Boundary Financing Limited In re Securefin Limited v International Bank of Southern AfricaLimited and Others, Alexander v Securefin Limited and Others (16314/00) [2002] ZAGPHC 26 (11 September 2002)

NOT REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

(WITWATERSRAND LOCAL DIVISION)

JOHANNESBURG

CASE NO:16314/00

DATE:2002-09-11

In the matter between:

BOUNDARY FINANCING LIMITED IN RE

SECUREFIN LIMITED..................................................................................................Applicant

and

INTERNATIONAL BANK OF SOUTHERN AFRICA

LIMITED.......................................................................................................... First Respondent

CAMBOURNE INVESTMENTS LIMITED...................................................Second Respondent

NORMAN KLEIN AND MATTHEW PHOZA N.O.

FOR KNA INSURANCE AND INVESTMENT

BROKERS (PTY) LTD.................................................................................... Third Respondent

DAVID ALEXANDER.....................................................................................Fourth Respondent

CHARLES STRIDE......................................................................................... Fifth Respondent

DAVID ALEXANDER.....................................................................................................Applicant

SECUREFIN LIMITED..................................................................................... First Respondent

INTERNATIONAL BANK OF SOUTHERN

AFRICA LIMITED........................................................................................Second Respondent

CAMBOURNE INVESTMENTS LIMITED.......................................................Third Respondent

BROKERS (PTY) LIMITED..........................................................................Fourth Respondent

CHARLES STRIKE...........................................................................................Fifth Respondent

JUDGMENT

WILLIS, J: There are two interlocutory applications before me. The first (to which I shall hereinafter refer for the sake of convenience as "the first application") has been brought by Boundary Financing Limited, the first defendant, in what 1 shall hereinafter refer for the sake of convenience as "the main action", for a separation of issues of fact and law in terms of Uniform Rule 33(4).

The second application (to which I shall hereinafter for the sake of convenience refer as "the second application") has been brought by David Alexander, the fourth defendant in the main action, for a similar separation of issues, alternatively a postponement of the trial until the finalisation of a criminal trial against the fourth defendant and further relief.

These two applications are both opposed by Securefin Limited (the plaintiff in the main action) and KNA Insurance and Investment Brokers (Pty) Ltd (In Liquidation) (the third defendant in the main action). The third defendant has agreed to abide the decision as to the application for a postponement.

It would seem by reason of a letter which was handed to me during the course of argument that the second defendant in the main action has adopted what might be described as a luke warm attitude to both the application for separation and the alternative application for a postponement. The attitude of the second defendant is therefore largely irrelevant for the purposes of this judgment.

The counsel for all parties have agreed that these two applications should be heard together. It is common cause that the trial in the main action will deal with complex issues involving some R30 million and has been set down for hearing on 7 October 2002.

In the first application the relief sought has been cast in the following manner:

"Boundary Financing Limited (hereinafter called the applicant)

apply to the above Honourable Court for an order:-

1. In terms of Rule 33(4) of the Uniform Rules of Court that the issues of law and fact as are pleaded in paragraphs 1 to 18 of the plaintiff's amended particulars of claim be decided before and separately from any question of law and fact as may be contained in the plaintiff's particulars of claim;

2. That the court grant such order as to the further conduct of the trial as it may deem fit.

3. That all further proceedings be stayed until the issues contained in paragraphs 1 to 18 are disposed of.

4. Alternatively relief.

5. Costs of the application."

In the second application the fourth defendant in the main action has sought relief in the following form:

"Take notice that the applicant will apply for the following order:-

1. That an order be granted in terms of Rule 33(4) of the Uniform Rules of Court, that the issues of law and fact as are reflected in paragraphs 1 to 18 of plaintiff's amended particulars of claim be decided before and separately from any other question of law and fact referred to in the plaintiff's particulars of claim.

2. In the alternative to prayer 1, and if prayer 1 should not be granted, an order that all claims of plaintiff relating to fourth

defendant be postponed until finalisation of all criminal proceedings against fourth defendant.

3. In the alternative to prayers 1 and 2, and if prayers 1 and 2 should not be granted, an order that the questions of law referred to in fourth defendant's amended plea in paragraph 17.2, 20.2, 20.3, 22.2, 22.3, 22.4, 22.5, 22.6, 23.2, 23.3, 23.4, 24.2, 24.3, 24.4 and 24.5 thereof be adjudicated upon separately before the trial in respect of all remaining issues commences.

