Case Law[2024] ZAGPJHC 528South Africa
EOH Mthombo (Proprietary) Limited and Others v Henry and Others (55272/2021) [2024] ZAGPJHC 528 (31 May 2024)
High Court of South Africa (Gauteng Division, Johannesburg)
31 May 2024
Judgment
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# South Africa: South Gauteng High Court, Johannesburg
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## EOH Mthombo (Proprietary) Limited and Others v Henry and Others (55272/2021) [2024] ZAGPJHC 528 (31 May 2024)
EOH Mthombo (Proprietary) Limited and Others v Henry and Others (55272/2021) [2024] ZAGPJHC 528 (31 May 2024)
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sino date 31 May 2024
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
1.
REPORTABLE: NO
2.
OF INTEREST TO OTHER JUDGES: NO
3.
REVISED: NO
31
May 2024
In
the matter between -
CASE
NO 55272/2021
EOH
MTHOMBO (PROPRIETARY) LIMITED
First
Plaintiff/Applicant
EOH
AFRIKA (PROPRIETARY) LIMITED
EOH
MANAGED SERVICES PS
Second
Plaintiff/Applicant
(PROPRIETARY)
LIMITED
and
ARNOLD,
PHILIP HENRY
Third
Plaintiff/Applicant
(Identity
Number […])
ALTERAM
MUNICIPAL SOLUTIONS
First
Defendant/Respondent
(PROPRIETARY)
LIMITED
ALTERAM
SOLUTIONS
Second
Defendant/Respondent
(PROPRIETARY)
LIMITED
AM
TO PM STRATEGIC
Third
Defendant/Respondent
(PROPRIETARY)
LIMITED
CLIPPER
FINANCIAL SERVICES
Fourth
Defendant/Respondent
(PROPRIETARY)
LIMITED
ULTIMAX
CONSULTING
Fifth
Defendant/Respondent
(PROPRIETARY)
LIMITED
Sixth
Defendant/Respondent
MONICA
COWIN N.O.
Seventh
Defendant/Respondent
ANKIA
VAN JAARSVELDT N.O.
Eighth
Defendant/Respondent
NORMAN
KLEIN N.O.
Ninth
Defendant/Respondent
DIMAKATSO
ARNOLD MICHAEL
MOHASOA
N.O. Tenth
Defendant/Respondent
MAHOMED
MAHIER TAYOB N.O. Eleventh
Defendant/Respondent
JUDGMENT
BOKAKO
AJ
Delivered:
This judgment was prepared and authored by the Judge whose name
is reflected and is handed down electronically by circulation to
Parties / their legal representatives by email and by uploading it to
the electronic file of this matter on Case Lines. The date
of the
judgment is deemed to be 31 May 2024.
INTRODUCTION
1.
This application for condonation pertains to the late filing of
Plaintiff's replication dated 7 February 2023 to Defendant's
plea in
the main action. Plaintiff claims damages and losses sustained due to
a scheme perpetrated by the Defendant. The Plaintiff's
case against
the first respondent is that he developed an unlawful scheme from
January 2014 to April 2018.
2.
Defendant opposed this application because the replication had
been introduced woefully late, and it is not "to be taken"
that the issues raised in the replication are triable in the sense
required to permit the amendment of the pleadings by the introduction
of the proposed replication.
3.
The Plaintiffs were entitled to file a
replication within ten days of the First Defendants filing their
plea, i.e. on or before
12 December 2022. The Plaintiffs failed to
file their replication on this date and, by Rule 26 of the Uniform
Rules of Court, were
ipso facto barred from doing so.
CONDONATION PRINCIPLES
4.
Compliance with time limits indicated in
the court's rules or a court directive is mandatory. Any delay
obligates the party concerned
to seek the court's indulgence as soon
as it becomes aware of the necessity of an application for
condonation.
5.
For an application for condonation to
succeed, the applicant must provide a detailed explanation of the
cause of the delay.
6. One
of the most critical considerations for granting condonation is
ensuring that the interests of justice are served.
FACTUAL
MATRIX
7.
The facts summarised briefly are that the Plaintiffs sue the
Defendants for damages and losses sustained due to the alleged
fraudulent scheme they perpetrated. The full details of Plaintiff s
case against the first Defendant appear in the Particulars
of Claim.
