Maize Board v Badenhorst and others (3260/2001) [2002] ZAFSHC 1 (28 February 2002)

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[2002] ZAFSHC 1
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Maize Board v Badenhorst and others (3260/2001) [2002] ZAFSHC 1 (28 February 2002)

IN
THE HIGH COURT OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Application
No.: 3260/2001
In the
matter between:
THE MAIZE BOARD
Applicant
and
F.H. BADENHORST & 18 OTHERS
Respondents
CORAM:
HANCKE, J
HEARD ON:
14 FEBRUARY 2002
JUDGMENT BY:
HANCKE, J
DELIVERED ON:
28 FEBRUARY 2002
This
is an application for the consolidation of 19 separate actions,
involving about R38-million, instituted in this Court against
the 19
respondents, together with ancillary relief.
It
appears from the application that during 1994 each of the
respondents concluded two contracts with the company, Rainbow
Chicken
Farms (Pty) Ltd, namely a contract described as “agreement
of lease, purchase and sale (broiler)” in which Rainbow leased or
purported to lease to each of the respondents broiler houses for
periods of approximately 49 days which are referred to as “growing
cycles”. At the same time Rainbow sold to each of the respondents
its entire stock of day-old chickens situated at the broiler
house
on the first day of each such growing cycle. At the end of the
growing cycle the parties agreed that the respondent would
sell to
Rainbow the now 49-day old chickens for a price to be agreed upon
between the parties. The other contract is described
as a
“management agreement (broiler)” in which each of the
respondents appointed Rainbow to manage the broiler operation
created
by the agreement of lease, purchase and sale. All these
contracts concluded between Rainbow and the respondents are in
exactly
the same terms and were concluded, on behalf of Rainbow, by
the same person during the period May to July 1994.
It
is the applicant’s case in each of the main actions that these two
contracts were simulated and were concluded between each
of the
respondents and Rainbow with the intention of (i) disguising the
fact that Rainbow in fact purchased, and each of the respondents
in
fact sold, yellow maize to Rainbow and (ii) evading the payment of
levies promulgated in terms of the maize marketing scheme
by
pretending that each of the respondents was a producer of maize
concerned for his/her own use to feed his/her own chickens and
therefore exempt from the payment of levies.
Approximately
260 summonses were issued against maize farmers who concluded
similar contracts in a number of Magistrate’s Courts
and in the
various Provincial Divisions of the Orange Free State, Natal,
Northern Cape and Transvaal. Each of the respondents
is defending
the action and each of them appointed the same firm as attorneys of
record as well as locally in Bloemfontein.
It
also appears from the application that the respondents filed a plea
in which they deny that the contracts were simulated. A
further
issue which appears from all the pleadings is whether or not the
statutory structure for the imposition of levies is
unconstitutional.
The
rule relating to the consolidation of action provides as follows:
“11.
Consolidation of
actions
Where separate actions have
been instituted and it appears to the court convenient to do so, it
may upon the application of any
party thereto and after notice to
all interested parties, make an order consolidating such actions,
whereupon -
(a) the said actions shall
proceed as one action;
(b) the provisions of rule 10
shall
mutatis
mutandis
apply with
regard to the action so consolidated; and
(c) the court may make any
order which to it seems meet with regard to the further procedure,
and may give one judgment disposing
of all matters in dispute in the
said actions.”
It appears that the word “convenient” in the context of rule 11
is not intended to convey only the notion of “facility or
ease or
expedience”, but also the notion of “appropriateness”. In
MINISTER OF AGRICULTURE v TONGAAT GROUP LTD
1976
(2) SA 357
(D),
Miller, J said the following at
363C-D
:
“
The word “convenient” in
the context of rule 33(4) is not used, I think, in the narrow sense
in which it is sometimes used to
convey the notion of facility or
ease or expedience. It appears to be used to convey also the notion
of appropriateness; the procedure
would be convenient if, in all the
circumstances, it appeared to be fitting, and fair to the parties
concerned.”
In an application in terms of the said rule, the Court has a
discretion whether or not to grant the application. In
NEW
ZEALAND INSURANCE CO LTD v STONE AND OTHERS
1963 (3) SA
63
(C),
Corbett, AJ stated the following at
69A-C
:
“In such an application for consolidation the Court, it would
seem, has a discretion whether or not to order consolidation, but
in
exercising that discretion the Court will not order a consolidation
of trials unless satisfied that such a course is favoured
by the
balance of convenience and that there is no possibility of prejudice
being suffered by any party. By prejudice in this
context it seems
to me is meant substantial prejudice sufficient to cause the Court
to refuse a consolidation of actions, even
though the balance of
convenience would favour it. The authorities also appear to
establish that the
onus
is upon the party applying to Court for a consolidation to satisfy
the Court upon these points.”
