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[2011] ZAKZDHC 70
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Lampac CC t/a Packaging World v Hawkey N.O and Others (17047/2009) [2011] ZAKZDHC 70 (14 June 2011)
IN THE KWAZULU-NATAL
HIGH COURT, DURBAN
REPUBLIC OF SOUTH
AFRICA
Case No: 17047/2009
In the matter between
Lampac CC t/a
Packaging World
…........................................
Applicant
and
John Henry Hawkey N.O.
….......................................
First
Respondent
John Dua Attorneys
…..........................................
Second
Respondent
Cox Yeats
…...............................................................
Third
Respondent
JUDGMENT
Delivered on: 14 June
2011
STEYN J
[1] The applicant has
lodged an application in terms of Rule 30 of the Uniform Rules of
Court, seeking an order that will set aside
all notices and pleadings
served and filed by the third respondent on behalf of the first
respondent as irregular.
1
[2] When the matter was
argued, Mr Wanless appeared on behalf of the applicant, Mr de Beer SC
on behalf of the second respondent
and Mr Suhr on behalf of the first
and the third respondent.
[3] The first respondent
is the duly appointed executor of the estate of the late Anthony John
Swaby. The second respondent is an
attorney practicing as a sole
practitioner under the name of John Dua Attorneys. The third
respondent is the law firm that is authorised
to represent the first
respondent in a pending action.
2
The applicant (plaintiff
in the main action) issued a combined summons against the defendant
whereby it sought enforcement of a
suretyship purportedly issued by
the deceased.
[4] This application has
a long history and I consider it necessary to refer to the following
background facts since it appears
to have informed the applicant’s
decision to challenge the regularity of the proceedings.
[5] The executor of the
deceased’s estate who is the first respondent, held a
consultation with a number of witnesses at his
office, whereafter one
of the members of the principal debtor, in the main action, took a
copy of the summons and handed it to
an attorney, who is the second
respondent. Subsequent to the aforesaid the second respondent,
delivered a notice of intention to
defend the main action. The notice
was filed on 19 January 2010. At the time when the notice was filed
the second respondent was
not authorised by the first respondent to
either defend the first respondent or to take any action in
connection with the instituted
action.
[6] Against this
background the applicant now seeks the following order:
“
1. That
all notices and pleadings served and filed by the third respondent on
behalf of the first respondent under case number 17407/2009
be and
are hereby set aside as irregular proceedings in terms of Rule 30(1).
2. That the first respondent,
alternatively the respondent, alternatively the second respondent,
alternatively the first, second
and third respondents jointly and
severally the one paying the other to be absolved, pay the costs of
this application on the scale
of attorney and own client.”
[7] The papers reveal
that on 2 February 2010 the first respondent was represented by the
third respondent. Third respondent was
duly authorised and had the
necessary mandate to act on behalf of the first respondent. The
following letter was also sent by the
second respondent to the
applicant’s attorneys:
“
We refer
to the above matter and confirm that
we
have withdrawn as Attorney of Record in the matter and that Mr Hawkey
will be instating himself as Attorney of Record
if he has
not already done so. In this regard, we filed an Appearance,
ex
abundante cautela
,
and will now leave the litigation to be dealt with by Mr Hawkey.
Should you have any queries herein,
kindly advise.”
3
(My emphasis)
[8] The crisp issue to be
decided by this Court is whether the applicant had suffered any
prejudice either through second or third
respondent’s conduct
when both law firms filed notices to defend the main action. To put
it differently, did the applicant
have reasonable doubt regarding the
authority of the third respondent to defend the first respondent in
the main action, especially
since the second respondent had withdrawn
as attorney of record. Much of the applicant’s argument
depended on the failure
of the second respondent to comply with Rule
16, which reads as follows:
“
16
Representation of parties
(1) If an attorney acts on behalf
of any party in any proceedings, he shall notify all other parties of
his name and address.
(2) (a) Any party represented by an
attorney in any
proceedings may at any time,
subject to the provisions of Rule 40, terminate such attorney’s
authority to act for him, and
thereafter act in person or appoint
another attorney to act for him therein, whereupon he shall forthwith
give notice to the registrar
and to all other parties of the
termination of his former attorney’s authority and if he has
appointed a further attorney
so to act for him, of the latter’s
name and address.
