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[2012] ZAGPPHC 370
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Seton South Africa (Pty) Ltd and Others v Dell; In re: Dell v Seton South Africa (Pty) Ltd and Others (25803/2011) [2012] ZAGPPHC 370 (27 March 2012)
IN THE HIGH COURT
OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
CASE NO
:
25803/2011
DATE
:
27 MARCH 2012
In the
matter between
SETON SOUTH AFRICA (PTY)
LTD
........................................................................
1
st
APPLICANT
ERIC
EVANS
................................................................................................................
2
nd
APPLICANT
SHALENDRASEWNANDAN
.....................................................................................
3
rd
APPLICANT
AND
RALPH
DENNIS
DELL
................................................................................................
RESPONDENT
In the
matter between
RALPH
DENNIS
DELL
......................................................................................................
PLAINTIFF
And
SETON SOUTH AFRICA (PTY) LTD
AND NINE OTHERS
................................
1
st
DEFENDANT
JUDGMENT
PRINSLOO: J:
This
application came before me yesterday and was postponed until this
morning for judgment. The three applicants are three defendants
out
often defendants in an action ("the main action")
instituted by the respondent in May 2011.
It is common cause that the summons
commencing action has not been served on the remaining seven
defendants who are all peregrini
of South Africa, with the apparent
exception of the sixth and seventh defendants. The applicants as
three of the defendants, and
the only three which feature as opposing
the case, apply for an order:
1.
Striking
out each of the respondent's claims against the applicants, as being
vexatious and constituting an abuse of process.
2.
In
the alternative, and to the extent that any of the respondent's
claims are not struck out, they ask for an order directing the
respondent to furnish security for the applicant's costs in respect
of such claims in an amount to be determined by the Registrar
and
staying those claims until the security has been furnished.
3.
They
ask for the respondent to pay the costs of the application.
The respondent, in turn, brought an
application for an order that the first and second applicants must
furnish security "in
respect of all claims for the total amount
of the claims or alternatively in an amount to be determined by the
Registrar."
The total amount of the claims, which I have
not added up, come to something in the order of R200-million.
I turn to the applicable principles
governing applications of this nature. The court has an inherent
power to strike out claims
which are vexatious. Ms de Kock who
appeared for the applicants referred to a number of authorities in
this regard including Western
Assurance
Company
v Coldwell's Trustee
1918 AD
262
at 272 and
Corderoy v Union
Government (Minister of Finance)
1918
AD 512
at 518.
The facts in the last mentioned case
correspond strikingly with the circumstances of the present case.
Vexatious proceedings have
been defined to include proceedings which
are "frivolous, improper, instituted without sufficient ground,
to serve solely
as an annoyance to the defendant".
It was pointed out by counsel that the power
to strike out is one which must be exercised with great care and only
in a clear case,
since it restricts a litigant’s rights to
access to court. There is authority for this proposition. I was
referred inter
alia to the Western Insurance Company Case, supra.
It has been held by the Constitutional Court
that the court is under a constitutional duty to protect bona fide
litigants, the processes
of courts and the administration against
vexatious proceedings. In this regard I was referred to Beinash and
Another v Ernst and
Young
1999 (2) SA 116
CC at 123(D-G). In that
case the Constitutional Court also held that the Vexatious
Proceedings Act 3 of 1956, which in appropriate
cases closes the door
to vexatious litigants to have their day in court, passes
constitutional muster.
I say this, because a defence often raised
in cases of this nature is that any party is entitled to have his
matter adjudicated
by a court of law or another competent forum in
terms of the provisions of Section 34 of the Constitution of 1996. In
this case
the respondent, who appears in person, raised the same
point in his heads of argument.
It was submitted by Ms de Kock that an
action which is obviously unsustainable is vexatious.and falls to be
struck out. Suitable
authority in support of this proposition was
brought to my attention including the case of African Farms and
Townships Limited
v Cape Town Municipality
1963 (2) SA 555(A)
at
565(D-E).
It was submitted that as part of its
inherent jurisdiction the court has the power to prevent vexatious
proceedings not only by
striking out a claim, but also by ordering a
plaintiff to furnish security for costs. See Ecker v Dean
1937 AD 254
at 259. I turn briefly to the background of the 10 case, admirably
summarised in the comprehensive heads of argument prepared by
the
applicants’ counsel.
These background facts are common cause and
undisputed and important for purposes of considering whether the
somewhat drastic relief
sought in this case ought to be granted. The
respondent was the Managing Director of the first applicant until his
dismissal for
misconduct on 6 May 2005.
