Western Flyer Manufacturing (Pty) Ltd v Dewrance N.O and Others (819/04) [2005] ZANWHC 10; 2007 (6) SA 459 (B) (1 January 2005)

IN THE HIGH COURT OF SOUTH AFRICA

(BOPHUTHATSWANA PROVINCIAL DIVISION)

CASE NO.:819/04

In the matter between:

WESTERN FLYER

MANUFACTURING (PTY) LTD APPLICANT

AND

MYRON DEWRANCE NO 1ST RESPONDENT

PAUL DANIEL KRUGER NO 2ND RESPONDENT

ENVER MOHAMED MOTALA NO 3RD RESPONDENT

JAYANT DAJI PEMA NO 4TH RESPONDENT

(in their capacity as the duly appointed

joint liquidators to Durabuild (Pty) Ltd)

MMABATHO

PISTOR AJ

JUDGMENT

PISTOR AJ:

INTRODUCTION

[1] This is an application for an order that certain dispositions by a company, Durabuild (Pty) Ltd (in liquidation) be set aside in terms of section 32 of the insolvency act, 1936 (Act 24 1936 – hereinafter referred to as the Act).

[2] Both the citation of the parties and the relief sought are relevant to the outcome of this matter. The parties are cited as stated in the head note herein above. I intend to revert to them later herein.

[3] The relief sought (apart from the normal prayer for costs), are set out as follows in the notice of motion:

(1) That Western Flyer Manufacturing (Pty) Ltd is ordered to indemnify the Applicants in accordance with the provisions of Section 32 of the Insolvency Act 24 of 1936 (the Act) in respect of any costs relating to this application and the relief sought herein.

(2) That Western Flyer Manufacturing (Pty) Ltd is hereby authorised to proceed with this application in the name of the Applicants.

(3) That the purported surety ship by Durabuild (Pty) Ltd (In liquidation) in favour of the Second Respondent alternatively the First Respondent dated 19 March 1999 be seta aside alternatively impeached.

(4) That the Notarial Bond purportedly passed by Durabuild (Pty) Ltd (In liquidation) over all its movable property in favour of the Second alternatively the First Respondent (BN/18346/99) be set aside alternatively impeached.

(5) That the Respondents take all such steps as may be necessary in order to procure the payment of the proceeds of the auction on 16 May 2002 in respect of the assets of Durabuild (Pty) Ltd (In liquidation) be paid to the Applicants upon service of this order.”

[4] Western Flyer Manufacturing (Pty) Ltd cited in the heading of the application as the applicant claims to be a creditor of the company known as Durabuild (Pty) Ltd. For the sake of convenience I will refer to Western Flyer Manufacturing (Pty) Ltd herein as the applicant and to Durabuild (Pty) Ltd as “Durabuild”.

[5] On Durabuild was finally liquidator by an order of this Court and subsequent thereto five liquidators were appointed. They are referred to hereinabove in the first instance as Respondents and in the second instance as the Applicants. I refer to them jointly as the liquidators.

[6] North West Transport Investment (Pty) Ltd (under judicial management ), North West Development Corporation (Pty) Ltd (under judicial management) and Comark Holdings (Pty) Ltd (In liquidation) were cited in this application as first second and third Respondents respectively. For sake of convenience I refer to them jointly as the Respondents and to North West Transport Investments (Pty) Ltd as NTI, to North West Development Corporation (Pty) Ltd as NWDC and to Comark Holdings (Pty) Ltd as Comark

[7] Since the filing of the present application the order of judicial management in respect of NWDC was uplifted but nothing turns on that fact in this application.

[8] …..that Durabuild signed a surety ship and a notarial bond in respect of its movable assets which, as a result subsequent cessions of rights in respect of said surety ship and bond can now be for all practical purposes be considered of having been signed in favour of the NWDC.

