South Africa: Eastern Cape High Court, Grahamstown

You are here:
SAFLII >>
Databases >>
South Africa: Eastern Cape High Court, Grahamstown >>
2021 >>
[2021] ZAECGHC 76
| Noteup
| LawCite
Webber N.O and Others v Hein (CA 221/2020) [2021] ZAECGHC 76 (10 August 2021)
Download original files |
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION, GRAHAMSTOWN)
Appeal case No: CA 221/2020
Case No: EL 1462/2019
In the matter between:
RUSSELL WAYNE WEBBER N.O. First Appellant
FELICITY ELAINE WEBBER N.O. Second Appellant
MAGDALEENE PELSER N.O. Third Appellant
THE WEBBER FAMILY TRUST Fourth Appellant
and
MEGAN HEIN Respondent
[As representative of Hannah
and Ashley Webber]
JUDGMENT
MBENENGE JP:
[1] On Friday, 13 December 2019, the respondent launched an urgent ex parte application seeking an order, in the form of a rule nisi returnable on 17 December 2019, worded as follows:
“2.1 that the first, second and third [appellants] be interdicted and restrained from taking any steps to give effect to the sale of the property known as Portion 1 of Farm 1092, Kidds Beach ‘the property’;
2.2 that the payment of the amount of R650 000.00 (Six hundred and fifty thousand rand) being the purchase price of the sale of the property should not be paid into the [respondent’s] attorney’s trust account . . ., which attorneys shall invest same into an interest bearing account until the adjudication and resolution of the relief sought in PART B of the notice of motion. . .” (emphasis supplied)
[2] Besides merely referring to “PART B” in the terms quoted above, the notice was bereft of PART B, shedding no light, whatsoever, in relation to what order would be sought therein, in due course, by the respondent.
[3] The urgency of the application was said to be predicated on the apprehension that the first appellant had, contrary to the terms of the relevant deed of trust,[1] ceded rights and benefits belonging to the fourth appellant to a third party and requested that R650 000 be paid directly into the personal account of the second appellant.
[4] As justification for bringing the application on an ex parte basis, it was alleged:
“22. Once the monies are paid into a personal account of a trustee, it becomes a more challenging issue and recovering same might prove difficult, if not impossible, where the application is brought on notice and fully compliant with the time provisions applicable.”
[5] Notwithstanding the fact that the court before which the application was moved[2] was oblivious to what PART B of the application might entail, it nevertheless granted the rule nisi sought, which it made returnable on 7 January 2020, together with interim relief in terms of the notice. Despite the fact that Capitec bank had not been joined as a further respondent in the proceedings, and the court had merely directed that the order be served on the bank, the bank froze and denied all access to the relevant account. The order further directed that opposing papers be delivered based on truncated time-frames.[3]
[6] The appellants got to be aware of the application when a copy of the order granted by the first court was transmitted to them by email at 20:04, on the same day.[4]
[7] Pursuant to the order, opposing papers were drawn and delivered, on 18 December 2019. Besides contending, inter alia, that the respondent had failed to disclose material facts germane to the launch of an ex parte application, the appellants contended that the rule nisi ought to be discharged as no case had been made out for the fictitious PART B on the papers. Various other contentions on the merits of the application were raised, but nothing, for present purposes, hinges on that.
[8] Soon thereafter, the respondent delivered her replying affidavit attested on 18 December 2019. In the replying affidavit, it is alleged that “[t]here is an order prayed in PART B, that the trustees are to attend arbitration so that they are declared incapable of managing the affairs of the fourth [appellant].”
[9] On 19 December, the respondent’s attorneys, without invoking rule 28 of the Uniform Rules of Court (the Rules),[5] delivered an “extended notice of motion”, the content of which was different from that which served before the first court, in that it included PART B, embodying the following prayers:
“1. The applicant and first to the third respondents attend and/or refer the dispute regarding the management of the trust to arbitration in terms of clause 34 of the Trust Deed, for an order removing the first to the third respondents as trustees of the fourth respondents;
2. That upon resolution of the dispute by means of arbitration, that the proceeds be paid, less banking and other reasonable charges and/ or fees, as directed by the arbitrator, into the banking account of the fourth respondent;
3. That the arbitration award be made an order of the court, in order to enforce compliance with the award made during arbitration.”
[10] The matter served before court[6] on the return day, when it was heard to a finish with judgment being reserved. The second court did not uphold the appellants’ contention that PART B was lacking, being of the view that it was a mere technical objection that did not culminate in prejudice being suffered by the appellants.
