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IN THE HIGH COURT OF SOUTH AFRICA

(WITWATERSRAND LOCAL DIVISION)

12 February 2007

CASE N0: 26597/2006

In the matter between:

AFGEM LIMITED Plaintiff

and

REX MINING CORPORATION LIMITED Respondent

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JUDGMENT

GOLDSTEIN J:

[1] This is an application for the winding up of the respondent. It was originally brought urgently on 7 December 2006, and was, with respect, correctly adjudged not to be urgent. When it came before me for the first time on 30 January 2007, I put my prima facie view to counsel that the bringing of the application as urgent amounted to an abuse of the process of the court, and that it ought to be dismissed on that ground. Counsel for the applicant persuaded to proceed to hear the matter in view of a pending Labour Court dispute, which given the lapse of time since 7 December, had now made the matter urgent. I expressly indicated that my decision to continue hearing the matter on the merits was subject to being reversed. Of course, this is the position in any event in respect of interlocutory rulings or orders. Estate Garlick v Commissioner for Inland Revenue 1934 AD 499 at 511. Sandell & Others v Jacobs & Another 1970 (4) SA 630 (SWA) at 634 C-D.

[2] The application was brought on notice of motion dated 29 November 2006, which was a Wednesday, and served on that day at the registered address of the respondent in Roodepoort. Both directors of the respondent were resident in Belgium, a fact which is stated in the answering affidavit, and which is “noted” in the applicant’s replying affidavit, and of which it must, I gather, have been well aware. The notice of motion gave the respondent until Thursday 30 November 2006 at 16h00 to indicate its intention to oppose, and until Monday 4 December 2006 at 12h00 to deliver its answer, and it went on to say that the reply would be delivered by 6 December 2006, and the matter heard the next day. In the event, one of the directors of the respondent was not available to work on the matter on Saturday 1 December, and neither was available to do so on Sunday 2 December. The answering affidavit states that the directors of the respondent received the notice of motion and founding affidavit, without its annexures, by fax at about 17h45 on 29 November. They completed the answering affidavit on Friday 30 November, and it was deposed to on Saturday 1 December, and delivered to the applicant’s attorneys on 4 December 2006 at 14h10. The replying affidavit was delivered to the respondent’s attorneys at 8h30 on 7 December 2006, and the matter was struck off the roll later that day.

[3] The notice of motion, founding affidavit and annexure runs to 168 pages, the answering affidavit and its annexures to 60 pages, and the replying affidavit to 66 pages. On 22 January 2007 the respondent delivered its supplementary affidavit – 180 pages long including annexures – from which 22 pages of a particular annexure were erroneously excluded, and which pages were handed up to me during the hearing. On 26 January 2007 the applicant delivered its supplementary affidavit which, with answers, numbered 25 pages, and also an application to strike out.

[4] I initially found the papers extremely difficult to read, and at least partly ascribed this to the distractions of having to cope with much other work during the very busy first motion court week of the term, and I heard argument at various times (between dealing with other matters on the roll) on 30 and 31 January and on 1 February 2007, after which on 2 February I postponed the matter, with the consent of the parties, to 12 February, having informed them that I wished to have extra time to study the papers more carefully.

[5] I have now done so, and have decided that the applicant appears, by bringing the matter urgently in the way it has done, to have caused itself and the respondent to present so confusing a picture of the issues as to make it extremely difficult, if not impossible, for me to do proper and reasonably expeditious justice between the parties. A few examples of fundamental importance will suffice.

[6] The respondent is said in the founding affidavit to be indebted to the applicant in the sum of “R4787750.00, as more fully appears from the annexures ‘RY3’ and ‘RY4’…” Annexure RY3 is a document on an accountant’s letterhead headed “Summary of creditor balances (all companies combined)”. There are many figures on the page – one of them accords with the amount claimed. Annexure RY4 consists of a letter from the South African Revenue Service (“SARS”), apparently to the applicant, dated 3 February 2005, together with a schedule containing the names of four companies including that of the respondent, and numerous figures none of which accords with the amount claimed. The date of the agreement of loan is not given, and nothing is said of whether it was concluded orally or in writing, or of where it occurred. The affidavit goes on to say that “notwithstanding demand, to wit, Annexure ‘RY5’ hereto, same remains unpaid.” This conveys a demand by the applicant to the respondent. But Annexure RY5 is not such a letter, and appears to be a letter from the applicant’s attorneys to it.