[9] Persuading to the set notarial bond having been signed and on 18 February 2002 NTI and the NWDC jointly as applicants obtained an order against Durabuild as Respondent in terms of which NTI and the NWDC were authorised to take her in terms of the provisions of the said notarial bond, to take possession of Durabuild’s movable assets. I refer to that order as the “perfecting order”.

[9] It is common cause that subsequent to the said order having been granted, the NWDC and NTI sold the movable assets and it is the proceed of the said auction that form the subject of the prayer contained in paragraph 5 of the Notice of Motion referred to above.

[10] The Applicant filed a founding affidavit deposed to by the Applicants’ Attorney.

[11] The Liquidators did not file any affidavits. The Respondents filed an answering affidavit in which they took three in limine they did not react to the averment relating to merits of the application. On the strength of the said three points the Respondents maintained that the application cannot succeed.

[12] The first of the set points was one of none joinder. However this point was subsequently abandoned and I need not refer to it at all.

[13] The second point raised in the answering affidavit was that the Applicant failed to indemnify the Liquidators against all costs of the application. This point was raised by virtue of the provisions of Section 32 (1)(b) of the Act to which I intend to revert to later herein.

[14] The further point in limine, raised in the answering affidavit, was raised an attack on counsel authority to depose to an affidavit on behalf of and in the Liquidators. The point was development further in argument and in the main it boils down to the fact that application was not made “in the name of” the Liquidators.

[15] The answering affidavit was signed on 16 August 2004. On 24 February 2005 the Respondents filed a “notice to introduce a further point in limine”. The latter point is to the fact that the Applicants have applied for the setting of aside of the perfecting order referred to above and that the Applicants can therefore not succeed with their application.

[16] On 2 December 2004 the Applicant and the Respondents were represented when the matter was called before Leeuw J. By agreement between the parties then before the Learned Judge a draft order prepared by the parties was made an order of court. In terms of the latter order the matter was referred for evidence of the following issues:

“Whether the surety ship, general notarial bond and perfection of the notarial bond constituted impeachable dispositions in terms of sections 26, 29, 30 or 31 of the Insolvency Act.”

[17] The matter was setdown for hearing before me for 16 May and subsequent days. A total of seven days were reserved for the hearing of the matter. Before the start of the matter on 16 May 2005 the legal representatives of the parties approached me in chambers. Advocate Joubert SC with Advocate , on behalf of the Applicant, Advocate Terblanche SC with Advocate , on behalf of the Respondents and Advocate Maree SC on behalf of the Liquidators. I was informed that the Applicant was prepared and ready to proceed with the evidence of a witness. However Mr Joubert indicated that the particulars of the evidence of the witness were given to Mr Terblanche late and that the matter might have to be postponed in order for Mr Terblanche to consider his position. Mr Maree was of the view that his clients were not given an indemnity and that he would in any event want to argue the point in limine with regard to the failure of the Applicant to provide the Liquidators with an indemnity. Mr Maree did not consider himself bound by the agreement that the matter be referred for evidence and that the points in limine be argued at the end of the evidence. I was informed that the points in limine had not been abandoned and will be proceeded with irrespective of whether the evidence will be led. I was of the view that at least in respect of some of the points in limine they appear prima facie to be of such a nature that, should they succeed the leading of evidence might be unnecessary. I then requested the parties to argue the points in limine first. There seems to be judicial support for this arrangement. See ……..

[18] The matter then stood down until the next morning when argument on the points in limine started. Having heard argument on the points I became convinced that at least the third point in limine ought to be successful. However I decided that I need more time to consider a full judgment on the matter. However the indication that I got from the parties was that the matter could be proceeded with if I dismissed the points in limine. I therefore and in order not to keep the parties in ……. decided not to reserve my entire judgment but to grant an order based on the third point in limine and reserved my on the other matters as well as my reasons and costs order in respect of the entire judgment. I therefore at the end of the argument on the points in limine I dismissed the application based on the third point and reserved the rest of my judgment. I now deal with the points in limine.

