Lamavuso Transport CC v Gontse Transport Management and Projects (Pty) Ltd and Others (UM75/2017) [2018] ZANWHC 11 (22 March 2018)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE HIGH COURT OF SOUTH AFRICA

NORTH WEST DIVISION, MAHIKENG

CASE NUMBER: UM75/2017

Reportable: YES / NO

Circulate to Judges: YES / NO

Circulate to Magistrates: YES / NO

Circulate to Regional Magistrates: YES / NO

In the matter between:

LAMAVUSO TRANSPORT CC

Applicant

In Re:-

LAMAVUSO TRANSPORT CC

Applicant

And

GONTSE TRANSPORT MANAGEMENT AND

PROJECTS (PTY) LTD

1st Respondent

MOGOROSI ROSA CONSTANCE

2nd Respondent

GONTSE ARTHUR HOTTIE

3rd Respondent

FIRST NATIONAL BANK

4the Respondent

STANDARD BANK SA LTD

5th Respondent

ABSA BANK LTD

6th Respondent

NEDBANK LTD

7th Respondent

CAPITEC BANK

8th Respondent

CIVIL MATTER

KGOELE J

DAlTE OF HEARING

: 22 MARCH 2018

DATE OF JUDGMENT

: 11 MAY 2018

COUNSEL FOR APPLICANT : MR VAN DER WESTHUIZEN

COUNSEL FOR 1st RESPONDENT : ADV VAN ROOYEN

JUDGMENT

A. INTRODUCTION

[1] The applicant instituted this application on an ex parte basis in order to obtain an Order in terms whereof the accounts of the first to third respondents, as held at the fourth to the eighth respondents, are declared suspended and put on hold, alternatively, an amount to the value of R2 792 754-63, be preserved in those accounts. In addition to these prayers, it sought a further prayer to the effect that the first to third respondents should be prohibited from dissipating any assets of the first respondent pending the finalization of a related action/application

to be instituted by the applicant against them within 30 days of the Order issued by the Court.

[2] The application served before Djaje J and an Interim Order was granted on an ex parte basis on the 15th December 2017. The first to third respondents thereafter filed a notice to oppose the granting of a final relief, at the same time raising a number of pre-liminary issues.

B. FACTUAL BACKGROUND

[3] The genesis of the issues that arose for determination between the parties were amongst others premised against the background that follows. The second respondent was cited in this proceedings in her personal capacity, as well as in a representative capacity as she represented the first respondent during the conclusion of the agreement. The sole director of the applicant is the third respondent and holds 100% shares in the first respondent. The dispute between the parties arose from a written transport agreement concluded on the 26 July 2017. The terms of the agreement were that the applicant would dedicate 3 buses to ferry school children to and from several schools at the special request and instance of the

first respondent. The rate at which the applicant was to be remunerated for the mentioned services was R480 000-00 per

month. It appears that after the conclusion of this agreement the relationship between them became sour as a result of the fact that the terms of the agreement were allegedly extended and amended from time to time and again verbally. It is precisely the payment terms that presented the contentious issue between the parties.

[4] A dispute arose because, as alleged by the applicant, the respondent did not pay in accordance with the initial payment agreed to. The applicant further alleged in its papers that the first respondent was in breach of another term of the agreement in that the accommodation for the drivers were never paid for. According to the applicant, the first respondent failed to make any payments whatsoever, notwithstanding related invoices being sent to it and numerous demands having been made and undertakings given, until when it was alerted to the fact that the applicant was seeking legal recourse, whereupon the first respondent made a random payment in the amount of R500 000-00 on the 29 November 2017.

[5] After making this payment, the second respondent hand-delivered a document at the offices of the applicant, wherein the first respondent purported to terminate the agreement between the parties. He then told the applicant that they will pay the outstanding amount “as soon as the client pays out” upon being asked. The applicant then wrote a letter of demand on the 5th day of December 2017 and the respondents did not reply thereto. According to the applicant, the respondents did not also answer to telephone calls, emails and related attempts to communicate. The applicant resorted to apply to this Court as according to him, he feared that he will obtain an empty judgment once it establishes its valid claim against the respondents. It is important for the consideration of this matter to quote the order granted by Djaje J which was couched as follows:-

“1. THAT: This Order serves as an interim order with immediate effect and return date on the 15th day of February 2018 at 10h00 when reason may be advanced by the Respondent(s) why this order should not be made final.