The Plaintiffs further contend that the first Defendant, from January
2014 to April 2018, developed an unlawful scheme
in which he would
procure the appointment of a company as a so-called subcontractor
regarding projects undertaken by the first,
second, or third
Plaintiffs. The Plaintiff sought to institute action proceedings
against the first respondent based on the information
provided.
8.
The combined summons in this matter was
issued on 23 November 2021. The First Defendant delivered his plea,
incorporating two special
pleas, on 22 November 2022. The Plaintiffs
condoned the late filing of the First Defendant's plea.
9.
The Plaintiffs were entitled to file a
replication within ten days of the First Defendant filing his plea,
i.e., on or before 12
December 2022. The Plaintiffs failed to file
their replication on this date.
10.
Plaintiff contends that the first Defendant delivered his plea and
special pleas on 21 November 2022. His plea is almost
exclusively
comprised of bare denials, and his special pleas seek to avoid
liability for his alleged fraudulent conduct based on
a pleaded
non-compliance with a notice provision in the Apportionment of
Damages Act, 34 of 1966 and prescription.
11.
In response to the special pleas of the first Defendant, the
plaintiffs delivered a replication on 7 February 2023. The
replication, which must have been filed by 12 December 2022, was 20
court days late.
12.
The plaintiffs further contend that, nonetheless, the plea was
delivered approximately 11 months after the initial due
date for the
plea and over 25 court days after the plaintiffs offered the amended
Particulars of Claim on 14 September 2022 and
which amendment was in
response to an exception that had been taken by the ninth and tenth
defendants in action. Notwithstanding
that the plaintiffs had granted
Mr. Arnold an indulgence regarding the period for filing his plea,
the first Defendant, Mr. Arnold,
did not condone the late filing of
the replication. In consequence, the plaintiffs instituted this
application to seek condonation.
13.
Defendant contends that the Plaintiffs have
discounted the provisions of Rule 26 and that the
Plaintiffs ought to have
applied for the upliftment of the bar
together with condonation for the late filing of the replication.
14.
Further, the Plaintiffs have yet to seek
the upliftment of the bar, and the days between 16 December and 15
January, i.e.,
dies non,
ought
to be counted as the period in which the Plaintiffs have delayed
filing their replication. The delay is not simply a delay
of 20 days,
as alleged by the Plaintiffs in their founding affidavit. Their delay
was far more than this period.
Replication
15.
In its replication, the plaintiffs assert that they admit that the
first Defendant was not sued in the EOH 2020 action
but deny that no
notice was given to him in terms of section 2(2)(a) of the
Apportionment of Damages Act 34 of 1956 ("ADA")
about the
EOH 2020 action.
16.
It is the Plaintiffs contention that on or about 1 February 2021, the
first Defendant instituted an application ("the
intervention
application") against the third Plaintiff, Silver Touch I.T.
Solutions (Proprietary) Limited (in liquidation)
("Silver
Touch"), the seventh Defendant, the Master of the High Court,
Gauteng Local Division ("the Master")
and the Companies and
Intellectual Property Commission ("CIPC") under case number
42876/2020. In the intervention application,
the first Defendant
sought leave to intervene as a respondent in an application ("the
main application") instituted by
the third Plaintiff against
Silver Touch, the seventh Defendant, the Master and CIPC also under
case number 42876/2020. In the
intervention application, the first
Defendant attached a copy of the Combined Summons and Particulars of
Claim in the EOH 2020
action to his founding affidavit.
17.
Plaintiff, opposed the intervention application and delivered an
answering affidavit confirming the existence, content,
and import of
the EOH 2020 action.
18.
The second, fourth, fifth, and sixth defendants are defendants in the
EOH 2020 action. They are also, as alleged in paragraph
26.1 of the
particulars of the claim, the alter ego of the first Defendant who
was the sole beneficial shareholder and was the
directing force,
controlling mind and will of each such entity and who exercised sole
control over their affairs.
19.
The other issue raised in the Plaintiff's replication is that before
the close of pleadings in the EOH 2020 action on
21 September 2021,
the first Defendant was informed of and had knowledge of the
existence, content, and import of the EOH 2020
action. The plaintiffs
complied with section 2(2)(a) of the ADA; alternatively, first, the
Defendant waived his entitlement to
rely on non-compliance.