At that time he was the only Director of the
first applicant situated in South Africa. The other Directors were
based in America
and Germany. In April 2005 various allegations of
misconduct were brought against the 20 respondent by the first
applicant. At
a disciplinary hearing chaired by an independent third
party, Prof Weiner, he was found guilty of certain of the charges
against
him.
The charges entailed in essence that the
respondent had over a period of almost five years granted to himself
increases in his remuneration
and procured for himself bonusses to
which he was not
entitled
and that he had misrepresented the extent of his remuneration to his
employer.
Subsequent to his dismissal, and probably as
a result thereof, the first applicant and the respondent had been
involved in protracted
litigation. This, in a nutshell, revolved
around a challenge to the respondent's dismissal in the Labour Courts
as well as a civil
action instituted in this court by the first
applicant, in which the respondent advanced certain counterclaims.
As far as the Labour Court proceedings are
concerned the respondent unsuccessfully challenged his dismissal
before the CCMA, and
on 29 November 2005 the Commissioner found that
the respondent's dismissal was substantively and procedurally fair
and he accordingly
dismissed the dispute.
The respondent then brought an application
to review and set aside the decision of the CCMA. This application
was dismissed by the
Labour Court on 23 July 2008 and the
respondent's appeal against this judgment to the Labour Appeal Court
was also dismissed. As
far as the proceedings in this court are
concerned, on 4 July 2005 the first applicant instituted an action
against the respondent
in this court under case number 22380/2005.
This will be referred to as the “High Court Action".
In short,the first applicant claimed that
the respondent had breached his fiduciary duty to act in the best
interest of the first
applicant when he caused himself to be paid
remuneration which he was not entitled to and a double incentive
bonus. The first applicant
sought to obtain repayments of the amounts
which the respondent had so irregularly caused himself to be paid.
The respondent not only defended all these
claims, but brought the following counterclaims:
1.
Counterclaim
1 for payment of a salary increase in the amount of some R142 000 for
the period January 2005 to April 2005, the respondent
contending that
the first applicant had breached the terms of the employment
agreement by failing to grant him a salary increase.
2.
Counterclaim
2 was for payment of other amounts for the period January 2005 to
April 2005 such as the pro rata portion of the respondent's
10% bonus
and other items.
3.
Counterclaim
3 was for payment of the respondent's monthly remuneration package in
the alleged amount of sum R237 000 per month
from 1 May 2005 onwards,
as the respondent contended that the employment agreement had not
been lawfully terminated, and the contract
was still in existence.
4.
Counterclaim
4 was for payment of an additional bonus for the financial year 2002,
equal to 30% of the respondent's annual salary,
in the amount of some
R437 000, which the respondent contended had been orally agreed to by
one Winkler.
5.
Counterclaim
5 was for payment of the bonus the respondent contended he was
entitled to in respect of the 1997 and 1999 bonusses
for the first
and second quarters of the 2005 financial year.
The Trial Court action in the High Court was
heard by the late Snijman AJ. On 7 December 2006 he delivered a
judgment and made an
order:
1. Granting judgment in favour of the
applicant on Claim A in the amount of some R1,7-million and on Claims
B, C, D and E in lesser
amounts except on Claim D the amount of the
judgment was also some R1,7-million. Claim H of the first applicant
in the trial was
dismissed and counterclaims 1, 3, 4 and 5 were
dismissed. The learned Judge granted judgment in favour of the
respondent on counterclaim
2 in the amount of some R16 000.
The respondent was granted leave by Snijman
AJ to appeal to the Full Court of this division, save in respect of
the first applicant's
Claim G in respect of which leave to appeal was
not sought and in respect of the dismissal of counterclaim 1 where
leave to appeal
was sought but refused.
On 1 March 2011 judgment was handed down by
the Full Court per Murphy J. The folowing order was made:
1.
The
appeal against the applicant's Claim D was dismissed.
2.
The
appeal in respect of the first applicant's Claims A, B, C, and E
partially succeeded and the order of the court a quo in respect
of
those claims was set aside and substituted as follows:
"The parties are directed to attempt to
settle Claims A, B, C and E on the basis of a salary of R121 500
being payable to the
appellant for the period 1 January 2002 until 5
May 2005. Any settlement so reached is hereby made an order of court.
