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IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
Case Number: 17191/24
In the matter between:
CELLUCITY (PROPRIETARY) LIMITED Applicant
and
SHARLENE PHILLPSON-GARCIA First Respondent
JOHN MICHAEL BARRINGTON Second Respondent
JENNIFER LOUISA BARRINGTON Third Respondent
CANDICE ASHLEIGH CAMPBELL Fourth Respondent
BASIC BLUE TRADING 450 (PTY) LTD Fifth Respondent
CAPITEC BANK LIMTED Sixth Respondent
FIRST NATIONAL BANK LIMITED Seventh Respondent
REGISTRAR OF DEEDS, CAPE TOWN Eighth Respondent
JUDGMENT
JANISCH AJ:
Introduction
1. This is the return day of a rule nisi issued ex parte on 6 August 2024. After the
matter became opposed, the rule was amended by agreement on 11 September
2024 to have regard to a property sale to which I refer below.
2. The substantive relief sought on the return day is two-fold:
1. the Applicant claims payment f rom the First Respondent in the amount
of R10,184,455.95; and
2. the Applicant seeks so -called “ anti-dissipation” orders against the
Respondents, which would prevent the withdrawal of amounts from
specified bank accounts and the dissipation and/or encumbering of
certain immovable properties, pending the payment of the above money
claim and the outcome of proceedings to be launched for the recovery of
additional amounts.
3. The Applicant is a company operating in the cellular telephone industry.
4. The First Respondent was employed by the Applicant for just shy of 16 years in a
financial administration role . She resigned on 8 July 2024 in circumstances to
which I return below.
5. The Second Respondent is the First Respondent’s son -in-law. He is married to
the Third Respondent, who is the First Respondent’s daughter. The Fourth
Respondent is the First Respondent's niece.
6. The Fifth Respondent is a company of which the First Respondent is the sole
director. It had a bank account (now closed) into which it is alleged that the First
Respondent dishonestly caused substantial sums of money from the Applicant’s
funds to be paid over time.
7. The Sixth and Seventh Respondents are commercial banks . The Fifth
Respondent’s bank account was with the Seventh Respondent. The First
Respondent has personal bank accounts with each of the Sixth and Seventh
Respondents. The banks are cited to enable enforcement of the prayer that no
withdrawals be permitted from these accounts.
8. The Eighth Respondent is the Registrar of Deeds, Cape Town . The Registrar is
cited because if the application succeeds , the title deeds of the immovable
properties must be endorsed with a caveat reflecting the restriction on alienation
or encumbrance thereof.
The relevant facts
9. The Applicant set s out the following key facts in its founding papers and in a
supplementary affidavit which it had leave to file ahead of the return day.
10. The Applicant state s that a fter noticing unusual and suspicious entries in the
financial records under the First Respondent’s control, it confronted her with
these. She failed to provide an explanation . Three days later, she sent an email
tendering her resignation with immediate effect on 8 July 2024.
11. Investigations have revealed that over a considerable period of time, the First
Respondent had falsified supplier invoices made out to the Applicant. She inflated
the actual invoice amounts and inserted the Fifth Respondent’s banking details
for payment in place of the suppliers’ details . She then purportedly verified the
falsified invoices for payment and caused the Applicant to pay the total amounts
into the Fifth Respondent’s bank account, of which she had control.
12. In the founding affidavit, it is shown that in relation to 45 separate inflated
invoices, payments exceeding the true invoiced amounts by R10,184,455.95 had
been made by the Applicant to the Fifth Respondent’s account.
13. By the time the supplementary affidavit was filed, the Applicant’s investigation had
revealed that the inflated sum that the First Respondent had caused the Applicant
to pay out amounted to R70,024,152.24.
14. The First Respondent, despite having filed two answering affidavits, one t o the
founding affidavit in the ex parte application and one to the supplementary
affidavit, has not denied the allegation that she caused these payments to be
made out of the Applicant’s funds in the manner alleged.
15. On 25 July 2024, the Applicant’s attorneys sent a letter to the First Respondent
notifying her that there was evidence of stolen and/or misappropriated funds
totalling R10,184,455.95, and that the invest igation was ongoing. It was also
stated that the Applicant had discovered that a property owned by the First
Respondent in Kleinbaai was in the process of being sold. The Applicant sought
an irrevocable undertaking from the First Respondent that she would not in any
way purport to further dissipate that property and the funds currently in her
possession, failing which urgent legal steps would be taken pending proceedings
to recover all funds misappropriated.
