Osmans Spice Works CC v Corporate International (Pty) Ltd (A5036/04) [2005] ZAGPHC 1; 2005 (6) SA 494 (W) (19 May 2005)

IN THE HIGH COURT OFSOUTH AFRICA(WITWATERSRANDLOCAL DIVISION)Case No: A5036/2004Osmans Spice Works CC

Appellant/Plaintiff a quovsCorporate International (Pty) Ltd Respondent/Defendant a quoJUDGMENTLabeJ:A INTRODUCTION[1] This is an appeal by the appellant against the decision of a single judge in this division in an application brought by the appellant as applicant against the respondent (the application) about which I give further details below. The appellant is represented byAdvO.A.MoosaSC and the respondent byAdvP.Strathern. On19 May 2005we upheld the appeal and granted ancillaryand consequential relief. We said that our reasons for doing so would follow. These are the reasons.B THE BACKGROUND TO THE APPLICATION[2] 1. On18 June 2003provisional sentence was granted in favour ofthe appellant against the respondent for:“CLAIM A:1.Payment of the sum of R795,000.002.Interest on R795,000.00 to date of payment at the rate of 15.50 per centum per year from1 October 2002.CLAIM B:1.Payment of the sum of R1 200 000.002.Interest on R1 200 000.00 to date of payment at the rate of 15.50 per centum per year from1 October 2002.CLAIM C:1.Payment of the sum of R1 200 000.002.Interest on R1 200 000.00 to date of payment at the rate of 15.50 per centum per year from1 October 2002.3.Costs of suit including the costsoccasioned by the employment of 2 Counsel.”2.On25 June 2003in a letter served on the appellant at12:09p.m.on that day,the respondent demanded that security de restituendo be furnished

by the appellant by not later than10 a.m.on26 June 2003.On the same day at2:46 p.m.and before the periodgrantedfor the putting upofthe security hadelapsed,a letter was delivered by the respondent to the appellant advising the appellant that the respondent was entering into the principal case.3.On26 June 2003the appellant furnished security by way of the document bearing that date.4.The registrar ruled on3 July 2003that the document did not constitute security.5.The appellant then furnished the respondent with a letter of undertaking from Nedbank dated11 July 2003which the registrar ruled on17July 2003constituted securityin terms ofRule 8(9) of the rules.6.The respondent nonetheless refused to make payment of the principal sum, interest and costs contending that because the appellant had not furnished security to the satisfaction of the registrar pursuant to its request therefor dated25 June 2003, it was entitled to enter upon the principal case.C THE APPLICATION[3] By notice of motion dated1 August 2003the appellant claimed an order in the following terms:“1. The citation of the Defendant in this entire matter, including in respect of the Provisional Sentence Judgement delivered in Plaintiff’s favour on the 18th of June 2003, be and is hereby amended to Sir Trading (Pty) Ltd t/a Corporate International, and the Registrar is directed to furnish Plaintiff with the Provisional

Sentence Judgment aforesaid reflecting the Defendant’s citation as amended aforesaid;2. That it beand ishereby declared that the Defendant/Respondent is not entitled to enter into the principal case in case No. 24614/2002 in this Honourable Court in terms of Rule 8(11);3.That the Defendant/Respondent’s notice ofintention to enter into the principal case in Case No.24614/2002 and its Plea in the same matter be set aside in terms of Rule 30 as irregular proceedings;4.That it be and is hereby declared that the provisional sentence judgement granted in Case No. 24614/2002 by Madam Justice Mailula on Wednesday the 18th June 2003 has become a final judgement;5.That it be and is hereby declared that the Plaintiff/Applicant is entitled to levy execution in terms of the Uniform Rules of Court in respect of the said provisional sentence judgment granted under Case No. 24614/2002;6.That the Respondent pay the costs of this application including those occasioned by the employment of two Counsel;7.Such further or alternate relief as this Honourable Court may deem meet.”D THE DECISION OF THECOURTAQUO[4] The court a quo granted the application to amend and dismissed the remaining prayers.E THE APPEAL[5] Leave to appeal having been granted an appeal was noted to this court. The grounds of appeal are set out below:“2.The Court erred in not holding that the Plaintiff had sixty (60) days fromthe

18thof June 2003within which to furnish Defendant with security to the satisfaction of the Registrar.3.Alternatively, the Court erred in not holding, following on its acceptance that the import of Rule 8(10) of the Uniform Rules of Court is that a person should be afforded a reasonable opportunity to furnish security following on demand, that the Plaintiff, as a logical consequence thereof, must be afforded more than one opportunity to furnish security provided that this is done within a reasonable time.4.Further alternatively, the Court erred in not holding, following on its acceptance that the import of Rule 8(10) of the Uniform Rules of Court is that a person should be afforded a reasonable opportunity to furnish security following on demand, that the demand made by the Defendant on 25 June 2003 that security should be furnished by 10h00 on 26 June 2003 did not afford Plaintiff reasonable time within which to furnish security.5.Further alternatively, the Court erred in not holding that the Defendant purported to enter into the principal case on25 June 2003, that is even before its own deadline for the furnishing of security had expired, and that such purported act was accordingly premature and invalid, with the consequence that the Defendant has never entered the principal case.”F THE APPEALABILITY OF THE DECISION OF THECOURTAQUO[6] When we first read the papers, we were of

