Case Law[2024] ZAGPJHC 208South Africa
Pick and Pay Retailers Proprietary Limited v Kemptongate Foodlane Proprietary Limited and Others (2024-012775) [2024] ZAGPJHC 208 (23 February 2024)
Judgment
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## Pick and Pay Retailers Proprietary Limited v Kemptongate Foodlane Proprietary Limited and Others (2024-012775) [2024] ZAGPJHC 208 (23 February 2024)
Pick and Pay Retailers Proprietary Limited v Kemptongate Foodlane Proprietary Limited and Others (2024-012775) [2024] ZAGPJHC 208 (23 February 2024)
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sino date 23 February 2024
REPUBLIC
OF SOUTH AFRICA
# IN THE HIGH COURT OF
SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
# (GAUTENG DIVISION,
JOHANNESBURG)
(GAUTENG DIVISION,
JOHANNESBURG
)
Case
No:
2024-012775
REPORTABLE:
No
OF
INTEREST TO OTHER JUDGES:No
REVISED:
NO
Date:
23 February 2024
In
the matter between:
PICK
AND PAY RETAILERS PROPRIETARY
APPLICANT
LIMITED
and
KEMPTONGATE
FOODLANE PROPRIETARY
FIRST RESPONDENT
LIMITED
BONAEROPARK
FOODLANE PROPRIETARY
SECOND RESPONDENT
LIMITED
BIRCHLEIGH
FOODLANE PROPRIETARY
THIRD
RESPONDENT
LIMITED
EDEN
TERRACE FOODLANE PROPRIETARY
FOURTH RESPONDENT
LIMITED
VAN
RIEBEECK PARK FOODLANE PROPRIETARY
FIFTH RESPONDENT
LIMITED
ELGIN
FOODLANE PROPRIETARY
LIMITED
SIXTH RESPONDENT
GLEN
BALAD FOODLANE PROPRIETARY
SEVENTH
RESPONDENT
LIMITED
BRENTWOOD
PARK FOODLANE PROPRIETARY
EIGHTH
RESPONDENT
LIMITED
EDENVALE
FOODLANE PROPRIETARY
NINTH
RESPONDENT
LIMITED
STONEHILL
FOODLANE PROPRIETARY
TENTH
RESPONDENT
LIMITED
JUDGMENT
Introduction
1.
In preparing this judgment I have utilised extracts from heads of
argument filed by the parties on factual
issues which are not
contentious. The Applicant seeks an order perfecting various general
notarial covering bonds (“the bonds”)
registered by the
First to Tenth Respondents in its favour. The amount secured by way
of the bonds and in respect of each of the
Respondents is dealt with
in paragraph 28 of the founding affidavit on behalf of the Applicant.
Thus for instance, in respect of
the First Respondent, the amount is
R1 million and in respect of the Tenth Respondent, the amount is R6
million. The capital sum
in respect of all the Respondents,
cumulatively speaking, is R47 million.
2.
The effect of general notarial bonds is trite. The holder of a
general notarial bond does not enjoy a real
right of security in the
assets subject to the bond. There is nothing to prevent the owner
from dealing with and disposing of assets
subject to the bond, or of
bonding them to another creditor. The creditor cannot prevent an
alienation or pledge of the assets
subject to the bond, cannot follow
up the property in the hands of the acquirer and cannot prevent a
judicial attachment. The rights
of the bondholder as observed in
Joubert (ed)
The Law of South Africa
vol 17 (1
st
re-issue) paragraph 517 are of importance mainly upon insolvency.
3.
The bondholder is not a secured creditor and is entitled to a
preference over the concurrent creditors of the
insolvent only with
respect to the proceeds of assets subject to the bond. This is why
our courts have emphasized that the bondholder
“has a right to
take possession of a pledged article” (
Contract Forwarding
(Pty) Ltd v Chesterfin (Pty) Ltd and Others
2003 (2) SA 253
SCA
at para 10). It is this right to take possession that is its
security.
The
material facts concerning this application
4.