Failing the
parties being able to reach a settlement within 30 days
of this order, either party may approach this court on the same
papers,
duly supplemented, for an order determining the amounts
payable by the appellant to the respondent in terms of these claims."
3.
The
appeals against the dismissal of the counterclaims 3, 4 and 5 were
dismissed and;
4.
The
respondent was ordered to pay 60% of the costs of the appeal.
As far as the qualified granting of the
appeal with a view to the parties settling the details of certain
figures are concerned,
the contents of which order I have quoted, I
was given the assurance by Ms de Kock that these outstanding issues,
such as they
are, are irrelevant for purposes of this application.
I turn to the proceedings in the Supreme
Court of Appeal and the Constitutional Court. On 31 May 2011 the
Supreme Court of Appeal
dismissed with costs the respondent's
petition for special leave to appeal against the judgment of the
Labour Appeal Court as well
as the respondent's petition for special
leave to appeal against the judgment of the Full Court of this
division.
On 8 August 2011 the Constitutional Court
dismissed the respondent's application for an order remitting the
petitions for special
leave to appeal back to the Supreme Court of
Appeal, alternatively that he be granted leave to appeal to the
Constitutional Court.
Subsequent to the launching of this
application, the respondent brought a further application to the
Constitutional Court in terms
of which he sought, seemingly, the same
relief as in the first application to the Constitutional Court.
This application was dismissed on 12
September 2011. Following on the conclusion of all the appeal
processes the respondent is at
present indebted to the first
applicant for the judgment debt in the High Court action of which, I
have said, the capital amounts
have been finally determined in the
figures of R1 774 580 in respect of Claim D and R164 690 in respect
of Claim G, as well as
in respect of the various cost orders that had
been made against him in the litigation.
It is important to note that the respondent
deposed to an affidavit on 19 June 2011, which he attached to his
application to the
Constitutional Court and in which he stated that
he has not been employed in any permanent type of employment since 6
May 2005,
that he has no means to make any arrangements to repay any
debt whatsoever, and that he has no assets that are not subject to
judgments
that have been executed.
Turning to the main action, I have already
pointed out that this was instituted by the respondent as plaintiff
against ten defendants,
including the present three applicants. In
the main action the respondent advances five claims. Claims 1 to 3
are claims arising
from alleged breaches of his employment contract.
Claims 4 and 5 are ostensibly claims for
defamation and injuria. As described later, Claims 1 to 3 are
essentially the same claims
which he advanced as counterclaims in the
previous action in this court, "the High Court action", and
it was argued pursuasively
by Ms de Kock, who illustrated the
corresponding details of the first three claims in the main action
with those in the counterclaims
dismissed on appeal, that the first
three claims are res iudicata, and apart from that they have clearly
become prescribed.
It was also argued convincingly that to the
extent that Claims 4 and 5 disclose any recognisable cause of action,
they have also
clearly become prescribed. Ms de Kock dealt with the
trite principles surrounding the exceptio rei iudicatae and with the
authorities
prescribing that this defence entails an objection "to
the same thing demanded on the same ground" or "the same
relief claimed on the same issue" or that the issues raised by
these claims have been "finally disposed of in the first
action".
Ms de Kock referred me to a host of
authorities in this regard notably the case of National Sorghum
Breweries (trading as Vivo African
Breweries) v International Liquor
Distributors (Pty) Ltd 2001(2) SA 232 SCA at 239(1). In respect of
the reliance on prescription
I was reminded that the respondent, in
his answering affidavit, does not dispute the applicant's contentions
regarding the date
from when prescription would run in respect of his
claims, nor does he rely on any delay in the completion of
prescription.
Indeed, in my view, on a general reading of
the answering affidavit and the heads of argument presented by Mr
Dell yesterday he
offers nothing of note by way of defences to the
relief sought in this application. The only answer to the defence of
prescription
is the ascertion that "this matter has been
attended to and is still being attended to and still accumulating
into the future".
It was correctly submitted that this is no
answer to the allegation that the claims have become prescribed.
Claims 1 to 3, all based
on an alleged breach of contract, are
brought not only against the first applicant, being the party to the
contract relied upon,
but also against the other defendants, in this
case directors or employees of the first applicant.
In response to the applicant's assertion
that no cause of action against these individuals had been made out,
and that would include
the second and third applicants before me, the
respondent has responded that they "are or were agents acting
for the first
defendant". Assuming that this is so, so Ms de
Kock argued, it is trite that an agent cannot be held liable on a
contract
concluded by his principal. I was referred to Blower v van
Noorden
1909 TS 890
at 899.