First point in limine

Failure by the Applicant to grant the Liquidators an Indemnity in terms

Of Section 32 of the Act.

1.1 It is common cause that on the morning on the day on which the points in limine before the Liquidators received an indemnity to their satisfaction of the costs of this application. However the contention of both Mr Maree and Mr Terblanche was that such an indemnity was too late and that the Applicants application, having been instituted without an indemnity having been granted prior to the institution of the application must result in the dismissal of the application.

[2] Section 32 of the Act provides as follows:

“

[3] It is more particularly section 32(1)(b) that is relevant for the present moment in time.

[4] Mr Joubert argued that the Liquidators and the Respondents are factually incorrect in so far as they maintained that the Liquidators had not been given an indemnity prior to the hearing of the application. He (Mr Joubert) argued that in any event the Act does not contain provisions relating to the nature of the indemnity to be furnished. He referred me in this regard to the case of Lane & Another NO vs ……

[5] With regard to the nature of the indemnity Van Zyl J remarked inter alia:

“Quite clearly it must be sufficient to cover the costs the arising from the proceedings for which the Trustee will be liable . . . It would appear that, although the Act does not specify, the Trustee must be satisfied that the indemnity is adequate for the purposes of section 32 (1)(b) proceedings. Whether or not a particular indemnity is adequate will depend on an objective evaluation of its nature, extend and effect……….

[6] With regard to the question as to whether an indemnity had indeed be provided in the present matter Mr Joubert referred me to a letter dated 13 November 2003 which appears at page 359 of the papers before me.

[7] His argument was that no response was received to the letter and that a subsequent letter was address to one of the Liquidators on 22 January 2004 in which the Liquidators were given a further indemnity.

[8] He further argued that no response by the Liquidators was received subsequent to the second letter and that the Applicant was entitled to believe that the Liquidators were satisfied with the indemnity.

[9] The application was then filed with the Registrar of this Court on 5 July 2004.

[10] On the Respondents Attorneys wrote a letter to the Applicant’s Attorneys inviting their attention to the fact that Applicant had instituted the application without having provided the required indemnity to the Liquidators of Durabuild. The Respondents further indicated in that letter that the Applicant should withdraw the application and provide the indemnity. They further intimated that in the event of the Applicant not been prepared to do so they reserved the right to require a special costs order against the Applicant.

[11] Mr Terblanche argued that the Liquidators indeed had indicated that to the Applicant that they were not satisfied with the indemnity and he referred me to a telephone discussion on behalf of the Liquidators and Mr on behalf of the Applicant which telephone discussion was paginate of the papers before. Although it appears from the telephone discussion that there was some dissatisfaction with regard to the indemnity provided, it is not clear on to when the discussion had taken place and I am prepared accept in favour of the Applicant that it is not stated in the papers that the Liquidators had indicated to the Applicant that they (the Liquidators) were not prepared to accept the indemnity referred to in the aforesaid letters.

[12] However, in my view it is necessary to established objectively as to whether the indemnity was a proper indemnity as contemplated in the Act. If it was not then, in my view a failure by the Liquidators then and there that they were not satisfied with the indemnity cannot remedy any defects in the indemnity. They were in my view entitled irrespective of whether then and there raised an objection or not against the indemnity to raise point at the hearing of the matter. At the best for the Applicant the effect of the failure of the Liquidators to raise the point earlier ought to restricted to the question of costs.

[13] I now turn to consider whether the indemnity referred to by Mr Joubert can be considered objectively as an acceptable indemnity. Mr Maree argued that, had the first indemnity been a proper indemnity the Applicant would not have bothered to provide further or supplementary indemnities. And he maintained that the first indemnity was not a proper indemnity. This argument was supported by further submissions made by Mr Terblanche.