16. No such undertaking was furnished . This led to the Applicant ’s ex parte
application which is the source of the rule nisi.
17. By the time that application was launched, the Applicant had further ascertained
that the First Respondent had bank accounts in her own name with the Sixth and
Seventh Respondents. Moreover, a deeds office search revealed that since 2018
the First Respondent had acquired nine immovable properties in her own name,
bond free . Apart from the K leinbaai property referred to above , six of these
properties are registered in her name alone. A further property (Erf 3 […]
Milnerton) is owned in undivided shares between the First, Second and Third
Respondents. Another (Erf 3[…] Milnerton) is owned in undivided shares between
the First and Fourth Respondents.
18. The Applicant contended that given the First Respondent’s salary (which at
termination was R41,500 per month before tax), it would have been all but
impossible for her to afford these properties, let alone without the need for a
bond. The Applicant’s conclusion was stated as follows:
“The only plausible explanation is that these pro perties were purchased with
the proceeds of the fraud and theft committed.”
19. The First Respondent did not deny this.
20. The Applicant also put up a range of further facts which it contended warranted
an order interdicting the First to Fourth Respondents from d isposing of the
identified assets pending the finalisation of recovery proceedings.
21. On 5 August 2024, t his Court issued the rule nisi and granted interim interdicts
prohibiting the disposal or encumbrance of the identified properties and any
withdrawals from the bank accounts pending the return day.
22. On 11 September 2024, the rule nisi was amended by agreement to deal with an
arrangement that had been reached pertaining to the sale of the Kleinbaai
property. It was agreed that the sale could be put into effect and the proceeds
paid into the Applicant’s attorneys’ trust account pending the final determination of
the application.
23. I turn to deal with the Applicant’s claims for substantive relief.
The Money Claim
24. The Applicant in its founding papers demonstrated that the First Respondent had
knowingly misappropriated the sum of R10,184,455.95 through producing inflated
invoices and causing the Applicant to pay the inflated amount into the bank
account of the Fifth Respondent, which was controlled by the First Respondent .
The said sum is the difference between the inflated and valid invoices and was
effectively stolen from the Applicant.
25. The Applicant seeks a n order directing the First Respondent to repay to it the
misappropriated or stolen amount.
26. The First Respondent has made no effort to deny or contest this claim in any way.
In oral argument, counsel for the First Respondent fairly conceded th at his client
had no defence to the claim.
27. In these circumstances, I am satisfied that the Applicant has established a right to
judgment in the amount claimed.
28. The Applicant intends to launch separate proceedings to claim the difference
between the above amount and the total of some R70 million that it contends to
have been stolen or misappropriated. That claim is not before me, although I note
that the First Respondent has also not denied the allegations on which it will be
based.
The Anti-Dissipation Orders
29. What was in dispute before me were the prayers to interdict the transfer or
encumbrance of the immovable properties and any withdrawal from the bank
accounts, pending payment of the money claim and the outcome of the intended
proceedings to recover the rest of the misappropriated money.
30. The law in relation to “anti-dissipation” interdicts (i.e. interdicts prohibiting the
alienation or encumbering of assets pending proceedings in which amounts will
be claimed from the owner of those assets) is well developed.
31. The leading case is Knox D’Arcy Ltd v Jamieson 1996 (4) SA 348 (A) (“Knox
D’Arcy”). It recognises th at a court is empowered to grant such relief . While it
remains necessary for the applicant to establish all the requirements for an
interim interdict (a prima facie right, an apprehension of irreparable harm, the
balance of convenience favouring the grant of the interim and the lack of an
adequate alternative remedy), the remedy will not be granted unless a particular
state of mind on the part of the respondent is shown to exist: i.e. “ that he is
getting rid of the funds, or is likely to do so, with the intention of defeating the
claims of creditors” (at 372G).
32. At the same time, the Court recognised that there may be exceptional
circumstances in which this state of mind need not be established.