4. That any of the parties who may oppose the application be ordered to pay the costs of the application.

5. Further and alternative relief."

In paragraph 26 of the founding affidavit to the first application, Mr Jay, the attorney of record for the first defendant, says as follows: "26. I draw specific attention to the remaining portion of the letter. Therein it appears:-

26.1 that the fourth defendant is the accused in criminal proceedings;

26.2 that such criminal proceedings have not yet commenced;

26.3 that he intended exercising "his constitutional right not to testify";

26.4 that in the light thereof it was suggested by the fourth defendant's attorneys that the legal issues referred to above be raised and argued first and separately."

The letter referred to was one dated 30 July 2002 by attorneys Gerber Incorporated of Pretoria acting for and on behalf of the fourth

defendant.

Paragraph 27 of this affidavit reads as follows: "27. The fourth defendant's attorneys also considered the suggestion by the first defendant's legal advisers that the claims of the plaintiff against the first and second defendants be adjudicated separately from the claims against the fourth and fifth defendants. In the letter the attorneys of the fourth defendant made it clear that they believe the matter should be dealt with in such a fashion. 28. In addition, and more importantly, the fourth defendant advises that by virtue of the perceived prejudice arising out of an obligation to testify in civil proceedings preceding criminal proceedings, that the fourth defendant may seek a postponement of the trial." In paragraph 32 of this affidavit Mr Jay goes on to say:

"32. I further say that it is clear from the aforegoing that it will be convenient and in the interests of justice if the procedure suggested by the first defendant be adopted. In this regard I point out -

32.1 that the adjudication of the claims of the plaintiff against the first and second defendants may have the result (if the plaintiff is successful) that the two conditional claims go away;

32.2 that the first defendant has no interest whatsoever in the alleged breaches of care contained in the two conditional claims against the fourth and fifth defendants and, in particular, no interest in the monetary claim constituting the unconditional claim against the fourth and fifth defendants;

32.3 that the first defendant does not share in and does not have any interest in and to the conditional counterclaim of the second

defendant."

Mr Levy, the attorney acting for the plaintiff, in the answering affidavit filed in this application on behalf of the plaintiff, says as follows in paragraph 4:

"The evidence relating to those issues is essentially the same and the very same witnesses will be required to testify (in fact on identical matters in respective of both the issues arising in paragraphs 1 to 18 aforereferred to and the remaining paragraphs (as read with the pleas of the defendants))." Mr Nathan Kirsh, a director of Securefin, says in paragraph 15 of his affidavit which was the founding affidavit in an application to join the fourth and fifth respondents which application was not opposed by the first, second and third defendants and which is an annexure to the fourth defendant in the main action's answering affidavit to this application:

"In broad terms it is the applicant's case that Alexander (the fourth defendant) and Stride (the fifth defendant) owed a duty of care to the applicant as is set out in paragraph 19 of the amended particulars of claim annexed as 'X' to the notice of motion which duty of care arose in consequence of the facts set out in paragraph 19.2."

It is alleged in paragraph 19 of the plaintiff's conditional claims against the fourth and fifth defendants:

"19.1 At all material times hereto the fourth and fifth defendants owed a duty of care to the plaintiff to take reasonable steps to ensure that neither the second nor the third defendants:-19.1.1 misappropriated money or property of the plaintiff or to which the plaintiff was entitled; 19.1.2 acted in a manner which may cause damage or loss to the plaintiff or its property

19.2 The duty of care arose in consequence of the facts set out in paragraph 7 to 13 and 15 above." It will immediately be clear that 19.2 of the plaintiff's amended particulars of claim which relates to the plaintiff's conditional claim against the fourth and fifth defendants refers precisely to the paragraphs which both applicants wished to have adjudicated separately from the other issues.

The fourth defendant in the main action says in paragraph 13 of its answering affidavit:

"13. I am of the view that the separation which is applied for by the applicant should not and cannot be granted in this matter for the following reasons:-

13.1 During my investigations I determined that the events which transpired in the period June 1998 to November/December 1999 as to KNA which culminated in the applicant receiving the policies are all inextricably interwoven in so far as it involves Alexander and Stride, KNA and Cambourne.

1 3.2 In my view the roles of KNA, Alexander and Stride will prominently feature in Securefin's case against the applicant. In the

case against Alexander and Stride the bank officials employed by the applicant will be central witnesses.

