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2024
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[2024] ZALMPPHC 186
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Metene and Another v Legal Practitioners Fidelity Fund SA and Others (11124/2023) [2024] ZALMPPHC 186 (13 November 2024)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
CASE
NO: 11124/2023
(1)
REPORTABLE:
YES
/NO
(2)
OF INTEREST TO THE JUDGES:
YES
/NO
(3)
REVISED:
YES
/NO
DATE:
13/11/2024
SIGNATURE:
In
the matter between:
PATRICK
MALEPE METENE
(In
his capacity as a joint
co-Trustee
of
Ekaya
Trust)
FIRST
APPLICANT
PROMISE
METENE
(In
her capacity as a joint
co-
Trustee of Ekaya Trust)
SECOND
APPLICANT
And
THE
LEGAL PRACTITIONERS
FIDELITY
FUND SA
FIRST
RESPONDENT
JOHAN
VAN DER BERG
SECOND
RESPONDENT
REUBEN
MILLER N.O.
THIRD
RESPONDENT
SAJIDA
ABDULLA N.O.
FOURTH
RESPONDENT
In
re:
PATRICK
MALEPE METENE
(In
his capacity as a joint
co-
Trustee of Ekaya Trust)
FIRST
APPLICANT
PROMISE
METENE
(In
her capacity as a joint
co-
Trustee of Ekaya Trust)
SECOND
APPLICANT
And
JOHAN
VAN DER BERG
RESPONDENT
Heard
:
15
October 2024
Delivered
: 13
November 2024 by circulation
to the parties' legal
representatives
Coram
: PILLAY
AJ
JUDGEMENT
PILLAY
AJ
Introduction
[1]
The Applicants sought on an urgent basis that the Court dispense with
the requirements
of time limits, forms and service and permit the
application to be heard as one of urgency as contemplated in terms of
Rule 6(12)
of the Uniform Rules of Court. The Applicants further
sought amended relief and the amplification of the founding affidavit
as
contained in the second urgent application.
[2]
The Applicants request a declaratory order that the Fidelity Fund was
obliged to indemnify
the Applicants in respect of:
[2.1]
Its claim for interest on the capital sum of R2 000 000,00 at the
rate of 11.75% per annum
a tempora more
from 5 July 2022 until
date of payment;
[2.2]
The legal cost incurred in excussing the offending attorney Van der
Berg and parties whom he represented,
which was at the Fidelity
Fund's instance.
[2.3]
Payment of the amount of R1 098 909,82.
[3]
The application was opposed by the First Respondent who sought
condonation for the
late filing of the answering affidavit which was
not opposed. The First Respondent raised a point in limine concerning
the lack
of urgency which needed ventilation and if the Court found
that the matter was urgent the First Respondent opposed the relief
sought
in respect of the merits.
The
Brief Facts:
[4]
The Applicants were embroiled in litigation to recover their R2 000
000,00 investment
and other funds, which was stolen by Van der Berg
Attorneys. The Applicants were not successful in recovering the funds
and subsequently
lodged a claim on 25 August 2022 to the First
Respondent being the Fidelity Fund, on account of the theft by Van
der Berg Attorneys.
The Applicants had to institute sequestration
proceedings against Van der Berg which was finalised on 9 March 2023
at the behest
of the First Respondent.
[5]
Despite undertakings to make payment of the money stolen and cost
incurred in excussing
Van der Berg, the indemnity undertook by the
First Respondent, was not forthcoming. A flurry of emails was
exchanged between the
parties concerning the above-mentioned issue.
The Applicants launched a second urgent application against the First
Respondent
on 6 December 2023 as per the notice of motion, wherein
relief was sought for the R2 000 000,00 interest and costs. This
application
by agreement was removed from the roll as the Applicants
received payment of the R2 000 000,00 from the First Respondent on 5
December
2023.
[6]
From January 2024 to August 2024 the Applicants and First Respondent
were communicating
concerning the costs and interest issue. On 2
September 2024 the applicants address a further letter to the First
Respondent as
follows:
"In the
circumstances we are constrained to address this formal demand to
you. The Bill of Costs taxed total the sum of R1240166,95.
All the
necessary details have previously been submitted to you. Should
payment of the aforementioned sum not be paid within five(5)
days
from date hereof it is our intention to bring application proceedings
against the Fidelity Fund. The cost of which will be
for the Fidelity
Fund's account."