(b) If such party does not appoint
a further attorney, such party shall in the notice of termination
appoint an address within eight
kilometres of the office of the
registrar for the service on him of all documents in such
proceedings.
(3) Upon receipt of a notice in
terms of sub-Rule (1) or (2) the address of the attorney or of the
party, as the case may be, shall
become the address of such party for
the service upon him of all documents in such proceedings, but any
service duly effected elsewhere
before receipt of such notice shall,
notwithstanding such change, for all purposes be valid, unless the
court orders otherwise.
(4) (a) Where an attorney acting in
any proceedings
for a party ceases so to act, he
shall forthwith deliver notice thereof to such party, the registrar
and all other parties: Provided
that notice to the party for whom he
acted may be given by registered post.
(b) After such notice, unless the
party formerly represented within 10 days after the notice, himself
notifies all other parties
of a new address for service as
contemplated in sub-Rule (2), it shall not be necessary to serve any
documents upon such party
unless the court otherwise orders: Provided
that any of the other parties may before receipt of the notice of his
new address for
service of documents, serve any documents upon the
party who was formerly represented.
(c) The notice to the registrar
shall state the names and addresses of the parties notified and the
date on which and the manner
in which the notice was sent to them.
(d) The notice to the party
formerly represented shall inform the said party of the provisions of
paragraph (b).”
[9] Mr Wanless strongly
argued that a distinction should be made between representation and
authority to act on behalf of a litigant
and based on this
distinction Rule 7 finds no application. He submitted Rule 16 should
have found application whereby second respondent
should have filed a
notice to withdraw from the proceedings.
In my view an attorney
acts on behalf of a litigant, once he has been duly instructed and
authorised. The purported distinction
between the aforementioned
concepts as claimed by the applicants is without legal substance.
There is, however,
another problem with a rigid application of Rule 16 in circumstances
wherein the attorney was not duly appointed.
The second respondent
could never have acted on behalf of the first respondent since he was
never instructed by first respondent
and henceforth lacked the
necessary capacity to represent the first respondent. If the second
respondent had the necessary authority
to act and issue any process,
including issuing a notice to defend, then I would have expected Rule
16 to find application, more
specifically Rule 16(4). This was never
the case. Second respondent was never mandated by the first
respondent and acted under
a mistaken belief that he should protect
the interests of the first respondent.
[10] Could there have
been any doubt post 2 February 2010 that the third respondent was
duly authorised to act as the first respondent’s
attorney? If
so, should such authority of either second or third respondent not
have been challenged by applicant in using Rule
7(1) as a mechanism?
[11] Rule 7(1) of the
Rules, provides as follows:
“
(1)
Subject to the provisions of sub-Rules (2) and (3) a power of
attorney to act need not be filed, but the authority of anyone
acting
on behalf of a party may, within 10 days after it has come to the
notice of a party that such person is so acting, or with
the leave of
the court on good cause shown at any time before judgment, be
disputed, whereafter such person may no longer act
unless
he satisfies the court that he is authorised so to act
,
and to enable him to do so the court may postpone the hearing of the
action or application.”
(My emphasis)
[12] I aligned myself
with the view of Gorven J, that Rule 7 is the appropriate remedy to
utilise when authority is challenged by
a party. This much has also
been stated by Flemming DJP in
Eskom
v Soweto City Council
4
at 705E-H:
“
The care
displayed in the past about proof of authority was rational. It was
inspired by the fear that a person may deny that he
was party to
litigation carried on in his name. His signature to the process, or
when that does not eventuate, formal proof of
authority would avoid
undue risk to the opposite party, to the administration of justice
and sometimes even to his own attorney
. . . .
The developed view, adopted in
Court Rule 7(1), is that the risk is adequately managed on a
different level. If the attorney is
authorised to bring the
application on behalf of the applicant, the application necessarily
is that of the applicant. There is
no need that any other person,
whether he be a witness or someone who becomes involved especially in
the context of authority,
should additionally be authorised. It is
therefore sufficient to know whether or not the attorney acts with
authority.
As to when and how the attorney’s
authority should be proved, the Rule-maker made a policy decision.
Perhaps because the risk
is minimal that an attorney will act for a
person without authority to do so, proof is dispensed with except
only if the other
party challenges the authority. See Rule 7(1).
Courts should honour that approach. Properly applied, that should
lead to the elimination
of the many pages of resolutions, delegations
and substitutions still attached to applications by some litigants
especially certain
financial institutions.”
