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[2015] ZAWCHC 57
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Hollard Insurance Company Ltd v SA Coetzee and Others (24120/2011) [2015] ZAWCHC 57 (6 May 2015)
REPUBLIC OF SOUTH ARICA
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE HIGH
COURT, CAPE TOWN)
Case No: 24120/2011
DATE: 06 MAY 2015
In the matter between:
HOLLARD INSURANCE COMPANY
LTD
............................................................................
Plaintiff
And
SA
COETZEE
.....................................................................................................................
1st
Defendant
MB
BEGINGSEL
.............................................................................................................
2nd
Defendant
HM
SANGIORGIO
...........................................................................................................
3rd
Defendant
JUDGMENT
DELIVERED ON 06 MAY 2015
RILEY, AJ
[1] The applicant, who is the second
defendant in the main application, has applied for an order in terms
of Rule 33(4) for the
separation of certain of the issues which are
in dispute in an action instituted against himself and the two other
defendants by
Hollard Insurance, (the plaintiff).
Background facts and circumstances
[2] It is common cause that on or about
the 17th April 2003 Timber Tech Holdings (Pty) Ltd was placed in
liquidation and that the
three defendants were the duly appointed
joint liquidators of Timber Tech Holdings (Pty) Ltd in liquidation on
3 February 2004.
[3] According to the particulars of
claim, plaintiff alleges that first, second and third defendants
bound themselves jointly and
severally to pay the Master such amount,
up to a maximum of ten million rand (R10 million) as the Master might
claim from them,
in respect of any loss or damage that might be
suffered by the company in liquidation, due or by reason of their
failure to perform
their functions properly. The relevant
undertakings upon which the plaintiff relies are annexed to the
particulars of claim as
annexures “POC 1” and “POC
2”.
[4] Plaintiff further alleges that it
was the intention of the defendant’s as well as the Master that
the liability of the
defendant’s would be jointly and
severally.
[5] According to the particulars of
claim it is further alleged that the defendants represented by their
respective insurance brokers
thereafter called upon plaintiff to bind
itself as surety and co-principal debtor to the Master for the due
and proper performance
of their duties and obligations as
liquidators.
[6] On 24 April 2003 the plaintiff
bound itself by way of a written deed of suretyship. It is common
cause that during October
2004 to August 2007 the first defendant
misappropriated amounts totaling R3 447 109-09 which belonged to the
company in liquidation.
[7] As the result of the conduct of
first defendant the Master addressed a demand to the plaintiff
calling upon it to make good
the loss suffered. Plaintiff complied
with the demand and on 1 August 2011 it paid to the Master the sum of
R3 447 109-09.
[8] On 19 November 2012 default
judgment was granted against the first defendant in favour of the
plaintiff for payment of the amount
of R3 447 109-09 and interest
thereon.
[9] In terms of “POC 2”,
the applicant and the third defendant undertook an bound themselves
‘jointly and severally’
should they be appointed as
provisional liquidators and or liquidators of Timber Tech Holdings
(Pty) Ltd, to pay to the Master
on demand an amount of R10 milliion
as the Master may claim ‘in respect of any loss or damage as
may be suffered by the said
estate or by any person by reason of the
fact that I /we failed to perform properly my/our functions in the
above capacities or
because of any maladministration on my/our part’.
The underlying purpose of Rule 33(4)
[10] It is necessary to consider the
underlying purpose of Rule 33(4) and to highlight the applicable
principles. Rule 33(4) provides
that:
‘If, in any pending action, it
appears to the court mero motu that there is a question of law or
fact which may conveniently
be decided either before any evidence is
led or separately from any other question, the court may make an
order directing the disposal
of such question in such manner as it
may deem fit and may order that all further proceedings be stayed
until such question has
been disposed of, and the court shall on the
application of any party make such order unless it appears that the
questions cannot
conveniently be decided separately’.
[11] In Denel (EDMS) Bpk v Vorster
2004(4) SA 481 (SCA) at para 3 the SCA reiterated the trite principle
that the underlying purpose
of Rule 33(4) is to entitle a court to
try issues separately in appropriate circumstances and is aimed at
facilitating the convenient
and expeditious disposal of litigation.
