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Rademeyer and Others v Rademeyer Estates and Others (2072/2014) [2014] ZAECPEHC 68 (23 July 2014)

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IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE LOCAL DIVISION, PORT ELIZABETH

CASE NO.: 2072/2014

DATE: 23 JULY 2014

In the matter of:

RADEMEYER & OTHERS                                                      APPLICANTS

AND

RADEMEYER ESTATES &

OTHERS                                                                          RESPONDENTS

JUDGMENT

BROOKS AJ:

INTRODUCTION

[1] The applicants have approached this court as a matter of urgency.  They seek an order directing the 3rd respondent, a firm of attorneys, to retain in trust half the net proceeds from the sale of the immovable property owned by the 1st and 2nd respondents pending the outcome of an action instituted against the 1st respondent by the applicants in the Magistrate’s Court for money which they claim is owed to the 2nd applicant by the 1st respondent.

[2] The 1st and 2nd respondents oppose the application.  The 1st respondent indicates in his answering affidavit that he will defend the action commenced against him by the 2nd applicant.  In addition he intends to file a claim in reconvention for the recovery of money which he claims is owed to him by the 2nd applicant.

THE LEGAL PRINCIPLES

[3] It is common cause that the applicants seek what is sometimes referred to as an anti-dissipation order.  They would be entitled to such relief if two requirements are met by the case put up:

  1. the demonstration that the 1st and 2nd respondents are wasting or getting rid of funds, or secreting assets, or that there exists a reasonable apprehension that the respondents are about to embark on such conduct; and 

  2. save in exceptional circumstances, it is demonstrated that there is an intention on the part of the 1st and 2nd respondents to defeat the applicants’ claims.

KNOX D’ARCY LTD AND OTHERS v JAMIESON AND OTHERS  1996(4) SA 348 (A) at 372F-H; CARMEL TRADING CO LTD v COMMISSIONER, SOUTH AFRICAN REVENUE SERVICE AND OTHERS 2008(2) SA 433 (SCA).

[4] In establishing an entitlement to an anti-dissipation order in accordance with the principles set out in the preceding paragraph, the applicants must demonstrate that the requirements for an interim interdict have been met.  OSNER v OSNER, unreported judgment, Case No. ECD499/2004 para [21].

[5] The requirements for an interim interdict are the establishment of :

  1. a clear right, or a right prima facie established though open to some doubt;

  2. a well grounded apprehension of irreparable harm if the interim relief is not granted;

  3. the balance of convenience in favour of the granting of relief; and

  4. the absence of any other satisfactory remedy.

The granting of an interim interdict pending an action is an extraordinary remedy within the discretion of the court.  ERIKSON MOTORS (WELKOM) LTD v PROTEA MOTORS, WARRENTON & ANOTHER  1973(3) SA 685 (AD) at 691C-E.

[6] A court will exercise a discretion to dismiss the application if a dispute of fact arises on the application papers which is a serious dispute of fact, incapable of resolution on the papers, and which the applicant ought to have foreseen or did in fact foresee when launching the application.  ADBRO INVESTMENT CO LTD v MINISTER OF THE INTERIOR 1956(3) SA 345 (A).

[7] In assessing whether or not the applicants have established an entitlement to an interim interdict for an anti-dissipation order, and particularly with regard to the enquiry as to whether the applicants have established a prima facie right, the customary test for interim relief is to be applied. 

“In determining whether or not the applicants crossed the threshold, the right relied upon for a temporary interdict need not be shown by a balance of probabilities, it is enough if it is prima facie established though open to some doubt.

The proper approach is to take the fact set out by the applicants together with any facts set out by the respondents, which the applicants cannot dispute, and to consider whether having regard to the inherent probabilities the applicants should, not could, on those facts obtain final relief at the trial.  It is also necessary to repeat that although normally stated as a single requirement, the requirement for a right prima facie established, though open to some doubt, involves two stages.   Once the prima facie right has been assessed, that part of the requirement which refers to the doubt involves a further enquiry in terms whereof the Court looks at the facts set up by the respondent in contradiction of the applicants’ case in order to see whether serious doubt is thrown on the applicant’s case and if there is a mere contradiction or unconvincing explanation, then the right will be protected.  Where, however, there is serious doubt then the applicant cannot succeed. See WEBSTER v MITCHELL 1948(1) SA 1186 (W) at 1189; GOOL v MINISTER OF JUSTICE AND ANOTHER 1955(2) SA 682 (C) at 688.”

SPUR STEAK RANCHES LTD AND OTHERS v SADDLES STEAK RANCH, CLAIRMONT, AND ANOTHER 1996(3) SA 706 (C) at 714E-G. 

THE ALLEGATIONS OF FACT

[8] The 1st and 2nd respondents are married to each other out of community of property.  They are the joint owners of certain immovable property which they have sold.  The financial circumstances pertaining to their interest in the immovable property, and the sale thereof, are such that an amount of capital will become available to the respondents once transfer of the property into the name of the purchasers occurs. 

