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HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

 

(1)  REPORTABLE: NO.

(2)  OF INTEREST TO OTHER JUDGES: NO.

(3)  REVISED.

DATE: 24 NOVEMBER 2020

 

CASE NO: 31395/2019

 

In the matter between:

 

GEORGE ANTONIO GONSALVES SEQUEIRA                                           Plaintiff

 

and

 

MANDLA BRICKS AND BLOCKS CC                                                             First Defendant

LINTEL SUPPLIERS CC                                                                                    Second Defendant

LABOUR SECRETARIES CC                                                                           Third Defendant

CELESTE ANTONETTE BRITS                                                                       Fourth Defendant

GIDEON PETRUS BRITS                                                                                  Fifth Defendant

NADIA BORCHER                                                                                              Sixth Defendant

RICHARD KENNETH BORCHER                                                                   Seventh Defendant

DE'MON BRITS                                                                                                   Eighth Defendant

J U D G M E N T (Costs of postponement)

This matter has been heard in terms of the Directives of the Judge President of this  Division  dated  25  March 2020,  24  April  2020 and  11  May 2020. The judgment and order are accordingly published and distributed electronically.

 

DAVIS, J

[1]        In this action, which has been certified as a commercial matter and which has been case managed as such, the plaintiff claims some R22 million from his sister, her husband and their children (including a son-in-law) as "buy­ out" of his membership or shares in three close corporations (of which one has been converted to a company) which had previously been run by all the said family members jointly. In the alternative, the plaintiff claims payment of the amount/s from the three corporate entities.

[2]          The three entities have, since the plaintiff's unilateral departure from the management of the entities some years ago (due to reasons which are somewhat in dispute), run into severe financial constraints. They are alleged to currently being largely dormant and merely being run for the attempted payment of creditors. They are also alleged to have been suppo1ted financially by interventions by the eighth defendant and some companies under his control. These facts and the sale of some of the entities' assets, escalated the distrust between the parties as well as the extent of the disputes.

[3]          The matter has, after case management, been set down on agreed and allocated dates for the whole week of 23 - 27 November 2020.

[4]          On 12 November 2020, the eighth defendant, who resides in Port. Elizabeth, was diagnosed with having contracted the COVID-19 disease. He was clinically advised to self-isolate for 10 days and, should his condition require him to be admitted to hospital, to remain in isolation there. His condition has subsequently been reported as presenting with breathing- and speaking-difficulties and exhaustion.

[5]        Pursuant to him being not only a party to the case, but also a crucial witness for the defendants, the plaintiff reluctantly agreed to the defendants' belated request for a postponement contained in a latter dated 20 November 2020, that is the Friday prior the Monday on which the trial would have commenced.

[6]          The issue I am now called upon to decide, is that of liability for the wasted costs occasioned by the postponement.

[7]          Generally, so the learned authors of Erasmus: Superior Court Practice, at D l-559 say, "... the applicant for postponement is ordered to pay the wasted costs if the illness of a party or a witness ... necessitates postponement". Reference is then made to Cape Law Society v Feldman 1979 (1) SA 930 (E) at 934 A- A and Manong & Associates v City of Cape Town 2011 (2) SA 90 (SAC) at (95] and [96]. In the last-mentioned case , the postponement , although not inevitable, was pursued because the company sought an indulgence to be represented by its retained senior counsel, who had fallen ill. In the present case, it appears that the postponement was inevitable due to the illness of the eighth defendant and no other indulgence is sought by the defendants.

[8]          In Van Staden v Union and South-West African Insurance Co Ltd 1977 (1) SA 758 (E) the court declined to order the eventually successful plaintiff to pay the costs or a postponement necessitated by his illness, on the ground that this was not due to the fault of either party.

[9]          The proper approach, in the exercise of a courts' discretion, is not to follow a general rule blindly (for that would not be the exercise of a discretion at all) but to have regards to all the facts as well as consideration of fairness  to both parties in determining liability for wasted costs. See Grobblelaar v Snyman 1975 (1) SA 568 (O) and Brown v Santam Insurance Co Ltd 1979 (4) SA 370 (W) at 379 F- H. Often, when it appears to a court that the postponement is not due to the fault of any party but is necessary in any event, but that it would be fair that the ultimate loser pays all costs incurred, costs occasioned by the postponement are made costs in the cause, such as in Cohn v Cohn 1965 (3) SA 203 (0).