The court however cautioned, and correctly so, that it should not be
assumed that, that
result is always achieved by separating the
issues. I agree that in ‘many cases once properly considered
the issues will
be found to be inextricably linked, even though at
first sight, they might appear to be discrete’.
[12] It is further accepted law that
the court has a wide discretion in considering a separation
application. As was held in the
Denel matter (supra), our courts
have repeatedly stated that it is ordinarily desirable and in the
interest of the expedition and
finality of litigation to have one
hearing only at which all issues are dealt with so that the court, at
the conclusion of the
case may dispose of the entire matter. A
consideration of the authorities show that the applicant in a
separation application
must demonstrate convenience and place
sufficient information before the court to enable it to exercise its
discretion in a proper
and meaningful way. See Internatio (Pty) Ltd
v Lovemore Brothers Transport CC 2000(2) SA 408 (SEC) at 411 A –
B.
[13] In considering a separation
application the court must carefully and judicially exercise its
discretion so as to determine
whether the application will indeed
facilitate the proper convenient and expeditious disposal of
litigation. See Molotlegi and
Another v Mokwalase
[2010] 4 AllSA 258
(SCA) at para 20. According to the SCA ‘it is the duty of the
court to ensure that the issues to be tried are clearly circumscribed
in its order so as to avoid confusion. The ambit of terms, like the
‘merits’ and the ‘quantum’ , is often
thought
by all the parties to be self-evident at the outset of a trial, but
in my experience it is only in the simplest of cases
that the initial
consensus survives. When making rulings in terms of Rule 33(4) and
when issuing its orders, a trial court should
ensure that the issues
are circumscribed with the clarity and precision ...’ See LTC
of Delmas v Boshoff 2005(5) SA 514
(SCA) at para 29, Christalis NO v
Meyer NO (916/12) [2014] SASCA 53 (16 .04.2014) at para 8 and First
National Bank v Clear Creek
Trading 12 (Pty) Ltd and Others
(1054/2013)
[2015] ZASCA 6
(9 March 2015).
[14] The paramount consideration in
deciding a separation application is convenience. It is now accepted
law that the word ‘convenient’
in the context of Rule
33(4) include notions of ‘appropriateness’, ‘fairness’,
‘justice’, ‘good’,
‘sense’ and
‘reasonableness’, in all the circumstances of each
particular case. It follows that what is
prejudicial to one party
can hardly be convenient or reasonable to another party.
[15] It is convenient at this juncture
to refer to some of the factors which would resort under the heading
of the word ‘convenient’
as succinctly summarised in
plaintiffs heads of argument:
15.1 Whether the hearing on the
separated issues will materially shorten the proceedings: if not,
this obviously militates against
a separation. See Minister of
Agriculture v Tongaat Group Ltd
1976 (2) SA 357
(D) at 363A –
B. See also Erasmus Superior Court Practice RS 40, 2012 Rule-B1 p236
and more recent authorities cited in
support of this factor at
footnote 26 thereof.
15.2 Whether the separation may result
in a significant delay in the ultimate finalization of the matter:
such a delay is a strong
indication that the separation ought to be
refused. See Netherlands Insurance Co of SA Ltd v Simrie
1974 (4) SA
287
(C) at 289B - C (in that case, the factors that the plaintiff
had already waited a considerable period of time, and that the court
roll was congested were held to be relevant factors pointing against
the grant of a separation).
15.3 Whether there are prospects of an
appeal on the separated issues, particularly if the issue sought to
be separated out, is
highly controversial and appears to be one of
importance: if so, an appeal will only exacerbate any delay and
negate the rationale
for a separation. See Minister of Agriculture v
Tongaat Group Ltd (supra) at 363G – 364B.
15.4 Whether the number of court days
saved by the separation weighs up favourably against the delay that
may arise between the
finalization of the separated issues and the
continuation and the remainder of the proceedings: if as a result of
a separation,
the delay of the separation may render the saving in
court time less significant, the separation will not likely be
granted. See
Minister of Agriculture v Tongaat Group Ltd (supra) at
363D - G, as applied in numerous subsequent decisions.
15.5 Whether the plaintiff seeks a
separation contrary to the wishes of the defendant, yet the plaintiff
simultaneously insists
that he/she enjoys good prospects of success:
if the plaintiff adopts this contradictory position it weakens
his/her prospects
of obtaining a separation of issues. See Sharp v
Victoria West Municipality
1979 (3) SA 510
(NC) at 512C – D.