20.
Further contends in an alternative that should the court find that
the plaintiffs have failed to comply with section 2(2)(a)
of the ADA
and that the first Defendant has not waived his right to rely on such
non-compliance, which is denied, the Plaintiffs
aver that the court
ought to grant the Plaintiffs leave to pursue their claims in the
above action against the first Defendant,
under the provisions of
section 2(4)(a) of the ADA because having regard to the first
Defendant's conduct.
21.
Further averred that the first Defendant was fully aware of the EOH
2020 action before pleadings closed in that action
and that
apprehension was reasonable in the circumstances, and the first
Defendant failed and continues to fail to take steps to
intervene in
the 2020 EOH action. Further, the first Defendant will suffer no
prejudice if the Plaintiffs are permitted to continue
to pursue their
claims in this action.
22.
The other issue in the replication pertains to the Plaintiffs' strong
prospects of success in the above action. Prosecution
of the claim
against the first Defendant is essential in contributing to the fight
against corruption and holding defendants accountable
for substantial
wrongdoing.
23.
Further avers in their replication that section 11(d) of the
Prescription Act provides that the period of prescription
of debts,
other than those referred to in sections 11(a), (b) and (c), shall,
save where an Act of Parliament prescribes otherwise,
be three years;
section 12(1) of the Prescription Act provides that "subject to
the provisions of sections (2), (3) and (4),
prescription shall
commence to run as soon as the debt is due"; section 12(2) of
the Prescription Act provides that "If
the debtor wilfully
prevents the creditor from coming to know of the existence of the
debt, prescription shall not commence to
run until the creditor
becomes aware of the existence of the debt"; and section 12(3)
of the Prescription Act provides that
"A debt shall not be
deemed to be due until the creditor has knowledge of the identity of
the debtor and of the facts from
which the debt arises: Provided that
a creditor shall be deemed to have such knowledge if he could have
acquired it by exercising
reasonable care."
24.
The Plaintiffs aver that the particulars of claim were served on the
first Defendant within three years of the Plaintiffs
coming to know
of the existence of the debts, in circumstances in which the first
Defendant and complicit executives of the plaintiffs
wilfully
prevented the plaintiffs from coming to know of the existence of the
debts,
alternatively
within three years of the plaintiffs
knowing the identity of the first Defendant as debtor and of the
facts from which the first
Defendant's debts arise.
25.
In the alternative, the Plaintiffs aver that section 13(1)(b) of the
Prescription Act delays the running of prescription
for so long as a
debtor is outside the Republic unless the debtor consents to service
of process claiming the debt in a South African
court); at all
material times the first Defendant was outside the Republic thus
delaying the running of prescription against him;
that impediment was
removed only on 19 February 2021 when the first Defendant consented
to jurisdiction and service in this action,
and would only be
completed on 19 February 2022 and that the summons was served on the
first Defendant before 19 February 2022.
26.
The opposition raised by Defendant appears to be that the proposed
replication is ultimately excepiable, and permitting
it to be
delivered at this stage would accordingly serve no purpose; no case
for condonation has been made.
27.
Contending that the first Defendant is the joint wrongdoer, within
the term's meaning in Section 2(1) of the apportionment
of damages
Act 34 of 1956, with Laher and Mackay about the EOH 2020 action.
28.
The first Defendant was not sued in the EOH 2020 action, and no
notice was given to him in terms of Section 2(2) (a) of
the
Apportionment of Damages Act. Therefore, the Plaintiffs are precluded
from proceeding against the first Defendant, who has
failed to
procure the leave of the court in this action.
Submissions
29.
The Plaintiff submits that
the delay was limited and the
explanation for the delay is satisfactory, taking into cognizance
that the first Defendant does not
contend that the delay of 20 court
days in filing the replication has caused him or any of the other
litigants any prejudice or
that the delay has any prejudicial impact
on the administration of justice. He does not dispute the plaintiffs'
explanation for
the cause of the delay or contends that the
explanation proffered for the delay is not satisfactory.
30.