[14] I now turn to the letters relied upon by Mr Joubert in his submission that they constitute an indemnity as required by section 32 of the Act. The relevant portion of the letter of 13 November 2003 is quoted in the letter of 2 January 2004 and in so far it is relevant the contents of the first requested the Liquidators to take steps to have the relevant disposition set aside and that they should indicate their willingness to do so with\in seven days from the date of the first letter. Then the first letter proceeded to state that in the event of the Liquidators not indicating within the set number of days that they would set aside the disposition then:

“We will assume that you will not be doing so, and our clients as creditors will instruct us to make the necessary application in the name of the joint Liquidators for the necessary relief with the consequent indemnity in respect of costs”.

[15] The letter of 22 January 2004 was addressed to Mr Kruger, one of the joint Liquidators and the relevant portion of the letter reads as follows:

“As you confirmed that you had not received any response from your joint Liquidators, our client has instructed to bring the necessary application for the relief sought in the name of the joint Liquidators. As is required our client hereby indemnify the joint Liquidators in respect of the costs pursuant to such application. An application has been drawn in the name of the joint Liquidators . . . a copy of the application will be forwarded for your signature to enable the application to be proceeded with.”

[16] In my view it is clear from the contents of the first letter that no indemnification in whatever form or manner was contained in that letter. The letter, at best for the Applicant merely indicates that an application will be made in the name of the joint Liquidators “with the consequent indemnity costs”. It can therefore not be said that the first letter contained any form of indemnity.

[17] Both the aforesaid letters were written on behalf of three different companies, one of them being the present Applicant. The second letter states that “our client hereby indemnifies . . . in respect of the costs pursuant to such application.” It is not clear from the letter read in its entirety on behalf of which of the companies the indemnity was given. In the first letter is was indicate that the Attorney (the author of the letter) was acting on behalf of all three of the companies referred to in the heading of the letter. Mr Joubert however argued that it was clear between the parties that the company who actually gave the indemnity was the present Applicant. It is common cause that the present Applicant is a Shell company and in my view no Liquidator of his sound mind would have accepted for the costs of an application of this magnitude from a shell company.

[18] Consequently I am of the view that the Liquidators were entitled to reject he indemnity contained in the said letters.

[19] I accept that the Liquidators failed to then properly inform the Applicant that the indemnity is not accepted. However that, as I have indicated, is a matter for costs to which I intend to revert later herein.

[20] Consequently I am of the view that the Applicant instituted the present application without having given a proper indemnity in terms of section 32 (1)(b) of the Act and I now consider the effect of such failure.

[21] Mr Joubert in this regard argued that by virtue of the provisions of section 157(1) of the Act the indemnity given or the failure to give a proper indemnity does not necessarily nullify the proceedings. Section 157(1) of the Act provides as follows:

Mr Terblanche and Mr Maree both argued that section 157 does not find an application in a case where an indemnity has not been provided for in terms of section 32.

[22] It is clear from the wording of the latter section that it has effect only in respect of formal defects.

[23] The granting of an indemnity in terms of section 32 of the Act is a prerequisite for the institution for any proceedings by a creditor in the name of the trustee. Without such an indemnity having been provided a creditor has no locus standi to institute proceedings in the name of the trustee. Mars: “The Law of Insolvency SA 7ed (Waters & Jooste at 15 in this regard remarks as follows:

“In deciding whether a defect is formal, the test is not whether the provisions of the statute are directory of peremptory, but rather whether the statute aims at some definite object and whether that object would be defeated by an omission to comply with the statute . . . a defect is not formal if the rights of a creditor would in any way be effected.”

I was not able to find any decided case where the failure to provide an indemnity in terms of the said section 32 was held to be a formal defect. I was also not referred to such a case to any of the parties.

