Reuben Rosenbloom Family Investments (PTY) Ltd and Another v Marsubar (PTY) Ltd and Others (4256/01) [2001] ZAWCHC 2 (15 August 2001)

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[2001] ZAWCHC 2
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Reuben Rosenbloom Family Investments (PTY) Ltd and Another v Marsubar (PTY) Ltd and Others (4256/01) [2001] ZAWCHC 2; 2003 (3) SA 547 (C) (15 August 2001)

IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE NO: 4256/01
In
the matter between:
REUBEN
ROSENBLOOM FAMILY INVESTMENTS (PTY) LTD
(
Registration
Number 72/000737/07) 1
st
Applicant
GERMAZE
INVESTMENTS (PTY) LTD
(Registration
Number 60/003850/07) 2
nd
Applicant
and
MARSUBAR
(PTY) LTD
(Registration
number 68/02103/07) Respondent
FORWARD
ENTERPRISES (PTY) LTD
Intervening Shareholder
SOLOMON
WEINER
1
st
Intervening Shareholder
SAMUEL
TWORETSKY
2
nd
Intervening Shareholder
JUDGMENT: 15 AUGUST
2001
­­­­­­
VAN
REENEN, J:
First- and second
applicants launched an application for the winding-up of the
respondent on 23 May 2001 on the basis that it was
just and
equitable.
First-
and second respondents and Forward Enterprises (Pty) Ltd (Forward)
each hold one third of the shares in the respondent.
Forward and two of the
directors of the respondent namely Mr Solomon Weiner (Weiner) and Mr
Samuel Tworetsky (Tworetsky) on 23 May
2001, by notice of motion,
applied for leave to intervene in the proceedings instituted by
first- and second applicants so as to
seek the dismissal of the
winding-up application and an order that the applicants be ordered to
pay the intervening parties’ costs
on an attorney and client scale
jointly and severally.
By
agreement between the parties the court on 23 May 2001 postponed the
winding-up application as well as the intervention application
to 14
August 2001 for hearing in the 4
th
division and directed the applicants to deliver further affidavits on
or before 14 June 2001. The intervening parties were authorised,
if
deemed necessary, to file further affidavits dealing with the
applicants’ opposition to the application for leave to intervene,
before 5 July 2001.
No
further affidavits were filed but the applicants on 26 June 2001
filed a notice in terms whereof they withdrew the application
against
the respondent and tendered to pay its party and party costs. The
applicants on 5 July 2001 filed a further notice in terms
whereof
they, in addition to withdrawing the application against the
respondent, tendered to pay the party and party costs of Forward,
Weiner and Tworetsky (hereinafter referred to as the intervening
parties).
The
issue for decision is whether the intervening parties are entitled to
their costs on an attorney and client or on a party and
party scale.
Rule
41(1) provides as follows:
“
(1)(a) A
person instituting any proceedings may at any time before the matter
has been set down and thereafter by consent of the parties
or leave
of the court withdraw such proceedings, in any of which events he
shall deliver a notice of
withdrawal
and may embody in such notice a consent to pay costs; and the taxing
master shall tax such costs on the request of the
other party.
(b) A
consent to pay costs referred to in paragraph
(a),
shall have the effect of an order of court for such costs.”
As it
is the practice in this division for matters to be postponed to 4
th
division only after a date for hearing has been arranged with the
registrar, it must be accepted that the winding-up and the
intervention
applications were set-down to be heard on 14 August
2001. Accordingly the winding-up application could be withdrawn only
with the
consent of the respondent or the leave of the court, neither
of which was obtained. Accordingly the purported withdrawal was
ineffectual
(See:
Protea
Assurance Co Ltd v Gamlase and Others
1971(1) SA 460 (E) at 465 G). As it is not ordinarily the function
of a court to compel a plaintiff/applicant to continue with
proceedings against such a party’s will (See:
Levy
v Levy
1991(3) SA 614 (A) at 620 B) and in order to obviate the squandering
of court time, leave to withdraw the winding-up application
is
granted to the applicants to the extent that such leave is necessary.
In
terms of rule 41(1)(b) the tender of costs on a party and party basis
in the notice of withdrawal of the winding-up application
has the
effect of an order of court for such costs. The result of the
withdrawal of the winding-up application is that the need
for the
consideration of the intervention application has fallen away. As
the tender of party and party costs to the intervening
parties, in
the context of the purported notice of withdrawal was limited to the
winding-up application, it is for this court to
decide whether the
intervening parties are entitled to costs orders in respect of the
intervention application and if so, the scale
thereof. Those issues
must be decided on the basis that the applicants have withdrawn the
winding-up application and no longer place
any reliance on the
factual averments in the founding and supporting affidavits filed in
that application and furthermore have not
refuted the factual
averments in the affidavits filed by the intervening parties in
support of the intervention application. Accordingly
the issues in
question must be decided on the intervening parties’ version. It
is only in exceptional circumstances that a party
that has been put
to the expense of opposing withdrawn proceedings will not be entitled
to all the costs caused thereby (See:
Germishuys
v Douglas Besproeiingsraad
1973(3) SA 299 (NK) at 300 D). The intervening parties’ counsel
on the strength of
Epstein & Payne v Fraay and Others
1948(1) SA 1272 (W) contended for costs on a punitive scale as the
applicants by having failed to ascertain the correctness of their
factual averments made incorrect and misleading statements. Although
there may be merit in that contention, I prefer to base the
exercise
of my discretion in awarding attorney and client costs to the
intervening parties in respect of the intervention application,
on
the unfairness thereof that they should be out of pocket in respect
of their attorney and client costs for having sought to intervene
in
proceedings of such questionable merit that the applicants withdrew
it as soon as opposition manifested itself.
As no blameworthiness is
attributable to the applicants for having opposed the intervening
parties’ application for costs to be
awarded on an attorney and
client scale, the costs of 14 August 2001, in my view, should be
awarded on a party and party scale.
Accordingly the following
order is made -:
“
The first and second
applicant are ordered to pay the costs of the Intervening Shareholder
(Forward), the First Intervening Director
(Weiner) and the Second
Intervening Director (Tworetsky) as follows –
in respect of the
winding-up application on a party and party scale;
in respect of the
intervention application on an attorney and client scale; and
in respect of the
appearance on 14 August 2001 on a party and party scale
jointly and severally.”
________________
D.
VAN REENEN