Sibuya Game Reserve & Lodge (Pty) Ltd and Others v Cook and Others (4512/14) [2014] ZAECGHC 110 (11 December 2014)

IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE DIVISION, GRAHAMSTOWN)

CASE NO: 4512/14

Date heard: 04 December 2014

Judgment Delivered: 11 December 2014

In the matter between:

SIBUYA GAME RESERVE & LODGE (PTY) LTD.........................................................1st Applicant

SALISBURY TRADING CC...............................................................................................2nd Applicant

VINTONY (PTY) LTD.........................................................................................................3rd Applicant

and

GEOFFREY MARTIN COOK........................................................................................1st Respondent

SEABUSH INVESTMENTS (PTY) LTD.......................................................................2nd Respondent

HESBER IMPALA (PTY) LTD.......................................................................................3rd Respondent

JUDGMENT

BROOKS AJ:

[1] This a matter which was brought before the court on an urgent basis. It was initially enrolled for hearing on 27 November 2014 but congestion on that roll required that the matter be postponed to 4 December 2014, the issue of liability for payment of any wasted costs occasioned by the postponement being reserved.

[2] Soon after the matter was called, Mr Van Huyssteen, who appeared on behalf of the applicants, moved for an amendment to the notice of motion. The amendment was substantial, but notice thereof having been given and there being no objection thereto by Mr Hopkins, who appeared on behalf of the first respondent, the amendment was granted.

[3] For the sake of clarity, it is apposite to record that only the first respondent opposed the application. Only the first respondent was targeted in the substantive relief set out in both the original notice of motion which was served and the amended notice of motion upon which argument proceeded.

[4] It is common cause between the parties that litigation between them is pending in the South Gauteng High Court. The amended notice of motion seeks an interim interdict pending the finalisation of that litigation.

[5] The first and the third applicants are companies incorporated and registered in accordance with the laws of South Africa. The second applicant is a close corporation which is also so incorporated and registered.

[6] In the founding affidavit, the deponent (Fox) describes himself as the managing director of the first applicant and the third applicant, and the managing member of the second applicant. He claims authority to depose to the affidavit by virtue of the content of three documents annexed to the founding affidavit. He also relies upon the three documents as proof of his authority to bring the application on behalf of the three applicants.

[7] In his answering affidavit, the first respondent raises as a point in limine an apparent lack of authority on the part of Fox to bring the application on behalf of the three applicants. Reliance is placed on the insufficiency of the content of the three documents annexed to the founding affidavit to support the allegation contained therein.

[8] In the replying affidavit, Fox reiterates that he is authorised to bring the application and to represent the applicants. The affidavit contains the following further paragraph:

“As an extra precaution, I attach hereto affidavits by my fellow directors, Carolyn Diana Fox, who is my wife, and my sister-in-law

Fenella Lawrenson, my fellow directors of the First and Third Applicants and Trustees of the Foxlaw Family Trust owning the members’ interest in the Second Applicant, confirming inter alia that I was duly authorised to bring this application my authority and ratifying my authority to the extent necessary. I refer to annexure “B” and “C” respectively.”

[9] Bar changes in the name of the deponents, the affidavits attached as “B” and “C” respectively find expression in identical terms. Both are entitled “Confirmatory Affidavit”. Both deponents describe themselves as adult females residing at the farm Hopewell, Southwell District, Kenton-on-Sea, Eastern Cape. Both say that the facts deposed to are within their personal knowledge or prepared from records under their control, expect where the contrary appears, and are true and correct to the best of the deponents’ knowledge and belief. Notwithstanding the promise of information of substance and relevance contained in the preface to the affidavits, the third (and the last) paragraph of each states simply:

“I have read the affidavit of Nicholas James Fox and confirm the contents thereof insofar as they relate to me.”

[10] An evaluation of the extent of the merit in the point in limine involves an enquiry into, firstly, the sufficiency of the content of the annexures to the founding affidavit relied upon by the applicants and, secondly whether any deficiency is capable of being remedied in the replying affidavit and, if so, whether that has been achieved in the present matter.