33. Different principles apply where the interdict is claimed to protect or preserve
property that is the subject of what have been described as vindicatory or “quasi-
vindicatory” claims.
34. In Fey N.O. v Van Der Westhuizen 2005 (2) SA 236 (C) (“Fey”) at 249D-E, this
Court held that in the circumstances of that case, where a trustee was seeking to
preserve assets in a trust which was the alter ego of the insolvent pending a claim
to recover them, it was not necessary for the applicant to show an intention on the
part of the respondent to dissipate assets to defeat the claims of creditors. The
Court held that the circumstances before it, which fell into the category of a quasi-
vindicatory or quasi -proprietary claim, could be regarded as one of the
“exceptional cases” envisaged in Knox D’Arcy.
35. I am not sure that the rule in relation to the preservation of assets in the context of
vindicatory or quasi-vindicatory claims is truly an exception to Knox D’Arcy, since
the Court in that case expressly made its findings in relation to funds “to which the
applicant lays no claim” (at 372H), i.e. non-vindicatory claims.
36. Be that as it may, the legal position in relation to vindicatory or quasi -vindicatory
claims is independently established. In Fedsure Life Assurance Co. Limited v
Worldwide African Investment Holdings (Pty) Ltd 2003 (3) SA 268 (W)
(“Fedsure Life ”) , a full bench decision, Cloete J stated that in relation to
applications for interim relief pending vindicatory and quasi -vindicatory actions, it
was settled law that “ the court is entitled to ensure that the thing shall be
preserved until the dispute is decided finally ” (in paragraph [27]). There was no
need in those circumstances to demonstrate an intention to dissipate to frustrate
a creditor’s claim , as p er Knox D’Arcy (see the distinction of the cases in
paragraphs [44] and [45]).
37. I am of the view that the Applicant’s claim against the First Respondent, which is
for the return or recovery of stolen or misappropriated money, can be described
as quasi-vindicatory, with the result that the interdict can be granted without
establishing an intention to dissipate on the part of th e First Respondent . My
reasons are as follows.
38. In First National Bank of Southern Africa Limited v Perry N.O. 2001 (3) SA
960 (SCA) (“Perry”) in paragraph [18], the following was stated:
“..our courts have recognised that a person whose money has been stolen or
obtained by fraud and deposited in a bank account may be entitled to an
interim interdict prohibiting the respondent from dealing with the money
pending the institution of action”.
39. The Court cited Lockie Bros. Limited v Pezaro 1918 WLD 60 (“Lockie Bros ”)
and Henegan v Joachim 1988 (4) SA 361 (D) (“Henegan”) at 365 B-C in support
of this principle. On that basis:
“What an applicant must do in such a case is to trace the money back to the
stolen money, to identify it as a ‘fund’ of stolen money in the defendant’s
hands.”
40. In Henegan (at 365B-C), it was held that an interdict can be granted in respect of
money:
“if the money is identifiable with or earmarked as a particular fund to which
the plaintiff claims to be entitled … examples of a fund would be where
fraudulently obtained or misappropriated money can be traced to its source,
or where money, such as trust money is kept in a separate account, or where
a separate sum of money is received, retained or is d estined for a designated
purpose such as the payment of a particular debt.” (underlining added)
41. In Lockie Bros it was sought to interdict the transfer of an amount held to the
credit of the respondent in a fixed deposit account in a bank. It was shown that
the respondent had conspired to steal the applicant’s money which was first paid
into the respondent’s current account. Part of this was then withdrawn and paid
into the fixed deposit account. In granting the relief sought, t he Court stated as
follows (at 61-62):
“I think it is sufficient to show that the misappropriated money went to swell
the respondent’s banking account and that the deposit was drawn from that
account.”
42. In Perry (supra in para [18) ) it was specifically held that Lockie Bros was
correctly decided.
43. In Fedsure Life in para [30], the following was stated:
“If the money to be interdicted is identifiable with or earmarked as a particular
fund to which the plaintiff claims to be entitled, the money may be interdicted.
… Money remains earmarked where the property of the applicant has been
realised and the respondent is in possession of the proceeds, where the
proceeds are clearly identifiable.” (underlining added)
44. The consequence is that where it is possible to “ follow the stolen money ” to a n
identifiable fund, it does not matter that the money may first ha ve been placed in
a bank account and mixed with other money of the respondent. It is only where
the mixing was done with the authority of the applicant that an interdict would not
be available (cf. Fedsure Life Assurance (supra) in para [37]).