15.6 Whether the separated issues and
the non-separated issues are linked or discrete: if after careful
consideration of the pleadings,
the separated and non-separated
issues are found to be linked, even though at first sight they might
appear to be discrete, it
will be undesirable to separate the issues
and to hear the trial on such a piecemeal basis. See Denel (Edms)
Bpk v Vorster (SCA)
(supra) at para 3.
15.7 Whether the evidence required to
prove any of the separated issues on the merits may also be required
to be led when it comes
to proving the non-separated issues (i.e
witnesses leading evidence twice on the same facts: if so, a court
will not grant a separation
because it will result in the lengthening
of the trial, the wasting of costs, potential conflicting findings on
facts and on credibility
of witnesses, and it will also hinder the
opposing party in cross-examination. See Internatio (Pty) Ltd v
Lovemore Brothers Transport
CC (supra) at 411 G – I.
15.8 In relation to the latter two
factors – whether the separated issues and the non-separated
issues are linked or overlap,
and whether witnesses will be led and
cross-examination on more than one occasion on the same facts –
there is much recent
Supreme Court of Appeal authority for the
proposition that these are weighty considerations against the
granting of a separation
order. Furthermore, whilst, since the
amendment of the rule, there are some provincial authority advocating
the desirability of
separating issues the Supreme Court of Appeal has
more recently on several occasions cautioned against the wisdom of
separations,
because at the time that the application is made, it is
particularly difficult for a judge to properly assess whether issues
are
inextricably linked.
[16] Mr Eloff who was assisted by Mr
Van Eeden for the plaintiff / respondent, has in my view correctly
submitted that the decisions
of Denel (supra) at para 3, Privest
Employee Solutions (Pty) Ltd v Vital Distribution Solutions (Pty) Ltd
2005(5) SA 276 (SCA)
at para 26 -27, LTC of Delmas v Boshoff 2005(5)
SA 514 (SCA) at para 29, Consolidated News Agencies (Pty) Ltd (in
liquidation)
v Mobile Telephone Networks (Pty) Limited and Another
2010(3) SA 382 (SCA) para 90 Molotlegi and Another v Mokwalase
(supra) at
para 20, Absa Bank Ltd v Bernert 2011(3) SA 74 (SCA)
para 21, SA Transport and Allied Workers Union v Garvis and Others
2011(6)
SA 382 (SCA) at para 45 and Christelis NO v Meyer NO (supra)
at paragraph 8, is clear authority that the SCA has now adopted a
somewhat different approach with regard to separation applications in
that the following principles clearly emerge:
1. caution is expressed against
assuming the attractiveness of separating issues;
2. the expeditious disposal of
litigation is often best served, by ventilating all the issues at one
hearing;
3. there will be some case where a
separation would be convenient; especially where there are no real
prospects of overlapping issues
or evidence.
Discussion
[17] It was contended by Mr Oosthuizen,
on behalf of the second defendant / applicant, that whilst “POC
2” clearly constitutes
an acknowledgment by applicant and the
third defendant, that if appointed as liquidators, that they would
between them be jointly
and severally liable to the Master for an
amount of ten million rand (R10 million) should any loss be suffered
from their failure
to properly perform their functions, there is
nothing in annexure “POC 2” indicating that applicant and
third defendant
also intended to bind themselves either jointly and
severally or in any other fashion for any losses which might be
caused by maladministration
or dereliction of duty on the part of
first defendant.
[18] According to Mr Oosthuizen
annexure “POC 2” contains no indication that the
appointment of first defendant as co-liquidator
was contemplated. He
argued that first defendant signed a separate undertaking binding
himself to the Master i.e. “POC
1” and that “POC 1”
makes no reference to the applicant or third defendant or any
intention to impose a joint
and several liability on them.
[19] That although applicant
acknowledges entering into the undertaking contained in “POC
2”, he denies that he or third
defendant, by giving the
undertaking contained in “POC 2”, intended to bind
themselves for the obligations of the first
defendant as contained in
“POC1”..
[20] Applicant further avers that
plaintiff’s claim against them is based upon a ‘guarantee
policy’ covering any
loss suffered by Timber Tech Holdings
(Pty) Ltd as a result of any defaulting performance on the part of
the applicant in the
performance of his duties as liquidator.