Further, the first Defendant opposes condonation for the late filing
of the plaintiffs' replication because the plaintiffs'
prospects of
success are not strong. Consequently, the defendants will be charged
a substantial cost in dealing with an unsustainable
matter, which
would also inconvenience the court.
31.
Further, it contends that the First Defendant did not comprehend that
the application for condonation pertains only to
the plaintiffs'
replication of his special pleas. The plaintiffs elaborated in the
replying affidavit that they intend to persist
with the action, which
action they consider has excellent prospects of success. Also, the
contention made by the first Defendant
that the matters raised by the
plaintiffs in the replication have no prospects of success is
similarly flawed.
32.
The Plaintiffs further argued that the first Special Plea by the
first Defendant seeks to avoid liability for his fraudulent
conduct
based on an alleged failure by the plaintiffs to give him notice as a
"joint wrongdoer" in terms of section 2(2)
(a) of the
Apportionment of Damages Act), and the content regarding the second
Special Plea, he seeks to avoid liability for his
fraudulent conduct
by relying on
section 11
of the
Prescription Act, 68 of 1969
.)
33.
The Plaintiff further argued that there are excellent prospects of
success in the replication vis-à-vis the First
Special Plea.
The first Defendant was sued in the EOH 2020 action, and notice was
given to him in section 2(2)(a) of the Apportionment
of Damages Act,
and, in the circumstances, the plaintiffs are not precluded from
proceeding against him in this action. The plaintiffs
deny that no
notice was given to the first Defendant, Mr Arnold. Therefore, the
allegations in his First Special Plea ought to
be dismissed.
34.
Further, Mr. Arnold was informed of and knew of the existence and
content of the EOH 2020 action and that the plaintiffs
complied with
s 2(2)(a) of the Apportionment of Damages Act; alternatively, Mr.
Arnold has waived his entitlement to rely on non-compliance
.
35.
The Plaintiff refutes the contention in the answering affidavit filed
on behalf of Mr. Arnold that his "special plea
based on the
Apportionment of Damages Act is sustainable, and the Plaintiffs have
not disclosed a defense to this plea in their
replication is,
consequently and manifestly, unsustainable. In their replication, the
plaintiffs have disclosed three defenses,
each of which is a complete
answer to Mr. Arnold's First Special Plea.
36.
There are excellent prospects of success in the replication vis-à-vis
the Second Special Plea in that Mr. Arnold
attempts to avoid
liability for his alleged fraudulent conduct by relying on
section 11
of the
Prescription Act, 68 of 1969
. Mr Arnold pleads that by April
2018, Plaintiff's claims involving transactions carried out from
January 2014 to April 2018
fell due and that Plaintiff's
summons were issued more than three years after the claims arose, and
the claims have, consequently,
been prescribed. It was argued that
his contention on this aspect must fail.
37.
The particulars of the claim were served on Mr. Arnold within three
years of the plaintiffs coming to know of the debts
in circumstances
in which Mr. Arnold and the complicit executives of the plaintiffs
wilfully prevented the plaintiffs from coming
to know of the
existence of the debts. Referring to
section 12(3)
of the
Prescription Act provides
that - "A debt shall not be deemed to
be due until the creditor has knowledge of the identity of the debtor
and of the facts
from which the debt arises - Provided that a
creditor shall be deemed to have such knowledge if he could have
acquired it by exercising
reasonable care."
38.
It was further submitted that Mr Arnold was outside the Republic,
thus delaying the running of the prescription against
him. Therefore,
this impediment was removed only on 19 February 2021, when he
consented to jurisdiction and service in this action.
Consequently,
the summons was served on Mr. Arnold before the date the prescription
would be completed, i.e., before 19 February
2022.
39.
Further submitted that Mr Creswick does not qualify and cannot state
that Mr Arnold has no defense to the merits of the
claim against him.
Plaintiff refutes this contention, in that the plaintiffs have laid
relevant documentary evidence, precisely
showing how Mr Arnold
conducted his fraudulent scheme and received payments by
misrepresenting to the plaintiffs, and he has baldly
denied the
allegations and has furnished not a shred of evidence that the work
he billed for was done.
40.
The Plaintiffs further submitted that their senior
Counsel was unavailable because of health-related issues.