[11] In essence, the second court held:
“[9] . . . What is clear is that when the matter was heard on 13 December 2019 there were amendments effected to the order by insertion of paragraph 3.3 and 3.4. PART B was a referral of the dispute between the parties to arbitration in terms of clause 34 of the Trust Deed for an order removing the first to third respondents as trustees. The question is whether the respondents were prejudiced by the service of two notices. . .
[15] In her affidavit Ms Venter confirmed service of the notice of motion . . . on 17 December 2019. She said it remained on her desk without perusing it. Ms Mostert submitted that the two notice of motion served on the respondent were ‘highly irregular’ and ‘highly prejudicial’ as alluded to earlier without highlighting which of the respondents was prejudiced and what prejudice they suffered. In my view no prejudice suffered by any of the respondents by the service of the notices. The notice of motion filed on 13 December 2019 when the matter was heard contained PART B hence the parties agreed that at the time of the hearing of the application they would only argue PART A and PART B would be relevant at a later stage.” (emphasis supplied)
[12] The merits of the application were delved into and paragraph 3.3 of the rule nisi granted on 13 December confirmed. In effect, the second appellant was restrained and interdicted from withdrawing, utilising and dissipating the sum of R650 000, “pending the finalization of this application.”
[13] Discontent with this outcome, the appellants now appeal to this court with the leave of the second court.
[14] A plethora of grounds of appeal against the order of the court a quo has been raised, but one that emerges from the papers and is dispositive of this appeal is the contention that the second court erred in confirming the rule nisi in the circumstances of this case. A further ground that will be dealt with later in this judgment is the contention that the respondent breached the duty to lay all relevant facts before the court so that it may have full knowledge of all the circumstances of the case before issuing an order on an ex parte basis.
[15] From a reading of the excerpt quoted in paragraph 11, it becomes clear that the second court premised its conclusion on the issue at hand upon an acceptance that the “extended notice of motion” subsumed or amended the original one, and that such step was not prejudicial to the appellants.
[16] The Rules make no provision for the delivery of an “extended notice of motion.” They allow a party to seek an amendment to a notice of motion, in terms of rule 28.[7] Only once the amendment has been effected will the initial notice of motion be subsumed by the amended one.
[17] In the event that the proposed amendment is objected to, leave to amend must first be sought.[8] A court hearing an application for an amendment has a discretion whether or not to grant it, a discretion which must be exercised judicially.[9]
[18] In Devonia Shipping Ltd v MV Luis (Yeoman Shipping Company Ltd intervening)[10] Rose Innes J held:
“The general rule is that an amendment of a notice of motion, as in the case of summons or pleading in an action, will always be allowed unless the application to amend is mala fide or unless the amendment would cause an injustice or prejudice to the other side which cannot be compensated by an order for costs or, in other words, unless the parties cannot be put back for the purposes of justice in the same position as they were when the notice of motion which it is sought to amend was filed.”[11]
[19] In this matter, no application to amend the notice of motion so as to include the prayers embodied in PART B was made. The case the appellants were called upon to meet was predicated on the original notice of motion. The opposing papers dealt with the relief as sought in that notice, and not otherwise.
[20] The approach adopted by the respondent, upheld by the second court, eschews the remarks made by Madlanga J in Eke v Parsons,[12] where it was held that under our constitutional dispensation, the object of the court rules is, among others, to ensure a fair trial or hearing. It is not only prejudicial but unfair for a party to invite the other, on the strength of relief sought in the notice of motion, to show cause why such relief should not be granted, and then, after the other party has ventilated itself by way of opposing papers, to sneak in an “extended notice of motion” seeking relief to which the other party was not directed.
[21] Absent an appropriate amendment of the original notice of motion, the second court, therefore, erred in dealing with the matter on the basis that the so-called “extended notice of motion” had subsumed the original one.
[22] The first court was never requested to grant an order in the knowledge of what PART B was. It granted an order dependent on PART B that was lacking. The order was, for that reason, incompetent. By the same token, the order confirming the rule nisi on the return day is bedevilled by the same fate.
[23] The anomalous situation in which the respondent finds herself, in this case, is no different from that which arose in Moyane v Ramaphosa and Others,[13] where it was held:
“[39] . . . The interim relief sought against the Commission is pursued pending the outcome of the Constitutional Court application. This has been dismissed. The basis for interim relief thus fell away in any event. Furthermore, applicant has attempted to cure this defect by filing a proposed amended notice of motion together with his replying affidavit. PART A of the notice of motion continues to seek the interim relief applied for in these proceedings. PART B, however, seeks to amend and revive the relief previously sought in the Constitutional Court application. . . Of importance is that the amended notice of motion does not afford the respondent an opportunity to answer the allegations in PART B of the intended amendment. It would therefore be highly prejudicial to permit the amendment and to allow PART B to proceed in those circumstances. The result is that as there is no proper pending application for final relief before any court, no interim order can competently be made. Furthermore, the interim order sought against the SARS Commission is in any event wholly unrelated to the relief pursued against it in the Constitutional Court application and PART B of the proposed amended notice of motion.”