13.3 The transfer of policies from KNA to Cambourne and its eventual presentation in securitatem debiti to applicant are all dependent on and involve the same witnesses which feature in the claims by Securefin against the other defendants.

13.4 Issues of possession/ownership of the policies and KNA's right to transfer the policies to Cambourne are inextricably linked to the rights of IBSA to have received such policies in securitatem debiti. The roles which Alexander and Stride played in KNA and Cambourne are pivotal to the alleged cession of policies in securitatem debiti.

13.5 The issues relevant to the funding of Cambourne, i.e. R5 million of share capital and the additional security of R12,5 million which are alleged to have been paid from the funds of Securefin, are not only relevant to the claims against Stride and Alexander but also to the issue of release of policies by IBSA contained in batch 2007. I am particularly interested in IBSA's claim that the policies which form part of batch 2007 was not released to batch 2007, was intended to result in the release in other policies.

13.6 Depending on the outcome of the trial numerous possibilities or permutations may occur, i.e. KNA represented by me may lay claim to policies which IBSA may hold and for which Securefin will not be able to prove its claim. Possible claims against Stride, Alexander, Cambourne and applicant will also be considered by me once judgment is granted in this matter. If the matter is dealt with piecemeal I will have to wait till finalisation of all the cases before I decide on further steps to be taken.

14. From my investigations I can therefore state that the witnesses which will feature in the case between Securefin and applicant will also be witnesses of relevance in the claims against Alexander and Stride.

15. I am of the view that a separation will result in a duplication of trials and that issues cannot conveniently be separated or adjudicated as is claimed by the applicant. Costs will not be curtailed by separating the proceedings. It will, in my view, be inflated if the separation is granted as it will result in multiple trials covering the same issues of fact, witnesses and events."

The references to Alexander in the third defendant's affidavit are reference to the fourth defendant in the main action; to Stride, the fifth defendant; to KNA, the third defendant; to Cambourne, the second defendant and to IBSA, the first defendant.

In the founding affidavit in the second application, the attorney acting for the fourth defendant says as follows in paragraph 14:

" 14. If the plaintiff succeeds with plaintiff's claim against first and second defendants, it will not be necessary for the above Honourable Court to determine the two conditional claims against fourth and fifth defendants. These claims were instituted in the event of plaintiff's claim against the first and second defendants failing."

In paragraph 15 he goes on to submit:

"15. It would therefore be convenient and would save both time and costs if the plaintiff's claim against first and second defendants be adjudicated first and separately from the other claims as if the claim is upheld the two conditional claims will fall away."

In paragraph 17 he alleges:

"17. Fourth defendant is being investigated by the National Director of Public Prosecutions for fraud. A charge sheet has not been finally formulated but the fourth defendant has been provisionally charged and is currently out on bail."

In paragraph 18 he says:

"18. The charges relate to, in the main, to the same issues which arise in the claims against the fourth defendant referred to in the particulars of claim of the plaintiff in this matter.

19. Therefore evidence which the fourth defendant will have to present to the above Honourable Court relating to the issues in the action will overlap the issues which will arise in the criminal proceedings against the fourth defendant.

20. If the fourth defendant, in order to defend himself against the plaintiff's claim, is required to give testimony in this matter about issues which will arise in the criminal matter, the fourth defendant's legal and constitutional rights will be infringed.

21. The fourth defendant's right to be protected from self-incrimination may be infringed in order to avoid a civil judgment if the fourth defendant is obliged to give testimony in this civil action. There is no doubt that the fourth defendant will be required to testify as he was involved in all the transactions referred to in the particulars of claim.

22. Furthermore, the fourth defendant will in all probability, if the fourth defendant exercises his right against self-incrimination, not be able to present the above Honourable Court with his full and complete version of the issues in this matter.

23. Therefore the proper adjudication of this matter on the merits will be prejudiced and the fourth defendant's rights in this regard will be prejudiced.

24. The fourth defendant has a constitutional right to have the dispute between the fourth defendant and the plaintiff resolved by the application of law in a fair public hearing before a court. The hearing in this matter will not be fair if the fourth defendant is precluded from presenting full and complete evidence about the facts in this matter as a result of the pending criminal matter. In the alternative and the fourth defendant in order to have a full and fair hearing in the civil action will be obliged to forego his institutional (sic) (presumably constitutional} right against self-discrimination.