45. A change in the nature of the stolen item does not alter the principle. In
Gernholtz and Another N.N.O. v Geoghe gan 1953 (2) PH F102 (O) (referred to
in Fedsure Life in para [31]), a prima facie case had been made out that a truck
had been fraudulently acquired by the respondent from the applicant . The truck
had been sold in the meantime. The Court however held that there was a clear
link between the truck and the proceeds that the respondent had in her
possession. In that case the fund consisting of the proceeds of the
misappropriated item could be interdicted.
46. A further case relied on in Fedsure Life was Van Woudenberg N.O. v Roos
1946 TPD 110. Here a person incapable of managing his own affairs had made a
cash donation to a third party which had then been placed on fixed deposit. The
court interdicted the further disposal of the fixed deposit, stating as follows
(underlining added):
“I am of opinion that an applicant is entitled to relief not only where it is clear
that the property is the subject matter in dispute but also where the immediate
proceeds of such subject -matter are in possession of the respondent. A clear
direct connection between the su bject-matter converted and the money
sought to be interdicted appears to me to be sufficient to found an applicant’s
right to an interdict . To hold that the respondent may be restrained from
disposing of the cheque but that the proceeds therefrom are immun e would
be to indulge in unjustifiable nicety and refinement.”
47. In my view, this principle applies equally where stolen money has been converted
into another form of property such as a fixed asset. If it is competent to interdict
money into which a stolen o r misappropriated asset has been converted (as in
Gernholtz) or a separate deposit funded with stolen money (as in Lockie Bros
and Van Woudenberg), there is no reason why the same should not apply where
stolen monies have been used to acquire identified properties which are in the
hands of the respondent.
48. Applying the above to the present case, the applicant has not only established a
clear or at leas t prima facie case that the First Respondent has stolen and/or
misappropriated a substantial sum of money, but also that the identified
immovable properties owned by her were acquired out of this money. The First
Respondent has not denied the Applicant’s specific averment to this effect.
49. The Applicant has therefore established a clear connection between the
misappropriated funds and the immovable properties. In essence, the properties
represent the stolen money which it is sough t to recover. The claim thus amounts
to a quasi-vindicatory claim.
50. Accordingly, to establish a right to an interdict , it is not necessary to go further
and show that the First Respondent is intending to dissipate these properties.
51. Relief is also sought prohibiting withdrawals from a bank account in the name of
the Fifth Respondent and two bank accounts in the name of the First Respondent.
52. It is apparent that the Fifth Respondent’s bank account has since been closed.
There is no basis for an order in relation to a closed account.
53. As regards the other two bank accounts, the founding papers refer to them and
aver, in relation to them, that “this is the Applicant’s money .” In other words, it is
averred that whatever is in those accounts also emanates from the stolen money.
54. In respect of these averments, too, the First Respondent has chosen to remain
silent. It would have been possible for her to identify and explain the source of
funds in the account , if such source was legitimate. The lack of an explanation,
particularly in the conte xt of other evidence provided as to how she diverted
amounts derived from the Applicant into acquiring fixed property and to fund
certain other businesses, means that she cannot displace the prima facie
conclusion that her two personal bank accounts also contain funds derived from
the stolen monies.
55. The necessary prima facie right has therefore been established in relation to both
the properties and the bank account . T he resultant presumption of irreparable
harm (see Fedsure Life in para [ 28]) has not been rebutted. The balance of
convenience also favours the granting of the interdict , since the assets will be
protected pending the further proceedings, and the First Respondent has put up
no facts as to any inconvenience to her if the interim relief is granted . There also
does not appear to me to be an adequate alternative remedy to protect the assets
pending the payment of the money claim and the further proceedings to be
launched.
56. I am therefore of the view that the Applicant has made out a proper case for the
interdict in relation to the First Respondent’s bank accounts and immovable
property (including her undivided shares in two of the properties).
