Crossroads Distribution (PTY) Ltd t/a Jowells Transport v Petersen N.O. and Another (1638/2003) [2004] ZAWCHC 24 (11 October 2004)

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[2004] ZAWCHC 24
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Crossroads Distribution (PTY) Ltd t/a Jowells Transport v Petersen N.O. and Another (1638/2003) [2004] ZAWCHC 24 (11 October 2004)

IN THE HIGH COURT OF
SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION
)
CASE
NO: 13608/98
In
the matter between:
FHP
MANAGERS (PTY) LTD
Applicant
and
THERON
N.O., SHANDO
1
st
Respondent
THERON
N.O., FRANS JACOBUS SMIT
2
nd
Respondent
THERON,
FRANS JACOBUS SMIT
3
rd
Respondent
JUDGMENT:
VAN REENEN, J:
This is an opposed
application in terms of Supreme Court Rule 49(11) which provides as
follows:
“
Where an appeal has
been noted or an application for leave to appeal against or to
rescind, correct, review, or vary any order of
court has been made,
the operation and execution of the order in question shall be
suspended, pending the decision of such appeal
or application, unless
the court which gave such order on the application of a party,
otherwise directs.”
In
terms of a written agreement of sale entered into on 29 May 1998, the
applicant sold Section No 11 in a sectional title scheme
known as
Harbour Island Two (the premises) to the AS and R Children’s
Family Trust (the trust) represented by Mr Frans Jacobus
Smit Theron
(hereinafter referred to as 2
nd
/3
rd
respondent), in his capacity as trustee, for an amount of R680 000.
2
nd
/3
rd
Respondent in his personal capacity bound himself to the applicant as
surety and co-principal debtor for the due fulfilment by the
trust of
its obligations under the Agreement of Sale.
Pursuant
to the terms of the Agreement of Sale the trust paid the applicant a
deposit of R34 000; R10 000 in respect of certain movables;
and
occupational interest in an amount of R14667 for the period 11 May
1998 until 31 August 1998. The trust also paid an amount
of R9372,60
in respect of transfer costs.
The
trust took occupation of the premises on 11 May 1998. 2
nd
/3
rd
Respondent has occupied the property since that date and still does
so.
As
the trust failed to take transfer of the premises the applicant
instituted opposed motion proceedings against it out of this court
with a view to enforcing the terms of the agreement of sale. The
matter was argued on 1 June 2000 before Duminy AJ who on 7 August
2000 granted judgment in favour of the applicant in the following
terms:
“47.1 The trustees of the A S and R Children Family Trust (“the
trust”) are directed to deliver to the offices of the applicant’s
attorneys, Feinsteins, of 9
th
Floor, The
Atrium,
41 Stanley Avenue, Milpark, Johannesburg, within a period of 7
(seven) days after the grant of this Order, a bank guarantee
required
in terms of clause 4.1.2 of annexure “SS(4)” to the applicant’s
founding affidavit in the sum of R646 000 (six hundred
and forty six
thousand rand), payable
to
Feinsteins as against registration of transfer in favour of the
trustees of certain immovable property comprising Section 11, as
described on Sectional Plan no. SS 142/1993 in the scheme known as
Harbour Island 2, together with an undivided share in the common
property in the aforesaid Scheme and an
exclusive
use area described as Parking Bay number P37 (“the property”);
Failing compliance with
the preceding paragraph the said trustees and the third respondent,
jointly and severally with them are
directed to make payment to the
applicant in the sum of R646 000;
The said trustees
are directed to sign all documents which are required for purposes
of registration of transfer of the property
to them, within a
period of 7 (seven) days after the grant of this Order, failing
which, the Sheriff of this Court or his lawful
Deputy is authorised
and directed to sign all documents and take
all
steps that may be required for the transfer of the
property,
in the name and stead of the trustees and at their cost;
The said trustees and
third respondent, jointly and severally with them, are directed to
effect payment to the applicant of the
sum of R129,80 per day from
1 September 1998 to date of registration of transfer of the
property in favour of the trustees;
The said trustees
and the third respondent jointly and
severally
with them, are directed to pay the costs of this application, the
one paying the other to be absolved
pro
tanto.”