25. Therefore the fourth defendant's rights in terms of section 34 of the Constitution of the Republic of South Africa will be infringed if the matter is not postponed sine die for hearing after finalisation of the criminal matter.

26. The provisional date for hearing of the criminal matter has been arranged with the Director of Public Prosecutions namely at the start of the first time of 2003.

27. The fourth defendant's precarious position in this regard is a further reason why a separation of the issues in respect of the claim of the plaintiff against first and second defendants and the other claims should be granted.

28. If the claim of the plaintiff is successful against first and second defendants, the two conditional claims against fourth and fifth defendants will not have to be adjudicated on."

The plaintiff in its answering affidavit to the second application

says:

"For reasons I have already advanced and which are set out in detail in my answering affidavit to the first defendant's application under Rule 33(4), 1 deny the contents of this paragraph."

The plaintiff essentially repeats the submissions and allegations contained in the answering affidavit in the first application in opposing the second application.

The third defendant in its answering affidavit goes considerably further and says as follows:

"7.4 Since my appointment as joint liquidator of KNA I have investigated the affairs of the KNA Group, and particularly the involvement of directors David Alexander and Charles Stride. The investigations commenced in October 2000 and is not yet completed. This is largely so as a result of the extent of the deceit of Alexander. More than R250 million was paid by Securefin Limited to KNA for the purposes of acquiring second and endowment policies on its behalf. 7.5 My investigation have unearthed grave complications and startling instances of fraud and theft by Alexander and other individuals of funds of Securefin and KNA. I can reliably state that Alexander appear to have taken monies from Securefin and KNA as he wished. He had no regard of any corporate governance and cleared treated the monies of Securefin and KNA as his own. He caused to be transferred at will millions of rands to numerous entities including Cambourne. No underlying legal justification existed for such transfers. 7.7 I am of the view that the separation which is applied for by the applicant should not and cannot be granted in this matter for the following reasons:-

7.7.1 During my investigations 1 have determined that the events which transpired in the period June 1998 to November/December 1999 as to KNA which culminated in applicant receiving the policies are all inextricably interwoven in so far as it involves Alexander and Stride, KNA and Cambourne.

7.7.2 In my view the roles of KNA, Alexander and Stride will prominently feature in Securefin's case against the applicant. In the cases against Alexander and Stride the bank officials employed by the applicant will be witnesses.

7.7.3 The transfer of policies from KNA to Cambourne and its eventual presentation in securitatem debiti to applicant are all dependent and involve the same witnesses which feature in the claims by Securefin against the other defendants.

7.7.4 Issues of possession/ownership of the policies and KNA's right to transfer the policies to Cambourne are inextricable linked to the rights of IBSA to have received such policies in securitatem debiti. The roles which Alexander and Stride played in KNA and Cambourne are pivotal to the alleged session of policies in securitatem debiti." In paragraph 7 of the amended particulars of claim of the plaintiff in the main action, it is alleged as follows: "7. At all material times -

7.1 Alexander (i.e. the fourth defendant) was the managing director of the third defendant.

7.2 Stride was a director of the third defendant and the chairman of the third defendant's Board of Directors.

8. At all material times -

8.1 Alexander through Alexander Trust was a beneficial shareholder in the second defendant;

8.2 Stride was a beneficial and registered shareholder in the second defendant.

9. On or about 27th November 1998 Alexander and Stride were appointed directors of the second defendant and Alexander in the capacity as managing director and Stride as chairman of its Board of Directors.

10. In July 1998 the plaintiff, represented by Adrian Rabet and the third defendant, represented by Alexander, entered into a written

agency agreement ("the agency agreement") in terms of which the third defendant undertook to act as the plaintiff's agent to procure the purchase of insurance policies ("the policies") in the

Republic of South Africa. A copy of the agency agreement is annexed hereto as 'A'. 11. The material terms of the agency agreement are set out below:-

11.1 From 1 March 1998 the third defendant was appointed as agent for the plaintiff in the procurement of policies;

11.2 It was recorded that the plaintiff had already provided working capital of US $6,25 million (then equating to R31,7 million) for the above purpose;

11.3 The third defendant undertook to procure the purchase of policies on behalf of the plaintiff and the registration of a security cession in favour of BHF Bank A-G (London branch);

11.4 Where any policy acquired on behalf of the plaintiff was not a fully paid up policy, the future premiums payable up to the maturity date on such policy would be determined by the third defendant and discounted to present day value;

11.5 The third defendant would pay all such amounts into a premium account held by the plaintiff at the Hatfield branch, Pretoria on Nedcor Bank Limited (Nedbank Division)."