the opinion that it was debatable whether the decision of the court a quo was appealableand we asked the parties to include argument in regard thereto in their heads of argument.[7]InZweni v Minister of Law and Order1993(1) SA 523 (A) where Harms AJA, as he then was, said this at 531I - 532A:“1. For different reasons it was felt down the ages that decisions of a ‘preparatory or procedural character’ ought not to be appealable (perSchreiner JA in thePretoria Garrison Institutescasesupraat 868). One is that, as a general rule, piecemeal consideration of cases is discouraged. The importance of this factor has somewhat diminished in recent times (SA Eagle Versekeringsmaatskappy Bpk v Harford[1992] ZASCA 42;1992 (2) SA 786(A) at 791B – D). The emphasis is now rather on whether an appeal will necessarily lead to a more expeditious and cost-effective final determination of the main dispute between the parties and, as such, will decisively contribute to its final solution (Priday t/a Pride Paving v Rubin1992 (3) SA 542(C) at 548H – I).”See alsoPriday t/a Pride Paving v Rubin1992 (3) SA 542(C) Conradie J, as he then was, said this at 547D – G:“The Courta quonow has a large measure of control over appeals and is able to assess whether or not an interlocutory order, whether final in effect or not, could fruitfully be taken on appeal. This assessment includes not only a consideration of

the prospects of success on appeal. It includes deciding whether the result of the appeal would contribute to resolving one or more of the disputes between the parties in an efficient and cost effective way and generally the efficacy of leave to appeal in curtailing the overall duration of litigation between parties.There is therefore no longer any practical distinction between an interlocutory order with final effect and a simple interlocutory order. In the case of an interlocutory order with final effect the Court would, as before, determine whether it disposed of any issue or any portion of an issue in the main case; in the case of a simple interlocutory order, the question would be whether the decision of the Courta quo, if reversed or altered on appeal, would dispose of any issue or portion of an issue in the main case. One no longer looks, as was the case formerly, only at the effect of the decision of the Courta quoon the proceedings in the Courta quo. In each case the critical consideration would be whether a judgment on appeal before the matter proceeded any further would best serve the interests of both parties.Van StreepenGerms (supraat 585E – I.)”InVan Streepen& Germs (Pty) Ltd vTransvaalProvincial Administration1987 (4) SA 569(A) Corbett JA, as he then was, said at 585E – I:“It is clear from the line of casesto which I have thus far referred that the main reason

for this Court having given what Centlivres CJ described as a ‘restricted meaning’ to the words ‘judgment or order’ has been a reluctance to allow the piecemeal decision of cases, ie numerous subsidiary appeals during the course of a single legal proceeding, with all the expense and inconvenience attached thereto. (See the remarks ofInnesACJinDickinson’scasesupraat 428.) This is undoubtedly a very cogent consideration, particularly where the decision in question relates, for instance, to a procedural matter or to the admissibility of evidence and it may in the end not have a decisive effect upon the outcome of the case. Where, however, the decision relates to a question of law or fact, which if decided in a particular way would be decisive of the case as a whole or of a substantial portion of the relief claimed, then a somewhat different position arises, and indeed in that event the advantages of expense and convenience may favour a final determination of the question on appeal, even though the proceedings in the Courta quomay not have been concluded. The advantages of having such a question of law or fact determined by the Court of first instance as a separate, preliminary issue are recognised by the provisions of Rule 33(4) (see the remarks of Holmes JA inBotha v AA Mutual Insurance Association Ltd and Another1968 (4) SA 485(A) at 489A – E); and under the present system of

appeal, which requires leave to appeal in all cases falling under ss 20 and 21 of the Act, there is much to be said for the application of a more flexible approach (of which there was some evidence inShacklock’scasesupra) to the question of the appealability of such decisions taken by the Court of first instance.”See also:Oliff vMinnie1952(4) SA 369 (A) at375G – 376A andPalmerv Goldblatt1961(3) SA 692 (N) at 700AIf we hear the appeal and the appellant succeeds therein the litigation will be brought to an expeditious and cost-effective conclusion in that its effect will be that the provisional judgment will have become final and the parties will not have to go into the drawn out and expensive procedure of a trial in order to determine whetherthe appellantis entitled to a final judgment against the respondent.G THE MERITS OF THE APPEAL[8] Rules 8(8), 8(9), 8(10) and 8(11) read:“(8) Should the court refuse provisional sentence it may order the defendant to file a plea within a stated time and may make such order as to the costs of the proceedings as to it may seem just. Thereafter the provisions of these rules as to pleading and the further conduct of trial actions shallmutatis mutandisapply.(9) The plaintiff shall on demand furnish the defendant with securityde restituendoto the satisfaction of the registar, against payment of the amount due under the judgment.(10) Any person

against whom provisional sentence has been granted may enter into the principal case only if he shall have satisfied the amount of the judgment of provisional sentence and taxed costs, or if the plaintiff on demand fails to furnish due security in terms of sub-rule (9).(11) A defendant entitled and wishing to enter into the principal case shall, within two months of the grant of provisional sentence, deliver notice of his intention to do so, in which event the summons shall be deemed to be a combined summons and he shall deliver a plea within 10 days thereafter. Failing such notice or such plea the provisional sentence shallipso factobecome a final judgment and the security given by the plaintiff shall lapse.”[9] The object of provisional sentence is to afford plaintiffs armed with liquid documents a speedy remedy and the entitlement to immediate payment against the furnishing of security de restituendo. SeeKentv Transvaalsche Bank1907 TS 765at 768 whereInnesCJsaid:“The object of granting provisional sentence was to afford a summary remedy to plaintiffs who were prepared with liquid proof of the defendant’s liability, and to enable them to obtain payment of their claims at once on giving securityde restituendo. And if a defendant could, by entering appearance, without satisfying the provisional judgment, prevent the issue of a writ, the whole object of the procedure would be