The Applicant, which seeks to perfect its security, entered into
franchise agreements with each of the Respondents
and provided credit
to the Respondents upon the terms and conditions set out in the bond
agreements and which also enabled the
Respondents to have access to
and utilise the intellectual property of applicant and enjoy the
advantages of similar retail supermarkets.
In turn the ten separate
legal entities, the Respondents, who all fall within the AJP group of
companies executed various general
notarial covering bonds giving
security of stock in the ten separate legal entities to the
cumulative value of R47 million in favour
of the Applicant.
5.
The family controlling the AJP group of companies has been in a
business relationship with the Applicant for
some 30 years and
currently employs 2000 employees in its retail, property and food
sectors.
6.
Prior to analysing, to the extent necessary, the terms of the bonds,
I propose to deal with the defences raised
by the Respondents.
The
Defences
7.
There are in substance four defences. First, urgency is an issue, and
second, whether there is a debt without
which it is contended that
the jurisdictional requirements for declaring the bonds executable is
lacking. Third, defences are raised
in terms of the Consumer
Protection Act 68 of 2008 (“
CPA
”) as well as the
Competition Act 89 of 1998 (“
the
Competition Act
”).
8.
As to urgency, the application was served on the Respondents
attorneys on the 6
th
of February 2024 and the Respondents
filed substantial papers on Friday, the 16
th
of February
2024. They had some nine days to do so. Proceedings as is appreciated
in the commercial world to perfect security are
in their very nature,
almost invariably urgent. Binns-Ward J pointed out that generally
such proceedings are
ex parte
with a rule
nisi
provisionally as an effective order. Prior notice to the debtor that
the creditor was about to perfect its security would put the
security
sought to be obtained at risk (
David Simon Green N.O. and Others v
Vista Marina
; case numbers 1141/2018 and 15887/2018, Cape High
Court).
9.
Korf AJ in the case of IDC and Bokona Group of Companies case
number 2022/027186 in this division aptly
sums up why a party seeking
to perfect its security is entitled to do so as a matter of urgency.
This is what he says in paragraphs
95 - 99:
“
[95]
As I have stated above, the respondent's movable assets were attached
by the Sheriff on 5 October 2022 through inventorying
and affixing
identifying markers/stickers as envisaged by orders 4.2, 4.2.1 and
4.2.2. As matters stand, the applicant's Notarial
Bond has thus been
perfected.
[96]
Where there is a failure to disclose all material facts, the court
could exercise its discretion to preserve the orders granted
in
the ex parte proceedings, provided there were very cogent
practical reasons to do so. In exercising that discretion,
this
court will also regard the extent of the nondisclosure, whether a
proper disclosure might have influenced the court that granted
the
perfection order, the reasons for nondisclosure and the consequences
of setting the provisional order aside. The test
is objective.
[97]
It is worthwhile to appreciate the following remark by Harms J in
the Contract Forwarding matter: "The right
in
question, a pledge, is a real right, which is established by means of
taking possession and not by means of an agreement to
pledge. The
bondholder who obtains possession first thereby establishes a real
right. If I may be permitted some more Latin: vigilantibus
non
dormientibus iura subveniunt, meaning that the laws aid those who are
vigilant and not those who sleep."
[98]
This passage quoted immediately above emphasises the inherent
vulnerability of a notarial bondholder. However, if an applicant
fails to make out a case in its founding papers that it is entitled
to have its notarial bond perfected, or if the respondent
demonstrates that the applicant failed to disclose facts that the
applicant was not entitled to such relief, then there would be
no
reason whatsoever to find that the application is urgent. I am
therefore of the view that the nature of the application, i.e.,
the
perfection of a notarial bond, and the applicant's concomitant right
to have an order to this effect granted, are factors that
a court can
(and should, in my view) take into account when considering the issue
of urgency in matters of this nature.