In her comprehensive heads of argument Ms de
Kock gave detailed summaries of the five claims featuring in the main
action. Claim
1, based on breach of contract, is one in which the
respondent alleges that the employment contract between him and the
first applicant
obliged the latter "and by implication all the
defendants" to review his remuneration at least once a year,
that it breached
this obligation by failing to increase his salary
during the period 2003 to 2005 and as a result he suffered "a
loss of income
and or damages" in the amount of sum R767 000.
In the High Court action the respondent, in
terms of counterclaim 1,
advanced
the same claim, although he limited his claim to the period March
2005 to April 2005. This claim was dismissed by the Trial
Court which
held that the employment contract made annual increases subject to
the discretion of the first applicant, and that
there had been a
review of the respondent's salary for the year commencing January
2005.
Leave to appeal against this dismissal was
refused. In the circumstances, so it was submitted, the respondent's
claim against the
first applicant insofar as it relates to the period
March to April 2005 has been finally decided by a court of competent
jurisdiction
and is res iudicata.
The Full Court furthermore dealt in detail
with the reviews of the respondent's salary during the period 2001 to
2005, and came
to the conclusion that the respondent is liable to
repay to the first applicant the amounts he received in excess of
R121 500 per
month during this period. In the circumstances this
issue of whether the respondent is entitled to any increase in excess
of R121
500 per month has been finally decided by a court of
competent jurisdiction, so it was argued, correctly in my view, and
is res
iudicata.
In any event, the entire claim has clearly
become prescribed since the debt to which it relates would have
become due prior to 30
April 2005. Claim 2 was one for breach of
contract. The respondent alleges that in terms of the employment
contract between him
and the first respondent, the latter was obliged
to give him three months written notice of termination of his
employment and that
it has failed to do so and that he has
accordingly suffered a loss of income or damages in the amount in
excess of R144-million,
apparently the amounts that he contends he
would have earned in terms of the employment contract from May 2005
until his retirement
at the age of 65 years. This claim, so I was
informed compellingly, is identical in all material respects to
counterclaim 3 in
the High Court action. The Trial Court dismissed
this claim on the basis that given the CCMA Arbitrator's award that
the dismissal
without notice was substantively and procedurally fair,
the issue was res iudicata.
The Full Court dismissed the respondent's
appeal on the basis that the provision of the contract relied upon
related to an instance
of summary dismissal for material breach, that
the respondent had seriously breached a material term of the
contract, namely the
implied duty of good faith, and that the first
applicant had accordingly been entitled to terminate the contract.
In the circumstances, so it was correctly
argued, the respondent's claim against the first applicant has been
finally decided by
a court of competent jurisdiction and is res
iudicata. In any event, it was correctly pointed out that this claim
has also clearly
become prescribed since the debt which it relates to
would have become due on the date of termination of the employment
contract,
namely 6 May 2005.
I debated with Ms de Kock the issue of
whether prescription would affect the alleged further losses running
up to retirement age
and I was referred to Truter and Another v
Deysel 2006(4) SA 168 SCA at 175(G) to 176(A) where it was held in
terms of the "once
and for all rule" that the cause of
action is complete when some damages are sustained. The cause of
action does not accrue
or reaccrue on a yearly basis.
Claim 3, for breach of contract, is one in
which the respondent alleges that the first applicant failed to give
him a bonus equal
to 30% of his annual salary for the year 2000 which
he alleges he was entitled to in terms of an oral agreement between
him and
one Winkler concluded in November 2002.
This claim is identical in all material
respects to counterclaim 4 in the High Court action. This claim was
dismissed by the Trial
Judge and the respondent's appeal against such
dismissal was dismissed by the Full Court which held "the claim
if not frivolous
is entirely without merit". In the
circumstances, so Ms de Kock correctly argued, this claim has already
been finally decided
by a court of competent jurisdiction and is res
iudicata.
In any event, so it was correctly pointed
out, the claim has clearly become prescribed since the debt it
relates to would have become
due during 2002 or 2003. Claim 4 is one
of defamation of character or crimen injuria. This did not feature in
the earlier litigation
so that the argument that it was res iudicata
does not apply.
The respondent alleges that from 11 February
2005 to date the defendants "have on a continuous basis
willfully, intentionally
and with the sole objective of damaging and
or destroying the plaintiff's reputation, good name and integrity by
spreading false
and damaging information in the immediate and wider
community".