[24] Little wonder, therefore, that, at the hearing of this appeal, when confronted with the difficulty that the respondent finds herself in, Ms Brauns eventually resorted to leaving the matter in the hands of the court.
[25] In light of this, the order of the second court is liable to be set aside. Both the costs in the second court and those resulting from this appeal ought to follow the result.
[26] It was urged upon this court that, when substituting the order of the second court with one discharging the rule nisi, the court should award costs on the punitive attorney and client scale because, argued Mr Cole for the appellants, the respondent had failed to disclose material facts in pursuit of her ex parte application.
[27] It is trite law that if the affidavit filed in support of an ex parte application omits to disclose something that might affect the court’s decision, the court may, on the return day of any rule nisi or at the appropriate stage in the proceedings, discharge the rule or set aside the order which it granted as a matter of urgency.[14]
[28] What information was withheld when the instant application was being launched? To begin with, the absence of a prayer in terms of PART B of the notice of motion was never brought to the attention of the first court. Rule 57.4 of the Code of Conduct for all Legal Practitioners, Candidate Legal Practitioners and Juristic Entities[15] is of relevance. It provides that a legal practitioner shall, in any ex parte proceedings, disclose to a court every fact (save those covered by professional privilege or client confidentiality) known to the legal practitioner that might reasonably have a material bearing on the decision the court is required to make. When the application was moved on 13 December 2019, the court was not addressed on this shortcoming, with the result that the principle against non-disclosure of material information was breached.
[29] There is essential background information that also did not feature in the proceedings that served before the first court.
[30] It is common cause that the first appellant and the respondent had been married to each other. They were divorced in December 2017 and, according to the affidavit filed in opposition to the application that served before the second court, concluded a deed of settlement in April 2019 resolving the accrual calculation. Whilst their marriage was still in subsistence, they had three properties, with the respondent retaining the house at 8 Hebbes Street, East London as her sole property and with the obligation to cover all costs relevant thereto, moving forward. Two farm properties were to be retained by the first appellant as his part of accrual and both farms were registered in the name of the Webber family Trust. The first appellant would cover all costs relating to those properties, going forward. It would appear that, according to the deed of settlement, the first appellant and the respondent intended one another to retain the respective properties as their personal property and that their daughters accepted that to have been the position.
[31] The respondent was privy to this information but did not disclose the fact that the first appellant had, by way of a deed of settlement, agreed to the terms on which the three properties, which, during the subsistence of the marriage, were registered in the trust should be dealt with in the founding affidavit. Had this background information been set out in the founding papers, the first court might, in all probability, have exercised its discretion against granting the impugned order.
[32] The following remarks made by Solomon JA in Estate Logie v Priest[16] are apposite:
“. . . [I]t cannot . . . be too strongly insisted upon that in ex parte applications it is the duty of the applicant to lay all the relevant facts before the court, so that it may have full knowledge of the circumstances of the case before making its order. The fact of a settlement having been arrived at was certainly a relevant and important circumstance in the proceedings and had its terms been set out in the petition, it may well be that the judge before whom it came may in his discretion have refused to make an order. . .”
[33] The failure to disclose factual information in relation to the absence of PART B and the facts emanating from the conclusion of the deed of settlement pursuant to the divorce of the first appellant and the respondent is lamentable.
[34] The application was launched ex parte, with unwarranted haste, causing much inconvenience to the appellants. It is alleged that they only realised over the ensuing weekend, when attempting to access the Capitec bank account, that the account had been frozen. This was a long weekend, and the first appellant could only attend at the bank in person on the morning of Tuesday, 17 December. It is further alleged that the freezing of the account caused untold misery to the first appellant: he utilised the account with the full knowledge of the second appellant, and purchased chronic medication which he uses, from this account; his Toyota Hilux Bakkie payments made out of the cash transferred into the account could not be paid; his cellular phone contract service provider suspended the contract as a result of the first appellant not being able to withdraw money to pay for his contract; the appellant also ended up hamstrung and not being able to pay maintenance towards his two minor children and had to approach his mother for financial assistance. All this took place in circumstances where there was a gross failure to put before the court a fact of which it was essential for the court to know.[17]
[35] In H. R. Holfeld (Africa) Ltd v Karl Walter & Co GmbH and Another (1)[18] the court frowned upon the conduct of a litigant who disregarded the need to place the full facts before the court when seeking relief without notice. Attorney and client costs were awarded against the party responsible for such conduct.