[99]
The Supreme Court of Appeal stated that a court, in the exercise of
its discretion, cannot refuse an order to an applicant
who has a
right to possession of a pledged article to take possession and the
principles relating to the limited discretion to
refuse specific
performance do not apply to the enforcement of any such right. In the
absence of a conflict with the Bill of Rights
or a rule to the
contrary, a court may not, under the guise of the exercise of
discretion, have regard to what is fair and equitable
in that
particular court's view and so dispossess someone of a substantive
right. A rule relevant to the perfection of a notarial
bond can only
be discharged on grounds that go to the root of the creditor's
entitlement to possession.”
I
agree with the reasoning.
10.
Mr. McNally SC who appeared together with Mr. Rowan however raised
four factors which he contended ought to result in the matter
being
struck off the roll for lack of urgency. First, he argued that there
has been a dispute for a period commencing in 2018 in
which the
Respondents contend that they have, for want of a better term, a
substantial claim arising from Applicant’s wrongdoing,
and
which will material impact on whether there is a debt. He referred to
the fact that there has been an ongoing mediation process
and the
parties met on some twenty-four occasions to try and resolve the
dispute. Thus, he argued the matter is not urgent and
ought to be
heard in the ordinary course or in an arbitration.
11.
Second, he argued that by reference to the sheer weight of the issues
involved and the volume of the documentation that I should
colloquially speaking “kick for touch” and avoid
burdening myself with complex issues. Third, by reference to the
directives of the Court dealing with urgent matters, he contended
that as the beneficiary of the directive, the Respondents can
take
the point that the matter is not so urgent that it must be heard in
this week regardless of the fact that I have read the
papers. Fourth,
Counsel submitted that the Applicant could get substantial redress at
a hearing in due course.
12.
I am not persuaded that there is any merit in any of these
submissions. A bondholder, as Justice Harms pointed out, is an
applicant
who has a right to possession of a pledged article and is
entitled to take possession. If the jurisdictional requirements
trigger
the perfection of a pledge, then the applicant is entitled to
appropriate relief. The risk is inherent and that is that the
applicant
loses its security on an insolvency, and that factor
appeared not to matter to Respondents counsel.
13.
The
suggestion that because the matters are complex and the volume of
papers are overbearing that the matter should not be heard
as one of
urgency is regrettably a submission one would not expect from senior
counsel. It is the duty of the Judge to grapple
with complex issues
and if the Judge is in a position to deal with the voluminous amount
of paper generated by an application of
this nature
[1]
,
then the Judge is duty-bound to deal with the matter. The fact that
the parties have been in protracted mediation negotiations
is not a
factor to shirk one’s responsibility and deal with the material
issues the Court is confronted with.
14.
On my understanding of the authorities, the issues are not complex
and I deal with this more fully in the further defences raised
by the
Respondents.
Risk
15.
There was no critical analysis on the part of the Respondents
with the risk element inherent in a mortgagor pledging its
goods in
favour of a mortgagee in a determinable amount. The Applicant’s
case is that the Respondents lossmaking, poor financial
performance
and failure to pay the Applicant promptly causes it to come to Court
on an urgent basis to perfect its security. In
paragraph 66 of its
founding affidavit, it avers “
it appears that the
Respondents are in severe financial distress and that their
winding-up may well be unavoidable
.” On this premise it
would not be afforded substantial redress at a hearing in due course.
On insolvency, the very purpose
of this security bond is defeated.
The delay in instituting the application arising from whatever
considerations there may be is
not
per se
a reason to find
that there is no urgency. The critical issue is whether, despite the
delay, the Applicant can or cannot be afforded
substantial redress at
a hearing in due course (
East Rock Trading 7 (Pty) Ltd and Another
v Eagle Valley Granite (Pty) Ltd and Others
(11/33767) [2011]
ZAGPJHC 196 (23 September 2022)).
16.