[9] It is common cause that the 1st respondent was employed previously by the 2nd applicant as the assistant to the 1st applicant, who is an estate agent.  The employment contract was terminated on 1 April 2014.  The 2nd respondent is unemployed. 

[10]  The exact terms of the employment contract, particularly those relating to the nature and extent of the 1st respondent’s remuneration, are in dispute.  This is at the heart of the 2nd applicant’s claim in the action which the 2nd applicant has instituted against the 1st respondent in the Magistrate’s Court and in which it seeks the recovery of R203 773-06 from the 1st respondent.  The terms of an agreement between the 1st applicant and the 1st respondent pertaining to the advance of a deposit to purchase a motor vehicle are also in dispute. This is central to another action instituted against the 1st respondent in the Magistrate’s Court, this time by the 1st applicant for the recovery of R10 000-00.

[11]  The 2nd respondent has not been cited as a defendant in either of the actions proceeding against the 1st respondent in the Magistrate’s Court.

[12]  Subsequent to the termination of the 1st respondent’s employment with the 2nd applicant the 1st applicant became aware of rumours that the respondents intended to move back to Belgium, their country of origin.  These rumours were borne out by the respondents’ actions in re-homing some of their pets.  Messages appearing on the social media, of which the 1st respondent is the author, further fuelled the applicants’ belief that the respondents are intent on returning to Belgium.  

[13]  The applicants alleged that registration of the transfer of ownership in the immovable property is scheduled to occur by agreement between the parties on 1 August 2014.  This allegation is not dealt with pertinently by the respondents and accordingly must be accepted for present purposes as being admitted. 

[14]  In the answering affidavit filed on behalf of the 1st and the 2nd respondents, the 1st respondent admits the occurrence of the events which gave rise to the rumours that he and his wife intend to relocate to Belgium.  He offers an explanation for them, stating that it was necessary to sell the immovable property because there is no opportunity for the respondents to remain in Port Elizabeth.  He cites as the reason a recent conviction for shoplifting on 14 March 2014 and that the 1st applicant has made it his business to ensure that the 1st respondent is unable to work or operate in Port Elizabeth.  He states that he is “beyond embarrassment at what has transpired”   and that he and his wife want “to start a clean slate”.  As part of starting a new life, the respondents took a decision to pretend that they were leaving South Africa.  Part of the reasoning behind this ploy is to bring about a quicker sale of the immovable property and to ensure that the 1st applicant had no idea of the whereabouts of the respondents. 

[15]  The 1st respondent has secured employment in Wellington in the Western Cape with another estate agency.  The employment is due to commence on 1 August 2014.  He has also rented immovable property in Wellington and provides both the lease agreement and the address.  He states that his passport has expired. 

[16]  The 1st applicant urges the court to find that the 1st respondent has lied.  In particular, the 1st applicant wishes the court to find that, notwithstanding the 1st respondent’s assertions under oath supported by a lease agreement in respect of domestic property in the Western Cape and a letter of appointment in respect of employment there, the respondents are going to leave South Africa. 

[17]  I am reluctant to do so.  Firstly, the applicants’ notice of motion was issued by the Registrar on 1 July 2014. Service on the three respondents was effected on the same day.  The agreement of lease entered into by the 1 respondent was signed by him on 16 June 2014.   This appears to be accepted by the 1st applicant in his replying affidavit.  The timing militates against any conclusion that the allegations by the 1st respondent made in the answering affidavit in respect of the negotiation of a lease are made mala fides and with the sole intention of defeating the applicants’ application.   The same can be said of the allegations made by the 1st respondent to the effect that he has secured employment.  This, he says, he did on 11 June 2014. On that date, the letter of appointment annexed to the answering affidavit was issued, probably to enable the 1st respondent to secure rented accommodation.  Again, these allegations are largely accepted in the replying affidavit. 

[18]  Secondly, and against this background, an application of the test appropriate to the consideration of affidavits in this matter, which is an application for interim relief, militates against such a finding.  To conclude that the 1st respondent is a liar from the admission by the 1st respondent in the answering affidavit that he and the 2nd respondent deliberately created the impression that they were going overseas is, in my view, a bridge too far particularly in the absence of the benefit of oral evidence. 

ARE THE REQUIREMENTS FOR AN ANTI-DISSIPATION ORDER SATISFIED?

[19]  The applicants’ allegations relating to their entitlement to an anti-dissipation order are all important and can be summarised succinctly as follows:

  1. In the event that the 1st respondent is leaving South Africa for Belgium and/or Israel, the applicants “will never have another opportunity to collect the money that he owes us despite having obtained judgment in the future against him”; and

  2. The proceeds of the sale of the property are the only recourse the applicants have to collect the money that the 1st respondent owes.