In 11.6-11.9 the plaintiff continues to set out various of the terms and conditions which are not immediately relevant. In 11.10 it is alleged:

"11.10 Without limiting the generality of the foregoing, the third defendant agreed that it would -

11.10.1 at all times during the term of the agreement act reasonably, honestly and in good faith;

11.10.2 perform the obligations arising out of the agreement diligently and with reasonable care;

11.10.3 make full disclosure to the plaintiff of any matter that may affect the execution of the agreement.

In paragraph 12 it is alleged as follows:

"12. At all material times Alexander was aware of the existence of the agency agreement and its terms by virtue particularly of the following:-

12.1 Alexander represented the third defendant in the negotiations which led to the conclusion of the agency agreement;

12.2 Alexander was on behalf of the third defendant responsible for the implementation of the agency agreement;

12.3 Alexander at all times had access to the agency agreement;

12.4 Alexander was party to later negotiations between the second and third defendants which led to the signing of an agreement (referred to below) on

virtually identical terms to those set out in the agency agreement." The plaintiff seeks as against the first and second defendant an order declaring that -

"(i) It is the unencumbered owner of the title and interest in and to each of the policies listed on Annexure C and/or the cash proceeds thereof, as the case may be, and that neither the first or the second defendant nor any party other than the plaintiff has any claim or title thereto; (ii) the plaintiff is the owner of the policy documents underlying each policy listed on Annexure C; (b) delivery of the aforesaid documents; (c) delivery of various shares which may have accrued to the owners of each policy reflected in Annexure C.

Alternatively and to the event and extent that the claim against first and second defendants failing, the plaintiff has conditional claims against the fourth and the fifth defendants." The allegations to which I have earlier referred in paragraph 19 are then set out. In paragraph 24 it is alleged that Alexander inter alia -"knew that the plaintiff was lawfully entitled to the policies and knew that the second defendant was not entitled to acquire the policies and that the fourth defendant fraudulently and unlawfully diverted the policies to the second defendant to the detriment of the plaintiff". The plaintiff then claims against the fourth and fifth defendants jointly and severally, the one paying the other to be absolved:.

"To the extent that any of the policies reflected in Annexure D is not delivered unencumbered to the plaintiff by the first or second defendants, payment of the surrender value of any such policy not so returned in accordance with the values reflected in Annexure D hereto". And the plaintiff then proceeds to set out further claims against the fourth and fifth defendants which amount to some R17 500 000.

In paragraph 13 of its plea the first defendant pleads as follows: "13.3 At all material times the plaintiff knew, alternatively ought reasonably to have known -

13.3.1 the third defendant was controlled by Alexander;

13.3.2 the second defendant bought and sold insurance policies;

13.3.3 Alexander had the power to sign all deeds of cession and all other instruments on behalf of the third defendant;

13.3.4 Alexander or any other authorised agent and/or employee of the third defendant had power to deal with or transfer policies registered in the name of the third defendant, the policy documents being in the possession of the third defendant.

13.4 Plaintiff advised Old Mutual that the third defendant was authorised to deal with any policies acquired by the third defendant whether registered in the name of the plaintiff or the third defendant.

13.5 Plaintiff placed the third defendant in possession of cession of policy forms signed for and on behalf of the plaintiff in blank.

13.6 ...

13.7 In the circumstances plaintiff ought reasonably to have foreseen that there was a risk that Alexander and/or a person in the position of the third defendant might sell and/or cede the policies to an innocent third party and deliver or cause to be delivered the policies to the said third parties in pursuance of any such sale.

13.8 ...

13.9 By reason of the negligent conduct of the plaintiff as aforesaid -

13.9.1 second defendant purchased the policies from third defendant;

13.9.2 the second defendant obtained loans from the first defendant to enable it to acquire the policies from the third defendant'

13.9.3 second defendant caused the cessions of the policies to be delivered to Old Mutual and caused the latter to register the cession against the policy so as to reflect the second defendant as being the owner of such policies;

13.9.4 second defendant ceded the policies to the first defendant in securitatem debiti as security for the loans advanced by the first defendant to the second defendant for the purposes of acquiring the policies;

13.9.5 the first defendant loaned and advanced to the second defendant money on the strength of the cessions in securitatem debiti.