[24] In Cassim vs The Master and Others 1962 (4) SALR 601 (D&CLD) the estates of a partnership and of the partners were requested. Contrary to the provisions of section 92 (5) of the Insolvency Act creditors of the partnership were permitted to file claims against the partners. An objection against this procedure turned down by the trustee and the court was requested to set aside the ruling of the trustees. It was argued on behalf of the trustee that the non-complianance with section 49 (5) of the Act was “a formal defect” as contemplated in section 157(1) of the Act. At 606H Wessels J is reported to have said:

“The failure to comply with the section in question cannot be describe merely as a departure . .. .

In my view, it cannot be said that the failure to provide an indemnity in terms of section 32 of the Act is a formal defect. As I have indicated, a creditor would no locus standi to bring an application in terms of section 32 until such time as an indemnity has been given. Mr Joubert has, correctly in my view, conceded the indemnity has to be given “upfront”.

[25] I must therefore conclude that a proper in terms of section 32 was not provided to the Liquidators until the morning of the on which the hearing of the matter was to start before.

[26] In any event, if I would be wrong in this regard, I further to agree with Mr Maree and Mr Terblanche in so far as they submitted that the failure to provide an indemnity timeously caused the Liquidators to suffer damages in the sense that they were at risks to the costs of the application until such time as a proper indemnity has been provided. In the premises I am of the view that this point in limine must be upheld.

[27] However, since an expectable indemnity has now been provided, I believe that I should allow the Applicant to proceed on the same papers, supplemented if necessary and if so advise in order to save further unnecessary escalation of costs. I intend to deal later herein with the Applicant’s liability for costs as a results of its failure to provide the indemnity.

[28] Failure to bring the application in the name of the Liquidators

(1) Section 32 (1)(b) of the Act provides that in the event of the trustee failing to take steps to set aside a disposition a creditor may take such “in the name of the trustee”. Upon the creditors the indemnifying the trustee against all costs thereof. The argument advanced on behalf of the Liquidators and on behalf of the Respondents is that the present application was not instituted “in the name of the Liquidators” of Durabuild.

(2) It is in my view clear that the Applicant in an application for the setting aside of a disposition (such as the one casu) must be the trustee (the Liquidators in casu). Albeit it that the trustee is the nominal applicant. See Smith, the Law of Insolvency 3(Ed) at 140.

(3) It is not expectable that a creditor instituted an application “on behalf of” the trustee. (See ).

(4) Mr Terblanche referred to various passages in the Notice of Motion and the Founding Affidavit in support of his argument that the present application was not instituted “in the name of” the Liquidators. In my view the most aspect in this regard is the authority of the deponent to the founding affidavit. Mr D N Khan who deposed to the founding affidavit states in paragraph that affidavit that he is an attorney practising as such in Johannesburg. In paragraph of the founding affidavit he states:

“I am duly authorised to depose to this affidavit for on behalf of Western Flyer Manufacturing (Pty) Ltd under and by virtue of a resolution passed by the board of Directors dated 18 May 2004 attached hereto marked DNK1”.

The latter annexure is a resolution of the board of Directors of the Applicant in this matter which states that “the company be and is hereby authorised and empowered to launch an application in the High Court of South Africa (Bophuthatswana Provincial Division) has a creditor of Durabuild (Pty) Ltd (in liquidation) … in terms of section 32 of the Insolvency Act no 24 of 1936 . . . to set aside the disposition of certain assets by Durabuild . . .” and further “that David Khan of David Khan and Associates be and is hereby authorised and empowered to sign all such documentation . . . and to do all such things as may be necessary, to give effect to one above”.

(5) It is in my view clear from the aforesaid resolution that is does not authority by the Liquidators in terms of which the Applicant or Mr Khan was authorised to institute an application “in the name of” the Liquidators. There is no other authority signed by or on behalf of the Liquidators in terms of which Mr Khan was authorised to depose to the founding affidavit in the name of the Liquidators.