41.
Defendant submits that the Plaintiffs have
not given a proper and sufficient explanation to show good cause, and
the application
should be dismissed for several reasons.
42.
Defendant contends that the Plaintiffs
mistakenly calculated the delay and failed to explain the period of
dies non, and did not
explain why they have not requested the First
Defendant to uplift the bar.
43.
Further contending that the Plaintiff's
replication admits paragraphs 1, 2, and 3 of the
First Defendant's First
Special Plea, in that their claim
of damages against Laher and Mackay, amongst others, is arising from
their fraudulent
conduct in inducing payments by one or other of the
Plaintiffs to one or other of the liquidated suppliers and also admit
paragraphs
4 to 4.3 of the First Special Plea, thereby admitting that
they pleaded that the First Defendant, Arnold, developed an unlawful
scheme which was implemented in collusion with Laher and Mackay,
under which the First Defendant, colluding as aforesaid, procured
payments to the relevant companies for work, which was not done.
44.
Further, it was submitted that the
Plaintiffs admitted that Arnold was not sued in the EOH
2020 action; however, they
deny that no notice was given to him
regarding
section 2(2)(a)
of the ADA about the EOH 2020 action.
45.
Contending that the avoidance pleaded
by the Plaintiffs in the replication must consist of averments which
would comprise a complete
defense to the allegations made by the
First Defendant in his Special Plea.
The avoidance defense
now raised by the Plaintiffs necessitates
correctly interpreting section 2(2) of the Apportionment of Damages
Act.
46.
It was also argued that it is imperative
that notice be given to any joint wrongdoer who is not sued in that
action, which can only
be interpreted to mean that notice be given to
a party who is alleged to be a joint wrongdoer. In other words, the
notice must
stipulate that the person giving the notice alleges that
the party to whom the notice is given is a joint wrongdoer and that
he
is facing potential liability. The Plaintiff failed to stipulate
such.
47.
The allegations made by the Plaintiffs in
their replication also infer that Arnold impliedly obtained notice of
the EOH 2020 action.
The Plaintiffs have failed to advance any
material facts, such as that the first Defendant was notified of the
EOH 2020 action
before the closing of pleadings.
48.
The notice should allege that the First
Defendant was a joint wrongdoer with Laher and Mackay and that he
was, in law, entitled
to intervene in that action or to join as a
co-defendant.
49.
The Plaintiffs have not advanced any
material facts in defense of the first special plea of the First
Defendant and, accordingly,
cannot avoid its consequences, which are
submitted as an absolute defense to the Plaintiffs' claim against the
First Defendant.
The replication has not neutralized the allegations
contained in the first special plea.
Discussion
50.
Rule 27(3) of the Uniform Rules states that:
“
The Court may,
on good cause shown, condone any non-compliance with these rules
.”
51.
Rule 25(1) of the Uniform Rules states that:
“
Within fifteen
days after the service upon him of a plea and subject to subrule (2)
hereof, the plaintiff shall, where necessary,
deliver a replication
to the plea and a plea to any claim in reconvention, which plea shall
comply with Rule 22
.”
52.
Defendant`s complains that Plaintiff has not complied with Rule
25(1), and a delay of 20 court days late has not been
explained.
Indeed, Plaintiff's explanation for the delay in filing its
replication might be considerably late and not be a blow-by-blow
type
of explanation.
53.
In my analysis, the reason proffered by the Plaintiff is cogent and
reasonable. The Plaintiff explained that their Senior
Counsel had
some serious health setbacks, which she was not in control of.
Further alluding to the fact that the first Defendant's
plea was
delivered approximately 11 months after the initial due date for the
plea and over 25 court days after the plaintiffs
offered the amended
Particulars of Claim on 14 September 2022 and which amendment was in
response to an exception that had been
taken by the ninth and tenth
defendants in action, and notwithstanding that the plaintiffs had
granted Mr Arnold an indulgence
regarding the period for the filing
of his plea. It should be noted that this was not a deliberate act or
suggestive that they
are automatically entitled to such an
indulgence.
54.
The other explanation was that this application for condonation
pertains only to the plaintiffs' replication of the first
Defendant's
special pleas.
55.