2. THAT: The following account of the First Respondent held at the Fourth Respondent is declared suspended and put on hold:

2.1

Account number: 6[...] (First National Bank)

3. THAT: The following account of the Second Respondent held with the Fifth Respondent is declared suspended and put on hold:

3.1 Account number: 1[...] (Standard Bank)

4. THAT: The following accounts of the Second Respondent held with the Sixth Respondent are declared suspended and put on hold:

4.1 Account number: 2[...] (Absa Bank)

4.2 Account number: 4[...] (Absa Bank)

4.3 Account number: 9[...] (Absa Bank)\

5. THAT: The following account of the Second Respondent held with the Seventh Respondent is declared suspended and put on hold:

5.1 Account number: 2[...] (Nedbank Limited)

6. THAT: The following account of the Second Respondent held with the Eighth Respondent is suspended and put on hold:

6.1 Account number: 1[...] (Capitec Bank)

7. THAT: The following account of the Third Respondent held with the Fourth Respondent is declared suspended and put on hold:

7.1 Account number: 6[...] (First National Bank)

8. THAT: The following account of the Third Respondent held with the Fifth Respondent is declared suspended and put on hold:

8.1 Account number: 1[...] (Standard Bank)

9. THAT: Alternatively, to prayers 3 - 9 above, that an amount to the value of R2 792 754.63 (Two Million Seven Hundred and Ninety Two Thousand Seven Hundred and Fifty Four Rand and Sixty Three Cents) is to be preserved in those accounts.

10. THAT: The First to Third Respondents are prohibited from dissipating any assets of the First Respondent pending the finalization of related

action to be instituted by the Applicant against the First to Third Respondents within 30 (Thirty) days of the order.

11. THAT: The First; Second and Third Respondents are prohibited from selling, encumbering, disposing, selling off or alienating any assets in any manner whatsoever;

12. THAT: This order remains in full force and effect pending the finalization of an action or application to be instituted within 30 (THIRTY) days of the granting of this order;

4

13. THAT: This interim order, together with the notice of motion, founding affidavit and annexure thereto are to be served via electronic mail and by Sheriff on the respective Respondents;

14. THAT: The Respondents are to be informed of their rights in terms of Rule 6 of the Uniform Rules of Court regarding reconsideration and anticipation;

15. THAT: The Respondents are to be informed of their rights in terms of Rule 6 of the Uniform Rules of Court regarding consideration and anticipation;

16. THAT: The cost of this application is reserved”

[6] As already indicated above, the first respondent in its opposition of the granting of the final relief raised a myriad of pre-liminary issues stating that they are dispositive of the matter. But on the 15th of February 2018 the application was withdrawn against the second and third respondents, hence only the first applicant’s case was argued before this Court.

C. POINTS IN LIMINE

Notice of Motion not issued

[7] The first respondent’s Counsel submitted that the notice of motion does not have a date stamp and a case number, therefore it was not issued by the Registrar. This according to him renders the proceedings fatally defective.

[8] The applicant’s legal representative in reply indicated that it was properly issued. He referred this Court to a paginated page 0001, which is labelled index, and submitted that the Registrar put his date stamp there on including the case number. Hence the submission that factually it was issued.

[9] It is indeed correct that the notice of motion is not stamped and no case number appears thereon. Despite this, I am prepared to accept the applicant’s averments that the Registrar put his stamp on the index when he/she was supposed to have done that on the face of the notice of motion. The case number also appears there. I am inclined to accept the version that the application was issued.

Court Order was not served

[10] The first respondent’s Counsel submitted that there is no return of service to the effect that the first respondent was served with the ex parte application and therefore the Rule Nisi cannot be confirmed.

[11] Applicant’s legal representative indicated that the first respondent cannot rely on this point because it was not raised in its papers. If they could have done so earlier, they could have furnished a return of service or explanation.