[36] In this matter, too, there seems good reason for the costs resulting from the discharge of the rule nisi to be awarded on the punitive attorney and client scale.
[36] I, therefore, make the following order:
1. The appeal succeeds with costs.
2. The order of the court a quo is set aside and substituted with the following:
“(a) The rule nisi granted by this court on 13 December 2019 is hereby discharged.
(b) The applicant shall pay costs of the application on the punitive attorney and client scale.”
S M MBENENGE
JUDGE PRESIDENT OF THE HIGH COURT
BROOKS J:
I agree.
R W N BROOKS
JUDGE OF THE HIGH COURT
GQAMANA J:
I agree.
N W GQAMANA
JUDGE OF THE HIGH COURT
Appellants’ counsel : S H Cole, SC
Appellants’ attorneys : Wheeldon Rushmere & Cole Inc.
Grahamstown
Respondent’s counsel : L R Brauns
Respondent’s attorneys : Makaula Makaula Inc.
East London
Date matter heard : 20 July 2021
Date judgment delivered : 10 August 2021
[Also by electronic mail transmitted to the parties’ attorneys, in terms of paragraph 68 of the Eastern Cape National State of Disaster Management Directions]
[1] The trust deed was entered into by and between the respondent (as owner and trustee) and the appellant (as trustee) and Birch Bruce Administration Close-Corporation (as independent trustee), giving rise to the existence of the fourth appellant, whose beneficiaries were, inter alia, the descendants of the first appellant and the respondents, and whose objective is to serve as a family trust and competent to receive any benefit of either an income or capital nature, including the acquisition of the immovable property.
[2] Herein after conveniently referred to as the first court.
[3] The appellants were directed to deliver opposing papers by 20 December, and the applicants replying papers by 6 January 2020.
[4] 13 December 2019.
[5] Rule 28 provides that any party desiring to amend any document other than a sworn statement, filed in connection with any proceedings, shall notify all other parties of his intention to amend and shall furnish particulars of the amendment.
[6] Conveniently referred to as the second court.
[7] Fn 4.
[8] Sub-rules 28(3) to 28(6).
[9] Caxton Ltd and Others v Reeva Forman (Pty) Ltd and another [1990] ZASCA 47; 1990 (3) SA 547 (A) at 565 G.
[10] 1994 (2) SA 363 (CPD) at 369 F - I.
[11] Also see Affordable Medicines Trust v Minister of Health [2005] ZACC 3; 2006 (3) SA 247 (CC) at para 9; also see Bondev (Midrand) (Pty) Ltd v Van Blerk (909/2014) [2019] ZAGPPHC 466 (30 August 2019).
[12] (CCT214/14) [2015] ZASCA 30; 2015 (11) BCLR 1319 (CC); 2016 (3) SA 37 (CC), at para 40.
[13] (82287/2018)[2018] ZAGPPHC 835; [2019] 1 All SA 718 (GP) (11 December 2018).
[14] Schlesinger v Schlesinger 1979 (4) SA 342 (W) 348 E – 350 C and MV rizcun Trader (4), MV rizcun v Manley Appeldore Shipping Ltd 2000 (3) SA 776 (C).
[15] GN 168 published in GG 42364 dated 29 March 2019 (corrected by GN 198 dated 29 March 2019), made under the authority of section 36 (1) of the Legal Practice Act 28 of 2014.
[16] 1926 AD 312 at 323.
[17] Compare James v Jockey Club of SA [1954] 1 All SA 242 (W); 1954 (2) SA 44 (W) at 46.
[18] [1987] 3 All SA 850 (W) at 861 B – C, where it was held:
“There is, however, the further aspect mentioned above that some office-bearer of the applicant must have known of the material facts which were not disclosed to the Court when the rule nisi was sought.
Applying the principles enunciated by Tindall JA in Nel v Waterberg Landbouwers Kooperatiewe Vereniging 1946 AD 597 at 607 I am of the opinion that there are special considerations in this matter arising from the conduct of the losing party which justify an order of attorney and client costs. As in the Schlesinger case supra, there was a reckless disregard of the need to place the full facts before this Court when seeking relief without notice. In all the circumstances I am of the view that attorney and client costs, as awarded in Nel’s case, should follow the event in this matter.”