[7]
On 17 September 2024 the First Respondent addressed a letter to the
Applicant's attorney
ignoring their previous undertakings, according
to the Applicants, stating as follows;
"I have
pleasure in advising that the Fund's Board of Control resolved to
make a contribution towards the costs incurred by
the claimant in the
preparation and submission of this claim against the Fund. I
accordingly enclose a copy of the deposit slip
reflecting the payment
into your trust account of the amount of R 141 257,13.11
[8]
On 27 September 2024, the Applicants legal representative addressed a
letter to the
First Respondent indicating the following;
"We are most
surprised that you have ignored your undertaking to make payment of
the sum of R1240166,95 and have without explanation
simply paid the
sum of R141 257,13, in respect of the sequestration application,
which is one of the three amounts taxed, but not
the other bills of
costs taxed in the sums of R410 309,80 and R 688 600,02 in respect of
the legal costs incurred in excussing
Mr Van der Berg and his
entities under case number 7144/2022.
We are accepting
the sum of R141 257,13 on account but are constrained to address this
formal demand for you to pay the sums of
R410 309,80 and R 688 600,02
in respect of the Bills of Costs taxed. All the necessary details
have previously been submitted to
you.
In light thereof,
our client is proceeding to file an amplifying affidavit and setting
down the previous application instituted
under case number 11124/2023
as a matter of urgency"
[9]
The Applicants launched this third urgent application flowing from
the above
mentioned circumstances. The Applicants motivated the
issue of urgency on the premise that they would not receive
substantial redress,
at a hearing in due course. They highlighted the
following as justification for the urgency in launching this
application;
[9.1] "The Trust
owes the attorneys over one million rand (R1000000,00) in legal cost
incurred at the request of the Fidelity
Fund to exhaust all remedies
against Van der Berg and other parties involved in the transaction,
including the other seller of
the property.
[9.2] These legal
costs were incurred at the specific instance and request of the
Fidelity Fund.
[9.3] The Trust
attorney has deferred taking legal action against the Trust based on
the undertakings of the Fidelity Fund to pay
and reimburse the Trust
for the legal costs incurred.
[9.4] The Trust does
not have the resources to pay its attorney in the absence of
reimbursement by the Fidelity Fund.
[9.5] The Trust's
attorneys who also acts for me and my company Kipp Consulting's (Pty)
Ltd, is threatening not only to withdraw
as our attorneys of record
but also to launch urgent legal proceedings against the trust for
nonpayment of the outstanding
legal costs as per the attached
communication.
[9.6] There was no
justification for the Fidelity Fund not to make payment and
commercial urgency is a recognised ground of urgency
and the present
matter falls within such category. Moreover, the parties agreed that
the Applicants could approach the Court on
the same papers duly
supplemented on an urgent basis.
[9.7] If the funds are
not immediately released by the Fidelity Fund grave and irreparable
harm will be occasioned to the Trust,
not only will it be
sequestrated, as it has no defence to its attorneys claim but the
beneficiaries thereof, my minor children,
would have lost the
opportunity to recover their legal costs and interest that should not
be allowed to happen."
[10]
The Applicants prayed for the orders sought in the notice of motion.
[11]
The application was opposed and in answer to the abovementioned
allegations the First Respondent
raised the point in limine
concerning urgency. The First Respondent submitted that urgency was a
procedural issue, allowing a Court
to dispense with the forms and
services provided for in the Uniform Rules of Court. It was for the
Applicants to show the circumstances,
that rendered the matter urgent
and the absence of substantial redress, if the matter was not heard
as a matter of urgency. This
was not the equivalent of irreparable
harm required, before granting interim relief, but something less.
[12]
The First Respondent noted that the application was based on two
separate causes of action, one
for payment of interest and the second
for payment of legal fees. In addressing urgency in the founding
affidavit, the Applicants
only relied on the alleged non-payment of
legal fees and did not address the first course of action, being the
non-payment of interest
on which the Applicants were silent.
[13]
The First Respondent indicated that commercial urgency did not apply
in this matter. The Applicants
were aware from 17 September 2024 that
their claim for costs had not materialised as sought. They waited
until 27 September 2024
when they wrote a letter of demand to the
First Respondent and threatened to set this matter down. The First
Respondent denied
that there was any agreement between the parties
entitling the Applicants to approach the Court on an urgent basis for
the nonpayment
of interest or the legal costs as alleged.
Moreover, even if such an agreement existed, it would not bind the
Court in the exercise
of its discretion and that the application was
not urgent.