[11] In respect of the first applicant and the third applicant, there is nothing in the founding affidavit to suggest that the board of directors of each of the two companies have authorised the application. In the case of the first applicant, Fox asserts in the founding affidavit that his authority to litigate on behalf of the first applicant appears from annexure A1. That annexure purports to be a resolution of the directors of the first applicant. In my view, it is not. It is an undated document signed only by Fox himself. The most generous interpretation of the document suggests no more than that Fox has purported to authorised himself to commence litigation on behalf on the first applicant and in the South Gauteng Court. Where the application papers disclose that the first applicant has three directors, the purported authorisation of himself by Fox is insufficient. There is nothing in the founding affidavit to suggest that all three directors have resolved to authorise Fox to litigate on behalf of the first applicant.[1]

[12] The position of the third applicant receives the same treatment in the founding affidavit and in annexure A3 thereto. The same criticism as has been advanced in respect of the deficiencies pertaining to the authority for Fox to act on behalf of the first applicant is accordingly entirely apposite in respect of the extent to which authority for him to act on behalf of the third applicant has been demonstrated in the founding papers.

[13] Considering the position pertaining to Fox’s authority to act on behalf of the second applicant, it is to be noted that whereas the second applicant is a close corporation of which Fox is the managing member, annexure A2 purports to be a resolution of the directors of the second applicant. Accordingly, to the criticisms levelled against the content of its companion documents annexed to the founding affidavit as A1 and A3, which are equally applicable to annexure A2, must be added the criticism that a close corporation does not have directors and a lack of any mention of a meeting of the members of the second applicant in annexure A2 renders it useless for the purpose of which it was intended.

[14] Alerted to the deficiencies in the founding papers by the content of the first respondent’s answering affidavit, Fox attempts to deal with the challenge to his authority in the replying affidavit that is put up. It has been held that a court may permit a litigant to put up evidence of authority in his or her replying papers. This is particularly so where an applicant wishes simply to place the resolution of the applicant’s board before court. [2] Whether to dismiss the application or to permit supplementation will depend upon the outcome of the exercise of a judicial discretion which has regard to the particular circumstances of the matter and determines with regard thereto what will ultimately be fair to the litigants.[3]

[15] Accordingly I am of the view that in the exercise of its judicial discretion it is proper for the court to have regard to the nature and extent of the proof of authority with which an applicant in these circumstances wishes to supplement its papers. Clearly, little problem arises from the presentation of a clear, pre-existant resolution of the applicant’s board of directors which could have formed part of the founding papers in support of allegations contained therein.

[16] The position is more complex where an applicant wishes to place evidence of a ratification of the applicant’s actions before the court as part of the replying papers. In my view, what is required is a clear and unequivocal resolution of the applicant’s board of directors which demonstrates that a board meeting was held at which the issue of ratification was debated and which resulted in an informed decision being taken to ratify the steps already taken.[4] This should be accompanied by a full explanation as to why the applicant had proceeded initially without the prerequisite authority.

[17] Turning to the material placed before the court by the applicants as part of the replying papers in this matter, it is immediately evident that what has been placed before the court to meet the challenge in the first respondent’s answering affidavit falls far short of a resolution of directors or members which demonstrates that an informed decision was taken at a duly convened meeting of directors, or members in the case of the second applicant, pursuant to a debate on the issue of the need for ratification of authority. What has been put up are only the two affidavits to which I have made reference elsewhere in his judgment. In my view, the content of the replying affidavit and the two confirmatory affidavits which are attached thereto contain no evidence that the applicants’ respective boards of directors, or members, considered the matter and took decisions in regard thereto.[5]

[18] It follows that no evidence has been placed before the court to demonstrate that the applicants authorised the present proceedings.

The point in limine raised by the first respondent must succeed.

[19] I make the following order:

1. The application is dismissed.

2. The applicants are hereby directed to pay the first respondent’s costs, such costs to include the wasted costs occasioned by the postponement of the matter on 27 November 2014.

_____________________

RWN BROOKS

JUDGE OF THE HIGH COURT (ACTING)

Appearances

Applicants: Mr KJ Van Huyssteen of Fluxmans

Attorneys instructed by John Haydock Attorneys.

First Respondent : Adv Hopkins

instructed by Wheeldon Rushmere and Cole.

[1] Griffiths v Ingles (PTY) LTD v Southern Cape Blasters (PTY) LTD 1972 (4) SA 249 (C) at 253 to D

[2] Merlin Gerin (PTY) LTD v All Current and Drive Centre (PTY) LTD and Another 1994 (1) SA 659 (C) at 660 I

[3] Note 2 at 660 H

[4] Smith v Kwanonqubela Town Council 1999 (4) SA 947 (SCA) para [9]

[5] Note 1 at 253 E to 254 A