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IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

 

CASE NO: 94052/2015

In the matter between:

GARY LIONELL MAGILL N.O.                                                             APPLICANT

(In his capacity as trustee of the GLM Trust

IT6776/00)

and

DEON MARIUS BOTHA N.O.                                                               1^ST RESPONDENT

YSUF IBRAHIM N.O.                                                                             2^ND RESPONDENT

 

 

JUDGMENT

MTATI AJ

 

Introduction

[1]        This application comes before Court couched in the form of contempt of Court for failure by the Respondents to comply with an order of Court granted on 16 October 2017 by Van der Westhuizen J. It however turned out that the substantial pre-requisites that were demanded by Applicant have ultimately been met and the contempt of Court application was abandoned during the hearing.  The only remaining issue was payment of costs de bonis propriis. It should be noted that whilst the substantial order of this Court was complied with, at the time of hearing of this application this order was still not fully complied with. I will revert to the Court order later in this judgment.

 

Background

[2]        This matter emanates from an initial order that was made by Rabie J on 15 January 2016 where he ordered Respondents to make payment to the Applicant in the sum of R1 240 200.00. Costs of the application were reserved.

 

[3]      As a result of continuous delays from the Respondents in complying with the Court order this matter found its way again to this Court and on 16 October 2017 Van der Westhuizen J granted another order the relevant portions thereof being:

“1.        Respondents are ordered to pay to Applicant the sum of R1, 170, 000.00 (One million one hundred and seventy thousand rand).

2.         The Respondents will, within three days of this order being granted, furnish to the Applicant written confirmation from the Guardian Fund, that the Respondents have complied with all the necessary requirements in order to effect the payment from the Guardian Fund. (my emphasis)

                       3.         …”

 

[4]      Importantly the order of 16 October 2017 was granted by agreement between the parties. The Respondents were represented by Counsel in those proceedings. This order was not complied with to the letter despite Respondents’ attention being drawn thereto. There is correspondence filed of record demonstrating that Respondents were alerted to the Court order. At any rate a party cannot come to Court and plead ignorance of the subsequent Court order whilst participating in the proceedings. Worse still, a party cannot agree to a Court order and later allege ignorance thereof. In the present circumstances however, it was argued on behalf of the Respondents that they were not aware of the Court order.  I find this to be disingenuous.

 

[5]     Applicant instructed his Attorney of record to communicate and alert the Respondents through their Attorney that they were in contempt of this Court’s order and that an application would be made to this Court if non-compliance persisted. This letter was sent to Respondents four days after the order of this Court. It is not disputed by Respondents that they responded to Applicants Attorney by alleging that the Court order would be attended to immediately.  This did not take place until the contempt of Court proceedings had commenced.

 

[6]     It is important to also note that, as at the hearing of this application, paragraph 2 of the order of 16 October 2017 had still not been complied with or at least no such proof had been provided to the Applicant in compliance with the order.

 

[7]     This application for contempt of Court was filed on 27 October 2017 and served on the Respondents’ attorneys and First Respondent on the same day and on 31 October 2017 on the Second Respondent. On 6 December 2017 the Respondents filed their notice of intention to oppose. The matter was enrolled for hearing on 20 February 2018 and only on 15 February 2018 did Respondents file their answering affidavit which necessitated the matter to be postponed. Prinsloo J ordered the Respondents to pay the wasted costs of the postponement on an opposed scale.

 

Issues for determination

[8]     As alluded to above this matter now comes before Court for the determination of an appropriate award of costs due to the alleged dilatory conduct of the Respondents. In other words, was the conduct of Respondents so grossly negligent that they require to be mulct with a cost order de bonis propriis on an attorney and client scale? I now turn to consider their conduct in this application.

 

[9]        The general principle at common law is that a party who litigates in a representative capacity (such as the liquidators) cannot be ordered to pay the costs de bonis propriis unless they have been guilty of improper conduct.  (Cooper NO v First National Bank of South Africa Limited 2001 (3) SA 705 (SCA)).

           

In the matter of Stapelberg v Schlebusch N.O. and another 1968 (3) 596 (O) at 605 G-H, Smuts J is quoted as saying: “Koste de bonis propriis kan toegeken word as n’ eksekuteur mala fide is of indien hy nalatig of baie onredelik opgetree het.”

 

Such party may however be ordered to pay such costs where there is a want of bona fides on his or her part or if he or she has acted with gross negligence.  (Blou v Lampert and Chipkin NNO and Others 1973 (1) SA 1 (A)).

 

 

[10]      The Court is concerned about the following factors in the conduct of the Respondents:

            i.          Compliance with this Court’s order dated 15 January 2016 was delayed;

ii.         This delay necessitated an order reached by agreement dated 16 October 2017;

iii.        Compliance with the 16 October 2017 was also delayed necessitating Applicant’s Attorney to engage with Respondents Attorneys;

            iv.        Notwithstanding the reminders nothing took place;

v.         Only upon service of the contempt of Court application did Respondents file the required documents with the Master seeking to comply with the Court order particularly paragraph 2 thereof;

vi.        Respondents proceeded to oppose the application by Applicant and only filed their answering affidavit three days before the hearing by Prinsloo J with an order to pay the wasted costs; and

vii.       No effort was made by Respondents to tender the wasted costs of this application until concessions made at Court.

 

[11]      Non-compliance with Court orders frustrates the very purpose of the rule of law. A successful litigant has to constantly conform to the relaxed or cool-handed attitude of the opposing party. This attitude cannot go unchallenged as there is always an issue of costs to pursue an otherwise victorious battle to again enforce compliance. It is true that any cost order other than what is sought on behalf of the Applicant will further burden the creditors of the insolvent estate. Counsel for the Respondents conceded that Respondents litigate in many matters. I will be fair in my view to assume that Respondents appreciate the importance of complying with Court orders. To a greater degree, it was not disputed that one of the Respondents is an officer of this Court. The Respondents as liquidators are obliged to act in the interests of the creditors and the insolvent estate. It cannot be an acceptable practice to always burden the insolvent estate with cost orders that arise through lackadaisical conduct of the liquidators. It appears that all previous Court orders in this matter were borne by the insolvent estate. In my view this needs to change and actions of liquidators should be considered judiciously and the interests of creditors and the insolvent estate should always be prudently protected. I find that the Respondents did not act in the best interests of the insolvent estate, they were mala fide, negligent or unreasonable in not complying with the order of this Court. In the circumstances and in this Court’s show of displeasure in their conduct they need to bear the costs of this application de bonis propriis on an attorney and client scale.

 

[12]      I accordingly make the following order:

Order

1.    Respondents are ordered to pay the costs of this application de bonis propriis on an attorney and client scale jointly and severally, the one paying the other to be absolved.

 

 

 

MTATI AJ

GAUTENG DIVISION, PRETORIA

 

 

APPLICATION HEARD ON: 26 NOVEMBER 2018

JUDGMENT DELIVERED ON: 14 DECEMBER 2018

APPEARANCES

COUNSEL FOR THE APPLICANT: ADV MMW VAN ZYL SC

INSTRUCTED BY: THOMAS MINNIE ATTORNEYS, PRETORIA

COUNSEL FOR THE RESPONDENTS: ADV J GREYLING

INSTRUCTED BY: JOHN WALKER ATTORNEYS, PRETORIA

 

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