defeated.”[10] The essence of this case is whether the plaintiff on demand failed to furnish due security in terms of sub-rule (9).The phrase “on demand” has been interpreted to mean within a reasonable time of the demand, taking the surrounding circumstances into account.SeeANZ Banking Group (NZ) Ltd vGibson[1981] 2 NZLR 513at 526wherethe following was said:“What is meant by ‘payable on demand’ in the debentures? It was submitted that ‘upon demand’ cannot in the context mean instantaneously upon service of a demand without regard to the surrounding circumstances but must mean within a reasonable period of service of the demand having regard to all the surrounding circumstances.”See alsoHavenga v Lotter1912 TPD395at 398[11]The facts on which thisappealfalls to be decided are not in dispute.[12]As I have said,the respondent has not paid the principal debt and yet has purported to enter into the principal case.[13] As I havealsosaid the respondent achieved this position by demanding on25 June 2003that security be furnished by the appellant by10 a.m.on26 June 2003and on25 June 2003announcing that it was entering upon the principal case.[14] I think that the purported entering into the principal case by the respondent was bad in law and for two reasons: firstly becausethe period in which the appellant was requiredto put up security was not a reasonable one because it was too

shortin the circumstances namely that the security had to be put up by a financial institution,the amount to be secured was over R3 000 000.00,and less than a business day had been given to put up the security (see the judgment delivered in this division by Levin AJ which is unreported in the related matter of Osmans Spice WorksCC v Maslex under case number 24615/2002 dated 5 February 2004 which is at page 108 et seq of the record and particularly page 110). Secondlythe respondent gave notice of its intention to enter into the principal case before the time for the provision of security in terms of its demand had lapsed. Infact on 3 July the registrar rejected the security put up by the appellant.[15] Was that to be the end of the road for the appellant? I think not. As was held by the court a quo the giving of security is often a matter of negotiation. If that is so, and it is so, why should a security bond which at first does not satisfy the registrar not be timeously amended, as happened in this case, so as to satisfy the registrar? See:C.G.E. Rhoode Construction Co (Pty) Ltd v Provincial Administration,Cape, and Another1976(4) SA 925 (C) at 926 D.[16] I am not suggesting that the appellant had an unlimited time to furnish security.However, in my opinion, unless the appellant failed to deliver security timeously to enable the respondent to make payment withintheperiod

allowed by rule 8(11), that is within two months of the date of the provisional order which was made on 18 June 2003, it cannot be said to have “failed” to deliver security in terms of rule 8(10). That this is so, is borne out by the fact that payment of the amount required and the delivery of the security shall take place semel ac semel. See:Van der MerwevBonaeroPark(Edms) Bpk2000(4) SA 329 (SCA) at 334C – H.See alsoAntares (Pty) Ltd v Chenille Corporation ofSouth Africa(Pty) Ltd1976(4) SA 140 (W) at 141A – F[17] The position would be different if the appellant refused to furnish security. But in casu it did not do so. It in fact furnished security to the satisfaction of the registrar in July 2003.This fact, I think, is probably decisive of the appeal. The effect of the ruling of the registrar is that the security furnished by the appellant is in complete compliance with that contemplated in Rule 8(9). While the decision of the registrar stands, the respondent is precluded from contending that the appellant failed to furnish security in terms of sub-rule (9).It cannot simply ignore the ruling.This gave the appellant ample time to pay the principal debt against that security. It refused to do so,contendingthat the appellant had failed to deliver proper security.Furthermore all the objections made by therespondentto the security furnished,which was found satisfactorybythe

registrar,were laid at rest by Nedbank in a letter.H THE ORDER[18] In all the circumstances the following orderwasmade:1.The appeal of the appellant is upheld with costs, excluding the costs occasioned by the inclusion in the record of pages 123 – 426 inclusive.2.It is declared that the respondent is not entitled to enter into the principal case under case number 24614/2002 in the Witwatersrand Local Division.3.It is hereby declared that the provisional sentence judgment granted in case number 24614/2002 in this court on16 June 2003became a final judgment by no later than18 August 2003.4.It is hereby declared that the document purporting to give notice of the respondent’s intention to enter into the principal case dated25 June 2003is a nullity.5.The respondent is ordered to pay the costs of the application in the court a quo.THESE REASONS WERE SIGNED ON THE ___ DAY OF ___ 2005 ATJOHANNESBURGTHESE REASONS WERE HANDED DOWN ON THE ___ DAY OF _____ 2005 ATJOHANNESBURG____M. B. LABEJUDGE OF THE HIGH COURTI agree_____C.J.CLAASSENJUDGE OF THE HIGH COURTI agree_______R.R.ROSENBERGACTING JUDGE OF THE HIGH COURTCounsel for Appellant:

Counsel for Respondent:AdvO.A.MoosaSCAdvP.StrathernAttorney for Appellant:

Attorney for Respondent:Naidoo Maharaj IncAlanE.WarrenerRef:R.MoodleyRef:MrA.E.WarrenerArgument was heard on19 May 2005

IN THE HIGH COURT OF

SOUTH AFRICA

(

WITWATERSRAND

LOCAL DIVISION)

Case No: A5036/2004

Osmans Spice Works CC

Appellant/Plaintiff a quovsCorporate International (Pty) Ltd Respondent/Defendant a quo

JUDGMENT

LabeJ:

Labe

J:

A

INTRODUCTION

[1] This is an appeal by the appellant against the decision of a single judge in this division in an application brought by the appellant as applicant against the respondent (the application) about which I give further details below. The appellant is represented byAdvO.A.MoosaSC and the respondent byAdvP.Strathern. On19 May 2005we upheld the appeal and granted ancillaryand consequential relief. We said that our reasons for doing so would follow. These are the reasons.

[1] This is an appeal by the appellant against the decision of a single judge in this division in an application brought by the appellant as applicant against the respondent (the application) about which I give further details below. The appellant is represented by

Adv

O.