[14]
The First Respondent indicated that the threat by the instructing
attorney to withdraw as attorney
of record in respect of all seven
matters, wherein they act on behalf of the Applicants was not a
ground of urgency, and the instruction
by the Applicants to the
attorney, to pursue the balance of the funds, from the First
Respondent on an urgent basis, also did not
justify urgency.
[15]
The First Respondent argued that the Applicants failed to provide any
reason why they would not
be afforded substantial redress at a
hearing in due course in respect of these claims. It was based on
this aspect that the First
Respondent prayed that the application be
struck from the roll with costs, due to lack of urgency.
[16]
On the main issues the First Respondent indicated, that the
Applicants believed that they were
entitled to interest, in terms of
the Common Law. The claim for indemnification, for the Applicant's
claim for interest on the
capital sum of R2 000 000,00 was prohibited
by
section 56(2)(a)
of the
Legal Practice Act 28 of 2014
, which
determined payment of any claims from this Fund. The Applicants did
not allege that they have earned interest on the capital
sum which
was given in trust to Van der Berg or that the First Respondent in
its discretion, had decided to pay interest to the
Applicants.
Therefore, the Applicants were not entitled to the relief sought.
[17]
In respect of the legal fees, the First Respondent indicated that the
claim for indemnification,
for the Applicant's legal costs for
excussing Van der Berg, and the claim for the payment of the sum of
R1 098 909,82 were subject
to the discretion of the First Respondent
as provided for in section79(2) of the
Legal Practice Act 28 of 2014
.
The Applicants failed to provide any grounds for payment of the sum
of R1 098 909,82 especially as the First Respondent, had made
a
discretionary payment of an amount of R141 257,13.
[18]
The First Respondent highlighted that it was common cause that the
Applicant's attorney sent
three taxed bills of costs to the First
Respondent on 15 August 2024. The First Respondent paid the bill
submitted in respect of
the sequestration of Van der Berg. It did not
pay the other two bills for the very reason that the First Respondent
disputed that
the costs claimed in these two bills relate to Van der
Bergs excussion. These two bills were not attached to the founding
affidavit,
moreover it was impossible to determine from these two
bills, that they were for the excussion of Van der Berg. The amounts
claimed
on these two bills were disputed as being relevant for the
excussion of Van der Berg. If the Applicants sought to persist in
respect
of these two claims they were welcome to institute Summons
for these amounts.
[19]
The First Respondent indicated that this was an abuse of the Urgent
Court roll and that the matter
be struck off with costs. On the
merits of the claim in respect to interest and costs, there was a
dispute concerning the amounts
and the Applicants would not be
successful in respect of the merits. The First Respondent prayed that
the application due to lack
of urgency, be struck from the roll with
costs, alternatively it be dismissed with costs.
[20]
In reply the Applicants indicated that there was an agreement that
the matter could be set down,
on a future date, on the Urgent Court
roll, for the issues to be ventilated between the parties. Inasmuch
as it was a discretion
of the Court, both parties could have jointly
approached the Court on the basis that they were in agreement, that
the matter was
urgent, and for the Court to then make a
determination. The Applicants indicated that they had made out a case
for urgency, both
in respect of interest and legal costs, reliant on
the agreement between the two parties as well as independently of the
agreement.
[21]
The Applicants denied that the delay of 10 days was unreasonable or
that the threat of the Applicant's
attorney to withdraw as attorney
was not a ground of urgency. The application was brought as soon as
reasonably possible, and the
Applicants denied that they would obtain
substantial redress at a hearing in due course. The Applicants sought
the Court to grant
the application as prayed.
Issues
[22]
The following issues were identified to be adjudicated on by this
Court;
[22.1] The first issue to
be determined was whether this matter was an urgent matter where the
provisions of Rule 6(12) of the Uniform
Rules of Court applied.
[22.2] The issue of
interest on the amount of R2 000 000,00 as claimed by the Applicants.
[22.3] The issue of the
amount of R1 098 909,82 being the outstanding two taxed Bills of
Cost, being sought to be paid by the First
Respondent.
The
Relevant Law and Applicability to the Issues
[23]
For an Applicant to succeed on any grounds of urgency the Applicant
needs to show that this was
not self-created urgency and that the
Applicant would not be afforded substantial redress, if the matter
was to be heard in due
course.
