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[2009] ZAGPPHC 18
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E H Hassim Hardware (Pty) Ltd t/a E H Hassim v Thembaf Construction CC and Another (3108/09) [2009] ZAGPPHC 18 (3 April 2009)
IN THE HIGH
COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
DATE:
3/4/2009
NOT
REPORTABLE CASE NO: 3108/09
In the matter
between
E. H. HASSIM
HARDWARE (PTY) LTD
T/A E.H. HASSIM
REGISTRATION
NUMBER: 2006/005211/07 APPLICANT
And
THEMBAF
CONSTRUCTION CC 1
ST
RESPONDENT
REGISTRATION
NUMBER: 2004/121284/23
SOUTH AFRICAN
REVENUE SERVICES 2
ND
RESPONDENT
JUDGMENT
MSIMEKI, J
INTRODUCTION
[1] The Applicant
by way of urgency sought an order:
“
1. That
this application be heard as a matter of urgency in terms of rule 6
(12) and that strict compliance with the forms and service
provided
for in the rules of this Honourable Court be dispensed with.
That
any non-compliance by the Applicant with the provisions of Section
35 of the General Law Amendment Act, 62 of 1955, be condoned
for
such lesser period as the Honourable Court may consider reasonable.
Restraining and
interdicting the First Respondent from:
Taking
possession or receiving any payment due to the First Respondent by
the Second Respondent in regards (sic) to any VAT
refunds payable
by the Second Respondent to the First Respondent in respect of the
project known as ‘335 RDP Houses at
Emsagweni/Enkanini
informal Settlement’ (hereinafter referred to as ‘the
project’) other than into the First
Respondent’s
current account conducted at Standard Bank under account number:
031517668. (hereinafter referred to as
‘the Designated
Account’)
”
restraining and
interdicting the Second Respondent from:
making
payment (electronically or otherwise) or handing possession of any
cheque payment due to the First Respondent by the
Second Respondent
in regards (sic) to VAT refunds payable by the Second Respondent to
the First Respondent in regards (sic)
to the Project, other than
into the Designated Account;
That
the First Respondent shall pay the costs of this application as
between attorney and own client; provided that, should any
other
Respondent oppose this application, that the First Respondent and
such other Respondent be ordered to pay the costs of
this
application, jointly and severally, the one paying the other to be
absolved.
Granting
such further or alternative relief as the Honourable court may deem
fit.”
BACKGROUND
FACTS
[2] The
Applicant , in its papers,
contended
that the parties concluded two agreements namely, the Credit
Application agreement, Annexure EH 2 to the Applicant’s
founding affidavit and the joint venture agreement, Annexure EH3 to
the founding affidavit. The Credit Application agreement,
the
Applicant averred, governed the legal relationship between the
parties in respect of the order, supply and payment terms for
the
building materials that the Applicant supplied to the First
Respondent. The Credit Application agreement according to the
Applicant, made provision for cession of all the First Respondent’s
right, title and interest in and to its claims against
its debtors
both present and future and from whatsoever cause arising as security
for all or any amount which the First Respondent
presently owes to or
may at any time in the future owe the Applicant (clause 17 Annexure
EH 2 to the founding affidavit). For the
purpose of this judgment, I
find it unnecessary to deal with the cession. The Applicant, in terms
of the joint venture agreement,
would supply building materials to
the First Respondent to enable it to build 335 RDP houses at
Emsagweni/Enkanini informal settlement,
Witbank. (“the
project”). The project had been allotted to the First
Respondent by the Department of Housing and Land
Administration. The
parties, according to the Applicant, in terms of the joint venture
agreement, agreed:
1. to
open a joint bank account. Such joint bank account was opened with
Standard Bank being account number 031517668 (“the
designated
account”)
2. that
Mr T. Finca and Mr S. O. Tayob would represent the Respondent and the
Applicant respectively as the only signatories in
respect of the
designated account (clause 5.2 Annexure EH 3)
3. that all
payments received from the Department or from any other source on
behalf of the Department, in execution of the main
agreement, would
be paid into this bank account. (clause 5.3 and 6.1 Annexure EH 3)
4. that
the account would be in the name of the Respondent (clause 5.1
Annexure EH 3)
The appointment of
the Applicant as the supplier of the building materials for the
execution of the project was confirmed by way
of a letter EH4 to the
founding affidavit.