A.

Moosa

SC and the respondent by

P.

Strathern

. On

19 May 2005

we upheld the appeal and granted ancillary

and consequential relief. We said that our reasons for doing so would follow. These are the reasons.

B

THE BACKGROUND TO THE APPLICATION

[2] 1. On18 June 2003provisional sentence was granted in favour of

[2] 1. On

18 June 2003

provisional sentence was granted in favour of

the appellant against the respondent for:

the appellant against the respondent for

:

“CLAIM A:1.

“CLAIM A:

1.

Payment of the sum of R795,000.00

2.

Interest on R795,000.00 to date of payment at the rate of 15.50 per centum per year from1 October 2002.

Interest on R795,000.00 to date of payment at the rate of 15.50 per centum per year from

1 October 2002

.

CLAIM B:1.

CLAIM B:

Payment of the sum of R1 200 000.00

Interest on R1 200 000.00 to date of payment at the rate of 15.50 per centum per year from1 October 2002.

Interest on R1 200 000.00 to date of payment at the rate of 15.50 per centum per year from

CLAIM C:1.

CLAIM C:

3.

Costs of suit including the costsoccasioned by the employment of 2 Counsel.”

Costs of suit including the costs

occasioned by the employment of 2 Counsel.”

On25 June 2003in a letter served on the appellant at12:09p.m.on that day,the respondent demanded that security de restituendo be furnished by the appellant by not later than10 a.m.on26 June 2003.On the same day at2:46 p.m.and before the periodgrantedfor the putting upofthe security hadelapsed,a letter was delivered by the respondent to the appellant advising the appellant that the respondent was entering into the principal case.

On

25 June 2003

in a letter served on the appellant at

1

2

:09

p.m.

on that day

,

the respondent demanded that security de restituendo be furnished by the appellant by not later than

10 a.m.

on

26 June 2003

On the same day at

2:46 p.m.

and before the period

granted

for the putting up

of

the security had

e

lapsed

a letter was delivered by the respondent to the appellant advising the appellant that the respondent was entering into the principal case.

On26 June 2003the appellant furnished security by way of the document bearing that date.

the appellant furnished security by way of the document bearing that date.

4.

The registrar ruled on3 July 2003that the document did not constitute security.

The registrar ruled on

3 July 2003

that the document did not constitute security.

5.

The appellant then furnished the respondent with a letter of undertaking from Nedbank dated11 July 2003which the registrar ruled on17July 2003constituted securityin terms ofRule 8(9) of the rules.

The appellant then furnished the respondent with a letter of undertaking from Nedbank dated

11 July 2003

which the registrar ruled on

7

July 2003

constituted security

in terms of

R

ule 8(9) of the rules

6.

The respondent nonetheless refused to make payment of the principal sum, interest and costs contending that because the appellant had not furnished security to the satisfaction of the registrar pursuant to its request therefor dated25 June 2003, it was entitled to enter upon the principal case.

The respondent nonetheless refused to make payment of the principal sum, interest and costs contending that because the appellant had not furnished security to the satisfaction of the registrar pursuant to its request therefor dated

, it was entitled to enter upon the principal case.

C

THE APPLICATION

[3] By notice of motion dated1 August 2003the appellant claimed an order in the following terms:

[3] By notice of motion dated

1 August 2003

the appellant claimed an order in the following terms:

“1. The citation of the Defendant in this entire matter, including in respect of the Provisional Sentence Judgement delivered in Plaintiff’s favour on the 18th of June 2003, be and is hereby amended to Sir Trading (Pty) Ltd t/a Corporate International, and the Registrar is directed to furnish Plaintiff with the Provisional Sentence Judgment aforesaid reflecting the Defendant’s citation as amended aforesaid;

2. That it beand ishereby declared that the Defendant/Respondent is not entitled to enter into the principal case in case No. 24614/2002 in this Honourable Court in terms of Rule 8(11);

2. That it be

and is

hereby declared that the Defendant/Respondent is not entitled to enter into the principal case in case No. 24614/2002 in this Honourable Court in terms of Rule 8(11);

That the Defendant/Respondent’s notice ofintention to enter into the principal case in Case No.24614/2002 and its Plea in the same matter be set aside in terms of Rule 30 as irregular proceedings;

That the Defendant/Respondent’s notice o

f

intention to enter into the principal case in Case No.24614/2002 and its Plea in the same matter be set aside in terms of Rule 30 as irregular proceedings;

That it be and is hereby declared that the provisional sentence judgement granted in Case No. 24614/2002 by Madam Justice Mailula on Wednesday the 18th June 2003 has become a final judgement;

That it be and is hereby declared that the Plaintiff/Applicant is entitled to levy execution in terms of the Uniform Rules of Court in respect of the said provisional sentence judgment granted under Case No. 24614/2002;

That the Respondent pay the costs of this application including those occasioned by the employment of two Counsel;

7.

Such further or alternate relief as this Honourable Court may deem meet.”

D

THE DECISION OF THECOURTAQUO

D

THE DECISION OF THE

COURT

A

QUO

[4] The court a quo granted the application to amend and dismissed the remaining prayers.

E

THE APPEAL

[5] Leave to appeal having been granted an appeal was noted to this court. The grounds of appeal are set out below:

“2.

The Court erred in not holding that the Plaintiff had sixty (60) days fromthe 18thof June 2003within which to furnish Defendant with security to the satisfaction of the Registrar.

The Court erred in not holding that the Plaintiff had sixty (60) days from

the 18

th

of June 2003

within which to furnish Defendant with security to the satisfaction of the Registrar.

