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[2001] ZAWCHC 9
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Telecom Namibia Ltd v Ganes and Another (6266/01) [2001] ZAWCHC 9 (29 October 2001)
FINAL
SEQUESTRATION
CASE
NO. 6266/2001
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT)
CAPE
TOWN: Friday 3 May 2002
Before
the Honourable Ms Justice Knoll
In
the matter between:
TELECOM
NAMIBIA LTD
…..............................................................................................
Applicant
And
LUTCHMAN
IVAN GANES
…..............................................................................
First
Respondent
LYNNETTE
GAYLE GANES
…........................................................................
Second
Respondent
Both Residing at
6
Grace Road
CLAREMONT
Cape
Having
heard the Legal Representative for the Applicant and having read the
documents filed of record;
IT IS ORDERED:
(a)
That the rule nisi granted on 12 July 2001 is made absolute and
First and Second Respondent's estate is placed under Final
Sequestration.
(b)
That the costs incurred by the applicant in prosecuting this
application, including the costs of all interlocutory applications,
hearings and postponements which stood over, are to be costs in the
sequestration and are to include the costs incurred by reason
of the
employment of two counsel.
BY
ORDER OF THE COURT
COURT
REGISTRAR
42
Fairbridges
CAPE
TOWN
IN THE HIGH COURT OF SOUTH AFRICA
CAPE OF GOOD HOPE PROVINCIAL DIVISION
CASE NO: 6266/01
In the matter between:
TELECOM
NAMIBIA LTD
….....................................................................................
Applicant
and
LUTCHMANAN
IVAN GANES
…..................................................................
First
Respondent
LYNETTE
GAYLE GANES
…..................................................................
Second
Respondent
RULING
OOSTHUIZEN A.J.:
The parties are agreed
that there are two matters which should be disposed of at the outset
and before argument is presented on
the balance of the issues in
dispute between them. The first of these matters pertains to the
question of whether the applicant
had established that the instant
application was authorised by it.
Where
an application is launched by a company or other juristic person, it
is necessary to show that the litigation was authorised
by the
juristic person in question. Ordinarily, the principal founding
affidavit will contain an allegation that the deponent
thereof is
duly authorised. An applicant will not necessarily be entitled to
cure any such omission in the replying papers. Where
allegations are
raised in reply in an attempt to remedy the inadequacies in the
founding affidavit on the issue of authorisation,
such replying
allegations should be carefully scrutinised. The aforegoing
reasoning formed the basis of the decision in
Griffiths
& Inglis (Pty) Ltd v Southern Cape Blasters (Pty) Ltd
.
1972 (4) SA 249
(C).
The
deponent to the founding affidavit in that matter had relied on the
mistaken assumption that his position as the managing
director and
majority shareholder of the applicant company
per
se
amounted
to the requisite authorisation. An attempt was made to remedy that
shortcoming in the replying affidavit, but the allegations
contained
in the replying affidavit in themselves raised further difficulties.
The Court held that the applicants had not made
out a case on the
issue of authorisation and dismissed the application.
The
applicant need do no more, in the founding papers, than allege that
authorisation has been duly granted. Where that is alleged,
it is
open to the respondent to challenge the averments regarding
authorisation. When the challenge to authority is a weak one,
a
minimum of evidence will suffice to establish such authority
(
Tattersall
& Another v Nedcor Bank Ltd
.
[1995] ZASCA 30
;
1995 (3) SA 222
(A)
at
228
J - 229 A).
In
the instant case, the founding papers consist of various affidavits,
one of which is the affidavit of one Hanke. Paragraph
1
thereof
contains two separate allegations, namely:
A) That he is employed
by the Applicant as its Director: Finance and Administration;
B) That he is duly
authorised and able to depose to the affidavit, the contents whereof
are within his personal knowledge save
where otherwise indicated by
the context;
Although the title
attaching to Mr Hanke's position might create some confusion, he
does not allege that he is a director of the
Applicant in the normal
sense of the word, ie. a member of the Applicant's Board of
Directors. No allegation to such effect is
found elsewhere in the
Applicant's founding or replying papers. The Respondent points out
that Mr Hanke is not a member of the
Board of Directors (which fact
appears to be common cause) but accepts that his job title is that
of Director: Finance and Administration.
As regards the
allegation that Mr Hanke is duly authorised, the First Respondent
states the following in the replying affidavit:
"Respondents
have no knowledge as to whether Hanke is duly authorised to depose
to the founding affidavit on behalf of the
Applicant, do not admit
same and put Applicant to the proof thereof."
The
challenge is, therefore, to use the phrase employed in
Tattersall
v Nedcor Bank
supra,
a
weak one and the minimum of evidence will suffice to rebut such
challenge.