Plaintiff explained that the Counsel deemed replicating Defendant's
special pleas appropriate.
56.
Courts have
consistently refrained from attempting an exhaustive definition of
what constitutes good or sufficient cause for exercising
its
discretion.
[1]
Good cause or sufficient cause for the exercise of discretion, in my
view, suggests that each case must be judged on its
own merits.
57.
The Plaintiff has ably set out the factors that count heavily in
favour of condonation. The Defendant has not gained such
factors.
58.
Defendant does not dispute the Plaintiff's assertion that Plaintiff's
claim had been formulated in such a way that allegations
of the
perpetration of a fraudulent and corrupt scheme by Mr. Arnold who, in
perpetrating the unlawful scheme is also alleged to
have committed an
unconscionable and gross abuse of the juristic personalities of the
other defendants.
59.
As the initiator of legal proceedings, the Plaintiff cannot be told
by any party in the proceedings how it should proceed
in prosecuting
its claim. They deem it appropriate that the first Defendant must be
a party to this proceedings. Upon the Plaintiff
realizing their case
had not been appropriately presented before the court, he was bound
to ask for the court's indulgence and
present it properly.
60.
As the Defendant did not consent to the Plaintiff's filing its
replication out of time, it is therefore incumbent upon
this court to
exercise its discretion judicially in assessing whether there have
been sufficient or convincing reasons and or good
cause shown for the
granting of the condonation in this regard.
61.
It is common cause that this matter has not made its way to trial,
and in such circumstances, the Plaintiff was at liberty
to file an
application for condonation for the late filing of its replication.
Defendant did not take issue with the delay in finalizing
the main
action but confined its opposition to the late filing of the
replication.
62.
The court had an opportunity to assess the conduct and motive of the
Plaintiff, in doing such an exercise, this court
is convinced that
the Plaintiff would not have pursued this matter this vigorously if
there were no prospects of success; a cogent
explanation was made.
63.
In my
opinion, there appears to be no prejudice or potential prejudice to
be suffered by the Defendant if this condonation is granted.
In all
fairness, this court has a duty to protect the interests of all
parties. In the interest of justice and fairness, this duty
is
entrenched in the Constitution
[2]
.
How the Constitution is to be interpreted and applied is of paramount
importance.
64.
In addition, I am afraid I have to disagree with the assertion
that the First Defendant should be absolved from taking
responsibility
in this regard
. The plaintiffs have
successfully advanced material facts that the First Defendant was
given notice of the EOH 2020 action before
the close of pleadings.
65.
The first Defendant' attempts to avoid liability for his alleged
fraudulent conduct by relying on
section 11
of the
Prescription Act,
68 of 1969
. Such contention needs to be more substantial,
and it stands to fail.
66.
Mr. Arnold pleads that by April 2018, the Plaintiff's claims
involving transactions carried out from January 2014 to April
2018
fell due, that the plaintiffs' summons were issued more than three
years after the claims arose, and that the claims have,
consequently,
been prescribed. This contention stands to fail as well.
67.
The Plaintiff posed a valid point in that the particulars of the
claim were served on Mr. Arnold within three years of
the Plaintiff's
knowledge of the debts, in circumstances in which Mr. Arnold and the
plaintiffs' executives wilfully prevented
the plaintiffs from
learning of the debts.
68.
The Plaintiff directs that the replication was filed as a result of
the first Defendant's special pleas. The plaintiffs
elaborated in the
replying affidavit that they intend to persist with the action.
69.
In the circumstances, there is no way that this court would dismiss
the allegations by the Plaintiff that Mr Creswick
does not, and is
not able to, state that the first Defendant, Mr. Arnold, has any
defense to the merits of the claim against him.
70.
The plaintiffs have provided relevant documentary evidence, precisely
how the first Defendant conducted his scheme and
received payments by
misrepresenting them to the plaintiffs. He has baldly denied the
allegations and has furnished no evidence
that the work he billed for
was done. This court is convinced that Plaintiff has raised triable
issues in its replication.
71.
The replication filed by the Plaintiff is a
further procedural step which proceeds to address various issues
raised by the defendants
in their special pleas.
COSTS
72.