The purpose of joinder under Rule 11 is to ensure that issues which
are essentially the same are heard and determined in one trial
so as
to avoid a multiplicity of actions with the concomitant
disadvantages and prejudice. The paramount test in regard to
consolidation
of actions is convenience. Convenience would usually
dictate that a multiplicity of actions and the costs incidental
thereto should
be avoided. In
NEL v SILICON SMELTERS (EDMS)
BPK EN ‘N ANDER
1981 (4) SA 792
(A)
the following
is said at
802B-C:
“
Die doel van konsolidasie
kragtens Hofreël 11 en van voeging kragtens Hofreël 13 is
hoofsaaklik dieselfde, dit is, naamlik om
geskilpunte wat wesenlik
dieselfde is, saam in een saak te laat bereg sodat ‘n
veelvuldigheid van verhore met gepaardgaande nadele
vermy kan word.”
See
also
JACOBS v
DEETLEFS TRANSPORT BK
1994 (2) SA 313
(O) at 320A-B.
Mr
Van Schalkwyk, counsel for the respondents, submitted that a
consolidation of actions in the instant case will not be convenient
other than to the applicant, and will prejudice one or more or all
of the respondents. In argument he referred to the fact that
the
principal and fundamental issue in each of the actions between the
parties is whether or not each of the agreements concluded
between
Rainbow and each particular respondent was a simulated agreement.
The applicant bears the
onus
of proving in each case that the agreement between Rainbow and the
particular respondent was a simulated or disguised transaction.
In
order to discharge this onus, the applicant must, in the case of
each respondent, establish that -
“
... there is a real
intention, definitely ascertainable, which differs from the
simulated intention. For if the parties in fact
mean that a
contract shall have effect in accordance with its tenor, the
circumstances that the same object might have been attained
in
another way will not necessarily make the arrangements other than
what it purports to be.”
per
Innes, CJ in
ZANDBERG
v VAN ZYL
1910 AD 302
at 309.
See also
COMMISSIONER
OF CUSTOMS AND EXCISE v RANDLES, BROTHERS AND HUDSON LTD
1941 AD 369
at 381;
BIRD
v LAWCLAIMS (PTY) LTD
1976 (4) SA 726
(D) at 728F
;
DIE REGISTRATEUR
VAN AANDELEBEURSE v ALDUM
,
(unreported SCA case no. 320/2000 delivered 28 November 2001,
paragraph [4]).
Mr
Van Schalkwyk disputed the applicant’s estimate that its own case
will last five days and submitted that it will last substantially
longer. He pointed out that on the assumption that other witnesses
are to be called on behalf of the respondents, the evidence
in a
consolidated trial will, at best for the applicant, last at least 24
days, which he regarded as “very optimistic”. The
previous
matter of this nature before Bam, AJP (
THE
MAIZE BOARD v P.W. MICHAU
,
O.P.D.
,
case no. 2814/96, decided on 20 December 2001) lasted six days.
According to counsel the estimated legal costs amounted to R150
000,00 per day, i.e. roughly R900 000,00 over six days. The cost
involved in a consolidated trial which lasts for 24 days will
be
approximately R3,6-million. On the assumption that the respondents
are unsuccessful, the burden of the costs would be divided
by 19 in
which case it will amount to approximately R189 473,68. Even if the
costs amount to
R200
000,00 it will represent about 22% of the costs of R900 000,00. If
the respondents are successful in the consolidated trial
the
applicant will bear the costs in which case they will enjoy a
similar saving. In
NEL
v SILICON SMELTERS (EDMS) BPK EN ‘N ANDER
(supra)
the following was stated at
801D-E:
“
Ten tweede is dit om
verskeie redes vir die partye gerieflik dat die twee aksies as een
verhoor sal word; geen party word daardeur
benadeel nie, inteendeel,
dit skyn tot voordeel van al drie partye te wees. Omdat die aksies
as een voortgesit gaan word is die
gedingskoste laer en die
tydsverloop korter; daar sal ook net een bevinding ten opsigte van
dieselfde feitegeskil wees en aldrie
partye het belang by die
beregting van daardie geskil.”