In the answering affidavit the Respondents attach their latest
audited financial statements for the year ended 30
th
of
September 2023. This shows that nine of the Respondents reflect a
trading loss and that the financial position of all the Respondents
is worsening significantly year on year. The analysis in the replying
affidavit at 01-1028 makes two telling points. First, insofar
as
substantial redress in due course is concerned, the Applicant is
entitled to approach this Court on an urgent basis because
it, in all
probability, will lose its security if it does not take remedial
steps at this point in time bearing in mind the precarious
financial
position of the majority of the Respondents. Second, in terms of
clause 8.2.13 of the bonds, in terms of each of the
bonds in respect
of all of the Respondents other than Brentwood Park, the Eighth
Respondent, they are in default. Their annual
financial statements
for the period ending September 2023 reflect a trading loss.
17.
Insofar as risk is concerned, I also point out that despite the
passing of the bonds, the secured movables remained in the possession
of the Respondents. Thus, to obtain a real right over security, the
Applicant needs to take possession, either by procuring the
Respondents consent and cooperation or by judicial sanction (
Bock
and Others v Duburoro Investments (Pty) Ltd
2004 (2) SA 242
(SCA)). This is why urgent applications in matters of this nature are
recognised by our courts.
Is
there a debt and have the jurisdictional requirements for perfection
been met?
18.
Clearly, if Applicant fails to prove on the
Plascon-Evans
test
that the jurisdictional requirements for invoking the pledge have not
been met, then the application must fail.
19.
Respondents’ Counsel conflated the issue as to the quantum of
the claim as distinguished from the question as to whether
there is
in existence a debt. In this application the Applicant does not seek
an order to realise the Respondents’ property
and to apply the
proceeds in settlement of its claim. That is not its case. This is a
case in which it is sought to perfect the
pledge, that is to take
possession of the stock, equipment and the value of the goodwill
which is attached to the businesses. The
material terms of the bonds
manifest a clear agreement and intention that should the Respondents
default or the business fail,
the Applicant would have the right to
keep the lease of the premises alive, take over operation of the
store and continue the business
at the same locations. This would
further afford the Applicant an opportunity of finding a new
franchisee who would be able to
takeover an existing business. It
follows that the reliance on the part of the Respondents on the
existence of a dispute about
the computation of the precise sum in
which they are indebted to the Applicant is of no moment in the case
before me.
20.
Clause 6 of the bonds provides that if the bond becomes executable
under clause 8, the Applicant -
“
shall
be entitled (but not obliged) without notice to the mortgagor and
without first obtaining any order or judgment
6.1.1
to claim and recover from the
mortgagor forthwith all and any sums for the time being
secured by
this bond, whether then due for payment or not; and/or
6.1.2
for the purpose of perfecting
its security hereunder to enter upon the premises of the
mortgagor or
any other place where any of its assets are situated, and to take
possession of its assets”
21.
This is the classical
parate
execution. It is enforceable in
the common law provided that the stipulations are not far-reaching as
to be contrary to public
policy, are valid and enforceable. The
Applicant has taken the precaution of applying for judicial sanction
before executing on
the pledge and has, in this respect, afforded the
Respondents the opportunity to protect themselves against prejudice
at the hands
of the Applicant. It may well be that in the present
constitutional era that the practice of seeking judicial sanction is
not only
salutary but ought to be prescriptive. This however is not
an issue before me as the Applicant correctly chose to approach the
Court, afford
audi
to the Respondents and seek judicial
sanction to assert its rights.
22.
Clause 8 of the respective bonds prescribe when each bond becomes
executable against the respective Respondent. Of application
in this
matter is clause 8.2.5 which is triggered when the Respondent “
shall
fail to pay any amount due to the Applicant promptly on due date
therefore.”
Respondents’ Counsel’s submission
that the trigger date is when the application is heard as
distinguished from when
payment is due is incorrect. Counsel could
not refer me to any authority to this effect but, in any event, is
contrary to the clear
terms of 8.2.5 of the bonds. Clause 8.2.13
states that it will be a trigger event when “
any audited
financial statements of the Respondent for any financial period
reflect a trading loss.”