The
Applicant contends that it is owed R1.038.913.05 together with
interest at 24, 00% per annum by the First Respondent for the
building materials supplied as per annexure EH5 to its founding
affidavit. The Applicant further contends that the First Respondent
has breached the joint venture agreement by diverting funds from the
designated account into the account of Double M Financial
Consultancy
CC in November 2008. the Applicant further contends that it has now
established that the first Respondent intends to
divert all VAT
refunds into accounts other than the designated account. Mr Prinsloo,
on behalf of the Applicant, submitted that
the Applicant had
established that the matter was urgent, had established a clear right
which has been harmed, and that there is
no other remedy which can be
of assistance to the Applicant and that the Applicant has made out
the case for the relief that it
seeks.
[3] Mr
Mphahlele, on behalf of the First Respondent, submitted, to the
contrary, that the matter was not urgent, that the Applicant
had not
satisfied the requirements for a final interdict, that there were
serious disputes of fact in that the First Respondent
avers that it
does not owe the Applicant as the Applicant alleges and that the
Applicant had been receiving all the money and that
it had been
administering it.
THE
ISSUE
S
TO BE DETERMINED
[4] The
issue
s
to be resolved are whether the matter is urgent and whether the
Applicant has made out a case for the relief that it seeks.
[5] Having
heard arguments by both Counsel, it is prudent, in my view, that I
deal with the issues that both of them have raised.
COMMON CAUSE
FACTS
[6]
The
following facts are common cause.
1. That the
Applicant would supply the First Respondent with the building
materials.
2. that the
parties entered into a joint venture agreement
3. that the
parties concluded the construction agreement
4. that
the joint venture bank account was to be opened in the name of the
First Respondent and that it was in fact opened with
Standard Bank as
account number 031517668
5. that Mr T Finca
on behalf of the First Respondent and Mr S. O. Tayob on behalf of the
Applicant would be the only signatories
to the said designated
account.
6. that
all payments received from the Department or from any other source on
behalf of the Department in the execution of the main
agreement
‘shall’ be paid into the designated account referred to
in clause 5.3 of annexure EH 3
7. that all
refundable VAT payable by the Second Respondent to the First
Respondent would be deposited into the designated account
(clause
2.3.3 and clause 3.2 of annexure TF2 to the answering affidavit)
8. that payments
received from the Department were made into the designated account.
9. that
the cheques copies of which are annexed to the answering affidavit
were signed by Mr O. S. Tayob and Mr T. Finca.
10. that the
Applicant kept the cheque books.
11. that the bank
statements relating to the joint venture’s bank account were
sent to Mr Finca the sole member of the First
Respondent as evidenced
by TF 4 to the answering affidavit.
12.
the agreements between the parties have not been cancelled.
13. none
of the parties ha
s
called on the other to remedy whatever wrong the party might have
engaged in.
[7] It
is evident from the evidence that the relationship between the
parties has gone sour. There is, in deed, such acrimony between
them
that the sooner the issues are properly disposed of and resolved, the
better.
[8] It
is further evident from the evidence that there is unhappiness on the
part of the first Respondent relating to the management
of the money
which went into the designated account. Whether the disputes raised
are proper or not, these, in my view, are not
issues to be dealt with
by me for the reasons that will be shown shortly. This is also so
because the construction agreement makes
provision for the resolution
of such disputes by arbitration. (clause 6 thereof).