[12] Indeed there is no return of service of the Interim Order issued by Djaje J. Although the first respondent is silent as to how it managed to get knowledge of this application, I am of the view that besides having regard to the application of the Audi Alteram Partem Rule, the service of the Interim Order is important especially in this matter because it is one of the Orders that were granted by the Court. The granting of an Order by the Court has certain specific consequences, one of which is that it must be served on the other party. More so if it was granted in his absence. It is trite law that a person is entitled to notice of legal proceedings against him, and more particularly, if it is an Order of Court granted ex parte. Mere knowledge of the Court Order is not service and the applicant is not relieved of its obligation to comply with the Order of the Court. It is furthermore not the duty of the first respondent to remind the applicant to comply with the Order of Court, e.g. by raising an issue of non-service of the Court Order. As I understand the argument of Mr Van der Merwe, mere “knowledge” would suffice for the Interim Order to be made final.

[13] This cannot suffice in casu more especially because the Court Order granted by Djaje J prescribed two methods of service to the respondents namely:- by electronic mail and by Sheriff. In my view, service in the manner so prescribed by the Court was important because the Interim Order was granted without the notice of the first respondent. It is surprising why the applicant want to be reminded to comply with the Order it so requested and obtained, and furthermore, when it managed to file the return of services for the fourth until the eighth respondents (the Banking institutions). It cannot escape one’s mind that only the banking institutions were served with the Court’s Order. This issue is further complicated by the fact that initially in this application the Interim Order was granted against 3 respondents. The second and third respondents are not before this Court now as the Interim Order was previously discharged against them per agreement with the applicant. Unfortunately, the first respondent is a company. But even if the applicant can argue that the first respondent did not suffer any prejudice by virtue of its failure to file the return of service of the first respondent because it managed to file its opposition, the fact remains that such a failure clearly denotes a failure to comply with one of the conditions of the Interim Order, it therefore cannot be confirmed.

Urgency

[14] Counsel representing the first respondent submitted that the applicant does not explain to the Court that granted the Interim Order why it could only prepare the application on the 14 December 2017 after it had allegedly engaged with the respondents for a number of months, and furthermore why the matter became so urgent to such an extent that the matter had to be heard on a non-motion Court day. According to him, it is clear that the urgency contended for by the applicant was not only self-created but in fact a fallacy.

[15] The applicant’s legal representative replied by saying that the degree of urgency is borne out by the actions of the respondents of not paying since the agreements were signed which were clearly depicted in the papers that were before the Court. According to him, the conduct explained in its papers led to the fact that there was no other conclusion that could be drawn from it other than that the applicant was not going to be paid, especially when the respondents did not even reply to the letter of demand dated 5 December 2017. This, according to the applicant’s Counsel, was confirmed by the fact that when asked when the first respondent was going to pay, the second respondent did not promise something positive but said that they will pay when they get the money. All of these actions, caused a pertinent fear in the mind of the applicant that he would eventually obtain a hollow judgment.

[16] Rule 6 (12) (b) of Uniform of Rules of Court provides:-

“(b) In every affidavit or petition filed in support of any application under paragraph (a) of this sub-rule, the applicant shall set forth explicitly the circumstances which he avers render the matter urgent and the reasons why he claims that he could not be afforded substantial redress at a hearing in due course”.

[17] It is trite law that mere lip service to the requirements of Rule 6(12) (b) will not suffice and an applicant must make out a case in the founding affidavit to justify the particular extent of the departure from the norm, which is involved in the time and day for which the matter may be set down.

[18] The applicant’s legal representative in an attempt to reply to a request from the Court to point out in the applicant’s papers where it dealt pertinently with the issue of urgency, he referred this Court to paragraph 4.1 up to paragraph 5.8 of its founding affidavit filed in paginated pages 17-24. He submitted that the reasons for the departure from the Rules is patently addressed in clear, succinct and unambiguous terms in those paragraphs.

