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[2009] ZAGPJHC 26
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Santino Publishers CC v Waylite Marketing CC (A5001/2009) [2009] ZAGPJHC 26; 2010 (2) SA 53 (GSJ) (12 June 2009)
IN THE SOUTH GAUTENG HIGH COURT
(JOHANNESBURG)
CASE NO A5001/2009
DELETE
WHICHEVER IS NOT APPLICABLE
REPORTABLE:
YES
OF
INTEREST TO OTHER JUDGES:
YES
REVISED.
12
June 2009 FHD van Oosten
DATE
SIGNATURE
In
the matter between
SANTINO PUBLISHERS CC
APPELLANT
and
WAYLITE MARKETING CC
RESPONDENT
Practice – applications and
motions - Insolvency – provisional winding-up – Dispute
of fact on papers - applicant
not invoking Rule 6(5)(g) - court a quo
dismissed application with costs – on appeal contended that
court a quo should mero
motu have ordered a referral – Held:
although court having a discretion to adopt such a procedure mero
motu - in casu Judge
a quo correctly dismissed application with
costs.
Appeal – application for
referral made for the first time on appeal - power of court of appeal
to order referral – claim
relied on for indebtedness however
having become prescribed – application for winding-up academic
– appeal dismissed.
___________________________________________________________
J U D G M E N T
___________________________________________________________
VAN
OOSTEN J
[1] This appeal concerns the power of
the court of appeal to refer a matter for the hearing of oral
evidence as envisaged in Rule
of Court 6(5)(g). The appellant applied
to the court
a quo
for the winding-up of the respondent in terms of s 68(c) of the Close
Corporations Act 69 of 1984 (the Act). The respondent opposed
the
application primarily challenging whether the appellant was a
creditor of the respondent and therefore the appellant’s
locus
standi
. The matter came
before Marais J. Having heard argument the learned Judge found that
the appellant had failed to make out a
prima
facie
case that the
respondent was indebted to it and dismissed the application with
costs. Leave to appeal was subsequently sought but
refused. The
appeal is before us by way of leave granted by the Supreme Court of
Appeal, on the following basis:
Whether the application should have
been granted, and if not, whether this was a proper matter to be
referred to the hearing of
oral evidence.
[2] The first issue we are required to
determine is no longer alive. In his heads of argument counsel for
appellant conceded, in
my view rightly so, that the learned Judge
a
quo
correctly found that
there were fundamental irresoluble disputes of fact on the affidavits
filed in the application which warranted
the dismissal of the
application. The only issue accordingly remaining is whether this was
a proper matter to be referred to the
hearing of oral evidence.
[3] It is at the outset necessary to
state that there was no application for the referral to oral evidence
made at the hearing of
the matter. The first reference thereto
featured in the argument on behalf of the appellant when leave to
appeal was sought. It
was there contended that the learned Judge in
the absence of an application for a referral,
mero
motu
should have exercised
his discretion in referring those issues on which he held no
prima
facie
case had been
established, to oral evidence. The argument found no favour with the
learned Judge because no application had been
made for such an order
to which he added that had such an application been made, he would
have refused it.
[4] In his heads of argument counsel
for the appellant faintly submits that a request for the hearing of
oral evidence was made
in the appellant’s replying affidavit,
which on this aspect reads as follows:
Due to the very hostile and
acrimonious relationship between the applicant and its former member,
Mr Santino Cianfanelli, it is
impossible for the Applicant to obtain
any affidavit from Mr Santino Cianfanelli to support the Applicant’s
version. Should
this Honourable Court require the viva voce evidence
of Mr Santino Cianfanelli for the purposes of this affidavit, an
order will
be sought to compel Mr Santino Cianfanelli to be
subpoenaed to give oral evidence at the hearing of this application.