Alternatively, the Court erred in not holding, following on its acceptance that the import of Rule 8(10) of the Uniform Rules of Court is that a person should be afforded a reasonable opportunity to furnish security following on demand, that the Plaintiff, as a logical consequence thereof, must be afforded more than one opportunity to furnish security provided that this is done within a reasonable time.

Further alternatively, the Court erred in not holding, following on its acceptance that the import of Rule 8(10) of the Uniform Rules of Court is that a person should be afforded a reasonable opportunity to furnish security following on demand, that the demand made by the Defendant on 25 June 2003 that security should be furnished by 10h00 on 26 June 2003 did not afford Plaintiff reasonable time within which to furnish security.

Further alternatively, the Court erred in not holding that the Defendant purported to enter into the principal case on25 June 2003, that is even before its own deadline for the furnishing of security had expired, and that such purported act was accordingly premature and invalid, with the consequence that the Defendant has never entered the principal case.”

Further alternatively, the Court erred in not holding that the Defendant purported to enter into the principal case on

, that is even before its own deadline for the furnishing of security had expired, and that such purported act was accordingly premature and invalid, with the consequence that the Defendant has never entered the principal case.”

F

THE APPEALABILITY OF THE DECISION OF THECOURTAQUO

F

THE APPEALABILITY OF THE DECISION OF THE

[6] When we first read the papers, we were of the opinion that it was debatable whether the decision of the court a quo was appealableand we asked the parties to include argument in regard thereto in their heads of argument.[7]InZweni v Minister of Law and Order1993(1) SA 523 (A) where Harms AJA, as he then was, said this at 531I - 532A:

[6] When we first read the papers, we were of the opinion that it was debatable whether the decision of the court a quo was appealable

and we asked the parties to include argument in regard thereto in their heads of argument

.[7]

I

n

Zweni v Minister of Law and Order

1993(1) SA 523 (A) where Harms AJA, as he then was, said this at 531I - 532A:

“1. For different reasons it was felt down the ages that decisions of a ‘preparatory or procedural character’ ought not to be appealable (perSchreiner JA in thePretoria Garrison Institutescasesupraat 868). One is that, as a general rule, piecemeal consideration of cases is discouraged. The importance of this factor has somewhat diminished in recent times (SA Eagle Versekeringsmaatskappy Bpk v Harford[1992] ZASCA 42;1992 (2) SA 786(A) at 791B – D). The emphasis is now rather on whether an appeal will necessarily lead to a more expeditious and cost-effective final determination of the main dispute between the parties and, as such, will decisively contribute to its final solution (Priday t/a Pride Paving v Rubin1992 (3) SA 542(C) at 548H – I).”

“1. For different reasons it was felt down the ages that decisions of a ‘preparatory or procedural character’ ought not to be appealable (

per

Schreiner JA in the

Pretoria Garrison Institutes

case

supra

at 868). One is that, as a general rule, piecemeal consideration of cases is discouraged. The importance of this factor has somewhat diminished in recent times (

SA Eagle Versekeringsmaatskappy Bpk v Harford

[1992] ZASCA 42;1992 (2) SA 786(A) at 791B – D). The emphasis is now rather on whether an appeal will necessarily lead to a more expeditious and cost-effective final determination of the main dispute between the parties and, as such, will decisively contribute to its final solution (

[1992] ZASCA 42

1992 (2) SA 786

Priday t/a Pride Paving v Rubin

1992 (3) SA 542(C) at 548H – I).”

1992 (3) SA 542

See alsoPriday t/a Pride Paving v Rubin1992 (3) SA 542(C) Conradie J, as he then was, said this at 547D – G:

See also

1992 (3) SA 542(C) Conradie J, as he then was, said this at 547D – G:

“The Courta quonow has a large measure of control over appeals and is able to assess whether or not an interlocutory order, whether final in effect or not, could fruitfully be taken on appeal. This assessment includes not only a consideration of the prospects of success on appeal. It includes deciding whether the result of the appeal would contribute to resolving one or more of the disputes between the parties in an efficient and cost effective way and generally the efficacy of leave to appeal in curtailing the overall duration of litigation between parties.

“The Court

a quo

now has a large measure of control over appeals and is able to assess whether or not an interlocutory order, whether final in effect or not, could fruitfully be taken on appeal. This assessment includes not only a consideration of the prospects of success on appeal. It includes deciding whether the result of the appeal would contribute to resolving one or more of the disputes between the parties in an efficient and cost effective way and generally the efficacy of leave to appeal in curtailing the overall duration of litigation between parties.

There is therefore no longer any practical distinction between an interlocutory order with final effect and a simple interlocutory order. In the case of an interlocutory order with final effect the Court would, as before, determine whether it disposed of any issue or any portion of an issue in the main case; in the case of a simple interlocutory order, the question would be whether the decision of the Courta quo, if reversed or altered on appeal, would dispose of any issue or portion of an issue in the main case. One no longer looks, as was the case formerly, only at the effect of the decision of the Courta quoon the proceedings in the Courta quo. In each case the critical consideration would be whether a judgment on appeal before the matter proceeded any further would best serve the interests of both parties.Van StreepenGerms (supraat 585E – I.)”

There is therefore no longer any practical distinction between an interlocutory order with final effect and a simple interlocutory order. In the case of an interlocutory order with final effect the Court would, as before, determine whether it disposed of any issue or any portion of an issue in the main case; in the case of a simple interlocutory order, the question would be whether the decision of the Court

, if reversed or altered on appeal, would dispose of any issue or portion of an issue in the main case. One no longer looks, as was the case formerly, only at the effect of the decision of the Court

on the proceedings in the Court

. In each case the critical consideration would be whether a judgment on appeal before the matter proceeded any further would best serve the interests of both parties.