[21] Placing reliance on inter alia
Momentum Group Ltd v Fire Control Systems (Cape) CC an unreported
case of this division (case
no 8278/03) Mr Oosthuizen contended that
as a matter of law, damages flowing from the risk insured against
cannot be claimed from
an insured party.
[22] In his view, these disputes are
integral to the determination of the main action and unless plaintiff
can establish that all
three parties undertook to be jointly and
severally liable for any loss caused by any one of them and can
establish that applicant
and third defendant agreed to their being
jointly and severally liable for any loss occasioned by first
defendant, plaintiff cannot
succeed with his action.
[23] In his view, whatever the nature
of the guarantee or suretyship undertaking given by applicant and
third defendant as contained
in “POC 3” to the
Particulars of Claim, it cannot impose joint and several liability on
the two defendants. If this
is so, then on his interpretation,
whether “POC 2” is interpreted to be a contract of
suretyship or a guarantee, then
the obligation undertaken by the
surety or guarantee, is of an accessory nature, and can therefore not
impose obligations diferring
from the principal debt.
[24] Accordingly he submitted on behalf
of the applicant that if the plaintiff does not succeed in
establishing joint and several
liability and in particular the
allegation in para 6.4 of the Particulars of Claim, then the issues
flowing from the averments
set out in paragraphs 9 to 13 of the
particulars of claim do not arise, as between plaintiff and applicant
and third defendant,
and no evidence need be led on such issues. He
submitted further that if it is correct that the legal consequences
of plaintiff
issuing a guarantee policy covering the loss which has
arisen, it will be unnecessary for the court to consider the issue
raised
in paragraphs 9 to 13.
[25] Consequently he submitted that the
issues raised in paragraph 2 of the second defendant’s amended
plea and in paragraph
2.4 to 2.7 of the third defendant’s
amended plea be dealt with at the outset of the trial, with all other
issues standing
over for later determination.
[26] On a reading of the pleadings, and
in particular paragraph 2 of second defendant’s amended plea,
it seems to me that
applicant appears to admit that the defendant’s
entered into the undertakings contained in annexures “POC 1”
and “POC 2”. Mr Eloff who was assisted by Mr Van Eeden
for the plaintiff, contended that this admission did not make
sense
as it appears that what second defendant is in fact admitting is that
the defendants entered into undertakings and bonds
of security (i.e.
“POC 1” and “POC 2”).
[27] On the plaintiff’s version
it will be obliged, at the hearing of the matter relating to the
separated issue, to adduce
evidence relating to the interpretation of
annexures “POC 1” and “POC 2” to the effect
that each defendant
was aware that he/she was appointed initially as
joint provisional liquidator and thereafter final liquidator by the
Master before
entering into and requiring their broker on their
behalf, to provide the Master with undertakings and bonds of
security as contained
in “POC 1” and “POC 2”
i.e. the undertakings as well as the suretyship and guarantee to be
provided at
their request by plaintiff in terms of annexure “POC
3”.
[28] Plaintiff further avers that it
also intends to adduce evidence of the broker instructed by the
second and third defendants
and to produce documentary evidence which
will illustrate that applicant, third defendant and her attorney of
record, at all material
times considered them bound jointly and
severally with the first defendant in terms of the undertaking and
guarantee provided by
or on their behalf to the Master in the estate.
[29] To illustrate the point Mr Eloff
made reference to a letter dated 19 April 2005 by applicant to first
defendant (which plaintiff
intends to present as evidence at the
trial of the matter), in which he expressly stated that “Is
there anything which has
happened in this estate which we should know
off (sic) as we are jointly and severally liable in the estate (my
emphasis).