[13] The SCA in
Unlawful
Occupier of the School Site v City of Johannesburg
5
highlighted the
importance of the
Eskom
judgment, especially the
fact that the remedy of a respondent who wishes to challenge the
authority of a person allegedly acting
on behalf of an applicant is
provided for in Rule 7(1).
Brand JA succinctly
stated it as follows:
“
The
ratio
decidendi
appears
form the following dicta (at 705D-H):
‘
The care
displayed in the past about proof of authority was rational. It was
inspired by the fear that a person may deny that he
was party to
litigation carried on in his name. His signature to the process, or
when that does not eventuate, formal proof of
authority would avoid
undue risk to the opposite party, to the administration of justice
and sometimes even to his own attorney.
. . .
The developed view, adopted in
Court Rule 7(1), is that the risk is adequately managed on a
different level. If the attorney is
authorised to bring that
application on behalf of the applicant, the application necessarily
is that of the applicant. There is
no need that any other person,
whether he be a witness or someone who becomes involved especially in
the context of authority,
should additionally be authorised. It is
therefore sufficient to know whether or not the attorney acts with
authority.
As to when and how the attorney’s
authority should be proved, the Rule-maker made a policy decision.
Perhaps because the risk
is minimal that an attorney will act for a
person without authority to do so, proof is dispensed with except
only if the other
party challenges the authority. See Rule 7(1).’
And (at 706B-D):
‘
If then
applicant had qualms about whether the ‘interlocutory
application’ is authorised by respondent,
that
authority had to be challenged on the level of whether [the
respondent’s attorney] held empowerment. Apart from more
informal requests or enquiries, applicant’s remedy was to use
Court Rule 7(1)
.
It was not to hand up heads of argument, apply textual analysis and
make submissions about the adequacy of the words used by a
deponent
about his own authority.’”
6
(My emphasis)
[14] The applicant,
however, failed to use the mechanism provided for in Rule 7(1), when
it challenged the authority of the second
and third respondent.
Instead it persisted with an application to declare earlier
proceedings as irregular.
[15] At best, any so
called irregularity complained of could be regarded as technical in
nature, especially when regard is had to
the letter that was promptly
filed by the second respondent.
7
As stated earlier in this
judgment I have serious doubt that Rule 16 could ever find
application since second respondent never had
any mandate to
represent the first respondent.
[16] In
Trans-African
Insurance Ltd v Maluleka
8
the court held:
“
Technical
objections to less than perfect procedural steps should not be
permitted, in the absence of prejudice, to interfere with
the
expeditious and, if possible, inexpensive decision of cases on their
real merits.”
And
Sandprops 1160 CC v
Karlshavn Farm Partnership
9
where Page J stated it as
follows:
“
It is
trite law that the Court has a discretion and is entitled in a proper
case to overlook an irregularity in procedure that does
not cause
substantial prejudice to the party complaining of it.”
10
[17] Applicant has
created a further conundrum by electing to challenge the proceedings
as irregular rather than challenging the
authority of third or second
respondent. Annexure “N”, which is the notice of
irregular proceedings, reads as follows:
“
WHEREAS
John Dua Attorneys placed themselves on record by serving an
Appearance to Defend on behalf of the Defendant on the Plaintiff’s
Attorneys on the 19
th
January
2010, and remain on record in these proceedings.
AND WHEREAS Cox Yeats Attorneys
served an Appearance to Defend thereafter a Plea, Claim in
Reconvention and Request for Security
on the Plaintiff’s
Attorneys on the 29
th
of January 2010
purportedly on behalf of the Defendant whilst John Dua Attorneys
remain on record as the Defendant’s attorneys.
AND WEREAS the Plaintiff has not
taken a further step in these proceedings.
KINDLY TAKE NOTICE THAT, the
Plaintiff affords the Defendant an opportunity of instructing
Cox
Yeats to withdraw all Notices, Pleadings and Applications irregularly
served in this matter within 10 days
, failing which the
Plaintiff will make application to the above Honourable Court in
terms of Rule 30(2)(c).”
(My emphasis)
The notice files and the
prayers in the notice of motion do not correspond with each other.
What was never sought by the applicant
was to set aside the notice
filed by second respondent or an order to direct the second
respondent to withdraw properly.