[9] Clearly,
9.1 the
parties agreed that there would be a joint venture with a designated
account;
9.2 designated
account number 031517668 was opened with Standard Bank;
9.3 money was
deposited into this designated account;
9.4 by way of
cheques signed by Mr O. S. Tayob and Mr T. Finca, the money in the
said account was used to make payments evidenced
by TF4 to the
answering affidavit;
9.5 the First
Respondent received the bank statements relating to the designated
account;
9.6
the
First Respondent changed its particulars with the South African
Revenue Services. This is admitted by it. However the reason
that it
furnishes for such a change, namely that that was due to the
appointment of a new accountant, cannot be convincing. The
First
Respondent forgets that the parties agreed that a designated account
would be opened into which all the money relating to
the joint
venture would go. I also find the First Respondent’s denial
that payment into the designated account included the
money received
from the South African Revenue Services astounding in light of
clauses 2.3.3 and 3.2 of the construction agreement
which the
Applicant had not even made reference to in its founding affidavit.
[10] The
First Respondent breached the joint venture agreement and the
construction agreement if it diverted the money meant for
the
designated account into another account.
[11] The
First Respondent was not entitled to change its particulars with SARS
relating to the designated account in respect of
the refundable VAT
payable to the First Respondent by the Second Respondent. This is
breach of the agreements between the parties
by the First Respondent.
The First Respondent does not deny that it is ‘experiencing a
serious financial instability and
inability to make payments of its
debts’. If this is so and coupled with its instructions to the
Second Respondent to make
payments of refundable VAT into a different
bank account then, and in such an event, that makes this case urgent.
it at the same
time evinces that unless relief of some sort is
afforded the Applicant it will be utterly exposed with no remedy to
resort to should
it succeed in the arbitration proceedings or in any
court in the event that it proceeds against the First Respondent for
payment
of the money that it alleges the First Respondent owes it.
[12] That
there are disputes in this application does not assist the First
Respondent which is doing what the agreements do not
allow it to do.
[13] Mr
Prinsloo, on behalf of the Applicant, submitted
that
an order that the money that should go into the designated account
should not be withdrawn by both the Applicant and the First
Respondent ‘pending the finalisation of the arbitration
proceedings for the dissolvement (sic) of the joint venture
established
between the Applicant and the First Respondent”
which proceedings should be instituted within 14 days from the date
of my
order and that the costs of the application be reserved for the
arbitration. This submission has merit. Regard being had to the
facts
of the case, in my view, it will be prudent to grant an interim
relief, which I believe, will go a long way towards resolving
the
disputes between the parties.
[14] I
find no merit in the submission that the First Respondent did not
know how the designated account was run particularly if
regard is had
to the fact that the cheques were co-signed and that the statements
in respect of the account were received by the
First Respondent. That
the First Respondent was forced to sign the cheques ending up
receiving petty cash from Mr Tayob equally
has no merit. Without the
two signatories no money could be withdrawn.
[15] As I said
above, the application, on the common cause facts, stands to succeed
and the order I make in the result is as follows:
Pending
finalisation of arbitration proceedings
to
be instituted by the Applicant against the First Respondent for the
determination of the disputes between them whether by the
dissolution of the joint venture established between them or
otherwise:
the
First Respondent is restrained and interdicted from taking
possession or receiving any payment due to the First Respondent
by
the Second Respondent in respect of any VAT refunds payable by the
Second Respondent to the First Respondent pertaining
to the project
known as ‘335 RDP Houses at Emsangweni/Enkanini Informal
Settlement’ (hereinafter referred to as
‘the project’)
other than taking possession or receiving same into the First
Respondent’s current account
conducted at Standard Bank under
account number : 031517668 (hereinafter referred to as ‘the
Designated Account’),
the
Second Respondent is restrained and interdicted from making payment
(electronically or otherwise) or handing possession
of any cheque
payment due to the First Respondent by the Second Respondent in
regard to VAT refunds payable by the Second Respondent
to the First
Respondent in respect of the project, other than into the
Designated Account,
the
Applicant and the First Respondent are interdicted from withdrawing
any funds from the designated account,
The
Applicant is to institute the said arbitration proceedings within a
period of 14 days from the date of this order.
T
he
costs of the application are reserved for determination by
arbitration.
M.
W. MSIMEKI
JUDGE OF
THE HIGH COURT
Heard on: 04 March
2009
For the Applicant:
Adv. D. Prinsloo
Instructed by:
Marius Botha Inc
For the 1
st
Respondent: Adv. M. S. Mphahlele
Instructed by: A.
P. Ledwaba Inc.