What remains is the issue of an appropriate cost
order. In their application for condonation, the Plaintiffs requested
costs regarding
their notice of motion. In their heads of argument,
Counsel for the Plaintiff sought a cost order, in that
the
Defendant's refusal in the first instance to condone the late filing
of the replication, which necessitated the bringing of
this
application and, after that, the flimsy grounds upon which he has
sought to oppose this application for condonation are vexatious,
and
yield the ineluctable inference that his continued opposition "
is
in furtherance of the ulterior purpose of delaying and frustrating
the progress of the action."
73.
Also, by the lengths to which the first Defendant has gone to avoid
answering the claims against him and the companies
he used as
vehicles for fraud in other matters, and his refusal in this
application to respond to the challenge to deal with these
facts with
relevant evidence, failing which the inference is that he has no
answer to the case against him.
74.
The plaintiffs consequently sought an order that the first Defendant
pay their costs on the punitive scale of attorney
and own client,
including the costs of two counsels where two counsels were employed.
75.
Generally,
the awarding of costs
is
always at the court's discretion
.
[3]
The
ordinary rule is that such costs should follow the result and be
awarded
to a successful litigant
.
Is
a punitive costs order warranted?
76.
Costs on an
attorney-client scale are to be awarded where fraudulent, dishonest,
or vexatious conduct amounts to an abuse of the
court process. In
this regard, it was held in Plastic Converters Association of South
Africa on behalf of members v National Union
of Metalworkers of
S.A.
[4]
The scale of attorney
and client is an extraordinary one that should be reserved for cases
where it can be found that a litigant
conducted itself in a clear and
indubitably vexatious and reprehensible manner.
77.
Such an
exceptional award is intended to be very punitive and indicative of
extreme opprobrium." In Fisheries Development Corp
v Jorgensen
and Another
[5]
"vexatious"
was held to mean frivolous, improper, instituted without sufficient
ground, to serve solely as an annoyance
to any party.
78.
Vexatious
proceedings no doubt include proceedings which, although adequately
instituted, continued with the sole purpose of annoying
either party;
‘abuse’ connotes a misuse, an improper use, a use mala
fides, a use for an ulterior motive.”
[6]
79.
I am not satisfied that the Defendant's conduct can fairly be
described as vexatious.
80.
In the present matter, this court, in exercising its discretion, is
of the view that the appropriate costs to be awarded
are costs to be
reserved for determination by the trial Court.
CONCLUSION
81.
It must be stated that none of the findings in this judgment should
be construed as a finding on the merits in this case.
82.
In line with the findings above, I conclude that the condonation
sought by Plaintiff is justified and necessary to facilitate
meaningful ventilation of the facts upon which Plaintiff seeks to
hold Defendant liable. The Defendants’ objections stand
to be
rejected.
83.
In conclusion, the Plaintiff has made a proper case to grant
condonation for the late filing of its replication.
ORDER
81.
Following the findings in this judgment, an order is made that;
1. The Plaintiff’s
application for condonation is granted.
2. T
he
Plaintiff is permitted to file their replication dated 7 February
2023
3. That the costs of this
interlocutory application be costs in the cause.
T. BOKAKO
Acting Judge of the
High Court
Gauteng Local
Division, Johannesburg
APPEARANCES
Counsel
for the Applicant
Adv. S Stein SC
Counsel
for the Respondent
Adv.
R Shepstone
Date
of Hearing:
5 March 2024
Date
of Judgment:
31 May 2024
[1]
Mynhardt
v Mynhardt
1986 (1) SA 456
(T) at 463 E - F
[2]
The
Constitution of the Republic of South Africa, Act 108 of 1996
[3]
Kruger
Bros & Wasserman v Ruskin
1918 AD 69
; Also, Graham v
Odendaal
1972 2 SA 611
(A) at 616
[4]
3
[2016] ZALAC 39
; [2016] 37 ILJ 2815 (LAC)
[5]
4
1979 (3) SA 1331(W)
at 1339 E – G.
[6]
Also
see Marsh v Odendaalsrus Cold Storage Ltd
1963 (2) SA 263
(W) at 270
C – F, where it was held that
vexatious proceedings
include proceedings that put the other side in unnecessary trouble
and expense. The
proceedings did not need
to be reprehensible, malicious, or misleading.
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