I have already dealt with this
aspect implicating all of the Respondents, save for the Eighth
Respondent to be in breach. Clause
8.2.1 is a further jurisdictional
factor that has been demonstrated by the Applicant to exist namely
where a Respondent commits
a breach of any terms and condition of the
bond and clause 8.2.11 arising from the death of Alexander Baladakis,
the surety in
respect of the obligations of the First and Second
Respondents. Similarly, the breach notice which was not remedied
(clause 8.2.1).
The
debt
23.
The application is based on the non-payment by the Respondents
of weekly statements that became due and payable to the
Applicant in
the period 6 November 2023 to 22 January 2024. There is no dispute
that this debt remained unpaid, other than the
past “
parked”
or “
historic debt.
” It is not insignificant to
record that the Respondents, on an ongoing basis, ordered stock,
received the stock, sold the
stock and ordinarily would have to
honour payment. The Applicant on the other hand of the spectrum would
not want to refuse the
sale and delivery of stock to protect and
enhance its brand.
24.
Subsequent to the institution of the application, the Respondents
made payments totalling R72,046,849.84. Thus, when the application
was instituted, the Respondents admit a debt, by virtue of the
subsequent payment being made. The argument advanced by the
Respondents’
counsel that it was unreasonable for the Applicant
to allocate payments to past indebtedness is intertwined with the
issue of the
historic debt. I find no merit in the contention that a
debtor can prescribe to creditor how allocation is to be made on an
ongoing
debtor-creditor account. Counsel could not direct me to any
authority to support such contention. In any event, this argument is
intertwined with the submission that there is an historic debt, which
I will deal with more fully below. The terms of the agreement
also do
not accord with counsel’s submission that the respondents can
prescribe allocation of payments. I deal with this
more fully below.
25.
Insofar as the current indebtedness of the Respondents owed to the
Applicant, the Applicant has analysed with the aid of the
SAP system
and certification by its finance manager, Willine Webb, in terms of
section 15
of the
Electronic Communications and Transactions Act 25
of 2002
that there is an amount of R188,853,497.14 due and payable by
the Respondents as at 16 February 2024. The detailed analysis in
respect of each of the Respondents other than the Sixth and Eighth
Respondent appears on the chart at 01-1040 with reference to
annexures RA7.1 and onwards. There are separate certificates of
indebtedness issued by Willine Webb. Clause 13 of the bonds entitles
the Applicant to allocate payments either to the capital sum or
interest as the applicant may in law determine. Clause 9.3 of the
bond agreements entitle the Applicant to allocate any payments
received from the Respondents to any cause or debts or amount then
owing by the franchisee in terms of the agreement in its reasonable
discretion.
The
parked debt
26.
Clauses 9.2 and 9.3 of the agreements does not permit any deduction
or set-off of whatsoever nature without the Applicant’s
prior
written consent. Nor can the Respondents delay the timeous and full
payment of all and any monies due and payable under or
in terms of
the agreements. Agreements must be complied with and adhered to,
otherwise commercial ventures become imperilled. Nevertheless,
I will
consider the parked debt in the context of what has been presented on
the papers and by reference of the arguments advanced
in the hearing.
27.
The genesis of this complaint is a purported damages claim by the
Respondents against the Applicant. This is dealt with in paragraphs
130 to 157 of the answering affidavit. There are two legs to this
claim. First, it is alleged that the implementation of a ‘new’
discount model introduced in 2018 by the Applicant has resulted in
respondents suffering extensive losses, which include loss of
profits
and additional indebtedness and interest yet to be qualified. The
second leg is premised on the provisions of the CPA and
I gathered
from the argument presented to me that it rest on bad conduct on the
part of the Applicant in imposing unfair, unreasonable,
or unjust
prices.
28.
Both causes are action are vague and with reference to the argument
before me – superficial. In my debate with counsel,
I put to
him that insofar as the respondents rely on a breach of the
contractual terms (and none were identified in the papers
or in
argument), the remedy of the respondent (the ‘innocent party’
in the circumstances) is to accept that the Applicant
is in breach,
cancel the agreement and sue for damages or to sue for specific
performance, i.e. the enforcement of the terms of
the contract.