I am not persuaded that
applicant has made out a case for setting aside the notices,
pleadings and counterclaim.
[18] One more aspect
remains, the issue of costs. Mr de Beer has urged this court to show
its displeasure with the application,
given the specific
circumstances, by dismissing the application with costs on attorney
and client scale. Mr Suhr has supported
the contention.
The principles for a
punitive costs order have been comprehensively dealt with in
Waar
v Louw
,
11
Webb and Others v
Botha
,
12
SA
Droëvrugtekoöperasie Bpk v SA Raisins (Edms) Bpk
13
and
Ketwa
v Agricultural Bank of Transkei
.
14
I have asked Mr Wanless
to explain why the applicant persisted in this application,
especially after the applicant had been in receipt
of the second
respondent’s withdrawal and to indicate why a punitive costs
order should not be granted. Mr Wanless simply
relied on the
provisions of Rule 16 and the non-compliance thereof and the impact
of such failure on the applicant’s case
in the main action.
In my view the applicant
in advancing this argument overlooked the fact that there could be no
confusion regarding the third respondent’s
authority to
represent first respondent since second respondent admitted that he
would no longer be part of the litigation. Prior
to this application
being lodged applicant was aware of the fact that second respondent
filed a notice to defend without being
authorised and that the firm
was never instructed by the first respondent. This should have been
the end to any
lis
between applicant and
second respondent. Applicant, however, persisted in lodging this
application, unjustifiably, in my view, and
with unnecessary trouble
and expense to the respondents concerned.
The application was
entirely unnecessary and without legal basis. It warrants an
appropriate punitive costs order to mark this court’s
disapproval.
15
[19] In the result the
following order is made.
The application is
dismissed.
Applicant to pay the
costs of the application, such costs to be on the scale as between
attorney and client.
____________________________
Steyn,J
Date of Hearing: 18 March 2011
Date of Judgment: 14 June 2011
Counsel for the applicant: Adv Wanless
Instructed by: Atkinson, Turner &
De Wet
Counsel for the first respondent: Adv
Suhr
Instructed by: Morris Fuller Walden
Williams
Counsel for the second respondent: Adv
De Beer SC
Instructed by: John Dua Attorneys
Counsel for the third respondents: Adv
Suhr
Instructed by: Cox Yeats
1
See
Rule 30 that reads as follows:
“
30
Irregular proceedings
A party to a cause
in which an irregular step has been taken by any other party may
apply to court to set it aside.
An
application in terms of
subRule
(1) shall
be on notice to all parties specifying particulars of the
irregularity or impropriety alleged, and may be made only
if –
the applicant has
not himself taken a further step in the cause with knowledge of
the irregularity;
the applicant has,
within ten days of becoming aware of the step, by written notice
afforded his opponent an opportunity of
removing the cause of
complaint within ten day;
the application is
delivered within 15 days after the expiry of the second period
mentioned in paragraph (b) and subRule (2).
If at the hearing of
such application the court is of opinion that the proceeding or
step is irregular or improper, it may set
it aside in whole or in
part, either as against all the parties or as against some of them,
and grant leave to amend or make
any such order as to it seems
meet.
Until a party has
complied with any order of court made against him in terms of this
Rule, he shall not take any further step
in the cause, save to
apply for an extension of time within which to comply with such
order.
. . . ”
2
Hereinafter
referred to as the main action.
3
See
page 249 of the record.
4
1992
(2) SA 703
(W); Also see
ANC Umvoti
Council Caucus and Others v
Umvoti
Municipality
2010 (3) SA 31
(KZP) for a detailed review of the
Rule
and
the relevant case law.
5
(2005)
All SA 108
(SCA).
6
Unlawful
Occupier supra
at para 14.
7
See
Scott and Another v Ninza
1999 (4) SA 820
(ECD) at 826
et
seq
.
8
1956
(2) SA 273
(A).
9
1996
(3) SA 1026
(N).
10
See
Soundprops supra
1033
A–B.
11
1977
(3) SA 297
(O).
12
1980
(3) SA 666
(N).
13
1999
(3) All SA 245
(NC).
14
2006
(4) All SA 262
(Tk).
15
See
Moosa v Laloo
1957
(4) SA 207
(D) at 225 and
Koetsier v SA
Council of
Town
and Regional Planners
1987 (4) SA 735
(W) at 744J-745A.