Mr
Van Schalkwyk submitted that it will be necessary for all 19
respondents to attend the proceedings in Bloemfontein. As appears
from the summonses issued in the various actions, 12 of the
respondents farm in the Harrismith district, 2 are from Warden, 2

from Bethlehem, 2 from Reitz and 1 from Kranskop. This would
require them to be absent from their farms for a considerably longer
period than would be the case if separate trails were to be run. It
is doubtful whether it would be necessary for the respondents
to be
present during the whole trial.
Mr
Gordon submitted on behalf of the applicant that the respondents
will be represented by the same legal team during the trial
who will
be able to provide each one with advice concerning the allegations
which may have a bearing on the particular respondent.
He also
suggested that by providing a typed record, the legal
representatives of the various respondents can obtain proper
instructions
from the respondents without each of them necessarily
having to attend the trial during the full duration thereof. In my
view
it must be accepted that the respondents will have to attend
the trial at least when the applicant adduces evidence. According
to the applicant’s estimate, its own case will last about 5 days,
while Mr Van Schalkwyk submitted that it will last substantially
longer. Be that as it may, one must accept that each of the
respondents will have to be absent from their farms for a longer

period than would be the case if separate trials were to be run and
that it will involve some inconvenience.
Mr
Van Schalkwyk submitted that in a consolidated trial different
evidence may be required to meet the case against different
respondents,
and that the trial will be prolonged for those
respondents who require little or no evidence. It may be necessary
to call particular
witnesses on behalf of certain respondents while
it might not be in the interest of other respondents to adduce such
evidence.
He also submitted that in a consolidated trial it would be
tantamount to compelling certain respondents to call witnesses
against
their own interests. He mentioned the possibility of a
conflict of interest which may develop during the trial. Mr Gordon
referred
to these possibilities as “imaginative speculation”.
The possibilities mentioned by Mr Van Schalkwyk in his argument
appear
to me to be academic and very theoretical. Having regard to
the judgment in the case of
THE
MAIZE BOARD v MICHAU
(supra),
I am of the view that it is very improbable that any of these
possibilities would cause prejudice. They appear to me to be more
apparent than real.
Mr
Gordon submitted on behalf of the applicant that if the application
for consolidation is not granted, the applicant will experience
huge
logistical problems to ensure that the dates upon which the various
actions are to be enrolled do not coincide. In view of
the fact
that the same advocates appear on behalf of all the parties, it is
impossible to hear more than one at the same time.
As far as the
preparation of the trials are concerned, separate pre-trial
conferences will have to be held in each of the different
main
actions. Futhermore, the applicant will have to subpoena the bank
officials of the bank at which Rainbow opened bank accounts
for each
of the respondents
duces
tecum
in each of the
actions, with concomitant cost of service and conduct fees, whilst
should the actions be consolidated, one such
a subpoena would be
sufficient to obtain the documentation relevant to each of these
bank accounts. It is clear that the applicant
will suffer great
inconvenience if the present application is not granted.
Apart
from the possible convenience (or inconvenience) of the parties, the
convenience of the Court should also be considered.
Consecutive
enrollment of the actions in this Division would cause serious
disruption of the rolls of the court. Having regard
to the previous
matter which lasted 7 days, it could last some 57 court days to hear
the 19 matters, if all of them proceed. It
is important to note
that the same witnesses will be called by the plaintiff in each of
the actions. This would mean that the
various Judges of this
Division will have to listen to the same witnesses giving basically
the same evidence on 19 different occasions.
Various Judges may
have to consider and make findings on the credibility of these
witnesses and the same issues will come up for
decision before
different Judges in 19 different actions.
Having
regard to all the circumstances of the present application, I am of
the view that the convenience occasioned by a consolidated
trial far
outweighs any prejudice, or potential prejudice, or inconvenience
which the respondents may suffer if such consolidation
is ordered.
A consolidation will save substantial legal costs to the benefit of
all parties concerned, including the respondents.
Applicant is
therefore entitled to the relief claimed.
Accordingly
the following orders are made:
1. An order is granted in terms
of prayers 1, 2, 3 and 4 of the notice of motion.
2. The respondents are ordered
to pay the costs jointly and severally, the one paying the other to
be absolved.
S.P.B.
HANCKE, J
On behalf of
Applicant:
Adv.
D.A. Gordon, SC
instructed
by
Bezuidenhout
& Milton Earle Incorp.
On behalf of
Respondents:
Adv.
G.D. van Schalkwyk, SC and
Adv.
D. Mitchell, SC
instructed
by
Webbers
/scd