13.10 In acting as aforesaid first defendant acted to its prejudice and would not have so acted had it not been for the plaintiff's aforesaid negligent^conduct.

13.11 In the premises the plaintiff is estopped from claiming against the first defendant:

13.11.1 that it is the owner of the right, title and interest in and to each of the policies listed on Annexure C to the plaintiff's particulars of claim; and

13.11.2 that it is the owner of the policy documents underlying the policies listed in Annexure C; and

13.11.3 that it is entitled to delivery to it by the first defendant of the policy documents underlying each policy listed on Annexure C.

In paragraph 11 of the fourth defendant's plea (pleading to paragraph 12.2 of the plaintiff's amended particulars of claim) the

fourth defendant says:-

"Save from denying that the agreement was an agency agreement, the further allegations in this paragraph are admitted."

In paragraph 12 (in its plea to paragraph 12.3 of the plaintiff's

particulars of claim) he says:

"Save for denying that the agreement was an agency agreement, the further allegations in this paragraph are admitted."

Paragraph 13 (pleading to paragraph 12.4 of the plaintiff's particulars of claim) he says:

"The allegations in this paragraph are denied as if each and every allegation contained therein is specifically and separately

traversed."

It will immediately become apparent from the pleadings, never mind the allegations made in the plaintiff's answering affidavit to each of these applications, and the allegations made by Mr Kirsh in his affidavit for joinder of the fourth and fifth defendants, that the issues in the plaintiff's particulars of claim are inextricably and fundamentally interwoven and linked. The issues in the conditional claim against the fourth and fifth defendants are fundamentally and intimately bound up with the issues in the claim against the first and the second defendants. Although the questions of law may be different, it is clear that the same evidence will have to be led in respect of the claim against the first and second defendant and the conditional claim against the fourth and fifth defendants. Indeed, much will depend upon the inference which the trial court draws from certain facts established by the evidence before it as well as the conclusions of law which it may draw from such evidence and such facts derived from the evidence.

Mr Maritz, who appeared for the fourth defendant abandoned, for the purposes of this particular application, the relief sought in prayer 3 of the second application and I accordingly will not deal with that.

Rule 33(4) of the Uniform Rules of Court reads as follows:-"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." The subrule (4) in its new form came into operation on 3 July 1992. In the case of Minister of Agriculture v Tongaat Group Limited 1976 (2) SA 355 (D&CLD) Miller J said as follows at 363A-G:

"In cases properly brought under Rule 33(4) where the court has to decide whether it would be 'convenient' to have questions decided separately from others, a most important consideration will no doubt usually be whether a preliminary hearing for the decision of such questions would materially shorten the proceedings. Ordinarily, if it were to appear to the court that the duration of the trial would be substantially curtailed by a preliminary hearing to settle specific questions, it would probably grant the application. But even then it would not necessarily do so because the nature of the case may be such that a proper consideration of overall convenience may involve factors other than those relating only to the actual duration of the hearings. The word 'convenient' in the context of Rule 33{4) is not used, I think, in the narrow sense in which it sometimes is used to convey the notion of facility or ease or expedience. It appears to be used to convey also the notion of appropriateness. The procedure would be convenient if in all the circumstances it appear to be fitting and fair to the parties concerned. (Shorter Oxford Dictionary, s.v. "convenient" and see Burkill v Thomas (1892) 1 QB 99 at 102). It must be borne in mind that the grant of any application under the rule, although it might result in the saving of many days of evidence, might nevertheless cause considerable delay in the reaching of a final decision in the case because of the possibility of a lengthy barren interregnum between the conclusion of the first hearing at which the special questions are canvassed and the commencement of the trial proper."