[30] Further correspondence to be
relied on by plaintiff which appears to point to the fact that third
defendants’ attorney
of record accepted that all the defendants
were jointly and severally liable, is a letter dated 27 August 2010
addressed to Astra
Brokers by third defendant’s attorney of
record which reads as follows:
“My perusal of the Suretyship
given by Hollard Insurance Company (“Hollard”) to the
Master, and the respective
Undertakings and Bonds of Security given
in the one instance by Sarel Coetzee alone, and in the other on a
joint and several basis
by Mark Beginsel and Hanne Sangiorgio, does
not alter my view that if any of the Liquidators misbehaves, this
would entitle the
Master to exercise his rights against any or all of
the Liquidators under the Undertakings and Bonds of Security…
The fact
is that the Liquidators are bound jointly and severally to
the Master under their respective Undertakings and Bonds of Security
dated 24 April 2003… The Suretyship held by Hollard is a
separate legal act and undertaking. If Hollard has to pay the
Master
in its capacity as Surety, then it has an automatic common-law right
of recourse against the Liquidators…’
[31] Other correspondence which the
plaintiff intends to adduce at the hearing of any separated issues
will include but not be limited
to a letter by first defendant to the
applicant advising him of the ‘fee split’, the
arrangement that applicant would
provide the Master with security as
required by the estate and the subsequent conduct of the parties
which will illustrate that
applicant and the third respondent would
be bound jointly and severally with the first defendants in terms of
the undertakings
provided by them to the Master in the Estate.
[32] According to the plaintiff it
further intends to adduce evidence, at the separation of issues,
trial of the practice at the
Masters office which gave rise to the
issuing of the documents i.e. “POC 1” and “POC 2”
as read with “POC
3” and the manner in which annexures
“POC 1” and “POC 2” as well as “POC 3”
came to be
issued and the policy and attitude of the Master when
joint trustees are appointed an estate.
[33] Accordingly it was contended on
behalf of the plaintiff that the instructions given by the applicant
and third defendant to
their broker to issue the documents and how
they were given to the Master are relevant factual material in
relation to the interpretation
of the undertakings as read with “POC
3”. According to Mr Eloff, evidence of this nature is required
so as to put
into perspective how the documents such as the
undertakings annexures “POC 1” and “POC 2” to
the particulars
of claim must be interpreted.
[34] On the pleading it is clear that
the plaintiff has never regarded “POC 1” and “POC
2” as suretyships,
nor does the plaintiff contend that they are
suretyships. According to the plaintiff, “POC 1” and
“POC 2”
are principal obligations and it was never the
intention that they were to bind the signatories thereto as
accessories to a principal
debt. In this regard, plaintiff clearly
intends to adduce evidence in relation to the factual matrix which
existed at the time
that the undertakings i.e. “POC 1”
and “POC 2” as read with “POC 3” were signed,
issued and
provided to the Master by the defendants’ brokers at
the request of the defendants.
[35] On the face of it “POC 1”
and “POC 2” appear to contain the main obligations
undertaken by the defendants.
There is accordingly merit in Mr
Eloff’s submission that the only question to be decided in
relation to the interpretation
of “POC 2” and “POC2”
is whether the said documents can be interpreted to mean what is set
out in paragraphs
6.4 and 6.4(A) of plaintiff’s particulars of
claim as amended.
[36] A further factor to consider is
that there is nothing on the pleadings or the evidence before me to
indicate that any of the
defendants had requested their respective
brokers to record in any way on the undertakings that they would only
be liable for his/her
own default, or that he or she did not accept
joint and several liability with the others of them for any loss or
damages as may
be suffered by the estate as set out in each
undertaking.
[37] In regard to the contention that
applicant is the insured under the guarantee policy and that
plaintiff is therefore not entitled
in law to recover any amount paid
by the plaintiff in terms of the guarantee policy, it seem to me that
there is merit in the submissions
made by Mr Eloff on behalf of the
plaintiff that:
1. plaintiff is not a party to the
undertakings contained in annexures “POC 1” and “POC
2” and that the
undertakings cannot be construed in their terms
as guarantee policies;
2. in order for the applicant to rely
on the defence that “POC 1” and “POC 2”
constitute guarantee policies,
they would have to prove that a
premium was paid for the cover concerned; no such allegation is made
in the amended pleas;
3. even if applicant was to allege that
the document i.e. “POC 3” constitutes a guarantee policy
that would not be sustainable
as plaintiff issued annexure “POC
3” under a guarantee policy and one premium was paid annually
in respect of such
cover;
4. such premium was not paid by the
defendants personally but was paid by them as a cost of the
administration out of the assets
of the estate;
5. only one guarantee in respect of the
suretyship “POC 3” was requested to be provided by all
the defendants to the
Master and there was never any request to
defendant’s brokers to issue a separate guarantee or suretyship
on behalf of each
of the defendants;
6. plaintiff issued the suretyship in
the form of annexure “POC 3” under a guarantee policy and
now seeks to recover
the payment it made from the applicant and the
third defendant as the principal debtors.