57. I mentioned above that an interim arrangement had been made in relation to the
Kleinbaai property, with a special provision having been added to the rule nisi to
cater for the proceeds of the sale. I was told by counsel for the Respondents that
the sale had in the meantime fallen through, but there is nothing about this on the
papers and I cannot say that the sale will not be resurrected. I therefore propose
to retain the specific language added to the rule, although if that sale does not
proceed, the general interdict applies to the property.
Relief against the Second to Fourth Respondents
58. The Applicant also claims anti -dissipation relief against the Second to Fourth
Respondents in relation to their undivided shares in the two erven referred to
above.
59. Although the papers contain certain statements to the effect that the Second to
Fourth Respondents, who are apparently also business associates of the First
Respondent, must have known that the source of her wealth was ill-gotten, the
Applicant does not go so far as to say that they committed theft or
misappropriation of its money.
60. The papers also do not specify the nature of any claim which the Applicant may
pursue against the Second to Fourth Respondents. Counsel for the Applicant
suggested that such claims may lie in unjustified enrichment.
61. I do not intend to specula te as to what cause of action, if any, the Applicant may
in due course be able to establish against the Second to Fourth Respondents.
What is important for present purposes is that it has not established that the
undivided shares held by the Second to Four th Respondents would constitute a
“fund” which could be the subject of a quasi-vindicatory claim by the Applicant.
62. In those circumstances, any interdict restricting them from disposing of their
undivided shares would have to meet the requirements of Knox D’Arcy.
63. The Applicant has not made out a case that the Second to Fourth Respondents
have the intention of disposing of their undivided shares in the properties to
frustrate claim s by creditors such as the Applicant. The mere fact of a close
familial and business relationship with the First Respondent , or the fact t hat they
have benefited from the First Respondent’s largesse in various respects, does not
assist in this regard.
64. Accordingly, I do not believe that the Applicant has established a case for an anti-
dissipation order against the Second to Fourth Respondents.
65. For all practical purposes, however, the interdict on disposal of the First
Respondent’s undivided share of the two properties will preserve the whole of the
properties. They cannot be disposed of in their entirety without the First
Respondent’s co-operation, which is impossible under the interdict . The Second
to Fourth Respondents could attempt to dispose of their undivided shares to a
third party, but this is an un realistic scenario as anyone purchasing those shares
would co-own the property with the First Respondent, whose share is restricted .
These are however not considerations that warrant an interdict against the
disposal of those undivided shares.
Costs
66. The Applicant has been successful against the First Respondent on both legs of
the relief it sought in these proceedings (i.e. the money claim and the interdict) . It
follows that it should have its costs pertaining to those claims.
67. As regard the scale of c osts, the Applicant sought an order on an attorney and
client scale. It pointed to the blameworthy conduct of the First Respondent which
had compelled it to incur the cost of bringing this application.
68. Although the First Respondent’s conduct as a litigant canno t be described as
vexatious or unnecessarily obstructive, that is not the only circumstance in which
a court, in the exercise of its discretion, may award costs on a punitive scale.
Such an order may be made on the basis of the circumstances which gave rise to
the action or application, where the Court thinks it just, by way of such an order,
to ensure more effectively than it can by way of a judgment for party and party
costs that the successful party will not be out of pocket in respect of litigation
costs (Nel v Waterberg Landbouwers v Ko -operatiewe Vereeniging 1946 AD
597 at 607).
69. This is one of those cases. The First Respondent has essentially admitted fraud
and self-enrichment on a significant scale, to the detriment of the Applicant . She
has also not voluntarily undertaken not to dispose of her assets pending the
finalisation of the claim. The Applicant was therefore put to significant expense in
having to enforce its rights to protect the assets fro m which it must try to recoup
its lost funds.
70. In these circumstances, I am of the view that a costs order against the First
Respondent on a scale as between attorney and client is warranted.
71. As regards the Second to Fourth Respondents, their opposition has been
successful. Whether or not some substantive relief may be claimed against them
in the future, I have found that the Applicant was not entitled to attempt to restrict
their ability now to deal with their undivided shares. I see no advantage in holding
over the question of their costs for later determination.
72. While I consider that the Applicant should bear the Seco nd to Fourth
Respondents’ costs, I cannot however find that the Applicant’s conduct is
sufficiently blameworthy to warrant a punitive costs order.