Leave
to appeal against the above order was sought but refused by the
learned Judge. The Chief Justice, on petition, granted leave
to
appeal to a Full Bench of this Division.
A
notice of appeal was timeously filed. The notice of appeal assails
the validity of the Agreement of Sale on the basis that due
to the
fact that 2
nd
/3
rd
Respondent was an unrehabilitated insolvent he was disqualified to
act as a trustee of the trust and therefore unable to enter into
an
enforceable agreement of sale and furthermore, that he was not
properly authorised to have represented the trust as the special
resolution that authorised him to do so was signed by him only and
not also by him and his co-trustee Mr Shando Theron the 1
st
respondent herein.
The noting of the appeal
automatically suspended execution of the judgment of Duminy AJ so
that execution thereof cannot be levied
without the leave of this
court.
The
applicant seeks the following relief in this application:
“1. Granting the Applicant leave to execute against the First,
Second and Third Respondents, the order referred to in paragraph
47.4
of the written judgment of his Lordship Mr Acting Justice Duminy
which was delivered in the above Honourable court on the 7
th
of August 2000 in Case No. 3608/98 between the parties in terms of
Rule 49(11) of the Uniform Rules of the High Court. A copy of
the
said judgment is annexed to the founding affidavit marked “SS2”;
That in terms of Rule
49(12), unless the above Honourable Court so orders, that prior to
such execution the Applicant be ordered
to enter into such security
as the parties may agree or the Registrar of the above Honourable
Court may decide, for the restitution
of any sum obtained upon such
execution and that the Registrar’s decision shall be final in
terms of the aforesaid rule of court;
That the costs
occasioned by this application be costs in the cause of the pending
appeal to the Full Bench of the above Honourable
Court;
other and/or alternative
relief.”
The applicant seeks leave
to execute only that part of the order that relates to the payment of
occupational interest at R129,80 per
day from 1 September 1998 to the
date on which the premises are transferred into the trust’s name.
The amount that has accrued
as at 31 March 2001, assuming that the
Agreement of Sale is enforceable, is R12 241,40. The applicant also
claims interest in an
amount of R25296,29. That claim is being
disputed.
I
shall for purposes of this judgment assume, without deciding, that it
is permissible in terms of Rule 49(11) for a court to direct
that
execution may be levied in respect of only part and not the whole of
an order granted by it.
The
criteria applicable to an application of this nature have been fully
set out by Corbett JA (as he then was) in
South
Cape Corporation (Pty) Ltd v Engineering Management Services (Pty)
Ltd
1977(3) SA 534 (A) at 545 B – 546 C and do not necessitate
repetition. The purpose of the rule regarding the automatic
suspension
of a judgment as soon as an appeal has been lodged, is to
prevent irreversible harm to an intending appellant in the event of
the
appeal succeeding. A court has a wide general discretion, based
on what is just and equitable in the circumstances of a particular
case, to decide whether or not execution should be permitted to be
proceeded with. A court may furthermore determine the conditions
upon which any right to execute pending an appeal should be
exercised. It should be borne in mind that the four factors
enumerated
in the
South
Cape Corporation
case at 545 E – G do not constitute a
numerus
clausus
,
but are merely factors that should ordinarily be taken into
consideration by a court in exercising its discretion. It was held
in the
South
Cape Corporation
case that the onus to show the existence of special circumstances
justifying execution pending an appeal rests on the applicant
irrespective
of whether the judgment is one
ad
pecuniam solvendam
or
ad
factum praestandum
.
In my
view the applicant has failed to show that it will suffer irreparable
harm or prejudice should leave to execute be refused.
All that is
likely to happen is that the applicant’s claim against the trust
would have escalated by a further approximately R27000
by the time
the appeal is heard in January/February 2002. Depending on whether
the appeal succeeds or not the applicant will be
able to recover all
amounts payable in respect of occupational interests
ex
contractu
or an appropriate amount of money in respect of the trust’s
occupation of the premises based on another legal causa.