[10]     The plaintiff complains that not only was he ready to proceed to trial, but that the defendants have been persistently dilatory: they have not filed their statement of defence on 23 September 2020 as directed at the case management conference, but only did so on 20 October 2020, after having been cajoled to do so in writing on multiple occasions. Despite the defendants' general duty to make discovery and despite a notice calling upon them to make discovery having been delivered as long ago as 27 August 2019 as well as the fact that they have by further correspondence been requested to make discovery, they have to date failed to do so. This discovery is all the more important since the defendants claim that a part of the reason for the lateness of their statement of defence, was substantial change in the circumstances (and financial positions) of the various corporation entities.

[11]     On the other hand, the defendants claim that the plaintiff's expert  notices and, in particular the expert summaries were filed late and introduced new matter. The plaintiff countered  that the "new  matter"  was foreshadowed by an explanatory letter and an invitation to the defendants to also appoint similar experts and to have all experts liaise with each other. There was no response to this letter.

[12]       The parties also raised the issue of the defendants' complaints about the plaintiffs late supplementary discoveries. These complaints are a red herring and without substance: the first supplementary discovery was made of the corporate entities own financial statements, which the plaintiff had obtained via a duces tecum subpoena served on the relevant auditor. It was on the obtaining of these documents that the plaintiffs expert compiled his report complained of, as described above. The plaintiff countered that, had the defendants objected to the expert evidence being led, and if such objection would have led to a postponement of the matter, the plaintiff would have jettisoned the expert evidence and proceeded with his claim on a different tack and asked for alternative relief than a pure monetary judgment as envisaged in section 49 of the Close Corporations Act or section 169 of the Companies Act, on which provisions the plaintiff in any event relied for his cause of action. The second supplementary discovery contained correspondence between the parties' legal practitioners and no prejudice could have been caused thereby.

[13]       In summary then, the position is the following:

-            the trial has to be postponed due to the illness of the eighth defendant, who is also a crucial witness, but this is not due to a fault of himself or any other defendant;

-            the defendants have been dilatory in their litigation obligations but despite this, the plaintiff made ready to proceed to trial;

-            the supplementary discoveries filed of late by the plaintiff have no bearing on the issue of postponement;

-           

the expert summaries delivered by the plaintiff have a bearing on the matter, but there is a dispute regarding the contents of the reports. Their lateness was again, as a result of the defendants' default of their obligations. This issue alone would also not have resulted in a postponement.

 

[14]       Had the plaintiff been alerted of the illness of the eighth defendant immediately after he had been diagnosed, which carried with it the inevitability of the postponement of the trial, the plaintiff would not have incurred further costs in preparation for the trial, such as consultations, preparation, the procurement of the expert reports and the like. For present purposes, all those costs are wasted, save to the extent that the taxing master determines otherwise.

[15]       It is also inconceivable that family members who were at all relevant times jointly involved, not only in business, but in impending litigation, including a looming trial with huge implications, would not be aware of the eighth defendant's diagnosis. It is unexplained why they delayed in informing their legal practitioners thereof until 18 November 2020. It is equally not sufficiently explained why it thereafter took until the court day before the start of the trial to inform "the other side". This mode of litigation is such an extension of the previous dilatory approach to the matter, that it deserves the court's censure.

[16]       I have taken all of the above into consideration in exercising my discretion regarding the liability for wasted costs. Regarding the plaintiff's primary argument that the "personal" defendants should pay the costs and not the corporate entities in which the plaintiff still holds membership or shares, his alternative claim is against those same entities themselves, which claim in includes a claim for costs. I do not find it fair in the circumstances to mulct the non-corporate defendants with costs to the exclusion of the corporate entities.

[17]       In these premises, the following order shall issue:

1.          The trial is postponed sine die.

2.          The defendants are jointly and severally ordered to pay the plaintiffs wasted costs for steps taken after 12 November 2020 up to and including the first day of trial, on the scale as between attorney and client, including the costs of senior counsel and the preparation and reservation costs of the two expert witnesses Ferreira and Bosman.

3.           The remainder of wasted costs occasioned by the postponement shall be costs in the cause.

4.          The defendants are ordered to make discovery within 10 (ten) days from date of this order.

 

 

 

N DAVIS

Judge of the High Court

Gauteng Division, Pretoria

 

 

 

Date of Hearing: 23 November 20 20

Judgment delivered: 24 November 2020

 

APPEARANCES:

For the Appellant:              Adv. M P van der Merwe SC

Attorney for Appellant:      Barnard & Patel Inc, Pretoria

For the Respondent:           Adv M Verster together with Adv A Botha

Attorney for Respondent:   BMV Attorneys, Johannesburg

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