[24]
The law on urgency is abundantly clear. Urgent applications must be
brought in accordance with
the provisions of rule 6(12) of the
Uniform Rules of Court ("The Rules"), with due regard to
the guidelines set out in
cases such as
Die
Republikeinse Publikasies (Edms) Bpk vs Afrikaanse Pers Publikasies
(Edms) Bpk
[1]
as well
as a well-known case of Luna Meubelvervaardigers (Edms) Bpk v Makin
and Another
[2]
,
and further Sikwe vs SA Mutual Fire and General Insurance.
[3]
Before a
Court
makes a finding on the merits of an urgent application, the Court
must first consider whether the application is indeed so
urgent that
it must be dealt with on the Urgent Court roll.
[25]
The rule has a two-step process to be present before urgency can
properly be founded, namely; firstly,
the urgency should not be
self-created and secondly, the applicant must provide reasons why
substantial relief cannot be achieved
in due course.
[26]
The application is re-enrolled on proper notice and compliance. In
each and every matter that
is brought on urgent basis, the reasons
for urgency must be clearly and concisely set out in the founding
affidavit and it must
be clear that urgency was not self-created.
[27]
The principle set out in a case of
East
Rock Trading 7 (Pty) Limited and Another v Eagle Valley Granite (Pty)
Limited and others
[4]
in which it was held:-
"The import
thereof is that the procedure set out in Rule 6(12) is not there for
the taking
. An Applicant has to set forth explicitly the
circumstances which he avers render the matter urgent. More
importantly, the
Applicant must state the
reasons why he
claims that he cannot be afforded substantial reddress at a hearing
in due course
. The question of whether a matter is
sufficiently urgent to be enrolled and heard as an urgent application
is
underpinned by the issue of absence of substantial
redress
in the application in due course. The rules allow
the Court to come to the assistance of a litigant because if the
latter, were
to wait for the normal course laid down by the rules, it
will not obtain substantial redress.
It is important to
note that the rules require absence of substantial redress. This is
not equivalent to irreparable harm
that is required, before
the granting of an interim relief It is something less. He may still
obtain redress in an application
in due course, but it may not be
substantial. Whether an Applicant will not be able to obtain
substantial redress in an application
in due course, will be
determined by the facts of each case. An Applicant must make
out his case in this regard."
[28]
The High Court, Pretoria, in
Dynamic
Sisters Trading (Pty) Limited and Another v Nedbank Limited
[5]
stressed the importance of providing viable reasons for dispensing
with the formalities in application proceedings, when instituting
an
urgent application, as set out in Rule 6(12) of the Uniform Court
Rules.
[29]
The Applicants referred the Court to the case of Avis Southern Africa
(Pty)ltd v David Porteous
[6]
where the Court noted, "
that
there is no category of proceedings that is intrinsically urgent,
that crippling commercial loss was likely to be urgent in
the context
of commercial matters
".
The Applicants highlighted that commercial interests are equally
worthy of protection to justify reliance on Rule 6(12)
and that this
matter was more than protecting the Applicant's financial interests.
The Applicants motivate that they would not
be able to obtain redress
at a hearing in due course, as it will be too late due to the threat
of sequestration by the Applicant's
attorney. This would also
prejudice the Applicant's children, to seek redress against the First
Respondent for the abovementioned
claims.
[30]
The Applicants made specific reference to the agreement that existed
between the parties that
the matter could be set down in future, on
the Urgent roll for ventilation flowing from the second Urgent
Application. This Court
notes that the second Urgent Application was
in December 2023. The Applicants indicated that Judgment could have
been granted then,
on the amended papers for the costs and interest,
but they trusted the First Respondent to follow through with the
undertakings.
[31]
The Court had regard to the following concerning attending to a
matter on the basis of urgency
and considered the following;
[31.1] The prejudice that
the Applicant may suffer by having to wait for a hearing in the
ordinary course
[31.2] The prejudice that
other litigants might suffer if the application were to be given
preference.
[31.3] The prejudice that
the Respondents might suffer on account of the abridgement of the
prescribed terms and an early hearing
of the matter.
[32]
The First Respondent denied any agreement concerning the matter being
reenrolled on an urgent
basis and maintained that the Applicants
had not made out a case for urgency. The First Respondent argued that
the application
was an abuse of the Court process, indicating that
the Applicants did have redress, in the normal course of proceedings
and the
threat of possible sequestration could never warrant urgency.
The First Respondent indicated that the Applicants received payment
and had means to attend to their attorney's fees from the funds
received.