[19] Unfortunately I cannot agree with these submissions made by the applicant’s legal representative in this regard. Firstly, paragraphs 4.1 – 4.2 he referred this Court to deal in the most with the purpose of the application. Secondly, paragraphs 5.1 to 5.5 contains sweeping statements of the factual background and the legal position of Rule 6 (12) (b). The heading of paragraph 5.6 where we thought we will get some grounds of urgency specifically dealt with is couched as follows:-

“Grounds of urgency, justifying the applied for degree of abridgment of prescribed time period and the ex parte nature thereof, as interwoven with the factual background of the matter” [My Emphasis added]

The rest of the sub-paragraphs under 5.6 deal with the factual background with the exception of the last two paragraphs 5.7 and 5.8 under this heading, but they also referred sweepingly so, to the fact that the application is the only mechanism with which to secure its rights, as formal notice will cause the available funds to be dissipated in anticipation.

[20] Looking at all the sub-paragraphs 5.6.1 up until 5.6.21, it is difficult to discern which facts the applicant relies on in as far as urgency is concerned. As indicated earlier, it is only in paragraph 5.1 and 5.2 where the applicant made some sweeping statements regarding urgency. The same applies to paragraph 5.5 also, but specifically in relation to the issue of whether or not it will be afforded substantial redress at a hearing in due course. The rest of the sub-paragraphs deal with their agreement, how their relationship got sour, that the applicant was expecting payments and nothing was coming forth, that the applicant paid R500 000-00 and lastly that a letter of demand was written on the 5th of December 2017.

[21] I do not see anything that justify urgency from all these paragraphs that I was referred to. What I can deduce from these factual averments is that barely two weeks after the respondents paid some money, on the 29th November 2017, the applicant came to Court and sought this urgent application, and worse, without notice to the respondents. There is no explanation why it took the applicant from the 29th November 2017 to the 15th December 2017 to launch this application. The letter of demand of the 5th of December 2017 is the only thing that they did to recover the money but this was hardly 6 days after the respondents paid the said money. I do not see any reason why the applicant panicked within 6 days of receiving the money and furthermore, why it then waited for this matter to be heard on the last day of term, the 15th December 2017, if ever it was panicking so much. As far as the second leg of Rule 6 (12) (b) that deals with the issue of substantial redress is concerned, the applicant failed dismally because the papers that were before the Court just regurgitated what the legal position is, no factual averments were made whereupon the applicant based this legal point on. The applicant therefore failed to make a case of urgency in its papers. In addition, taking into consideration the background which it heavily relied on, that it was claiming money since the dispute arose in August 2017, it is clear that the urgency the applicant claimed, if there was any, was self-created.

Ex Parte Application

[22] On this pre-liminary point the first respondent’s Counsel submitted that there is no case which is made out in the papers that were before Court that the applicant would not have succeeded in obtaining substantial redress with less invasive process which closer assimilates the ordinary course. He gave the following reasons for this proposition:-

22.1 There is no explanation why the applicant had to deviate from using the ordinary long form of the Notice of Motion whatsoever;

22.2 There is no explanation why the applicant would believe that if it gave short notice of the proceedings that the fourth to eighth respondents would not have prevented transactions pending the determination of the application;

22.3 The applicant also does not explain why it could only prepare the application on 14 December 2017 after it had allegedly engaged the respondents for a number of months and why the matter then became so urgent that the matter had to be heard on a non-motion Court day;

22.4 It is clear that the urgency contended for by the applicant and the fact that the first respondent might dissipate its assets / money were not only self-created but in fact a fallacy.

[23] In reply the applicant’s legal representative submitted that these submissions are unsound because these aspects were dealt with in clear, succinct and unambiguous terms in paragraphs 4.1 - 5.8 of the founding affidavit.

[24] In as far as this issue is concerned, the applicant does not only rely on making sweeping statements only, but based its factual averments on subjective opinions and suppositions. The following can be cited:-

“5.6.17 I am of the view that the first respondent had been fully compensated by the relevant department of government to whom it rendered services utilizing the busses, the drivers, diesel and expertise of the applicant, such payment being sourced of the payment of R500 000-00 referred to above. The first respondents’ action have however, made it clear that it is intent upon dissipating the balance of the amount due to the applicant, leaving the applicant at its mercy by attempting to conveniently terminate the agreement during the festive season and appointing a new transporter in the coming year”

AND

“5.6.18 I further have the patent apprehension that the funds so received by the first respondent is being, alternatively has been, siphoned to the personal accounts of the second and third respondents in an endeavor to render the inevitable judgment in favour of the applicant empty” [my Emphasis added]