7. In any event, the only person(s) who
could be insured under a guarantee policy would be the Master on
behalf of the creditors
in the estate.
[38] I agree with the arguments by Mr
Eloff that the trial court would be best placed and in a position to
make a finding as to
the real issues between the parties i.e. whether
the principal debt, which was discharged by the plaintiff when it
paid the Master,
is that of the first defendant only, or also that of
the applicant and third defendant. In my view the proposed
separation will
not relieve the trial court of the necessity to
determine the issues raised in paragraphs 9.2 and 9.3 of the
particulars of claim
nor in respect of the allegations contained in
paragraphs 13 to 13.5.8 thereof in the event of the documents not
being regarded
as suretyships.
[39] I am further satisfied that in
relation to the determination of the alleged failure of the applicant
and third defendant to
prevent further loss to the estate, the
evidence of the officials at the Master’s office may be
required, and that on plaintiffs
case such evidence will also be
required with regard to the issues sought to be separated and the
background circumstances and
practice with regard to the issuing of
annexures “POC 1” and “POC 2” as read with
“POC 3” by
or on behalf of the defendants.
[40] When regard is had to the evidence
and the issues involved in the present matter, then it seems to me
that they are not as
straight forward and or clear cut as Mr
Oosthuizen has made them out to be. I must accordingly caution
myself that in exercising
my judicial discretion that I am guided by
the principles outlined in the authorities hereinbefore referred to
and that I should
be particularly cautious not to adopt an over
simplistic approach. This matter must clearly be distinguished from
what we know
as your normal run of the mill, Road Accident Fund
matters where issues relating to the merits and quantum can be dealt
with separately
very easily.
[41] I am not persuaded by Mr
Oosthuizen’s contention that much of the evidence which
plaintiff intends to lead and traverse
in cross-examination of the
defendant’s witnesses in the interpretation of the
documentation would be inadmissible before
the eventual trial court.
It is accepted law that issues of admissibility should be determined
by the trial court and the court
hearing a separation of issues
application cannot, and at the least, ought not to make binding
decisions on the admissibility of
the evidence of witnesses that are
called at the separation application.
[42] In my view evidence of relevant
and admissible context, including the circumstances in which the
documents referred to hereinbefore
came into being, is crucial to the
determination of the matter as a whole. First National Bank v Clear
Creek Trading 12 (Pty)
Ltd and Another (supra) the SCA made it clear
that the circumstances as to how a document came to take the form it
did seems to
be highly relevant particularly in circumstances where
what is signed by the parties appears to be a standard form document.
[43] I further agree with the approach
that evidence of the state of knowledge of the defendants at the time
when they were appointed
as joint liquidators and when they entered
into the undertakings, will certainly be relevant and admissible and
constitutes the
type of evidence which a trial court would require in
order to interpret the documents in the present matter. See Durant v
Fedsure
General Insurance Ltd 2004(3) SA 350 SCA at 359 to 360. This
approach is endorsed in Natal joint Municipal Pension Fund v Endumeni
Municipality 2012(4) SA 593 at para 18 where Wallis JA stated at para
18 ‘… Interpretation is the process of attributing
meaning to the words used in a document, be it legislation, some
other statutory instrument, or contract, having regard to the
context
provided by reading the particular provision or provisions in the
light of the document as a whole and the circumstances
attendant upon
its coming into existence. Whatever the nature of the document,
consideration must be given to the language used
in the light of the
ordinary rules of grammar and syntax; the context in which the
provision appears; the apparent purpose to which
it is directed and
the material known to those responsible for its production …
The ‘inevitable point of departure
is the language of the
provision itself’, read in the context and having regard to the
purpose of the provision and the background
and production of the
document.’ In Comwezi Security Services (Pty) Ltd and Mohamed
Shaffie Mowzer NO v Cape Empowerment
Trust Ltd, Case number 759/2011,
an unreported judgment of the SCA, Wallis JA at para 14 – 15
held that ‘…there
is no reason not to look at the
conduct of the parties in implementing the agreement where it is
clear that they have both taken
the same approach to its
implementation, and hence the meaning of the provision in dispute,
their conduct provides clear evidence
of how reasonable business
people situated as they were and knowing what they knew, would
construe the disputed provision….’