He claims an amount in excess of R92-million
being apparently, so Ms de Kock concluded, special damages relating
to the amount that
he would have been able to earn until his
retirement at age 65. The only reference to defamatory statements
published of and concerning
the respondent are those allegedly
evidenced by ANNEXURE C to M to the particulars of claim.
They reflect statements by the first
applicant's attorney during the proceedings before the CCMA
Commissioner and statements made
by witnesses during the proceedings
of the CCMA. ANNEXURES E and F reflect the second applicant's
testimony and ANNEXURE G reflects
the testimony of Mr Coleman, a
representative of Ernst and Young.
There are also statements reflecting
evidence during the High Court action by one of the other defendants,
not featuring in the
application before me. These statements were
made in the presence of the respondent during August and November
2005 in respect
of the CCMA and August to September 2006 in respect
of the trial in the High Court action.
Any claim arising from the publication of
these statements has accordingly become prescribed. A statement made
by one Mr Holloway
who is not cited as a defendant, and in respect of
which there is no indication as to why the first or other applicants
would be
liable for such statement, appears from a document relied
upon and it seems that this statement came to the respondent's
knowledge
before March 2006 and was made in January 2006 so that this
claim has also become prescribed.
Statements by a Mr Law, the Contracts
Director of an entity described as HPD Construction which would not
have become prescribed
because they were allegedly made in November
2008 to February 2011 constitute and reflect no defamatory
publication by any of the
applicants or other defendants, so that any
possible claim for defamation and injuria that the respondent may
have has clearly
become prescribed.
Claim 5, for physical and emotional pain and
suffering is evidently also based on the allegations offered to
support the particulars
of claim relating to Claim 4 which I have
dealt with. Here the respondent alleges that "from about 1 May
2005 to date the
defendants have inflicted both physical and
emotional pain and suffering on the plaintiffs and nis family by
destroying and or
bodily damaging the good reputation, good name and
integrity of the plaintiff and his family by spreading false and
damaging information
in the immediate and wider community (refer
Claim 4)", and he claims that he has suffered damages in excess
of R53-million,
being the amount "that he have/would have
required to have been able to alleviate the pain and suffering"
to date of
his retirement. Insofar as any meaning can be attributed
to these allegations it appears to be a claim for general damages
arrising
from the defamation alleged in Claim 4.
The claim, so it was convincingly argued,
must accordingly suffer the same fate as that of Claim 4 which I have
dealt with. The
only possible claim for injuria that is made out
arising, at best for the respondent, from the statements that I have
referred
to, has long since become prescribed.
In the result, it was submitted by Ms de
Kock, correctly in my view, that each of the respondent's claims are
obviously unsustainable
and as such constitute vexatious proceedings
and each of those claims accordingly fall to be struck out. In the
alternative, as
I have said, there is a prayer for the respondent to
be directed to furnish security for costs, particularly in light of
his statement
to the Constitutional Court that he has no means
whatsoever to pay any debt.
This will only be applicable in the event of
some of the claims not being struck out. For reasons that I have
mentioned, I do not
propose dealing with this part of the relief
claimed in the alternative. Finally, I turn to the respondent's
application for security
to be furnished by the applicants, in the
total amounts of the claims to be found in the main action’s
summons or in an amount
to be fixed by the Registrar. The allegations
made in support of this application are unsupported by evidence.
These are unsubstantiated
allegations to the effect that the first
applicant, which is still well into carrying on a successful
business, is stripping its
assets and that the second applicant
intends fleeing the jurisdiction of the court.
It was argued correctly that this
application is misconceived. There is no provision in the common law
or any statute which entitles
the plaintiff to demand security for
either the amount of his claim or his costs from a defendant. I was
referred to appropriate
authorities in this regard. Mr Dell, in his
address, argued that the applicants as defendants have now become
applicants for purposes
of this interlocatory application.
They have only become applicants in the
course of their effort to protect their rights as defendants and are
not applicants in the
true sense as intended by the authorities
dealing with security for costs. I find no merit in the defences,
such as they are advanced
by the defendant. For all the reasons I
mentioned I am pursuaded that a proper case was made out for the
relief sought, drastic
as it may be.
The costs of this application should follow
the result. I make the following order:
1.
Each
of the respondent's claims against the applicants in the action
instituted by him under case number 25803/2011 is struck out.
2.
The
respondent is ordered to pay the costs of this application.
COURTADJOURNS