However,
I respectfully submit that the version of Mr Santino
Cianfanelli can be gleaned from the best evidence available, being
notes recorded
by him in his own handwriting…”
The appellant was much criticised by
both the Judge
a quo
as well as the respondent for relying on hearsay evidence to prove
the agreement from which the respondent’s alleged indebtedness
arose. But as is apparent from the quoted portion of the replying
affidavit, the appellant no doubt was in no position to do more
than
that. Cianfanelli at the time of the conclusion of the agreement was
the appellant’s sole member and he also acted on
its behalf in
concluding the agreement. The sole purpose for obtaining the proposed
order (which was not persisted with at the
hearing) was to present
the oral evidence of Cianfanelli on a specified issue. It was clearly
not intended nor can it in any way
be construed as an application for
the referral of the matter as a whole to the hearing of oral
evidence.
[5]
The question that arises is whether the court hearing an opposed
application has the competence to
mero
motu
order a referral to oral evidence. Rule of Court 6(5)(g) provides as
follows:
Where an application
cannot properly be decided on affidavit the court may dismiss the
application or make such order as to it seems
meet with a view to
ensuring a just and expeditious decision. In particular, but without
affecting the generality of the aforegoing,
it may direct that oral
evidence be heard on specified issues with a view to resolving any
dispute of fact and to that end may
order any deponent to appear
personally or grant leave for him or any other person to be
subpoenaed to appear and be examined and
cross-examined as a witness
or it may refer the matter to trial with appropriate directions as to
pleadings or definition of issues,
or otherwise.
The
Rule extends a wide discretion to the court. See
Cresto
Machines (Edms) Bpk v Die Afdeling Speuroffisier SA Polisie, Noord
Transvaal
1970
(4) SA 350
(T) 365A-H and
Pautz
v Horn
1976
(4) SA 572
(O) 575H. In practice an application for a referral is
typically made at the hearing of an opposed application by the
applicant
who is faced with the reality of irresoluble disputes of
fact having arisen on the papers. I have no doubt that the court in
principle
has the competence to
mero
motu
order such referral, but this in my experience as well as in the
experience of a number of my colleagues in this Division who I
have
consulted on this aspect, has never occurred. The undesirability of a
Judge
mero
motu
ordering a referral to oral evidence or to trail was highlighted and
conclusively dealt with by a full court of the then Transvaal
Provincial Division in
Joh-Air
(Pty) Ltd v Rudman
1980
(2) SA 420
(T) where Myburgh J writing for the court, said the
following (428H):
It requires in my view a bold step,
by a presiding Judge in an opposed application, to refer the matter
to evidence or trial mero
motu, because it is a real possibility that
the applicant had decided not to ask for such procedure to be
followed because: he
may not want to be involved in the cost thereof;
his prospects of success, after studying the answering affidavits,
may be slender;
it may possibly lead to an undesired protracted
hearing; the amount involved may be small; the respondent may be a
man of straw
or on account of any of the other usual considerations
in deciding whether or not to apply for the provisions of Rule
6(5)(g) to
be invoked. In the present case the amount involved is
only half of R5 375. In my view is should not be left to the
presiding
Judge to determine, in the light of what I have said,
whether the application should be decided on the affidavits or not.
In proper
circumstances the presiding Judge may, in his discretion,
decide to do otherwise. In the present case, in my view, the Judge
cannot be faulted for not having referred the case to trial,
notwithstanding that he had not been requested so to do.
See also
Ter
Beek v United Resources CC and Another
1997
(3) SA 315
(C) 337G.
Applied
to the present matter the learned Judge
a
quo
quite
clearly was neither obliged nor can he be faulted for not having
mero
motu
referred the matter to the hearing of oral evidence.
[6]
It is in this context that this Court’s competence to order a
referral to oral evidence, at the request of the appellant
where it
was neither applied for nor considered in the court below, needs to
be considered. It is true, as I have already alluded
to, that Marais
J did express himself in the judgment on the application for leave to
appeal on the fate of such an application,
had it been made at the
hearing. It however remains a view expressed by the learned Judge for
the purpose of deciding the application
for leave to appeal. An
application for referral was plainly not made at the hearing and the
learned Judge therefore was not required
to nor did he address his
mind to it.
