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South Africa Judgment

South Gauteng High Court, Johannesburg

Williams v Bashumi Investment Holdings (Pty) Ltd and Another (19701/16) [2016] ZAGPJHC 406 (23 June 2016)

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01

Holding and result

The court found that there was no legal basis to attach the bank accounts of SATAWU, as it is a separate legal entity and the applicant failed to establish any right, title, or interest of the first respondent in those accounts. The writ of execution was not properly served on SATAWU, but only on the first respondent at SATAWU House. The applicant did not satisfy the requirements for urgency under Uniform Rule 6(12)(b), as no circumstances were set out showing harm if relief was delayed, and the applicant had waited two months before issuing the writ. The first respondent raised doubts about proper service of the summons and presented a defence to the underlying claim. The court dismissed the applicant's application with costs, set aside the writ of execution and attachment, and stayed execution of the default judgment pending the finalisation of a rescission application to be launched by the first respondent by 30 June 2016.

Court disposition

Application dismissed with costs; writ of execution and attachment set aside; execution of default judgment stayed pending rescission application.

Orders

  • The applicant's application is dismissed with costs.
  • The writ of execution dated 3 July 2016 and the attachment in terms of Rule 45(8) read with Rule 45(12) is set aside.
  • Execution of the default judgment granted in favour of the applicant on 1 April 2016 under case number 6768/15 is stayed pending finalisation of a rescission application, which is to be launched by the first respondent by no later than 30 June 2016.
  • The first respondent is directed to pay the applicant's costs of the counter-application.

02

Material facts

Parties

Ayanda Williams

Applicant Counsel: D Ehrlich

Bashumi Investment Holdings (Pty) Ltd

Respondent Counsel: X Mofokeng

Standard Bank of South Africa Limited

Respondent

Amounts and remedies

  • Amount Sought for Attachment: ZAR 1,410,000

03

Procedural history

  1. Posture

    Urgent Application / Application for Attachment and Stay of Execution

04

Questions and positions

Legal issues

Party arguments

Applicant
The applicant argued that the bank accounts in the name of SATAWU should be attached because SATAWU is the investment arm of the first respondent, has paid the debts of the first respondent, and did not respond to the writ of execution. The applicant further contended that urgency arises because the respondents need to pay salaries and the accounts are blocked, causing harm if relief is delayed.
Respondent
The first respondent argued that the writ of execution should be set aside or stayed, as it intends to bring a rescission application. It claimed the summons was not properly served at its correct address and disputed the terms and duration of the agreement underlying the default judgment. The respondent asserted that it has a valid defence to the applicant's claim.

05

Court’s reasoning

  1. 01

    Common law principle

    Assets of a separate legal entity cannot be attached for the debts of another unless there is a legal basis for piercing the corporate veil.

  2. 02

    Uniform Rule 6(12)(b)

    Urgency in application proceedings requires the applicant to demonstrate harm that cannot be remedied in the ordinary course and compliance with Uniform Rule 6(12)(b).

  3. 03

    Uniform Rule 45(8) read with Rule 45(12)

    A writ of execution must be properly served on the party whose assets are to be attached.

06

Ratio, limits and disposition

Ratio decidendi

The court found that there was no legal basis to attach the bank accounts of SATAWU, as it is a separate legal entity and the applicant failed to establish any right, title, or interest of the first respondent in those accounts. The writ of execution was not properly served on SATAWU, but only on the first respondent at SATAWU House. The applicant did not satisfy the requirements for urgency under Uniform Rule 6(12)(b), as no circumstances were set out showing harm if relief was delayed, and the applicant had waited two months before issuing the writ. The first respondent raised doubts about proper service of the summons and presented a defence to the underlying claim. The court dismissed the applicant's application with costs, set aside the writ of execution and attachment, and stayed execution of the default judgment pending the finalisation of a rescission application to be launched by the first respondent by 30 June 2016.

Obiter and limits

  • The court noted that the first respondent ought to have launched a rescission application before 17 June 2016 and is seeking an indulgence from the court in requesting a stay of execution.
  • The fact that SATAWU paid debts of the first respondent does not confer any right or interest in SATAWU's bank accounts to the first respondent.

Court disposition

Application dismissed with costs; writ of execution and attachment set aside; execution of default judgment stayed pending rescission application.

  • The applicant's application is dismissed with costs.
  • The writ of execution dated 3 July 2016 and the attachment in terms of Rule 45(8) read with Rule 45(12) is set aside.
  • Execution of the default judgment granted in favour of the applicant on 1 April 2016 under case number 6768/15 is stayed pending finalisation of a rescission application, which is to be launched by the first respondent by no later than 30 June 2016.
  • The first respondent is directed to pay the applicant's costs of the counter-application.

Source and reliance status

South Gauteng High Court, Johannesburg

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Judgment reading view

Judgment text

The complete available source text.

Source document

South Gauteng High Court, Johannesburg

Judgment

[2016] ZAGPJHC 406

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

REPUBLIC

OF SOUTH AFRICA

GAUTENG LOCAL DIVISION

JOHANNESBURG

CASE NO: 19701/16

In the matter between:

AYANDA

WILLIAMS Applicant and

BASHUMI INVESTMENT HOLDINGS (PTY) LTD First Respondent

STANDARD

BANK OF SOUTH AFRICA LIMITED Second Respondent

JUDGEMENT

CARSTENSEN AJ:

1. The Applicant seeks, in summary, an order that the Second Respondent pay to the Sheriff the amount of R1 410 000.00 together with interest, by close of business on the 22nd June 2016 from accounts held at Standard Bank in the name of SATAWU – Salaries, account number […]22 and account in the name of Bashumi Investment Holdings (Pty) Ltd, the First Respondent, account number […]33.