(6) In my view it was also not the intention of the Applicant to institute this application in the name of the Applicant since in paragraph 2 of the Notice of Motion they seek relief form this Court in following terms “That Western Flyer Manufacturing (Pty) Ltd is hereby authorised to proceed with application in the name of the Applicants.” That this is so further appears from the discovery affidavit, filed by the Applicant. It was filed by the Managing Director and sole shareholder of the Applicant. In paragraph 3 of the affidavit it is stated “the Applicant in his possession of power further documents relating to the matters in question in cause set forth in the first second parts of the schedule hereto.” I am inclined to agree with the submissions by Mr Terblanche in this regard namely that the documents in the Applicant’s possession are not relevant to the issues in the present matter. What is, of importance is the documents in possession of the Liquidators. That has not been disclosed in the discovery affidavit.

(7) Mr Joubert argued that the Applicant was to file the application in the name of the Liquidators but that the Applicant was to be the driving force and was responsible for the prosecution of the application. In my view, it might be correct that the Applicant (as a creditor) could have taken responsibility for the prosecution of the application, but there is no room in my view for an argument that the Applicant could have done so without authority from the Liquidators. In my view, the Liquidators cannot be considered to be the Applicants if the founding affidavit has not been filed with their authority.

(8) Consequently this point in limine must also be upheld.

[29] Disposition of in terms of a Court Order

(1) It is common cause that Durabuild signed a suretyship and notarial bond in favour of . NTI and NDWC subsequently became entitled to apply for an order for the perfection of the notarial bond. On 18 February 2002 NTI and NWDC obtained the following order in this Court:

“The Applicants be and are hereby authorised to take possession of all the Respondent’s movable assets of every description and of whatever nature including those specified in inventory A1 to A3 to the notarial bond B18346/99 (the notarial bond) (special and general) attached to the founding affidavit where so ever they may be found.

(2) It is common cause that subsequent to the said order the movable assets of Durabuild were attached and sold pursuant to the said order.

(3) It is the proceeds of the latter sale that form the subject of the prayer contained in paragraph 5 of the Notice of Motion.

(4) In terms of the definition of the word “disposition” in paragraph 2 of the Act a disposition in compliance with an order the Court does not constitute a disposition for purposes of the Act.

(5) The point raised by Mr Terblanche on behalf of the Respondents is that the disposition that the Applicant wants to have reversed has been made pursuant to a court order and the Applicant has failed to apply for a recession of the Court order. Consequently, and as long as the court order stands the disposition cannot be considered as a disposition in terms of the Act and cannot be reversed.

(6) Mr Joubert’s reaction to this argument was that the parties have agreed that the matter be referred for evidence as to “whether . . . general notarial bond and the perfection of the notarial bond constituted impeachable dispositions.” The said agreement was made an order of by Leeuw J on 2 December 2004. The order was obtained by agreement between the parties and the relevant portion reads as follows:

“The application is referred for the hearing of oral evidence on a date to be arranged with the Registrar on the following issues: whether the suretyship, general notarial bond and perfection of the notarial constituted impeachable disposition in terms of sections 26, 29, 30 or 31 of the Insolvency Act.”

(7) Mr Joubert argument was that the parties are bond by the agreement as contained said court order and that the Respondents are not entitled to raise this point at this stage.

(8) In the documents exchange between the parties for the purposes of a pre-trial conference the Respondents have stated their view with regard to the said court order as follows:

“The Respondents point out that, although the court order referring the application for hearing of oral evidence, refers to the perfection of the notarial bond as an issue, the Respondents are of the view, that, as no relief is claimed in respect of the perfection of the notarial in terms of the court order and as no case is made out for any such relief in the founding affidavit ‘issue’ should be deleted from the court order and no evidence would be admissible in respect of ‘issue’. And further the “Respondents referred to the Notice of a further point in limine to be taken by the Respondents dated 22 February 2005 to the effected the ….. of the registration of the notarial is raised …… by virtue of the fact that the Honourable Court granted the order perfecting the security and thereby recognising the ….. of the notarial bond.”