Counsel’s response was to the effect that if the agreement was
illegal, then the innocent party is not required
to make payment for
goods received and consumed, as this would amount to enforcing an
illegality. Applicant’s recourse is
to claim monies based on
unjustified enrichment. No authority was advanced for this startling
proposition, but in fairness, counsel
contended that it is not a
matter for me to come to grips with as it would, in due course, be
debated in arbitration proceedings
which is the forum the parties
agreed upon to ventilate their disputes. Clearly I disagree.
29.
First, set-off is not permitted in terms of the agreement. Second,
the terms of the agreement has the usual non-variation clause
and it
is not contended that the terms of the agreement were unilaterally
changed by reference to any documentation. Third, contract
law is
trite, the innocent party can either cancel upon a breach and sue for
damages or claim specific performance. The reliance
on the CPA was
similarly vague and possibly contrived because there was no proper
submission on what remedy would follow when two
commercial parties
continue in the commercial relationship for some five years and no
cause of action is articulated and no relief
arising therefrom
substantiated. I must agree with Mr. Smit, who appeared on behalf of
the applicant that, in any event, any such
claim or counterclaim may
have prescribed, there has been no referral to arbitration, there has
been no waiver by the Applicants
of its rights and there is no
impediment by the terms of the provisions of the bonds to enable
applicant to perfect its security.
In any event, I conclude that such
claims, if such exist, are in any event, in my view, frivolous. The
Applicant points out that
there is no contractual terms in these
agreements that oblige the Applicant that ensure that policies,
procedures or strategies
are profitable, benefit the Respondents or
attract a specific margin. Thus, it contends that in adopting certain
commercial promotional
strategies in 2018 and implementing an interim
business model in June 2023, were aimed at ameliorating adverse
business conditions
arising from poor economic conditions aggravated
by COVID-19 and like matters. Its commercial strategies applied to
all of the
applicant’s franchised stores (about 223
supermarkets in South Africa) and its own some 300 corporate
supermarket stores.
30.
Moreover, the projections it made emphatically required the
franchisees to take independent financial advice. This appears in
its
disclosure document attached to answering affidavit and which
emphasises that the projections are no more than projections
and no
guarantees are proffered. There is further a disclaimer by the
Applicant on its own behalf and its employees in the preparation
of
the projections. There is considerable material place before me by
the Applicant to demonstrate good faith insofar as models
are
concerned and adjustments on profit margins and rebates in an
endeavour to assist its franchisees financially.
31.
I am not persuaded that there is much merit in the Respondent’s
damages claim but it is at liberty to pursue this in the
appropriate
forum. I reiterate that no cogent particularity has been provided to
me to demonstrate a viable cause of action.
The
defence based on The
Competition Act
32.
In
the course of argument, it became apparent that the reliance on
the provisions in The
Competition Act are
without substance. In the
founding affidavit, it is stated that should an order be granted in
applicant’s favour, the Applicant
would establish control over
the business of the Respondent’s as defined in The
Competition
Act. This
would result in a merger between the Applicant and the
Respondents. Accordingly, this action would contravene provisions of
The
Competition Act as
a merger necessitates (i) a formal
notification to the competition authorities and such notification has
not been delivered, as
well as (ii) approval of the merger, which
likewise has not occurred. My jurisdiction is ousted as the
competition authorities
have exclusive jurisdiction in this regard.
Mr. Wilson SC, appearing for the Applicant cogently demonstrated that
if the Respondent’s
contention is correct then no security
could be perfected without obtaining merger approval. This would have
a drastic consequence
for commercial life in South Africa as the
process of merger approval typically takes month to finalise in
circumstances where
perfection must typically take place on an urgent
basis in order to protect the commercial interests of the security
holder.
33.
This novel approach to
section 12
of The
Competition Act is
unsustainable. First, applying a sensible and business-like
approach to the matter, perfection of the bonds does not constitute
control of any of the businesses. The definition of merger is
intended to capture only those transactions that carry the
potentiality
of effecting long-lasting structural changes in the
relevant markets (
Caxton and CTP Publishers and Printers and
others v Multichoice (Pty) Ltd and others
, Case No.