[7]
The appellant belatedly for the first time in counsel for the
appellant’s heads of argument filed in this appeal, sought
an
order for the matter to be referred to the hearing of oral evidence
.
The question
arising is
whether
this court can entertain the application. A court of appeal is
endowed with wide powers on the hearing of an appeal under
s 22 of
the Supreme Court Act 59 of 1959, and in particular sub-sec (b)
thereof:
to
confirm, amend or set aside the judgment or order which is the
subject of the appeal and to give any judgment or make any order
which the circumstances may require.
See
Erasmus:
Superior Court Practice
A1-58.
In
principle I cannot see any reason for disentitling this court from
entertaining the application.
[8] Assuming this court to have the
power to order a referral, a number of problems face the appellant.
It is only necessary to
deal with one thereof. In argument before us
we raised the point with counsel whether
prima
facie
the appellant’s
claim on which the winding-up application was based, by now has not
become prescribed.
Ex facie
the papers before us the appellant’s claim became due at the
latest on 8 March 2006 which is the date of the letter of demand
in
terms of s 69 of the Act, sent on the appellant’s behalf to the
respondent in respect of the appellant’s claim.
More than three
years have since elapsed. Counsel for the appellant informed us that
no legal steps for the enforcement of the
appellant’s claim
against the respondent have been taken. Service of the present
application for the respondent’s winding-up
did not interrupt
the running of prescription - see
Misnun’s
Heilbron Roller Mills Holdings (Pty) Ltd v Nobel Street Central
Investments (Pty) Ltd
1979
(2) SA 1127
(W) 1129. Both counsel agreed (correctly in my view) that
the appellant’s claim has become prescribed. A prescribed debt
is unenforceable and cannot be proved against an insolvent estate.
See
Aspeling and Another v
Hoffman’s Trustee
1917
TPD 305
at 307. Should a winding-up be ordered the liquidator will be
able to prevent the appellant from proving a claim that has become
prescribed. See
Nicholl v
Nicholl
1916 WLD 10
at 13;
Henochsberg on the Companies
Act
Vol 1 p 720(1)
.
For this reason
the court in the exercise
of its discretion will not grant a winding-up order on a claim which
is prescribed. See
Jhatam
and Others v Jhatam
1958
(4) SA 36
(N) 38F. The application for the winding-up of the
respondent has therefore become academic. The application for the
referral to
oral evidence accordingly must fail. This finding at the
same time disposes of the appeal.
[9] Finally, to revert to the second
issue before us as articulated in the Supreme Court of Appeal’s
order granting leave
to appeal. The issue in view of what I have said
above, of course, is no longer decisive of the appeal. I therefore
propose to
only briefly deal with it. I am satisfied that a dispute
of fact incapable of decision on the affidavits as they stand,
exists.
I am unable to agree with the learned Judge
a
quo
that the appellant has
failed to make out a
prima
facie
case. In my view the
probabilities were evenly balanced which on the approach enunciated
by Corbett JA (as he then was) in
Kalil
v Decotex (Pty) Ltd and Another
1988
(1) SA 943
(A) 977/8, would have led me to conclude that this matter
indeed was a proper matter to be referred to the hearing of oral
evidence,
had such an application been made at the hearing of the
matter. Such application, as I have mentioned, was not made.
[10] In the result the following order
is made:
The appellant’s application for
the referral of this matter to the hearing of oral evidence is
dismissed.
The appeal is dismissed with costs.
_________________________
FHD VAN OOSTEN
JUDGE OF THE HIGH COURT
I agree.
_________________________
FR MALAN
JUDGE OF THE HIGH COURT
I agree.
_________________________
RRD MOKGOATHLENG
JUDGE OF THE HIGH COURT
COUNSEL FOR THE APPELLANT ADV
BW MASELLE
APPELLANTS’
ATTORNEYS MERVYN J SMITH
COUNSEL FOR THE RESPONDENT ADV
GB ROME
RESPONDENT’S
ATTORNEYS RAYMOND DRUKER
DATE OF HEARING 3 JUNE 2009
DATE OF JUDGMENT 12 JUNE
2009