[7] The founding affidavit states that the parties and others concluded a “Sale of Shares Agreement”, and that the applicant issued the respondent with 20 million ordinary shares in partial payment of the purchase price. It appears that these were shares in the applicant itself. They “were pledged back by the Respondent to the Applicant, as security for the repayment of a loan of R5 million, which the Applicant made to the Respondent, in terms of Annexure E” to the Sale of Shares Agreement. Then it is alleged that the respondent ceased trading in 2005, and that the respondent “on its version .. has no assets other than the pledged shares … annexure ‘RY13’ hereto refers.” But Annexure RY13 indicates something different – that the respondent not only owned the shares, but that it was also entitled to a royalty, the latter, I may add being an asset provided for in the Sale of Shares Agreement. Annexure RY13 indicates that “Rex SA”, which is apparently the applicant, had disposed of the shares and the royalty to “Rex CA”, apparently a Canadian company. The founding affidavit goes on to say that the respondent attempted to dispose of “a portion of the respondent’s only asset, namely, 20 million … shares ..”, but as I have indicated, annexure RY13 indicates that not only a portion was sold.

[8] After having said that the respondent’s only asset was the pledged shares the founding affidavit deals for the first time with “royalties”, and states that such will not generate enough revenue to affect the respondent’s solvency.

[9] The confusion in the applicant’s case is compounded in the hastily drawn answering affidavit. Thus, for example, reference is made to R3.4 million paid to SARS and to a “compromise … sanctioned by the High Court on 14 April 2005, and thereafter registered”. The figure of R3.4 million appears in a document of the applicant itself, headed “Consolidated Reviewed interim results for the 6 months ended 30 September 2005.” The compromise, which may well be relevant, is not contextualised or explained in any intelligible way.

[10] In Goldberg v Goldberg 1938 WLD 83, Schreiner J (as he then was), referred at 85 to “the Court’s inherent jurisdiction to refuse to entertain proceedings which amount to an abuse of its process…” During argument on 30 January, I referred counsel to Sealandair Shipping and Forwarding v Slash Clothing Co (Pty) Ltd 1982 (2) SA 635 (W), in which Coetzee DJP quoted inter alia the words I have referred to with apparent approval. It seems clear to me that I have the authority to refuse to entertain this matter, since it amounts to an abuse of the process of this Court, and of course, such refusal must result in the application being dismissed.

[11] I desisted from dismissing the application when I first heard it because counsel for the applicant, whilst accepting (if I understood him correctly) that the matter was not urgent in December 2006, informed me that it had become urgent now, by reason of a case in the Labour Court involving employees of the parties before me, and set the down for 17 February 2007. It seems to me, however, that I erred in doing so. This Court surely cannot be coerced into countenancing the bringing of an application, which is not urgent, in all the circumstances of this matter, and which amounts to an abuse of the process of the court, and which, possibly as a result of the haste on both sides, is difficult, if not impossible, to adjudicate upon properly, simply because it later becomes urgent. A case presented to the Court as this has been seriously impedes the work of the Court because it results in inordinate hearing time, and judges’ reading time, being spent in trying to plumb unnecessary opaqueness and contradiction. And so, the application must be dismissed and the applicant can, if so advised, launch fresh proceedings for winding up of the respondent. Since an abuse of the process of this Court has occurred, a punitive costs order is called for. In the result, the application is dismissed with costs on the scale as between attorney and client.

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E L GOLDSTEIN

JUDGE OF THE HIGH COURT

For the Plaintiff: M Nowitz

Instructed by: Nowitz Attorneys

For the First Defendant: A P den Hartog

Instructed by: Smit and Marais Attorneys

Dates of Hearing: 30, 31 January, 1, 12 February 2007

Date of Judgment: 12 February 2007.

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