The
facts of this case are very much on all fours with those confronting
the court in
Tattersall
v Nedcor bank
,
supra.
Firstly,
Mr Hanke states that he is duly authorised. In
Tattersall
v Nedcor Bank
,
supra,
Nestadt
JA pointed outthatdue weight must be given to such an allegation on
oath, particularly where the Respondent is unable
to gainsay the
allegation that the deponent is duly authorised. Secondly, an
affidavit forming part of the founding papers deposed
to by one
Kurz, a partner in the firm of attorneys representing the Applicant,
contains the following allegation:
"Fairbridges are
the duly appointed attorneys of record for Telecom Namibia Limited,
the Applicant in this application".
That
allegation in unchallenged. It therefore serves as independent
confirmation that the Applicant has authorised the proceedings
(
Tattersall
v Nedcor Bank
,
supra
at
229
C - D).
Thirdly,
it is manifestly clear from the papers that Mr Hanke was the person
who was primarily responsible for investigating the
transactions
giving rise to the instant sequestration proceedings, on the
Applicant's behalf. He moreover was a party to various
of the
discussions which are of material importance, in regard to the
claims or alleged claims which the Applicant now relies
on. He is
the party to whom the First Respondent addressed his letter of
resignation dated
2
July
2001
,
which letter contains an undertaking that 7
shall
provide the company with a separate statement concerning the
allegations of fraud and theft.
Mr
Hanke's position is, in this regard, comparable to that of Mr
Spencer, the party who deposed to the founding affidavit in
Tattersall
v Nedcor Bank Ltd
and
who alleged that he had been authorised to do so. The court
commented as follows in regard to Mr Spencer's position:
"... the
probabilities are that the bank (regarding the amount as due) wished
to take steps to recover what is, after all,
a large sum. And if
this is so, Spencer would surely be the person who would act on
behalf of the bank"
In
all the circumstances, I find that there is sufficient proof that
the instant proceedings are duly authorised. The objection
raised in
limine
by
the Respondents in relation to the issue of authority is dismissed.
The
Respondent furthermore applies for the striking out of certain
passages in the replying affidavit. A notice of application
to
strike out was delivered by the Respondents shortly prior to the
hearing. For present purposes, I am asked to deal only with
paragraph
4
thereof.
The basis upon which the averments are challenged may, in my view,
conveniently be divided into two categories. Firstly,
the
Respondents' complaint regarding paragraph 12.3 of Hanke's replying
affidavit is that the allegations therein contained constitute
a
cause of action entirely different from that in the founding papers.
In the founding papers the Applicant seeks to make out
a case that
the Respondents are factually insolvent. In paragraph 12.3 .of the
replying papers, the Applicant for the first time
raises allegations
to the effect that the Respondents allegedly committed an act of
insolvency by taking steps to place assets
beyond the reach of
creditors and by making a disposition to one of the Respondents'
creditors, one Eberle, with the intention
to prefer Eberle above the
Respondents' other creditors.
An
applicant cannot make out a particular cause of action in the
founding papers and then abandon that claim and substitute, in
the
place thereof, a fresh and completely different claim based on a
different cause of action in the replying papers.
(
Johannesburg
City Council v Bruma Thirty-Two (Pty) Ltd
.
1984 (2) SA 87
(T) at D - E;
Director
of Hospital Services v Mistry
.
1979 (1) SA 626
(A)).
Mr
van Riet who, together with Mr Sholto-Douglas, appeared for the
Applicant, contended that this was not what the Applicant had
done
by raising the averments contained in paragraph 12.3 of the replying
papers. Mr van Riet submitted that the cause of action
throughout
was insolvency and that there was no deviation from that cause of
action in regard to the allegations under attack.
I am not persuaded
by that submission. A cause of action ordinarily means
"every
fact which it would be necessary for the plaintiff to prove, if
traversed, in order to support his right to judgment
of the Court'
.
(
MacKenzie
v Farmers Cooperative Meat Industries Ltd
.
1922 AD 16
at
23;
Evins
v Shield Insurance Co Ltd
.
1980 (2) SA 815
(A)).
A
party who relies on factual insolvency is setting up a particular
cause of action different from that of the various acts of
insolvency created by section 8 of the Insolvency Act. Similarly,
each of the separate acts of insolvency created by section
8
constitutes a distinct cause of action. The cause of action in the
instant case being the Respondents' alleged factual insolvency,
the
Applicant cannot seek to introduce a new cause of action
in
reply
(
De
Wet v Le Riche
,
2000 (4) All S.A. 25
(T)
at
30
b - d).
The
application
to strike out paragraph 12.3 of the replying papers must succeed.