[25] According to the applicant, alerting the respondents by giving them notice will in the circumstances undoubtedly cause all available funds and assets to be dissipated in anticipation, rendering an order to be issued later herein valueless. With due respect to the applicant’s Counsel, there are no facts whatsoever in the applicant’s papers to evidence that the first respondent was dissipating or attempting to dissipate its assets. In fact, it is clear from the quoted paragraphs that the applicant has not furnished any primary evidence to this fact, but had resorted to advancing unsubstantiated, inadmissible opinions and mere conclusions of law in the founding affidavit. This, does not satisfy the requirements for evidence being furnished to satisfy the Court in motion proceedings especially when regard is had to the extraordinary ex parte nature of the interdict sought.

[26] In Investec Employee Benefits Ltd and Another v Electrical Industry Kwazulu-Natal Pension Fund and Others 2010 (1) SA 446 (W) it was held at paragraph [116] that:-

“The law in this regard is set out in Knox D’Acry Ltd and Ohers v Jamieson and Others [1996] ZASCA 58; 1996 (4) SA 348 (A) ([1996] 3 All SA 669). It was trenchantly summarized as follows in Carmel Trading Co Ltd v Commissioner, South African Revenue Services, and Others 2008 (2) SA 433 (SCA) ([2008] 2 All SA 125) in para 3 as follows: ‘Such an order, which interdicts a respondent from disposing of or dissipating assets, is granted in respect of a respondent’s property to which the applicant can lay no special claim. To obtain the order the applicant has to satisfy the court that the respondent is wasting or secreting assets with the intention of defeating the claims of creditors.”

[27] In Knox D’Acry Ltd and Others v Jamieson and Others [1996] ZASCA 58; 1996 (4) SA 348 (A) at 379 E- 380B it was held that:-

“The procedure followed in this case

The argument before us was confined to the merits of Stegmann J’s judgment and did not advert to the procedure adopted when the ex parte application was heard. Nevertheless, I believe that some reference should be made to it even if it is not strictly necessary for the purposes of this judgment. In his reasons for granting an interim interdict in the present case Stegmann J said (1994 (3) SA at 707J-708A):

‘The making of an order which affects an intended defendant’s rights, in secret, in haste, and without the intended defendant

having had any opportunity of being heard, is grossly undesirable and contrary to fundamental principles of justice it can be lead to serious abuses and oppressive orders which may prejudice an intended defendant in various ways, including some ways that may not be foreseeable……

[28] The principles enunciated above was not heeded to in casu. It is furthermore trite law that in urgent proceedings the minimum relief should be claimed in order to preserve the status quo. This has clearly not been done in casu because, the Order granted froze all of the first respondent’s accounts. The first respondent is in the strict sense prevented from conducting its own business in the normal sense. This clearly prejudices the first respondent in various ways. This issue is compounded by the fact that both the main and the alternative prayers were granted by the Court a quo. A further predicament facing the applicant is that the Order as against the second and third respondents has been previously discharged after the Interim Order was issued, and it is the matter against the first respondent that remains alive for determination. The first respondent is a legal entity, a company. The Order under prayer 10 is far reaching especially when there is no allegations supporting the fact that the first respondent contravened any Company laws.

[29] I fully agree with the submissions of the first respondent’s Counsel that the applicant, together with the Court, did not apply its mind to the fact that there was an alternative relief, and merely took the Order in the form wherein it appears in the Notice of Motion which although referring to a Rule Nisi, has final elements therein which required positive proof of clear rights, which were not provided. Both the oppressiveness of the Interim Order and the intended interference with the rights and obligations of the first respondent were in my view not kept to the minimum, let alone justified in the circumstances and the manner in which the application was couched.

Main action instituted out of time

[30] The first respondent’s argument is that the interim relief was granted pending the institution of an application or action against the respondents within 30 days of the granting of the Interim Order, and the applicant failed to adhere to this condition as well. The first respondent’s Counsel submitted that the summons in the intended action was issued by the Registrar on 25th January 2018 and it was served on the respondent on the 2nd February 2018. He maintained that a calculation using Court days reveals that the 30 days ended on the 26th January 2018. The applicant has not even tried to apply for condonation. It simply ignored the Court Order. This is another flagrant disregard of the Court’s Order and or Rules of Court, according to the respondent’s Counsel, and signify the end of the whole enquiry or application.