73. For practical purposes i t will be necessary to apportion the costs between the
First Respondent on the one hand and the Second to Fourth Resp ondents on the
other.
74. The vast majority of the costs of this application related to the claim between the
Applicant and the First Respondent . Having regard to the contents of the
affidavits and the written and oral arguments, I am of the view that a fair
apportionment of costs would attribute 80% to the case involving the First
Respondent and 20% to the case involving the Second to Fourth Respondents.
ORDER
75. In the premises, I make the following order:
1. The First Respondent is to make payment to the Applicant in the amount of
R10,184,455.95 (Ten Million One Hundred and Eighty -Four Thousand Four
Hundred and Fifty-Five Rand and Ninety-Five Cents).
2. The First Respondent is not permitted to make, or cause to be made, any
withdrawal from the following bank accounts:
2.1 Bank: First National Bank Limited
Account Number: 6[…]
2.2 Bank: Capitec Limited
Account Number: 6[…]
3. The First Respondent is not to dissipate and/or encumber any of the following
immovable properties:
3.1. The First Respondent’s undivided share in Erf no: 3 […] Milnerton, Cape
Town, also known as 9[…] B[…] Road, Table View, Cape Town.
3.2. The First Respondent’s undivided share in Erf no: 3 […] Milnerton, Cape
Town, also known as 1[…] B[…] Road, Table View, Cape Town.
3.3. Erf no: 2 […] Milnerton, Cape Town, also known as 4 […] R[…] Drive,
Parklands, Cape Town.
3.4. Erf no: 3 […] Milnerton, Cape Town, also known as 9 […] B[…] Road,
Table View, Cape Town.
3.5. Erf no: 1 […] Milnerton, Cape Town, also kn own as 2 […] A[…] Avenue,
Table View, Cape Town.
3.6. Erf no: 3 […] Milnerton, Cape Town, also known as 9 […] B[…] Road,
Table View, Cape Town.
3.7. Sectional Title Unit […] SS J […] Court – Scheme Number 1 […],
Langebaan 5[…], Cape Town.
3.8. Erf no: 5 […], Lang ebaan, Cape Town, also known as […] C[…] Close,
Langebaan, Cape Town.
3.9. Erf no: 9 […] V[…], Gansbaai Municipality, Cape Town, also known as
3[…] R[…] Street, Kleinbaai, Western Cape , subject to paragraph 4
below.
4. The First Respondent will be permitted to sell and effect transfer of the property
described in paragraph 3.9 supra (‘the Property’), in terms of the deed of sale
marked Annexure ‘A’ hereto, subject thereto that the proceeds of the sale, after
deduction of the outstanding bond(s), if any, held by registered financial
services provider(s), are to be kept in an interest -bearing trust account of Heidi
van der Meulen Attorneys, or such al ternative firm of attorneys as may be
nominated by the Applicant.
5. The Eighth Respondent is authorised and directed to endorse the title deeds of
the immovable property listed in paragraphs 3 and 4 with a caveat evidencing
the aforesaid, where necessary in substitution for any caveat already endorsed
under the interim relief granted in this application.
6. Paragraphs 2 to 4 above are to operate as an interim interdict pending:
6.1 Payment of the amounts contemplated in paragraph 1 and paragraph 7
below; and
6.2 The outcome of an application and/or action to be instituted by the
Applicant for the recovery of any monies, in addition to the amount of
R10,184,455.95, misappropriated and/or stolen by the First Respondent,
which is to be instituted within 21 calendar days of the date of this order.
7. The First Respondent is to pay the Applicant’s costs of this application (as to
80% thereof) on a scale as between attorney and client , including the costs of
counsel.
8. The application against the Second to Fourth Respondents is dismissed with
costs on a scale as between party and party , including the costs of counsel on
scale B, in respect of 20% of the costs of the application.
-----------------------------
M W JANISCH
Acting Judge of the High Court
Western Cape Division
APPEARANCES:
For the Applicants: J P Steenkamp
Instructed by:
Heidi van der Meulen Attorneys
For the First to Fourth Respondents: T I Ferreira
Instructed by:
Andre Kirsten Attorneys
Date of hearing: 28 October 2024
Date of judgment: 4 November 2024 (electronically)