The
other category of complaint raised in paragraph
4
of
the notice to strike out stands on a different footing. In the
founding affidavit Hanke averred that the
First
Respondent had accepted payment of unlawful and unauthorised
commissions from an entity, Dresselhaus Scrap CC, with which
the
Applicant had business dealings. The Applicant had moreover adverted
to the fact that the First Respondent had acquired certain
assets
which the First Respondent could not have financed from the income
which the First Respondent received as an employee
of the Applicant.
The Applicant alleged that the acquisition of such assets was
suspicious and required investigation in order
to establish whether
commissions improperly received by First Respondent had been used to
fund the acquisition of those assets.
In the First Respondent's
answering affidavit, the First Respondent denied that he had
received commissions from Dresselhaus
or any other entity, and
denied the suggestion that the acquisition of the assets referred to
indicated any irregular conduct
on his part.
In
the replying affidavit, the Applicant seeks to introduce averments
relating to evidence given by the First Respondent at an
enquiry
convened in terms of the provisions of section 152 of the Insolvency
Act, which allegedly show that the aforesaid denials
in the First
Respondent's answering affidavit are untruthful. Ordinarily, an
applicant would, in the replying papers, be entitled
to raise
allegations in reply to any factual averment or denial contained in
the respondent's answering papers
(
Lane
& Another NNO v Magistrate, Wynberg
.
1997 (2) SA 869
(CPD)
at
886
G - H).
I
accordingly do not regard the paragraphs complained of as
impermissible new matter which should, on that basis, be struck out.
I am also not persuaded by the Respondents' contention that the
material complained of constitutes a new cause of action. As
already
pointed out, the cause of action originally relied upon was the
factual insolvency of the Respondents. If information
comes to light
subsequent to the delivery of the founding affidavits which has a
bearing on the solvency or insolvency of the
Respondents, there is
no reason why such information cannot be placed before the Court in
the replying affidavits. An application
for a provisional order is
frequently placed before the Court as a matter of urgency in the
interest of the applicant, the respondent's
creditors and the public
generally. Often the applicant will have incomplete information at
his disposal when launching the proceedings.
It would be
inappropriate and impractical to require of an applicant in
sequestration proceedings to include, in the founding
papers, all
allegations and information pertaining to the financial position of
the respondent and to preclude the applicant
from supplementing such
information in the replying papers.
(
Uys
& Another v Du Plessis (Ferreira Intervening)
.
2001 (3) SA 250
(C)
at
253
C
-
F).
Even if my
aforementioned view is incorrect, and it were to be accepted that
the allegations which the Respondents seek to raise
do constitute
new matter, a Court has a discretion to permit new matter in the
replying papers. Such discretion is exercised
the more readily where
the facts sought to be adduced were not known to the Applicant when
the founding papers were drawn
(
Kleinhans
v Van der Westhuizen
,
supra;
Cohen
NO v Nel
.
1975 (3) SA 963
(W)
at
966
F;
Knox
P'Arcy Ltd & Others v Jamieson & Others
,
1995 (2) SA 579
(W)
at
586
J - 587 B;
Shepherd
v Mitchell Cotts Sea Freight SA (Pty) Ltd
,
1984 (3) SA 202
(T)
at
205
F).
In
exercising a discretion to permit new material the court will
obviously seek to achieve fairness and will, where appropriate,
give
the respondent the opportunity to deal with such new matter in a
second set of answering affidavits
(
Dawood
v Mahomed
.
1979 (2) SA 361
(W) at 364 E;
Bowman
NO v De Souza Roldao
,
1988 (4) SA 326
(T)
at
327
H).
In the instant case the
material sought to be introduced was not known to the Applicant at
the time that the founding affidavits
were finalised. Moreover, the
Applicant has adopted the stance that the Respondents should be
given an opportunity of dealing
with the material introduced in the
replying affidavits. In the circumstances, and if the material
complained of is new matter,
I am of the view that I should exercise
my discretion and allow the averments in question to stand,
affording the Respondents
an opportunity to deal therewith.
I accordingly make the
following order:
(1)
The point
in
limine
regarding
the authorisation of the Applicant is dismissed;
(2) Paragraph 12.3 of
the replying affidavit is struck out;
(3)
The application for the striking out of the paragraphs and annexures
referred to in paragraph
4
of
the application to strike out, save for paragraph 12.3, is
dismissed. The Respondents are, however, afforded an opportunity
of
filing further affidavits dealing with the matters raised in the
said paragraphs and annexures, such affidavit to be filed
on or
before 12 November 2001;
(4) The costs of the
proceedings on 23 October 2001 stand over for later determination.
A C OOSTHUIZEN