As
regards the trust’s ability to pay any amounts it may be liable for
in respect of its occupation of the premises, the highwater
mark of
the applicant’s case is that it verily believes that the
respondents may not be able to pay it the amount which it is entitled
to. Despite the fact that those averments have not been specifically
denied, they are of doubtful evidentiary value in that they
constitute inferences and conclusions unsupported by the primary
facts on which they are based. (See:
Bezuidenhout
v Otto and Others
1996(3) SA 339 (W) at 344 J – 345 E). Despite their doubtful
evidentiary value the said averments, in my view, are sufficient
to
dispel the prima facie inference that the providing of security
de
restituendo
would protect the appellant against irreparable harm or prejudice and
obviate the need on the part of the trust to adduce evidence
to the
existence of special circumstances (See:
South
Cape Corporation
case
at 548 D – G).
As the
reason for the automatic suspension of a judgment as soon as an
appeal is noted, is the avoidance of irreparable harm or prejudice
to
the intended appellant, a court considering an application in terms
of Rule 49(11) should have regard to whether the
status
quo ante
could be restored in the event of the appeal being upheld (See:
Kalahari
Salt Works (Pty) Ltd and Another v Bonne Fortune Beleggings Bpk
1973(4) SA 471 (NC) at 476 H – 477 C). In the case of a claim
sounding in money the mechanism by which any potentiality of
irreparable
harm to an intending appellant is obviated is to make
execution subject to the providing of security
de
restituendo
.
That objective is clearly achievable if the intended appellant is
capable of meeting the claim in full. In the absence of the
ability
of meeting the claim in full, an applicant, unless precluded from
doing so by the court’s order, could proceed to levy
execution
against the intended appellant’s corporeal- and incorporeal
movables and also immovables. It is notionally possible
that an
applicant could attach and sell in execution the intended appellant’s
interest in the pending appeal and thereby procure
the termination of
an appeal that might have merit (See:
Brummer
v Gorfil Brothers Investments (Pty) Ltd en Andere
1999(3) SA 389 (SCA) at 418 B – H). It would also be possible to
resort to the sequestration of the intended appellant ‘s estate
as
a recognised form of execution (See:
Wilkens
v Pieterse
1937 CPD 165
at 170;
Moldenhauer
v De Beer
1959(1) SA 890 (O) at 892 F) and bring the provisions of
Section 75
of the
Insolvency Act, No 24 of 1936
into play. On the facts of the
instant case, at best for the applicant, I have been left in doubt
that the providing of security
de
restituendo
would obviate the potentiality of irreparable harm or prejudice to
the trust should execution of paragraph 47.4 of the order of Duminy
AJ be permitted.
An
extra-ordinary feature of the litigation between the applicant and
the Trust is that although the upholding of the latter’s contention
will nullify the legal basis upon which it, and through it 2
nd
/3
rd
respondent may occupy the premises, it has continued to do so since
11 May 1998. Thát conduct on the part of the trust is difficult
to
reconcile with a
bona
fide
intention of seeking a reversal of the judgment of Duminy AJ and is
susceptible of an inference that the proceedings were opposed
and the
appeal lodged for some ulterior purpose such as to gain time. Any
temptation to construe the trust’s aforementioned conduct
as a
barometer of its own negative perceptions of its chances of success
on appeal must however yield thereto that the Chief Justice
by having
granted leave to appeal on petition took a favourable view of its
prospects of success on appeal.
In view of the aforegoing
I have not been convinced that I should exercise my discretion and
grant the relief claimed in prayer 1
of the Notice of Motion and
accordingly the application is refused, as is the belated request to
order the trust to provide security
for the payment of any amounts
due in respect of occupational interest.
In this matter I have
decided to deviate from the general rule that a substantially
successful party is entitled to his or her costs.
In my view the
trust, by occupying the premises whilst assailing the validity of the
Agreement of Sale in terms of which it originally
became entitled to
do so, without making any payments in respect of occupational
interest, is acting opportunistically and unacceptably.
In order to
signify my disapprobation of the trust’s conduct no costs order is
made.
________________
D.
VAN REENEN.