Van Streepen

Germs (supra

at 585E – I.)”

InVan Streepen& Germs (Pty) Ltd vTransvaalProvincial Administration1987 (4) SA 569(A) Corbett JA, as he then was, said at 585E – I:

In

& Germs (Pty) Ltd v

Transvaal

Provincial Administration

1987 (4) SA 569(A) Corbett JA, as he then was, said at 585E – I:

1987 (4) SA 569

“It is clear from the line of casesto which I have thus far referred that the main reason for this Court having given what Centlivres CJ described as a ‘restricted meaning’ to the words ‘judgment or order’ has been a reluctance to allow the piecemeal decision of cases, ie numerous subsidiary appeals during the course of a single legal proceeding, with all the expense and inconvenience attached thereto. (See the remarks ofInnesACJinDickinson’scasesupraat 428.) This is undoubtedly a very cogent consideration, particularly where the decision in question relates, for instance, to a procedural matter or to the admissibility of evidence and it may in the end not have a decisive effect upon the outcome of the case. Where, however, the decision relates to a question of law or fact, which if decided in a particular way would be decisive of the case as a whole or of a substantial portion of the relief claimed, then a somewhat different position arises, and indeed in that event the advantages of expense and convenience may favour a final determination of the question on appeal, even though the proceedings in the Courta quomay not have been concluded. The advantages of having such a question of law or fact determined by the Court of first instance as a separate, preliminary issue are recognised by the provisions of Rule 33(4) (see the remarks of Holmes JA inBotha v AA Mutual Insurance

Association Ltd and Another1968 (4) SA 485(A) at 489A – E); and under the present system of appeal, which requires leave to appeal in all cases falling under ss 20 and 21 of the Act, there is much to be said for the application of a more flexible approach (of which there was some evidence inShacklock’scasesupra) to the question of the appealability of such decisions taken by the Court of first instance.”

“It is clear from the line of case

s

to which I have thus far referred that the main reason for this Court having given what Centlivres CJ described as a ‘restricted meaning’ to the words ‘judgment or order’ has been a reluctance to allow the piecemeal decision of cases, ie numerous subsidiary appeals during the course of a single legal proceeding, with all the expense and inconvenience attached thereto. (See the remarks of

Innes

ACJ

in

Dickinson

’s

at 428.) This is undoubtedly a very cogent consideration, particularly where the decision in question relates, for instance, to a procedural matter or to the admissibility of evidence and it may in the end not have a decisive effect upon the outcome of the case. Where, however, the decision relates to a question of law or fact, which if decided in a particular way would be decisive of the case as a whole or of a substantial portion of the relief claimed, then a somewhat different position arises, and indeed in that event the advantages of expense and convenience may favour a final determination of the question on appeal, even though the proceedings in the Court

may not have been concluded. The advantages of having such a question of law or fact determined by the Court of first instance as a separate, preliminary issue are recognised by the provisions of Rule 33(4) (see the remarks of Holmes JA in

Botha v AA Mutual Insurance Association Ltd and Another

1968 (4) SA 485(A) at 489A – E); and under the present system of appeal, which requires leave to appeal in all cases falling under ss 20 and 21 of the Act, there is much to be said for the application of a more flexible approach (of which there was some evidence in

1968 (4) SA 485

Shacklock’s

) to the question of the appealability of such decisions taken by the Court of first instance.”

See also:Oliff vMinnie1952(4) SA 369 (A) at375G – 376A andPalmerv Goldblatt1961(3) SA 692 (N) at 700A

See also:

Oliff v

Minnie

1952(4) SA 369 (A) at

375G – 376A and

Palmer

v Goldblatt

1961(3) SA 692 (N) at 700A

If we hear the appeal and the appellant succeeds therein the litigation will be brought to an expeditious and cost-effective conclusion in that its effect will be that the provisional judgment will have become final and the parties will not have to go into the drawn out and expensive procedure of a trial in order to determine whetherthe appellantis entitled to a final judgment against the respondent.

If we hear the appeal and the appellant succeeds therein the litigation will be brought to an expeditious and cost-effective conclusion in that its effect will be that the provisional judgment will have become final and the parties will not have to go into the drawn out and expensive procedure of a trial in order to determine whether

the appellant

is entitled to a final judgment against the respondent.

G

THE MERITS OF THE APPEAL

[8] Rules 8(8), 8(9), 8(10) and 8(11) read:

“(8) Should the court refuse provisional sentence it may order the defendant to file a plea within a stated time and may make such order as to the costs of the proceedings as to it may seem just. Thereafter the provisions of these rules as to pleading and the further conduct of trial actions shallmutatis mutandisapply.(9) The plaintiff shall on demand furnish the defendant with securityde restituendoto the satisfaction of the registar, against payment of the amount due under the judgment.(10) Any person against whom provisional sentence has been granted may enter into the principal case only if he shall have satisfied the amount of the judgment of provisional sentence and taxed costs, or if the plaintiff on demand fails to furnish due security in terms of sub-rule (9).

“(8) Should the court refuse provisional sentence it may order the defendant to file a plea within a stated time and may make such order as to the costs of the proceedings as to it may seem just. Thereafter the provisions of these rules as to pleading and the further conduct of trial actions shall

mutatis mutandis

apply.(9) The plaintiff shall on demand furnish the defendant with security

de restituendo

to the satisfaction of the registar, against payment of the amount due under the judgment.(10) Any person against whom provisional sentence has been granted may enter into the principal case only if he shall have satisfied the amount of the judgment of provisional sentence and taxed costs, or if the plaintiff on demand fails to furnish due security in terms of sub-rule (9).