[31] In reply, the applicant’s legal representative submitted that the first respondent’s Counsel has not calculated the dies correctly. He maintained that a proper calculation of the Court days reveals that the 30 days ended on the 31st January 2018 and they were therefore within the stipulated time as they filed their summons with the Registrar on the 25th January 2018.

[32] To substantiate his argument, Advocate Van Rooyen appearing on behalf of the first respondent submitted that the word “instituted” in our law refers to when the summons is issued by the Registrar and served on the other party (defendant). Because the summons in casu were served on the first respondent on the 2nd February 2018, this is the time when the matter was instituted.

[33] This issue was laid to rest in the case of Finishing Touch 163 Ltd v BHP Billiton Energy Coal SA 2013 (2) SA 204 where the Supreme Court of Appeal held:-

“[17] In my judgment, the argument on behalf of BHP cannot be sustained. The interpretation favoured by it will give rise to absurd consequences and could never reflect Preller J’s intention. In Republikeinse Publikasies (Edms) Bpk v Afrikaanse Pers Publikasies (Edms) Bpk Rumpff JA held:-

‘Hoewel ṅ dagvaarding eers deur die griffier uitgereik work voordat dit beteken work (Reël 17(1) en (3), word dit nie in die Reël vereis dat ṅ kennisgewing van mosie deur die griffier uitgereik moet work of by hom ingelewer moet word voordat dit aan die respondent betokens kan word nie… Die doel van ṅ dagvaarding en kennisgewings van mosie is natuurlik om die verweerded of respondent by ṅ geding te betrek, en wat hom betref, word by eers dan betrek wanneer ṅ betokening van die dagvaarding of kennisgewing van mosie plaasgevind het.’

“[18] There can be no doubt that Preller J intended that the review should effectively proceed by 25 January 2006. He could never have intended for BHP to have an application issued and a case number allocated by the registrar and thereafter remain supine.’

“[19] In my view the Preller J order falls squarely within the ambit of the cases to which we were referred by Counsel for Finishing Touch. These case were concerned with statutory provisions or regulations which require that an application had to be made within a specified period. In Mame Enterprises (Pty) Ltd v Public Cations Control Board, Nicholas J held that it was manifest from uniform rule 6 and from the contents of Form 2(a) that the giving of notice to the respondent in a case where relief is claimed against him is an essential first step in an application on notice of motion. In Tladi v Guardian National Insurance CO Ltd the Court had to determine whether an application had been made within a period of 90 days as contemplated in s14(3) of the Motor

Vehicle Accidents Act 84 of 1986. Botha J held that the application could not be considered to have been made if it had merely been issued but not served.”

“[20] It follows, in my view, that in ordering that the review proceedings shall be initiated by no later than Wednesday, 25 January 2006 Preller J intended that notice of the application be given to the registrar and the application served on the affected parties by 25 January 2006. Accordingly, the finding of the Court below that the filing of the application papers with the registrar and the issue thereof must be regarded as the initiating of proceedings cannot be sustained.” [My Emphasis added]

[34] The above quoted remarks are apposite in our matter. I fully agree with Advocate Van Rooyen that the Order has thus by effluxion of time lapsed. The applicant sought and was granted the Order which it authored in its terms and despite this the applicant disobeyed the said Order which it so obtained. This is another reason why the Rule Nisi cannot therefore be confirmed.

[35] Under the circumstances, the Rule nisi granted by this Court against the first respondent on the 15th December 2017 is discharged. The applicant is ordered to pay the costs including all the costs previously reserved.

A M KGOELE

JUDGE OF THE HIGH COURT.

ATTORNEYS

FOR THE APPLICANT: Wentzel & Partners Attorneys 5 North Rand Road KEMPTON PARK C/O Smit Stanton Incorporated 29 Warren Street MAHIKENG FOR THE RESPONDENT: ME Tlou Attorneys and Associates 43 Baden Powel Street, Gold View MAHIKENG