2. The Applicant attached the aforesaid accounts by means of a writ of execution, issued on the 3rd June 2016 at the instance of the Applicant’s attorneys.

3. The Applicant relies on three grounds to attach the account in the name of SATAWU.

3.1. Firstly, the Applicant says that SATAWU, although a separate and distinct legal entity to the First Respondent, is the investment arm of the First Respondent. This, in my view, does not constitute grounds to attach the assets of the First Respondent.

3.2. Secondly, the Applicant states that on at least two occasions, as is evident from the bank statement attached as annexure AA1, page 29, a bank statement in the name of SATAWU – Salaries Account, SATAWU paid the debts of the First Respondent and as is evident from page 158, a bank account in the name of SATAWU CEC an amount was paid to the Applicant’s attorneys to settle the debt of the First Respondent.

3.2.1. The fact that SATAWU has paid the debts of the First Respondent, however, does not give the First Respondent any right, title or interest in or to the bank accounts of SATAWU.

3.3. Finally, the Applicant contends that the writ of execution was served on SATAWU and SATAWU did not respond thereto or attempt to set aside the writ. This is in fact not true. The writ was not served on SATAWU, but on the First Respondent who has its address at SATAWU House, as appears from the Sheriff’s return at page 169. Consequently, it is clear that the writ of execution was in fact not served on SATAWU.

4. Consequently, there is no basis at all to attach the bank accounts of SATAWU.

5. The attachment of the bank account of the First Respondent requires separate consideration. The Applicant points out that the First Respondent has failed to launch a rescission application despite having been aware of the default judgement since approximately 6th April 2016.

6. However:

6.1. the Applicant’s basis for urgency is that the Respondents pay salaries and should the application not be granted, the bank accounts will remain blocked and no transactions can take place;

6.2. in addition, the Applicant does not set out any circumstances showing why the Applicant would suffer harm if the Applicant had to wait for relief at a hearing in due course. Consequently, it is my view that the Applicant has not satisfied the requirements of Uniform Rule 6(12)(b);

6.3. the Applicant waited from 1st April 2016 until the 3rd June 2016 before the writ was issued and cannot now contend that the execution process is urgent.

7. Furthermore, the First Respondent has launched a counter application either to set aside the writ, alternatively to stay the writ.

7.1. The basis of the counter application is that the First Respondent states that it seeks to bring a rescission of the default judgement.

7.2. The Respondent states that the summons did not come to its notice and in fact that the summons was served at 208 to 212 Jeppe Street, and not at its address which is 215 Jeppe Street as appears from pages 66 and 94. This may be so, although as is pointed out by the Applicant, the summons was apparently served at 6th Floor Marble Towers, which is apparently the address of the First Respondent. It does appear that the summons was not served at 117 De Korte Street, SATAWU House, being the principal place of business of the First Respondent.

8. Consequently, there is doubt in my mind as to whether summons was in fact served.

9. In any event, the First Respondent states that it has a defence to the Applicant’s claim as it concluded a fixed term agreement

which was extended for a period of 6 months, the Applicant breached that agreement by setting up office in Braamfontein as opposed to Fourways. The Applicant chose Fourways as the the Applicant sought to cede to the First Respondent an agreement of lease which the First Respondent’s company had concluded with Redefined Properties.

10. In any event, the terms of the agreement as set out by the Plaintiff in the summons are disputed by the First Respondent who denies that the period of the agreement was five years, from the 1st February 2013 to 31st January 2018, the First Respondent stating that the period of the agreement was only from January 2013 until June 2013.

11. In the result, I am of the view that the Applicant’s application ought to be dismissed with costs, but that the First

Respondent is entitled to certain of the relief it seeks.

12. I am also of the view, however, that the First Respondent ought to have launched a rescission application before the 17th June 2016, and in seeking a stay of execution, requires an indulgence from the court.

13. In the result, I make the following order:

13.1. the Applicant’s application is dismissed with costs;

13.2. the writ of execution dated 3rd July 2016 and the attachment in terms of Rule 45(8) read with Rule 45(12) is set aside;

13.3. execution of the default judgement granted in favour of the Applicant on the 1st April 2016 under case number 6768/15 is stayed, pending the finalisation of a rescission application, which application is to be

launched by the First Respondent by no later than 30th June 2016.

14. The First Respondent is directed to pay the Applicant’s costs of the counter-application.

_____

P

L CARSTENSEN

ACTING

JUDGE OF THE

HIGH

COURT

HEARD: 21 JUNE 2016

DELIVERED: 23 JUNE 2016

COUNSEL FOR APPLICANT: D EHRLICH

INSTRUCTED BY: MBANA INC.

COUNSEL FOR 1ST RESPONDENT: X MOFOKENG

INSTRUCTED BY: MASONDO ATTORNEYS INC.

COUNSEL FOR 2ND RESPONDENT:

INSTRUCTED BY:

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Authorities

Authorities used by the court

Cases, legislation, regulations, and constitutional provisions identified in the available record.

Uniform Rule 6(12)(b)

Legislation

Legislation referenced in the available case record.

Uniform Rule 45(8)

Legislation

Legislation referenced in the available case record.

Uniform Rule 45(12)

Legislation

Legislation referenced in the available case record.

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