(9) My impression therefore is that although the parties have agreed that the matter be referred for evidence, the Respondents clearly are of the view that they are entitled this point as a point in limine.

(10) Whatever the contention of the Respondents might be in respect of the court order, I am of the view that an agreement between the parties to have the matter referred for evidence on specific issues, such agreement being in respect a procedural matter cannot forbid a party to that agreement to raise a point in limine at stage of the proceedings.

(11) What is of importance, in my view, is that neither in the said court order nor in the Notice of Motion is there, indication that it is the intention of either the Applicant or the Respondent to have the order set aside. In Dablestien & Others vs Lane & Fey NNO [2000] ZASCA 156; 2001 (1) SALR 1222(SCA) at 1228 Hefher AD CJ restated the requirements of our law with regard to what should be in the founding affidavit as follows:

“However, excepting the statements at face value, it is plain that an applicant must at the very least make all the allegations in his founding affidavit that will sustain a course of action. I accept for purposes of argument . . .

(12) In my view, the Applicant should have expressly claimed relief in the Notice of Motion for the recession of the court order and should have stated the grounds on which such court order ought to be rescinded in the founding affidavit. In the absence such relief being sought and such averments being made the Applicant can in my view not have the perfecting order set aside.

(13) This principle was formulated by ……AJA (as he then was) Swadif (Pty) Ltd 1978 (1) at 938B:

“The whole frame of the particulars of claim indicates that the plaintiff is relying on section 26 of the Act, and nothing more. And, for the purposes of deciding the issues raised on exception the Court must of course, deal the Plaintiff’s case as it is represented by the particulars of claim. The importance of stating a Plaintiff’s cause of action clearly and unequivocally in a case such as this was emphasis by Innes CJ……

(14) In the latter case a Liquidator of a company instituted action against a creditor of that company for the rescission of a court order and the setting aside of a disposition pursuant to a mortgage bond signed on behalf the company in favour of the creditor (the defendant in that case) and pursuant……. The Defendant obtained provincial sentence against the company. At 940A ……AJA remarked as follows:

“Then it was also argued on behalf of the Plaintiff…..

(15) As I have indicated there are, in my view, no grounds for the setting aside of the perfecting order. In any event, I believe there is …… difficulty for the Applicant in this regard. The following remarks of ……AJA in the …… case supra at 939D …. are in my view on all force with effects of the present application:

“However,……

(16) Consequently I came to the conclusion that this point must succeed as well.

[30] Costs

(1) The Respondents have strongly argued that the Applicants must pay the wasted costs of the application up to the present in time on attorney and client scale. A costs order is matter that falls within the discretion of the Presiding Judge. (See Sentrachem Limited v Prinsloo 1997 (2) SA 1 (A) at 24D-E. The Respondents invited me to order the Applicant to pay the costs of the application on an attorney and client scale.

Such an costs order is an extra-ordinary order and should not be made without good reason (See Sentrachem supra at 22B-C) in Rhino Hotel and Resort (Pty) Ltd 2000 (1) SA 1180 attorney and own client costs were awarded as a token as the Court’s disapproval of the fact that the Applicant in that case approached the Court with an ulterior motive and the Applicant’s conduct constituted an abuse of the process of the Court. In Cambridge …. AG 1990 (2) SA 574 (T) it was said that the purpose of a costs order of on an attorney and own client scale is to recompense the litigant as far as possible for costs incurred as a result of litigation. I took due notice of the fact that in the present case the Applicant was informed in advanced of the points in limine and that the Applicant proceeded well aware of the risks that the said might go against the Applicant. However I believe that it cannot be said that the Applicant intended to abuse the process of the Court or that the Applicant had an ulterior motive. In my view a costs order on the scale as between attorney and client is in itself punitive in nature and would suffice in the circumstances. Both Mr Joubert and Mr Terblanche requested to allow the costs of two counsel. Bearing in mind the complexity of the matter I am of the view that such an order is justified.

[31] The application is dismissed with costs

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