[20]  In support of these allegations the applicants attached a Windeed Report which discloses that the property is bonded in favour of Absa Bank Limited for an amount of R300 000-00.  They also attached a copy of the recent agreement of sale which discloses the selling price of the respondents’ immovable property as R1350 000,00.  Accordingly, the court is urged to accept that sufficient capital will be available from the sale of the property to satisfy the debts which the applicants seek to recover from the 1st respondent by way of action in the Magistrate’s Court. 

[21]  In my view these grounds are insufficient to found an entitlement to an anti-dissipation order.  The founding affidavit discloses no basis upon which the court can conclude, even by necessary inference, that the 1st respondent is intent upon the wasting or the dissipation of his assets, or has taken, or is about to take, steps to secrete them.  Indeed, the rumours relied upon by the applicants in approaching the court all flow from openly publicised activity on the part of the respondents posted on the social media.  Nothing is evident therein to indicate an intention on the part of the 1st respondent to defeat the applicants’ claims against him.

[22]  Indeed, and in sharp contrast to the inferences which the applicants presumably urge upon the court in the answering affidavit, the 1st respondent gives a plausible explanation for the behaviour which has given rise to the applicants’ concerns and which, in my view, is not incompatible with the unfortunate circumstances which overtook the 1st respondent’s career and personal reputation in March and April 2014.

[23]  On the application of the legal tests applicable to the assessment of the factual allegations which emerge from the application papers in which interim relief is sought, and particularly where that relief amounts to an anti-dissipation order, I am of the view that the applicants cannot be said to have demonstrated that they have a clear right, or even a prima facie right though open to some doubt. 

[24]  Far from evading the applicants’ claims, the 1st respondent has expressed an intention to participate in the actions commenced by the applicants and to lodge a claim in reconvention.

[25]  Furthermore, in the replying affidavit, reference is made by the 1st applicant to the prospect that in the circumstances surrounding the termination of the 1st respondent’s employment with the 2nd applicant, it is probable that there will be a CCMA hearing, and that accordingly the circumstances surrounding that dismissal are irrelevant for present purposes.  In my view, this is a further factor which militates against the ability of this court to draw the necessary inference that the 1st respondent is intent upon the evasion of the applicants’ claims or of acting in any way which is secretive and to the detriment of the applicants. 

[26]  It follows that I am of the view that the applicants have also failed to demonstrate a reasonable apprehension of irreparable harm.  The applicants have already invoked the satisfactory alternative remedy to be found in the actions which they have instituted to recover the money which they claim is owed to them.  Nothing has been placed before the court in the papers to substantiate the claim that any judgment obtained against the 1st respondent in due course could not be pursued against him even if he were to relocate to Belgium. 

[27]  Against the background of this analysis of the extent to which the applicants have failed to establish an entitlement to relief, it follows as a matter of logic that the balance of convenience does not lie in the applicants’ favour.  More telling, in my view, would be the inconvenience to the 1st respondent were an order to issue preventing him from dealing with his portion of the capital which will accrue to him and thereby exercising his right of ownership in an unfettered manner.  This is particularly so in the face of the applicants’ inability to satisfy the requirements peculiar to establishing a right to an anti-dissipation order. 

[28]  It follows that I am of the view that the application cannot succeed.

COSTS

[29]  Ordinarily, costs will follow the result unless circumstances evident at the time of the issue of the costs order call for the issue of a different order in the exercise of a judicial discretion.

[30]  In seeking the dismissal of the application, the 1st respondent urges the court to find that the application constitutes an abuse of the court proceedings and that the court should express its displeasure at the nature of these proceedings by issuing a punitive costs order against the applicants, on the scale as between attorney and own client.  In substantiation of the submission, the 1st respondent claims that the respondents were obliged to sell their home in Port Elizabeth because of what he describes at the 1st applicant’s “malicious vendetta” against them.  His submission is that these proceedings form part of this vendetta.  In my view it is not necessary for this court to enter the debate as to whether or not a vendetta has been commenced against the 1st respondent. 

[31]  For the reasons which are apparent from this judgment,       the application for interim relief has not succeeded.

Whilst the court has found that the applicants have failed to demonstrate an entitlement to an anti-dissipation order, and accordingly it may be so that they have misconstrued their remedy, in the climate of uncertainty in which they found themselves I do not consider the launch and pursuit of the urgent application to constitute behaviour which can be described as an abuse of the process of court. Accordingly I am unable to exceed to the wishes of the 1st respondent on the scale of costs order.

ORDER

[32]  In the circumstances the following order will issue:

1.       The application is dismissed.

2.       The applicants are directed to pay the 1st and the 2nd respondents costs of suit on a scale as between party and party, jointly and severally, the one paying the other to be absolved.

3.       The applicants are further directed to pay the costs occasioned by the introduction by the 3rd respondent of a notice of intention to abide, on the scale as between party and party, jointly and severally, the one paying the other to be absolved.

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RWN BROOKS

JUDGE OF THE HIGH COURT (ACTING)