuries the child sustained. In any event, the
accident occurred only in the afternoon of the 6 June 2013,
being the
due date for service of the answering affidavit. The respondents as
at 5 June 2013, prior to the accident, had already
written a letter
to indicate that they will not be in a position to serve and file by
the due date (6 June 2013). Counsel’s
trips to overseas tips
the scales more to unreasonableness for purposes of court
proceedings. Similarly, the respondents’
counsel undertook a
trip to unknown place out of South Africa two days before the
answering affidavit’s due date. There is
no explanation other
than being involved in Black Sheep inquiry. Reliance on the inquiry
is in my view, unacceptable.
[43]
Considering the principle set out in
Saloojee
and Another NNO v Minister of Community Development
1965 (2) SA 135
(A)
where
the court stated that it should not be assumed that where
non-compliance was due entirely to the neglect of the appellant’s
attorney, condonation will be granted,’
14
[44]
What I find most unacceptable is the absence of a reasonable
explanation for the non-compliance with the DJP’s directive,
which was given in the presence of the respondents legal
representatives who
agreed
thereto.
[45] Further
thereto, the respondents failed to deliver and file their application
for condonation as directed by the DJP. The respondents
had to be
reminded by the DJP to file the said application. Notwithstanding the
respondents’ compliance in finally serving
the condonation
application as directed by the office of the DJP, the respondents’
conduct of lateness is, to me, tantamount
to disrespect of the DJP’s
office.
[46] In my further
evaluation, I am of the view that the respondents are less interested
in bringing finality to the matter Alternatively,
I, reluctantly so,
may accept the submissions advanced by the applicant’s counsel
that the respondents are buying time for
the outcome of this matter
until the hearing of the appeal, for which they have been granted
leave by the Supreme Court of Appeal.
The outcome of the appeal may
spell the outcome of this matter moot. I accept that granting a party
leave to appeal creates an
impression that such a party has prospects
of success especially when such leave is granted by the Supreme Court
of appeal.
[47]
The respondents seek the court’s indulgence in condoning the
late filing of the answering affidavit. Indulgence, as defined
in the
South African Concise Oxford Dictionary, means to
allow
someone
to
enjoy
a desired pleasure.
Considering
all factors mentioned above, I am not inclined in allowing the
respondents to enjoy their desired pleasures in their
failure to
serve their answering affidavit timeously. I am mindful of the
impression on their prospects of success. The leave granted
may not
necessarily be a prospect of success on the part of the respondents.
Costs
[47] It is trite
that costs follow the event. The applicants are successful in their
opposition to the application for condonation
of the late filing of
the answering affidavit. They are thus entitled to the costs. I, as a
result, make the following order:
Order:
1. Application for
condonation of the late filing of the Answering Affidavit is
dismissed with costs which includes the costs of
two counsel.
2. The main
application is postponed sine die
3. The applicant is
ordered to substitute the 2 and 14 respondents with the
trustees/liquidator appointed for 2 and 14 respondent
4. There shall be no
order as to costs in respect of postponement for substitution
A.M.L.
Phatudi
Judge
of the High Court
On behalf of the
Applicants: Norton Rose Fulbright SA
C/O Van Der Merwe du
Toit Inc
Cnr Bronkhorst &
Dey Streets
Brooklyn
Pretoria
Adv. A.R. Bhana SC
Adv. P. Bosman
On behalf of the
1
st
,
3
rd
to
13
th
Respondents: Horak Incorporated
PO Box 5043
Dainfern North
2055
C/O Geyser van
Rooyen Attorneys
383 Farenden Street
Arcadia
Pretoria
Adv. S. Vivian
Adv. F.S. Hobden
1
The
main application - Notice of Motion page 2 prayer 1.
2
Prinsloo
J order - page 65 condonation bundle.
3
Court
order - 17 April 2013 - paragraph 5 page 66 of condonation bundle
4
Page
69 condonation application
5
Applicants
Answering Affidavit in re Condonation Application - annexure CAA 8
page 75
6
CAA
9 - page 80 paragraph 617
7
CAA
12
8
Ibid
9
See:
Commissioner of Inland Revenue v Burger
1956 (4) SA 446
(A) at 449 G
- H; Rennie v Kamby Farms (Pty) Ltd
1989 (2) SA 124
(A)
10
Most
factors set out in Dengetenge Holdings (Pty) Ltd v Southern Sphere
Mining and Development Company Limited and Others (619/12)[2013]
ZA
SCA 5 (11 March 2013)
11
Ibid
paragraph [12]
12
Rule
6 (5)(d) (ii) of the Uniform Rules
13
Op
cit - page 66 see fn 6
14
Page
141 B -G