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[2015] ZAWCHC 212
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Hollard Insurance Company Ltd v Coetzee and Others (24120/2011) [2015] ZAWCHC 212 (6 May 2015)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
Case
No: 24120/2011
In the matter
between:
HOLLARD INSURANCE
COMPANY
LTD
............................................................................
Plaintiff
And
SA
COETZEE
.....................................................................................................................
1
st
Defendant
MB
BEGINGSEL
..............................................................................................................
2
nd
Defendant
HM
SANGIORGIO
...........................................................................................................
3
rd
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 17
th
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