[44] It accordingly follows that
plaintiff would also be entitled to adduce the evidence of the broker
engaged by applicant and
third defendant on the issue of their joint
and several liability with first defendant and in relation to the
practice followed
by the Master in regard to the background
circumstances and facts known to the parties at the time of the
genesis of the documents
in question, the practice in the industry
and the manner in which defendants conducted themselves subsequently.
[45] The contention by Mr Oosthuizen,
that plaintiffs case stands or falls on the interpretation of the
documents will depend largely
on legal argument, cannot therefore in
the circumstances of this case be correct. Such an approach is in my
view an over simplification
of the issues and more so would result in
what Mr Eloff described as an impermissible constraint on the
procedural right of a litigant
to adduce evidence that will bear on
the relevant factual matrix and the contextual setting relating to
the genesis of the documents
concerned.
[46] In any event, it is trite law that
a plaintiff is not limited by its pleadings regarding adducing
evidence in relation to the
interpretation of the documents upon
which it relies.
[47] On a conspectus of the evidence
and the pleadings I am accordingly not persuaded that an
interpretation of the legal effect
of “POC 1” and “POC
2” together with “POC 3” in favour of the applicant
will constitute the
end of the matter against applicant and third
defendant. I have come to this conclusion inter alia based on the
fact that according
to plaintiff’s particulars of claim it
clearly pleads under paragraph 9 to 9.4 read with paragraph 10.2 of
the particulars
of claim as amended, that the applicant and third
defendant’s purported delegation of their powers and duties to
the first
defendant, in itself constituted a failure to administer
and account properly, resulting in the plaintiff having to pay in
terms
of its suretyship and that applicant and third defendant are
accordingly liable jointly and severally to reimburse the plaintiff
for the amount so paid.
[48] In addition plaintiff also relies
on the deliberate or negligent failure of the applicant and third
defendants to comply with
their statutory duties and obligations to
ensure that funds collected on behalf of or belonging to the company
were properly dealt
with and accounted for. The argument presented
on behalf of the applicant in this regard can therefore not succeed.
[49] The situation envisaged by
applicant during the separation of issues trial will also result in
plaintiff being precluded from
adducing evidence in relation to the
guarantee policy itself and how it came about. In my view this would
result in severe prejudice
to the plaintiff which is certainly not
one of the purposes sought to be achieved by Rule 33(4).
[50] There is further a great
likelihood that if all the issues are not dealt with together at the
main trial that it may result
in what has been described by Mr Eloff
as an artificial curtailment and assessment of the evidence which
will have undesirable
consequences. See Christelis supra.
[51] In my view a determination of the
issues sought to be separated will not be dispositive of the entire
or even a substantial
part of the case. The reality is that the
proceedings will not be shortened at all. There is real likelihood
that at the conclusion
of a hearing on the issues to be dealt with at
a separation of issues trial, considering the nature and complexity
of the issues,
will result in a duplication of witnesses called. In
the event of a ruling against either of the parties it is more than
likely
that an appeal will follow and that the delay occasioned by
this will delay and negate the rationale for a separation. I am
satisfied
that the ‘separated’ and ‘none separated’
issues in this matter are inextricably linked and that it would
be
undesirable to separate the issues and to hear the trial on a
piecemeal basis. It seems to me to be inevitable that to order
a
separation of issues trial will ultimately result in a situation
where the separation will result in the lengthening of the trial,
additional wasted costs, hinder the plaintiff’s
cross-examination and conceivable result in conflicting findings on
the
facts and the credibility of witnesses. The facts and
circumstances of the matter overwhelming favour a process where all
the
issues are dealt with at one trial.
Conclusion
[52] Accordingly I am satisfied that
based on the facts and circumstances hereinbefore set out that to
separate the issues will
not result in the convenient and expeditious
disposal of the matter as envisaged by Rule 33(4). Accordingly the
application cannot
succeed.
[53] In the result I make the following
order:
The application is dismissed with
costs, including the costs of two counsel.
RILEY, AJ