140/CAC/Mar16, paras 2 – 3). In giving effect to its pledge,
the applicant becomes an agent of the businesses,
to conduct the
businesses to protect its security and if, of course, the business is
sold to a third party, it would require merger
approval (
Competition
Commission v Shashe Trading (Pty) Ltd and Another
, Case No.
FTN154Nov202, in the Competition Tribunal).
34.
In my view, imposing further restraints in the business world unduly
restrains freedom of trade and competition. Say, for instance,
a
newcomer in the industry wishes to do business with the Applicant.
The newcomer does not have financial resources but is given
the
opportunity by the applicant of credit provided the newcomer pledges
its movable assets as security. Imposing merger authorisation
by the
competition authorities in the event of executing of security would
deter opportunities to such newcomers.
35.
In my view, bearing in mind the financial resources of the Respondent
as articulated in the answering affidavits, namely, that
the
businesses involve millions of rands, this defence is opportunistic
and frivolous.
Constitutional
values, oppressive and unconscionable conduct
36.
The business relationship between the parties in substance is the
supply by the applicant to retail stores of consumable goods,
under
its brand and intellectual property, its ability to supply and
procure the supply of the products and check out packaging
to each of
the respondents for the purposes of the respondents conducting the
business of a retail supermarket. Turnover figures
are in the
multimillion rands.
37.
When they entered into the business relationship and concomitant
agreements to regulate the business relationships, the parties
did so
knowingly and, no doubt, by taking appropriate financial and legal
advice. Our courts have occasioned to deal with bonds
of the nature
before me. In
Juglal No and Another v Shoprite Checkers (Pty) Ltd
2004 (5) SA 248
SCA, Justice Heher found that the kind of remedy
available to the applicant is not contrary to public policy and
enforceable in
our law. This is understandable because that is what
the parties bargained for and parties appreciate the consequences of
a default.
Nothing new was argued before me and agreements of this
nature have stood the test of constitutional scrutiny.
38.
I endeavoured to encourage the parties to resolve the matter by
reference to what I understood in the financial statements that
the
Respondents could raise alternative security or isolate some of the
stores by tendering securities as attached to individual
stores. I
also ask the parties to consider other practical arrangements that
would, in a manner of speaking, ease the burden if
I were to give
orders perfecting the security.
39.
On 22
nd
of February 2024, after I had worked through my
judgement in the early hours of the morning, I received further
submissions on
behalf of the Applicant which reiterated matters I had
already canvassed with the parties, and more importantly, a draft
order
marked with prejudice which in paragraph 2 provides for
arbitration (and as I understand the tender, it is expedited
arbitration)
and provision is made is paragraph 1.13 for the
Respondents to participate on matters incidental to the running of
the businesses.
I did receive notification that the respondents are
considering the offer and would revert to me. This being my last day
as Acting
Judge and having completed my roll and all my judgements, I
see no reason to delay finalising this matter. The alternate draft
order proposed by the Applicant is an attenuated order from that
sought for in the notice of motion.
40.
Because of my findings in this matter, I see no need to delay my
judgement and the orders.
41.
In the result, I grant the alternative draft order which I have made
an order of court signed and initialled. If the alternative
order, as
proposed by the Applicant is not acceptable, by the Respondents, then
the order sought for in the notice of motion is
granted.
_________________________________________
N
CASSIM AJ
ACTING
JUDGE OF THE HIGH COURT,
GAUTENG
DIVISION, JOHANNESBURG
APPERANCES.
COUNSEL
FOR THE APPLICANT: ADV J WILSON SC and ADV JE SMIT
INSTRUCTED
BY: DLA PIPER SOUTH AFRICA (RF) INC.
COUNSEL
FOR THE RESPONDENT: ADV P McNALLY
INSTUCTED
BY: WEBBER WENTZEL
[1]
The Respondents’ Answering Affidavit is 78 pages
and, together
with annexures, exceeds
1000 pages.
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