(11) A defendant entitled and wishing to enter into the principal case shall, within two months of the grant of provisional sentence, deliver notice of his intention to do so, in which event the summons shall be deemed to be a combined summons and he shall deliver a plea within 10 days thereafter. Failing such notice or such plea the provisional sentence shallipso factobecome a final judgment and the security given by the plaintiff shall lapse.”

(11) A defendant entitled and wishing to enter into the principal case shall, within two months of the grant of provisional sentence, deliver notice of his intention to do so, in which event the summons shall be deemed to be a combined summons and he shall deliver a plea within 10 days thereafter. Failing such notice or such plea the provisional sentence shall

ipso facto

become a final judgment and the security given by the plaintiff shall lapse.”

[9] The object of provisional sentence is to afford plaintiffs armed with liquid documents a speedy remedy and the entitlement to immediate payment against the furnishing of security de restituendo. SeeKentv Transvaalsche Bank1907 TS 765at 768 whereInnesCJsaid:

[9] The object of provisional sentence is to afford plaintiffs armed with liquid documents a speedy remedy and the entitlement to immediate payment against the furnishing of security de restituendo. See

Kent

v Transvaalsche Bank

1907 TS 765at 768 where

1907 TS 765

CJ

said:

“The object of granting provisional sentence was to afford a summary remedy to plaintiffs who were prepared with liquid proof of the defendant’s liability, and to enable them to obtain payment of their claims at once on giving securityde restituendo. And if a defendant could, by entering appearance, without satisfying the provisional judgment, prevent the issue of a writ, the whole object of the procedure would be defeated.”

“The object of granting provisional sentence was to afford a summary remedy to plaintiffs who were prepared with liquid proof of the defendant’s liability, and to enable them to obtain payment of their claims at once on giving security

. And if a defendant could, by entering appearance, without satisfying the provisional judgment, prevent the issue of a writ, the whole object of the procedure would be defeated.”

[10] The essence of this case is whether the plaintiff on demand failed to furnish due security in terms of sub-rule (9).

The phrase “on demand” has been interpreted to mean within a reasonable time of the demand, taking the surrounding circumstances into account.

SeeANZ Banking Group (NZ) Ltd vGibson[1981] 2 NZLR 513at 526wherethe following was said:

See

ANZ Banking Group (NZ) Ltd v

Gibson

[1981] 2 NZLR 513at 526

[1981] 2 NZLR 513

where

the following was said:

“What is meant by ‘payable on demand’ in the debentures? It was submitted that ‘upon demand’ cannot in the context mean instantaneously upon service of a demand without regard to the surrounding circumstances but must mean within a reasonable period of service of the demand having regard to all the surrounding circumstances.”

See alsoHavenga v Lotter1912 TPD395at 398[11]The facts on which thisappealfalls to be decided are not in dispute.[12]As I have said,the respondent has not paid the principal debt and yet has purported to enter into the principal case.[13] As I havealsosaid the respondent achieved this position by demanding on25 June 2003that security be furnished by the appellant by10 a.m.on26 June 2003and on25 June 2003announcing that it was entering upon the principal case.[14] I think that the purported entering into the principal case by the respondent was bad in law and for two reasons: firstly becausethe period in which the appellant was requiredto put up security was not a reasonable one because it was too shortin the circumstances namely that the security had to be put up by a financial institution,the amount to be secured was over R3 000 000.00,and less than a business day had been given to put up the security (see the judgment delivered in this division by Levin AJ which is unreported in the related matter of Osmans Spice WorksCC v Maslex under case number 24615/2002 dated 5 February 2004 which is at page 108 et seq of the record and particularly page 110). Secondlythe respondent gave notice of its intention to enter into the principal case before the time for the provision of security in terms of its demand had lapsed. Infact on 3 July the registrar rejected the security put up by

the appellant.[15] Was that to be the end of the road for the appellant? I think not. As was held by the court a quo the giving of security is often a matter of negotiation. If that is so, and it is so, why should a security bond which at first does not satisfy the registrar not be timeously amended, as happened in this case, so as to satisfy the registrar? See:C.G.E. Rhoode Construction Co (Pty) Ltd v Provincial Administration,Cape, and Another1976(4) SA 925 (C) at 926 D.[16] I am not suggesting that the appellant had an unlimited time to furnish security.However, in my opinion, unless the appellant failed to deliver security timeously to enable the respondent to make payment withintheperiod allowed by rule 8(11), that is within two months of the date of the provisional order which was made on 18 June 2003, it cannot be said to have “failed” to deliver security in terms of rule 8(10). That this is so, is borne out by the fact that payment of the amount required and the delivery of the security shall take place semel ac semel. See:Van der MerwevBonaeroPark(Edms) Bpk2000(4) SA 329 (SCA) at 334C – H.See alsoAntares (Pty) Ltd v Chenille Corporation ofSouth Africa(Pty) Ltd1976(4) SA 140 (W) at 141A – F[17] The position would be different if the appellant refused to furnish security. But in casu it did not do so. It in fact furnished security to the satisfaction of the registrar in

July 2003.This fact, I think, is probably decisive of the appeal. The effect of the ruling of the registrar is that the security furnished by the appellant is in complete compliance with that contemplated in Rule 8(9). While the decision of the registrar stands, the respondent is precluded from contending that the appellant failed to furnish security in terms of sub-rule (9).It cannot simply ignore the ruling.This gave the appellant ample time to pay the principal debt against that security. It refused to do so,contendingthat the appellant had failed to deliver proper security.Furthermore all the objections made by therespondentto the security furnished,which was found satisfactorybythe registrar,were laid at rest by Nedbank in a letter.