Evaluation
[33]
As highlighted earlier the Applicants were required to show this
Court that the matter was urgent
and needed immediate attention of
this Court. In support of same they relied on an agreement between
the parties, that they could
approach the Court on the supplemented
papers, on an urgent basis. It is interesting to note this agreement
stemmed, from the removal
of the second urgent application in
December 2023. The Applicants seek this Court to accept, that based
on the agreement, they
had a right to access the Urgent Court, almost
a year later. Such an arrangement is untenable and must be stopped,
before it becomes
a trend amongst practitioners, to have their cases
attended to, outside of the normal course, on account of an agreement
that the
matter is urgent. Rule 6(12) of the Uniform Rules of Court,
the Courts Practise Directives and the various case law have settled
the issue on urgency. This Court is not bound by an agreement of that
nature and same does not entitle an urgent hearing on account
of this
agreement.
[34]
When considering the other grounds of urgency, in respect of the
potential sequestration and
or commercial urgency, it must be noted
that the Applicants have been aware, as far back as December 2023,
when the second urgent
application was sought, that their
negotiations with the First Respondent, was not straight forward and
capable of being settled,
without having to approach the Court a
second time, and then only getting payment in respect of the R2 000
000.
[35]
On the 27 September 2024, the Applicants having received the amount
of R141 257,13 should
have appreciated that the amount sought,
as contained in the claims submitted, differed materially from the
amount paid, but still
they delayed till the launching of the third
urgent application. They elected to negotiate further with the First
Respondent rather
than instituting proceedings. It is appreciated
that the Applicants fear a potential sequestration however, that in
itself cannot
justify needing to approach the Court on an urgent
basis, to be afforded preference of hearing, whilst the Applicants
have failed
to motivate why they would not be afforded substantial
redress, at a hearing in due course and why they failed to act prior
this
urgent application.
[36]
This Court considered what was highlighted in the case of
Dynamic
Sisters Trading (Pty) Limited and Another v Nedbank Limited
,
[7]
that the need to consistently refuse urgent applications, in cases
where the urgency relied upon is self-created.
"Consistency
is important in this context as it informs the public and legal
practitioners that Rules of Court and Practice
Directives (such as
the actual need for urgency as prescribed by rule 6(12)) should never
be ignored."
The Court concluded that the matter was not urgent and struck it from
the roll.
[37]
The Applicants have not made out a case for approaching the Court on
an urgent basis for protection
and relief, neither on the basis of
agreement or any other reason. Commercial urgency is a very real
circumstance when considering
urgency, but it is as highlighted in
East Rock Traders not just there, for the taking.
[38]
This Court appreciates the frustration being experienced by the
Applicants in recovering their
funds from the First Respondent, but
this cannot motivate bypassing the other matters that have been
waiting to be entertained
under the guise of sudden emergency,
financial or otherwise.
[39]
Costs
[40]
The Applicants sought punitive costs on account of the conduct of the
Respondent and requested
the Court to mark its disapproval by
granting an order of costs on an attorney and client scale.
[41]
The First Respondent sought the matter be struck off roll for lack of
urgency alternatively dismissed
with costs. This Court notes that
costs follow the successful party and is in the discretion of the
Court, however due to the issue
between the parties it would be
prudent at this stage to order that same is reserved to be
adjudicated at the relevant time when
the matter is being
adjudicated.
Order
[42]
In the result I make the following order;
[42.1] The Application is
struck off the roll due to lack of urgency.
[42.2] The order of costs
is reserved.
KL
PILLAY AJ
ACTING
JUDGE OF THE HIGH COURT OF
SOUTH
AFRICA, LIMPOPO DIVISION,
POLOKWANE
APPEARANCES
FOR
THE APPLICANT : Adv RA Solomon SC and
Adv Gumbi
INSTRUCTED
BY
: Micheal Raphela Attorneys
FOR
THE RESPONDENT : Adv T P Kruger SC
INSTRUCTED
BY
: Nentswuni Attorneys
DATE
OF HEARING : 15
October 2024
DATE
OF JUDGEMENT : 13 November 2024
[1]
1972(1) SA 773 (A) at para 782A - G
[2]
1977(4) SA 135 (W),
[3]
1977 (3) SA 438
(W) at 440G - 441A.
[4]
[2012JJOL28244(GSJ)at paragraph 6 and 7
[5]
[2023] ZAGPPHC 709 (21 August 2023)
[6]
2023/0817898 see paragraph 6
[7]
[2023] ZAGPPHC 709 (21 August 2023)