Clearly it must be borne in mind that that case was decided before subrule (4) appeared in its new form. In the case of Braaf v Fedgen Insurance Limited 1995 (3) SA 938 (C) King J referred to this case with approval and said that at 940C:

"'Convenient' connotes not only facility or ease of expedience but also appropriateness. The procedure would be convenient if in all the circumstances it appears to be fitting and fair to the parties concerned. See Minister of Agriculture v Tongaat Group Limited 1976 (2) SA 357 (D) at 363D." In the case of Tudoric-Ghemo v Tudoric-Ghemo 1 997 (2) SA 246 (W) Joubert AJ also referred to the Minister of Agriculture v Tongaat Group Limited case with approval and said as follows in 2511:

"The issues in the present matter are much intermingled. For this reason alone the matter cannot conveniently be tried piecemeal (see Grindrod Cotts Stevedoring (Pty) Ltd and Another v Brock's Stevedoring Services 1979 (1) SA 239 (T) at 241 D). The nature and extent of the advantages which would flow from the grant of the order sought in terms of Rule 33(4} should be weighed up against the disadvantages (see Grindrod Cotts Stevedoring (Pty) Ltd and Another v Brock's Stevedoring Services (supra) at 341A). I fail to see any advantage in this matter being adjudicated piecemeal." He then quotes with approval the following words of Miller J in the aforesaid Minister of Agriculture v Tongaat Group Limited case, supra, at 362G-H:

"Ordinarily it is desirable in the interests of expedition and finality of litigation to have one hearing only at which all the issues are canvassed so that the court, after conclusion of the trial, might dispose of the whole of the case. Rule 33{4) was no doubt conceived in the realisation that in some instances the interests of the parties and the ends of justice would be better served by disposing of a particular issue (or issues) before considering other issues which, depending on the result of the issues singled out, might fall away or become confined in substantially narrower limits."

If one has regard to the nature of the pleadings; the fact that the allegations of Mr Kirsh in the application for the joinder of fourth and fifth defendants, were never disputed and the application itself never opposed; the fact that the plaintiff makes out a cogent case in its answering affidavit of the fact that the issues to be adjudicated are so fundamentally interlinked and intermingled that it would not be convenient for there to be a separation, then I am satisfied that the application for a separation of issues in both the first and the second applications must fail.

With regard to the question of the postponement, because the fourth defendant faces the possibility of a criminal trial on issues related to those in the civil trial, early in 2003, Mr Maritz who, as I have already indicated, appears for the fourth defendant shifted the spotlight somewhat. He seemed to accept on the basis of the authority in Nedcor Bank Ltd v Behardien 2000 (1) SA 307 (C) at 314H and£t?u/sec {Pty} Ltd v Rodriques andAnother 1999 (3) SA 113 (W) at 11 6H and 1171 and S v Dlamini and Others [1999] ZACC 8; 1999 (4) SA 623 (CC) at paras [B8] to [100], that the mere fact that the fourth defendant may wish to give evidence in this action to resist a civil claim, which evidence could be incriminating in the criminal trial, was not sufficient to grant a postponement. He therefore focused on the following allegations which appear in the answering affidavit of the plaintiff. I refer in the first instance to paragraph 1 2 thereof;

"The evidence of the fourth defendant is central to the issues arising between the plaintiff and the first and second defendants and there is no practical way in which a trial could proceed as between the plaintiff and the first defendant without the involvement of the fourth defendant and the fifth defendant. The central role played by fourth and fifth defendants is apparent from the allegations in the pleadings". He then also referred to the following which appears in paragraph 17: "In any event, the evidence of the fourth and fifth defendants will be directly relevant to the proceedings between the plaintiff and the first and second defendants and so too would documentation from the fourth and fifth defendants", and finally, the following at paragraph 33.2:

"The first defendant has overlooked the fact that the evidence of the fourth defendant {and probably that of the fifth defendant) is relevant to the adjudication of the claims of the plaintiff against the first and second defendants. Documentation from the fourth and fifth defendants is similarly relevant".

Mr Mahtz submitted that the real risk for the fourth defendant testify and such testimony could be gravely prejudicial to him in the criminal trial.

In the case of Davis v Tip NO and Others 1996 (1) SA 1152 (W) Nugent J (as he then was), said at 11 57F-G:

"Civil proceedings invariably created a potential for information damaging to the accused to be disclosed by the accused himself. Not least so because it will often serve his interests in the civil proceedings to do so. The exposure of an accused person to those inevitable choices has never been considered in this country to conflict with his right to remain silent during criminal proceedings. Where the courts have intervened there has always been a further element which has been the potential for State compulsion to divulge information. Even then the courts have not generally suspended the civil proceedings hut in appropriate cases have rather ordered that the element of compulsion should not be implemented (Cf Du Toit v Van Rensburg 1967 (4) SA 433 (C) at 437A-B; Gratus & Gratus (Prop) Ltd v Jackelow 1930 WLD 226 at 231; Kamfer's case, (i.e. Kamfer v Millman and Stein NNO and Another 1 993 (1) SA 112 (C)."