Havenga v Lotter

1912 TPD

395

at 398

[11]

The facts on which this

appeal

falls to be decided are not in dispute.[12]

As I have said

the respondent has not paid the principal debt and yet has purported to enter into the principal case.[1

3

] As I have

also

said the respondent achieved this position by demanding on

that security be furnished by the appellant by

and on

announcing that it was entering upon the principal case.[1

4

] I think that the purported entering into the principal case by the respondent was bad in law and for two reasons

: firstly because

the period in which the appellant was requ

ired

to put up security was not a reasonable one because it was too short

in the circumstances namely that the security had to be put up by a financial institution

t

he amount to be secured was over R3 000 000.00

and less than a business day had been given to put up the security (see the judgment delivered in this division by Levin AJ which is unreported in the related matter of Osmans Spice Works

CC v Maslex under case number 24615/2002 dated 5 February 2004 which is at page 108 et seq of the record and particularly page 110)

. Secondly

the respondent gave notice of its intention to enter into the principal case before the time for the provision of security in terms of its demand had lapsed. In

fact on 3 July the registrar rejected the security put up by the appellant.

[1

5

] Was that to be the end of the road for the appellant? I think not. As was held by the court a quo the giving of security is often a matter of negotiation. If that is so, and it is so, why should a security bond which at first does not satisfy the registrar not be timeously amended, as happened in this case, so as to satisfy the registrar? See:

C.G.E. Rhoode Construction Co (Pty) Ltd v Provincial Administration,

Cape

, and Another

1976(4) SA 925 (C) at 926 D.[1

6

] I am not suggesting that the appellant had an unlimited time to furnish security.

However, i

n my opinion, unless the appellant failed to deliver security timeously to enable the respondent to make payment within

the

period allowed by rule 8(11), that is within two months of the date of the provisional order which was made on 18 June 2003, it cannot be said to have “failed” to deliver security in terms of rule 8(10). That this is so, is borne out by the fact that payment of the amount required and the delivery of the security shall take place semel ac semel. See:

Van der Merwe

v

Bonaero

Park

(Edms) Bpk

2000(4) SA 329 (SCA) at 334C – H.See also

Antares (Pty) Ltd v Chenille Corporation of

South Africa

(Pty) Ltd

1976(4) SA 140 (W) at 141A – F[1

] The position would be different if the appellant refused to furnish security. But in casu it did not do so. It in fact furnished security to the satisfaction of the registrar in July 2003.

This fact, I think, is probably decisive of the appeal. The effect of the ruling of the registrar is that the security furnished by the appellant is in complete compliance with that contemplated in Rule 8(9). While the decision of the registrar stands, the respondent is precluded from contending that the appellant failed to furnish security in terms of sub-rule (9).

It cannot simply ignore the ruling.

This gave the appellant ample time to pay the principal debt against that security. It refused to do so,

contending

that the appellant had failed to deliver proper security.

Furthermore a

ll the objections made by the

respondent

to the security furnished

which was found satisfactory

by

the registrar

were laid at rest by Nedbank in a letter.

H

THE ORDER

[18] In all the circumstances the following orderwasmade:

8

] In all the circumstances the following order

was

made:

1.The appeal of the appellant is upheld with costs, excluding the costs occasioned by the inclusion in the record of pages 123 – 426 inclusive.

The appeal of the appellant is upheld with costs, excluding the costs occasioned by the inclusion in the record of pages 123 – 426 inclusive.

2.It is declared that the respondent is not entitled to enter into the principal case under case number 24614/2002 in the Witwatersrand Local Division.

It is declared that the respondent is not entitled to enter into the principal case under case number 24614/2002 in the Witwatersrand Local Division.

3.It is hereby declared that the provisional sentence judgment granted in case number 24614/2002 in this court on16 June 2003became a final judgment by no later than18 August 2003.

It is hereby declared that the provisional sentence judgment granted in case number 24614/2002 in this court on

16 June 2003

became a final judgment by no later than

18 August 2003

4.It is hereby declared that the document purporting to give notice of the respondent’s intention to enter into the principal case dated25 June 2003is a nullity.

It is hereby declared that the document purporting to give notice of the respondent’s intention to enter into the principal case dated

is a nullity.

5.The respondent is ordered to pay the costs of the application in the court a quo.

The respondent is ordered to pay the costs of the application in the court a quo.

THESE REASONS WERE SIGNED ON THE ___ DAY OF _____ 2005 ATJOHANNESBURG

THESE REASONS WERE SIGNED ON THE ___ DAY OF _____ 2005 AT

JOHANNESBURG

THESE REASONS WERE HANDED DOWN ON THE ___ DAY OF ___ 2005 ATJOHANNESBURG

THESE REASONS WERE HANDED DOWN ON THE ___ DAY OF ___ 2005 AT

____M. B. LABEJUDGE OF THE HIGH COURTI agree_____C.J.CLAASSENJUDGE OF THE HIGH COURTI agree_______R.R.ROSENBERGACTING JUDGE OF THE HIGH COURT

____

M. B. LABEJUDGE OF THE HIGH COURTI agree_______C.

J.

CLAASSEN

JUDGE OF THE HIGH COURTI agree_____

R.

ROSENBERG

ACTING JUDGE OF THE HIGH COURT

Counsel for Appellant:

Counsel for Respondent:AdvO.A.MoosaSCAdvP.StrathernAttorney for Appellant:

Attorney for Respondent:Naidoo Maharaj IncAlanE.WarrenerRef:R.MoodleyRef:MrA.E.Warrener

Counsel for Appellant:

Counsel for Respondent:

SC

Attorney for Appellant:

Attorney for Respondent:Naidoo Maharaj Inc

Alan

E.

Warrener

Ref:

Moodley

Mr

Argument was heard on19 May 2005

Argument was heard on