He then goes on to say that:

"In the present case the preservation of the applicant's rights lies entirely in his own hands and there is no element of compulsion. What the applicant seeks to be protected against is the consequence of the choices he may be called upon to make."

In the case of Seapoint Computer Bureau v McLoughiin & De Wet NNO 1 997 (2) SA 636 {W| Navsa J (as he then was) referred to the judgment of Nugent J in Davis v Tip {supra) with approval. He also referred to the case of Williams v Deputy Superintendent of Insurance (1 993) 18 CRR (2d) 31 5 (Nova Scotia SC) where MacAdam J said the following at 331:

"To proceed on the basis that Mr Williams need not respond, thereby preserving 'his rights of silence', we may be hearing nothing short of a charade and certainly not within the contemplation of section 46 of the Insurance Act. This section as noted contemplates the agent being provided with an opportunity to respond to the evidence in the possession of the superintendent. The choice to attend the hearing and to either to respond to the evidence and thereby waive the 'right to silence' ought to maintain the 'right to silence' and thereby remain unresponsive to the evidence presented is in fact no choice at all."

Navsa J then goes on, referring to the judgment of Nugent J and said at 647F-G:

"He refused to stay proceedings on the basis of the right to remain silent derives from the abhorrence of coercion to secure a conviction and it achieved this by protecting the accused person from being placed under compulsion, not by shielding him from making 'legitimate choices'. He concludes that what distinguishes compulsion from choice is whether the alternative to remaining silent presents itself as constituting a 'penalty' which serves to punish a person for choosing a particular route as an inducement to him not to do so."

As Nugent J (as he then was) noted in the Equisec (Pty) Ltd v Rodriques case, {supra), the impact of a series of Constitutional Court judgments is that a person facing criminal charges is not relieved of a general duty to testify in antecedent civil proceedings. See, e.g. Ferreira v Levin N. 0. and Others 1 996 (1) SA 984 (CC) and Bernstein and Others v Bester and Others NNO 1996(2) SA751 (CC); Net v Le ftoux N.O. [1996] ZACC 6; 1996 (3) SA 562 (CC); S v Dlamini and Others (supra) at para [96].

I agree with the submission of Mr Gauntlett, who appears for the third defendant that two separate, albeit inter-related issues, should not be confused These are:

(I) whether a witness should be compelled to give self-incriminating evidence before an enquiry;

(ii) whether evidence could be used thereafter against him or her in pending criminal proceedings.

I agree with Mr Gauntlett that the effect of the recent Constitutional Court judgments to which I have referred, as well as section 35(5) is to protect a person in subsequent criminal trials from evidence being used unfairly against him or her. There is no absolute protection whatsoever, such that a person who may later be giving evidence in a criminal trial, cannot in an antecedent civil trial do so, whether voluntarily or under a measure of compulsion.

Finally, I would wish to emphasise that in the case of Ferreira v Levin N.O. (supra) both Chaskalson P (as he then was) at paragraph 185 and Ackermann J at paragraph 153 stressed that it was for the trial judge to exclude evidence which he or she considers trenches upon the rights to a fair trial. See also Key v Attorney-General Cape Provincial Division and Another 1996 (1) SA 984 (CC) at paras [ 1 3] and [14]; S v Dlamini and Others (supra) at paras [96] and [97]. A similar view was expressed by Farlam J (as he then was) in the case of Dabelstein v Hildebrandt 1996 (3) SA 42 (C) at 67F-G.

There is no certainty as to whether there will indeed be a criminal trial against the fourth defendant; there is no certainty as to when, if there is such a trial, it will proceed. It is common cause, however that this criminal trial if and when it commences, will be one of lengthy duration.

For these reasons I am satisfied that the fourth defendant's application for a postponement must fail.

The following orders are made:

1. Both the first and second applications are dismissed.

2. The applicant (i.e. the first defendant in the main action) is to pay the costs of the plaintiff and the third defendant in the first application, which costs are to include the costs occasioned by the employment of two counsel.

3. The applicant (i.e. the fourth defendant in the main action) is to pay the costs of the plaintiff and the third defendant in the second application, which costs are to include the costs occasioned by the employment of two counsel.

4. It is noted that the same junior was instructed to act for both plaintiff and the third defendant.